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November 28, 2007

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Case and Legislative Notes:
by Russell H. Rapoport
Plotkin, Rapoport & Nahmias, P.C.,
Encino

El Toro Materials v. Saddleback Valley  --- F.3d ----, 2007 WL 2822019 (C.A.9, 2007) :
A landlord's remedy of a damage claim is subject to a cap under the bankruptcy code.  In a ruling that should give landlords some satisfaction, the Ninth Circuit Court of Appeals holds here that only the damages relating to the rejection of a lease, namely lost rental income are to be capped, but damages that would exist regardless of whether the lease was rejected or not, such as trespass, waste or nuisance are not capped under the laws.

The homestead exemption is a remedy for beleaguered debtors.  A weakness in the statutory protection was eliminated this summer through California SB 433 which amends C.C.P. § 704.720 by providing that a judgment debtor who is not currently residing in the homestead is entitled to the exemption while a separated or former spouse resides in or exercises control over the possession of the homestead until entry of judgment or other legally enforceable agreement dividing the community property, or until a later time period as specified by court order.

Musaelian v. Adams, 153 Cal.App.4th 882 (1st Dist. 2007) held that an attorney who represented himself could not be awarded attorney fees as sanctions pursuant to C.C.P. §128.5 because he hasn’t incurred any.  Keep your eye on this one as review has been granted by the state Supreme Court.

McMullen v. Haycock, 147 Cal.App.4th 753 (C.A. 2nd Dist.,2007) held, in a boon to debtors, that under the tracing statute, the full statutory exemption for funds held in private retirement accounts applied to assets that were rolled over into an IRA that would otherwise have provided for only a limited exemption.



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