Spencer v. Lowery

Opinion

LOW, P.

J.—Plaintiff appeals from the grant of defendants’ claim of statutory homestead exemption under Code of Civil Procedure section 704.720, subdivision (b).

1

Plaintiff contends defendants are not entitled to the statutory homestead exemption because the sale of defendants’ home under a power of sale in a deed of trust was not in execution of a money judgment, as required under section 704.720, subdivision (b). We agree and reverse.

Plaintiff Norma Spencer is the executrix of the estate of Anthony Kryla. An action was filed during Kryla’s lifetime against the defendants Donald and Sharon Lowery for, inter alia, constructive trust of Kryla’s real property. After Kryla’s death, the action was pursued to judgment by plaintiff, who then commenced enforcement of the judgment. On November 16, 1990, defendants’ home was sold by the California Reconveyance Company, as trustee, when defendants defaulted in the payment of a note secured by a deed of trust. Defendants claimed exemption for the $7,000 in proceeds in surplus of the note. The court allowed the exemption.

Plaintiff asserts that because the foreclosure sale of defendants’ home was not in execution of a money judgment, defendants are not entitled to the statutory homestead exemption under section 704.720, subdivision (b)

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(hereafter section 704.720(b)). The defendants contend that section 704.720(b) exempts proceeds from all involuntary sales.

Section 704.720(b) reads in part: “If a homestead is sold

under this division

... the proceeds of sale ... are exempt in the amount of the homestead exemption . . . .” (Italics added.) The section’s reference is to division 2 of title 9 of the Code of Civil Procedure (§§ 695.010-709.030), which is concerned with the enforcement of money judgments. Sections 701.510 to 701.640 describe the procedures for the sale of real property in execution of a money judgment. Sales “under this division” referred to in section 704.720(b) are sales in execution of a money judgment. This category does not include a sale pursuant to the power of sale in a deed of trust or mortgage; such sales are not within the referenced division, but instead are described in Civil Code sections 2924 to 2924k. There is nothing ambiguous or uncertain in section 704.720(b) which would require us to examine any policy concerns or legislative history. Since defendants’ property was not sold in execution of a money judgment, they are not entitled to the statutory homestead exemption.