Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_99-cv-01143/USCOURTS-cand-3_99-cv-01143-0/pdf.json

Nature of Suit Code: 152
Nature of Suit: Recovery of Defaulted Student Loans
Cause of Action: 28:1345 Recovery of Debt to US

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

USA,

Plaintiff,

 v.

 AREVALO,

Defendant. /

No. C-99-01143M EDL

ORDER GRANTING DEFENDANT’S

CLAIM OF EXEMPTION AND

DENYING DEFENDANT’S REQUEST TO

TRANSFER

On July 31, 2007, Defendant’s Claim of Exemption and Request to Transfer came on for

hearing. Michael Consentino appeared on behalf of the government, and Herbert Arevalo appeared

pro se. After full consideration of the papers and the arguments at the hearing, and for the reasons

stated below, the Court GRANTS Defendant’s claim of exemption and DENIES Defendant’s request

to transfer the matter to Napa County.

I. Claim of Exemption

In June 1999, a default judgment was entered against Mr. Herbert D. Arevalo in a student

loan debt collection action in the amount of $26,010.58. On February 6, 2007, Plaintiff moved for a

writ of continuing garnishment, which the Court ordered on February 8, 2007. Approximately

$500.00 of the debtor’s disposable income is currently being withheld from his pay to satisfy this

judgment. On July 5, 2007, Mr. Arevalo filed a Claim of Exemption seeking a $400.00 reduction in

the amount garnished each month to satisfy the judgment, along with a request that the Court hold a

hearing on his Claim of Exemption. Plaintiff opposed the request for an exemption, arguing that not

all of Mr. Arevalo’s monthly expenditures were necessary for his support and, even if they were,

Mr. Arevalo is not entitled to any exemption because his debt was incurred to obtain the “common

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United States District Court

For the Northern District of California

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necessaries of life,” which Plaintiff contends include Mr. Arevalo’s education at the California

Culinary Academy. Plaintiff stated, however, that it would be willing to reduce the monthly

garnishment to $250.00 in compromise. At the hearing, Plaintiff reduced the amount of garnishment

it was willing to accept to $200.00.

 California has opted out of the federal scheme of exemptions; accordingly, exemption rights

are determined under California law. See CCP § 703.130. California law exempts

from creditor’s claims those property and earnings that are “necessary for the support” of the

judgment debtor and his family. See CCP § 706.051. There are exceptions to this exemption,

however, including obligations for taxes, child support, or debts incurred for “the common

necessaries of life furnished to the judgment debtor or the family of the judgment debtor.” Id. 

Pursuant to CCP §§ 703.530 and 706.122, Mr. Arevalo properly completed a “Claim for

Exemptions Form” and a judgment debtor’s financial statement (“Financial Statement”) listing his

monthly assets and liabilities. According to his Financial Statement, Mr. Arevalo is unmarried and

has two dependents, his two minor children. See Financial Statement. He earns $3,127.00 per

month, from which $390.15 is deducted for taxes and $462.00 for child support, leaving net monthly

pay of $2,274.85. Id. Mr. Arevalo’s monthly expenditures for such items as housing, food, medical,

transportation, laundry, utilities, and cellphone total $2416.27. Id. In addition to these

expenditures, Mr. Arevalo’s wages are being garnished approximately $500.00 per month to satisfy

his outstanding student loan debt, which he incurred to attend the California Culinary Academy. 

Mr. Arevalo has some money in the bank, but his outstanding credit card balance exceeds that

amount. He owns a car, which is necessary for him to get to work. Although Plaintiff disputes the

necessity of Mr. Arevalo’s car, cable television, and cellphone, the Court finds that Mr. Arevalo’s

listed expenditures are reasonable and necessary under the circumstances. See Sanker v. Humborg,

48 Cal.App.2d 205, 207 (1941) (the definition of necessary “is not confined in application merely to

what is essential barely to support life, but that it includes many of the conveniences of refined

society.”). Moreover, exemptions statutes are liberally construed in favor of the claimant. See

Independence Bank v. Heller, 275 Cal.App.2d 84, 88 (1969). Accordingly, an exemption is

warranted here because a garnishment of $500.00 per month would not leave Mr. Arevalo sufficient

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funds to support himself or his family, while $100.00 is the most he can pay and still support himself

and his family.

Plaintiff relies on Diamond v. Bent to argue that Mr. Arevalo is not entitled to an exemption

because his student loan debt was incurred to obtain an education, which is a “common necessary of

life.” See Diamond v. Bent, 157 Cal.App.2d Supp. 857, 859 (1957). In Diamond, the court found

that a debtor could exempt as “necessary” the funds required to educate the debtor’s minor children

because a parent has a statutory duty to “support, maintain and educate” his children. Id. Funds

used to support and educate an adult child in college, however, could not be exempted as necessary

for the support of the debtor or his family. Id. 

Diamond fails to support Plaintiff’s argument for two reasons. First, it holds only that

education funds are “necessary” in the context of an exemption, not that they come within the

exception to the exemption for “common necessaries of life,” as Plaintiff advocates. Second,

Diamond suggests that funds for college, rather than funds for education of minor children, may not

be “necessary” in the context of an exemption. Diamond is silent as to any exception to the

exemption, including the “common necessaries of life” exception that Plaintiff seeks to apply here.

The “common necessaries of life” exception is construed narrowly and “does not refer to

‘necessaries’ in the broad sense.” See Ratzlaff v. Portillo, 14 Cal. App. 3d 1013, 1015-16 (1971). 

Instead, the exception covers only expenses “required for the sustenance of all men.” Id. at 1015

(emphasis in original). A common necessary is “an article that in the hands of anyone it is to be

regarded universally or substantially so, as necessary to sustain life.” Id. (quoting Los Angeles

Finance Co. v. Flores, 110 Cal.App.2d Supp. 850 (1952)). An education, particularly the chef’s

training at issue here, while useful, is not universally necessary to sustain life. Accordingly, the

“common necessaries of life” exception does not apply.

Therefore, the Court hereby GRANTS Mr. Arevalo’s Claim of Exemption and orders that the

garnishment taken to satisfy the student loan debt be reduced to $100.00 per month. 

II. Application to Transfer Case

On May 30, 2007, Mr. Arevalo filed a motion to transfer this matter to Napa County, closer

to his residence. See Application to Transfer. As discussed at the hearing, this matter is properly

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within the jurisdiction of the federal court and Napa County is within the Northern District of

California. Accordingly, the Court DENIES the request to transfer the matter. 

IT IS SO ORDERED.

Dated: August 1, 2007 

ELIZABETH D. LAPORTE

United States Magistrate Judge

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