Judgment In Favor Of PLP Law Client Upheld On Appeal Against Competing Secured Creditor In A Lien Priority Dispute

Poniatowski Parikh Commercial Property Creditors Rights

We represented a judgment lien creditor that sought priority of its attachment/judgment lien against the holder of a senior deed of trust in an interpleader action. This was to determine which party was entitled to nearly $300,000 in surplus funds after a trustee’s sale of commercial real property in Hayward, CA.

Hayward Commercial Real Estate Proceeds Subject to Creditor Dispute

After a 4-day bench trial in 2016 between these two competing secured creditors, the trial court entered judgment in favor our client, even though our client’s lien was recorded after the opposing party pension plan’s deed of trust. The court agreed with our argument that the presumed pension plan, the beneficiary of the deed of trust, was not a legal entity. Therefore, the trial court held that the granting of the deed of trust was ineffective to take priority over our client’s judgment lien because “an effective conveyance of an interest in real property must name and identify a definite and specific grantee who has capacity to hold title. A deed that does not adequately identify the grantee is void, and the attempted conveyance of the property is ineffective.” As a result, the surplus funds were awarded to our client.
The holder of the deed of trust appealed this ruling. However, after significant briefing and oral argument, the trial court ruling was affirmed in full this month. The appellate court held that the trial court properly considered the lack of credibility of the evidence presented by appellant to support its findings, and that “because the attempted conveyance of an interest in the property to an entity that does not exist was not effective, the court concludes that [our client], and not [appellant], is entitled to the surplus funds.”
Needless to say we are thrilled with the result after 4 years of litigating this matter!

  • First with the granting of our motion for summary judgment against the underlying account receivable debtor to obtain the underlying judgment exceeding $500,000
  • Second, winning the Alameda County Superior Court trial against the competing secured creditor in the interpleader action
  • Finally, prevailing on the appeal in the first appellate district

Partners Mark D. Poniatowski and Meera T. Parikh worked the case from start to finish along with significant support from senior paralegal Bryan Waage. Way to go Team PLP in fighting successfully for our client’s rights as a secured creditor!

Defend Your Creditors Rights with an Experienced Bay Area Attorney

If you have a claim as a creditor in a business or real estate dispute, we may be able to offer significant legal advice to negotiate, resolve or litigate the matter. Give us a call at 510-881-8700 or contact us here to see how we may help.