Mirolla v. Mendez

Opinion

FLEMING, J.

Plaintiff Victor Mirolla appeals an order of the superi- or court declaring defendant Larry Mendez’ vehicle exempt from execution. The issue is whether unperfected liens are included in the exemption provided in Code of Civil Procedure section 690.4 for the first $2,500 of value “over and above all liens and encumbrances” on certain items used by the debtor in his trade or profession.

In October 1978 plaintiff brought an action against defendant in which he alleged that defendant had sold him a stolen vehicle. On October 25 the parties settled the suit for $7,000. The sum was to be paid by defendant in monthly installments of $500, but if defendant defaulted judgment could be entered against him for the unpaid balance plus interest and attorneys’ fees. Defendant failed to make the payments, and in August 1979 plaintiff secured a judgment against defendant for $7,000 plus interest and attorneys’ fees.

Defendant was in possession of a truck bearing Oregon license plates. Plaintiff’s attorney was informed by Oregon’s Department of Motor Vehicles that the truck was registered in Oregon to defendant at his Glendale, California, address, that defendant “had clear legal title to the vehicle, and that there [were] no outstanding liens or encumbrances of record on the vehicle.” In September 1979 plaintiff directed the Los Angeles County Marshall to levy on the truck.

[521]

Thereafter, defendant filed a claim of exemption under Code of Civil Procedure section 690.4, which exempts from execution $2,500 of “aggregate actual cash value.. .over and above all liens and encumbrances on [various items used by the debtor in his trade or profession] at the time of any levy of attachment or execution thereon,” items which include “one commercial motor vehicle reasonably necessary to and actually used [by the debtor] in commercial activity.” In the affidavit filed in support of his claim for exemption, defendant, a truck driver, declared that he used the truck levied upon to earn his livelihood, that he had purchased it in May 1978 from Asbury Transportation Company, and that Asbury retained a lien on the truck to secure payments due under the purchase contract.. Defendant further declared that since he still owed Asbury $7,900, the vehicle was exempt from execution, because its fair market value (estimated at less than $10,000) did not exceed $2,500 “over and above” the $7,900 lien then held by Asbury. In opposition, plaintiff argued that Asbury’s lien was invalid for purposes of defendant’s exemption under Code of Civil Procedure section 690.4 because it had never been recorded. In December 1979 the trial court concluded that the vehicle was exempt from execution under Code of Civil Procedure section 690.4, and ordered its release.