Defendant Michael Walton's Opposition To Attachment; Points And Authorities
MICHAEL WALTON SBN97947
700 Larkspur Landing Circle, #165
Larkspur, CA 94939
(415) 456- 7920
(415) 456-8026 Facsimile
In Propria Persona
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF MARIN
CHURCH OF SCIENTOLOGY INTERNATIONAL, a California not-for-profit religious corporation, Plaintiff, vs. GERALD ARMSTRONG; MICHAEL WALTON; THE GERALD ARMSTRONG CORPORATION, a California for profit corporation; DOES 1 through 100, inclusive, Defendants. AND RELATED CROSS-ACTIONS |
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CASE NO. 157 680 DEFENDANT MICHAEL WALTON'S
Date: June 13, 1997 |
1.INTRODUCTION
Plaintiff is seeking a writ of attachment against alleged insurance proceeds, in a matter where plaintiff did not present any evidence regarding any amount of a judgement to which plaintiff would allegedly be entitled, in a matter which is not appropriate for attachment, and in a matter wherein plaintiff has not sought a writ of attachment previously to protect its rights, and is now
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seeking a writ not for purposes of collecting a debt but for the purposes of harassment.
Under such circumstances, plaintiff is not entitled to a right to attach order.
2. STATEMENT OF FACTUAL AND PROCEDURAL BACKGROUND
The instant lawsuit is based upon claims by plaintiff, Church of Scientology International ("CSI"), that Defendant Gerald Armstrong transferred his interest in the residence located at 707 Fawn Drive in San Anselmo to defendant Michael Walton receiving no consideration in return. Scientology obtained a judgment against Armstrong in a non related lawsuit regarding liquidated damages.
Armstrong filed for bankruptcy protection which was granted. In June 1996 Scientology obtained permission to continue this action against Walton. There is no trial date scheduled.
Although the subject matter of this action is real property originally held in the name of defendant, and now held in the name of Solina Walton, plaintiff has never previously sought a writ of attachment against the real property. Plaintiff now asserts on the basis of inadmissable evidence, to which defendant objects, that the real property was burned in a fire, and the plaintiff wishes to attach insurance proceeds.
Defendant does not dispute that a one-half interest in real property was transferred to him without payment of money in August 1990. Plaintiff, however, nowhere asserts what the value of that
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property was at the time of The transfer. Plaintiff also nowhere asserts that Gerald Armstrong, at the time of the transfer, had incurred any obligation to plaintiff.
Defendant, in fact, believes he was entitled to receive Mr. Armstrong's one half interest, because Mr. Armstrong had decided he no longer wished to participate in the agreement which had induced defendant to leave his law practice and home in Southern California, move to San Anselmo, and execute a substantial mortgage on a home. There was no intent to defraud anyone by this transaction. Rather, defendant avoided sustaining more damages than he already did sustain through the actions o Mr. Armstrong.
3. ATTACHMENT IS NOT AUTHORIZED IN THIS INSTANCE
The remedy of attachment is wholly statutory, its scope and procedure are limited by the statutes, and these statutes are strictly construed. (Nakasone v. Randall (1982) 129 C.A.3d 757, 181 C.R. 324.) California's Attachment Law is very specific in describing when an attachment is authorized. C.C.P. 483.010 reads in pertinent part, "Section(a) Except as otherwise provided by statute, an attachment may be issued only in an action on a claim or claims for money, each of which is based upon a contract, express or implied, where the total amount of the claim or claims is a fixed or readily ascertainable amount not less than $500 exclusive of costs, interest, and attorney's fees ...(c) If the action is against a defendant who is a natural person, an
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attachment may be issued only on a claim which arises out of the conduct by the defendant of a trade, business, or profession. An attachment may not be issued on a claim against a defendant who is a natural person if the claim is based on the sale or lease of property, a license to use property, or the loan of money where the property sold or leased, or licensed for use, the services furnished, or the money loaned was used by defendant primarily for personal, family, or household purposes."
Scientology's claims against Walton do not satisfy any requirement of the attachment statutes. This action is not an action on a claim for money based upon a contract where the total amount of the claim is readily ascertainable. There is no contract in this action. There is no readily ascertainable amount that Scientology can claim is due from Walton. Nor is this an action which arises out of conduct by Walton or by Armstrong or any other named defendant in this action (or even the contract action against Armstrong) of a trade, business or profession. Scientology argues that Civil Code Section 3439.07(a) (2) provides that a creditor may attach a transferred asset "in accordance with the procedures described in the attachment statutes, Code of Civil Procedure Sections 481.010,et.seq." These sections do not authorize attachment in this kind action. It appears from the statute allowing attachment that this provision is not intended to allow for a writ of attachment in the action against the transferee, but is to allow the creditor to attempt attachment against the property in the action
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against the transferee then left to make a third party claim. See, e.g., Whitehouse v. Six Corp. (1995) 40 Cal.App.4th 527, 533. In this event, the burden of proof is on the creditor to show the transfer was fraudulent. Id. At 535. The attachment remedy is narrowly limited to liquidated, unsecured, nonfrivolous claims, which, if against individual debtors, must relate to business matters." Code of Civil Procedure, section 483.010.
4. SCIENTOLOGY HAS NOT SHOWN THE PROBABLE VALIDITY OF ITS CLAIM.
A. Scientology Has Not Shown Any Evidence Regarding Any Amount of Judgment It Could Possibly Obtain.
CCP Section 484.090 requires that to issue a right to attach order, the court must find that plaintiff has established the probable validity of the claim. CCP Section 481.190 provides that probable validity means that it is more likely than not that plaintiff will obtain judgment on the claim.
Civil Code Section 3439.08(b) and (c) provide that if a transfer is avoidable, the creditor can recover judgment for the lesser of the value of the asset transferred at the time of the transfer, or the amount necessary to satisfy the claim.
Plaintiff has introduced absolutely no evidence whatsoever, even by way of inadmissable evidence, to establish that it can obtain a judgement in any amount under CC 3439.08 (b) and (c). All
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plaintiff has done is to show that some property was transferred. It was, in fact, a half interest in a residence. The evidence introduced by defendant, however, shows that there was a house with a mortgage. The evidence does not show what the equity was, if any, in said property. Plaintiff made no attempt whatsoever to introduce any such evidence. Under the evidence introduced by plaintiff, it is certainly possible that the value of the property transferred was zero, if the market value of the property at the time of the transfer did not exceed the amount of liens against the property at the time.
There is no evidence introduced to show that the plaintiff could possibly be entitled to judgment under CC 3439.08 (b) and (c), and plaintiff has not established the probable validity of the claim.
B. There is No Showing of Actual Intent to Defraud.
Plaintiff asserts that there is a showing of actual intent to defraud under 3439.04. The declaration of Michael Walton in opposition to this motion shows otherwise. There was simply no intent to defraud. Plaintiff did not even allege that any conduct for which liability arose on the part of Mr. Armstrong occurred prior to the transfer of the property.
Under the circumstances, even if plaintiff could allege the value of the property at the time of transfer, plaintiff cannot be said to have carried its burden of showing the probable validity of the claim of an actual intent to defraud, and plaintiff is not
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entitled to a judgement.
5. THE CLAIM IS NOT IN A READILY ASCERTAINABLE AMOUNT.
CCP Section 483.015 provides that the amount (a) provides that the attachment is authorized only where the amount of the claim is readily ascertainable.
As seen above, if there is a claim, it must be in an amount no greater than the value of the property transferred, and there is no evidence whatsoever of the value. Therefore, the amount of the claim is not readily ascertainable.
Further, CC Section 3439.08(d) provides that the amount of any judgment is to be reduced by the value given to the debtor for the transfer. If the property transferred had any value, any judgment would have to be reduced by the value given by defendant, especially in not pursuing any claims against Mr. Armstrong for the damages suffered by defendant in leaving his law practice and home and entering into the mortgage arrangement. The amount of the claim cannot be readily ascertainable.
6. THE ATTACHMENT IS FOR THE PURPOSE OF HARASSMENT OF DEFENDANT, NOT FOR THE PURPOSE OF RECOVERY ON THE CLAIM; OTHERWISE PLAINTIFF WOULD HAVE SOUGHT ATTACHMENT LONG AGO, AND NOT JUST WHEN DEFENDANT MAY SEEK TO REBUILD A HOUSE.
CCP Section 484.090(a)(3) requires that a right to attach order may be issued only if the court finds that the attachment is not
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sought for a purpose other than the recovery on the claim on which the attachment is based.
Plaintiff has never sought attachment in this action. Obviously, plaintiff was always aware of the existence of the house, as it is the subject of the action. Such real property, if there is a right to attach, can be the subject of attachment. CCP 487.010(c)(1) .
Plaintiff now seeks attachment only because it believes that it can, under the circumstances harass defendant through that remedy. If plaintiff obtained an attachment against real property, it would only provide security for the judgement, and not provide substantial harassment of the defendant, since it would only act as a lien until the time of judgment, and then be eliminated once defendant prevails.
Now, however, plaintiff believes that there may be insurance proceeds (depending on the liens of mortgage holders). If plaintiff could attach such proceeds, plaintiff could prevent defendant form being able to rebuild his family's home. For years, the property has been free of a lien of plaintiff, and plaintiff sought no lien. Defendant could have sold the property at any time and taken the equity, if any, out of the house.
Only now, when defendant would obviously need insurance proceeds to rebuild a house and rebuild a life does plaintiff choose to seek the remedy of attachment. This makes sense only if the purpose of the attachment is not recovery on the claim, but
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harassment of defendant. Scientology has been free to prosecute its claim against defendant since June 1996 and has not done so. Scientology has given no notice to defendant or this court that the bancruptcy court had lifted the automatic stay. There is still no trial date. Scientology is not entitled to attachment by virtue of CCP 484.090(a)(3).
7. EQUITABLE LIEN NOT SUBJECT TO ATTACHMENT
Scientology has filed this action claiming an equitable lien on Walton's property as a result of an alleged fraudulent transfer. Attachment is not allowed on a claim secured by "any interest in real property arising from agreement, statute, or other rule of law, including a mortgage or deed of trust of realty, and a statutory, common law, or equitable lien."(C.C.P. 483.010(b)).
Therefore, Scientolgy is not entitled to an attachment.
CONCLUSION
For all the reasons stated above, defendant Michael Walton respectfully requests that the court deny plaintiff's application for a right to attach order and writ of attachment.
[signed Michael Walton]
Michael Walton
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STATE OF CALIFORNIA, COUNTY OF MARIN
I am a resident of the county aforesaid; I am over the age of eighteen years and not a party to the within entitled action; my business address is 700 Larkspur Landing Circle, Suite 120, Larkspur CA 94939.
On March 6, 1997, I served the within NOTICE OF OPPOSITION TO RIGHT TO ATTACH ORDER, DEFENDANT MICHAEL WALTON'S OBJECTION TO ATTACMENT; POINTS AND AUTHORITIES; and MICHAEL WALTON'S DECLARATION IN SUPPORT OF OPPOSITION TO SCIENTOLOGY'S REQUEST FOR ATTACHMENT on the interested parties by placing true copies thereof enclosed in sealed envelopes with postage thereon fully prepaid, in the United States mail at San Anselmo, California addressed as follows:
Andrew Wilson
Wilson Campilongo LLP
115 Sansome, Suite 400
San Francisco, CA 94104
Gerald Armstrong
715 Sir Francis Drake
San Anselmo, CA 94960
Executed on June 6, 1997 at Larkspur, California.
I declare under penalty of perjury that the foregoing is true and correct.