Judge Holly J. Fujie, Case Number: 23STCP02162, Date: 2023-09-15 Tentative Ruling

On July 5, 2023, Petitioner filed an amended petition for an order for the sale of dwelling (the “Petition”). The Petition seeks an order for the sale of real property owned by Respondents located at 1721 West 150th Street, Units A, B, and D in Los Angeles County (the “Property”) on the ground that proceeds from the sale of the Property may be applied to satisfying a judgment (the “Judgment”) awarded in Petitioner’s favor against Respondents by the San Francisco County Superior Court.

On August 17, 2023, the Court continued the hearing to allow Respondents to file a supplemental opposition (the “Supplemental Opposition”) clarifying their arguments.

Petitioner’s objection to Respondents’ Exhibit 4 is SUSTAINED. Petitioner’s objection to the evidence offered in the Supplemental Opposition is SUSTAINED.

California Code of Civil Procedure (“CCP”) section 704.750, subdivision (a) provides:

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. (CCP § 704.750, subd. (a).)

Under CCP section 704.760, subdivision (b), if the dwelling is located in a county other than the county where the judgment was entered:

(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; and

(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. (CCP § 704.770.)

Under CCP section 704.760, an application for order of sale of dwelling 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; and

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. (CCP § 704.760.)

Local Rule 3.223(a) provides that an application for an order for sale of a dwelling must provide at the hearing competent evidence of the following:

(2) Litigation guarantee or title report that contains a legal description of the property, the names of the current owners, a list of all deeds of trust, abstracts of judgments, tax liens and other liens recorded against the property, whether a declaration of homestead has been recorded, whether a current homeowner's exemption or disabled veteran's exemption has been filed with the county assessor, and the persons claiming such exemption;

(3) The amount of any liens or encumbrances on the dwelling, and the names and addresses of the lienholders and when the judgment creditor's lien attached. The judgment creditor must ascertain the precise amounts of obligations secured by senior liens by making a written demand for beneficiary statements from senior lienholders pursuant to Civil Code section 2943. The judgment creditor may need to conduct an examination pursuant to Code of Civil Procedure sections 708.120 or 708.130 to determine the precise amounts of the junior liens, the daily rate of interest due on the senior and junior liens, and encumbrances of record; and

(4) The date of service on the judgment creditor of the levying officer's notice that the dwelling was levied upon.

Under CCP, section 704.780, subdivision (a)(1), 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. (CCP § 704.780, subd. (a)(1).)

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. (CCP § 704.780, subd. (b).)

On October 14, 2021, a default judgment (the “Judgment”) in the amount of $1,038,100.44 was entered in Petitioner’s favor against numerous defendants, including Respondents. (See Declaration of William Vollbrecht (“Vollbrecht Decl.”) ¶ 2, Exhibit A.) An abstract of judgment (the “Abstract”) was issued on October 20, 2021. (Vollbrecht Decl. ¶ 3.) The Abstract was recorded on October 22, 2021. (Id., Exhibit B.) A writ of execution (the “Writ”) was issued on April 4, 2023. (Vollbrecht Decl. ¶ 10, Exhibit D.) The Writ specifies that $708,646.14 of the Judgment remains due. (See id.)

The Petition complies with the requirements of CCP section 704.760. Respondents’ opposition (the “Opposition”) argues that selling the Property is impracticable because Respondents reside in Unit C (which is not a subject of the Petition), which is therefore subject to the homestead exemption. Notably, the grant deed (the “Deed”) describing the Property and transferring title to Respondents reflects that Respondents hold title to two contiguous parcels of land, Parcel Number 6103-021-010 (the parcel describing the Property where Units A, B, and D are located), and Parcel Number 6130-021-008, where Unit C is situated. (See Declaration of Maggie Jun Lei (“Lei Decl.”) ¶¶ 3-6, Exhibit 3.)[1] Respondents contend that ordering a sale of Units A, B, and D is impracticable because Unit C, which shares a water meter, electricity meter, gas meter, and driveway with Units A, B, and D, and is encumbered by the same mortgage, is indivisible from the remainder of the Property. (See Lei Decl. ¶¶ 8-14.)[2]

The Supplemental Opposition fails to present evidence that clarifies the status of the contiguous parcels that comprise the Property. Respondents have not provided evidence that demonstrates that the parcels have been combined. While the Supplemental Opposition contends that the parcels satisfy the criteria set forth under the Los Angeles Municipal Code for merging contiguous lots, there is no evidence that the parcels have in fact been legally merged.[3] Further, Respondents provide no evidence to support their speculation that installing utility meters for Unit C may cost hundreds of thousands of dollars. Nor does the Supplemental Opposition raise arguments that contradict Petitioner’s position that if the parcels were separated, an easement by necessity would be created to allow Respondents to use the common driveway to access Unit C.

In light of Respondents’ lack of evidence rebutting the law and evidence presented in the Petition, the Court GRANTS the Petition. At the time of the hearing, the Court will discuss Respondents’ request to have the Property reappraised with the Parties

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] The Property as described in the Petition refers to Parcel Number 6103-021-010.

[2] The Court observes that Petitioner contends that a Federal Bankruptcy Court determined that the Property is not subject to a homestead exemption. (See Vollbrecht Decl. ¶ 8, Exhibit C.)

[3] See Gov. Code § 66451.10; LAMC § 17.10.1.)