07AS02807

Integrated Payment Systems, Inc. vs. Rita Narayan

Nature of Proceeding: OSC Re: Sale of Dwelling

Filed By: Young, Kenrick

Judgment Creditor Western Union Financial Services, Inc.’s Application for Order for
Sale of Dwelling is denied, without prejduice.

Judgment Creditor seeks an order to sell Judgment Debtor Rita Narayan’s dwelling in
order to enforce a judgment obtained against her in March 2010. On April 22, 2014,
this Court issued an OSC why an order for sale of dwelling should not be made and
set the matter for hearing on today’s calendar.

The Court must first determine whether the dwelling is subject to the homestead
exemption. Here, as seen in Judgment Debtor’s opposition, the dwelling is a
homestead. A homestead is the principal dwelling in which the debtor resided on the
date the judgment lien attached to the dwelling and which the debtor resided
continuously thereafter until the date the court determines whether the dwelling is a
homestead. (CCP § 704.710(c).) She currently occupies the property and has lived
there continuously since a lien has been placed on the property. (Narayan Decl. ¶ 2.)
In addition, she has recorded a declaration of homestead. (Id. Exh. A.)
See, e.g.§ 704.720. Judgment Debtor has established that the dwelling is a
homestead. Both parties recognize that if the dwelling is a homestead, than the
amount of the exemption is $75,000. (CCP § 704.730(a)(1).)

Once a dwelling is determined to be subject to a homestead exemption, and the
amount established, the Court must then determine the fair market value of the
property and shall make an order for sale subject to the exemption, unless the Court
finds that the sale of the dwelling is not likely to produce a bid high enough to satisfy any part of the judgment creditor’s judgment. (CCP §704.780(b).) “[A]ll liens and
encumbrances” on the dwelling must be paid off first from the proceeds of the sale.
(CCP § 704.785(a)(1).) Therefore, a sale cannot be completed unless the bid exceeds
the amount of any liens, plus the amount of the homestead exemption. (CCP §
704.800(a).)

Here, the application is denied as the judgment debtor failed to submit competent
evidence showing the fair market value of the property. Indeed, Judgment Creditor
simply states in its application that according to the property’s tax statement the
assessed value of the Property is $127,375.00, however, no tax statements are
included with the moving papers. In addition, the moving papers assert that “Western
Union is informed and believes the Property has a market value not less than
$153,093.00.” Statements made on information and belief “are hearsay and must be
disregarded…, and [they] are ‘unavailing for any purpose’ whatever…A ruling ‘of the
court is to be based upon facts which may be presented to it, and not upon the belief
of the affiant…Such allegations on ‘information and belief’ furnish no proof of the facts
stated.” ( Thiebaut v. Blue Cross (1986) 178 Cal.App.3d 1157, 1161 [quoting Star
Motors Imports, Inc. v. Superior Court (1979) 88 Cal.App.3d 201, 204].) Thus, given
the failure to provide any competent evidence regarding the property’s fair market
value, the Court concludes that the sale of the dwelling, which is subject to Judgment
Debtor’s $75,000 homestead exemption, is not likely to produce a bid high enough to
satisfy any part of the judgment creditor’s judgment. (CCP § 704.780(b).)

Further, Judgment Creditor alludes to the fact in the moving papers that Judgment
Debtor may only have a 25% interest in the property. This fact is confirmed by
Judgment Debtor as she declares that she only holds an undivided 25% interest in the
property. (Narayan Decl. ¶ 4) Thus, even if the Court were to accept the statement on
information and belief that the value of the Property was $153,093, which it does not,
Judgment Debtor’s interest would only be valued at $38,273.25 which would be the
only portion that Judgment Creditor could sell. A sale of that $38,273.25 interest in the
dwelling would be subject to the $75,000 homestead exemption and there would be
nothing left to satisfy the judgment.

As a result, the application is denied without prejudice to a subsequent application
supported by evidence of fair market value.

In reply, Judgment Creditor states that the declaration received from Judgment Debtor
was unsigned. It argues that her true residence is not clear and requests that if a
signed declaration was provided to the Court that the hearing be continued for 30 days
so that it can conduct a debtor’s examination under oath to determine Debtor’s true
residence. The Court sees no need to continue the hearing as the declaration filed
with the Court was signed and executed under penalty of perjury and stated that the
debtor has resided at the subject property continuously since the lien was placed on
the property.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or other notice is required.