Opinion
G062415
01-16-2024
SAIL EXIT PARTNERS, LLC, Plaintiff and Respondent, v. WALTER L. SCHINDLER et al., Defendants; MARILYN WILLIAMS, Third Party Claimant and Appellant.
Law Offices of Alexandria C. Phillips and Alexandria C. Phillips for Third Party Claimant and Appellant. Troutman Pepper Hamilton Sanders, Peter N. Villar, Bryan M. Sonksen and Elizabeth Holt Andrews for Plaintiff and Respondent.
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County No. 30-2018-00994978, Layne H. Melzer, Judge.
Law Offices of Alexandria C. Phillips and Alexandria C. Phillips for Third Party Claimant and Appellant.
Troutman Pepper Hamilton Sanders, Peter N. Villar, Bryan M. Sonksen and Elizabeth Holt Andrews for Plaintiff and Respondent.
OPINION
GOETHALS, J.
Marilyn Williams appeals from the trial court's entry of a minute order denying her motion to avoid collection efforts by Sail Exit Partners, LLC (SEP) following a default judgment SEP obtained against Williams's husband, John A. Severson. (See Code Civ. Proc., § 720.110 et seq. [authorizing third party claims to assert interests "superior to the creditor's lien" on judgment debtor property].) Although the record does not include SEP's levy filing, nor is the record complete in other respects as we discuss below, it appears SEP sought to enforce the judgment against Severson's share of community property, including an IRA account that Williams claims is her separate property. After a hearing, the trial court found Williams's "evidence . . . insufficient to establish that the TD Ameritrade IRA account is exempt or separate property"; the court did not identify Severson's interest, if any, in the account nor did it find SEP was entitled to any portion of the account.
All further undesignated statutory references are to the Code of Civil Procedure.
The trial court did not enter a judgment (§ 720.390) that is a prerequisite for an appeal (§ 720.420), perhaps because Williams had another exemption claim or claims still pending. Whatever the reason, the absence of a judgment requires that we dismiss the appeal. Neither Williams nor SEP suggests there are any "unusual circumstances" to justify treating Williams's premature appeal as a petition for writ of mandate. (See H.D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1366-1367 (H.D. Arnaiz).) We therefore dismiss the appeal and remand the matter to the trial court for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Because dismissal and further proceedings in the trial court are required, we limit our background discussion.
This is the second time that the parties appear before us on appeal. In the first installment, Severson challenged the underlying default judgment against him and Williams asserted a global challenge to collection efforts involving Severson's putative share of alleged marital assets on grounds that "she and Severson were never actually married because their 2004 Italian wedding did not satisfy Italy's requisite formalities." (Sail Exit Partners, LLC v. Severson (Jan. 11, 2022, G059275) [nonpub. opn.] (SEP I).) We found no merit in either challenge. (Ibid.)
Subsequently, the trial court held a hearing on Williams's third party motion, submitted on October 18, 2019, in which she sought to preclude SEP from levying on "[m]y [s]eparate [p]roperty IRA, being held [at] TD Ameritrade." The court also heard Williams's bid to shield other assets and entered a minute order following the hearing.
The court's minute order stated as to a "Manufactured Home" that Williams sought to protect against collection efforts: "Although she does not provide documentary evidence of how and when she made full payment on the home, the Court finds Williams' testimony sufficient to establish the home is her separate property-acquired before her marriage to Severson." The court nonetheless denied Williams's "motion as to [the home] as there is no levy." The court also denied Williams's claim related to an electric boat: "The evidence does not establish that the boat is exempt as Williams' separate property." Williams does not challenge either of these aspects of the court's minute order.
As noted above, the trial court found Williams did not carry her burden of proof as to the contested IRA. The court then entered its minute order; Williams now appeals.
DISCUSSION
SEP contends that, "[s]trictly speaking," the minute order from which Williams appeals "is an interlocutory, non-appealable order." We agree and conclude the appeal must therefore be dismissed.
The claims statute provides for "a third-party claim under this chapter" when real or personal property "has been levied upon." (§ 720.110, subds. (a), (b).) The statute authorizes "fil[ing] the claim with the levying officer . . . after levy on the property ...." (§ 720.120; see § 720.130 [form and contents of third party claim, including requisite copies of documents upon which claim is based].) Within 15 days after filing a claim, the third party or the levying creditor "may petition the court for a hearing to determine the validity of the third-party claim and the proper disposition of the property that is the subject of the claim." (§ 720.310, subd. (a); see also § 720.350, subd. (a)(1) [court may permit amendment of third party's initial claim in the interest of justice].)
At the hearing on the third party claim, "the third person has the burden of proof." (§ 720.360.) As SEP notes in arguing that Williams's appeal is premature, the statutory framework provides that, following a hearing, "the court shall give judgment determining the validity of the third-party claim and may order the disposition of the property or its proceeds in accordance with the respective interests of the parties." (§ 720.390, italics added.) That resulting "judgment is conclusive between the parties to the proceeding" (ibid.), and, as such, "[a]n appeal may be taken from a judgment given pursuant to Section 720.390" (§ 720.420). Thus, "[a] judgment dismissing a third party claim in a proceeding under [§ 720.390's predecessor statute] is appealable as a final judgment in a special proceeding." (Askew v. Resource Funding Ltd. (1979) 94 Cal.App.3d 402, 405, fn. 1.)
Notably, section 720.430 provides that a judgment debtor's property subject to a third party claim "may be levied upon or otherwise sought to be applied to the satisfaction of the judgment only if it is determined in the hearing on the third-party claim that the debtor has an interest in the property that may be levied upon or otherwise applied to the satisfaction of the judgment." (Italics added.)
Adler v. Blair (1959) 169 Cal.App.2d 92 (Adler) illustrates the third party claims process with an appeal following entry of judgment in the matter. After a creditor levied upon and obtained an attachment on a laundry business said to belong to the debtor, the debtor's wife pursued a third party claim asserting "the attached property was her separate property and was not subject to attachment for the separate debt of [her husband]." (Id. at p. 93.) After a hearing, the trial court found the husband "was the part owner and entitled to a share in the possession of the property attached at the time of the levy; [the wife] was not and is not the sole owner or entitled to its exclusive possession; she has no exclusive right, estate, title, or interest therein; and not all of the property was her separate property." (Ibid.) The court then entered a "judgment . . . to the same effect," and the wife appealed. (Ibid.)
On appeal, after highlighting that the wife bore the burden of proof in the proceedings below, the reviewing court upheld the judgment: "The conclusion of the trial court is amply supported by the evidence we have recited. There is evidence in the record which would have supported a contrary finding, but it cannot be said as a matter of law that the property attached was [the wife]'s separate property." (Adler, supra, 169 Cal.App.2d at p. 95.)
Here, no final judgment has issued; instead, Williams appeals from the trial court's minute order denying her motion for an order "Releasing [her] 'Separate Property' IRA from [SEP]'s Wrongful Lien." The trial court did not and, to our knowledge, has not yet determined Severson has an interest in the IRA that Williams claims is hers (see § 720.430), nor has the court ruled on the scope of Severson's interest, if any, or the extent or manner in which it may be attached or otherwise subjected to levy. We do not know why the trial court has delayed clarifying Severson's interest in Williams's IRA, or SEP's right to levy on that portion. It may be that the court is awaiting, as we note below, the resolution of other exemption claims to reach a global determination as to property in which Williams claims a sole, separate interest.
SEP acknowledges authority that when an appeal from an order following a section 720.310 hearing is "premature" because "[t]he appeal should be taken from a judgment determining the validity of the third party claim," the reviewing court may "treat the appeal as a petition for writ of mandate to compel the superior court to vacate its order ...." (Chrysler Credit Corp. v. Superior Court (1993) 17 Cal.App.4th 1303, 1308, italics added.) "An appellate court has discretion to treat a purported appeal from a nonappealable order as a petition for writ of mandate, but that power should be exercised only in unusual circumstances." (H.D. Arnaiz, supra, 96 Cal.App.4th at pp. 1366-1367.)
Williams has not filed a reply brief. She does not seek writ relief, nor does she suggest there are unusual circumstances here that require her appeal be treated as a writ petition, nor does SEP. In short, we have been given no reason to undertake mandate review sua sponte, and we decline to do so.
Several additional factors inform our decision, including the fact that Williams does not provide in the appellate record the underlying levy request SEP filed with a levy officer to enforce SEP's judgment against Severson. (See §§ 695.010-695.070 [identifying property subject to money judgment, including community property]; see also §§ 697.010-709.030 [money judgment enforcement mechanisms include liens, execution, garnishment, and other creditor remedies]; see generally Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295 [it is appellant's burden to furnish adequate appellate record].) On the record presented, we do not know which levy mechanism or mechanisms SEP is pursuing, nor against which assets.
This is important because it appears Williams may believe other assets are at stake beyond the contested IRA here-and indeed it appears she is actively litigating one or more further exemption claims regarding those assets. We know by virtue of Williams's prior appeal that she claimed a global exemption from SEP's collection efforts on grounds she held only separate property and no community property with Severson because their nuptials were invalid. (SEP I, supra, G059275.) We take judicial notice of the record in G059275 wherein Williams's amended claim of exemption in the underlying proceedings, submitted on October 30, 2019, stated that the property for which she claimed an exemption extended far beyond the lone IRA now at issue in this appeal (Evid. Code, §§ 459, subd. (a), 452, subd. (d) [judicial notice of court records]): "The property I claim to be exempt is . . .: Any and all property, accounts on deposits, security boxes, IRA, investment accounts, personalty, [and] real property held in my name" (italics added).
We also take judicial notice that Williams has filed in a separate, pending appeal (G062767), in which she contends the trial court erred when it entered an order concerning other personal property apparently subject to SEP's levy. Specifically, she challenges in that appeal a "May 5, 2023 . . . 'Order' . . . denying her claim of exemption . . . for her car ...."
The purpose of the third party claims process outlined in section 720.110 et seq. "is to give a quick and effectual remedy to third parties whose property has been levied upon by mistake." (Regency Outdoor Advertising, Inc. v. Carolina Lanes, Inc. (1995) 31 Cal.App.4th 1323, 1329.) That purpose would be undermined by according writ treatment to Williams's interlocutory appeal which would likely be followed by another appeal once a judgment is entered identifying Severson's interest and the court's decision regarding disposition of the asset. Moreover, creditors have an interest in the prompt resolution of exemption claims, and permitting piecemeal interlocutory appeals would frustrate that interest, absent unusual circumstances. Similarly, to the extent Williams's exemption claims arise from the same levy, allowing an interlocutory appeal here would only delay matters further.
For all the foregoing reasons, we discern no unusual circumstances that warrant treating Williams's premature appeal as a writ petition (H.D. Arnaiz, supra, 96 Cal.App.4th at pp. 1366-1367); indeed, the circumstances weigh against doing so.
DISPOSITION
The appeal is dismissed. SEP is entitled to its costs on appeal.
WE CONCUR: BEDSWORTH, ACTING P. J. MOORE, J.