Judge Ralph C. Hofer, Case Number: GC041398, Date: 2024-10-11 Tentative Ruling

This action was brought by plaintiff Great Plains Capital Corporation, as successor in interest to Bank of America, N.A., seeking to recover sums allegedly due to plaintiff as assignee under a credit application and agreement for a business credit line loan entered into by defendant Fred Jahed aka Fariborz Jahed aka Fred Golnazar Jahed, an individual dba Quantum Travel. The complaint alleges that defendant had defaulted under the agreement by failing to pay the installment which became due on September 15, 2007, or any installments which became due thereafter, as a result of which plaintiff had declared the whole sum of principal, plus the agreed upon interest owed, due and payable, in the sum of $100,003.00.

The file shows that on October 27, 2008, plaintiff filed a Request for Entry of Default against defendant, which default was entered as requested the same date.

On November 17, 2008, a Judgment by the court by default was entered based on plaintiff’s written declaration, entering Judgment in favor of plaintiff and against defendant in the total sum of $113,978.38.

The judgment has since been renewed, and several writs of execution have been submitted, with the most recent writ of execution received on June 24, 2024, addressed to the Sheriff of Contra Costa County, for a total amount due under the judgment of $357,277.56, plus daily interest from the date of writ of $60.11.

On May 7, 2021, plaintiff filed a Notice of Assignment of Judgment and Change of Plaintiff, granting, selling, assigning, transferring, setting over and conveying all interest in the Judgment entered on November 17, 2008 to States Resources Corp., with that entity to be the plaintiff/judgment creditor in this action as of the date of the filing of the notice. That entity is not reflected as the judgment creditor in the court’s register of parties to the action.

The Sheriff of Contra Costa County has received a Claim of Exemption (Enforcement of Judgment) submitted by Fred Jahed, which has been forwarded to this court.

Judgment creditor States Resources Corp. as assignee has filed a Notice of Hearing on Claim of Exemption (Wage Garnishment—Enforcement of Judgment) and a Notice of Opposition to Claim of Exemption (Enforcement of Judgment).

The Notice of Hearing and Opposition here are filed by judgment creditor “States Resources Corp.,” as successor in interest to Judgment Debtor Great Plains Capital Corporation. However, there is no order in the file recognizing this assignment or the standing of State Resources Corp. to pursue relief before this Court.

As noted above, on May 7, 2021, plaintiff filed a Notice of Assignment of Judgment and Change of Plaintiff, granting, selling, assigning, transferring, setting over and conveying all interest in the Judgment entered on November 17, 2008 to States Resources Corp., with that entity to be the plaintiff/judgment creditor in this action as of the date of the filing of the notice. The court was not requested to, and did not act to, recognize this assignment and the standing of State Resources Corp. to enforce the outstanding judgment.

“(a) An assignee of a right represented by a judgment may become an assignee of record by filing with the clerk of the court which entered the judgment an acknowledgment of assignment of judgment.

(d)(1) If an acknowledgment of assignment of judgment purports to be executed or acknowledged by an authorized agent of the judgment creditor or an authorized agent of a prior assignee of record, then documentation sufficient to evidence that authorization shall be filed together with the acknowledgment of assignment of judgment.

(2) Notwithstanding paragraph (1), an assignee of a right represented by a judgment may also become an assignee of record by filing with the clerk of the court that entered judgment a court order or other documentation that evidences assignment of judgment by operation of law.”

There has been no acknowledgment of assignment filed by the moving party, and the notice of assignment document submitted, while including the information required in subdivision (b), is not executed and acknowledged by the judgment creditor or any prior assignee of record, with the required authorization. The court will hear argument concerning whether the opposing party has appropriately established standing to appear and challenge the claim of exemption in this matter, and whether the matter should be continued to permit the purported assignee/successor in interest to obtain the appropriate order of this court to appear in this matter as judgment creditor, or whether the court can issue such an order based on the documentation previously submitted.

The claim of exemption is confusing, as it indicates that the property claimed to be exempt from enforcement of judgment is “the money in my checking account and wages,” claiming that “they are necessary to cover living expenses and should be exempt from garnishment.” [Claim, para. 4].

The claim then goes on to state that the claim is made pursuant to a provision exempting property to the extent necessary for the support of the judgment debtor, and submits a “Financial Statement (Wage Garnishment-Enforcement of Judgment).” [Claim, para. 7].

It does not appear from the claim or the file, however, or any correspondence from the Sheriff’s Department, that there has been any levy on a bank account of the judgment debtor, or that there has been any attempt to garnish wages.

CCP § 706.051 pertains to paid earnings and an earnings withholdings order under the wage garnishment law, and exempts from wage garnishment, “Paid earning that can be traced into deposit accounts or in the form of cash or its equivalent” in amount of all of paid earnings subject to an earnings withholding order or an earnings assignment order for support.

CCP § 706.051 provides an exemption for “the portion of the judgment debtor’s earnings which the judgment debtor proves is necessary for the support of the judgment debtor or the judgment debtor’s family supported in whole or in part by the judgment debtor…”

A problem here is that there has evidently been no attempt to levy any bank accounts or garnish the judgment debtor’s earnings, so that these exemptions would not apply.

Under CCP § 706.105, a claimant after service of a withholding order may make a claim of exemption. Under CCP § 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. See Le Font v. Ranin (1959, 2nd Dist.) 167 Cal.App. 2d 433, 435.

“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.”

The claim fails to provide evidence showing that any sums which are at issue here are exempt, and also fails specifically to show that any purportedly exempt sums can be traced to an account or wage garnishment order. Under CCP section 703.080(a), an exempt fund remains exempt “to the extent that it can be traced into the deposit account or in the form of cash or its equivalent.” Under subdivision (b), “The exemption claimant has the burden of tracing an exempt fund.” The debtor has failed to meet this burden.

In fact, the opposition indicates that at no time has judgment creditor sought to levy on judgment debtor’s bank accounts or wages. [Gost Decl., para. 2]. The opposition indicates that on September 3, 3024, judgment debtor did cause a real property levy to be served at judgment debtor’s home, owned by judgment debtor and his spouse in Contra Costa County, and anticipates filing a motion for sale of the dwelling, so that the Contra County court will be setting an OSC re: Sale of Dwelling. [Gost Decl., paras. 2-5, Exs. 1-4].

The opposition argues that the legal procedure for judgment debtor to contest the sale of his home is not to file a claim of exemption for levy on bank accounts or wages, but to file opposition to the motion to sell the dwelling in the proceeding in Contra Costa County.

The proceeding is accordingly subject to the provisions of CCP section 704.710, et seq., pertaining to the sale of the interest of a natural person in a dwelling, pursuant to which an exemption claim is to be made and determined in accordance with Article 2, commencing with section 703.510. CCP section 704.740 (b)(2).

Judgment creditor indicates that an order to show cause why an order for sale should not be made in accordance with its application will be the appropriate proceeding in the Contra Costa court, as set forth in CCP section 704.770.

Judgment debtor here has failed to establish any entitlement to relief in this court based on an evidently non-existent bank account levy or wage garnishment proceeding. The claim accordingly is denied, or, if it appears appropriate at the hearing, continued for further argument and evidence pursuant to CCP section 703.580 (c) (“If not satisfied, the court shall order the hearing continued for the production of other evidence, oral or documentary.”)

Specifically, to the extent there are ongoing debt collection activities in connection with bank accounts or wages, the court will expect the submission of evidence showing such activities and will also expect further evidence explaining why the Financial Statement submitted with the moving papers does not identify the real property interest judgment debtor holds in real property in Contra Costa County. [See Gost Decl., paras. 2-6, Exs. 1-5].

The Court will hear argument concerning procedures necessary to formalize the claimed status of opposing entity States Resources Corporation as judgment creditor.

Please make arrangement in advance if you wish to appear via LACourtConnect by visiting www.lacourt.org to schedule a remote appearance. Please note that LACourtConnect offers free audio and video appearances. However, ADVANCE REGISTRATION IS REQUIRED.

If no appearance is set up through LACourtConnect, or no appearance is otherwise made, then the Court will assume the parties are submitting on the tentative.