Zohrabian v. PNC Bank CA2/4 ( 2023 )

Filed 5/19/23 Zohrabian v. PNC Bank CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
TALIN ZOHRABIAN, B316041
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v.
20CMCV00019)
PNC BANK, N.A.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Thomas D. Long, Judge. Affirmed.
Law Office of Michael N. Berke and Michael N. Berke for
Plaintiff and Appellant.
Akerman, Parisa Jassim and Alejandro P. Pacheco for
Defendant and Respondent.
INTRODUCTION
After being served with a levy, a third person has a duty to
pay obligations owing to the judgment debtor by delivering them
to the levying officer unless there is “good cause” not to do so.
(Code Civ. Proc., § 701.010.)1 Talin Zohrabian filed a complaint
against BBVA USA (BBVA), a bank, for failure to seize funds in a
trust account after being served with writs of execution and
notices of levy.2 In response, BBVA moved for summary
judgment, contending it had good cause for not delivering the
funds held in the trust account to the levying officer absent a
court order authorizing seizure of funds from that account.
The trial court granted BBVA’s motion, concluding
Zohrabian failed to proffer any evidence to dispute BBVA’s
contention that it had good cause to decline to deliver the trust
account funds to the levying officer. For the reasons discussed
below, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 2015, Zohrabian obtained a judgment against nonparties
Xavier Mitchell and Dane Belle (the judgment debtors) in the
amount of $24,295.00 in a case entitled Talin Zohrabian v. Xavier
1 All further undesignated statutory references are to the
Code of Civil Procedure.
2 BBVA was acquired by PNC Bank, N.A. (PNC), and BBVA
no longer exists. We granted PNC’s motion to substitute itself as
a party in this appeal in place of BBVA under California Rules of
Court, rule 8.814. The parties refer to the respondent in their
appellate briefs as BBVA, however, and not to PNC as the
successor in interest. Thus, for ease of reference, we will refer to
the respondent as BBVA.
2
Mitchell, et al., Los Angeles Superior Court Case No. 15P04303
(the underlying action). On October 1, 2018, Zohrabian served
BBVA with writs of execution and notices of levy for both
judgment debtors. The notices of levy directed BBVA to seize
checking and savings account funds held in the names of the
judgment debtors. They did not specifically reference the
judgment debtors’ beneficial or other interests in any trust
account.3
To prevent erroneous seizure of customer account funds,
BBVA’s policy directs employees not to automatically seize
account funds pursuant to a levy unless two of three pieces of
information provided in the levy match customer information on
BBVA’s system: (1) customer name; (2) customer address; and (3)
taxpayer identification (TIN) or social security number. BBVA
located an account titled “DAX Family Trust.” The account was
held in the name of the DAX Family Trust since January 16,
2018. The signature card associated with the account was signed
by the judgment debtors as trustees of the DAX Family Trust,
identified as a revocable trust. The trust account was associated
with a TIN not included in the levies, and the address for the
account did not match the addresses in the levies.
BBVA declined to seize the DAX Family Trust account
funds. Zohrabian filed a motion to enforce the levy in the
underlying action. The court granted the motion and ordered
BBVA to “honor the Notice of Levy.” BBVA then filed an ex parte
3 The notices of levy described the property to be levied upon
as follows: “Any and all Stock Certificates, Checking Accounts,
Saving Accounts, Certificates of Deposit, Safe-Deposit Boxes, and
Money Market Accounts held at [BBVA] in the names[s] of the
[judgment debtors].”
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application, seeking “clarity as to whether the Court orders
BBVA to freeze and turn over the revocable trust account funds
belonging to Xavier Mitchell and Dana Belle, or whether the
Court holds BBVA directly liable for the amount of the
judgment.” The court issued a subsequent ruling, clarifying as
follows: “The court ordered and continues to order the moving
party, a financial institution, to comply with the levy. The court
did not order payment of any funds other than those belonging to
customers or their creditors. The court did not find liability on
the part of the bank, nor did it vindicate the bank’s actions.” By
the time the court issued its order, however, the DAX Family
Trust account had been closed.4
In 2020, Zohrabian filed this lawsuit against BBVA,
alleging two causes of action: (1) noncompliance with levy under
section 701.020; and (2) creditor’s suit. The trial court sustained
BBVA’s demurrer to the second cause of action with leave to
amend. Zohrabian did not amend the complaint; thus, only the
first cause of action remained.
BBVA moved for summary judgment, arguing Zohrabian
failed to establish an element of her claim. BBVA argued it had
good cause for not delivering the funds held in the DAX Family
Trust absent an order authorizing seizure from that account. It
claimed that the name, address, and TIN for the DAX Family
Trust did not match the information on the levying documents,
and by the time Zohrabian obtained an order from the court
directing BBVA to seize funds from the trust account, the
4 When Zohrabian served the levy notices on October 1, 2018,
the trust account had a balance of $27,723.41. All funds were
withdrawn, however, by March 2019, and the account was closed
on July 25, 2019.
4
judgment debtors had closed the account. In opposition,
Zohrabian contended BBVA violated the levy notices to withhold
funds from the accounts in the names of the judgment debtors by
not seizing the funds in the DAX Family Trust account, and
triable issues of material fact exist regarding whether BBVA had
good cause not to withhold those funds.
The trial court granted BBVA’s motion, and entered
judgment in its favor. Zohrabian appeals from the judgment.
DISCUSSION
A. Standard of Review
“A party is entitled to summary judgment only if there is no
triable issue of material fact and the party is entitled to judgment
as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A
defendant moving for summary judgment must show that one or
more elements of the plaintiff's cause of action cannot be
established or that there is a complete defense. (Id., subd. (p)(2).)
If the defendant meets this burden, the burden shifts to the
plaintiff to present evidence creating a triable issue of material
fact. (Ibid.) A triable issue of fact exists if the evidence would
allow a reasonable trier of fact to find the fact in favor of the
party opposing summary judgment. (Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 850.)
We review the trial court’s ruling on a summary judgment
motion de novo, liberally construe the evidence in favor of the
party opposing the motion, and resolve all doubts concerning the
evidence in favor of the opponent. (Miller v. Department of
Corrections (2005) 36 Cal.4th 446, 460.) We must affirm a
summary judgment if it is correct on any of the grounds asserted
in the trial court, regardless of the trial court’s stated reasons.”
5
(Grebing v. 24 Hour Fitness USA, Inc. (2015) 234 Cal.App.4th
631, 636-637.)
B. Statutory Scheme
“Detailed statutory provisions govern the manner and
extent to which civil judgments are enforceable. In 1982,
following the recommendations of the California Law Revision
Commission, the Enforcement of Judgments Law (EJL) was
enacted. The EJL appears in sections 680.101 through 724.260
and is a comprehensive scheme governing the enforcement of all
civil judgments in California.” (Imperial Bank v. Pim Electric,
Inc. (1995) 33 Cal.App.4th 540, 546.)
Under the EJL, after being served with a levy, a third
person has a duty to pay obligations owing to the judgment
debtor by delivering them to the levying officer unless there is
“good cause” not to do so. (§ 701.010, subd. (b).) “‘Good cause’
includes, but is not limited to, a showing that the third person did
not know or have reason to know of the levy from all the facts
and circumstances known to the third person.” (§ 701.010, subd.
(c).) A third person who fails to deliver to the levying officer
amounts owed to the judgment debtor without good
cause becomes personally liable to the judgment creditor.
(§ 701.020, subd. (a).)
A judgment creditor may satisfy its judgment by levying
on its judgment debtor’s deposit accounts. (§ 700.140.) The
interest of a trust beneficiary, however, is not subject to
execution. (See § 699.720, subd. (a)(8) [“[t]he interest of a trust
beneficiary” is “not subject to execution”].) “The judgment
debtor’s interest as a beneficiary of a trust is subject to
enforcement of a money judgment only upon petition . . . by a
judgment creditor to a court having jurisdiction over
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administration of the trust . . . .” (§ 709.010, subd. (b).) “The
judgment debtor’s interest in the trust may be applied to the
satisfaction of the money judgment by such means as the court,
in its discretion, determines are proper . . . .” (Ibid.)
C. Analysis
Zohrabian contends the trial court erred by granting
BBVA’s motion for summary judgment because triable issues of
facts exist regarding: (1) whether BBVA was obligated to turn
over funds that were in the DAX Family Trust account at the
time of the levy; and (2) whether BBVA had good cause to refuse
to honor the levy against the DAX Family Trust account.
In support of her first point, Zohrabian’s argument is
limited to the following: “Service of a notice of levy upon [ ] BBVA
created an immediate execution lien in favor of . . . Zohrabian on
all amounts in the subject deposit accounts so levied in the name
the judgment debtor at the time of service. [Code of Civil
Procedure] §700.140[, subd.] (b)]. BBVA violated Section
700.140[, subdivision] (d) when it failed to identify and turn over
the funds from the . . . alleged trust account pursuant to the levy
and thereafter allowed the Debtors to withdraw from the
accounts while the execution lien was in effect.” But neither
subdivision (b) nor (d) of section 700.140 states BBVA had an
“immediate” duty to turn over the funds from the DAX Family
Trust account. (See § 700.140, subd. (b) [“The execution lien that
arises upon service of a writ of execution and notice of levy
reaches only amounts in a deposit account at the time of service
on the financial institution . . . ”]; § 700.140, subd. (d) [“The
financial institution shall not honor a withdrawal request or a
check or other order for the payment of money from the deposit
account if presentment of the withdrawal request or item to the
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financial institution occurs during the time the execution lien is
in effect unless, following the withdrawal or payment, sufficient
funds are available to cover the levy”].) Rather, under section
701.020, subdivision (a), BBVA is liable for noncompliance with
the levies only if it “fail[ed] or refuse[d] [to comply with the levy]
without good cause to do so.” This brings us to Zohrabian’s second
point.
As discussed above, it is undisputed the DAX Family Trust
account was: (1) held in the name of the trust, not the judgment
debtors, who were merely identified as trustees; (2) associated
with a different address than the one identified in the levies; and
(3) associated with a TIN not included in the levies. Moreover,
the levying documents did not identify the DAX Family Trust
account, or any trust account, as a judgment debtor. With no levy
naming the trust (or including trust account funds generally),
and no matching account holder name, customer address, or TIN,
BBVA declined to automatically seize the funds in the DAX
Family Trust account absent a court order specifically
authorizing seizure from that account. Based on this undisputed
evidence, we conclude BBVA met its prima facie burden of
demonstrating an element of Zohrabian’s claim cannot be
established, i.e., that BBVA did not have “good cause” when it
declined to comply with the levies.
The burden therefore shifted to Zohrabian to establish the
existence of a triable issue of fact regarding the “good cause”
element of its claim under section 701.020. (§ 437c, subd. (p)(2).)
Zohrabian relies on three purported material triable issues of fact
regarding whether BBVA had good cause to not immediately
comply with the levies. As discussed in greater detail below,
however, none of these facts go directly to the heart of the issue,
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which is that the levying documents did not identify the DAX
Family Trust account or any trust account as a judgment debtor,
and BBVA was not in possession of any documents
demonstrating the judgment debtors were settlors of the DAX
Family Trust.5
First, Zohrabian argues BBVA did not comply with its own
internal policy by failing to obtain a copy of the DAX Family
Trust origination document when the trust account was created.
If it had, according to Zohrabian, the document would have
“definitively proven” that the judgment debtors were the settlors,
trustees, and beneficiaries of the DAX Family Trust. Zohrabian
provides no support for her speculative statement, however. Nor
does she cite to any authority that imposes liability on BBVA for
its alleged failure to obtain trust documents before opening the
DAX Family Trust account. Zohrabian could have, but did not,
request documents from the judgment debtors identifying who
opened the trust account and the trust beneficiaries. (See
§ 708.030, subd. (a) [“judgment creditor may demand that any
judgment debtor produce and permit the party making the
demand, or someone acting on that party’s behalf, to inspect and
to copy a document that is in the possession, custody, or control of
the party on whom the demand is made . . . if the demand
requests information to aid in enforcement of the money
judgment.”].)
5 If the judgment debtors were settlors of the DAX Family
Trust, and the settlors retained the power to revoke the trust in
whole or in part, the trust property is subject to the “claims of
creditors of the settlor to the extent of the power of revocation
during the lifetime of the settlor.” (Prob. Code, § 18200.)
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Without documents demonstrating the judgment debtors
were the settlors of the DAX Family Trust, BBVA could not seize
the funds in the trust account even if the judgment debtors were
the sole beneficiaries—their beneficial interests would not be
subject to a writ of execution without first petitioning the trial
court for an order. (See § 709.010 [“The judgment debtor’s
interest as a beneficiary of a trust is subject to enforcement of a
money judgment only upon petition under [section 709.010] by a
judgment creditor to a court having jurisdiction over
administration of the trust as prescribed in [section 17000, et
seq.] of the Probate Code.”]; see also FirstMerit Bank, N.A. v.
Reese (2015) 242 Cal.App.4th 408, 412 [“By its plain terms, the
enforcement procedures of section 709.010 are the only means
available for a judgment creditor to enforce a money judgment
against an interest in a trust”].)
Moreover, Zohrabian claims BBVA knew from an
examination of the bank account statements of the DAX Family
Trust that transfers of funds between the trust account and the
individual accounts of the judgment debtors regularly occurred.
But contrary to her contention, BBVA had no duty to supervise
account activity or inquire into the purpose for which account
funds were being used. (See Grover v. Bay View Bank (2001) 87
Cal.App.4th 452, 456 [“‘“The relationship of bank and depositor
[is that of debtor and creditor, and it] is founded on contract”
. . . This contractual relationship does not involve any implied
duty “to supervise account activity” . . . or “to inquire into the
purpose for which the funds are being used” . . .’”].)
Next, Zohrabian contends BBVA “willfully or negligently”
failed to properly comply with the requirements of the statutorily
required Memorandum of Garnishee (MOG). The MOG states
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that if BBVA “will not deliver to the levying officer any property
levied upon” it must “describe the property and the reason for
not delivering.” It further asks BBVA to describe any property
of the judgment debtor not levied upon that is in BBVA’s
possession or control. BBVA did not respond to these line
items. Even assuming BBVA failed to provide complete
information in the MOG, however, the remedy provided in the
EJL is that BBVA may, “in the court’s discretion[,]” be required
“to pay the costs and reasonable attorney’s fees incurred in any
proceedings to obtain the information required in the garnishee’s
memorandum.” (§ 701.030, subd. (d).) It is not, as Zohrabian
appears to contend, to hold BBVA liable for the amount of the
levy. That remedy is reserved for noncompliance with a levy. (See
§ 701.020, subd. (a)(1) & (2) [if a third person fails or refuses to
comply with a levy without good cause to do so, the third person
is liable to the judgment creditor for the lesser of “[t]he value of
the judgment debtor’s interest in the property or the amount of
the payments required to be made” or “[t]he amount required to
satisfy the judgment pursuant to which the levy is made.”].)
Finally, we reject Zohrabian’s argument that BBVA’s
violation of section 700.140, subdivision (d), triggered the
consequences enumerated in section 701.020. Section 700.140,
subdivision (d), provides, in relevant part: “The financial
institution shall not honor a withdrawal request or a check or
other order for the payment of money from the deposit account if
presentment of the withdrawal request or item to the financial
institution occurs during the time the execution lien is in effect
unless, following the withdrawal or payment, sufficient funds are
available to cover the levy.” It is undisputed that BBVA did, in
fact, send the levying officer a memorandum of garnishee
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capturing $399.02 from Belle’s personal checking account.
Zohrabian does not argue BBVA permitted withdrawals from
that account during the time the execution lien was in effect. The
issue here is whether BBVA had good cause for its refusal to
seize funds from the DAX Family Trust account when no levying
document named the trust, or any trust account funds generally.
Thus, section 700.140, subdivision (d), is inapplicable.
In sum, the parties do not dispute that property in a
revocable trust can be subject to a levy. Here, however, the
levying documents did not identify the DAX Family Trust
account or any trust account as a judgment debtor and, based on
documents in its possession, BBVA could not determine whether
the judgment debtors were the settlors of the DAX Family Trust.
On this record, we conclude Zohrabian failed to proffer any
evidence to dispute BBVA’s showing that it had good cause when
it declined to deliver the DAX Family Trust account funds to the
levying officer without a court order authorizing seizure of funds
from that account.
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DISPOSITION
The judgment is affirmed. PNC is awarded its costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CURREY, Acting P. J.
We concur:
MORI, J.
ZUKIN, J.*
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to Article VI, section 6, of the California
Constitution.
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