CASE NAME: RE 4888 CLAYTON ROAD 38, CONCORD

HEARING ON PETITION FOR UNRESOLVED CLAIMS & DEPOSIT OF

UNDISTRIBUTED SURPLUS? /? FILED BY MERIDIAN FORECLOSURE SERVICE

* TENTATIVE RULING: *

Petitioner Meridian Foreclosure Services has filed the instant petition regarding claims to surplus proceeds of a trustee?s sale of property located at 4888 Clayton Rd. #38, Concord, CA.? Pursuant to Civil Code section 2924k, surplus proceeds are awarded to Calvary Apostolic Church in the amount of $32,037.68.

Civil Code section 2924k describes the order of priority the court must follow when?distributing proceeds of a trustee?s sale.? Pursuant to section 2924k, after covering sale costs and first deed of trust obligations, the court shall distribute surplus proceeds ?to?satisfy the outstanding balance of obligation secured by any junior liens or encumbrances in the order of their priority.?

Calvary Apostolic Church (?Calvary?) submitted a claim to the surplus as a junior lienholder under a deed of trust ultimately recorded on April 2, 2010.? Claimants Daniel Dorsett and Pepperwood HOA each filed surplus claims upon junior liens that were recorded after April 2, 2010.? Thus, Calvary maintains a first priority claim to this surplus.

Petitioner did not honor Calvary?s surplus claim because it appeared that Calvary?s lien under the deed of trust was ?merged,? and thus extinguished, when Calvary acquired full title to the property.

Merger is always a question of intent, as necessary to protect the buyer?s rights.? (Decon Group, Inc. v. Prudential Mortgage Capital Company, LLC (2014) 227 Cal.App.4th 665, 671.)? ?It is well established that equity will interpose to prevent a merger where from?the circumstances it is apparent that it was not the intention of the grantee that a merger should take place.?? (Sheldon v. La Brea Materials Co. (1932) 216 Cal. 686, 691.)? The grantor, Gabriella Benedetto, and the grantee, Calvary, have both asserted in their respective papers that no merger was intended when Calvary acquired full title to the?property.

This court finds that, in light of parties? intent, Calvary?s deed of trust did not merge into Calvary?s title in the subject property.? Calvary maintains a valid first priority claim to the surplus as junior lienholder in the amount of $84,365.09.? Thus, pursuant to Civil Code section 2924k, the surplus amount of $32,037.68 is awarded to Calvary Apostolic Church.