Another Amicus Curiae Victory for UTA:

The California Court of Appeal in Banc of America Leasing & Capital, LLC, v. 3 Arch Trustee Services, Inc. held, as Asserted in UTA’s Amicus Brief, that Where a Trustee Complies with the Notice and Claim Procedures in Civil Code § 2924j, it has no Duty to Search for Other Persons Who May Otherwise be Entitled to Surplus Proceeds

In a big victory for UTA’s amicus curiae (friend of the court) program, on December 19, 2009, the California Court of Appeal (4th District, Division 3) handed down it option in Banc of America Leasing & Capital, LLC, v. 3 Arch Trustee Services, Inc. (2009 W.L. 4727904).  The court of appeal opinion completely adopted the position in UTA’s amicus curiae brief and in the briefs filed by counsel for 3 Arch Trustee Services.

The court of appeal held, in essence, that trustee’s duties relating to surplus proceeds are limited to those set forth in the deed of trust and in comprehensive state legislative scheme regulating nonjudicial foreclosure.  While the general legal principal is not new, for the first time the court of appeal applied it to the distribution of surplus funds, interpreting the alleged ambiguity between Civil Code § 2924j (nonjudicial interpleader statute) and Civil Code § 2924k (dealing generally with person who are entitled to surplus proceeds).  The court of appeal held that where a trustee follows the procedures in Civil Code § 2924j (i.e., regarding notices and claims), the trustee has no further legal duty to search for other persons named in 2924k (i.e., judgment lien holders, mechanic’s lienholders etc. who have not timely filed a request for notice of default pursuant to Civil Code § 2924b.)

It is too early to tell whether Banc of America Leasing will appeal this decision to the California Supreme court.

Initially the court of appeal did not certify its opinion for publication which would have meant that the court’s opinion could not be cited as legal authority.  UTA’s counsel petitioned the court of appeal to publish its opinion.  In an unprecedented showing of support, many UTA members or their counsel joined in filing letter petitions for publication.  UTA thanks each and every member providing financial support and support to obtain publication of this important decision.
Read the published opinion

A more thorough article discussing the court’s holding in the 3 Arch case will appear in the next issue of the UTA Quarterly and on the UTA website.

The result in the 3 Arch case is a prime example of the importance of members digging into their pockets and contributing to the UTA Amicus Fund.  Without financial support from its members, UTA cannot file amicus briefs in matters of utmost importance to its members.