Judge Holly J. Fujie, Case Number: BC638735, Date: 2023-11-03 Tentative Ruling

The Court has considered Defendant’s Claim of Exemption and Plaintiff’s Notice of Opposition thereto.

On October 26, 2016, Plaintiff filed a complaint against Defendant Scott Schamber, also known as Scott A. Schamber, doing business as Scott Schamber’s Snack Shop alleging causes of action for: (1) breach of contract; (2) account stated; (3) money lent; (4) breach of contract; (5) account stated; and (6) money lent. The complaint arises from the alleged default on a business line of credit.

On January 10, 2017, Plaintiff filed a request for Entry of Default and default was entered against Defendant on such date. On March 7, 2017, the Court entered default judgment against Defendant in the amount of $64,320.40. On March 29, 2017, Plaintiff filed a Notice of Entry of Judgment with the Court. The Notice of Entry of Judgment was served on Defendant on March 28, 2017.

On August 4, 2023, the Court issued an Abstract of Judgment identifying Plaintiff as the judgment creditor and Defendant as the judgment debtor. The Abstract of Judgment indicates that the total amount of judgment entered or last renewed is in the amount of $64,320.40 and that the judgment was entered on March 7, 2017.

On August 17, 2023, Plaintiff filed and served a Memorandum of Costs after Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest which provides that the amount of judgment principal remaining due is $64,320.40. On August 18, 2023, Plaintiff filed a Writ of Execution (Money Judgment).

On October 10, 2023, Plaintiff filed and served a Notice of Hearing on Claim of Exemption, as well as a Notice of Opposition to Claim of Exemption. In opposition to Defendant’s Claim of Exemption, Plaintiff presents the declaration of its counsel, Yvonne Ramirez-Browning (“Ramirez-Browning”). Plaintiff did not file a memorandum of points and authorities in support of its Notice of Opposition to Claim of Exemption. Defendant seeks a Claim of Exemption as to his savings account at Chase Bank.

The notice of opposition to the claim of exemption shall be executed under oath and shall include both of the following: “(a) [a]n allegation either (1) that the property is not exempt under the provision of this chapter or other statute relied upon or (2) that the equity in the property claimed to be exempt is in excess of the amount provided in the applicable exemption” and “(b) [a] statement of the facts necessary to support the allegation.” (Code Civ. Proc. § 703.560.)

Initially, the Court will address the procedural compliance of Plaintiff’s Notice of Opposition. While Plaintiff failed to check a box in Paragraph 5 of the Notice of Opposition to indicate that either: (1) the property is not exempt under a provision or other statute relied upon; or (2) the equity in the property claimed to be exempt is in excess of the amount provided in the applicable exemption (See Notice of Opposition at ¶ 5), the declaration of Ramirez-Browning asserts that Defendant’s Chase bank account is not exempt pursuant to a homestead or funds from a personal injury case. (Ramirez-Browning Decl., ¶¶ 6, 12.) The declaration of Ramirez-Browning is referenced in the Notice of Opposition and is incorporated therein. Thus, the Court finds that Plaintiff has complied with Code Civ. Proc. § 703.560.

The claimant may make a claim of exemption by filing with the levying officer, either in person or by mail, a claim of exemption together with a copy of the claim. (Code Civ. Proc. § 703.520(a).) If the claimant is served by mail, the claim shall be made within 20 days after the date the notice of levy on the property claimed to be exempt is served on the judgment debtor. (Id.) Promptly after the filing of the claim of exemption, the levying officer must serve the judgment creditor with a copy of the Claim of Exemption and a Notice of Claim of Exemption pursuant to California Code of Civil Procedure, Section 703.540.

To oppose a claim of exemption, within 15 days after service of the notice of the claim of exemption, the judgment creditor must: (1) file with the court notice of opposition to the claim of exemption and a notice of motion for an order determining the claim of exemption; and (2) file a copy of the notice of opposition and a copy of the notice of motion with the levying officer. (Code Civ. Proc. § 703.550(a).) Upon the filing of the copies of the notice of opposition and notice of motion, the levying officer shall promptly file the claim of exemption with the court. (Id.) If copies of the notice of opposition and notice of motion are not filed with the levying officer within the time allowed, the levying officer shall immediately release the property to the extent it is claimed to be exempt. (Id.)

The claim of exemption and notice of opposition to the claim of exemption constitute the pleadings, subject to the power of the court to permit amendments in the interest of justice. (Code Civ. Proc. § 703.580(a).) At a hearing on a claim of exemption, the exemption claimant has the burden of proof. (Code Civ. Proc. § 703.580(b).) In meeting this burden, the one who claims the exemption must establish the right by evidence or facts; an affidavit which merely follows the language of the statute and states nothing more than conclusions of law is insufficient. (Bertozzi v. Swisher (1938) 27 Cal.App.2d 739, 743.) “The claim of exemption is deemed controverted by the notice of opposition to the claim of exemption and both shall be received in evidence. If no other evidence is offered, the court, if satisfied that sufficient facts are showing by the claim of exemption (including the financial statement if one is required) and the notice of opposition, may make its determination thereon. If not satisfied, the court shall order the hearing continued for the production of other evidence, oral or documentary.” (Code Civ. Proc. § 703.580(c).) At the conclusion of the hearing, the court shall determine by order whether or not the property is exempt in whole or in part. (Code Civ. Proc. § 703.580(d).)

If the court extends the time allowed for an act to be done under the procedure for claiming exemptions, written notice of the extension shall be filed with the levying officer and, unless notice is waived, shall be served promptly on the opposing party, and service shall be made personally or by mail. (Code Civ. Proc. § 703.590.) A hearing on a motion for claim of exemption shall be held no later than 30 days from the date the notice of motion was filed with the court unless continued by the court for good cause. (Code Civ. Proc. § 703.570(a).)

“If a homestead is sold under this division or is damaged or destroyed or is acquired for public use, the proceeds of the sale . . . are exempt in the amount of the homestead exemption provided in Section 704.730.” (Code Civ. Proc. § 704.720(b).) The proceeds are exempt for a period of six months after the time the proceeds are actually received by the judgment debtor. (Id.) The amount of a homestead exemption is the greater of: (1) the countywide median sale price of a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed six hundred thousand dollars ($600,000); or (2) three hundred thousand dollars ($300,000). (Code Civ. Proc. § 704.730(a)(1)-(2).)

Code Civ. Proc. § 704.140(a) provides that a cause of action for personal injury is exempt without making a claim. An award of damages or a settlement arising out of personal injury is exempt to the extent necessary for support of the judgment debtor and the spouse and dependents of the judgment debtor. (Code Civ. Proc. § 704.140(b).)

Initially, the Court finds that Defendant’s Claim of Exemption is procedurally compliant under Code Civ. Proc. § 703.520. The Claim of Exemption seeks to exempt Defendant’s Chase bank savings account on the grounds that the property claimed to be exempt are funds remaining from the sale of a homestead and funds from a personal injury case.[1] (Ramirez-Browning Decl., ¶ 5 and Exhibit 3 at p.1.) Defendant states that he “sold [his] homestead and the proceeds are partially that and funds received from a PI case for damages.” (Id.) Defendant declares that he requests an exemption of all the funds in his bank account and that he is disabled and needs the money to make upgrades to his house to make it more livable for his disabilities. (Id., Exhibit 3 at p.4.) Defendant states that 50 percent of the funds in his account belong to his wife. (Id.)

Defendant provides a Financial Statement to support his Claim of Exemption. (Ramirez Browning Decl., Exhibit 3 at pp. 2-3.) Defendant indicates that his total monthly income is $2,022.00, which are social security disability funds. (Id., Exhibit 3 at p.2.) Defendant states that his spouse, Maria Munoz Schamber, does not receive a monthly take-home income. (Id.) Defendant’s total monthly expenses are in the amount of $4,200. (Id., Exhibit 3 at p.3.) Defendant makes a monthly payment of $50.00 towards a credit card that has a total balance of $514.00. (Id.)

Defendant owns the following property: cash in the amount of $112.00 (Id., Exhibit 3 at p.2), a Chase savings account which is on levy with a balance of $64,412.40 (Id.), a Chase checking account with a balance of $313.00 (Id.), two cars with a collective value of $2,500.00 (Id.), real estate equity in the amount of $167,000.00 (Id.), and 20 year-old furniture worth $2,000.00 (Id.).

Plaintiff’s counsel declares that: (1) since the date of the judgment no payment has been received leaving the current judgment balance of $64,320.40 (Ramirez-Brown Decl., ¶ 3); (2) Defendant’s bank account was levied in September 2023 to attempt to recover the outstanding debt (Id., ¶ 5 and Exhibit 2); (3) as a result of the levy, Defendant submitted his Claim of Exemption (Id., ¶ 5 and Exhibit 3); (4) Defendant failed to provide any type of bank statements, proof of sale of homestead, court documents for personal injury cases, letters, or agreements to support his Claim of Exemption (Id., ¶ 6); (5) Defendant provides no supporting documents to substantiate expenses as stated in Sections 4 and 5 in Defendant’s Financial Statement (Id., ¶ 7); and (6) due to Defendant’s failure to provide proof of earnings and proof of expenses, it is impossible to determine a percentage of the levy that can be claimed for exemption (Id., ¶ 8).

The Court finds that while Defendant has provided a Financial Statement, Defendant has not provided any bank statements, proof of the amount of homestead proceeds and when such proceeds were obtained, or proof of damages awarded from the personal injury case. Defendant has not met his burden under Code Civ. Proc. § 703.580(b) and Bertozzi v. Swisher, supra, 27 Cal.App.2d 739, 743 to warrant an exemption. Besides the Claim of Exemption and the declaration in support thereof, the Court lacks a sufficient evidentiary basis to ascertain whether Defendant’s Chase bank savings account is exempt because it contains funds from the sale of a homestead, funds received from a personal injury case for damages, or is being utilized to make Defendant’s home more livable for his disabilities. Defendant has not met his burden in showing that the funds in his Chase bank savings account come within the scope of California Code of Civil Procedure, Sections 704.720, 704.730, or 704.140.

The Court therefore DENIES Defendant’s Claim of Exemption unless Defendant provides competent evidence at the hearing establishing Defendant’s Chase bank savings account to be exempt from the judgment in this action.

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.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] Defendant’s Claim of Exemption cites California Code of Civil Procedure, Sections 704.720, 704.730, and 704.140 as the basis for the claim that the funds in Defendant’s Chase bank savings account are exempt.