Claim of Exemption
Mechanics Bank v. Hixson, 20CVP-0378
Hearing: Claim of Exemption
Date: August 4, 2026
Mechanics Bank (Bank) filed this action for breach of promissory note against David Hixson on December 1, 2020. On June 8, 2021, the Court granted plaintiff’s motion for summary judgment. On June 28, 2021, judgment was entered in the total amount of $182,239.24, with interest accruing at a per diem rate of $56.06 until the judgment is fully satisfied.
On October 13, 2021, the Court entered an amended judgment in the total amount of $193,193.07, which included the original judgment plus an award of attorney’s fees and costs, with interest to accrue as allowed by law.
On April 8, 2026, a writ of execution was issued by the Court in the total amount of $289,527.55, including principle, interest and the $40 fee for issuance of the writ.
On June 11, 2026, Mechanics Bank levied upon Hixson’s interest in commercial real property located at 9655 El Camino Real, Atascadero, California 93422 (the Property) to satisfy the amended judgment. (Loughrey Decl., 8.) Hixson uses the property for his chiropractic practice.
Given the mandatory 120-day period before a sale can be advertised pursuant to Code of Civil Procedure section 701.545, no notice of sale has yet been issued or published. (Loughrey Decl., ¶ 9.)
On July 6, 2026, the San Luis Obispo County Sheriff’s Office mailed a Notice of Filing of Claim of Exemption to the Bank’s counsel. (Loughrey Decl., ¶ 11; Ex. D.) The Sheriff did not attach a copy of the claim of exemption. (Loughrey Decl., ¶ 12.)
The Bank opposes the claim of exemption. The Bank served notice of hearing on the claim of exemption on Hixson’s counsel of record and on the Sheriff’s office. The Sheriff has not filed a copy of the claim of exemption with the Court. However, Hixson filed a reply and declaration in support of the claim of exemption, which attaches his financial statement, thus the Court has sufficient information to consider the claim. (Hixson Decl.; Ex. 1.)
The exemption claimant has the burden of proof at a hearing on a claim of exemption. (Code Civ. Proc., § 703.580(b).)
Hixson asserts exemptions under Code of Civil Procedure sections 706.051, 704.060 and 704.120. The Bank contends that none of these statutes apply to the real property levy at
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issue.
Code of Civil Procedure section 706.051 exempts “the portion of the judgment debtor’s earnings that the judgment debtor proves is necessary for the support of the judgment debtor or the judgment debtor’s family supported in whole or in part by the judgment debtor.”
Code of Civil Procedure section 704.060 exempts “tools, implements, instruments, materials, uniforms, furnishings, books, equipment, one commercial motor vehicle, one vessel, and other personal property” up to certain aggregate monetary value where they are reasonably necessary to and actually used by the judgment debtor and/or his spouse in the exercise of the trade, business, or profession by which the yearn a livelihood.
Code of Civil Procedure section 704.120 exempts contributions by workers payable to the Unemployment Compensation Disability Fund and by employers payable to the Unemployment Fund.
Hixson contends that his chiropractic business is not mere a capital asset or investment vehicle but is the professional practice through which he provides chiropractic services and derives his sole means of retirement support necessary to support himself and his wife. (See Hixson Decl., ¶ 4.)
Hixson focuses on his sole proprietorship chiropractic practice and its tangible assets and personal property, which are situated on the Property. However, the Bank does not seek to levy the practice or its equipment, just the commercial real property at which it is located, not its contents. (Loughrey Decl., Ex. C [levy on interest in real property].)
Hixson argues that although Code of Civil Procedure section 704.060 expressly identifies personal property, “its underlying protective purpose would be defeated if the creditor could accomplish indirectly what the exemption prevents directly- namely, destroying Defendant's ability to use his exempt professional equipment and continue practicing his profession by selling the premises in which the practice necessarily operates.” (Reply, p. 11, ll. 20-24.) However, Hixon cites no authority for this proposition, and no authority that real property is exempt from levy under a statute that specifies it applies to personal property. “These exemptions are wholly statutory and cannot be enlarged by the courts. [Citation.]” (Kono v. Meeker (2011) 196 Cal.App.4th 81, 86.)
Nor is the real property itself “earnings” subject to exemption under Code of Civil Procedures section 706.051. That section applies to wage garnishment, and “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.” (Code Civ. Proc., § 706.011(b.)) Again, the Bank is not levying Hixson’s business, personal property, bank account or earnings, only the interest in the real property. (Loughrey Decl., Ex. C [levy on interest in real property].)
Hixson further contends that the real property on which is chiropractic practice is located
is owned jointly with his wife as community property. 1 (Hixson Decl., ¶ 6; Ex. 2 [grant deed showing title for the Property held by Hixson and his wife Ellen Lynn Hixson as community property.])
The Bank responds that under Family Code section 910(a), community property is liable for debts incurred by either spouse during marriage, regardless of whether one or both spouses are parties to the debt. Moreover, the judgment against Hixson arose from an unsecured promissory note, which is presumptively a community debt. (In re Marriage of Stephenson (1984) 162 Cal.App.3d 1057, 1084 [A presumption exists that the proceeds of a loan acquired during marriage are community property].)
The note was executed on December 18, 2009 and breached on June 30, 2020. (Cmpl., ¶¶ 7, 8.) Hixson does not declare precisely when he and his wife married, but he does declare that he and his wife have resided at their primary residence since 2001, and Hixson does not contend that the debt was acquired before marriage.(Hixson Decl., ¶¶ 7, 8.)
The deed explicitly titles Hixson and wife’s interests in the Property as community property, and the property is subject to levy.
Hixon’s claim of exemption as to the real property located at 9655 El Camino Real, Atascadero, California 93422 is denied.
1 The enforcement of money judgments law does provide a homestead exemption for the principal dwelling of a debtor. (See Code Civ. Proc., § 704.710, et seq.) The property here apparently contains a dwelling on the second floor. (See Loughrey Decl., Ex. C.) However, Hixson does not claim the homestead exemption and declares that he and his wife have a separate primary residence. (See Hixson Decl., ¶¶ 7-8.) The Property therefore is not Hixson and his wife’s principal dwelling, and that exemption is inapplicable. 3