California Partition Law Blog
Generally, a bankruptcy proceeding acts as a stay on the collection of debt as well as any acts needed to be taken to enforce a debt. The rules regarding partition actions in bankruptcy proceedings are codified in the Code of Civil Procedure section 715.050. Typically, whether a partition action is exempt from a bankruptcy proceeding depends on when the bankruptcy proceeding was initiated. Therefore, a bankruptcy proceeding will not necessarily prevent a person from recovering possession of premises for which they have the right to recover possession.
If a writ of possession was not yet obtained prior to the filing of a bankruptcy proceeding, then a tenant may be able to stop the execution of a writ of possession initially by initiating a bankruptcy proceeding. Therefore, timing is an essential element in determining whether a partition action is exempt from a bankruptcy proceeding. At Underwood Law Firm, our attorneys are more than familiar with bankruptcy proceedings and their impact on partition actions.
Code of Civil Procedure section 715.050
Code of Civil Procedure section 715.050 states, “Except with respect to enforcement of a judgment for money, a writ of possession issued pursuant to a judgment for possession in an unlawful detainer action shall be enforced pursuant to this chapter without delay, notwithstanding receipt of notice of the filing by the defendant of a bankruptcy proceeding.”
Similarly, 11 U.S.C. section 362 provides for exemption from the automatic stay caused by the filing of a bankruptcy petition. (see In re Badax, LLC (C.D.Cal.B.K. Nov. 1, 2019) 608 B.R. 730.)
Lee v. Baca (1999) 73 Cal.App.4th 1116
In Lee v. Baca, the Court of Appeal interpreted this statute in the context of a standard landlord-tenant matter. Lee was a landlord who rented an apartment to Carlos Navarro and Alma Rodriguez and filed an action against the sheriff of Los Angeles County. (Lee, 73 Cal.App.4th at 1118.) After Carlos and Alma failed to pay their rent due for the apartment, Lee served them with a notice to pay rent or quit and then filed an unlawful detainer action. (Id.) Carlos and Alma defaulted, and judgment was entered in favor of Lee, giving Lee the right to recover possession of the apartment. (Id.) A writ of possession was issued to allow Lee to recover possession of the premises, and the writ was then delivered to the sheriff of Los Angeles County to enforce the writ. (Id.) However, a few days before the scheduled enforcement of the writ, Carlos and Alma filed a voluntary petition for bankruptcy and notified the sheriff of the bankruptcy filing. (Id.) In turn, the sheriff notified Lee that he would not enforce the writ of possession until Lee obtained relief from the automatic stay as a result of the bankruptcy proceeding. (Id.)
After Carlos and Alma moved out, Lee filed a petition for a writ of mandate and a complaint for declaratory and injunctive relief against the sheriff, asking for a declaration that the sheriff was required by law to enforce the writ of possession despite the bankruptcy proceeding. (Id.) The sheriff demurred, and the trial court dismissed Lee’s complaint. In turn, Lee appealed. (Id.)
The Court of Appeals reversed the trial court’s holding and remanded Lee’s complaint back to the trial court to overrule the sheriff’s demurrer to Lee’s claims for injunctive and declaratory relief. (Lee, 73 Cal.App.4th at 1122.) The Court’s reasoning was based on Code of Civil Procedure section 715.050. Under section 715.050, “a writ of possession issued pursuant to a judgment for possession in an unlawful detainer action shall be enforced pursuant to this chapter without delay, notwithstanding receipt of notice of the filing by the defendant of a bankruptcy proceeding.” (CCP § 715.050.) Therefore, under section 715.050, because Carlos and Alma filed for bankruptcy after Lee initiated his unlawful detainer action and obtained a writ of possession, the sheriff was required to enforce the writ of possession. (Lee, 73 Cal.App.4th at 1119.)
The Sheriff contended that section 715.050 was preempted by federal code 11 U.S.C. section 362(a), which provides that a bankruptcy petition operates as an automatic stay to the enforcement, against a debtor or against the property of the estate, of a judgment obtained before the commencement of a bankruptcy proceeding, and any act to obtain possession of property of the estate or of property from the estate. (Lee, 73 Cal.App.4th at 1119; 11 U.S.C. section 362(a)(2)-(3).) However, as the Court of Appeals stated, the property of the estate includes all of the debtor’s legal and equitable interests in property at the commencement of the bankruptcy proceeding. (Lee, 73 Cal.App.4th at 1119.) In California, a tenant does not have a legal or equitable interest in the rented property once the judgment of possession has been entered in favor of the landlord. (Id.) Therefore, once the judgment for the unlawful detainer action was entered in favor of Lee, Carlos, and Alma lost any and all legal and equitable interest they had in the apartment, which is why section 362(a) did not apply.
An Example of Section 715.050
“Shawn” and “Julie” was a young couple who owned a single-family house in Riverside. To purchase the home, Shawn and Julie undertook a mortgage with Bank of America. Shawn is still in dental school, and Julie is working as a night nurse at the local hospital; therefore, the couple is living from paycheck to paycheck. After a year, Julie got pregnant and gave birth to a beautiful baby girl. However, with a new baby in the house, money became extremely tight as Shawn and Julie were trying to find a way to support all three of them solely on Julie’s paycheck. Shawn and Julie began missing their mortgage payments. Thereafter, Bank of America began the process of partitioning the house. However, Shawn and Julie filed for bankruptcy one day before Bank of America obtained a writ of possession to recover possession of the house. Therefore, the writ of possession may not be enforced because Shawn and Julie initiated their bankruptcy proceeding before the writ of possession was executed by Bank of America.
How the Underwood Law Firm Can Help
A person’s right to recover real property through a writ of possession may be impacted by a tenant initiating a bankruptcy proceeding. According to Code of Civil Procedure section 715.050, whether a writ of possession is exempt from a bankruptcy proceeding depends on whether the bankruptcy proceeding was initiated before or after the litigant obtained the writ of possession. If the writ of possession was obtained before the initiation of the bankruptcy proceeding, then the writ of possession must be enforced.
As each case is unique, litigants would be well-served to seek experienced counsel familiar with the ins and outs of bankruptcy proceedings and the law surrounding them. At the Underwood Law Firm, our knowledgeable attorneys are here to help. If you believe your writ of possession may be impacted by a bankruptcy petition, are worried about a writ of possession being enforced against you despite your bankruptcy petition, or if you just have questions, please do not hesitate to contact our office.
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