Department 58

Hearing Date: January 26, 2023

Case Name: Citizens Business Bank v. 30Sixty Advertising & Design, Inc., et al.

Case No.: 20STCV34322

Matter: Application for Order for Sale of Dwelling

Moving Party: Judgment Creditor Citizens Business Bank

Responding Party: Unopposed

Tentative Ruling: The Application for Order for Sale of Dwelling is granted.

Background and procedural history

On September 8, 2020, Citizens Business Bank (Plaintiff or Judgment Creditor) sued Defendants 30Sixty Advertising & Design, Inc., Paer Larsson, and David Fuscellaro for breach of promissory note, breach of commercial guaranties, money lent, account stated, fair valuation, claim and delivery, conversion, appointment of receiver, and injunctive relief. Plaintiff loaned money to Defendants who allegedly failed to pay back $261,666.31.

On March 9, 2022, this Court entered a stipulated judgment in favor of Plaintiff against Defendant David Fuscellaro (Judgment Debtor) for $186,312.83. The Judgment Debtor failed to pay. As of December 9, 2022, the outstanding amount is $206,852.20 because of accrued interest.

Plaintiff now files an Application for Order of Sale of Dwelling. No opposition was filed.

Legal Standard

“[A] dwelling may not be sold to enforce a money judgment except pursuant to a court order for sale obtained under this article and the dwelling exemption shall be determined under this article.” (Code Civ. Proc., § 704.740, subd. (a).) “The ‘article’ referred to is part 2, title 9, division 2, chapter 4, article 4, ‘Homestead Exemption,’ sections 704.710 through 704.850.” (Wells Fargo Financial Leasing, Inc. v. D & M Cabinets¿(2009) 177 Cal.App.4th 59, 67.)

“Section 704.740 is part of the homestead laws. ‘Homestead laws are designed to protect the sanctity of the family home against a loss caused by a forced sale by creditors .... The homestead exemption ensures that insolvent debtors and their families are not rendered homeless by virtue of an involuntary sale of the residential property they occupy. Thus, the homestead law is not designed to protect creditors .... This strong public policy requires courts to adopt a liberal construction of the law and facts to promote the¿beneficial purposes of the homestead legislation to benefit the debtor [and his family].’” (Id. at pp. 67–68.)

Discussion

Timeliness of Application

Code of Civil Procedure section 704.750, subdivision (a) states:

Promptly after a dwelling is levied upon (other than a dwelling described in subdivision (b) of Section 704.740), the levying officer shall serve notice on the judgment creditor that the levy has been made and that the property will be released unless the judgment creditor complies with the requirements of this section. Service shall be made personally or by mail. Within 20 days after service of the notice, the judgment creditor shall apply to the court for an order for sale of the dwelling and shall file a copy of the application with the levying officer. If the judgment creditor does not file the copy of the application for an order for sale of the dwelling within the allowed time, the levying officer shall release the dwelling.

Here, the “Notice to Creditor of Levy on Dwelling” from the County of Los Angeles Sheriff’s Department was served by mail on November 18, 2022. (App., Ex. 8.) As this Application was filed on December 12, 2022, it was timely under the additional five day service by mail rule in section 684.120, subdivision (b).

Requirements of Application

Code of Civil Procedure section 704.760 requires the judgment creditor's application to contain the following:

(a) A statement whether or not the records of the county tax assessor indicate that there is a current homeowner's exemption or disabled veteran's exemption for the dwelling and the person or persons who claimed any such exemption.

(b) A statement, which may be based on information and belief, whether the dwelling is a homestead and the amount of the homestead exemption, if any, and a statement whether or not the records of the county recorder indicate that a homestead declaration under Article 5 (commencing with Section 704.910) that describes the dwelling has been recorded by the judgment debtor or the spouse of the judgment debtor.

(c) A statement of the amount of any liens or encumbrances on the dwelling, the name of each person having a lien or encumbrance on the dwelling, and the address of such person used by the county recorder for the return of the instrument creating such person's lien or encumbrance after recording.

Plaintiff’s counsel avers that the Property is a homestead, but that no homestead declaration or exemption was claimed by the Judgment Debtor as reflected in the Los Angeles County Recorder’s Office. (App., ¶ 8.)

Counsel also provides a statement of liens or encumbrances on the dwelling. (App., ¶¶ 9-10.) There is a lien for property taxes not yet due and payable for fiscal year 2022-2023 in favor of the Los Angeles County Treasurer and Tax Collector. There is also a Deed of Trust with Wells Fargo Bank, N.A. as the beneficiary in the principal amount of $1,050,000. As of November 30, the amount still owed under the Note was $1,079,133.78.[1] (Id. at ¶ 10, Exs. 3, 4.) A litigation guarantee is provided as Exhibit 6. (Id. at ¶ 11.)

An appraisal report by Charles B. Baker issued on August 15, 2022, values the dwelling at $2,050,000.00. (App., ¶ 14; Baker Decl., ¶ 2, Ex. 2.)

Therefore, Judgment Debtor has satisfied Code of Civil Procedure section 704.750 and Los Angeles County Local Rule 3.223.

Service Requirements

Code of Civil Procedure section 704.770 states:

(a) Upon the filing of the application by the judgment creditor, the court shall set a time and place for hearing and order the judgment debtor to show cause why an order for sale should not be made in accordance with the application. The time set for hearing shall be not later than 45 days after the application is filed or such later time as the court orders upon a showing of good cause.

(b) Not later than 30 days before the time set for hearing, the judgment creditor shall do both of the following:

(1) Serve on the judgment debtor a copy of the order to show cause, a copy of the application of the judgment creditor, and a copy of the notice of the hearing in the form prescribed by the Judicial Council. Service shall be made personally or by mail.

(2) Personally serve a copy of each document listed in paragraph (1) on an occupant of the dwelling or, if there is no occupant present at the time service is attempted, post a copy of each document in a conspicuous place at the dwelling.

Judgment Debtor has filed a proof of service via mail of the order to show cause, Application, and notice of the hearing on the Judgment Debtor. In addition, it has posted a copy of each document in a conspicuous place at the dwelling.

Conclusion

The Application for Order for Sale of Dwelling is granted.

[1] On January 23, 2023, Plaintiff’s counsel averred that the payoff is now $1,072.112.07 with a $94.57 daily rate of interest.