Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-02739/USCOURTS-casd-3_09-cv-02739-8/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:0077 Securities Fraud

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TAMER SALAMEH, et al.,

Plaintiff,

v.

TARSADIA HOTELS, et al., 

Defendants.

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Case No. 09cv2739-GPC (BLM)

REPORT AND RECOMMENDATION

RE: MOTION FOR ORDER

DETERMINING CLAIMS OF

EXEMPTION 

[ECF No. 465]

This Report and Recommendation is submitted to United States District Judge

Gonzalo P. Curiel pursuant to 28 U.S.C. § 636(b) and Civil Local Rules 72.1(c) and 72.3(f)

of the United States District Court for the Southern District of California.

FACTUAL AND PROCEDURAL BACKGROUND

On December 8, 2009, Plaintiffs filed a class action complaint against Tarsadia

Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th Rock, LLC, MKP One, LLC, and

Gaslamp Holdings, LLC (collectively, “Tarsadia Defendants”) and other defendants involved

in the development of the Hard Rock Hotel in San Diego. ECF No. 1. On September 10,

2010, Plaintiffs filed a second amended complaint (“SAC”) alleging violations of federal and

state securities laws, fraud based on misrepresentation, and fraud by concealment against

numerous defendants, including Tarsadia Defendants. ECF No. 86. On March 22, 2011,

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District Judge Dana M. Sabraw granted Tarsadia Defendants’ motion to dismiss Plaintiffs’

SAC with prejudice, and on March 23, 2011, the Court entered a judgment against Plaintiffs. 

ECF Nos. 158 & 159. On October 7, 2013, the Ninth Circuit affirmed the District Court’s

order. ECF No. 224. 

On October 12, 2012, the case was transferred to District Judge Gonzalo P. Curiel. 

ECF No. 215. On July 31, 2014, Judge Curiel granted Defendants’ 5th Rock, LLC and MKP

One, LLP (collectively “Judgment Creditors”) motion for attorney’s fees. ECF No. 245 at 7. 

On August 22, 2014, Plaintiffs filed a notice of appeal from the Court’s order. ECF No. 246. 

Staring on January 16, 2015, Judgment Creditors began requesting the Court to enter

abstracts of judgment, which the Court subsequently entered against each Plaintiff. See

ECF Nos. 250-329, 332-71, 378-95. 

On March 3, 2015 and April 7, 2015, Judgment Creditors filed writs of execution

against numerous Plaintiffs. See ECF Nos. 373 & 398. Plaintiffs filed a motion to stay

enforcement of judgment pending appeal without posting a supersedeas bond on April 20,

2015. ECF No. 402. The Court denied Plaintiff’s motion on May 19, 2015, but granted a

temporary stay of thirty days to allow Plaintiffs to post a supersedeas bond. ECF No. 411

at 7-8. Plaintiffs did not post a supersedeas bond within the thirty-day period, and on

June 17, 2015, the Ninth Circuit denied Plaintiff’s motion to stay enforcement of judgment

pending appeal. See Docket; ECF No. 419. 

On May 7, 2015, Judgment Creditors initiated bank levies which resulted in the

capture of funds in bank accounts associated with Plaintiffs. See ECF Nos. 413; 465-3,

Declaration of Natalia A. Minassian (“Minassian Decl.”) at 2-3, 26-31; 465-2. On May 22,

2015, Alexis Cosio, Michele Curtis, Dale Curtis, Aleksey Kats, Diana Kats, Cesar Mota, Danon

Slinkard, Benjamin Steigerwalt and Eden Steigerwalt (collectively, “Exemption Claimants”)

each submitted a claim of exemption under California Code of Civil Procedure. Minassian

Decl. at 2, 4-25. Judgment Creditors filed the instant motion challenging each claim of

exemption on July 9, 2015. ECF No. 465-2 (“Mot.”). Exemption Claimants did not file an

opposition or any supplemental support for their exemption claims. See Docket.

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On August 6, 2015, the Court conducted a hearing during which Exemption

Claimants’ counsel confirmed that he was representing all of the Exemption Claimants,

acknowledged that Exemption Claimants had not filed any written response and that there

were legal and factual problems with some of the claims, and requested additional time to

file a response to Judgment Creditor’s motion and to provide additional supporting

evidence. ECF Nos. 474; 475 at 1. In accordance with the Court’s briefing schedule [ECF

No. 475], Exemption Claimants filed an opposition which included additional factual support

for some of the Exemption Claimants’ claims. ECF No. 477 (“Oppo.”). On August 20, 2015,

Judgment Creditors filed a timely reply. ECF No. 480 (“Reply”).1

LEGAL STANDARD

Under Federal Rule of Civil Procedure 69, a money judgment is enforced by a writ

of execution. Fed. R. Civ. P. 69(a)(1). “The procedure on execution–and in proceedings

supplementary to and in aid of judgment or execution–must accord with the procedure of

the state where the court is located, but a federal statute governs to the extent it applies.” 

Id. Under California law, a judgment creditor may enforce a money judgment by levying

the deposit account of the judgment debtor and his spouse or registered domestic partner. 

See Cal. Code Civ. P. (“CCP”) §§ 699.710, 700.160. 

After a judgment creditor levies a judgment debtor’s deposit account, the judgment

debtor and his spouse or registered domestic partner may claim the funds levied as exempt

from the enforcement of a money judgment. See CCP §§ 703.010, 703.020, 703.030. The

exemption claimant bears the burden to establish the exemption. CCP § 703.580(b). A

claim of exemption must include the following: (1) the claimant’s name and mailing

address; (2) the name and last known address of the judgment debtor if the claimant is not

1 Notably, the parties do not provide any documents establishing the specific amount of the levied

funds. Judgment Creditors assert that the levied funds at issue “total approximately 30,000.00,” but that the

amount is not verified because “the banks who received the levy instructions have not provided specific dollar

amounts corresponding to each specific claimant.” Reply at 4. Exemption Claimants did not specify the

amounts of levied funds in their claims of exemption, during the Court’s August 6, 2015 hearing, and in their

Opposition filed on August 13, 2015. See Minassian Decl. at 4-25; Oppo.

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the judgment debtor; (3) a description of the property claimed to be exempt; (4) a financial

statement if required by section 703.5302

; (5) a citation to the provision relied upon for the

exemption; and (6) a statement of the facts necessary to support the claim. CCP

§ 703.520. An opposition to a claim of exemption must include: “(a) [a]n allegation either

(1) that the property is not exempt under the provision of this chapter or other statute

relied upon or (2) that the equity in the property claimed to be exempt is in excess of the

amount provided in the applicable exemption” and “(b) [a] statement of facts necessary to

support the allegation.” CCP § 703.560.

“The claim of exemption and notice of opposition to the claim of exemption

constitute the pleadings, subject to the power of the court to permit amendments in the

interest of justice.” CCP § 703.580(a). The court may make its determination if it finds that

the claim of exemption, financial statement, if required by Section 703.530, and the notice

of opposition provide sufficient facts. CCP § 703.580(c). Otherwise, the court may

continue the hearing for the production of additional oral or documentary evidence. Id.

The court should construe the exemption statutes to the benefit of the judgment

debtor in order to “facilitate the debtor’s financial rehabilitation” and to “shift[] social

welfare costs from the community to judgment creditors.” See Ford Motor Credit Co. v.

Waters, 83 Cal. Rptr. 3d 826, 830 (Super. Ct. 2008) (citation omitted); see also Kono v.

Meeker, 126 Cal. Rptr. 3d 208, 211 (Ct. App. 2011). However, “[e]xemptions under

California law are wholly statutory and cannot be enlarged [or diminished] by the courts.” 

In re Hernandez, 483 B.R. 713, 724 (B.A.P. 9th Cir. 2012) (citing Ford Motor Credit Co., 83

Cal. Rptr. 3d at 829-30)); Sourcecorp, Inc. v. Shill, 142 Cal. Rptr. 3d 414, 416 (Ct. App.

2012).

2 “If property is claimed as exempt pursuant to a provision exempting property to the extent necessary

for the support of the judgment debtor and the spouse and dependents of the judgment debtor, the claim of

exemption shall include a financial statement.” CCP § 703.530(a).

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DISCUSSION

Judgment Creditors and Exemption Claimants dispute whether funds in the

Exemption Claimants’ levied bank accounts are exempt. Exemption Claimants Alexis Cosio,

Cesar Mota, Aleksey and Diana Kats, and Danon Slinkard claim exemptions on the ground

that the levied bank accounts contain their paid earnings. Minassian Decl. at 4-7, 12-17. 

Exemption Claimants Dale and Michele Curtis claim exemptions on the ground that their

levied accounts are retirement accounts. Id. at 8-11. Exemption Claimants Danon Slinkard

(on behalf of Daryl Slinkard), and Benjamin and Eden Steigerwalt claim exemptions on the

ground that they are not judgment debtors, but innocent third parties. Id. at 20-25.

I. Paid Earnings 

Under Section 704.070, debtors can claim exemptions for “[p]aid earnings that can

be traced into deposit accounts . . . .” CCP § 704.070(b) (emphasis added). “Paid

earnings” are defined as “compensation payable by an employer to an employee for

personal services performed by such employee, whether denominated as wages, salary,

commission, bonus, or otherwise” and “that were paid to the employee during the 30-day

period ending on the date of the levy.” See CCP §§ 704.070(a)(2), 706.011(b); Ford Motor

Credit Co., 83 Cal. Rptr. 3d at 832. Section 704.070 exempts paid earnings that can be

traced into deposit accounts in the following amounts: 

(1) 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.

(2) Seventy-five percent of the paid earnings that are levied upon or

otherwise sought to be subjected to the enforcement of a money judgment

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.

CCP § 704.070(b)(1)-(2) (emphasis added). 

The exemption claimant bears the burden of tracing the exempt funds in the levied

account to wages paid by the debtor’s employer, and should provide the court with bank

statements that show the relevant earning payments within the thirty day pre-levy period. 

See CCP § 703.080(b); see also Franco v. Gennaco, 2015 WL 1383525, at *4-6 (C.D. Cal.

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Mar. 23, 2015) (debtors who claimed exemptions under Section 704.070 provided the court

with bank statements showing their account balances on the date of the levy and the dates

and the amounts of earnings payments from their employers within the 30-day pre-levy

period); Ford Motor Credit Co., 83 Cal. Rptr. 3d at 828-29, 835 (debtor who sought

exemption under Section 704.070 provided bank statements that showed a balance on the

date of the levy and the dates and amounts of direct payroll deposits from the debtor’s

employer during the 30–day period ending on the date of levy). The court must apply the

“lowest intermediate balance principle”3

 to determine the amount of exempt funds in a

deposit account, unless the parties demonstrate that another method of tracing “would

better serve the interests of justice and equity under the circumstances of the case.” CCP

§ 703.080(c). Furthermore, to the extent the exempt earnings remain in the account at the

end of the 30-day period, a judgment debtor’s basic necessities are deemed to have been

satisfied, the earnings lose their exempt character, and may be reached to satisfy an

obligation owed to a judgment creditor. See Sourcecorp, Inc. v. Shill, 142 Cal. Rptr. 3d

414, 418 (Ct. App. 2012) (“once a debtor has had 30 days to pay for the necessities of life

out of exempt earnings, the remainder becomes available to satisfy the debtor’s outstanding

obligation to a judgment creditor.”); Franco, 2015 WL 1383525, at *3 n.2 (same).

Similarly, Section 706.051 allows a debtor to claim an exemption for “earnings” that

the debtor proves are necessary for support pursuant to California’s Wage Garnishment

Law. CCP § 706.051(b). However, Section 706.051 only applies to wages withheld

pursuant to “earnings withholding orders,” and not to paid earnings already deposited in

an account. See Franco, 2015 WL 1383525, at *3-4 (concluding that CCP § 706.051 does

not apply to deposit account levies because California’s exemptions are wholly statutory and

the “plain language” of Section 706.105, which sets forth procedures for claiming and

3 Pursuant to this principle, the exempt funds may not exceed the lowest balance occurring at any time

between the deposit of the exempt funds and the time of levy, and new deposits do not replenish the original

exempt funds although the new deposits may themselves be exempt. See Franco, 2015 WL 1383525, at *4

n.4; Republic Supply Co. v. Richfield Oil Co., 79 F.2d 375, 379-80 (9th Cir. 1935) (explaining the lowest

intermediate balance rule in the context of commingled funds in a trust). 

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opposing a Section 706.051 exemption, does not provide for such an exemption); see also

CCP § 706.105 legislative committee comments–assembly to 1982 addition (“[t]he general

provisions governing the procedures for claiming exemptions from execution are not

applicable.”). 

Judgment Creditors argue that none of the Exemption Claimants have established

an exemption under CCP § 704.070 because none of them provided evidence such as bank

statements “that the levied funds trace back to paid earnings.” See Mot. at 5-6, 9; Reply

at 5-7. Judgment Creditors also argue that Section 706.051 is not applicable to the levied

accounts and that, in any event, none of the Exemption Claimants have established

entitlement to the exemption. See Mot. at 6-9; Reply at 6-7.

A. Alexis Cosio

Exemption Claimant Alexis Cosio asserts that the levied Wells Fargo account ending

in 4841 contains her employment earnings and is exempt under CCP § 704.070(a)-(b). 

Minassian Decl. at 4-5. In her supplemental submission, Cosio states that her “paycheck

is directly deposited into [her] account ending on [sic] ‘4841’” and “[t]he property levied

consists of paid earnings paid to me by my employer during the 30-day period ending on

the date of the levy.” ECF No. 477-1, Declaration of Alexis Cosio (“Cosio Decl.”) at 1. To

support her claim, Cosio attaches two “Pay Vouchers” from her employer, Wells Fargo Bank,

which show deposits of $2,402.56 on April 10, 2015, and $4,237.14 on April 24, 2015 into

her checking account ending in 4841. Id. at 1-5. Cosio does not provide a bank statement

or any other evidence indicating when the levy was executed, how much money was in the

account when it was levied, the account balance during the relevant time period preceding

the levy, and whether any other deposits were made during the relevant time period. See

Oppo.; Minassian Decl. at 4-7.

Because Cosio does not provide evidence regarding the funds in her account at the

time the levy was executed and during the thirty days preceding the levy, the Court is

unable to determine the applicable 30-day period and conduct the required tracing of funds

to determine how much of the levied funds are entitled to protection. Consequently, the

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Court finds that Cosio has not established that she is entitled to the paid earnings

exemption. See CCP § 703.080(b); see also Franco, 2015 WL 1383525, at *4-6 (C.D. Cal.

Mar. 23, 2015) (debtors who claimed exemptions under Section 704.070 provided the court

with bank statements showing their account balances on the date of the levy and the dates

and the amounts of earnings payments from their employers within the 30-day pre-levy

period); Ford Motor Credit Co., 83 Cal. Rptr. 3d at 828-29, 835 (debtor who sought

exemption under Section 704.070 provided bank statements that showed a balance on the

date of the levy and the dates and amounts of direct payroll deposits from the debtor’s

employer during the 30–day period ending on the date of levy). 

It is unclear whether Cosio also is seeking an exemption under CCP § 706.051. Cosio

does not cite this section but she checked the box indicating that her claim of exemption

“is made pursuant to a provision exempting property to the extent necessary for the

support of the judgment debtor and the spouse and dependents of the judgment debtor”

and she provided a financial affidavit. See Minassian Decl. at 4-7. To the extent Cosio is

seeking an exemption under CCP § 706.051, the Court finds Cosio is not entitled to the

exemption because that section does not apply to levied funds obtained from a bank

account. See Franco, 2015 WL 1383525, at *3-4; see also CCP § 706.105 legislative

committee comments–assembly to 1982 addition. Accordingly, the Court RECOMMENDS

that Cosio’s claim of exemption be DENIED. 

B. Cesar Mota

Exemption Claimant Cesar Mota also claims an exemption for his paid earnings. 

Mota’s original claim declared that “[t]he money [in Wells Fargo account #4478] is paid

earnings from my employment.” Minassian Decl. at 16-17. In his supplemental submission,

Mota declares that his “paycheck is directly deposited into the account from which funds

were levied” and “[t]he property levied consists of paid earnings paid to me by my employer

during the 30-day period ending on the date of the levy,” and provides three “payroll

documents,” which appear to be statements showing bank transfers from General Atomics

to Wells Fargo Bank of $1,462.68 on April 3, 2015, $1,462.66 on April 17, 2015, and

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$1,462.68 on May 1, 2015. ECF No. 477-2, Declaration of Cesar Mota (“Mota Decl.”) at 1-2,

4-6. 

Mota’s claim suffers from the same inadequacies as discussed above with regard to

Cosio. Specifically, Mota does not provide a bank statement or any other evidence

establishing how much money was in the account when it was levied, the date the money

was levied, whether other money was deposited into the account during the thirty-days

preceding the levy, and the account balance during the relevant thirty days. As a result,

the Court is unable to determine the applicable thirty day period and conduct the required

tracing, and therefore finds that Mota has not satisfied his burden of establishing the

applicability of the claimed exemption. Accordingly, for the reasons stated above, the Court

RECOMMENDS that Exemption Claimant Mota’s claim of exemption be DENIED. 

C. Aleksey and Diana Kats 

Exemption Claimants Aleksey and Diana Kats assert in their claims of exemption that

the levied Chase bank account ending in 5578 contains “paid earnings from Diana Kats’

job . . . deposited directly into the account,” and is exempt under CCP 704.070(a)-(b). 

Minassian Decl. at 12-15. The Kats argue in their opposition that the levied funds are

traceable as direct deposits pursuant to CCP § 703.080(a), but they do not provide any

documentation to support the exemption claim. See Oppo. at 4. The Kats do not provide

a bank statement, a pay stub, or even a supplemental declaration to support their

exemption claim. See Oppo. Because Aleksey and Diana Kats have not provided any

evidence to support their claims, the Court finds that they have not established a legal right

to the exemption and RECOMMENDS that their claims of exemption be DENIED. 

D. Danon Slinkard

Exemption Claimant Danon Slinkard also claims an exemption for the money in the

levied Wells Fargo account ending in 7443 because it is “where my earnings are deposited”

and “[t]he money is paid earnings from my employment.” Minassian Decl. at 18-19. 

Slinkard does not provide any evidence (bank statement, pay stub, supplemental

declaration etc.) to support his exemption claim. See id.; Oppo. Accordingly, and for the

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reasons set forth above, the Court finds that Slinkard has not established a legal right to

the exemption and RECOMMENDS that his claim of exemption on this basis be DENIED. 

II. Retirement Accounts–Dale and Michele Curtis

CCP § 704.115 provides that “[a]ll amounts held, controlled, or in process of

distribution by a private retirement plan, for the payment of benefits as an annuity,

pension, retirement allowance, disability payment, or death benefit from a private

retirement plan are exempt.” CCP § 704.115(b). Three types of retirement accounts may

qualify for exemptions: (1) “[p]rivate retirement plans, including, but not limited to, union

retirement plans”; (2) “[p]rofit-sharing plans designed and used for retirement purposes”;

and (3) “[s]elf-employed retirement plans and individual retirement annuities” included in

the Internal Revenue Code of 1986. CCP § 704.115(a)(1)-(3). Funds in the first two

categories are completely exempt. CCP § 704.115(b), (e); Century Sur. Co., 2008 WL

2630959, at *9 (S.D. Cal. June 27, 2008). Funds in the third category are exempt “only to

the extent necessary to provide for the support of the judgment debtor when the judgment

debtor retires and for the support of the spouse and dependents of the judgment debtor,

taking into account all resources that are likely to be available for the support of the

judgment debtor when the judgment debtor retires.” CCP § 704.115(e). 

Exemption Claimants Dale and Michele4 Curtis assert in their claims of exemption that

the levied Wells Fargo accounts ending in 749 and 9201 under the name “CURTIS MICHAEL

PENSION PROFITSHARING PLAN, INC.” contain “benefits derived from private retirement

plan or profit sharing plan designed and used for purposes of retirement” and are exempt

under “CCP § 1705.115(a)(b)(d).”5

 Minassian Decl. at 9, 11. Judgment Creditors argue

that Exemption Claimants Curtis fail to identify which accounts contain retirement funds or

4 Michele Curtis was not a named plaintiff in the underlying judgment. See Docket. However, under

California law, a judgment creditor may enforce a money judgment by levying the deposit account of the

judgment debtor and his spouse. See CCP §§ 699.710, 700.160. 

5 The Court notes that California Code of Civil Procedure does not contain section 1705.115 cited by

Exemption Claimants Curtis. It appears that Exemption Claimants Curtis intended to cite CCP § 704.115. 

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specify the amount of the levied funds and therefore fail to establish that the levied funds

are held in an exempt retirement account. Mot. at 7. 

To establish that an account is exempt as a private retirement plan under CCP

§ 704.115(a)(1) or a profit sharing plan under CCP § 704.115(a)(2), the claimant must

establish two elements. See CCP § 703.580(b) (an exemption claimant bears the burden

of proof to demonstrate that the alleged retirement plan is exempt). First, the debtor must

prove that the retirement plan is “established and maintained by a corporation.” See

Century Sur. Co., 2008 WL 2630959, at *10; see also In re Cheng, 943 F.2d 1114, 1116-17

(9th Cir. 1991) (holding that retirement benefit plans established by a corporation, which

is solely owned by the debtor, constitute fully exempted “private retirement plans” within

the meaning of California law). Second, the debtor must prove that the plan is “designed

and used for retirement purposes.” See CCP § 704.115(a)(1)-(2); In re Bloom, 839 F.2d

1376, 1378 (9th Cir. 1988) (CCP § 704.115(a)(1) implicitly requires a claimant to prove that

the private retirement plan is “designed and used for retirement purposes”); see also In re

Crosby, 162 B.R. 276, 283 (Bankr. C.D. Cal. 1993) (“A profit sharing plan constitutes a

private retirement plan if it is designed and used for retirement purposes.”). In determining

whether a private retirement plan is designed and used primarily for retirement purposes,

courts consider the totality of the circumstances, including “evidence as to how the plan

was managed by the judgment debtor” and “corroborative detail as to how the plan was

created or administered.” See In re Rucker, 570 F.3d 1155, 1160-61 (9th Cir. 2009);

Century Sur. Co., 2008 WL 2630959, at *10.

Exemption Claimants Dale and Michele Curtis did not provide any supporting

evidence in their original claim of exemption. See Minassian Decl. at 8-11. They merely

identified the accounts and stated that the accounts contained “benefits derived from

private retirement plan or profit sharing plan designed and used for purposes of

retirement.” Id. at 9, 11. In the supplemental submission, Dale Curtis states in his sworn

declaration 

The Notice of Levy was served on a bank in which a private retirement

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account – a profit-sharing plan designed and used for retirement purposes. 

It was set up by a private employer – a corporation not by me acting on my

own. It was set up by San Diego Pension Consultants, Inc. as a Money

Purchase Pension Plan for the corporation, my employer, Curtis Michael

Appraisal, Inc.

ECF No. 477-4, Declaration of Dale Curtis (“Curtis Decl.”) at 2. Although Curtis states that

a “copy of the first two pages of the Pension Plan” is attached to his declaration, there are

no attachments. See id.; Oppo. Curtis also declares that “[t]here was no other source of

funds on which the Notice of Levy was served other than Curtis Michael Appraisal, Inc.

private pension plan on behalf of me and my wife, Michele Curtis.” Curtis Decl. at 2.

Considering Dale Curtis’ declaration and the sworn claims, the Court finds that the

Curtises have satisfied the first element by showing that the plan was established by a

corporation. However, the Curtises have not satisfied the second element as they have not

established that the plan is designed and used for retirement purposes. While Dale Curtis’

declaration states that the account is “a profit-sharing plan designed and used for

retirement purposes,” the Curtises do not provide any evidence to support this claim. See

id. For example, there is no evidence showing how the plan is managed and used by the

Curtises, such as bank statements showing deposits, withdrawals, and other account

activity or detailed declarations regarding the use of the funds since the plan was created. 

See Century Sur. Co., 2008 WL 2630959, at *5-6 (court considered the following factors to

determine whether the plan at issue was used for retirement purposes: whether deposits

to the account were made close to the time of the attachment, whether funds have ever

been withdrawn from the plan, and whether any of the funds were documented with loan

agreements); In re Jacoway, 255 B.R. 234, 239-40 (B.A.P. 9th Cir. 2000) (listing

nonexhaustive factors considered by courts, most of which relate to plan withdrawals or

loans). After considering the totality of the circumstances, the Court concludes that

Exemption Claimants Curtis fail to prove that the funds at issue were “designed and used

for retirement purposes.” See Century Sur. Co., 2008 WL 2630959, at *2-3, 10 (finding

that a debtor’s declaration, “Adoption Agreement” and redacted tax returns were insufficient

to establish that the debtor’s retirement account was “designed and used for retirement

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purposes”); see also CCP § 704.115. Because Exemption Claimants Curtis fail to meet their

burden of proof, the Court RECOMMENDS that their claims of exemption be DENIED. 

See CCP §§ 703.580(b), 704.115; Century Sur. Co., 2008 WL 2630959, at *2-3.

III. Third-party Claims

California Code of Civil Procedure provides a procedure for third parties, who are not

judgment debtors or creditors, to make claims of exemption for property levied by a writ

of execution. See CCP §§ 688.030, 720.110. The levying officer is required to “serve a

copy of the writ of execution and a notice of levy on any third person in whose name any

deposit account described therein stands.” CCP § 700.140(c). The service has to be made

personally or by mail: “(1) [a]t the time of levy or promptly thereafter, if the party seeking

the levy informs the levying officer of the person and his, her, or its residence or business

address” or “(2) [p]romptly following the levying officer’s receipt of a garnishee’s

memorandum if service was not accomplished pursuant to paragraph (1) if the garnishee’s

memorandum identifies the person and his, her, or its residence or business address.” Id.

After the creditor levies the property pursuant to a notice of levy, the third party

must file a claim with “the state department or agency that issued the notice of levy.” See

CCP § 688.030(b)(1). A third-party claim must be executed under oath and must contain

the following: 

(1) The name of the third person and an address in this state where service

by mail may be made on the third person.

(2) A description of the property in which an interest is claimed.

(3) A description of the interest claimed, including a statement of the facts

upon which the claim is based.

(4) An estimate of the market value of the interest claimed.

CCP § 720.130. A third-party claim must be filed with the levying officer before the officer

sells the property, delivers possession of the property to the creditor, or pays proceeds of

collection to the creditor. CCP § 720.120. After the third party files its claim, the levying

officer must serve the judgment creditor and debtor with the following: 

(1) A copy of the third-party claim.

(2) A statement whether the third person has filed an undertaking to release

the property pursuant to Chapter 6 (commencing with Section 720.610).

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(3) If the third person has filed an undertaking to release the property, a

notice that the property will be released unless, within the time allowed as

specified in the notice, the creditor objects to the undertaking. (4) If the third person has not filed an undertaking to release the property,

a notice that the property will be released unless, within the time allowed as

specified in the notice, the creditor files with the levying officer an

undertaking that satisfies the requirements of Section 720.160.

CCP § 720.140. The creditor opposing a third-party claim must object within ten days after

it receives the claim. CCP § 720.140(b). 

Either the creditor or the third party “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.” CCP § 720.310(a). The third party bears the burden of

proof at a hearing and can meet its burden by introducing evidence that it owns the levied

property. See CCP § 720.360; see also Whitehouse v. Six Corp., 40 Cal. App. 4th 527, 535

(Ct. App. 1995); Chrysler Credit Corp. v. Super. Ct., 22 Cal. Rptr. 2d 37, 43 (Ct. App. 1993)

(finding the third parties met their burden of demonstrating a valid interest in the funds

deposited in the levied account by filing a declaration stating that the account contained

funds to which the judgment creditor had no interest). 

After the third party claimant presents evidence that it owns the property in

question, the burden of proof shifts to the judgment creditor to establish that the third

party’s claim is invalid or that the judgment creditor’s claim is superior. See Oxford St.

Prop., LLC v. Rehab. Assoc., LLC, 141 Cal. Rptr. 3d 704, 712 (Ct. App. 2012) (citation

omitted). As a general rule, “a judgment or levy reaches only the interest of the debtor in

the property because a judgment creditor can acquire no greater right in the property levied

upon than that of its judgment debtor.” Regency Outdoor Advertising, Inc. v. Carolina

Lanes, Inc., 37 Cal. Rptr. 2d 552, 556 (Ct. App. 1995); Oxford St. Prop., LLC , 141 Cal. Rptr.

3d at 712 (“A security interest attaches only to whatever rights the debtor has in the

collateral.”). 

A. Danon Slinkard

Exemption Claimant Danon Slinkard asserts in his claim of exemption that the Wells

Fargo account ending in 8033 is a “joint account for someone not a judgment debtor” and

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that “[t]he property is not the judgment debtor[’]s. Half is a third party who did not receive

notice their property was levied.” Minassian Decl. at 19. Judgment Creditors respond that

a U.S. Marshal provided the third party with notice, that the Marshal has not received any

third-party claims to date, and that 100% of the levied funds should be released to

Judgment Creditors where a third party fails to timely file its claim of exemption. See Mot.

at 10; Minassian Decl. at 26; Reply at 9.

In the Notice of Levy mailed on June 30, 2015, Judgment Creditors stated the

following: “You are notified as a person other than the judgment debtor . . . . Third Party

Account Daryl Slinkard.” Minassian Decl. at 26. The Notice further stated that the

“property to be levied” included “all commercial accounts, all monies, all bank accounts, all

certificates of deposit, and all personal property standing in any account . . . any of the

names listed in Attachment A,” and listed the name of “Daryl D. Slinkard” in the referenced

Attachment A. Id. at 26-27. As such, Exemption Claimant Danon Slinkard’s argument that

the third party did not receive the Notice of Levy is unpersuasive. See id. at 19. 

Further, there is no evidence in the parties’ pleadings and exhibits indicating that the

third party, Daryl Slinkard, filed a claim with the levying officer. See Mot., Oppo., Reply. 

Rather, the evidence presented to the Court consists solely of Danon Slinkard’s original

claim, with no supplemental evidence. See Minassian Decl. at 18-19; Oppo. at 6. As such,

Daryl Slinkard has not “availed [himself] of th[e claim exemption] procedure,” and thus any

discussion as to whether the third party’s property is exempt is premature. See Century

Sur. Co., 2008 WL 2630959, at *8. The Court may not expand or increase claims of

exemption because they are purely statutory, and California Code of Civil Procedure does

not provide “statutory authorization for the use of third party claim procedures by named

defendants in an action.” Commercial & Farmers Nat’l Bank. v. Hetrick, 64 Cal. App. 3d

158, 165 (Ct. App. 1976); Century Sur. Co., 2008 WL 2630959, at *8 (same). Exemption

Claimant Danon Slinkard filed the claim of exemption himself, not as a third-party claim,

and therefore, his alleged third-party exemption claim for the funds levied in Wells Fargo

account ending in 8033 fails. See id. Accordingly, the Court RECOMMENDS that Danon

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Slinkard’s claim of a third-party exemption for the account ending in 8033 be DENIED. 

B. Benjamin and Eden Steigerwalt

Benjamin and Eden Steigerwalt claim exemptions because they jointly hold the levied

accounts with their parents, judgment debtors Kerry and Beth Steigerwalt. See Minassian

Decl. at 20-25; Oppo. at 5; ECF No. 477-3, Declaration of Eden Steigerwalt (“Steigerwalt

Decl.) at 1. In the exemption claim and accompanying financial statement filed on behalf

of Benjamin, there are statements that Benjamin Steigerwalt is not a judgment debtor, that

the levied account is “[m]y savings account. My parents never access my account and this

money is totally and exclusively mine,” and “I am a student in the 11th grade. This was

my own personal savings from Birthday/Holiday money gifts to me.” Minassian Decl. at 20,

22. However, this claim is NOT signed by Benjamin Steigerwalt under the penalty of

perjury; rather the name “Benjamin Steigerwalt” apparently was signed by an unidentified

third person because there are initials by the signature.6 Neither Benjamin nor his parents,

judgment debtors Kerry and Beth Steigerwalt, provide an explanation as to who signed the

claim and financial statement or the purpose of the initials by the signature.

The original claim of exemption and accompanying financial statement filed on behalf

of Eden Steigerwalt also were not signed under the penalty of perjury by Eden but rather

by an unidentified person whose initials are by the signature. See id. at 23, 25. Again,

neither Eden, nor her parents, provide an explanation for the signature or for the initials by

the signature. The exemption form states that Eden is not a judgment debtor and

describes the levied funds as “[i]t is totally my own money. It is my life’s savings and

employment-earned money. My parents never access my account.” Id. at 23 (emphasis in

original). The accompanying financial statement includes the following explanation

6

 The Court notes that the cursive “Steigerwalt” in Benjamin’s signature on the financial statement and

Eden’s signature on the claim of exemption (both of which have initials by them) are similar to each other and

to Kerry Steigerwalt’s signature on a declaration filed in this case. Compare Minassian Decl. at 22-23, with id.

at 33. Eden’s signatures on the original claim form and financial statement also appear to be different from

her signature on the supplemental declaration, which does not contain initials by it. Compare Minassian Decl.

at 23, 25, with Steigerwalt Decl. at 2.

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I am a 2nd grade school teacher. All monies in the savings [and] checking

account seized are exclusively my money which I earned and saved.

[Judgment debtor] Beth Steigerwalt was with me when I opened my account

years ago and is, as I understand, someone who I had to name as a

Beneficiary if I died.

Id. at 25. Eden’s financial statement indicates that her monthly income is $2,200, her

monthly expenses approximate $1,450, and that she owns a 2006 Lexus IS 250 worth

approximately $8,000. Id. at 24-25.

CCP § 720.130 dictates that “[t]he third-party claim shall be executed under

oath . . . .” CCP § 720.130 (emphasis added). CCP § 2015.5 provides that:

Whenever, under any law of this state . . . , any matter is required or

permitted to be supported, evidenced, established, or proved by the sworn

statement, declaration, verification, certificate, oath, or affidavit, in writing of

the person making the same . . . , such matter may with like force and effect

be supported, evidenced, established or proved by the unsworn statement,

declaration, verification, or certificate, in writing of such person which recites

that it is certified or declared by him or her to be true under penalty of

perjury, is subscribed by him or her, and . . . , if executed within this state,

states the date and place of execution . . . .

Id. (emphasis added). The verb “subscribed” in CCP § 2015.5 means “to sign with one’s

own hand.” In re Marriage of Reese & Guy, 73 Cal. App. 4th 1214, 1222 (Ct. App. 1999)

(for purposes of statute permitting submission of unsworn declarations provided they are

certified by the declarant to be true under penalty of perjury and subscribed by him or her,

“subscribe” means to sign with one’s own hand.). Because Benjamin and Eden Steigerwalt

did not sign their respective claims of exemption under penalty of perjury, the claims do not

comply with the requirements of CCP § 720.130. See id.; see also Commercial & Farmers

Nat’l Bank., 64 Cal. App. 3d at 165 (the California Code of Civil Procedure does not provide

“statutory authorization for the use of third-party claim procedures by named defendants

in an action”); Century Sur. Co., 2008 WL 2630959, at *8 (same). Benjamin Steigerwalt

did not submit a declaration or any supplemental evidence to support his claim of

exemption. See Oppo. 

In contrast to Benjamin, Eden Steigerwalt submitted a supplemental declaration

signed under the penalty of perjury in which she states that the funds in the levied account

are exclusively hers, that she earned the funds from her employment as a second grade

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school teacher, that she needs the funds to pay for her basic living expenses, and that her

parents have not accessed the account since it was set up when she was a minor. 

Steigerwalt Decl. at 1-2. Interestingly, the declaration does not mention the original claim

and financial form and does not explain who signed the original documents. See id.

However, the declaration does provide essentially the same facts as set forth in the claim. 

Compare Minassian Decl. at 23-25, with Steigerwalt Decl. at 1-2. Because the exemption

statutes are to be construed to the benefit of the judgment debtors (Ford Motor Credit Co.,

83 Cal. Rptr. 3d at 830; Kono, 126 Cal. Rptr. 3d at 211), the Court will consider Eden

Steigerwalt’s claim as if she had signed the original declaration under the penalty of perjury.

Judgment Creditors argue that Benjamin and Eden Steigerwalt failed to comply with

the requirements for third-party claims set forth in CCP § 720.130 because they did not

provide “a description of the property in which they claim an interest, a description of the

interest claimed, or the market value of the interest claim[ed],” as well as evidence showing

deposits into the accounts at issue or copies of the bank statements. See Mot. at 10-11;

Reply at 9. Judgment Creditors also argue that judgment debtors Kerry and Beth

Steigerwalt failed to produce documents showing that they did not deposit funds into the

levied accounts. Mot. at 11. 

As noted earlier, a third-party claim must be executed under oath and contain the

following: 

(1) The name of the third person and an address in this state where service

by mail may be made on the third person.

(2) A description of the property in which an interest is claimed.

(3) A description of the interest claimed, including a statement of the facts

upon which the claim is based.

(4) An estimate of the market value of the interest claimed.

CCP § 720.130. The form submitted on behalf of Benjamin Steigerwalt lists his parents’

attorney’s address, asserts that all the funds in the levied bank account are “exclusively”

his personal savings derived from birthday and holiday gifts, and that his parents “never”

access the account. Minassian Decl. at 20-22. As such, the claim submitted on behalf of

Benjamin Steigerwalt satisfies the first three elements of a third-party claim (although it is

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not signed under the penalty of perjury by Benjamin as required). The form submitted on

behalf of Benjamin Steigerwalt does not satisfy the fourth element because it does not

provide any evidence of the amount of seized funds, and thus fails to establish “the market

value of the interest claimed.” See CCP § 720.130(a)(4). Because Benjamin Steigerwalt

did not sign the claim of exemption under the penalty of perjury and did not satisfy the

statutory requirements for a valid third-party claim, the Court RECOMMENDS that his

claim of exemption be DENIED.

Eden Steigerwalt lists her parents’ attorney’s address, asserts under oath in the

declaration that the funds in the levied account are exclusively hers, that the funds were

earned from her employment as a second grade school teacher, that she needs the funds

to pay for her basic living expenses, and that her parents have not accessed the account

since her mother set it up when Eden was a minor. Minassian Decl. at 23-25; Steigerwalt

Decl. at 1-2. Accordingly, Eden Steigerwalt satisfies the first three elements of a third-party

claim under CCP § 720.130(a). With respect to the last element, “the market value of the

interest claimed,” Eden Steigerwalt’s father, judgment debtor Kerry Steigerwalt, asserts

under oath in his declaration, filed in support of a motion to stay the proceedings, that

$9,044.99 was seized from a bank account set up for his daughter. ECF No. 465-3,

Declaration of Kerry Steigerwalt (“Kerry Steigerwalt Decl.”) at 32. Although Mr.

Steigerwalt’s declaration is not part of Eden Steigerwalt’s claim of exemption and does not

specifically reference his daughter’s bank account number, it provides sufficient information

to establish the fourth element of CCP § 720.130. See Ford Motor Credit Co., 83 Cal. Rptr.

3d at 830 (courts are required to construe the exemption statutes to the benefit of the

judgment debtor); Kono, 126 Cal. Rptr. 3d at 211 (same). The Court also finds that Eden

Steigerwalt has presented sufficient evidence in her sworn declaration to establish that she

owns the funds in the levied account. See CCP § 720.360; Chrysler Credit Corp., 22 Cal.

Rptr. 2d at 43 (the third parties met their burden of demonstrating a valid interest in the

funds deposited in the levied account by filing a declaration stating that the account

contained funds to which the judgment creditor had no interest). Because Eden Steigerwalt

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presented evidence of her ownership of the funds in the levied bank account, the burden

of proof shifted to Judgment Creditors to establish that Eden Steigerwalt’s claim is invalid

or that their claim is superior. See Oxford St. Prop., LLC, 141 Cal. Rptr. 3d at 712. 

Judgment Creditors do not present any evidence in their pleadings and exhibits establishing

that judgment debtors Kerry and Beth Steigerwalt or anyone other than Eden Steigerwalt

contributed funds to the account at issue, or any other evidence undermining Eden’s

ownership claim in the funds at issue, and thus the Court finds that Judgment Creditors

failed to meet their burden of proof. See id. Accordingly, the Court RECOMMENDS that

Eden Steigerwalt’s claim of exemption be GRANTED in the amount of $9,044.99.

CONCLUSION AND RECOMMENDATION

Based on the forgoing, the Court RECOMMENDS that the District Court enter an

Order: (1) approving and adopting this Report and Recommendation; (2) denying the

claims of exemption filed by Alexis Cosio, Cesar Mota, Aleksey and Diana Kats, Dale and

Michele Curtis, Danon Slinkard and Benjamin Steigerwalt; and (3) granting the claim of

exemption filed by Eden Steigerwalt.

IT IS HEREBY ORDERED that any written objections to this Report must be filed

with the Court and served on all parties no later than September 18, 2015. The

document should be captioned “Objections to Report and Recommendation.”

IT IS FURTHER ORDERED that any reply to the objections shall be filed with the

Court and served on all parties no later than October 2, 2015. The parties are advised

that failure to file objections within the specified time may waive the right to raise those

objections on appeal of the Court’s order. See Turner v. Duncan, 158 F.3d 449, 455 (9th

Cir. 1998).

IT IS SO ORDERED.

DATED: September 3, 2015

BARBARA L. MAJOR

United States Magistrate Judge

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