Cal-Western Reconveyance v. Brown CA2/1

BACKGROUND

In 2011, Citimortgage, the senior lienholder on the Browns’ property, foreclosed on its lien. Cal-Western Reconveyance Corporation (CWRC) administered the foreclosure sale as the trustee, which resulted in a surplus of $256,233.77 after it paid Citimortgage’s senior lien. CWRC could not determine how to disburse the surplus among Chase Bank USA, N.A. (Chase), the Browns, and other parties, and deposited the funds with the superior court for the court to disburse the surplus. The court set a hearing date and ordered the parties to file all claims to the surplus within 15 days of the hearing date. The Browns timely filed a claim. Chase filed a claim late, two days before the scheduled hearing. The court subsequently continued the hearing several times and did not hear the case until more than two months after the hearing was originally scheduled. Despite an objection by the Browns, the court accepted Chase’s claim and awarded Chase its requested portion of the surplus. The court disbursed the remainder of the surplus to the Browns. The Browns appealed.

DISCUSSION

The Browns contend the order awarding Chase a portion of the surplus should be reversed because the trial…