Opinion
No. C-03-2168 SC.
September 24, 2004
ORDER RE: PETITIONER'S MOTION TO DENY EXEMPTION CLAIMS FOR MOTOR VEHICLES
I. INTRODUCTION
Pursuant to several previous Orders of this Court, Respondents Anila.org ("Anila"), Moses S. Joseph LLC ("MSJ LLC") and Moses S. Joseph ("Joseph") are judgment debtors of Petitioner Eastman Kodak Company ("Kodak"). In August 2004, Joseph and his wife, Cathleen Joseph, made several claims of exemption for certain motor vehicles seized pursuant to a Writ of Execution filed April 27, 2004. Presently before the Court is Kodak's Motion for an Order denying the Josephs' exemption claims for those motor vehicles. Kodak supports its motion by arguing that the Josephs' exemption claims are invalid and untimely under California Code of Civil Procedure § 703.010 et seq. For the reasons discussed herein, the Court denies two claimed exemptions as invalid, and grants a single exemption in the statutorily prescribed amount of $2300.00.
II. FACTUAL BACKGROUND
On July 16, 2003, this Court entered a judgment in this action in favor of Petitioner Eastman Kodak Company ("Kodak") and against Respondent Anila.org ("Anila") in the amount of $6,529,672.19. On March 30, 2004, we amended that judgment to add Moses S. Joseph LLC ("MSJ LLC") and Moses S. Joseph ("Joseph") as additional judgment debtors. A Writ of Execution was issued by this Court on April 27, 2004, and on May 6, 2004, the United States Marshal for the Northern District of California ("US Marshal") seized three vehicles belonging to Joseph and his wife, Cathleen Joseph. Notices of Levy were hand served at the time the vehicles were seized. The vehicles were scheduled to be auctioned on August 28, 2004 by Nationwide Auction Systems in Benecia, California. On August 18, 2004, the U.S. Marshal served notice on the Josephs that the cars would be sold. On August 27, 2004, the Josephs served three claims for exemption (one for each car) on Kodak, the U.S. Marshal and Nationwide Auction Systems. Kodak filed a notice of opposition, and moved this Court for an Order denying the exemption claims as invalid and untimely.
III. LEGAL STANDARD
A natural person against whom enforcement of a money judgment is sought may claim certain statutory exemptions pursuant to Title 9, Division 2, Chapter 4 of the California Code of Civil Procedure. At issue here is section 704.010, which provides for an exemption of $2300.00 for "the aggregate equity in motor vehicles." Cal. Code Civ. Pro. § 704.010(a)(1). The Code specifically addresses the effect of exemptions on a judgment debtor who is married:
. . . Where the property exempt under a particular exemption is limited to a specified maximum dollar amount, unless the exemption provision specifically provides otherwise, the two spouses together are entitled to one exemption limited to the specified maximum dollar amount, whether one or both of the spouses are judgment debtors under the judgment and whether the property sought to be applied to the satisfaction of the judgment is separate or community.
Cal. Code Civ. Pro. § 703.110(a).
A claimant entitled under this section must file a claim of exemption with the levying officer "within 10 days after the date the notice of levy on the property claimed to be exempt was served on the judgment debtor." Cal. Code Civ. Pro. § 703.520(a). Failure to do so waives the exemption and subjects the property to enforcement of a money judgment. Cal. Code Civ. Pro. § 703.030(a). Nevertheless, a court may "relieve a person upon such terms as may be just from failure to claim an exemption within the time and in the manner prescribed in the applicable enforcement procedure." Cal. Code Civ. Pro. § 703.030(c).
When a judgment debtor files a claim for exemption, the judgment creditor is afforded ten days within which to file an opposition. Cal. Code Civ. Pro. § 703.550. Once a claim of exemption has been opposed, the exemption claimant has the burden of proving entitlement to the exemption. Cal. Code Civ. Pro. § 703.580(b). It is the role of this Court to decide whether claimant is entitled to the exemption. Once issued, this Order "is determinative of the right of the judgment creditor to apply the property to the satisfaction of the judgment." Cal. Code Civ. Pro. § 703.580(d).
IV. DISCUSSION
At issue here are three claims of exemption for three cars. It appears that the Respondents are claiming one exemption for one car for Joseph, one exemption for another car for Cathleen Joseph, and one exemption for a third car for MSJ LLC. We hold that Respondents, in any combination, are entitled to only one exemption with regard to any or all of these cars. First, the motor vehicle exemption applies "only to the property of a natural person" and must be claimed by a "person" who is a judgment debtor. Cal. Code Civ. Pro. § 703.020. Therefore, MSJ LLC is not entitled to any claim of exemption under this section. Second, the statute clearly allows only one exemption for the "aggregate" value of the debtor's motor vehicles, not a separate exemption for each and every vehicle a debtor might own. Cal. Code Civ. Pro. § 704.010(a). Thus, Joseph and/or his wife may not seek separate exemptions for each vehicle. Finally, "two spouses together are entitled to one exemption," so Mrs. Joseph is not entitled to claim a separate exemption from her husband. Cal. Code Civ. Pro. § 703.110(a). Therefore, we hold that all Respondents may properly seek only ONE exemption — in the amount of $2300 — for all motor vehicles.
Although Kodak believes Respondents are entitled to one claim "at best," it urges the Court to deny that claim as untimely. It is undisputed that the Josephs failed to file the claims for exemption within the prescribed ten day period afer Notice of Levy. However, perhaps recognizing that an enforcement of judgment often imposes significant hardship on the debtor, the statute explicitly provides the Court discretion to relieve the claimants from these prescriptions "upon such terms as may be just." Cal. Code Civ. Pro. § 703.030(c). Given the staggering arsenal of time and resources that Kodak has deployed to pursue and enforce this judgment against Mr. Joseph, we do not doubt Respondent's assertion that they lacked the emotional, financial or legal wherewithal to timely file claims for the motor vehicle exemption. Taking into consideration the financial circumstances of the judgment debtor and the necessity of family support, as the statute allows, we hold that the Josephs, together, may claim one exemption for all three of their motor vehicles in the amount of $2300.00.
V. CONCLUSION
The motion of Petitioner is HEREBY GRANTED in part and DENIED in part. The Court denies two of Respondents' exemption claims, but allows Respondents one exemption in the amount of $2300.00. The Court Clerk shall promptly transmit a certified copy of this Order to the levying officer. Subject to Cal. Code Civ. Pro. § 703.610 the levying officer shall, in compliance with this order, release the $2300.00 to Respondents and apply the remainder of the property to the satisfaction of Petitioner's money judgment.
IT IS SO ORDERED.