Judge: Michelle Williams Court, Case: 21STCV14748, Date: 2022-09-29 Tentative Ruling

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Case Number: 21STCV14748    Hearing Date: September 29, 2022    Dept: 74

21STCV14748           MANUFACTURERS BANK vs NOORANI SUBS, INC

Hearing on Defendant Ibrahim Khanmohammed’s Claim of Exemption

TENTATIVE RULING:  The claim is DENIED.

Background

On April 19, 2021, Plaintiff Manufacturers Bank filed this action against Defendants Noorani Subs Inc., KMI Enterprises, Inc., and Ibrahim Khanmohammed. The complaint alleged eight causes of action: (1) breach of note, (2) breach of note, (3) breach of guaranty, (4) claim and delivery, (5) conversion, (6) money lent, (7) account stated, and (8) fair valuation. Plaintiff alleged that the Defendants defaulted and failed to make payments, as required by the loan documents.  

On May 12, 2022, the Court entered a default judgment against Defendants in favor of Plaintiff in the total amount of $241,600.49.

On July 25, 2022, the clerk issued a writ of execution.

Hearing

On August 31, 2022, Plaintiff filed and served a Notice of Hearing on Claim of Exemption and its Notice of Opposition to Claim of Exemption.

Request for Judicial Notice

Plaintiff requests the Court take judicial notice of two recoded deeds. The requests are GRANTED as to their existence and legal effect. (Evid. Code § 452(c); 452(h).)

Claim of Exemption

Standard

An individual defendant may apply to the Court to exempt her real or personal property from a postjudgment levy. (Code Civ. Proc., § 703.510.) The defendant must make the claim within 15 days after the date the notice of levy on the property was served (20 days if the notice of levy was served by mail). (Id., Code Civ. Proc. § 703.520(a).) The claim must be executed under oath and include the name and mailing address of the claimant, a description of the property claimed to be exempt, a financial statement, a citation of the statute on which the claim is based, and a statement of facts necessary to support the claim. (Code Civ. Proc. § 703.520(b).)

Promptly after the claim of exemption is filed, the levying officer must serve the judgment creditor with a copy of the Claim of Exemption and a Notice of Claim of Exemption. (Code Civ. Proc. § 703.540.) To oppose a claim of exemption, within 15 days after service of the notice of claim of exemption, the judgment creditor must file with the court: (1) a Notice of Opposition to the Claim of Exemption, (2) Notice of Motion for an Order Determining the Claim of Exemption, and (3) Notice of Hearing on Claim of Exemption and serve the same upon the levying officer copies of each of these documents. (Code Civ. Proc. § 703.550.)

“The claim of exemption and notice of opposition to the claim of exemption constitute the pleadings . . . At a hearing under this section, the exemption claimant has the burden of proof.” (Code Civ. Proc. § 703.580.)

Defendant Failed to Meet Their Burden

On August 15, 2022, Defendant Ibrahim Khanmohammed, in propria persona, executed a Claim of Exemption indicating $232,575.11 held by Bank of America was exempt pursuant to Code of Civil Procedure section 704.210. (Adnani Decl. Ex. 2.) The facts provided to support the claimed exemption state “Financial injury due to COVID (Closure of 2 stores).” (Ibid.) The levying officer served notice of the claim via regular mail on August 17, 2022. (Ibid.) Accordingly, Plaintiff’s opposition was timely filed on August 31, 2022. (Code Civ. Proc. § 703.550(a).)

The levying officer has not made any filings as required by Code of Civil Procedure section 703.550(a) (“Upon the filing of the copies of the notice of opposition and notice of motion, the levying officer shall promptly file the claim of exemption with the court.”).) As noted above, Plaintiff provided a copy of the claim. (Adnani Decl. Ex. 2.)

First, Plaintiff contends Defendant does not have a right to appear due to his default. (Opp. to Claim of Exemption at 1:23-2:9.) None of the cited authority relates to Defendant’s ability to participate in post-judgment proceedings and is therefore unpersuasive.

“The kinds and degrees of property exempt from levy are described in sections 704.010 through 704.210.” (Kono v. Meeker (2011) 196 Cal.App.4th 81, 86.) Code of Civil Procedure section 704.210 provides “[p]roperty that is not subject to enforcement of a money judgment is exempt without making a claim.” “As a general rule, under California's Enforcement of Judgments Law (§ 680.010 et seq.), ‘all property of the judgment debtor is subject to enforcement of a money judgment.’” (Coastline JX Holdings LLC v. Bennett (2022) 80 Cal.App.5th 985, 1004.)

As noted above, Defendant solely cited a purported financial hardship due to store closures. (Adnani Decl. Ex. 2.) Defendant failed to demonstrate any factual or legal basis to support the conclusion that the funds held by Bank of America are “not subject to enforcement of a money judgment” within the meaning of Section 704.210. There is no evidentiary basis establishing the funds include “payments of public benefits or social security benefits . . . directly deposited by the government or its agent,” which is the statutorily definition of a deposit account potentially subject to some exclusion. (Code Civ. Proc. § 704.080(a)(1); Kelley Decl. ¶ 9.) Accordingly, Defendant, as the exemption claimant, failed to satisfy the burden of proof. (Code Civ. Proc. § 703.580.)