Judge: Layne H. Melzer, Case: 2018-00994978, Date: 2023-05-25 Tentative Ruling
Third Party Claimant Marilyn L. Williams
Application For a Hearing to Determine The Validity of Third
Party Marilyn L Williams' Third Party Claim or In the Alternative Theory of
Vehicle is Exemption
Third party Marilyn Williams seeks an order:
(1) finding that her third party claim to a 2019 Mercedes-Benz C43 AMG (the “vehicle”) levied upon by plaintiff and judgment creditor Sail Exit Partners, LLC is valid; or, alternatively
(2) finding the vehicle is exempt from judgment enforcement under Code Civ. Proc. § 720.260.
The third-party claim is denied. The Court will hear further argument on the exemption. The court considered the Williams’ supplemental declaration on reply. Plaintiff/Judgment Creditor’s request for judicial notice is denied as unnecessary. Citation to orders in the court file is sufficient. Plaintiff’s evidentiary objections are sustained as to nos. 3, 4, 6, 7, 8, 9; they are otherwise overruled.
Third Party Claim
The third-party claims procedure is summary in nature: there is no right to a jury trial, discovery, or findings of fact. (Civ. Proc. Code, §§ 710.400, 720.410; Whitehouse v. Six Corp. (1995) 40 Cal. App. 4th 527.)
Under the EJL, not later than 15 days after the third-party files its claim, the creditor can petition the court for a hearing to determine the validity of the third-party claim and the proper disposition of the property that is the subject of the claim. (CCP § 720.310.)
Pursuant to Commercial Credit Plan, Inc. v. Gomez (1969) 276 Cal.App.2d Supp. 831, “[t]he law is also clear that when 15 days have run from the filing of the third party claim and no petition for hearing has been filed, the trial court in which the suit was brought loses jurisdiction to hear the summary proceeding.” (Id. at 834).
Once the petition is filed, then the court holds a hearing “within 20 days after the filing of the petition unless continued by the court for good cause shown.” (CCP § 720.310.)
Subject to the power of the court to permit an amendment in the interest of justice the third-party claim constitutes the pleading of the third person. (Civ. Proc. Code, § 720.350, subd. (a).)
The Evidence Code applies in a hearing in a third-party claim. (Evid. Code, § 300). At a hearing on a third-party claim, the court in its discretion may exclude from evidence any writing a copy of which was not attached to the third-party claim. (Civ. Proc. Code, § 720.130, subd. (b); Civ. Proc. Code, § 720.230, subd. (b).)
At a hearing on the third-party claim, the third person has the burden of proof. (Civ. Proc. Code, § 720.360.)
Once a third party introduces evidence that it is entitled to personal property that has been levied upon by a writ of attachment, a writ of execution, a writ of sale, or a writ of possession, the burden shifts to the creditor to establish that its claim is superior. (Oxford Street Properties, LLC v. Rehabilitation Associates, LLC (2012) 206 Cal. App. 4th 296.)
Application
There is no dispute that Williams did not file her application for determination of the validity of her third party claim within 15 days of submitting her third party claim to the Sheriff. The claim was submitted on 3/15/23, but the application was not filed until 4/5/23. [Sonksen Decl., ¶ 10, Ex. 5; ROA ##596, 600.]
In response to the issue raised in Plaintiff’s opposition, Williams asserts she filed a timely “claim of exemption” on 3/15/23. [Reply (ROA #637), at 2:10-13.]
Regardless of whether the underlying third-party claim was timely submitted to the levying officer, C.C.P. §720.310 requires “either the creditor or the third person” to “petition the court for a hearing to determine the validity of the third-party claim and the proper disposition of the property that is the subject of the claim,” no later than 15 days after the third-party claim is filed with the levying officer.
Here, having conceded the third-party claim was filed with the levying officer on 3/15/23 and having conceded that third-party did not file an undertaking, Williams has conceded that the deadline for her application was 3/30/23. Williams did not file her application until six days later.
Based on all of the above, the court has lost jurisdiction to rule on the third-party claim.
Again, as noted above, pursuant to C.C.P. §720.310, “either the creditor or third person may petition the court for a hearing…” Third-Party cites no authority which excuses her from the obligation of C.C.P. §720.310 or which otherwise indicates that the circumstances herein avoid the loss of jurisdiction.
For these reasons, Williams’ application for a determination that her third party claim is valid is denied.
Exemption
In her reply brief, Williams asserts she filed a claim of exemption on 3/15/23. She appears to be treating her third party claims as a claim of exemption. No other document titled claim of exemption has been submitted.
The process of determining an exemption – or whether a levy may be made on certain property of the judgment debtor -- is begun with a claim of exemption. While there are some assets that are “exempt without making a claim, “in the absence of agreement by the creditor the property will not be released to the judgment debtor by the levying officer without a claim, so a claim generally is the first step in all exemption situations.” Ahart, Cal. Prac. Guide, Enforcing Judgments and Debts, § 6:868 (2012 Thomson Reuters).
To claim an exemption, the judgment debtor files an original and one copy of a claim of exemption with the levying officer. Code Civ. Proc. § 703.520(a). Generally, The claim must be filed within 15 days after personal service (20 days after mail service) on the judgment debtor of the notice of levy on exempt property. Code Civ. Proc. § 703.520(a).
The judgment debtor may use the Judicial Council Claim of Exemption form (EJ-160), but in any event the claim must include: (1) the name and mailing address where service of a notice of opposition may be made; (2) if the claimant is not the judgment debtor, the name and last known address of the judgment debtor; (3) a description of the property; (4) a citation to the exemption statute upon which the exemption claim is made; (5) a statement of the facts which support the exemption claim; (6) if necessary, a description of which property the exemption is claimed for and (7) if necessary (for certain types of property), a statement of the nature and amount of other property of the same type owned. Code Civ. Proc. § 703.520.
Here, William’s third party claim referred only to the Bank of America lien – not to Code Civ. Proc. §§ 704.010 and 704.060, which she now relies on to argue that the vehicle is exempt. Other than declaring she uses the vehicle for work, Williams did not provide facts supporting the exemption she now claims. Nor did she make a statement of other property of the same type owned. According to Plaintiff, Williams previously testified that she has two vehicles, though she testified they were leased rather than owned and that the second was one she got for her grandson. [Sonksen Decl., ¶ 7, Ex. 2 at 17:14-18:9.]
On reply, Williams submitted a further declaration to support her prior statement that she needs the vehicle for work and to support its value. [ROA #635.]
The statutes now relied by Williams are:
Code Civ. Proc. § 704.010
(a) Any combination of the following is exempt in the amount of seven thousand five hundred dollars ($7,500):
(1) The aggregate equity in motor vehicles. . . .
(c) For the purpose of determining the equity, the fair market value of a motor vehicle shall be determined by reference to used car price guides customarily used by California automobile dealers unless the motor vehicle is not listed in such price guides. . . .
Code Civ. Proc. § 704.010.
Code Civ. Proc. §704.060
Section 704.060 makes exempt certain tools and materials – up to a certain amount of equity – necessary to operate the judgment debtor’s business.
Tools, implements, instruments, materials, uniforms,
furnishings, books, equipment, one commercial motor vehicle, one
vessel, and other personal property are exempt to the extent that the
aggregate equity therein does not exceed: . . .
(1) Eight thousand seven hundred twenty-five dollars ($8,725), if reasonably necessary to and actually used by the judgment debtor in the exercise of the trade, business, or profession by which the judgment debtor earns a livelihood.
(2) Eight thousand seven hundred twenty-five dollars ($8,725),
if reasonably necessary to and actually used by the spouse of the judgment
debtor in the exercise of the trade, business, or profession by which the
spouse earns a livelihood.
Code Civ. Proc. § 704.060(a).
Based on these statutes, Williams claims a total exemption amount of $12,0515.00. She asserts that the estimated market value of the vehicle is approximately $36,000.00 and the existing lien by Bank of America for the principal balance of $34,655.15. Therefore, the vehicle has the approximate value of $1,344.85 of equity. [Application MPA at 5-7; Williams Dec. (ROA #600).]
Plaintiff attacks the admissibility of Williams evidence. First, as to value, Williams has not presented an information from a car price guide, though she provides the listing for a comparable vehicle.
Plaintiff also objects that Williams has two cars. But she denies having the use of another car. [Reply Williams Decl., ¶ 12.]
The Court will hear argument from counsel on the claim of exemption before ruling.