PATTON vs ARVO SOLAR FRANCHISING, LLC

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

Tentative Ruling

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24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

***NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G. ST. SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 25 WILL BE HEARD IN DEPARTMENT 8D OF THE NEW COURTHOUSE. ALL PAPERS FOR THIS DEPARTMENT MUST BE FILED AT THIS NEW LOCATION AND WILL NOT BE ACCEPTED AT THE HALL OF JUSTICE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION***

Moving defendant Jon Phillip Horton’s (“Defendant”) motion to substitute Defendant’s undertaking for property is ruled on herein.

Factual and Procedural Background

This is an action for unfair competition, false advertising, and rescission. On August 25, 2025, this Court granted Plaintiff Bryan Patton’s (“Plaintiff”) application for right to attach order and for writ of attachment in the amount of $602,627.50. Prior to August 25, 2025 hearing on Plaintiff’s application, Defendant’s wife Nicole Rose Moreno Horton executed a grant deed conveying the Property to herself and Defendant as husband and wife as joint tenants. (See Defendant’s MPA, Exhibit A.) On August 22, 2025, Defendant recorded a homestead declaration on his undivided one-half interest in the Property under Code of Civil Procedure, section 704.920. (See id., Exhibit C.)

On December 18, 2025, the writ of attachment was levied and recorded in San Joaquin County, creating a lien on Defendant’s 50-percent undivided interest in the real property parcel known as 19997 East Liberty Road in Clements, California (“the Property”).

Defendant now moves to substitute the attachment of his 50-percent interest in the Property with an undertaking of $10,000, so that he may proceed with the sale of the Property to a third party in accordance with the condition of the sale.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

Plaintiff opposes.

Legal Standard

A homestead is the principal dwelling in which the debtor resided on the date the judgment lien attached to the dwelling and which the debtor resided continuously thereafter until the date the court determines whether the dwelling is a homestead. (Code Civ. Proc., § 704.710.) An attachment lien attaches to a homestead in the amount of any surplus over the total of the following: (1) all liens and encumbrances on the homestead at the time the attachment lien is created; and (2) the homestead exemption set forth in Code of Civil Procedure section 704.730. (Code Civ. Proc., § 487.025, subd. (b).)

When determining the amount of the homestead exemption, the statute in effect when the lien was created must be applied. (Code Civ. Proc., § 703.050, subd. (a).) Under the version of the applicable statute at the time the lien was created in 2025, the amount of the homestead exemption is the greater of the following, adjusted annually for inflation beginning on January 1, 2022: (1) the countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed $600,000; or (2) $300,000. (Code Civ. Proc., § 704.730, subds. (a), (b).)

In a case where the defendant applies for an order to release a portion of property which has been attached or where the defendant applies for an order preventing the attachment of property and the amount of the undertaking to be given is less than the amount to be secured by the attachment, the application shall include a statement, executed under oath, describing the property to be so released or so protected from attachment. (Code. Civ. Proc., § 489.310, subd. (b).) The defendant shall file an undertaking to pay the plaintiff the value of the property released not exceeding the amount of any judgment which may be recovered by the plaintiff in the action against the defendant. (Code.

Civ. Proc., § 489.310, subd. (c).) The amount of the undertaking filed shall be equal to the lesser of: (1) the value of the property attached or prevented from being attached; or (2) the amount specified by the writ to be secured by the attachment. (Ibid.) “The Court shall issue such order upon the condition that a sufficient undertaking be filed.” (Ibid.)

Discussion

Based on valuation and amounts provided in his motion and in reply to Plaintiff’s opposition,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

Defendant argues that, under current conditions, the value of the property attached is essentially zero because the surplus proceeds from the sale of the Property would not exceed the value of Defendant’s homestead exemption, such that an undertaking for $10,000 would be a reasonable substitute for the attachment.

Defendant bases this valuation on the proposed purchase price of $1,515,000, less a $45,000 credit to the buyer as set forth in the purchase agreement of the Property in the pending sale (Defendant’s MPA, Exhibit E), yielding a purchase price and proceeds of $1,470,000, of which Defendant would receive half, or $735,000. To compute the surplus over the homestead exemption, Defendant subtracts from $735,000 his share of liability for the following outstanding liens on the Property: (1) one half of the Property’s mortgage balance of $765,000, or $382,500; (2) one half of a federal tax lien of $19,539.56, or $9,769; (3) an entire federal tax lien of $56,150.69; (4) one half of a state tax lien of $21,032.50, or $10,516.25; (5) one half of a federal tax lien of $34,348.58, or $17,174.29. (See id., Exhibit D.)

When combined, these liens total $476,109.98. Subtracting $476,109.98 from Defendant’s share of sales proceeds of $735,000 yields net sales proceeds of $258,890.02. Defendant’s computation then deducts onehalf share of his asserted homestead exemption of $550,000, or $275,000—based on the median sales price of single-family homes in San Joaquin County as determined by the California Employment Development Department —and other unspecified expenses of the sale, Defendant estimates that Plaintiff would unable to be recover a judgment from the sale of the Property.

In opposition, Plaintiff disputes on numerous grounds Defendant’s computation of the surplus over the homestead exemption in the hypothetical sale of the Property. First, Plaintiff argues that Defendant has not provided any evidence in support of the asserted $550,000 homestead exemption. Second, Plaintiff argues that Defendant has incorrectly applied the homestead exemption by apportioning the exemption between himself and his wife; instead, Defendant asserts that the correct application of the exemption under current Code of Civil Procedure section 704.730 applies to a property as a whole and does not account for each spouse’s proportional shares of the homestead.

Using figures provided by Defendant, Plaintiff computes the surplus over the asserted homestead amount by subtracting the following amounts from the proposed purchase price of $1,515,000: (1) mortgage balance of $765,000; (2) a federal tax lien of $19,539.56; (3) a federal tax lien of $56,150.69; (4) a state tax lien of $21,032.50; (5) a federal tax lien of $34,348.58; (6) property taxes of $9,850.26; and (7) a homestead exemption of $550,000. Based on these figures, Plaintiff computes a surplus over the homestead exemption of $59,078.32, of which Defendant would take one half, or $29,539.16.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

Next, Plaintiff argues that the surplus cannot be reliably determined based on the documents submitted by Defendant; for example, the tax liens shown on Defendant’s Exhibit D are not current payoff figures, the mortgage balance is approximated as “about the face amount,” and there is no figure provided for the special tax lien for the Ygrene Community Facilities District, among others. Plaintiff also questions the reliability of Defendant’s Exhibit F, a property value assessment/broker price opinion prepared by Defendant’s mortgage lender United Wholesale Mortgage in response to Defendant’s application for loss mitigation. (See Defendant’s MPA, Exhibit F.)

Lastly, Plaintiff opposes Defendant’s motion for leaving blank the undertaking amount on his AT-170 application. Should the Court grant the present motion, Plaintiff requests for the Court to order the reinstatement of the attachment lien should the sale of the Property not close within 90 days of the Court’s order. Plaintiff also requests an order for Defendant to provide Plaintiff with a written accounting of the disposition of the proceeds of sale within 10 days of closing so that Plaintiff may monitor the investment of the proceeds, and application of the homestead exemption thereto, under Code of Civil Procedure section 704.960.

Here, Defendant has provided evidence of the Property’s fair market value through the purchase agreement (Defendant’s MPA, Exhibit E, p. 1) and the Broker Price Opinion (Id., Exhibit F). Although the Broker Price Opinion was prepared in 2025, the document provides a price opinion of $1,500,000 for the property (see Exhibit F, p. 6), which is comparable to the proposed purchase price set forth in the purchase agreement (see Exhibit E, p. 1). While neither of these documents are official appraisals, the Court finds them to be reasonable for purposes of providing evidence of the value of property attached.

Defendant also cites to the Employment Development Department to determine the median single family home price sale in San Joaquin County. Although Defendant has not provided evidence or requested judicial notice of the $550,000 median home price in San Joaquin County for 2024, the Court notes that such information is publicly available through the EDD’s website.[1] Despite Plaintiff’s opposition to this figure, Plaintiff has also used $550,000 as the homestead exemption in its own computations.

Accordingly, for purposes of estimating the value of the property attached, the Court accepts using $550,000 for the homestead exemption.

The parties next disagree as to how the homestead exemption applies to Defendant’s one-half undivided interest in the Property. While former Code of Civil Procedure section 704.730 included language stating that “if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead,” this language was removed when the statute was amended in 2020, effecting January 1, 2021. (See Stats. 2020, ch. 94, § 1.) Furthermore,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

while cotenants or spouses in joint tenancy may both claim the homestead exemption as to their individual undivided one-half interests, the homestead exception does not apply to the cotenant’s individual interest; rather, the exemption applies to the property itself and is not specifically limited to the cotenant’s share. (See, e.g. In re Rauer’s Collection Co. (1948) 87 Cal.App.2d 248, 262 [“We are not concerned here with the apportionment between husband and wife of the $5,000 exemption, but only with the husband’s interest in the property, over and above the exemption if the property brings at a sale a sum in excess of $5,000, the sum of $5,000 is exempt and the creditor is entitled to be paid only out of the husband’s portion of the excess, which would be one-half of that excess, if any.”]).

Defendant has provided in his reply a payoff statement for the mortgage encumbering the Property (see Reply, Exhibit A), which discloses a total payoff amount of $828,421.14. Defendant has attested to not making any further payments on any tax liens set forth in the preliminary title report. (Horton Decl., ¶ 8; see Defendant’s MPA, Exhibit D.)

Thus, the Court applies the following calculations that apply to the whole property (between joint tenants) based on the evidence before it:

Gross sales proceeds (whole property) $1,515,000.00 Buyer credit ($45,000.00) UWM total owed ($828,421.14) Joint federal tax lien (1/11/22) ($19,539.56) Joint FTB lien (4/9/2025) ($21,032.59) Joint federal tax lien (5/13/25) ($34,348.58) Ygrene/CFD Lien (Unknown) Household homestead exemption ($550,000.00) Whole property surplus: $16,658.13 (minus unknown Ygrene lien) Defendant’s 50 percent share of surplus: $8,329.07 (without accounting for unknown Ygrene lien)

In addition to the joint encumbrances, Defendant has an individual tax lien in the amount of $56,150.69. Applying this to Defendant’s one-half of the surplus, which does not take into account the amount of the unknown Ygrene lien, this would leave a negative balance of

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV017897: PATTON vs ARVO SOLAR FRANCHISING, LLC 05/27/2026 Hearing on Motion - Other for Order to Subsititue Defendant's Undertaking for Property in Department 8D

$47,821.63 after application of the above. Even if the Court did not apply the buyer credit of $45,000, which is currently built into the purchase price, Defendant’s share of the property after deductions for joint and individual liens and encumbrances would be a negative balance of over $25,000.00.

Based on these calculations, there is no surplus to which the attachment lien may attach. (See Code Civ. Proc., § 487.025, subd. (b).)

Based on the record currently before the Court, the Court concludes that Defendant has shown that surplus proceeds are unlikely to be realized to satisfy a portion of the judgment.

Accordingly, the Defendant’s motion to substitute the attachment for an undertaking of $10,000 is GRANTED. The Court denies Plaintiff’s request to order that the attachment lien be reinstated if the sale of the Property does not close within 90 days, as well as Plaintiff’s request for accounting of the sales proceeds, as Code of Civil Procedure section 489.310 does not appear to support such requested relief.

Defendant shall post a $10,000 undertaking no later than June 8, 2026. The undertaking shall be filed with the Court. (See Code Civ. Proc., § 995.340.) At the time the undertaking is given, the principal is required to serve a copy of the bond on the beneficiary. Proof of service must be filed with the undertaking. (Code Civ Proc., § 995.370.)

Defendant shall prepare a formal order for the Court’s signature pursuant to California Rules of Court, rule 3.1312 and the order will be signed after the proof of the undertaking in the amount of $10,000 has been filed with the Court.

[1]See

https://labormarketinfo.edd.ca.gov/cgi/databrowsing/localAreaProfileQSMoreResult.asp’menuChoice=localAreaPro &criteria=property+values&categoryType=economicindicators&geogArea=0604000077&area=San+Joaquin+Count y&timeseries=property+valuesTimeSeries. (Last accessed May 22, 2026.)