Opinion ID: 1158402
Heading Depth: 1
Heading Rank: 8

Heading: Whether Morse's solicitations were misleading

Text: (3) Morse remains steadfast in his view that his advertisements were not misleading. The Court of Appeal carefully reviewed the record and concluded to the contrary. ( People v. Morse, supra, 21 Cal. App.4th 259, 266-269.) The review department did likewise. Both courts were correct. Revisiting this issue in detail would serve no purpose, and we decline to do so. We shall briefly note, however, the ways in which the advertisements were found to be misleading. A. Morse failed to explain that, under Code of Civil Procedure sections 704.710-704.850, homeowners automatically receive a homestead exemption even if they do not record a homestead declaration. ( People v. Morse, supra, 21 Cal. App.4th 259, 266.) B. Morse's advertisements also were misleading in their discussion of a homeowner's protection against the forced sale of a home. The homestead information sheet suggests the recording of a homestead declaration necessarily prevents the forced sale of a home. The Court of Appeal correctly pointed out that, [E]ven where a homeowner records a homestead declaration, a creditor may force the sale of a home through a levy pursuant to a writ of execution. (See Code Civ. Proc., §§ 704.740-704.800; 704.970.) Morse's statement is misleading in suggesting otherwise. ( People v. Morse, supra, 21 Cal. App.4th 259, 267-268, fns. omitted.) [5] We also note that, even if Morse's statements regarding a forced sale were not misleading, they would nevertheless be unlawful under section 17537.6, subdivision (a)(1), which makes unlawful a representation that [t]he preparation or recordation of a homestead declaration will in any manner prevent the forced sale of a judgment debtor's dwelling. C. The homestead information sheet was further misleading in suggesting that, absent a recorded homestead declaration, the homeowner bears the burden of proving the applicability of the exemption. We agree with the Court of Appeal that, He is incorrect. Under Code of Civil Procedure section 704.780, subdivision (a)(1), even without a recorded homestead declaration, the creditor has the burden of proof `[i]f the records of the county tax assessor indicate that there is a current homeowner's exemption or disabled veteran's exemption for the dwelling claimed by the judgment debtor....' This section `creates a presumption in favor of exempt status if the judgment debtor has claimed a homeowner's or veteran's property tax exemption for the dwelling.' (Recommendation Relating to the Enforcement of Judgments Law (Sept. 1982) 16 Cal. Law Revision Com. Rep., supra [1982], at p. 1095.) Moreover, it places an affirmative burden on the creditor, in applying for an order of sale, to indicate `whether or not the records of the county tax assessor indicate that there is a current homeowner's exemption or disabled veteran's exemption for the dwelling and the person or persons who claimed any such exemption.' (Code Civ. Proc., § 704.760, subd. (a).) Thus, Morse's materials are deceptive in suggesting that, in order not to have the burden of proving the applicability of the homestead exemption, a homeowner must record a homestead declaration. ( People v. Morse, supra, 21 Cal. App.4th 259, 268-269, fn. omitted.) D. Rule 1-400(D)(2) states that an advertisement shall not Contain any matter, or present or arrange any matter in a manner or format which is false, deceptive, or which tends to confuse, deceive, or mislead the public. The review department found that, Because the arrangement of [Morse's] materials tended to mislead the recipient into believing that the letter came from the recipient's lender, [Morse] wilfully violated rule 1-400(D)(2). In short, we agree with the Court of Appeal and the review department that Morse's advertisements were misleading in multiple respects.