Judge Ralph C. Hofer, Case Number: EC056078, Date: 2024-04-12 Tentative Ruling

This is a common count action brought by plaintiff Citibank (South Dakota) N.A. against defendant Arabo Sarkesyan to collect for money allegedly lent in the sum of $25,950.85, which also alleges that defendant became indebted to defendant on an open book account, an account stated, and for money paid and expended for defendant on defendant’s special insistence and request.

The file shows that defendant, who was then proceeding in pro per, filed an Answer to the complaint on September 9, 2011, along with a cross-complaint.

On October 6, 2011, at a Case Management Conference, defendant failed to appear and the court, the Honorable David Milton presiding, set an OSC re Striking of the Answer and Dismissal of the Cross-Complaint on December 6, 2011. The CMC was continued to the same date.

On October 18, 2011, defendant filed a substitution of attorney, substituting in as new legal representation Arshak Bartoumian. A Notice of the Case Management Conference and OSC was served on counsel Bartoumian on November 17, 2011.

On December 6, 2011, there was again no appearance by defendant, and the court order provides, “Defendant having failed to appear for consecutive hearings, answer is stricken, and cross-complaint is dismissed.” The matter was set for an OSC re Entry of Default on January 10, 2012. A request for entry of default by clerk’s judgment was filed December 12, 2011, and the matter was set for a non-appearance case review on January 31, 2012 to allow the court to process the judgment.

On January 20, 2012, the court heard a motion brought by defendant through defendant’s attorney to set aside the default. The court’s tentative ruling was to deny the motion. The minute order reflects that there were appearances for both parties at the hearing, and the minute order states:

“Pursuant to Defendant’s request, the Court denies the motion without prejudice, allowing counsel for the Defendant to allege inexcusable neglect in subsequent pleadings.”

Evidently no subsequent motion was filed. On January 31, 2012, the court signed and filed a judgment by the clerk by default, entering judgment in favor of plaintiff and against defendant in the total sum of $26, 404.85.

On December 23, 2021, plaintiff filed an Application for and Renewal of Judgment, which renewal was entered by the court the same date pursuant to a Notice of Renewal of Judgment.

The claim of exemption is evidently directed to a levy of the judgment debtor’s bank account with Bank of America pursuant to which Bank of America is holding funds. It is not clear what sum is being held.

“The claim of exemption is deemed controverted by the notice of opposition to the claim of exemption and both shall be received in evidence. If no other evidence is offered, the court, if satisfied that sufficient facts are shown by the claim of exemption (including the financial statement if one is required) and the notice of opposition, may make its determination thereon. If not satisfied, the court shall order the hearing continued for the production of other evidence, oral or documentary.”

It appears that the method of judgment enforcement involved here is the levy of a bank account. Under CCP section 703.520, a claimant after levy may make a claim of exemption, which is required to be executed under oath and provide specified information, including a financial statement if required, a citation to the provision or statute upon which the claim is based, and a statement of facts necessary to support the claim.

Under CCP section 703.580(b), at a hearing on a claim of exemption, “the exemption claimant has the burden of proof.” In meeting this burden, the one who claims the exemption must establish the right by evidence or facts; an affidavit which merely follows the language of the statute and states nothing more than conclusions of law is insufficient. See Le Font v. Ranin (1959, 2nd Dist.) 167 Cal.App. 2d 433, 435.

Here the Claim of Exemption is signed under penalty of perjury and states that the property claimed to be exempt is all bank account funds in depository accounts and all wages. [Claim, para. 8c]. Judgment debtor indicates that the property is claimed to be exempt under CCP section 703.140(b)(5). [Claim, para. 5]. The claim includes an attachment which states that California law allows judgment debtor to exempt and protect up to approximately $30,000 of funds under Civil Code 703.140(b)(5).

CCP section 703.140 applies to federal Bankruptcy proceedings. Subdivision (a) of the statute indicates that the listed exemptions are “applicable,” “In a case under Title 11 of the United States Code.” This does not appear to be such a case. Subdivision (b), relied upon here, provides, in pertinent part:

(1) The debtor's aggregate interest, not to exceed twenty-nine thousand two hundred seventy-five dollars ($29,275) in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence.

(3) The debtor's interest, not to exceed seven hundred twenty-five dollars ($725) in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(4) The debtor's aggregate interest, not to exceed one thousand seven hundred fifty dollars ($1,750) in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(5) The debtor's aggregate interest, not to exceed one thousand five hundred fifty dollars ($1,550) in value, plus any unused amount of the exemption provided under paragraph (1), in any property.”

As noted above, the attachment makes reference to California Civil Code section 703.140, but there is no such section in the Civil Code.

The opposition appears to argue that the statutory grounds which are cited in the claim by the judgment debtor pertain to items which judgment creditor has not levied against here, such as insurance policy benefits, retirement plan funds, or household furnishings.

The opposition also points out that with respect to the bank account at issue, judgment debtor has the burden of tracing exempt funds from an exempt source under CCP section 703.080, which provides, in pertinent part:

“(a) Subject to any limitation provided in the particular exemption, a fund that is exempt remains exempt to the extent that it can be traced into deposit accounts or in the form of cash or its equivalent.

The opposition argues that here judgment debtor in support of the claim has failed to trace the source of funds or provide any documentation proving the funds levied consist only of exempt funds.

Without any documentation to support the purported claim of exemption, the claim cannot be evaluated, and the hearing is continued for submission of an appropriate showing.

The court will hear argument whether the matter should be continued, and judgment debtor required to submit a supplemental claim with argument and citation to appropriate statutes, if judgment debtor is aware of any, as well as supporting documentation.

The Claim which has been forwarded from the Sheriff’s office does not appear to cite to any applicable statutory basis supporting a claim of exemption and fails to meet judgment debtor’s burden of tracing exempt funds into the subject account. The hearing on claim of exemption is CONTINUED pursuant to CCP section 703.580(c) for the submission of supplemental briefing and necessary documentary support for any claim of exemption. The new hearing date is May 17, 2024 at 9:00 a.m. Judgment debtor defendant Sarkesyan must file his supplemental briefing by April 26, 2024 with judgment creditor plaintiff Citibank’s responsive pleading due on May 16, 2024.

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