Judge: Cherol J. Nellon, Case: 21STCV05598, Date: 2023-10-26 Tentative Ruling
Case Number: 21STCV05598 Hearing Date: April 9, 2024 Dept: 14
Sharp Remodeling v Brown
Case Background
This is an
action for breach of contract and foreclosure on mechanic’s lien. Plaintiff
alleges that it did work for which Defendant refuses to pay.
On February
11, 2021, Plaintiff filed its Complaint for (1) Breach of Contract; (2) Open
Book Account; (3) Account Stated; and (4) Foreclose Mechanic’s Lien against
Defendant Jacquelyn Brown (“Brown”) and DOES 1-10.
On February 22, 2021, Defendant Brown,
acting in pro per, filed her Answer.
On May 13,
2022, this court granted a motion to enforce a settlement agreement. On June
29, 2022, pursuant to this order, judgment was entered in favor of the
Plaintiff in the amount of $52,165.34. The judgment also awarded Plaintiff the
right to foreclose on its mechanic’s lien.
(1) OSC re:
Sale of Dwelling
On October
26, 2023, Plaintiff/Judgment Creditor moved this court for an order extending
the time to hear an OSC re: Sale of Dwelling. This court granted the motion and
set an OSC re: Sale of Dwelling for December 11, 2023. On that date, the court
continued the OSC to January 19, 2024. On that date, the court continued the
OSC to March 15, 2024.
Decision
The Order
to Show Cause re: Sale of Dwelling is CONTINUED to June 3, 2024.
Governing Statutes
Code of Civil Procedure
§ 704.740 provides in relevant part:
“(a) … the interest of a natural
person in a dwelling may not be sold under this division 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 of Civil Procedure
§ 704.750 provides in relevant part:
“(a) Promptly after a dwelling is
levied upon…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.
Code of Civil Procedure
§ 704.760 provides:
“The judgment creditor's
application shall be made under oath, shall describe the dwelling, and shall
contain all of 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.
(d) A statement that the judgment
is based on a consumer debt, as defined in subdivision (a) of Section 699.730,
or that the judgment is not based on a consumer debt, and if the judgment is
based on a consumer debt, whether the judgment is based on a consumer debt that
was secured by the debtor's principal place of residence at the time it was
incurred or a statement indicating which of the exemptions listed in
subdivision (b) of Section 699.730 are applicable. If the statement indicates
that paragraph (7) of subdivision (b) is applicable, the statement shall also
provide the dollar amount of the original judgment on which the lien is based.
If there is more than one basis, the statement shall indicate all bases that
are applicable.”
Code of Civil Procedure
§ 704.770 provides:
“(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.”
Code of Civil Procedure
§ 704.780 provides in relevant part:
“(a) The burden of proof at the
hearing is determined in the following manner:
(1) If the records of the county
tax assessor indicate that there is a current homeowner's exemption or disabled
veteran's exemption for the dwelling claimed by the judgment debtor or the
judgment debtor's spouse, the judgment creditor has the burden of proof that
the dwelling is not a homestead. If the records of the county tax assessor
indicate that there is not a current homeowner's exemption or disabled
veteran's exemption for the dwelling claimed by the judgment debtor or the
judgment debtor's spouse, the burden of proof that the dwelling is a homestead
is on the person who claims that the dwelling is a homestead.
(2) If the application states the
amount of the homestead exemption, the person claiming the homestead exemption
has the burden of proof that the amount of the exemption is other than the
amount stated in the application.
(b) The court shall determine
whether the dwelling is exempt. If the court determines that the dwelling is
exempt, the court shall determine the amount of the homestead exemption and the
fair market value of the dwelling. The court shall make an order for sale of
the dwelling subject to the homestead exemption, unless the court determines
that the sale of the dwelling would not be likely to produce a bid sufficient
to satisfy any part of the amount due on the judgment pursuant to Section
704.800. The order for sale of the dwelling subject to the homestead exemption
shall specify the amount of the proceeds of the sale that is to be distributed
to each person having a lien or encumbrance on the dwelling and shall include
the name and address of each such person. Subject to the provisions of this
article, the sale is governed by Article 6 (commencing with Section 701.510) of
Chapter 3. If the court determines that the dwelling is not exempt, the court
shall make an order for sale of the property in the manner provided in Article
6 (commencing with Section 701.510) of Chapter 3.”
Discussion
Plaintiff/Judgment
Creditor filed their application for an order for sale on August 24, 2023. On
October 26, 2023, Plaintiff/Judgment Creditor moved this court for an order
extending the time to hear an OSC re: Sale of Dwelling, pursuant to Section
704.770(a). This court granted the motion and set an OSC re: Sale of Dwelling
for December 11, 2023. That OSC has been twice continued and is now set on the
current date.
The
application contains all of the required elements under Section 704.760. It
states that the records of the county tax assessor indicate a homeowner’s
exemption recorded by the Judgment Debtor, that those same records contain no
recorded homestead declaration, that the only other lien on the property is a
recorded deed of trust securing a loan in the amount of $367,140.25, and a
statement that the judgment is not based on a consumer debt.
On March
15, 2024, Plaintiff/Judgment Creditor filed a proof of service indicating that Judgment Debtor received notice pursuant to
Section 704.770(b). The mandatory form prescribed by the Judicial Council is
Form EJ-180.
However,
also on March 15, 2024, Defendant/Judgment Debtor indicated that she had filed
for bankruptcy protection. The matter was temporarily put over to this date to
give opposing counsel time to verify the filing. Defendant/Judgment Debtor was
also instructed to file a Notice of Bankruptcy Stay with the clerk’s office in
this court. No such notice has yet been filed, and the court does not know
whether a bankruptcy proceeding is pending or not.
Conclusion
Because the
court is unclear as to whether there is a bankruptcy proceeding pending, the
court cannot order the sale of the building at this time. Therefore, the OSC
re: Sale of Dwelling is CONTINUED to June 3, 2024.
(2) Motion
for Specific Instructions
Plaintiff/Judgment
Creditor now moves this court for an order that the dwelling may be sold to a
bidder who offers less than 90% of the value of the property.
Decision
The motion
is DENIED, without prejudice.
Governing Statutes
Code of
Civil Procedure § 704.800 provides:
“(a) If no bid is received at a
sale of a homestead pursuant to a court order for sale that exceeds the amount
of the homestead exemption plus any additional amount necessary to satisfy all
liens and encumbrances on the property, including but not limited to any
attachment or judgment lien, the homestead shall not be sold and shall be
released and is not thereafter subject to a court order for sale upon
subsequent application by the same judgment creditor for a period of one year.
(b) If no bid is received at the
sale of a homestead pursuant to a court order for sale that is 90 percent or
more of the fair market value determined pursuant to Section 704.780, the
homestead shall not be sold unless the court, upon motion of the judgment
creditor, does one of the following:
(1) Grants permission to accept
the highest bid that exceeds the amount of the minimum bid required by
subdivision (a).
(2) Makes a new order for sale of
the homestead.”
Discussion
This motion
is not yet ripe. What Section 704.800 permits the court to do is either (1)
accept an actual bid that has been made and satisfied subdivision (a), or (2)
make a new order of sale which causes a complete renewal of the bidding
process. Section 704.800 does not permit the court to pre-emptively permit the
acceptance of bids which have not yet been made or presented. Should the sale
be ordered, and should there be no bids which meet the 90% threshold,
Plaintiff/Judgment Creditor may then move that this court accept the actual
next-best bid. The court will then rule on this motion with the advantage of
knowing the amount of the bid it is being asked to authorize, and any
circumstances of the bidding process which may justify making a second attempt
instead.
Conclusion
Because
this motion is premature, it is DENIED, without prejudice.