Judge Stephen P. Pfahler, Case 20CHCV00201 2022-10-18 Tentative Ruling

Plaintiff Sierra Canyon School (Sierra) alleges Defendants Aasim (Aasim) and Rachel (Rachel) Akhtar owe $79,100 in the form of school tuition from 2016 through 2019.

On March 16, 2020, Plaintiff filed a complaint for common counts (account stated and open book account), and breach of contract, and unjust enrichment. On November 30, 2020, the court approved service by publication on Aasim. Service by publication was completed on via the Metropolitan News Enterprise newspaper on November 17, 24, December 1 and December 8, 2020.

On January 22, 2021, the clerk entered a default against Aasim. A second judgment was submitted including Rachel Akhtar, but the court record shows no entry of this default. On March 9, 2021, the court entered judgment against Aasim and Rachel joint and severally for $103,568.08. On February 8, 2022, the court entered and amended default judgment.

On July 12, 2022, the Judgment Debtor filed a notice of pending bankruptcy. On July 14, 2022, the court took the motions for claim of exemption and motion to vacate default off-calendar, and stayed the entire action. On August 24, 2022, the court filed a notice of termination of stay, due to the dismissal of the Chapter 13 Bankruptcy on August 22, 2022.[1]

Judgment debtors Aasim and Rachel submitted a notice of claim exemption. Judgment debtors submitted a notice of hearing and set a motion, but none of the filings provide any factual basis for the requested exemption. Judgment creditor in opposition states Judgment debtors seek an exemption based on the claim that the funds in the attached bank account belong to third party Miguel Ramirez. The court electronic filing system shows no reply filed at the time of the tentative ruling publication cutoff.

(a) The claim of exemption and notice of opposition to the claim of exemption constitute the pleadings, subject to the power of the court to permit amendments in the interest of justice.

(b) At a hearing under this section, the exemption claimant has the burden of proof.

(c) 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.

(d) At the conclusion of the hearing, the court shall determine by order whether or not the property is exempt in whole or in part. Subject to Section 703.600, the order is determinative of the right of the judgment creditor to apply the property to the satisfaction of the judgment. No findings are required in a proceeding under this section.

(e) The court clerk shall promptly transmit a certified copy of the order to the levying officer. Subject to Section 703.610, the levying officer shall, in compliance with the order, release the property or apply the property to the satisfaction of the money judgment.

(a) If property is claimed as exempt pursuant to a provision exempting property to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor, the claim of exemption shall include a financial statement.

(2) The name, age, and relationship of all persons dependent upon the judgment debtor or the spouse of the judgment debtor for support.

(3) All sources and the amounts of earnings and other income of the judgment debtor and the spouse and dependents of the judgment debtor.

(4) A list of the assets of the judgment debtor and the spouse and dependents of the judgment debtor and the value of such assets.

(5) All outstanding obligations of the judgment debtor and the spouse and dependents of the judgment debtor.

(c) The financial statement shall be executed under oath by the judgment debtor and, unless the spouses are living separate and apart, by the spouse of the judgment debtor.

Judgment Debtor seeks relief pursuant to Code of Civil Procedure section 704.220, which provides:

(a) Money in the judgment debtor’s deposit account in an amount equal to or less than the minimum basic standard of adequate care for a family of four for Region 1, established by Section 11452 of the Welfare and Institutions Code and as annually adjusted by the State Department of Social Services pursuant to Section 11453 of the Welfare and Institutions Code, is exempt without making a claim.

(b) (1) Subdivision (a) does not preclude or reduce a judgment debtor’s right to any other exemption provided by state or federal law.

(2) If the financial institution holding the judgment debtor’s deposit account has actual knowledge that the judgment debtor is entitled to one or more exemptions that the financial institution is required to apply pursuant to federal law or state law other than that set forth in subdivision (a), the following shall apply:

(A) If the sum of the amount of money in the deposit account that would be exempt from levy under the additional exemptions is less than or equal to the amount set forth in subdivision (a), the additional exemptions described in this paragraph shall be considered encompassed within the exemption set forth in subdivision (a) and subdivision (a) shall apply.

(B) If the sum of the amount of money in the deposit account that would be exempt from levy under the additional exemptions is greater than the amount set forth in subdivision (a), subdivision (a) shall not apply and instead money in the deposit account equal to or less than the sum of the additional exemptions is exempt without making a claim.

(1) A levy to satisfy a judgment for wages owed, child support, or spousal support. For purposes of this paragraph, “wages owed” includes damages and penalties.

(2) A provision of the Public Resources Code, Revenue and Taxation Code, or Unemployment Insurance Code.

(3) A warrant or notice of levy issued by the state, or any department or agency thereof, for the collection of a liability.

(d) A levy against a judgment debtor’s deposit account shall include a written description of the requirements of this section.

(2) If a judgment debtor holds an interest in multiple accounts at a single financial institution, the judgment creditor or judgment debtor may file an ex parte application in the superior court in which the judgment was entered for a hearing to establish how and to which account the exemption should be applied. Subject to a service of an order issued in that hearing, if any, the financial institution may determine how and to which account the exemption should be applied. This paragraph does not create a cause of action against a judgment creditor who executes a levy or against a financial institution that complies with a levy pursuant to the court’s determination.

(3) If a judgment debtor holds an interest in multiple accounts at two or more financial institutions, the judgment creditor shall, and the judgment debtor may, file an ex parte application in the superior court in which the judgment was entered for a hearing to establish how and to which account the exemption should be applied. Subject to a service of an order issued in that hearing, if any, the financial institutions shall comply with the levy subject to the exemption. This paragraph does not create a cause of action against a judgment creditor who executes a levy or against a financial institution which complies with a levy pursuant to the court’s determination.

(f) Subdivision (e) of Section 700.140 applies to a financial institution acting under this section.

(g) The Judicial Council shall amend or adopt all forms necessary to implement this section. The forms shall clearly delineate the amount of funds exempt from levy by a financial institution, including funds exempted by this section.

Other than a written statement, nothing in the exemption application contains any documentation, including any levied account information and/or a financial statement. Judgment Creditor in opposition notes a number of items, which, again, are not included in the April 13, 2022, filed documents and therefore not reviewed by the court.

Notwithstanding the lack of documentation before the court, Judgment Creditor challenges the lack of any evidence for the alleged mobile home purchase, and suggests Judgment Debtor may be selling mobile homes without a license. Judgment Creditor also challenges the represented household expenses, given the claimed income of $5,500/month with household expenses totaling $6,540/month. Judgment Creditor suggests Judgment Debtor underreports household income, and fails to properly itemize expenses.

The application submitted to the court therefore lacks sufficient support for the basis of any exemption in advance of the hearing. The court therefore defers consideration until the time of the hearing, but if Judgment Debtor appears without supporting documentation for receipt into evidence, the court may deny the application at the time of the hearing. The court may alternatively continue the hearing for further submission of evidence, as well, but will not allow Judgment Debtor to use the statutory sections to delay resolution of the default judgment. (Code Civ. Proc., § 703.580, subd. (b-d).)

[1]The court subsequently granted Judgment Creditor’s request to reset the hearing for the claim of exemption on August 25, 2022. The court docket shows no effort to reset the hearing to vacate the default judgment by Judgment Debtor.