Filed 6/30/20 Mayflower Capital etc. v. Patel CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

MAYFLOWER CAPITAL COMPANY PROFIT SHARING PLAN,

Plaintiff and Respondent,

v.

MULJI PATEL,

Defendant and Appellant.

B300632

(Los Angeles County

Super. Ct. No. GC040256)

APPEAL from an order of the Superior Court of Los Angeles County, Edward B. Moreton, Jr., Judge. Affirmed.

Mulji Patel, in pro. per., for Defendant and Appellant.

Benedon & Serlin, Gerald M. Serlin and Melinda W. Ebelhar for Plaintiff and Respondent.

________________________

 

Defendant Mulji Patel (Patel) appeals from an order of the trial court entered on June 28, 2019, denying his motion asserting a workers compensation exemption on funds from a judgment levy. We have jurisdiction under Code of Civil Procedure section 904.1, subdivision (a)(2). Finding no error, we affirm.

BACKGROUND

This appeal represents the latest in a series of efforts by Patel to avoid the consequences of a civil judgment that was entered against him in 2011, and an order for sale of his residence to satisfy that judgment that was entered on September 24, 2018. Past decisions of this court have denied relief on the original judgment as well as an earlier order of sale, and have denied relief on other challenges he has made in these proceedings.

As with Patel’s previous trips to this court during the nine-year course of this litigation, we are again hampered by his failure to comply with the rules applicable to civil appeals. There is a sparse record, a brief that is almost entirely devoid of legal authority or analysis, and a lack of clarity as to the relief Patel seeks.

Piecing together what we can from the record in this case and in the most recent earlier cases, these appear to be the facts most pertinent to this appeal.

On September 24, 2018, the trial court approved the second amended order of sale for dwelling (Order) pursuant to Code of Civil Procedure section 704.750. This sale was authorized to enforce a personal injury judgment entered in favor of Erwin A. Nepomuceno, the original plaintiff in this action, against Patel as judgment debtor. The original judgment against Patel had been entered on July 5, 2011; as of June 28, 2018, the still-uncollected judgment was valued at $2,469,504.45.

In accordance with the homestead provisions of California’s Enforcement of Judgments Law (EJL) contained in sections 704.710 through 704.850, the Order found that Patel was entitled to a homestead exemption of $175,000 (§ 704.730, subd. (a)(3)), that the fair market value of the dwelling was $830,000 (§ 704.780, subd. (b)), and that sale of the dwelling was likely to produce a bid sufficient to satisfy all or part of the judgment (ibid.). The court ordered that the minimum bid pursuant to section 704.800, subdivision (a) would be $175,000 (covering the homestead exemption), and that the minimum bid pursuant to section 704.800, subdivision (b) would be $747,000 (representing 90 percent of the fair market value). The Order directed that if a sale meeting the criteria of section 704.800 was successful, the first $175,000 of the sale proceeds would be distributed to the judgment debtor, Patel, and the remaining proceeds, up to the full amount of the judgment, would be distributed to the judgment creditor, Mayflower.

Patel did not appeal this order, although he could have done so pursuant to section 904.1, subdivision (b). (See, e.g., California Coastal Com. v. Allen (2008) 167 Cal.App.4th 322, 324.) Instead, on November 26, 2018, Patel filed a motion entitled “Motion Request for Workers Compensation Benifits [sic] Claim of Exemption [Section] 704.160 from the Enforcement of Judgment.” It appears from trial court records that this motion was originally set to be heard on May 3, 2019. However, on April 25, 2019, the trial court on its own motion continued the hearing date to May 17, 2019. The court docket reflects that notice of this changed date was mailed to Patel on that same day, April 25, 2019.

The trial court called the matter on the continued date, May 17, 2019. Patel did not appear. Accordingly, because the moving party was not present, the motion was denied.

Patel states in his opening brief: “On May 03, 2019, defendant has hearing for Workers Compensation Exemption that date move forwarded to May 17, 2019 by the court. Defendant had booked the flight for India on Delta Airline on March 05, 2019 therefore on 05/01/2019 defendant has requested one-month extension because defendant booked the Delta airline ticket to depart to India on May 11, 2019.” This demonstrates that Patel was aware of the trial court’s continuance of the hearing date on his motion. However, there is no evidence in the court record of a request for a “one-month extension.”

Nonetheless, in some manner not clear from the record, the motion came on again for hearing on June 28, 2019. The minute order of this date reflects that Patel was present at this hearing. It further reflects that the trial court denied the motion of June 28 as “moot” because the same motion had already been denied on May 17, 2019.

Patel’s notice of appeal states that the instant appeal is taken from the trial court’s order of June 28, 2019.

DISCUSSION

A. Patel’s Contentions on Appeal

Quoted below is Patel’s entire legal argument from his opening brief:

“In the order there was homestead exemption $175,000.00 [section] 704[.]720[, section] 704[.]730 which was mandatory, we have received without filing claim.

“Workers compensation exemption [section] 704[.]160 should be mandatory and other benefits also appellant should receive without filing claim. . . . [¶] . . .

“In the order there was homestead exemption $175,000.00 [section] 704[.]720[, section] 704[.]730 which was mandatory.

“Workers compensation exemption [section] 704[.]160 should be mandatory and other benefits copy enclosed.”

In other words, since (by operation of the homestead provisions in the EJL) Patel received the benefit of a homestead exemption without having to do anything, he contends that he should have received an additional exemption credit for workers’ compensation proceeds paid to him in the past without having to do anything. This is because he claims (without providing any evidence) that his past workers’ compensation proceeds were used to buy the residence to be sold under the trial court’s order of sale, and therefore the exemption should apply to the proceeds of that sale.

Unfortunately for Patel, this is not how the California EJL provisions operate.

B. Executing on a Personal Residence to Satisfy a Money Judgment

California law, specifically sections 704.710 through 704.850 comprising the article entitled “Homestead Exemption,” sets forth a comprehensive and detailed set of rules and procedures applicable whenever a judgment creditor seeks to levy on a judgment debtor’s personal residence to satisfy a money judgment. This asset is treated differently from the other assets of a debtor that are subject to levy.

Most significantly, in the case of executing on a personal residence, the creditor must obtain in advance a formal order of sale for the residence from the court by means of a noticed hearing. (§ 704.740, subd. (a).) In broad outline, as part of this hearing, the court must determine (1) what homestead exemption may apply in favor of the debtor (§ 704.730, subd. (a)), (2) what liens senior to the judgment may exist (§§ 704.760, subd. (c), 704.780, subd. (b)), and (3) what is the fair market value of the property (§ 704.780, subd. (b)). Based on these figures, the court must determine whether sale of the property is likely to yield sufficient funds, after the homestead exemption and payment of senior liens, to satisfy all or part of the judgment. (§ 704.780, subd. (b).) If the court so concludes, the written order entered by the court must set forth these findings and set a minimum bid price of 90 percent of the fair market value of the property. (§ 704.800.) If the minimum bid is not achieved, the sale cannot go forward without further court approval of a lower bid. (Id., subd. (b).) If the sale does go through, the proceeds are to be distributed to the judgment debtor in the amount of the homestead exemption, to senior lienholders (if any), and only then to the judgment creditor to satisfy the judgment and related costs, with any balance going to the judgment debtor if one remains after the first three allocations. (Ibid.)

This procedure stands in stark contrast to the rules applicable to levies on other property of the judgment debtor. Property of the judgment debtor other than a principal residence—whether it be cash, financial instruments, or physical items—may be levied upon without the need for an advance court order. While a description of the entire process is far beyond the scope of this opinion, the salient distinctions are these: (1) the levy is carried out by a levying officer without initial court involvement; (2) a judgment debtor who contends that the levy may reach exempt property must act to assert that contention; and (3) no court involvement will come about unless the judgment creditor formally opposes the claim of exemption. Thus, a claim of exemption must be filed with the levying officer (§ 703.520, subd. (a)), and must set forth under penalty of perjury, among other things, a description of the property claimed to be exempt, a citation to the statutory exemption being claimed, and a statement of facts necessary to support the exemption (id., subd. (b)(3), (b)(5) & (b)(6)). Only if the judgment creditor elects to oppose the exemption claim does the court become involved. (§§ 703.550-703.570.)

Thus, if Patel wanted to assert that further exemptions might apply to the proceeds of the sale of his residence—keeping in mind that Patel’s argument seems to be that because years before this litigation he purchased the house using proceeds from a workers compensation award—he at a minimum had an affirmative burden to come forward with the supporting evidence in a timely manner. He could not simply stand by and do nothing while the levying officer was carrying out the writ of execution in accordance with the trial court’s order of sale.

In the case of the order of sale entered by the trial court here—which is not under review in this appeal—Patel received the maximum homestead exemption available in the amount of $175,000 (§ 704.730, subd. (a)(3)). The other terms of the order of sale appear to comply with the statutory requirements.

The statutes require the court to follow specific requirements in the order of sale for a personal residence, including what figures are to be used, and how the sale proceeds are to be distributed. The applicable homestead exemption is set forth as one of several fixed dollar amounts, chosen depending on the judgment debtor’s status and manner of holding the property. (§ 704.730.) While the court is tasked with making factual findings as to the fair market value of the property and the amount and validity of senior liens, once these findings are made the court must provide for allocation of the sale proceeds in a specific manner. (§ 704.780.) No meaningful leeway is given for the court to vary this statutory recipe.

Nowhere in this process does the Legislature appear to have provided for consideration of whether other statutory exemptions might apply to the proceeds of a sale pursuant to a statutory order of sale. We need not resolve this issue. For purposes of this appeal, it is sufficient to state that (1) there is no “automatic,” self-executing exemption for workers’ compensation proceeds baked into the homestead exemption statutes, as Patel argues, and (2) even if there were, a judgment debtor such as Patel would still have the burden of coming forward with sufficient evidence to substantiate that all or part of the money used to purchase the house came from workers’ compensation payments and that because workers compensation benefits were so used, he was entitled to trace those funds and declare them exempt. Patel offered nothing to the trial court, and offers nothing here, to document his contention that workers’ compensation proceeds were actually used to pay for this residence.

Thus, while the June 28, 2019 order appealed from was based on procedural reasons (mootness because of prior denial of the same motion), the record makes clear that the trial court would have been fully justified in denying Patel’s motion on the merits. On either basis, Patel has failed to demonstrate error in the trial court’s ruling.

DISPOSITION

The order of the trial court is affirmed. Mayflower shall recover its costs on appeal.

NOT TO BE PUBLISHED

WHITE, J.*

We concur:

ROTHSCHILD, P. J.

BENDIX, J.