Judge: Daniel S. Murphy, Case: 19STCV01640, Date: 2024-11-15 Tentative Ruling

Case Number: 19STCV01640    Hearing Date: November 15, 2024    Dept: 32

BACKGROUND

            On January 22, 2019, Plaintiffs Antonio Leon and Blanca Leon filed this action against Defendants James Jaber, MD, Georgia Bode, MD, and Los Angeles Community Hospital, asserting causes of action for (1) medical malpractice and (2) loss of consortium. The First Amended Complaint was filed on May 8, 2019. Blanca Leon’s claims were dismissed, leaving Antonio Leon’s medical malpractice claim.

            The matter came on for trial between January 29, 2024 and February 9, 2024, after which the jury returned a verdict for Plaintiff against Defendant Bode. Judgment was entered on March 21, 2024 in the total amount of $12,478,222.95.    

            On August 8, 2024, Plaintiff levied Defendant’s deposit accounts at Citibank and Chase Bank. Citibank and Chase turned over $1,227,657.16 and $97,915.03 to the levying officer, respectively.

            On September 30, 2024, the Court granted Defendant’s claim of exemption as to the Citibank funds in the amount of $384,143.02.

            On October 14, 2024, Defendant filed the instant motion for reconsideration of the Court’s order. Plaintiff filed his opposition on November 1, 2024.    

LEGAL STANDARD

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc., § 1008(a).)

Additionally, “the trial court retains the inherent authority to change its decision at any time prior to the entry of judgment.” (Darling v. Kritt (1999) 75 Cal.App.4th 1148, 1156.) “[S]ection 1008 does not govern the court's ability, on its own motion, to reevaluate its own interim rulings.” (Ibid.) “[T]he only requirement of the court is that it exercise ‘due consideration’ before modifying, amending, or revoking its prior orders.” (Id. at p. 1157.)

DISCUSSION

Social security and pension benefits are exempt from levy. (Code Civ. Proc., §§ 704.080, 704.110.) However, “[t]he exemption claimant has the burden of tracing an exempt fund.” (Id., § 703.080(b).) “The tracing of exempt funds in a deposit account shall be by application of the lowest intermediate balance principle unless the exemption claimant or the judgment creditor shows that some other method of tracing would better serve the interests of justice and equity under the circumstances of the case.” (Id., § 703.080(b).)     

The additional bank records attached to Defendant’s motion do not demonstrate that the Citibank accounts consist solely of social security and pension funds. (See Bode Decl., Ex. A-I.) Defendant claims that she has shown the lowest intermediate balance as follows: “As the deposited benefits accumulated, they were transferred to savings, including account ending in 3084 and certificates of deposit. Enough money has been deposited into the Bodes’ Citibank accounts to fully exempt the levied funds.” (Mtn. 6:11-14.) Defendant then concludes that because the total Social Security and LACERA deposits ($1,251,747.01) exceeds the levied amount ($1,227,657.16), the levied funds must necessarily be exempt. That is not how the lowest intermediate balance rule operates.

Plaintiff’s forensic accountant avers that Defendant has not accurately applied the lowest intermediate balance principle and explains the faults in Defendant’s methodology. (See Orrico Decl.) In particular, the expert notes the following:

“Judgment Debtor simply considered the balances in the Citibank Accounts as of the levy date and did not apply the LIBP on a day-to-day basis and did not identify non-exempt source funds. Thus, Judgment Debtor did not correctly apply the LIBP in her analysis and therefore, her analysis cannot be relied upon to provide an accurate accounting of Exempt Funds under the LIBP.”

(Id., ¶ 18.)

“[F]or $778,542 of the $1,227,657 of total levied funds, no support was provided. As such, it cannot be assessed or determined whether the source funds were exempt or non-exempt, and to the extent the source funds were exempt, whether such funds were depleted or remain in the account. Thus, it is unclear how Judgment Debtor concluded that $778,542 of the levied funds are exempt and therefore, her analysis cannot be relied upon to provide an accurate accounting of exempt funds under the LIBP.”

(Id., ¶ 20.)

Because Defendant has failed to properly trace the funds, the Court has no basis to find that any amount is exempt beyond the $384,143.02 conceded by Plaintiff. Accordingly, there is no reason to amend the Court’s order on the Citibank accounts.  

CONCLUSION

            Defendant’s motion for reconsideration is DENIED.