Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BD494069 Amy Pellman, Judge.
Law Offices of Kent M. Bridwell and Kent M. Bridwell for Appellant.
No appearance by Andreea Dumitrescu, Respondent.
Pasternak, Pasternak & Patton, John W. Patton, and David J. Pasternak, for Movant and Respondent.
PERLUSS, P. J.
Andre Deloje appeals from an order in this marital dissolution action directing the court-appointed receiver, David J. Pasternak, to sell two real properties owned by Deloje to satisfy court orders for temporary spousal support, attorney fees, forensic accounting fees and Pasternak’s receiver’s fees. Deloje contends the court erred in confirming the sale because those properties, which were held in Deloje’s private individual retirement account, were exempt from execution pursuant to Code of Civil Procedure section 704.115. We affirm.
Statutory references are to the Code of Civil Procedure unless otherwise indicated.
After this appeal was filed Deloje and his former wife, Andreea Dumitrescu, executed a stipulated judgment, entered by the trial court, resolving their family law dispute. However, as Deloje and Pasternak acknowledge, a justiceable controversy remains whether the properties can be sold to satisfy Pasternak’s outstanding receivership fees and expenses.
FACTUAL AND PROCEDURAL BACKGROUND
1. Deloje’s Petition for Dissolution of the Marriage
Deloje and Andreea Dumitrescu were married on September 16, 2004. On October 10, 2008 Deloje petitioned for dissolution of the marriage. In response Dumitrescu requested orders for temporary spousal support, attorney fees and additional funds to conduct a forensic accounting regarding “the community property interest in all real estate properties held in [Deloje’s] name and/or ADAD LLC, a community property business.”
2. The Court’s December 2, 2008 Order Awarding Dumitrescu Temporary Spousal Support and Other Expenses
In a declaration filed in opposition to Dumitrescu’s request for temporary spousal support, attorney fees and other expenses, Deloje testified he “makes his living” buying and selling real property through his company, ADAD, LLC, which he acquired in 1992 before his marriage. According to Deloje, ADAD lost money during the four years he and Dumitrescu were married and his personal assets and bank accounts were depleted. “The only significant asset” he owned was a Roth individual retirement account (Roth IRA), in which, among other things, he held real estate valued at $1,258,895.36. Deloje maintained he had made no contributions to his Roth IRA during the marriage.
A Roth IRA is a particular individual retirement plan defined in title 26 of the United States Code sections 7701(a)(37) and 408A.
On December 2, 2008, after full briefing and a hearing, the trial court found Deloje’s income and expense declaration not credible and deemed Deloje’s “expenses as his income, without prejudice.” The court ordered Deloje to pay $2,428 per month in temporary spousal support, $10,000 in attorney fees incurred by Dumitrescu and an additional $5,000 for forensic accounting fees.
3. Dumitrescu’s Motion To Enforce the December 2, 2008 Order
On January 14, 2009 Dumitrescu filed a motion to enforce the December 2, 2008 order. Dumitrescu requested the court order Deloje to liquidate some of the 99 real properties he owned to satisfy the December 2, 2008 orders. Deloje objected, contending enforcement of the interlocutory orders was premature; he also argued he had attempted to comply with the court’s orders but lacked sufficient funds.
4. Appointment of Pasternak as Receiver
The motion to enforce the December 2, 2008 order was initially heard on February 24, 2009. The court appointed Pasternak as a receiver in the action and directed him to review Deloje’s real estate portfolio and provide the court with a proposal as to whether any properties should be “refinanced, sold or otherwise liquidated to satisfy the December 2, 2008 spousal support, attorney’s fees, and forensic accounting fees orders, as well as to satisfy the fees associated with the administration of the receivership.” The court also ordered Pasternak to obtain a $2 million receiver’s bond. The court reserved jurisdiction on Dumitrescu’s request for attorney fees pursuant to Family Code section 3557 and continued the hearing on enforcement of the December 2, 2008 order to April 21, 2009 and then to May 18, 2009.
Deloje and Dumitrescu both testified at the May 18, 2009 hearing on the motion to enforce the December 2, 2008 order. Pasternak also reported his findings and recommendations to the court. Following the hearing, the court ordered that Deloje’s “outstanding obligations, including... attorney fees, forensic accounting fees, spousal support owed to [Dumitrescu] and [Pasternak’s] fees of administering the receivership” were “to be paid from the proceeds of the sale of [Deloje]’s property.” The court also ordered Deloje to pay $10,000 to permit Dumitrescu to secure a car for her personal use, subject to reallocation at trial. On June 23, 2009 the court specified that seven of the 99 real properties identified as Deloje’s were to be placed in receivership and listed for sale as is, “subject to this [c]ourt’s confirmation with possible overbidding.”
5. Pasternak’s Request To Confirm the Sale of Two of Deloje’s Real Properties
On November 16, 2009 Pasternak filed and served an ex parte application seeking orders confirming the sale of two undeveloped properties, 8571 and 8573 Crescent Drive (the Crescent Drive properties), for a total sum of $60,000; removing five properties from the receivership on the ground they were jointly owned by third parties, which made their sale difficult; and adding five other properties to the receivership. Pasternak also requested his receivership bond be reduced from $2 million, which was intended to cover all 99 properties, to $100,000. Pasternak contended ex parte relief was required because funds were needed quickly to pay the premium on the receiver’s bond; there was little interest in the purchase of undeveloped land in the current real estate market; the buyer was ready to purchase this undeveloped land; and this sale would not go through if there was further delay. Deloje objected, contending in a written response that ex parte relief was improper and that relief could only be granted upon noticed motion. He also argued for the first time the real estate assets were part of an individual retirement account exempt from execution under section 704.115.
The matter was not heard ex parte on November 19, 2009, as noticed, but rather was continued to December 1, 2009 to allow for full briefing on the issues raised. Following the hearing, the court granted Pasternak’s request and confirmed the sale of the Crescent Drive properties. The court directed that the “[f]irst $20,000 of sale proceeds shall pay Receiver’s bond premium, [the] next $30,000 to [go]to [Dumitrescu] for [spousal] support and the balance” to go toward payment of the receiver’s administrative fees. Deloje promptly filed a notice of appeal.
The December 1, 2009 order confirming the receiver’s proposed sale of the properties is an appealable order. (See In re Marriage of Skelley (1976) 18 Cal.3d 365, 368) [“[w]hen a court renders an interlocutory order collateral to the main issue, dispositive of the rights of the parties in relation to the collateral matter, and directing payment of money or performance of an act, direct appeal may be taken”].)
DISCUSSION
1. Governing Law on Exempt and Conditionally Exempt Assets
Under California law assets held in private retirement plans are, absent certain exceptions, fully exempt from execution, both before and after their distribution to the judgment debtor. (§ 704.115, subd. (b).) In contrast, assets held in individual retirement accounts, which include Roth IRA’s authorized under 26 U.S.C. section 408A, are exempt from execution “only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires....” (§ 704.115, subd. (e); see McMullen v. Haycock (2007) 147 Cal.App.4th 753, 755-756 [recognizing conditional exemption for IRA accounts].)
Even when property is deemed exempt, however, it may still be used in an appropriate circumstance to satisfy a judgment for child, family or spousal support. In particular, section 703.070, subdivision (c), provides, “[I]f property sought to be applied to the satisfaction of a judgment for child, family, or spousal support is shown to be exempt, under subdivision (a) in appropriate proceedings, the court shall, upon noticed motion of the judgment creditor, determine the extent to which the exempt property nevertheless shall be applied to the satisfaction of the judgment. In making this determination, the court shall take into account the needs of the judgment creditor, the needs of the judgment debtor and all the persons the judgment debtor is required to support, and all other relevant circumstances. The court shall effectuate its determination by an order specifying the extent to which the otherwise exempt property is to be applied to the satisfaction of the judgment.”
2. Deloje Did Not Satisfy His Burden of Proving the Crescent Drive Properties Were Exempt From Execution
Citing section 704.115, subdivision (e), Deloje contends the trial court never made the required findings concerning the extent to which the Crescent Drive properties in his Roth IRA were necessary for support in his retirement. Absent the required hearing and findings, he contends, the order authorizing the sale of the Crescent Drive properties is unlawful.
Contrary to Deloje’s characterization of the record, the question whether the Crescent Drive properties in his Roth IRA were exempt from execution was the focus of the December 1, 2009 hearing. Pursuant to section 704.115, subdivision (e), the court considered all Deloje’s resources, including the 97 other properties in his investment portfolio, which Pasternak had conservatively estimated to be worth between $1.5 million and $2 million, and found the sale of the Crescent Drive properties for $60,000—approximately 3 percent of his asset portfolio—would not substantially impair his ability to support himself in retirement. Therefore, the court found, the properties were not exempt from execution under section 704.115, subdivision (e).
Deloje contends that there is no evidence to support the court’s findings. He insists there should have been some evidence, preferably in the form of actuarial tables, of how much money was needed to support Deloje in his retirement. (Deloje was 54 years old at the time of the hearing.) Typically, such evidence is provided in the form of a financial statement listing all sources of earnings and other income, assets and outstanding obligations. (§ 703.530, subds. (a) [“[i]f property is claimed as exempt pursuant to a provision exempting property to the extent necessary for the support of the judgment debtor..., the claim of exemption shall include a financial statement”], (b) [listing the items to be included in financial statement].) The only financial statement filed in this case by Deloje was dismissed by the court as noncredible, a finding he does not contest on appeal. To the extent any additional evidence was warranted, it was Deloje’s burden to provide it in connection with his exemption claim. (See § 703.580, subd. (b) [person claiming exemption bears burden of proof]; Schwartzman v. Wilshinsky (1996) 50 Cal.App.4th 619, 627 [same].) His failure to do so was to his own detriment. It does not compel reversal of the judgment against him. (See Evid. Code, § 550, subd. (b) [“burden of producing evidence as to a particular fact is initially on the party with the burden of proof as to that fact”]; see generally Bookout v. State of California ex rel. Dept. of Transp. (2010) 186 Cal.App.4th 1478, 1486 [“Where, as here, the judgment is against the party who has the burden of proof, it is almost impossible for him to prevail on appeal by arguing the evidence compels a judgment in his favor. That is because unless the trial court makes specific findings of fact in favor of the losing plaintiff, we presume the trial court found plaintiff’s evidence lacks sufficient weight and credibility to carry the burden of proof.”].)
Finally, Deloje insists the December 1, 2009 order must be reversed because it was based on an ex parte application, contrary to the provision in section 703.070, subdivision (c), which requires a judgment creditor seeking to execute on property deemed exempt by the court in an appropriate proceeding to file a noticed motion, so the court may determine the extent to which the exempt property may nevertheless be used to satisfy the judgment for spousal, child or family support. The argument is flawed in several respects.
First, the court found pursuant to section 704.115 the Crescent Drive properties were not subject to the conditional exemption. Since the properties were not deemed exempt, section 703.070 was never triggered. (See § 703.070, subd. (c) [this section applies only in event asset is found “in appropriate proceedings” to be exempt].)
Second, the court did not grant ex parte relief but continued the hearing for 12 days to allow time for full briefing and a noticed hearing on the issue. (See § 1005 [directing motions to be served and filed at least 16 court days before hearing, or upon shorter time if court orders it].)
Finally, even if the Crescent Drive properties in the Roth IRA had been found to be conditionally exempt, the court would still have been permitted to confirm the sale pursuant to section 703.070, subdivision (c), which authorizes exempt property to be used to satisfy a judgment for spousal support if, upon consideration of all the circumstances, including the circumstances of the judgment creditor, use of otherwise exempt property to satisfy the judgment is warranted. Here, the court specifically explained it was considering all the evidence in this case, apart from Deloje’s financial statement that the court found not credible, and determined, on balance, the $60,000 proceeds from the sale of the Crescent Drive properties should be used to satisfy the December 2, 2008 order. In his briefs to this court Deloje has cited to nothing in the appellate record to demonstrate that determination was error.
Pasternak insists none of the properties in Deloje’s Roth IRA was exempt because the account was not used for retirement purposes but rather to protect his assets from the family court’s order. (See Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 14 [plan used to meet debtor’s short-term personal needs not primarily for retirement and therefore not subject to statutory exemption]; In re Rucker (9th Cir. 2009) 570 F.3d 1155, 1160-1161 [same].) In light of our holding the court’s order confirming the sale of the properties was proper, we need not reach that question.
DISPOSITION
The judgment is affirmed. Pasternak is to recover his costs on appeal.
We concur: ZELON, J.JACKSON, J.