217 Cal. App. 4th 156
Cal. Ct. App.2013Background
- Eves signed a Continuing Guaranty with an Asset Exclusion Schedule excluding his Como, Italy residence and its contents.
- Series AGI loaned $3.1 million to VPC-OR West Linn for a development project secured by a deed of trust; senior lender held $18.4 million.
- VPC-OR defaulted; Series AGI foreclosed and later sued VPC-OR and Eves to recover about $6.3 million.
- Eves opposed only the portion of attachment seeking proceeds from the sale of the Como property, claiming those proceeds were exempt.
- The trial court denied Eves's exemption claim and ordered attachment; Eves appealed.
- The court held that proceeds from the sale of an excluded asset are not automatically exempt absent express contractual language to that effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proceeds from sale of an excluded asset exempt? | Series AGI argues proceeds are intrumental to attachment. | Eves contends proceeds remain excluded by Paragraph 13. | Proceeds are not exempt; exclusion limited to expressly excluded assets. |
Key Cases Cited
- Levi Strauss & Co. v. Aetna Casualty & Surety Co., 184 Cal.App.3d 1479 (Cal.App.3d 1479 (Cal. Ct. App. 1986)) (cannot insert missing terms; contract governs)
- Hinckley v. Bechtel Corp., 41 Cal.App.3d 206 (Cal. App. 1974) (court may not rewrite contract to relieve bad deals)
- Sather Banking Co. v. Briggs Co., 138 Cal. 724 (Cal. 1903) (interpretation of guaranty should reflect its terms)
- Walnut Creek Pipe Distributors, Inc. v. Gates Rubber Co., 228 Cal.App.2d 810 (Cal. App. 1964) (courts not rewrite contracts for fairness when terms exist)
- Safeco Ins. Co. v. Robert S., 26 Cal.4th 758 (Cal. 2001) (improper to read implied exclusions where not stated)