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In re Jackson

Court of Appeals of California, Fourth District, Division Three.
Nov 12, 2003
No. G031746 (Cal. Ct. App. Nov. 12, 2003)

Opinion

G031746.

11-12-2003

In re Marriage of LISA and CURTISS JACKSON. LISA JACKSON, Respondent, v. CURTISS JACKSON, Appellant; COUNTY OF ORANGE, Respondent.

Nanci-Alis Townsend for Appellant. No appearance for Respondent Lisa Jackson. Bill Lockyer, Attorney General, James M. Humes, Assistant Attorney General, Thomas R. Yanger and Sharon Quinn, Deputy Attorneys General, for Respondent County of Orange.


Introduction

A judgment debtor is entitled to a statutory homestead exemption for a dwelling if he or she resides in the dwelling both on the date a creditors lien attaches and on the date the court determines the existence of the exemption. (Code Civ. Proc., § 704.710, subd. (c).) In this case, the debtor claimed the homestead exemption protected his share of the sales proceeds from a dwelling to which the debtor never held title, and in which he had not resided for approximately eight months before it was sold. The trial court concluded any homestead exemption in the property was lost because the debtor moved out of the dwelling and therefore did not reside there on either of the statutorily required dates. We conclude the trial court properly applied Code of Civil Procedure section 704.710, and therefore affirm.

Facts and Procedural History

In October 1993, the Ventura County Superior Court ordered Curtiss Jackson to pay child support to Lisa Jackson. (We shall refer to Curtiss Jackson and Lisa Jackson by their first names to avoid confusion, and intend no disrespect.) The Ventura County court increased the amount of child support in May 1994. Lisa registered the support orders in Orange County in January 1995. Curtiss filed several motions in Ventura and Orange Counties seeking to modify the amount of child support due, and/or to quash or modify the amount of child support in arrears. All such attempts were denied.

In 1992, Susan Carlson, Curtisss girlfriend, purchased a house in Palmdale (the Palmdale property). Curtiss provided the down payment for the Palmdale property, which was his primary residence until 2001. Title to the Palmdale property was taken only in the name of Susan Carlson, an unmarried woman.

In September 2001, Curtiss vacated the Palmdale property in response to a court order. Carlson then attempted to sell the Palmdale property. Curtiss recorded a lis pendens against the Palmdale property on October 23, 2001. On November 29, Carlson filed a bankruptcy petition, listing the Palmdale property as her primary asset. The bankruptcy trustee and Curtiss reached an agreement, by which Curtiss agreed to withdraw his lis pendens in exchange for a payment of $25,000 from the close of escrow on the sale of the Palmdale property.

In April 2002, the Orange County Department of Child Support Services (the Department) contacted the company handling the escrow for the sale of the Palmdale property. The Department requested that escrow not be completed until the Department could serve a writ of execution to attach the escrow funds to pay a portion of Curtisss child support arrearage. Before the writ of execution was filed, Curtiss agreed to direct the escrow company to pay to the Department his share of the sales proceeds, to be put into a suspense account pending a court order for disbursement.

The Department requested a hearing to determine Curtisss claim that the funds were exempt from attachment due to an undeclared homestead. After briefing and argument, the court found Curtiss had had an undeclared homestead interest in the Palmdale property, but lost his homestead exemption when he moved out in September 2001. Curtiss timely appealed.

Discussion

We review de novo the trial courts determination that Curtiss lost his homestead interest in the Palmdale property when he moved out in September 2001. "`As an appellate court, " . . . we `conduct independent review of the trial courts determination of questions of law. [Citation.] Interpretation of a statute is a question of law. [Citations.] Further, application of the interpreted statute to undisputed facts is also subject to our independent determination. [Citation.]" [Citation.]" (McKee v. Orange Unified School Dist. (2003) 110 Cal.App.4th 1310, 1316.)

It is undisputed that (1) Curtiss had an interest in the Palmdale property, (2) Curtiss moved out of the Palmdale property under court order in September 2001, and (3) Curtiss never again lived in the Palmdale property.

Although the Department argues on appeal Curtiss failed to prove an equitable interest in the Palmdale property, the Department conceded Curtisss interest in the Palmdale property in the trial court. In a declaration filed with the trial court, a Department employee stated, "Mr. Jackson proved to the Bankruptcy Court that he was either part owner or that he had an interest in the . . . property." Additionally, when the trial court stated its understanding that Curtiss had an equity interest in the Palmdale property, neither party objected or corrected the court.

"`Homestead means the principal dwelling (1) in which the judgment debtor . . . resided on the date the judgment creditors lien attached to the dwelling, and (2) in which the judgment debtor . . . resided continuously thereafter until the date of the court determination that the dwelling is a homestead." (Code Civ. Proc., § 704.710, subd. (c).) Because the language of subdivision (c) of this section is in the conjunctive, the Palmdale property would have to have been Curtisss residence both on the date the lien attached and continuously from that date until the trial court determined he had a homestead interest in the property. (Hoechst Celanese Corp. v. Franchise Tax Bd. (2001) 25 Cal.4th 508, 528.) Because it is undisputed Curtiss was not living in the Palmdale property when the trial court determined the applicability of the homestead exemption, the exemption could not apply to Curtisss share of the proceeds from the sale of the Palmdale property.

Curtiss argues that continuous residence at the property in question is not required. It is true that a temporary absence from a property, such as during a vacation or hospitalization, does not destroy ones residency in the property for purposes of the homestead exemption. (Cal. Law Revision Com. com., 17 Wests Ann. Code Civ. Proc. (1987 ed.) foll. § 704.710, p. 346.) Curtisss absence from the Palmdale property was not temporary, however. "The essential factors in determining residency for homestead purposes are physical occupancy of the property and the intent to live there." (In re Dodge (Bankr. E.D.Cal. 1992) 138 B.R. 602, 607; see Ellsworth v. Marshall (1961) 196 Cal.App.2d 471, 474; In re Bruton (Bankr. S.D.Cal. 1994) 167 B.R. 923, 926 [prolonged absences for work did not destroy residency because debtor demonstrated intent to return].) Curtiss never physically occupied the Palmdale property after September 2001, and had no intention to live there after that date. The homestead exemption could not apply.

Curtiss argues such a reading of Code of Civil Procedure section 704.710 would extinguish a homestead if ones property were destroyed by fire or earthquake, since one could not reside in the property. The law of homestead exemptions specifically addresses this circumstance. "If a homestead is sold under this division or is damaged or destroyed or is acquired for public use, the proceeds of sale or of insurance or other indemnification for damage or destruction of the homestead or the proceeds received as compensation for a homestead acquired for public use are exempt in the amount of the homestead exemption provided in Section 704.730. The proceeds are exempt for a period of six months after the time the proceeds are actually received by the judgment debtor, except that, if a homestead exemption is applied to other property of the judgment debtor or the judgment debtors spouse during that period, the proceeds thereafter are not exempt." (Code Civ. Proc., § 704.720, subd. (b).)

Division 2 of title 9 of part 2 of the Code of Civil Procedure, which includes section 704.720, provides the procedures for enforcement of money judgments in California.

Code of Civil Procedure section 704.720s reference to a sale of the property does not apply in this case, since the statute refers only to property "sold under this division" — meaning sales in the enforcement of money judgments. The sale of the Palmdale property by the bankruptcy trustee does not meet the statutory requirements of Code of Civil Procedure section 704.720. "Subdivision (b) [of Code of Civil Procedure section 704.720] provides an exemption for proceeds of an execution sale of a homestead, for proceeds from insurance or indemnifications for the damage or destruction of a homestead, and for an eminent domain award or proceeds of a sale of the homestead for public use. . . . As under former law, proceeds of a voluntary sale of the homestead are not exempt under the proceeds exemption provided by subdivision (b). . . ." (Legis. Com. com., 17 Wests Ann. Code Civ. Proc. (1987 ed.) foll. § 704.720, pp. 347-348.)

Finally, Curtiss argues that because the Department never filed a judgment lien against his share of the proceeds from the Palmdale property, it would have been impossible for him to have resided on the property when the lien attached, thus precluding a residency requirement. An agreement by the parties to hold property in a suspense account rather than pursuing formal lien proceedings is more efficient and imposes a lesser burden on the judicial system. We do not believe the Legislature intended the benefits of the homestead exemption could apply only when parties pursue formal legal proceedings to their ultimate conclusion. In this case, it is undisputed that Curtiss did not reside in the Palmdale property at any time after September 2001, including the date on which he and the Department reached an agreement to hold his sales proceeds in a suspense account.

We conclude the trial court correctly determined Curtisss homestead exemption to his share of the proceeds from the sale of the Palmdale property was lost.

DISPOSITION

The order is affirmed. Respondent County of Orange is to recover its costs on appeal.

WE CONCUR: SILLS, P. J. and ARONSON, J.


Summaries of

In re Jackson

Court of Appeals of California, Fourth District, Division Three.
Nov 12, 2003
No. G031746 (Cal. Ct. App. Nov. 12, 2003)
Case details for

In re Jackson

Case Details

Full title:In re Marriage of LISA and CURTISS JACKSON. LISA JACKSON, Respondent, v…

Court:Court of Appeals of California, Fourth District, Division Three.

Date published: Nov 12, 2003

Citations

No. G031746 (Cal. Ct. App. Nov. 12, 2003)