Judge James C. Chalfant, Case Number: 23STCV09801, Date: 2023-08-15 Tentative Ruling

Pacific Western Bank v. Norman Kravetz et al, 23STCV09801

Tentative decision on motion to determine claim of exemption: denied

Defendants Norman J. Kravetz (“Norman”) and Glenda J. Kravetz (“Glenda”) seek exemptions to the attachment order granted to Plaintiff Pacific Western Bank (“Bank”).

The court has read and considered the moving papers and opposition (no reply was filed) and renders the following tentative decision.

Plaintiff Bank filed the Complaint against Norman, Glenda, E&O Asset Holdings, LLC, (“E&O”); Lone Oak Fund, LLC (“Lone Oak”), and Qualfax, Inc. (“Qualfax”) on May 2, 2023. The Complaint alleges causes of action for (1) breach of promissory note, (2) conspiracy to fraudulently conceal assets, (3) aiding and abetting fraudulent concealment of assets, (4) voidable transfer under Civil Code sections 3439 et seq., and (5) declaratory relief. The Complaint alleges in pertinent part as follows.

On January 24, 2022, Bank and Norman entered into a Business Loan Agreement (“BLA”) by which Bank advanced monies to Norman from time to time that totaled $7,845,000 (“Loan”). Norman agreed to use the Loan solely for his business operations. Norman also agreed to maintain a Minimum Liquidity of $6,000,000. Norman executed a Note for the $7,845,000 Loan and provided Bank with a Disbursement Request and Authorization (“DRA”) that affirmed that the Loan’s primary purpose was for business.

On March 24, 2023, Norman defaulted on the BLA and Note for failure to make the $165,348.66 payment due. Bank exercised its right under the BLA and Note to accelerate all amounts due thereunder.

On February 8, 1991, Norman and Glenda acquired title via grant deed to property located at 21701 Erwin Street, Woodland Hills, California 91367 (“Erwin Property”). On March 21, 1994, they acquired any remaining interest and title to the Erwin Property pursuant to a quit claim deed.

On December 1, 2020, in an action filed by Citibank, N.A. (“Citybank”), the court granted summary judgment against Norman and Glenda. The couple then executed a grant deed for the Erwin Property to E&O. Although this grant deed was dated January 7, 2020, Norman and Glenda signed and notarized it on December 7, 2020, and had it recorded on December 15, 2020.

Bank has since obtained a Policy of Insurance of Record Title from California from Chicago Title Insurance Company for the Erwin Property. The title insurance policy shows deeds of trust (“DOT”) recorded against the Erwin Property in favor of Lone Oak and Qualfax on June 10, 2022.

For breach of the Note, Bank seeks $6,699,328.22 in unpaid principal, $56,804.72 in accrued unpaid interest, additional accruing unpaid interest at the default rate, late charges, and all related fees and costs, including attorney’s fees. Bank also seeks damages from Norman, Glenda, and E&O for conspiracy to fraudulently conceal assets and for aiding and abetting fraudulent concealment of assets. Bank further requests that the court void the December 2020 Grant Deed and issue a temporary restraining order enjoining Norman, Glenda, and E&O from disposing of or transferring the Erwin Property.

On May 10, 2023, Bank served Glenda and Norman with the Complaint and Summons by substitute service, effective May 20, 2023.

On May 16, 2023, Bank served Qualfax with the Complaint and Summons by substitute service, effective May 26, 2023.

On May 17, 2023, Bank served Lone Oak with the Complaint and Summons by substitute service, effective May 27, 2023.

On June 14, 2023, the court denied Bank’s ex parte application for a right to attach order against Norman for $6,855,804.67.

On August 15, 2023, the court granted Bank’s application for a right to attach order against Norman in the amount of $6,852,804.67. The court denied Norman’s claims for a homestead exemption and an exemption for amounts necessary to support his family.

Attachment is a prejudgment remedy providing for the seizure of one or more of the defendant’s assets to aid in the collection of a money demand pending the outcome of the trial of the action. See Whitehouse v. Six Corporation, (1995) 40 Cal.App.4th 527, 533. In 1972, and in a 1977 comprehensive revision, the Legislature enacted attachment legislation (CCP §481.010 et seq.) that meets the due process requirements set forth in Randone v. Appellate Department, (1971) 5 Cal.3d 536. See Western Steel & Ship Repair v. RMI, (1986) 176 Cal.App.3d 1108, 1115. As the attachment statutes are purely the creation of the Legislature, they are strictly construed. Vershbow v. Reiner, (1991) 231 Cal.App.3d 879, 882.

The property exempt from attachment consists of (a) all property exempt from enforcement of a money judgment,[1] (b) property which is necessary for the support of a defendant who is a natural person or the family of such defendant supported in whole or in part by the defendant, (c) “earnings” as defined by CCP section 706.011, and (d) all property not subject to attachment pursuant to CCP section 487.010. CCP §487.020.

If the defendant claims that any personal property described in the application is exempt from attachment, the defendant may include that exemption claim in the notice of opposition to the right to attach order. CCP §484.060(a). Alternatively, the defendant may file and serve a separate claim of exemption for the personal property. CCP §484.070(b). If the defendant does do either, the claim of exemption will be barred in the absence of a showing of a change in circumstances occurring after the expiration of the time for claiming exemptions. CCP §484.070(a); Bank of America v. Salinas Nissan, Inc. (“Bank of America”) (1989) 207 Cal.App.3d 260, 268 (plaintiff’s failure to oppose defendant’s exemption claim conceded its propriety). This waiver applies only to personal property. Thus, a homestead exemption for a dwelling is not waived by failing to make a claim for exemption. Martom v. Aboyan, (1983) 148 Cal.App.3d 826, 831.

The defendant may obtain a determination at the hearing whether real or personal property not described in the application, or real property described in the application, is exempt from attachment by including an exemption claim for such property in the notice of opposition/separate claim of exemption. The defendant’s failure to claim such property as exempt does not preclude the defendant from raising the issue at a later time. CCP §484.070(b). The claim of exemption shall (1) describe the property claimed to be exempt, and (2) specify the statute section supporting the claim. CCP §484.070(c). The claim of exemption shall be accompanied by an affidavit supporting any factual issues raised by the claim and points and authorities supporting any legal issues raised. CCP §484.070(d). The defendant must file and serve the claim of exemption and supporting papers not less than five court days before the date set for the hearing. CCP §484.070(e).

A defendant claiming an exemption as the result of a change in circumstances after (1) denial of a claim of exemption or (2) expiration of the time for claiming the exemption earlier in the action shall follow the procedure set forth in CCP section 703.510 et seq. CCP §482.100. A claimant seeking after levy to file a claim of exemption with the levying officer which includes the following information: (1) the name of the claimant and the mailing address where service of a notice of opposition to the claim may be made upon the claimant; (2) the name and last known address of the judgment debtor if the claimant is not the judgment debtor; (3) a description of the property claimed to be exempt; (4) a financial statement if required by Section 703.530; (5) a citation of the provision of this chapter or other statute upon which the claim is based; and (6) a statement of the facts necessary to support the claim. CCP §703.520(a), (b).

If the plaintiff opposes the claim of exemption, the plaintiff shall file and serve a notice of opposition to the claim of exemption, accompanied by an affidavit and memorandum of points and authorities on any legal issues, not less than two days before the date set for the hearing. If the plaintiff does not file and serve a notice of opposition, no writ of attachment shall be issued as to the property claimed to be exempt. Bank of America, supra, 207 Cal.App.3d at 270 (plaintiff’s failure to oppose exemption claim conceded its propriety). If the defendant claims an exemption to all the property described in the plaintiff’s application and the plaintiff does not file and serve a notice of opposition, no hearing shall be held, no right to attach order or writ of attachment shall issue, and any temporary protective order previously issued shall immediately expire. CCP §484.070(f).

If the plaintiff files and serves a notice of opposition to the claim, the defendant has the burden of proving that the property is exempt from attachment. CCP §484.070(g).

On August 15, 2023, two weeks before this motion, this court granted an application for a right to attach order against two real properties and all money that Norman and Glenda own. Norman Decl., ¶3; Genga Decl., ¶3. Although the court denied all requested exemptions, it stated that it did not believe Norman had waived the right to apply for them and could do so in a subsequent motion complying with the requirements for doing so. Genga Decl., ¶3.

Although Norman and Glenda have three grown children, Norman does not financially support them. Norman Decl., ¶4.

Bank has begun serving the writs of attachment on financial institutions where Norman has funds on deposit. Norman Decl., ¶5, Ex. A. $87,000 out of $104,000 in 12 accounts has become unavailable, leaving only $17,000. Norman Decl., ¶5, Ex. A. Four automatic debits from these accounts, including payments on a $500,000 line of credit with Bank of America, total $121,000 per month. Norman Decl., ¶6, Ex. A. The closing balance for some of these accounts is now $1,000 or less. Norman Decl., ¶6, Ex. A.

The account ending in 3632 is a trust account for one of Norman’s children, and for which Norman is just a custodian. Norman Decl., ¶7, Ex. A. Bank has levied all $12,060.42 therein. Norman Decl., ¶7, Ex. A.

Having substantial assets does not mean having abundant available cash, especially as expenses are commensurate with asset value. Norman Decl., ¶9. Norman has the funds needed to pay of any final judgment against him, but needs those funds in the interim. Norman Decl., ¶9.

Norman and his wife Glenda receive $4,106 and $1,419 in monthly Social Security payments, respectively. Norman Decl., ¶11, Ex. B, ln. 18-19, Ex. C. An investment account pays an average of $1,815 per month. Norman Decl., ¶12, Ex. B, ln. 20, Ex. D. Beyond that, Glenda has no income of her own. Norman Decl., ¶13.

Most family income is from shares in profits from companies that either Glenda or Norman owns. Norman Decl., ¶13, Ex. B, ln. 7-13. Last year’s distributions totaled $2,847,000, or about $245,000 per month. Norman Decl., ¶13, Ex. E. The source for these distributions is 14 commercial properties, each with an estimated value in the millions. Norman Decl., ¶14, Ex. B, ln. 31-44.

Norman owns over 50% of Equity Orchestration, the parent of a group of companies. Norman Decl., ¶15. Independent appraisal of its patents value them at $365 million. Norman Decl., ¶15, Ex. F. Once the company goes public or is sold, Norman estimates that he will receive $132 million in earnings. Norman Decl., ¶15, Exs. G-H.

Norman estimates his primary home in Tarzana (“Tarzana Property”) is worth $12.5 million, while his vacation home in Lake Arrowhead (“Arrowhead Property”) is worth $3 million. Norman Decl., ¶16, Ex. B, ln. 42-43. Norman sometimes has business associates stay at the Arrowhead Property. Norman Decl., ¶16. Norman and Glenda co-own E&O, which owns commercial property at Erwin Street and Owensmouth Avenue in the Woodland Hills area (“E&O Property”). Norman Decl., ¶17. This commercial property almost sold for $14.375 million in November 2022 and is now likely valued at $12 million. Norman Decl., ¶17.

Two loans on the Tarzana Property have a cumulative outstanding balance of $8.1 million. Norman Decl., ¶20, Ex. B, ln. 53-54, Ex. I. Norman must make monthly payments of $9,858 and $34,500. Norman Decl., ¶20, Ex. I. He estimates the value of the Tarzana Property at $12.5 million. Norman Decl., ¶20, Ex. B ln. 42, Ex. I.

The Arrowhead Property has an outstanding mortgage of $2.1 million and a monthly payment of $8,495. Norman Decl., ¶21, Ex. B ln. 63, Ex. J. The E&O Property has a monthly mortgage payment of $73,146. Norman Decl., ¶22, Ex. B ln. 83-84, Ex. K. That amount will increase to $160,000 in October 2023 if Norman cannot renegotiate the loan. Norman Decl., ¶22.

The monthly mortgage obligations on all the Properties total $125,999. Norman Decl., ¶23. Failure to pay these mortgages will result in foreclosure. Norman Decl., ¶23.

Each loan for the three properties requires Norman to carry insurance and keep current on taxes. Norman Decl., ¶24. The Tarzana Property incurs $4,159 in taxes and $5,612 in insurance per month. Norman Decl., ¶25, Exs. B, ln. 58-59, Ex. L. The Arrowhead Property incurs $1,884 in taxes and $2,572 in insurance per month. Norman Decl., ¶26, Exs. B, ln. 66-67, Ex. M. The E&O Property incurs $3,307 in taxes and $227 in insurance per month. Norman Decl., ¶27, Exs. B, ln. 87-88, Ex. N. Taxes and insurance total $17,761 per month. Norman Decl., ¶28.

Utilities average $9,084 per month for the Tarzana Property, $3,284 for the Arrowhead Property, and $523 for the E&O Property. Norman Decl., ¶30, Ex. B, ln. 56, 64, 86, Exs. O-Q. This totals $12,891 per month. Norman Decl., ¶30.

The Tarzana Property requires substantial maintenance and repair. Norman Decl., ¶31. Norman pays two full-time housekeepers and gardeners. Norman Decl., ¶31. A large oak tree recently fell on the property and took days to clear and repair the damage. Norman Decl., ¶31. Before that, storms had required costly plumbing repair. Norman Decl., ¶31. Norman had to pay these expenses to keep living in the house. Norman Decl., ¶31. Maintenance and repair costs of the Tarzana Property average $11,057 per month. Norman Decl., ¶31, Ex. B, ln. 55, 57, Ex. R.

The same is true for the Arrowhead and E&O Properties to a lesser extent. Norman Decl., ¶32. Maintenance and operating costs average $1,920 per month for the Arrowhead Property and $1,928 per month for the E&O Property. Norman Decl., ¶33, Ex. B, ln. 65, 85, Exs. S-T.

Although Norman’s cars are fully paid off, related expenses for gas and insurance total $1,239 per month. Norman Decl., ¶34, Ex. B, ln. 50.

Life insurance premiums total about $49,000 per year, or $4,084 per month. Norman Decl., ¶35, Ex. B, ln. 72, Ex. U.

Medical expenses include $1,504 per month in medical insurance premiums (Norman Decl., ¶36, Ex. B, ln. 74), $1,076 in uncovered medical and dental costs (Norman Decl., ¶36, Ex. B, ln. 73), and $1,920 a month for Glenda’s brother for kidney dialysis and related care (Norman Decl., ¶36, Ex. B ln. 76). This totals $4,500 a month. Norman Decl., ¶36.

Basic necessities of groceries, clothing, and some travel and entertainment total $23,149 per month. Norman Decl., ¶37, Ex. B ln. 75, Ex. V.

The family’s financial situation is complex and Norman employs accountants who charge an average of $22,091 per month. Norman Decl., ¶38, Ex. B ln. 79, Ex. W. From August 2023 thereafter, attorney’s fees have added $35,000 per month, or a little under 60 hours a month at $600 per month. Norman Decl., ¶38, Ex. B ln. 79; Genga Decl., ¶5.

Actual and estimated expenditures in 2023 total $2,856,546 per year. Norman Decl., Ex. B.

In opposition to the application for a right to attach order, Norman included evidence that he had liquid assets of about $4.1 million as of June 30, 2022. Goldflam Decl., ¶4, Ex. 3 (Norman Attachment Decl., Ex. N). Various loan agreements required him to maintain liquid assets of between $2 million and $5 million. Norman Attachment Decl., Exs. KK, NN.

Norman’s original ledger in support of his requests for exemptions included $15,000 a month deposited into Glenda’s account, dues to country clubs and resorts, and season tickets to Rams games. Norman Attachment Decl., ¶24, Ex. OO.

When this court granted the application for a right to attach order, the list of attachable property included Norman’s interest in multiple parcels of real property, any securities, any stocks, and any bonds. Goldflam Decl., ¶3, Ex. 2. Bank also sought to attach any interest in money on premises where a trade or business is conducted, plus money in excess of $1,000 located elsewhere or in a deposit account. Goldflam Decl., ¶3, Ex. 2.

The court denied all requests for exemptions. Goldflam Decl., ¶2, Ex. 1 (Order Notice Exs 1-2). The adopted tentative held that Norman could renew the claim for a homestead exemption, but it did not say the same for amounts necessary to support a family. Order Notice Ex. 1; Goldflam Decl., ¶3, Ex. 2.

Norman and Glenda [2] apply for various exemptions to the previously issued right to attach order, including for vehicles, life insurance, amounts necessary to support his family, and amounts held only as a custodian of a trust account for one of his children.

A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law. CCP §1008(b).¿ The moving party must present an attorney declaration stating when the party previously appeared, who the judge was, how the judge ruled, and what new or different facts, circumstances, or law are claimed to be shown. §1008(b). The party must also provide a satisfactory explanation for failing to produce such evidence in the first application. Kalivas v. Barry Controls Corp., (1996), 49 Cal.App.4th 1152, 1160-61. The requirement of satisfactory explanation for failing to provide the evidence earlier can only be described as a strict requirement of diligence. Garcia v. Hejmadi, (“Garcia”) (1997), 58 Cal.App.4th 674, 690.

Norman admits that this motion seeks the same exemption relief as his opposition to the application for a right to attach order. Norman Decl., ¶3; Genga Decl., ¶3; Order Notice Exs 1-2. In this motion, Norman now provides substantial detail of his expenses. See generally Norman Decl., Ex. B.

Bank asserts that the motion fails because Norman’s alleged facts existed at the time of his previous opposition and Norman could have presented them. See Garcia, supra, 58 Cal.App.4th at 690. Opp. at 3.

Compliance with CCP section 1008(b) requires an attorney declaration that provides a satisfactory explanation for failing to provide the evidence earlier, which can only be described as a strict requirement of diligence. Garcia, supra, 58 Cal.App.4^th at 690. Norman provides evidence that the court stated at the August 15, 2023 hearing that, while it was denying all requested exemptions, it did not believe Norman had waived the right to apply for them and could do so in a subsequent motion. Genga Decl., ¶3. The court does not recall the hearing, and the statement attributed to it does not seem precisely like something the court would say. The court’s notes and its August 15, 2023 minute order do not reflect Norman’s position either. Nonetheless, Bank does not present any declaration contradicting Norman’s counsel and the court accepts Norman’s counsel’s declaration.

The court’s statement means that Norman can make a motion for exemptions as if it were an initial attempt to claim exemption without the constraints of CCP section 1008(b) and (e).

If a defendant fails to make a timely claim for exemption or makes the claim but fails to prove that the personal property is exempt, the defendant may not later claim the exemption except as provided in CCP section 482.100. CCP §484.070(a).

A defendant claiming an exemption as the result of a change in circumstances after (1) denial of a claim of exemption or (2) expiration of the time claiming the exemption earlier in the action shall follow the procedure set forth in CCP section 703.510 et seq. CCP §482.100. CCP section 703.520 requires the claimant seeking an exemption after levy to file a claim of exemption with the levying officer which includes the following information: (1) the name of the claimant and the mailing address where service of a notice of opposition to the claim may be made upon the claimant; (2) the name and last known address of the judgment debtor if the claimant is not the judgment debtor; (3) a description of the property claimed to be exempt; (4) a financial statement if required by Section 703.530; (5) a citation of the provision of this chapter or other statute upon which the claim is based; and (6) a statement of the facts necessary to support the claim. CCP §703.520(a), (b).

Bank again cites the court’s previous denial of exemptions based on property necessary for the support of the defendant and notes that the instant motion is not based on a change in circumstances. Opp. at 2-3; Order Notice Exs. 1-2. However, CCP section 484.070(a) has no bearing on an application considered as an initial attempt to show exemption.

The aggregate equity in motor vehicles is exempt up to $3,325. CCP §704.010(a).

Although Norman’s cars are owned without lease or financing, he cites $1,239 per month in car expenses like gas and insurance. Norman Decl., ¶34, Ex. B, ln. 50.

Bank responds that it does not seek to attach Norman’s vehicles. Opp. at 4. Bank misunderstands Norman’s request. He seeks to exempt transportation costs. The exemption applies only to the value of the vehicles, not the related expenses for their use. To the extent that Norman seeks to exempt transportation costs, those are a part of amounts necessary to for the support of the defendant’s family. See post.

Unmatured life insurance policies, including endowment and annuity policies, but not the loan value of such policies, are exempt without making a claim. CCP §704.100(a).

Norman’s life insurance premiums total about $49,000 per year, or $4,084 per month. Norman Decl., ¶35, Ex. B, ln. 72, Ex. U. Bank agrees not to attach the insurance policies. Opp. at 4. Again, Bank misunderstands Norman’s request. He seeks to exempt $49,000 per year in life insurance premium, not the policies themselves. CCP section 704.100(a) does not exempt premium payments. While the policies themselves are exempt, the requested exemption for payment of life insurance premium is denied.

All amounts held, controlled, or in process of distribution by a public entity derived from contributions by the public entity or by an officer or employee of the public entity for public retirement benefit purposes, and all rights and benefits accrued or accruing to any person under a public retirement system, are exempt without making a claim. CCP §704.110(b). All amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are also exempt. CCP §704.115(b).

Norman and his wife Glenda receive $4,106 and $1,419 in monthly Social Security payments, respectively. Mot. at 9; Norman Decl., ¶11, Ex. B, ln. 18-19, Ex. C. An exemption for these payments of $5,525 per month, or $66,300 per year ($5,525 x 12 = $66,300), is granted.

Property which is necessary for the support of a defendant who is a natural person or the family of such defendant supported in whole or in part by the defendant may be exempt. Code CCP §487.020(b). All property of the defendant is considered when determining the needs of the defendant, his spouse, and his dependents. CCP §703.115.

A claim seeking to exempt property to the extent necessary for the support of the defendant, defendant’s spouse, and defendant’s dependents shall include a financial statement. CCP §703.530(a). That financial statement shall include all of the following information: (1) the name of the spouse of the judgment debtor; (2) the name, age, and relationship of all persons dependent upon the judgment debtor or the spouse of the judgment debtor for support; (3) all sources and the amounts of earnings and other income of the judgment debtor and the spouse and dependents of the judgment debtor; (4) a list of the assets of the judgment debtor and the spouse and dependents of the judgment debtor and the value of such assets; and (5) all outstanding obligations of the judgment debtor and the spouse and dependents of the judgment debtor. CCP §703.530.

Norman claims necessary family support expenses totaling $268,524 per month. Opp. at 9-10. This includes (1) $9,858 + $34,500 = $44,358 for mortgage on the Tarzana Property (Norman Decl., ¶20, Ex. B, ln. 53-54); (2) $8,495 for mortgage on the Arrowhead Property (Norman Decl., ¶21, Ex. B ln. 63, Ex. J); (3) $73,146 for mortgage on the E&O Property (Norman Decl., ¶22, Ex. B ln. 83-84, Ex. K); (4) $4,159 in taxes and $5,612 in insurance for the Tarzana Property (Norman Decl., ¶25, Exs. B, ln. 58-59, Ex. L); (5) $1,884 in taxes and $2,572 in insurance for the Arrowhead Property (Norman Decl., ¶26, Exs. B, ln. 66-67, Ex. M); (6) $3,307 in taxes and $227 in insurance for the E&O Property (Norman Decl., ¶27, Exs. B, ln. 87-88, Ex. N); (7) $9,084 in utilities for the Tarzana Property (Norman Decl., ¶30, Ex. B, ln. 56); (8) $3,284 in utilities for the Arrowhead Property (Norman Decl., ¶30, Ex. B, ln. 64); (9) $523 in utilities for the E&O Property (Norman Decl., ¶30, Ex. B, ln. 86); (10) $17,962 in maintenance and repair costs of the Tarzana Property (Norman Decl., ¶31, Ex. B, ln. 55, 57); (11) $1,920 in maintenance and repair costs of the Arrowhead Property (Norman Decl., ¶31, Ex. B, ln. 65); (12) $1,928 in maintenance and repair costs of the E&O Property (Norman Decl., ¶31, Ex. B, ln. 85); (13) $1,239 in automobile expenses (Norman Decl., ¶34, Ex. B, ln. 50); (14) $4,084 in life insurance premiums (Norman Decl., ¶35, Ex. B, ln. 72, Ex. U); (15) $1,504 in medical insurance premiums (Norman Decl., ¶36, Ex. B, ln. 74); (16) $1,076 in uncovered medical and dental costs (Norman Decl., ¶36, Ex. B, ln. 73); (17) $1,920 for Glenda’s brother for kidney dialysis and related care (Norman Decl., ¶36, Ex. B ln. 76); (18) $23,149 for groceries, clothing, and some travel and entertainment (Norman Decl., ¶37, Ex. B ln. 75, Ex. V); and (19) $22,091 + $35,000 = $57,091 in accounting and attorney’s fees (Norman Decl., ¶38, Ex. B ln. 79, Ex. W). Opp. at 9-10.

The exemption is for property which is necessary for the support of a defendant or his family dependents, not property necessary to maintain the defendant’s existing lifestyle. Code CCP §487.020(b). Norman’s expenses for the mortgages and maintenance of his commercial property in Woodland Hills and his home in Lake Arrowhead are not necessary to support him and his family.[3]

The Tarzana Property is Norman’s primary residence. Norman Decl., ¶16, Ex. B, ln. 42. The reasonable expenses for maintenance and operation of his, or to prevent its foreclosure, are necessary. This includes monthly payments of (1) $44,358 in mortgage payments, (2) $4,159 in taxes and $5,612 in property insurance, and (3) $9,084 in utilities.

Norman also seeks $11,057 in monthly maintenance and repair costs for his home. Norman argues that these expenses are necessary because his home requires several full-time workers and other work has been necessary to keep his home in good repair from storm damage. App. at 7. The employment of full-time workers -- which Bank says are two maids (Opp. at 4) --- and the use outside maintenance workers are not necessary for Norman’s support.

Norman seeks exemption for monthly expenses of $1,239 in automobile gas and insurance expenses, $1,504 in medical insurance premiums, $1,076 in uncovered medical and dental costs, and $1,920 for Glenda’s brother for kidney dialysis and related care. Norman does not show that Glenda’s brother is a dependent and that expense is disallowed. The other expenses are necessary for his and his family’s support.

Norman groups groceries, clothing, travel, entertainment into a single category averaging $23,149 per month. Norman Decl., ¶37, Ex. B ln. 75, Ex. V. Travel and entertainment do not qualify as necessities. Because the ledger does not distinguish between them and acceptable necessities like food, the full $23,149 is disallowed.

Norman asserts that his finances are complicated and he needs $22,091 per month for his accountants. Kravetz Decl., ¶38, Ex. B ln. 79, Ex. W. The court disagrees. Payments to his accountants are not necessary for family support. However, Norman’s anticipated $35,000 per month in attorney’s fees for this case is exempt.

Norman requests that the court increase this by 10% to account for one-time expenses. Mot. at 9. There is no legal reason to provide a plug increase for necessary expenses and it is disallowed.

The court need not total Norman’s reasonable monthly support expenses because he has not shown that he has an inability to pay them. All property of the defendant is considered when determining the needs of the defendant, his spouse, and his dependents. CCP §703.115. As a result, the court must balance Norman’s income and liquid assets against his necessary monthly expenses. Norman admits that he received millions in distributions last year from 14 commercial properties. Norman Decl., ¶¶ 13-14, Ex. B, ln. 31-44, Ex. E.[4] Bank notes that Norman’s opposition to the application for a right to attach order provided evidence that he had liquid assets of about $4.1 million as of June 30, 2022. Goldflam Decl., ¶4, Ex. 3 (Norman Attachment Decl., Ex. N). Norman’s various loan agreements also require him to maintain liquid assets of between $2 million and $5 million. Norman Attachment Decl., Exs. KK, NN.

Norman has not shown that his income and liquid assets are insufficient to defray the reasonable expenses necessary to support him and his family. The exemption is denied.

Escrow or trust funds are not subject to enforcement of a money judgment arising out of any claim against the licensee or person acting as escrow agent, and in no instance shall such escrow or trust funds be considered or treated as an asset of the licensee or person performing the functions of an escrow agent. Financial Code §17410.

Among the levied funds are $12,060.42 from an account Norman claims he holds in trust for one of his children. Norman Decl., ¶7, Ex. A. As Bank notes, Norman provides no proof of this fact beyond his own declaration and his ledger entry stating that he is the account’s custodian for “MATT PK”. Opp. at 4-5; Norman Decl., Ex. A. The exemption is denied.

An $66,300 annual exemption for Social Security benefits is granted. The remaining exemption claims are denied.

[1] The property exempt from enforcement of a money judgment is listed in CCP section 704.010 et seq.

[2] For convenience, the court will refer to Norman and not both Norman and Glenda.

[3] Nor are his dues to country clubs and resorts or season tickets to Rams games. Opp. at 4; Norman Attachment Decl., ¶24, Ex. OO. Norman excludes these expenses in this motion. Norman Decl., ¶39.

[4] He also owns over 50% of a company with a $365 million patent portfolio, but his shares are not liquid. Norman Decl., ¶15, Ex. F.