Filed 5/30/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

PLACER FORECLOSURE, 

INC.,

 Plaintiff and Appellant,

v.

SOLOMON AFLALO,

 Defendant and Appellant.

2d Civil No. B268589

(Super. Ct. No. 56-2015-

00471416-CU-OR-VTA)

(Ventura County)

Placer Foreclosure, Inc., acting as trustee, conducted 

a foreclosure sale of property owned by Solomon Aflalo. The 

foreclosure sale resulted in surplus proceeds. When Aflalo filed a

wrongful foreclosure action against Placer and the third-party 

buyer, Pro Value Properties, Inc., Placer filed a complaint in 

interpleader and deposited the surplus proceeds with the court. 

Placer appeals judgment of dismissal after the trial 

court sustained Aflalo’s demurrer to the interpleader complaint

without leave to amend. In a cross-appeal, Aflalo contends: the 

trial court erred when it did not direct the clerk of the court to 

release the interpleaded funds to him. We affirm the judgment of 
2

dismissal. We remand with directions to the trial court to release 

the interpleaded funds to Aflalo. 

FACTUAL AND PROCEDURAL HISTORY

Aflalo borrowed funds to buy a home. The loan was 

secured by a deed of trust. Placer was the trustee under the deed 

of trust. Aflalo defaulted on the loan, and Placer conducted a 

foreclosure sale. Pro Value bought the property. The sale 

resulted in $974,786.81 in surplus proceeds, after payment of the 

fees and costs of sale and the obligations on the loan.

Aflalo filed a wrongful foreclosure action. He named 

Placer and Pro Value as defendants. He sought to invalidate the 

foreclosure sale and quiet title to the property. 

Placer responded with the interpleader complaint. 

Placer alleged the wrongful foreclosure action gave rise to

conflicting claims to the surplus funds. It alleged it has “no 

interest in the Surplus and is indifferent with respect to which 

Defendant, or combination of Defendants, should receive the 

Surplus.”

After the trial court sustained Aflalo’s demurrer to 

the interpleader complaint without leave, Aflalo filed an 

application for a judgment of dismissal. He asked the court to 

release the interpleaded surplus funds to him. 

The trial court entered a judgment of dismissal of the 

interpleader complaint and ordered that Placer “may apply to the 

court for a release of the [surplus] Funds deposited with the 

court.” The trial court denied Aflalo’s request to release the 

interpleaded funds to him.
3

DISCUSSION1

Mootness

While this appeal was pending, Aflalo and Pro Value 

entered a settlement agreement in which Pro Value “disclaim[ed] 

any interest whatsoever in the $974,786.[8]1 of Surplus Proceeds 

deposited by Placer in the Interpleader Action with the Superior 

Court.” It declared that it did not “object to the immediate 

disbursement by the Superior Court to [Aflalo] of the Surplus 

Proceeds.” 

Based on the settlement agreement, Aflalo argues 

that the appeal should be dismissed because the interpleader 

complaint and the appeal are now moot. We disagree. 

California courts will decide only “‘justiciable 

controversies.’” (Association of Irritated Residents v. Department 

of Conservation (2017) 11 Cal.App.5th 1202, 1221.) A moot case 

is one in which there may have been an actual or ripe controversy 

at the outset, but due to intervening events, it no longer presents 

 

1 We grant Placer’s request for judicial notice filed on 

February 7, 2017, which contains (1) recorded documents related 

to the deed of trust and foreclosure sale, (2) pleadings related to 

Aflalo’s wrongful foreclosure suit, and (3) moving papers related 

to Aflalo’s motion to dismiss the appeal. (Evid. Code, §§ 452, 

459.) We also grant Aflalo’s request for judicial notice filed on 

October 6, 2017, which contains (1) the order of dismissal of the 

interpleader complaint and (2) Aflalo’s complaint filed May 2017 

against Placer, including an attached declaration from the 

president of Pro Value disclaiming any interest in the surplus 

funds. (Evid. Code, §§ 452, subd. (d), 459.) We deny Placer’s 

request for judicial notice filed January 10, 2018, which also 

contains Aflalo’s May 2017 complaint against Placer, because it is 

duplicative. 
4

a context in which the court can grant effectual relief. (Id. at p.

1222.)

Although Pro Value and Aflalo’s settlement resolved 

the dispute over the surplus proceeds, the appeal is not moot 

because justiciable controversies remain. Here, Placer’s 

interpleader complaint requests attorney fees, a discharge from 

liability, and dismissal from the underlying wrongful foreclosure 

action (Code Civ. Proc., §§ 386, 386.6). Because the award of 

attorney fees, discharge from liability, and dismissal from the 

wrongful foreclosure action are dependent on whether the trial 

court properly ruled on the demurrer, the appeal is not moot. 

(See White v. Lieberman (2002) 103 Cal.App.4th 210, 220.) 

Although we determine the appeal is not moot, we 

will conclude the interpleader was properly dismissed. Placer is 

thus not entitled to attorney fees, discharge from liability, or an

order of dismissal from the wrongful foreclosure action. 

Dismissal of the Interpleader Complaint

Placer contends that the trial court erred in 

sustaining the demurrer without leave to amend and dismissing 

the interpleader complaint because Aflalo and Pro Value’s 

competing claims subjected it to multiple liability.

We review the order de novo, and independently 

decide whether the complaint states a cause of action, reading it 

as a whole, and deeming true all material facts properly pled. 

(Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 

598, 606-607 (Westamerica).)

A party “against whom double or multiple claims are 

made,” that “may give rise to double or multiple liability,” may 

bring an action against the claimants to compel them to 

interplead and litigate their claims. (Code Civ. Proc., § 386, subd. 
5

(b).) The complaint must show that “‘the defendants make 

conflicting claims’” to the subject matter, and that the plaintiff

“‘cannot safely determine which claim is valid and offers to 

deposit the money in court . . . .’ [Citations.]” (Westamerica, 

supra, 201 Cal.App.4th at pp. 607-608.) But an interpleader 

action may not be maintained “‘upon the mere pretext or

suspicion of double vexation.’” (Id. at p. 608.)

Placer contends that the interpleader complaint was 

proper because Placer was faced with liability from Pro Value if it 

distributed the surplus funds to Aflalo. We reject this contention. 

Placer could safely distribute the surplus funds to Aflalo as 

required by statute without any risk of multiple liability.

The trustee’s role in preparing for and conducting a 

nonjudicial foreclosure sale is set forth in detail in Civil Code2

section 2924 et seq., as part of a comprehensive statutory scheme. 

The scope and nature of the trustee’s duties are exclusively 

defined by the deed of trust and the governing statutes. (Pro 

Value Properties, Inc. v. Quality Loan Service Corp. (2009) 170 

Cal.App.4th 579, 583 (Quality Loan Service).) No other common 

law duties exist. (Ibid.)

Placer was statutorily required under section 2924k

to disburse surplus funds to Aflalo. Section 2924k, subdivision 

(a) provides that a trustee “shall distribute the proceeds” in the 

following order of priority: (1) costs and expenses of the sale, (2) 

payment of the “obligations secured by the deed of trust,” (3) 

payment to any junior liens or encumbrances, and (4) payment

“to the trustor.” Placer paid the costs and expenses of the sale 

and the encumbrances as directed under section 2924k, 

 

2 Further unspecified statutory references are to the Civil 

Code. 
6

subdivision (a)(1) through (3), including payment to the lender of 

record, but did not pay the remaining funds to Aflalo, the trustor

(§ 2924k, subd. (a)(4)). Placer was required to do so. 

Placer does not cite to any authority that would 

prevent it from performing its statutory obligation to disburse the 

sale proceeds as directed under section 2924k. Relying on section 

2924j, it argues that it was not required to comply with section 

2924k when there are “disputed unresolved claims.” Placer’s 

reliance on section 2924j is misplaced. 

Section 2924j does not apply because the conflicting 

claims are not between parties who had recorded interests before 

the sale. Section 2924j, subdivision (a) sets forth the procedure 

for distributing proceeds to “persons with recorded interests in 

the real property as of the date immediately prior to the trustee’s 

sale.” It provides that “[o]nce an interpleader action has been 

filed” because of disputed unresolved claims, “thereafter the 

provisions of this section do not apply.” (§ 2924j, subd. (e).) 

However, section 2924j procedures regarding disputed claims 

apply to persons who make a claim to the property before the 

foreclosure sale such as lienholders, not purchasers at the sale. 

(See Banc of America Leasing & Capital, LLC v. 3 Arch Trustee 

Services, Inc. (2009) 180 Cal.App.4th 1090, 1104; see also Pacific 

Loan Management Corp. v. Superior Court (1987) 196 Cal.App.3d 

1485, 1490 [interpleader proper where junior lienholder and 

trustor disputed surplus funds].) The conflicting claims at issue 

here are not between lienholders, and Placer admits that Pro 

Value has no claim to the sale proceeds under section 2924k. 

Nothing in section 2924j excuses Placer from carrying out its 

duty of distributing the surplus proceeds in accordance with 

section 2924k. 
7

Citing to Bank of America v. La Jolla Group II (2005) 

129 Cal.App.4th 706 and Quality Loan Service, supra, 170 

Cal.App.4th 579, Placer argues that if the foreclosure action 

deemed the sale void, Placer “would not have had the power of 

sale,” Pro Value would have been “entitled to . . . the return of the 

purchase price, plus accrued interest,” and “an erroneous 

payment of sale proceeds” would have subjected Placer to 

liability. It argues the interpleader action was appropriate 

because it was merely a stakeholder with no obligation to resolve 

the disputed claims. (Cantu v. Resolution Trust Corp. (1992) 4 

Cal.App.4th 857.) 

But Placer did not face a valid threat of double 

vexation because Pro Value’s claim was against Aflalo, not 

Placer. (Westamerica, supra, 201 Cal.App.4th at p. 608.) This 

case is like Westamerica, in which a demurrer to a bank’s 

interpleader complaint was sustained without leave to amend 

because the bank, acting as an escrow agent, faced no threat of 

double vexation from the City of Berkeley and a building 

contractor, who were litigating a contract dispute. (Id. at pp. 

608-613.) The appellate court upheld the decision after 

interpreting an escrow agreement, which tracked a statutory 

scheme setting forth an escrow agent’s “specific list of rights and 

duties” for the distribution of escrowed funds. (Id. at p. 608.) 

The court determined there was no reasonable probability of 

double vexation because (1) the statutory terms of the escrow 

agreement clearly instructed the bank on how to pay funds (i.e., 

the bank must pay the city at the city’s direction and the 

contractor could not direct payment of funds without the city’s 

consent); (2) the agreement stated that the bank would be “held 

harmless” by the parties if it followed the escrow instructions; 
8

and (3) even without the hold harmless clause, the matter would 

resolve in the litigation between the city and the contractor, and 

the contractor had a statutory remedy against the city if 

distribution of the escrow funds were improper. (Id. at pp. 608-

610.) Here too, the statute directed Placer how to pay the funds, 

the competing claims were to be resolved in the foreclosure 

action, and Pro Value had a remedy against Aflalo who would 

have to return the surplus funds to the buyer if he successfully 

set aside the sale in the foreclosure action.

Placer argues that Westamerica is distinguishable 

because the escrow agreement in that case contained a “hold 

harmless” clause. But, even in the absence of an indemnity 

clause protecting the stakeholder from being sued, there is no 

threat of double vexation because there “would [be] little to gain 

by filing an action against” the stakeholder. (Westamerica, supra, 

201 Cal.App.4th at p. 610.) If the wrongful foreclosure action 

invalidated the sale, Pro Value would be entitled to a refund from 

Aflalo of its purchase proceeds, including the surplus, and would 

have nothing to gain by an action against Placer. (See id. at pp. 

609-610.) 

This case is also like City of Morgan Hill v. Brown

(1999) 71 Cal.App.4th 1114, 1123, in which there was no right to 

an interpleader action where the parties asserted rights over

different debts owed by different obligors. An attorney 

represented the City of Morgan Hill when she was a member of a 

law firm. When the law firm terminated her, she demanded her 

share of attorney fees that the city owed the law firm. (Id. at pp. 

1118-1119.) The city interpleaded the attorney fees. (Id. at p. 

1119.) The appellate court affirmed the trial court’s order 

granting the law firm’s summary judgment of the interpleader 
9

action and ordering the attorney fees to be released to the firm, 

because the parties claimed different debts owed by different 

obligors. (Id. at pp. 1121, 1123.) The firm claimed a debt of

attorney fees owed by the city; whereas, the attorney claimed a 

debt of compensation owed by the firm. There was no 

interpleader action because all that existed was a “possible 

eventual right to a judgment that might be satisfied” out of the 

disputed funds. (Id. at p. 1126.) 

Aflalo claims a right to collect surplus funds from 

Placer under section 2924k. Pro Value has no claim against 

Placer. It has only a “possible eventual right” to a refund of its

purchase proceeds from Aflalo in the event that Aflalo succeeds in 

its wrongful foreclosure lawsuit.

Placer notes that Aflalo’s counsel initially “refused to 

accept distribution” of surplus funds pending the outcome of the

foreclosure lawsuit. Six months later and after he retained new 

counsel, Aflalo demanded payment of the surplus funds. To the 

extent that Placer is asserting that Aflalo is estopped from 

claiming his entitlement to the immediate disbursement of 

surplus funds, we reject the argument. Regardless of whether 

Aflalo initially requested that Placer hold the funds, he 

subsequently requested the funds under section 2924k, and there 

is no evidence that his earlier request to hold the funds caused 

harm to Placer. (Contra, Schafer v. City of Los Angeles (2015) 

237 Cal.App.4th 1250 [estoppel appropriate where a party led 

another to do what it would not otherwise have done and as a 

result suffered injury or grave injustice].) 

Leave to Amend

Placer contends the trial court should have granted 

leave to amend the interpleader complaint. We review the court’s 
10

decision to sustain a demurrer without leave to amend for abuse 

of discretion. (Westamerica, supra, 201 Cal.App.4th at p. 613.) 

There is no abuse of discretion because Placer does 

not meet its burden to demonstrate a reasonable possibility that 

the defect can be cured by amendment. (Blank v. Kirwan (1985) 

39 Cal.3d 311, 318 (Blank).) “If the plaintiff does not proffer a 

proposed amendment, and does not advance on appeal any 

proposed allegations that will cure the defect or otherwise state a 

claim, the burden of proof has not been satisfied.” (Westamerica, 

supra, 201 Cal.App.4th at pp. 613-614.) 

Placer has not stated any allegations or facts that 

would cure the defect in the interpleader complaint. The trial 

court did not abuse its discretion when it denied leave to amend. 

(See Blank, supra, 39 Cal.3d at p. 318.) 

Disbursement of Surplus Funds

On cross-appeal, Aflalo contends that the trial court 

erred when it refused to release the interpleaded funds of 

$974,786.81 to him. While the cross-appeal was pending, Pro 

Value and Aflalo settled their dispute. Placer and Pro Value do 

not object to the disbursement of funds to Aflalo. We therefore 

direct the trial court to order the release of the interpleaded 

funds to Aflalo. 
11

DISPOSITION

We affirm the judgment of dismissal. We remand to 

the trial court with direction to the trial court to release the 

interpleaded funds of $974,786.81 to Aflalo. The clerk of the trial 

court is directed to amend the May 3, 2016, judgment of dismissal

accordingly. Aflalo is awarded costs on appeal. 

CERTIFIED FOR PUBLICATION.

TANGEMAN, J.

We concur:

GILBERT, P. J.

YEGAN, J.
Vincent J. O’Neill, Jr., Judge

Superior Court County of Ventura

______________________________

Adleson, Hess & Kelly, Patric J. Kelly, Phillip M. 

Adleson, Lisa J. Parrella; Law Offices of Kirk Rimmer and Kirk 

Rimmer, for Plaintiff and Appellant Placer Foreclosure, Inc.

Klapach & Klapach, Joseph S. Klapach; Ivie, McNeil 

& Wyatt, Rickey Ivie and Samuel E. Chilakaos, for Defendant 

and Appellant Solomon Aflalo.