Judge: Alison Mackenzie, Case: BC719593, Date: 2024-11-12 Tentative Ruling
Case Number: BC719593 Hearing Date: November 12, 2024 Dept: 55
NATURE OF PROCEEDINGS: Hearing on Motion for Order Releasing Levy of Bank Accounts of
Non-Party Sierra Elizabeth and Quashing Writ of Execution and Levy
Sierra Elizabeth’s Motion for
Order Releasing Levy of Bank Accounts of Non-Party Sierra Elizabeth and
Quashing Writ of Execution and Levy is granted.
BACKGROUND
The instant motion concerns a writ of execution on non-party
Sierra Elizabeth’s four Bank of America accounts. Sierra Elizabeth is the widow
of Plaintiff and Cross-Defendant Warren Braithwaite, against whom a judgment in
favor of Defendant and Cross-Complainant Nicole Guest was entered on January
18, 2023, in the amount of $553,879.40. Declaration of Jill Row, Ex. E. Guest
assigned her judgment to Collins Judgment Recovery Services (Collins). Collins
proceeded to file a writ of execution and spousal bank levy on Elizabeth’s bank
accounts. On August 8, 2024, Bank of America released the funds to the Los Angelese
County Sherriff’s Office. As represented by Elizabeth, the Sheriff intended to
release the funds to Collins on September 9, 2024.
Elizabeth filed an Order
Releasing Levy of Bank Accounts of Non-Party Sierra Elizabeth and Quashing Writ
of Execution and Levy. Collins opposes.
LEGAL STANDARD
“[A] trial court has the power, and it is the trial court's
duty, to vacate or recall a writ of execution which has been improvidently
issued.” Jones v. World Life Research Institute (1976) 60 Cal.App.3d
836, 840. “[A] notice of levy may be challenged by a motion to quash.” National
Financial Lending, LLC v. Superior Court (2013) 222 Cal.App.4th 262, 271 (citing
Lauer v. Rose (1976) 60 Cal.App.3d 493, 496). Some courts have held that “none
but the parties to the action who are liable to be injured can move for recall
of the writ unless the judgment upon which it issued or the writ is void on its
face.” Vest v. Superior Court of San Francisco (1956) 140 Cal.App.2d 91,
93. However in Brown v. Kennard (2001) 94 Cal.App.4th 40, 49, the court held
that the appropriate remedy for a levy on the exempt assets of a nonparty is to
“move to quash the allegedly wrongful writ of execution and levy, and obtain a
return of his property.” Brown v. Kennard (2001) 94 Cal.App.4th 40, 42.
ANALYSIS
Elizabeth argues that the assets of her bank account are immune
from collection.
Family Code section 911 provides that “The earnings of a
married person during marriage are not liable for a debt incurred by the
person’s spouse before marriage. After the earnings of the married person are
paid, they remain not liable so long as they are held in a deposit account in
which the person’s spouse has no right of withdrawal and are uncommingled with
other property in the community estate, except property insignificant in
amount.” For cases involving tort claims a debt is “incurred at the time the
tort occurs” Fam. Code, § 903, subd. (b).
Elizabeth married Braithwaite in April 2022, and he passed
away in February 2024. Elizabeth Decl., ¶ 2. Braithwaite committed the torts
giving rise to the judgment between March 2017 and April 2018. First Amended
Cross-Complaint ¶¶ 15, 21. Therefore, the cause of action arose prior to
Elizabeth’s marriage to Braithwaite.
Elizabeth affirms that the Bank of America accounts that
have been levied are entirely and solely her earnings directly deposited from
her employer, Braithwaite’s name was never on any of the accounts, and he never
had the ability to withdraw funds from them. Id. at ¶ 10.
Collins argues that Family Code Section 911 does not apply
because Elizabeth commingled funds from one of the accounts at issue “to Warren
to as contribution to our Culver City Property….” and consistently transferred
her earnings from her bank accounts to Braithwaite to pay the mortgage for
Windsor Lane, the marital home.” Opposition Ex. 17. This argument is
unpersuasive. While the funds Elizabeth spent on the Culver City property and
the marital home are not protected by section 911 because they are no longer in
a deposit account and the they have been commingled with other property in the
community estate, that is not true of the seized funds. To be commingled while
remaining in the deposit account requires that other community funds not earned
by Elizabeth during the marriage be deposited. The record is devoid of any
evidence that any such funds were ever deposited into any of the subject
accounts. Accordingly, the Court finds that the accounts were not liable to
satisfy the judgment against Braithwaite.
Exemption
Collins argues that Elizabeth was required to submit a Claim
of Exception to contest the execution.
Code of Civil Procedure section 703.030, subdivision (a)
states “[a]n exemption for property that is described in this chapter or in any
other statute as exempt may be claimed within the time and in the manner
prescribed in the applicable enforcement procedure. If the exemption is not so
claimed, the exemption is waived and the property is subject to enforcement of
a money judgment.” However, Code of
Civil Procedure section 704.210, subdivision (b) provides “[p]roperty that is
not subject to enforcement of a money judgment is exempt without making a
claim.”
In Coastline JX Holdings LLC v. Bennett (2022) 80
Cal.App.5th 985 (Coastline), a judgment creditor obtained a writ of
execution against a judgment debtor’s profit-sharing-plan (PSP). After
initially ordering the PSP liquidated to satisfy the judgment, the trial court
reconsidered and reversed its prior decision because it held that the PSP was
exempt from the levy due to preemption by the Employee Retirement Income
Security Act (ERISA) which prohibits attachment of funds in qualified pension
plans. 29 U.S.C. §§ 1001, 1144. The Court of Appeal declined to decide whether
ERISA preempted California law, and instead found that because ERISA provides
unequivocally that pension benefits under a qualified plan are not assignable,
they are exempt under Code of Civil Procedure section 695.030. Coastline,
supra, 80 Cal.App.5th at p. 1005; Code Civ. Proc., § 695.030 (“Except as
otherwise provided by statute, property of the judgment debtor that is not
assignable or transferable is not subject to enforcement of a money judgment.”).
Because the PSP was not subject to enforcement of a money judgment, under Code
of Civil Procedure section 704.210 it was exempt without making a claim. Coastline,
supra, 80 Cal.App.5th at p. 1005.
Because the accounts were not subject to enforcement of the
money judgment under Family Code section 911, they were exempt without Elizabeth
making a claim.
Fully Executed Writ
Collins argues that the Court is without power to stay the
writ, because once the money has been issued to the levying officer, it is the
property of the judgment creditor.
In Adir Internat., LLC v. Superior Court (2013) 216
Cal.App.4th 996, 100 (Adir), the court held that a trial court lacks the
authority to order a judgment creditor to return to a judgment debtor funds
which had already been disbursed to the creditor by the levying officer but
should not have been because the debtor had perfected an appeal. However, Coastline,
supra, 80 Cal.App.5th at p. 1010 held “Adir does not address a trial
court's authority to order the return of exempt funds to a third party … that
the court itself had previously and, by its own determination, wrongfully
ordered released to the creditor.” Under those circumstances, a trial court may
order the return of the funds from the judgment creditor to the third party. Ibid.
Here, as in Coastline, the accounts were
automatically exempt without making a claim, the writs of execution were
erroneously granted, and the Court retains the authority to order the funds
returned.
Attorney’s Fees
Elizabeth’s request for attorney’s fees is denied. The
sources that she cites in support of her entitlement to fees refer to writs of
attachment and possession, which are distinct from a writ of execution.
Moreover, the Court declines to find that Collin’s conduct was made in bad
faith and an abuse of process.
CONCLUSION
Sierra Elizabeth's Motion for Order Releasing Levy of Bank Accounts of
Non-Party Sierra Elizabeth and Quashing Writ of Execution and Levy is granted.