When Your Debtor Files A Claim Of Exemption
One of many judgment-related articles: I am a judgment broker, not a lawyer, and this article is my opinion based on my experience in California, please consult with a lawyer if you need legal advice.
To complicate judgment recovery matters, some debtors try to thwart creditors, by fraudulently transferring assets. In that case, you would have to file a fraudulent transfer lawsuit against the parties.
I believe fraudulent transfer lawsuits can only be against the transferee(s) of the asset(s). Fraudulent transfer lawsuits are common, and often include the judgment debtor in the lawsuit, because they are often the one who transferred the asset. Even if there is no good reason to include the debtor in a fraudulent transfer lawsuit, it is sometimes done just to annoy the debtor.
In such lawsuits, usually you would have to prove the parties intentionally put the assets out of reach of creditors. Often, the best start would be to make a list of your attempts to enforce the judgment, and their attempts to frustrate the enforcement of your judgment.
Make your response to their claim in writing first; so the court has a copy of your response. If there is no local court form for opposing a claim of exemption; a pleading would be appropriately named "Opposition to Claim of Exemption". Even if you lose, it is a good learning experience, and shows the debtor you are not stopping. Generally, you want your judgment debtor to be thinking about you every day.
If you have not done a court pleading before, you will learn a lot; and might want to contact a lawyer that works your court to review your first one. If you have nothing to start with, try looking up some cases of oppositions to motions to vacate. The codes/laws will be different, and although the issue is different, the general format is usually similar.
As for your court pleading heading, consider points such as:
A) The debtor has attempted to frustrate enforcement of your judgment.
B) The debtor intentionally put their vehicle asset out of reach of you or other creditors, etc.
One California example of an opposition to a claim of exemption, that involved shenanigans of the judgment debtor:
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA, SANTA CLARA JUDICIAL DISTRICT
SMALL CLAIMS, KEARNEY MESA BRANCH
ZZZ, Inc. DBA Dan Debtor Properties, and Dan Debtor.
CASE NUMBER: SC 107224
OPPOSITION TO MOTION TO VACATE JUDGMENT AND SUPPORTING DECLARATIONS
Judgment in the above-entitled matter was entered on July 20, 2015, in favor of the Plaintiff, Almond Plumbing, and against ZZZ, Inc. DBA Dan Debtor Properties and Dan Debtor individually, in the amount of $5,762.66 plus $88.00 in costs, with statutory interest to be earned at the rate of 10%. The judgment remains unsatisfied.
On January 6, 2016 Debtor Dan Debtor requested this Court to set aside the default judgment entered against him individually by filing a Motion to Vacate, and asserted in his motion, that "I was not served". Assignee of Record Edward Enforcer, argues against the Motion to Vacate as follows:
1. The debtor was properly served with the complaint.
CCP 116.340 sets forth personal service upon the defendant as a proper method of giving notice of the plaintiff's claim. Assignee of Record asserts that Dan Debtor was indeed personally served with a copy of the plaintiff's claim at 12:42 hours on April 16, 2015 by the San Diego County Sheriff (see Exhibit A for Declaration of Edward Enforcer for a true and correct copy of San Diego County Sheriff's Proof of Service).
CCP 2015.3 states, "The certificate of a sheriff, marshal or the clerk of the superior court has the same force and effect as his or her affidavit". Assignee asserts that service of process made by the San Diego County Sheriff should be accepted on its face because (1) the proof of service that was filed with this court has the force and effect of an affidavit, (2) the Sheriff's office is an arm of the state empowered with the authority to provide service of process and therefore trains its deputies well in the methods of proper service of process, thereby creating a presumption that service of process in the instant matter was properly performed and properly reported to the court.
Because the judgment debtor was indeed served with a copy of the plaintiff's claim, the motion to vacate should be denied.
2. The time limit for vacating the judgment has passed.
CCP 116.740(a) states that a defendant who claims inadequate service of process, and who did not appear at trial must file a Motion to Vacate the judgment within 180 days of when he learned, or should have learned of the entry of judgment. The judgment debtor did not file his motion within the permitted timeframe. In his motion to vacate, Dan Debtor asserts under oath that he first learned of the judgment against him on December 13, 2015. The Assignee asserts that debtor knowingly made this false oath, and that the facts are otherwise:
A. Early in 2015, Dan Debtor telephoned and spoke, with Don Shyster, former owner and judgment creditor, Almond Plumbing, regarding this judgment against him. (See Declaration of Don Shyster, attached hereto.) In that conversation, Dan Debtor stated that he was trying to improve his credit rating; and that if Don Shyster would first vacate the judgment, Dan Debtor would then pay him the amount of his award. Mr. Don Shyster told Dan Debtor that he would not vacate the judgment (file an acknowledgment of satisfaction of judgment) until the judgment was satisfied in full.
Dan Debtor did not pay Don Shyster, and had no further contact with him.
B. On November 17, 2016, assignee Edward Enforcer met with the judgment debtor's attorney Larry Lawyer, and told him of the judgments against Dan Debtor, whom attorney Larry Lawyer represented. Assignee assumes Mr. Larry Lawyer contacted his client about these judgments, because three days later, Dan Debtor telephoned assignee Edward Enforcer, and stated that he learned that Edward Enforcer was now the creditor. Dan Debtor expressed no surprise. In fact, he admitted that yes, he owed the judgment, however that the title company probably took care of it when he sold his real property in 2010. (See Declaration of Edward Enforcer, attached.)
The judgment was entered on July 20, 2015. The debtor failed to act diligently, and in a timely manner in seeking relief under CCP 116.740(a). Therefore, the motion to vacate should be denied.
3. The judgment debtor's statement that he was surprised is fraudulent.
4. The debtor has not met his burden of proving that he was not properly served, or that other "Good Cause" exists for Vacating this judgment.
The debtor states in an unsworn letter, attached to his motion; that he could not have been personally served, because he has "a hotel bill record for the night in question". However, the debtor does not explain where he was during the daytime, which is when he was served by the Sheriff (at 2:52 that afternoon according to the Proof of Service). Therefore, proof in the form of a hotel receipt for that night is not sufficient proof that he was not served in San Diego, that early afternoon.
In Kendall v. Barker (1988),197 Cal.App.3d 619: "The moving party has a double burden: He must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default". The debtor has shown neither.
Furthermore, in Estate of Wolper (1956) 146 Cal.App.2d, 251 [303 P2d 578] the court has said: While section 473 authorizes a court to relieve a party from default suffered through inadvertence, surprise, excusable neglect or mistake, these words are not meaningless. The party requesting such relief must affirmatively show that the situation is one which clearly falls within such category. See Hewins v. Walbeck (1943) 60 Cal.App.2d 603, 609-610 141 [P.2d 241]; accord, Tom Thumb Glove Co. v. Han (1978) 78 Cal.App.3d 1, 5 [144 Cal.Rptr. 30].)
The debtor has not met these burdens, and has instead provided the court with a fraudulent statement as to the date of his first knowledge of the judgment against him. The motion to vacate should be denied.
The motion to vacate should be denied for the following reasons:
1) Despite his statement to the contrary, Debtor Dan Debtor was personally and properly served by the sheriff in the above matter.
2) Debtor has claimed under oath that he was unaware of the judgment until December 13, 2015. The facts show that this is a lie. He was aware of the judgment long before that date.
Date_________ Edward Enforcer, Assignee of Record.
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