Judge: John J. Kralik, Case: EC062581, Date: 2024-02-02 Tentative Ruling
Case Number: EC062581 Hearing Date: February 2, 2024 Dept: NCB
North
Central District
|
catherine
gilmour smith, Plaintiff, v. brian
harrington, et al., Defendants. |
Case No.: EC062581 Hearing Date: February 2, 2024 [TENTATIVE] order RE: motion fOR an order determining claim of
exemption |
BACKGROUND
A.
Allegations and Relevant Background
In
this action Plaintiff Catherine Gilmour Smith (“Plaintiff”) alleges that
Defendant Brian Harrington (“Harrington”) is a “con man” who steals funds from
friends and associates and does not pay them back. Plaintiff alleges she believed that
Harrington was a rich, knowledgeable partner in Defendant Madison Financial,
based on his representations, when in fact he was an unlicensed
salesperson. Based on her belief in his
abilities, Plaintiff accepted Harrington’s offer to invest her savings of
approximately $400,000 to $500,000 through Madison financial. However, Harrington did not make the
investments and rather were used by Harrington, Defendant Claudia Fisher, and
Defendant Gary Ahlfeldt.
On February 4,
2016, Plaintiff filed the fourth amended complaint (“4AC”) against Defendants
for various causes of action for: (1) RICO violations; (2) fraud and deceit;
(3) conspiracy; (4) common count; (5) common count; (6) assault and battery;
(7) breach of contract; (8) unfair business practice; (9) fraud and deceit; and
(10) conspiracy. At the time trial
commenced, the remaining causes of action were the 2nd, 3rd,
4th, 5th, and 6th causes of action.
B.
Relevant Background
Trial
on the matter was held in May 2017, and the Court bifurcated trial on punitive
damages in October 2017. In the Court’s
Final Statement of Decision on Liability only, the Court awarded Plaintiff
$1,000,000.00 in compensatory damages.
In the Court’s Final Decision on the Punitive Damages issue, the Court
awarded Plaintiff punitive damages in the amount of $500,000.00 against Ahlfeldt
and $500,000.00 against Madison Financial.
On
May 13, 2021, Assignee of Record Creditors Adjustment Bureau, Inc.
(“Creditors”) filed a motion for an order determining claim of exemption,
arguing that Gary E. Ahlfeldt’s earnings claimed as exempt were not exempt. On June 4, 2021, the Court denied the motion
for claim of exemption as it was unclear as to if or how much money was being
held by the sheriff.
On
March 24, 2022, Creditors filed a Notice of Hearing on Claim of Exemption as to
Judgment Debtor Fidelity Investments account with a hearing date of April 22,
2022. Creditors opposed the claim of
exemption, arguing that Ahlfeldt provided insufficient proof to support funds
levied from Fidelity was exempt. On
March 28, 2022, Creditors filed a motion for an order determining claim of
exemption as to Fidelity and TD Ameritrade accounts set for April 22,
2022. On April 4, 2022, the Sheriff
filed 2 Memos to the Court Clerk stating that it was holding: (1) $35,816.41
and other: “FIDELITY INVESTMENTS, MORE LVEY [sic] & WAGE GARNISHMEN [sic]”;
and (2) $35,816.41 and other “TD AMERITRADEW [sic], INC. MORE LEVY & WAGE
GARNISHM [sic].” On April 11 and 12,
2022, Ahlfeldt filed oppositions briefs and requests for judicial notice. On April 22, 2022, the matter came for
hearing and the Court took the matter under submission. On May 18, 2022, the Court denied Ahlfeldt’s
claim of exemption and the levying officer was directed to release any and all
levied funds being held to Creditors for payment on the judgment. The Court signed the Order on Claim of
Exemption, finding that: (1) all the funds of Ahlfeldt’s TD Ameritrade SEP IRA
retirement account will be necessary to provide support of Ahlfeldt when he
retires, taking into account all resources that are likely to be available for
his support when he retires and (2) Ahlfeldt’s claim of exemption is granted
and the levying officer is directed to release to Ahlfeldt all levied funds
from Ahlfeldt’s TD Ameritrade SEP IRA retirement account.
C.
Motion on Calendar
On
November 21, 2023, Creditors filed a notice of hearing on claim of exemption,
seeking a determination on the claim of exemption of Ahlfeldt. The hearing was initially set for January 5,
2024. Creditors filed its motion papers
and its opposition to Ahlfeldt’s claim of exemption on November 21, 2023.
On December 12,
2023, the Court on its own motion continued the hearing to February 2,
2024.
On January 22,
2024, Ahlfeldt filed an opposition to the motion for order denying the claim of
exemption.
DISCUSSION
Creditors
moves for an order determining the claim of exemption claimed by Ahlfeldt. Creditors argues that after hearing evidence
relating to Ahlfeldt’s income, it was found that on average, Ahlfeldt earned approximately
$225,000 per year, which Ahlfeldt did not contest. On October 3, 203, Creditors sent to the
Orange County Sheriff’s office its bank levy instructing the OC Sheriff to
execute on all accounts held in the name of Ahlfeldt being held at Pacific
Premier Bank. (Frisccher Decl., ¶2, Ex.
1 [bank levy instructions and writ of Execution issued by the Court on
September 11, 2023].) On November 3,
2023, Creditors received Ahlfeldt’s claim of exemption from the OC Sheriff,
wherein Ahlfeldt claimed that all accounts levied except for Account No. 2907
in the amount of $158.30 and Account No. 5083 in the amount of $4.21, were
broker trust accounts and were exempt pursuant to Financial Code, § 17410 and
CCP § 695.030. (Id., ¶3, Ex. 2 [Claim
of Exemption and financial statements from OC Sheriff].) Creditors requests that Ahlfeldt’s claim of
exemption be denied in part as to the levied funds for: (1) Ahlfeldt’s
compensation fee of $1,614.85; (2) the funds levied from Account No. 2907 in
the amount of $158.30; and the funds levied from Account No. 5083 in the amount
of $4.21, for which Ahlfeldt is not claiming an exemption. Thus, Creditors seeks $1,777.36 to be turned
over.
In
opposition, Ahlfeldt states that he does not oppose the release to Creditors
the amount of $1,614.85 from the trust account levies, nor the $158.30 and
$4.21 unopposed levies, for a total of $1,777.36. Ahlfeldt requests that the Court issue an
order: (1) granting his claim of exemption as to the amount of $31,599.19 and
directing those funds to be released to him and (2) granting Creditor’s motion
as to $1,777.36 of the levied funds and ordering that the funds be turned over
to Creditors.
CONCLUSION AND
ORDER
Assignee of Record Creditors
Adjustment Bureau, Inc.’s motion for an order determining the claim of
exemption claimed by Judgment Debtor Gary E. Ahlfeldt is granted. The Court denies Ahlfeldt’s claim of
exemption with respect to the levied funds for: (1) Ahlfeldt’s compensation fee of $1,614.85; (2) the funds levied from
Account No. 2907 in the amount of $158.30; and the funds levied from Account
No. 5083 in the amount of $4.21, for which Ahlfeldt is not claiming an
exemption. As such, the Court orders that
$1,777.36 be turned over to Creditors.
The
remainder of Judgment
Debtor Gary E. Ahlfeldt’s claim of exemption is granted.
Note: The Court will be handling hearings
remotely on February 2, 2024. If you wish to be heard in person, please inform
the clerk and your matter will be continued to allow you to appear personally.
DATED: February 2, 2024 ___________________________
John
J. Kralik
Judge
of the Superior Court