Judge: Teresa A. Beaudet, Case: BC630866, Date: 2023-03-14 Tentative Ruling
Case Number: BC630866 Hearing Date: March 14, 2023 Dept: 50
DANIEL PEREZ, Plaintiff, vs. JOSEPH SAFRAN, et al. Defendants. |
Case No.: |
BC630866
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Hearing Date: |
March 14, 2023 |
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Hearing Time: |
10:00 a.m. |
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[TENTATIVE]
ORDER RE: PLAINTIFF DANIEL
PEREZ’S MOTION FOR ORDER TO GARNISH WAGES OF SPOUSE OF JUDGMENT DEBTOR AND
FOR ASSIGNMENT ORDER AGAINST SPOUSE |
Background
Plaintiff Daniel Perez (“Plaintiff”) filed this action
against Defendants Joseph Safran (“Safran”) and One Capital Group, Inc. (jointly,
“Defendants”) on August 17, 2016. The Complaint asserts causes of action for
(1) breach of written contract, (2) open book account, (3) money had and
received, (4) unjust enrichment, (5) conversion, (6) fraud in the inducement,
and (7) equitable relief.
On October 25, 2018, the Court entered a Judgment in
this action indicating that “judgment is entered in favor of Plaintiff Daniel
Perez (“Plaintiff”) and against defendants Joseph Safran, an individual
(“Safran”) and One Capital Group, Inc., a California Corporation (“One
Capital”) jointly and severally, in the sum of $190,000.00.”
Plaintiff now moves for (1) an order allowing Plaintiff to garnish the wages of Karen Harrosh (“Harrosh”), the spouse of Safran; (2) an order to assign Harrosh’s
interest in certain funds from third parties, including, but not limited to,
Sapir Realty Corporation, and the tenant(s) occupying the real property
commonly known as 5930 Beeman Avenue, Valley Village, California 91607, to
Plaintiff, to the extent necessary to pay the judgment entered in this action
in full, including accrued interest through the date of payment; and (3) an
order restraining Harrosh and any representative, agent, employee or attorney
of Harrosh and any person(s) in active concert and participating with Harrosh
from encumbering, assigning, disposing of, or spending the specified funds
and/or all rights to payment thereunder. Safran and Harrosh oppose.
Request for Judicial Notice
The Court denies the request for judicial notice filed
in support of Plaintiff’s reply. The Court notes that “[t]he general rule of motion practice…is that new evidence
is not permitted with reply papers.” (Jay v.
Mahaffey (2013) 218 Cal.App.4th 1522, 1537.)
Evidentiary Objections
The Court rules on Harrosh’s evidentiary objections as follows:
Objection No. 1: sustained
Objection No. 2: sustained
Objection No. 3: sustained
Objection No. 4: sustained
Objection No. 5: overruled
Objection No. 6: overruled
Discussion
As set forth above, Plaintiff seeks three separate
orders. First, Plaintiff seeks “[a]n order
allowing Creditor to garnish the wages of [Harrosh]…pursuant to Code of Civil Procedure § 706.109.” (Mot. at p.
2:2-4.) Code of Civil Procedure section 706.109 provides that, “[a]n earnings withholding order may not be
issued against the earnings of the spouse of the judgment debtor except by
court order upon noticed motion.”
As set forth above, on October 25, 2018, Plaintiff obtained a Judgment against Defendants, jointly
and severally, in the sum of $190,000.00. Plaintiff notes that on August 23, 2022, a writ of execution was issued on the Judgment in
the total amount
of $262,597.70, including interest. Plaintiff
indicates that no payments have been made towards the Judgment. (Medioni Decl.,
¶ 9.)
Plaintiff notes that “[e]xcept as
otherwise provided by statute, all property, real or personal, wherever
situated, acquired by a married person during the marriage while domiciled in
this state is community property.” (Fam. Code, § 760.) In addition, “[e]xcept as
otherwise expressly provided by statute, the community estate is liable for a
debt incurred by either spouse before or during marriage, regardless of which
spouse has the management and control of the property and regardless of whether
one or both spouses are parties to the debt or to a judgment for the debt.”
(Fam. Code, § 910, subd.
(a).)
Plaintiff’s counsel indicates that on November 6, 2019, he conducted the third-party examination (“ORAP”)
of Harrosh, and that
during the ORAP, Harrosh testified that she was married to Safran and had been married to Safran for
at least 15 years. (Medioni Decl., ¶ 5.)
Plaintiff seeks another order “[t]o assign Harrosh’s interest, right to payment due, or to become
due, rent,
referral fees, fees for services, contingency
fees, royalties, commissions, payments in general,
payments from sales, payments from leases, payments from refinances, payment from loan originations, payments from relocations, payments from a
patent or copyright,
advances, accounts receivable, general
intangibles (as defined by Commercial Code Section 9102(a)(42)),
judgments, instruments (as defined by Code of Civil
Procedure Section 708.510(a) and the comment to Section 708.510), etc.
(the ‘Funds’) from all third parties, including,
but not limited to, Sapir Realty Corporation, a California corporation and doing business as Weichert, Realtors – All Stars, and the
tenant(s) occupying the real property commonly
known as 5930 Beeman Avenue, Valley Village, California 91607, to Creditor to the extent necessary to pay the judgment entered in this
action in full, including
accrued interest through the date of payment.”
(Mot. at p. 2:5-16.)
Code of Civil
Procedure section 708.510, subdivision (a) provides
that “[e]xcept as otherwise provided by law, upon application of the judgment
creditor on noticed motion, the court may order the judgment debtor to assign
to the judgment creditor or to a receiver appointed pursuant to Article 7
(commencing with Section 708.610) all or part
of a right to payment due or to become due, whether or not the right is
conditioned on future developments, including but not limited to the following
types of payments: (1) Wages
due from the federal government that are not subject to withholding under an
earnings withholding order. (2) Rents. (3) Commissions. (4) Royalties. (5) Payments due from a patent or copyright. (6) Insurance policy loan value.” Pursuant to Code of Civil Procedure section 708.510, subdivision (d), “[a] right to payment may be
assigned pursuant to this article only to the extent necessary to satisfy the
money judgment.”
Plaintiff asserts that it is aware of
two revenue streams flowing to Harrosh. First, Plaintiff asserts that Harrosh
works for and/or owns Sapir Realty Corporation, a California corporation
(“Sapir Realty”), doing business as Weichert, Realtors – All Stars
(“Weichert”), and that Sapir Realty is a real estate brokerage firm that buys,
sells, and manages real estate. (Medioni Decl., ¶
11.) Plaintiff states that Sapir Realty’s statement of information filed with
the California Secretary of State on or about November 13, 2019, lists Harrosh
as the Chief Executive Officer, Secretary, Chief Financial Officer, Director,
and agent for service of process for the company. (Medioni Decl., ¶ 12, Ex. 8.)
Second, Plaintiff asserts that on August 7,
2020, Harrosh purchased the real property commonly known as 5930 Beeman Avenue,
Valley Village, California 91607 (the “Property”) for $1,200,000.00. (Medioni
Decl., ¶ 6.) Plaintiff’s counsel indicates that in or about November, 2022, he
instructed Plaintiff’s process server to serve Harrosh and Safran at the
Property with orders to appear for examination. (Medioni Decl., ¶ 19.) Plaintiff’s
process server indicated that on November 20, 2022, a woman who identified
herself as “Leah” answered the door and informed the process server that
Harrosh and Safran do not reside at the Property and that she has been leasing
the Property for approximately two years. (Medioni Decl., ¶ 19.) Plaintiff
asserts that it “presumes that the occupant pays [Safran] and/or Harrosh rent
for the use of the Property. However, since title to the Property is held in
Harrosh’s name only, the instant assignment order is necessary for Creditor to
obtain rents due to Harrosh from the tenant for the Property.” (Mot. at p.
10:7-10.)
Plaintiff also seeks an order “[r]estraining
Harrosh and any representative, agent, employee or attorney of Harrosh and any
person(s) in active concert and participating with Harrosh from encumbering,
assigning, disposing of or spending the Funds and/or all rights to payment
thereunder.” (Mot. at p. 2:17-20.) Code of Civil
Procedure section 708.520, subdivision (a)
provides that “[w]hen an application is made pursuant to Section 708.510 or thereafter, the judgment
creditor may apply to the court for an order restraining the judgment debtor
from assigning or otherwise disposing of the right to payment that is sought to
be assigned. The application shall be made on noticed motion if the court so
directs or a court rule so requires. Otherwise, it may be made ex parte.”
In the opposition, Safran
and Harrosh assert that “the ‘funds’ are Harrosh’s
separate property, which is not liable for the Judgment against Safran.” (Opp’n
at p. 3:6-7.) They note that pursuant to Family Code
section 850, subdivision (a), “[s]ubject
to Sections 851 to 853, inclusive,
married persons may by agreement or transfer, with or without consideration, do
any of the following: (a) Transmute
community property to separate property of either spouse.” (See also
In re Brace (2020) 9 Cal.5th
903, 914, “for property acquired on or after January 1,
1985, married persons may change—i.e., transmute—the character of property from
community to separate, or vice versa, if the transmutation is made in writing by an express declaration that is
made, joined in, consented to, or accepted by the spouse whose
interest in the
property is adversely affected.” [Internal quotations omitted].) In addition,
pursuant to Family Code section 913, subdivision (b)(1),
“[e]xcept as otherwise provided by statute: (1) The separate property of a married person
is not liable for a debt incurred by the person’s spouse before or during
marriage.”
Harrosh indicates that “all of [her] income and property are, by
agreement, [her] separate property, as reflected by the agreement which [Safran] and
[Harrosh] entered into…” (Harrosh Decl., ¶ 4.) Exhibit 1 to Harrosh’s
Declaration is a Separate Property Agreement between Harrosh and Safran, which provides
that the agreement shall be effective as of and at all times after June 5,
2018. (Harrosh Decl., ¶ 4, Ex. 1, ¶ 18.) The Separate Property Agreement
provides, inter alia, that “[t]his Agreement is intended to reaffirm
that certain Agreement dated August 20th, 2001, between Harrosh and Safran,
whereby, amongst other things, both parties agreed that all property obtained
prior to, or during the course of the marriage forever, and always, be the
individual and respective party’s sole and separate property. This Agreement
shall also define, establish, transmute and confirm that, except as may otherwise
be specifically agreed in writing, any interest of either of the parties in
Sapir Realty Corporation, a California corporation, dba Weichert Realtors –
Allstars (‘Sapir’), is and shall be Harrosh’s separate property…” (Harrosh
Decl., ¶ 4, Ex. 1, ¶ 1.) Saffran and Haroush have not attached the August 20,
2001 Agreement.
Harrosh
also states that “[t]he property located at 5930 Beeman Avenue, Valley Village,
CA 91607 (the ‘Property’) is [Harrosh’s] sole and separate property and [her]
family home. There is no tenant at or lease of the Property or rent or income
from the Property.” (Harrosh Decl., ¶ 8.) Harrosh asserts that she does “not
receive and [is] not entitled to any rent or income in connection with the
Property.” (Harrosh Decl., ¶ 8.)
In addition, Safran
and Harrosh note that Code of Civil Procedure sections 708.510
and 708.520, relied
upon by Plaintiff, refer to a “judgment debtor.” Plaintiff
does not respond to this point in the reply.
In the reply,
Plaintiff asserts that the Judgment in this action is a community property debt
that may be enforced against Harrosh and her separate property. Plaintiff
notes, as set forth above, that “[e]xcept as
otherwise expressly provided by statute, the community estate is liable for a
debt incurred by either spouse before or during marriage, regardless of which
spouse has the management and control of the property and regardless of whether
one or both spouses are parties to the debt or to a judgment for the debt.” (Fam. Code, § 910, subd. (a).) Harrosh notes in her
declaration that she has been married to Safran for 22 years. (Harrosh Decl., ¶
2.) Plaintiff asserts that Harrosh is thus liable for the October 25, 2018 Judgment because it was entered
against her husband during their marriage. But as Safran and Harrosh note in
the opposition (and as set forth above), “[e]xcept as otherwise provided by statute: (1) The
separate property of a married person is not liable for a debt incurred by the
person’s spouse before or during marriage.” (Fam. Code, § 913, subd. (b)(1).) Plaintiff does not address this
provision in the reply. As discussed below, the Court will require the parties
to address whether this section applies to a community debt incurred by a
spouse or only to a separate property debt incurred by a spouse.
Plaintiff also asserts that “[b]ecause Harrosh
is licensed by the DRE to conduct real estate transactions and earn commissions
therefrom under [Safran’s] DRE broker license…any money Harrosh earns in such a
capacity is earned by [Safran].” (Reply at p. 4:21-24.)[1]
Plaintiff cites to California Real Estate Loans,
Inc. v. Wallace (1993) 18
Cal.App.4th 1575, 1581, where
the Court of Appeal noted that “for purposes of liability to third parties for
torts, a real estate salesperson is the agent of the broker who employs him or
her.” Plaintiff does not appear to cite to
legal authority indicating that any money Harrosh earns in the capacity of a
salesperson is also earned by Safran. In any event, the instant motion seeks an
order allowing Plaintiff to garnish the wages of Harrosh, not Safran.
Plaintiff also notes that Harrosh’s declaration provides that
Safran’s “participation in the business of Sapir is minimal, probably less than an hour a month, for which he and I
have agreed he is not entitled to and he does not receive
compensation.” (Harrosh Decl., ¶ 7.) Plaintiff asserts that “Harrosh’s
statement about Debtor’s involvement in Sapir Realty and Weichert are
completely contradicted by Debtor himself and Sapir Realty’s marketing
efforts.” (Reply at p. 7:9-10.) Plaintiff also asserts that “Debtor may not delegate his authority and
responsibility to act as the responsible broker for Sapir Realty to Harrosh, a
salesperson.” (Reply at p. 5:12-14.) Plaintiff does not explain the ramification
of these allegation as to the effort to garnish Harrosh’s wages and assign
Harrosh’s interest in the subject funds to Plaintiff.
Plaintiff
also argues that the separate property agreement is evidence of Safran and
Harrosh’s efforts to defraud creditors. Plaintiff notes that the agreement is
effective as of June 5, 2018 (Harrosh Decl., ¶ 4, Ex. 1, ¶ 18), which is approximately
four months prior to the entry of the October 25,
2018 Judgment in this action. The Court is concerned by this timing.
Because
Plaintiff has provided additional evidence in connection with the Reply, the Court
will permit a surreply by Harrosh and Safran
as set forth below.
Conclusion
Based on the foregoing, the hearing on the motion is continued
to ____________, 2023 at 10:00 a.m. in Dept. 50. On or before ___________, 2023, Defendants
may file and serve a surreply with a supporting declaration of up to 10 pages
that will address the issues raised in the Reply as well as the impact of
Family Code section 913(b)(1), the existence of an August 20, 2001 Agreement
and the timing of the June 5, 2018 Agreement. On or before that same date, Plaintiff
may file and serve a supplemental brief of up to 3 pages regarding the meaning
and scope of Family Code section 913(b)(1). Courtesy copies of the surreply and
the supplemental brief must be delivered to Sept. 50 concurrently with their
filing.
Plaintiff is ordered to give notice of this Order.
DATED:
Hon.
Teresa A. Beaudet
Judge,
Los Angeles Superior Court
[1]In connection with
the motion, Plaintiff states that “Harrosh is
listed on the [California Department of Real Estate] as a salesperson for Sapir Realty under [Safran’s] license.” (Medioni
Decl., ¶ 14.)