Judge: Jon R. Takasugi, Case: BC669038, Date: 2024-11-25 Tentative Ruling

Case Number: BC669038    Hearing Date: November 25, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s claim of exemption is GRANTED.

On 11/4/2015, Plaintiff Cynthia Lopez filed suit against Kenneth Lopez. Plaintiff’s first amended complaint (FAC) alleges causes of action for: (1) defamation-libel; (2) defamation-slander; (3) intentional infliction of emotional distress; (4) negligent infliction of emotional distress; (5) malicious prosecution; (6) abuse of process; and (7) injunctive relief.

            On 8/5/2024, Defendant noticed a hearing for a claim of exemption.

Discussion  

            Defendant filed a claim of exemption, claiming a Wells Fargo account and two investment accounts are exempt from levy.

            As for the Wells Fargo Account, Defendant submitted documentation to show that the Wells Fargo Bank Account at issue had, and has, less than $2,170 in it. (Lopez Decl., ¶ 2, Exh. D). As such, it is exempt from levy under CCP Section 704.220(a), and the California Department of Social Services’ determination that, between July 1, 2024, and June 30, 2024, the exempt amount in Region 1 for a family of 4 is $2,170. (Walton Decl. ¶ 2, Exh. A).

            As for the Retirement Accounts, CCP section 704 provides in relevant part:

(a)   As used in this section, “private retirement plan” means:

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(3) Self-employed retirement plans and individual retirement annuities or accounts provided for in the Internal Revenue Code of 1986, as amended, including individual retirement accounts qualified under Section 408 or 408A of that code, to the extent the amounts held in the plans, annuities, or accounts do not exceed the maximum amounts exempt from federal income taxation under that code.

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(e) Notwithstanding subdivisions (b) and (d), except as provided in subdivision (f), the amounts described in paragraph (3) of subdivision (a) are exempt only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires. In determining the amount to be exempt under this subdivision, the court shall allow the judgment debtor such additional amount as is necessary to pay any federal and state income taxes payable as a result of the applying of an amount described in paragraph (3) of subdivision (a) to the satisfaction of the money judgment.

(f) Where the amounts described in paragraph (3) of subdivision (a) are payable periodically, the amount of the periodic payment that may be applied to the satisfaction of a money judgment is the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law). To the extent a lump-sum distribution from an individual retirement account is treated differently from a periodic distribution under this subdivision, any lump-sum distribution from an account qualified under Section 408A of the Internal Revenue Code shall be treated the same as a lump-sum distribution from an account qualified under Section 408 of the Internal Revenue Code for purposes of determining whether any of that payment may be applied to the satisfaction of a money judgment.

            Here, Defendant submitted evidence that the two accounts are retirement accounts: one is a traditional IRA, the other is a SEP-IRA. As such, this Court cannot order the levy upon any assets of that account unless they exceed:

(1) the amount “necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires.” (CCP. § 704.115(e)); less

(2) State and Federal income taxes due on the retirement amounts. (Code Civ. Proc. § 704.115(e)).

            Here, as of 11/12/2024, the balance in Mr. Lopez’ SEP IRA and Traditional IRA Fidelity accounts is $420,523.45. (Lopez Decl. ¶ 3, Exh. E)

Mr. Lopez is currently 55 years old. (Lopez Decl. ¶ 4). He lives with his parents and can live there without paying rent—although he tries to help out with household expenses when able, something he states he has not been able to do recently because of the downturn in property valuation work. (Lopez Decl. ¶ 4). Mr. Lopez’ projected life span, by the Social Security Administration, at age 65, is 16.95 more years after he attains age 65. (Walton Decl. ¶ 3, Exh. B). Thus, if Mr. Lopez retires at age 65, he will need to provide for himself and his wife for another 17 years. His average monthly expenses for the last three months have been $2,587—without having paid any rent, because he is living with his parents. (Lopez Decl. ¶ 5-8, Exh. F-I; Walton Decl. ¶ 4, Exh. C). Multiplying Mr. Lopez’ projected life expectancy of 17 years by 12 months yields 204 months he is projected to survive past age 65. (Walton Decl. ¶ 5). Multiplying 204 months by California’s absolute minimum standard for having a month’s worth of expenses in the bank account of $2,170 equates to $442,680. (Walton Decl. 5)

            After review, the Court finds insufficient evidence to conclude that the amount in Mr. Lopez’ Retirement Accounts were overcontributed to or that they exceed the amount necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor. (CCP § 704.115(e)).)

Based on the foregoing, Defendant’s claim of exemption is granted.

It is so ordered.

Dated:  December    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.