Judge Mark E. Windham, Case 17STLC02876 2023-03-07 Tentative Ruling

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Able Restoration, Inc. v. Long, et al.

ORDER TO SHOW CAUSE WHY ORDER FOR SALE OF DWELLING

Order to Show Cause why Order for Sale of Dwelling Should Not Issue is discharged. Judgment Creditor Able Restoration, Inc.’s Motion for Order for Sale of Dwelling is GRANTED.

Plaintiff Able Restoration, Inc. (“Judgment Creditor”) filed the instant action against Defendant Kevin Long (“Judgment Debtor”) on October 11, 2017. Following a bench trial, judgment was entered in Judgment Creditor’s favor on August 15, 2019. (Minute Order, 08/15/19, p. 5.) Judgment Creditor was further awarded attorney’s fees on March 4, 2020. (Minute Order, 03/02/20.) On December 28, 2022, Judgment Creditor filed an Application for (1) Order for Sale of Dwelling Further to Notice From The Sherriff’s Department; (2) Order to Specially Set Hearing on Claim of Exemption; and (3) Order to Show Cause Why Order For Sale of Dwelling Should Not Issue (the “Application”). On January 12, 2023, the Court granted Judgment Creditor’s ex parte application to advance the hearing date on the Application from April 5, 2023 to February 14, 2023. (Minute Order, 01/12/23.)

The Court granted Judgment Creditor’s Application on February 14, 2023 and set the instant Order to Show Cause Why Order For Sale of Dwelling Should Not Issue for March 7, 2023. (Minute Order, 03/07/23.) No opposition has been filed to date.

“Section 704.740 [] says[] a dwelling may not be sold to enforce a money judgment ‘except pursuant to a court order for sale obtained under this article ....’ (§ 704.740, subd. (a).) The ‘article’ referred to is article 4, “Homestead Exemption,” sections 704.710 through 704.850.” (Wells Fargo Financial Leasing, Inc. v. D & M Cabinets (2009) 177 Cal.App.4th 59, 67.)

“Section 704.740 is part of the homestead laws. ‘Homestead laws are designed to protect the sanctity of the family home against a loss caused by a forced sale by creditors .... The homestead exemption ensures that insolvent debtors and their families are not rendered homeless by virtue of an involuntary sale of the residential property they occupy. Thus, the homestead law is not designed to protect creditors .... This strong public policy requires courts to adopt a liberal construction of the law and facts to promote the beneficial purposes of the homestead legislation to benefit the debtor [and his family].’” (Id. at 67–68.)

“Promptly after a dwelling is levied upon (other than a dwelling described in subdivision (b) of Section 704.740), the levying officer shall serve notice on the judgment creditor that the levy has been made and that the property will be released unless the judgment creditor complies with the requirements of this section. Service shall be made personally or by mail. Within 20 days after service of the notice, the judgment creditor shall apply to the court for an order for sale of the dwelling and shall file a copy of the application with the levying officer. If the judgment creditor does not file the copy of the application for an order for sale of the dwelling within the allowed time, the levying officer shall release the dwelling.”

Notice to Creditor of Levy on Dwelling from the Sheriff was served by mail on December 9, 2022. (Motion, Wainer Decl., Exh. C.) As this Application was filed on December 28, 2022, it was timely under Code of Civil Procedure section 704.750, subdivision (a).

Code of Civil Procedure section 704.760 requires the judgment creditor’s application contain all of the following:

“(a) A statement whether or not the records of the county tax assessor indicate that there is a current homeowner's exemption or disabled veteran's exemption for the dwelling and the person or persons who claimed any such exemption.

(b) A statement, which may be based on information and belief, whether the dwelling is a homestead and the amount of the homestead exemption, if any, and a statement whether or not the records of the county recorder indicate that a homestead declaration under Article 5 (commencing with Section 704.910) that describes the dwelling has been recorded by the judgment debtor or the spouse of the judgment debtor.

(c) A statement of the amount of any liens or encumbrances on the dwelling, the name of each person having a lien or encumbrance on the dwelling, and the address of such person used by the county recorder for the return of the instrument creating such person's lien or encumbrance after recording.”

Judgment Creditor states there is no Homestead declaration, or homeowner’s exemption or disabled veteran’s exemption reflected in the records of the Los Angeles Country Recorder for the dwelling. (App., Wainer Decl., ¶¶3-9 and Exh. B.) Judgment Creditor also provides an appraisal report by Errol T. Jacobs issued on December 22, 2022 for a statement of liens or encumbrances on the Dwelling, and the name and address of the entity holding a lien or encumbrance as required by Code of Civil Procedure section 704.760, subdivision (c). (App., Jacobs Decl., Exh D.) The report appraises the dwelling at $1.25 million. (Ibid.) Finally, the application sets forth the liens and encumbrances on the dwelling based on County Assessor for General and Special City and/or County Taxes for $5,607.67. (App., Wainer Decl., Exh. B, p. 5.) Therefore, the requirements of Code of Civil Procedure section 704.760 have been satisfied.

“(a) Upon the filing of the application by the judgment creditor, the court shall set a time and place for hearing and order the judgment debtor to show cause why an order for sale should not be made in accordance with the application. The time set for hearing shall be not later than 45 days after the application is filed or such later time as the court orders upon a showing of good cause.

(b) Not later than 30 days before the time set for hearing, the judgment creditor shall do both of the following:

(1) Serve on the judgment debtor a copy of the order to show cause, a copy of the application of the judgment creditor, and a copy of the notice of the hearing in the form prescribed by the Judicial Council. Service shall be made personally or by mail.

(2) Personally serve a copy of each document listed in paragraph (1) on an occupant of the dwelling or, if there is no occupant present at the time service is attempted, post a copy of each document in a conspicuous place at the dwelling.”

Judgment Creditor has filed proof of mail and personal of the Application for Order to Show Cause, and following both parties appearance at the hearing on February 14, 2023, notice of the Order to Show Cause itself was waived. The court, therefore, finds that Judgment Creditor has satisfied the service requirements of Code of Civil Procedure section 704.770, subdivision (b).

CRC 3.223(a) states: “[a]n application for an order for sale of a dwelling must provide at the hearing competent evidence of the following:

(2) Litigation guarantee or title report that contains a legal description of the property, the names of the current owners, a list of all deeds of trust, abstracts of judgments, tax liens and other liens recorded against the property, whether a declaration of homestead has been recorded, whether a current homeowner's exemption or disabled veteran's exemption has been filed with the county assessor, and the persons claiming such exemption;

(3) The amount of any liens or encumbrances on the dwelling, and the names and addresses of the lienholders and when the judgment creditor's lien attached. The judgment creditor must ascertain the precise amounts of obligations secured by senior liens by making a written demand for beneficiary statements from senior lienholders pursuant to Civil Code section 2943. The judgment creditor may need to conduct an examination pursuant to Code of Civil Procedure sections 708.120 or 708.130 to determine the precise amounts of the junior liens, the daily rate of interest due on the senior and junior liens, and encumbrances of record; and

(4) The date of service on the judgment creditor of the levying officer's notice that the dwelling was levied upon.”

As noted above, Judgment Creditor has submitted a real estate appraisal of the dwelling by a real estate expert. (App., Jacobs Decl., Exh. D.) The statement of liens or encumbrances on the dwelling, the name and address of the entity holding a lien or encumbrance are evidenced by the Preliminary Report issues by Stewart Title on December 2, 2022. (App., Wainer Decl., Exh. B.) Based on the fair market value of the dwelling, the estimated equity in the property is $1.25 million. (App., Jacobs Decl., Exh. D.) The levying officer’s notice was served on Judgment Creditor on December 9, 2022. (App., Wainer Decl., Exh. C.)

Based on the foregoing, the Order to Show Cause why Order for Sale of Dwelling Should Not Issue is discharged. Judgment Creditor Able Restoration, Inc.’s Motion for Order for Sale of Dwelling is GRANTED.