American Express National Bank vs Juan C Karam

Case Number

22CV01210

Case Type

Hearing Date / Time

Wed, 12/20/2023 - 10:00

Nature of Proceedings

Claim of Exemption

Tentative Ruling

Plaintiff American Express National Bank [“American”] is represented by Lourdes Slinsky, Kambrie L. Keith,

Defendant Juan C Karam [“Defendant”] is self-represented

Issue

Declaration and Claim of Exemption filed by Defendant 12/5/2023

Ruling

For all the reasons set out below the Claim of Exemption is DENIED.

Analysis

The American complaint was filed in 3/2022; there was a default prove-up and Judgment was entered in favor of American on 12/22/22 for 34,111.16; a Writ of Execution was filed.

Defendant’s Claim of Exemption

Defendant filed a Financial Statement on 12/5/23; read and considered; summarized; testifies that his monthly income gross pay is $13,000; monthly take-home is $8,750; cash $200; $3,600 and levied by American; drives a 2022 VW Jetta that is financed; $0 in real estate equity; $0 in all other personal property; living expenses $8,050/mo; installment debt for Back Taxes $52,000 and Car $34,000; eldest son is attending college with student loans, but he helps him financially as much as possible; living separate and apart from spouse.

Supported by the Declaration of Defendant who testifies: “Due to financial difficulties in the last 3 years, I am literally living paycheck to paycheck as seen in my Financial Statement. I lost my real estate investment in 2020 because of the pandemic as both of my tenants abandoned their lease agreements. Because of this I was forced to sell at a loss and have yet to recover from this. These financial difficulties took a toll on my marriage and I have been separated from my Wife for a year and a half. I simply cannot afford to live with this bank levy. On Monday November 13th, 2023, I was surprised to see that $1,634.37 and $100.00 had been held from my checking account ending in 9662. This caused my rent check to bounce, and I had to explain the situation to my landlord. The levy was even imposed on my children's bank account that are linked to my account. I am currently trying to negotiate with the Plaintiff’s counsel on a settlement. With help from relatives and trying to sell my late father's watch, I offered a $15,000 settlement that was rejected by the Plaintiff. They countered at $25,000 which I simply cannot afford and advised that I need to come up with the funds by November 27th, 2023 in order to settle by that amount. I explained that this was not possible.”

American’s Opposition

American filed an Opposition to Defendants Claim of exemption on 11/29/23; read and considered; summarized; reports: The item or items claimed as exempt are not exempt under the statutes relied upon in the Claim of Exemption: Not necessary for the support of the debtor or the debtor's family. There is a comprehensive 6-page Declaration submitted by American signed by its lawyer Kambrie L. Keith,

The Court’s Conclusions

This claim of exemption should clearly be denied. CCP §700.140 outlines the procedure and allows for a judgment creditor to seek an earning withholding order in order to satisfy the judgment obtained against the judgment debtor. CCP §703.510, et al. allows the Defendant to seek an order of exemption for those funds but Defendant retains the burden of proof in order to show why funds should not be withheld. Defendant provides 42 U.S.C. Section 47 and CCP §704.070 as legal authority or basis to explain why funds would be exempt from levy. 42 U.S.C. Section 47 has no bearing on this matter and is the US Code section entitled “Juvenile Delinquency Prevention and Control”.

CCP §704.070 states that funds are exempt if “all of the paid earnings are exempt if prior to payment to the employee they were subject to an earnings withholding order or an earnings assignment order for support [and] disposable earning that would otherwise not be subject to levy under Section 706.050… are exempt if prior to payment to the employee they were not subject to an earnings withholding order or an earnings assignment order for support.”

Defendant states in his income and expense report that he pays $2,000.00 a month in child, spousal support there is no proof of any withholding order in affect here. American reports, per public records, no support order has been issued and while the debtor does have an active family law case, it does not appear per Court record, that any such order has been issued. Therefore, this CCP § does not exempt the funds and cannot be applied here.

Defendant claims that the funds should not be levied under CCP §704.225. CCP §704.225 states that a debtor’s “account that is not otherwise exempt under this chapter is exempt to the extend necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.” While Defendant makes this claim, the evidence used does not back this claim.

In his income and expense report he lists no dependents whatsoever and, in his statement, he explains that he and his spouse are separated. We can then only look to what the debtor is claiming as necessary solely for himself.

Defendant makes $13,000.00 each month before taxes and with $3,600.00 taken out for taxes (the only deduction listed that is required by law) it leaves $9,400.00 each month.

Defendant then lists many items in the expense report that are not legally necessary and should not be in the calculation for what is necessary.

Defendant also lists installment payments each month of $900.00 for IRS back taxes. There is no proof of any other judgment and other debts cannot take priority over this judgment.

In total, Defendant lists $3,950.00 of items that are not legal necessities and cannot be used to calculate what is legally necessary. Removing these items would leave Defendant with a surplus of funds of over $5,000.00 each month.

According to Defendant’s own statement, even if we included the non-necessary items, Defendant has a surplus of funds every month and therefore the saved funds in the accounts cannot be held exempt.

Defendant clearly has not met their burden of proof to show why their account is exempt under the codes listed or as necessary for support of the judgment debtor.

In light of the above, the judgment creditor’s request that the judgment debtor’s claim of exemption should be denied, and all funds currently held by the sheriff be released to Plaintiff must be granted.