Hackett v. Mathews CA3 ( 2015 )

Filed 9/30/15 Hackett v. Mathews CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(El Dorado)
----
BRENDA HACKETT, C073966
Plaintiff and Appellant, (Super. Ct. No. PC20100542)
v.
RONALD MATHEWS et al.,
Defendants and Respondents.
Plaintiff Brenda Hackett appeals from a judgment entered after the trial court ruled
against her on her action seeking to enforce a purported judgment lien against certain real
property that she had previously deeded over to her former husband Patrick Hackett in
accordance with their marital settlement agreement.
1
In this appeal we must decide whether a provision in a family law judgment
requiring a party to maintain health insurance for the parties’ minor children gives rise to
a judgment lien against real property.
Code of Civil Procedure section 697.3201 provides “the exclusive method of
establishing a lien on real property of the judgment debtor for child and spousal support
payments ordered by a court.” (Ellrott v. Bliss (1983) 147 Cal.App.3d 901, 904-905.) It
states in pertinent part that “[a] judgment lien on real property is created . . . by recording
. . . a certified copy of . . . the following money judgments with the county recorder: [¶]
(1) A judgment for child, family, or spousal support payable in installments.”
(§ 697.320.) We shall conclude that even assuming for purposes of this appeal that the
requirement in this case to maintain health insurance for minor children is a form of child
support, it does not give rise to a judgment lien against real property because it does not
constitute a money judgment, nor is it payable in installments. Accordingly, we shall
affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Brenda and Patrick were married in 1995 and separated in August 2006.2 A
judgment dissolving the marriage was entered on November 27, 2007.
Brenda and Patrick owned a residence in Folsom in which Brenda continued to
reside with their two daughters after the divorce. During the marriage, they also acquired
a 10-acre parcel of vacant land in Pilot Hill in El Dorado County for $110,000.
1 Further unspecified statutory references are to the Code of Civil Procedure.
2 We use the parties’ first names to avoid confusion generated by their common
surname. No disrespect is intended.
2
A marital settlement agreement governing the division of assets and other rights
and obligations undertaken by Brenda and Patrick was incorporated into the judgment of
dissolution. Under that agreement, Patrick was awarded the Pilot Hill property, which
was then free of debt. Patrick also was required to, among other things, pay $2,000 per
month in child support and obtain and maintain health insurance for the children on or
before December 1, 2007. Brenda and Patrick both waived entitlement to spousal
support.
Brenda recorded a certified copy of the dissolution judgment in El Dorado County
on February 11, 2008. (§ 697.320, subd. (a)(1).)
Later that month, Patrick filed an application to compel Brenda to sign over title to
the Pilot Hill property to him as required by the judgment, claiming that he was in debt
and facing financial collapse. Brenda opposed the application on the ground that Patrick
was not complying with his obligations under the judgment, including the payment of
child support and maintenance of health insurance for the children. At the March 5,
2008, hearing on Patrick’s application, Brenda and Patrick entered into a court-approved
stipulation and order, which provided that the following be “paid out of escrow”: a
$1,400 loan on Brenda’s car; $4,000 in child support arrearages; and $3,300 on the
“Washington Mutual flex account,” which encumbered the Folsom residence. The
stipulation and order also required Patrick to “notify [Brenda] as soon as he receives
approval for a loan to be secured by the 10 acres of unimproved real property awarded to
him from property division.”
Patrick arranged for a $120,000 loan on the Pilot Hill property from Verdeo
Capital Group (Verdeo), a private real estate lender that used funding from an investor
named Visione Enterprises (Visione), and an escrow was opened at Financial Title
Company in Roseville for that purpose. On March 7, 2008, Brenda went to the title
company and signed escrow instructions authorizing the escrow officer to deliver and
3
record Brenda’s deed to Patrick when the three conditions in the stipulation and order
were satisfied.
The escrow officer requested a payment demand from the Sacramento County
Department of Child Support Services, which had been authorized to act on Brenda’s
behalf to enforce Patrick’s child support obligation. The county submitted a demand of
$6,357.50, which included matured installments of child support, interest, costs, and fees
through March 31, 2008. That sum was remitted to the county from the loan proceeds at
the close of escrow.3
Escrow closed on March 14, 2008, and net loan proceeds of $73,113 were remitted
to Patrick. Thereafter, Patrick made monthly child support payments for a time, but
ultimately defaulted on that obligation. He similarly defaulted on his loan from Verdeo,
and the Pilot Hill property was foreclosed upon and conveyed to Visione by trustee’s
deed in May 2010. The property was later sold to respondents Ronald and Karen
Mathews for $155,000. Their deed was recorded on August 23, 2010.
Brenda commenced this action on August 26, 2010, claiming that the judgment
lien created by the recording of the dissolution judgment on February 11, 2008, had
priority over the Visione’s deed of trust, and as a result she “maintains a superior priority
lien/judgment right in and to the subject Pilot Hill property vis-à-vis defendants . . . .”
Brenda sought to quiet title to an interest in the Pilot Hill property arising under the
dissolution judgment, and to foreclose her alleged judgment lien. Alternatively, she
sought to impose a constructive trust or equitable lien on the property. Unaware that the
property had been sold to the Mathews, she initially brought the action against Visione.
She later amended her complaint, adding the Mathews as defendants.
3 In addition, $1,400 was remitted to Golden 1 Credit Union to pay off Brenda’s car
loan, and $3,300 was remitted to Washington Mutual to bring the flex debt current.
4
Following a two-day trial, the trial court concluded that Patrick’s “support
payments to . . . Brenda . . . were current at the time the Visione deed of trust [was]
recorded, and that the Pilot Hill property was therefore free of any lien rights of [Brenda]
at that time,” and entered judgment in favor of the Mathews. More specifically, the court
determined that “all [child support] payments which had accrued through March 1, 2008 .
. . were paid off prior to the recording of Visione’s Deed of Trust on March 14, 2008,”
and thus, the “Pilot Hill property was free of [Brenda’s] judgment lien on March 14,
2008, when Visione’s Deed of Trust was recorded.” The trial court also found that
evidence concerning Patrick’s failure to maintain health insurance for the children was
irrelevant to Brenda’s claims regarding the Pilot Hill property “for the reasons set forth in
[the Mathews’] . . . Closing Trial Brief,” which asserted that “[e]xcept for child support
payments, the original marital judgment did not impose a lien upon the Pilot Hill
property.”
DISCUSSION
Brenda contends that the trial court erred in concluding that the Pilot Hill property
was free of her judgment lien on March 14, 2008, when Visione’s deed of trust was
recorded. She argues that the lien remained in effect due to Patrick’s failure to obtain and
maintain health insurance for the children as specified in the dissolution judgment.
According to Brenda, “[h]ealth care insurance is a form of child support which must be
paid current as a condition of lien priority on the loan.” As we shall explain, even
assuming for purposes of this appeal that health care insurance is a form of child support,
that portion of the dissolution requiring Patrick to obtain and maintain it did not give rise
to judgment lien on real property.
Generally speaking, a judgment lien on real property is created by recording an
abstract of a money judgment with the county recorder. (§ 697.310, subd. (a).) The
exclusive method of establishing a lien on real property of the judgment debtor for
overdue child support payments is prescribed by section 697.320. (Ellrott v. Bliss, supra,
5
147 Cal.App.3d at pp. 904-905; see also In re Marriage of Orchard (1990) 224
Cal.App.3d 155, 158.) Subdivision (a)(1) of section 697.320 provides in pertinent part:
“A judgment lien on real property is created under this section by recording an abstract
. . . or a certified copy . . . of the following money judgments with the county recorder:
[¶] (1) A judgment for child, family, or spousal support payable in installments.”
“Unless the money judgment is satisfied or the judgment lien is released, a judgment lien
created under paragraph (1) of subdivision (a) . . . continues during the period the
judgment remains enforceable.” (§ 697.320, subd. (b).) “A judgment lien created
pursuant to Section 697.320 is a lien for the amount of the installments as they mature
under the terms of the judgment, . . . but does not become a lien for any installment until
it becomes due and payable under the terms of the judgment.” (§ 697.350, subd. (c).) If
real property subject to a judgment lien is transferred or encumbered, the interest
transferred or encumbered remains subject to the lien “in the amount of the lien at the
time of transfer or encumbrance plus interest thereafter accruing on such amount.” (§
697.390, subd. (b).) In other words, if there are matured and unpaid installments at the
time of the transfer or encumbrance, the judgment lien survives as to any arrearages but
does not increase by the amount of future installments as they mature. (Ibid.)
As a preliminary matter, Brenda does not dispute the trial court’s finding that all
child support arrearages arising from Patrick’s obligation to pay $2,000 per month in
child support were paid off before escrow closed and Visione’s deed of trust was
recorded. Rather, she claims that the trial court erred in failing to take into account
Patrick’s failure to obtain and maintain health insurance for the two children, an
obligation that remained unfulfilled at the close of escrow and beyond.
The marital settlement agreement, which was incorporated into the dissolution
judgment, required in pertinent part that Patrick “obtain and maintain a health insurance
policy for the minor children through their minority with Kaiser, or equivalent, and be
solely responsible for those premiums.” The judgment lien created by the recording of
6
the dissolution judgment only secured the payment of a money judgment for child,
family, or spousal support payable in installments. (§ 697.320, subd. (a)(1).) A
“ ‘[m]oney judgment’ ” is “that part of a judgment that requires the payment of money.”
(§ 680.270.) To be enforceable, a money judgment “must be stated with certainty and
should specify the amount.” (Kittle v. Lang (1951) 107 Cal.App.2d 604, 612.) That
portion of the dissolution judgment pertaining to health insurance does not require the
payment of money; it requires the maintenance of insurance. No monetary amount is
specified, nor is such ascertainable from the record. Thus, that portion of the judgment
requiring Patrick to obtain and maintain health insurance is not a money judgment. Nor
is it a judgment payable in installments. While insurance premiums often are payable in
installments, there is no indication that such was the case here. Moreover, as the
Mathews correctly observe, it is possible for an individual to obtain health care insurance
without making payments in installments or without making any payments at all if the
individual participates in a health insurance plan sponsored by an employer.
Accordingly, that portion of the dissolution judgment requiring Patrick to obtain and
maintain health insurance did not give rise to a judgment lien against the Pilot Hill
property or any other real property, and the trial court did not err in determining that the
Pilot Hill property was free of any lien rights of Brenda at that time when escrow closed
and Visione’s deed of trust was recorded.4
4 Because we find that the Patrick’s obligation to obtain and maintain health insurance
for the minor children did not give rise to a judgment lien, whether Brenda had notice of
the Verdeo loan is of no consequence. Accordingly, we shall not consider her claims
related to notice.
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DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal. (See
Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/s/
Blease, Acting P. J.
We concur:
/s/
Robie, J.
/s/
Mauro, J.
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