Chapter 3 - Third-Party Claim of Security Interest or Lien

California Code of Civil Procedure — §§ 720.210-720.290

Sections (9)

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)Where personal property has been levied upon under a writ of attachment, a writ of execution, a prejudgment or postjudgment writ of possession, or a writ of sale, a third person claiming a security interest in or lien on the personal property may make a third-party claim under this chapter if the security interest or lien claimed is superior to the creditor’s lien on the property.

(b)A secured party claiming a security interest in fixtures may make a third-party claim pursuant to this chapter if the security interest claimed is superior to the creditor’s lien

on the property. For this purpose, references in this division to “personal property” shall be deemed references to fixtures.

§ 720.220

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

A person making a third-party claim under this chapter shall file the claim with the levying officer, together with two copies of the claim, after levy on the personal property but before the levying officer does any of the following:

(a)Sells the property.

(b)Delivers possession of the property to the creditor.

(c)Pays proceeds of collection to the creditor.

§ 720.230

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)The third-party claim shall be executed under oath and shall contain all of the following:

(1)The name of the secured party or lienholder and an address in this state where service by mail may be made on the secured party or lienholder.

(2)A description of the personal property in which a security interest or lien is claimed.

(3)A detailed description of the security interest or lien claimed, including a statement of the facts upon

which it is based.

(4)A statement of the total amount of sums due or to accrue under the security interest or lien and the applicable rate of interest on amounts due.

(b)In the case of a security interest, a copy of the security agreement and any financing statement shall be attached to the third-party claim. In the case of a lien, a copy of any writing upon which the claim is based shall be attached to the third-party claim. At a hearing on the third-party claim, the court in its discretion may exclude from evidence any writing a copy of which was not attached to the third-party claim.

§ 720.240

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)Not later than five days after the third-party claim is filed with the levying officer, the levying officer shall serve the following personally or by mail on the creditor:

(1)A copy of the third-party claim.

(2)A statement whether the third person has filed an undertaking to release the property pursuant to Chapter 6 (commencing with Section 720.610).

(3)If the third person has filed an undertaking to release the property, a

notice that the property will be released unless, within the time allowed as specified in the notice, the creditor objects to the undertaking.

(4)If the third person has not filed an undertaking to release the property, a notice that the property will be released unless, within the time allowed as specified in the notice, the creditor does one of the following:

(A)Files with the levying officer an undertaking that satisfies the requirements of Section 720.260 and a statement under Section 720.280.

(B)Deposits with the levying officer the amount claimed plus interest at the applicable rate to the estimated date of tender to the secured party or lienholder.

(b)The time allowed the creditor for objecting to the third person’s undertaking to release the

property or for filing an undertaking and statement or making a deposit pursuant to subdivision (a) is 10 days after service under subdivision (a).

(c)Within the time allowed for service on the creditor under subdivision (a), the levying officer shall serve a copy of the papers specified in subdivision (a) on the debtor. Service shall be made personally or by mail.

(d)The levying officer may serve the copy of the third-party claim and the statement and notice pursuant to this section notwithstanding any defect, informality, or insufficiency of the claim.

§ 720.250

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)Except as otherwise provided by statute, if a third-party claim is timely filed, the levying officer may not do any of the following with respect to the personal property in which the security interest or lien is claimed:

(1)Sell the property.

(2)Deliver possession of the property to the creditor.

(3)Pay proceeds of collection to the creditor.

(b)The interest of a

secured party or lienholder in the property levied upon is not affected by the failure of the secured party or lienholder to file a third-party claim under this chapter.

§ 720.260

Amended by Stats. 2001, Ch. 812, Sec. 6. Effective January 1, 2002.

(a)If the creditor within the time allowed under subdivision (b) of Section 720.240 either files with the levying officer an undertaking that satisfies the requirements of this section and a statement that satisfies the requirements of Section 720.280 or makes a deposit with the levying officer of the amount claimed under Section 720.230:

(1)The levying officer shall execute the writ in the manner provided by law unless, in a case where the creditor has filed an

undertaking, the secured party or lienholder files an undertaking to release the property pursuant to Chapter 6 (commencing with Section 720.610).

(2)After sale, payment, or delivery of the property pursuant to the writ, the property is free of all claims or liens of the secured party or lienholder for which the creditor has given the undertaking or made the deposit.

(b)Subject to Sections 720.770 and 996.010, unless the creditor elects to file an undertaking in a larger amount, the amount of the undertaking filed by the creditor under this section shall be in the amount of ten thousand dollars ($10,000) or twice the amount of the execution lien as of the date of levy or other enforcement lien as of the date it was created, whichever is the lesser amount.

(c)An undertaking given by the creditor under this chapter

shall:

(1)Be made in favor of the secured party or lienholder.

(2)Indemnify the secured party or lienholder against any loss, liability, damages, costs, and attorney’s fees, incurred by reason of the enforcement proceedings.

(3)Be conditioned on a final judgment that the security interest or lien of the third person is entitled to priority over the creditor’s lien.

(d)If the creditor is a public entity exempt from giving an undertaking, the public entity shall, in lieu of filing the undertaking, file with the levying officer a notice stating that the public entity opposes the claim of the third person. When so filed, the notice is deemed to satisfy the requirement of this section that an undertaking be filed.

§ 720.270

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)In a case where the third person has not filed with the levying officer an undertaking to release the property pursuant to Chapter 6 (commencing with Section 720.610), if the creditor does not within the time allowed under subdivision (b) of Section 720.240 file with the levying officer an undertaking (or file a notice if the creditor is a public entity) that satisfies the requirements of Section 720.260 and a statement under Section 720.280, or deposit with the levying officer the amount claimed under Section 720.230, the levying officer shall release the personal property unless it is to be held under another lien or unless

otherwise ordered by the court.

(b)Except as otherwise provided in this section, release is governed by Section 699.060.

(c)If property that has been taken into custody is to be released to the debtor pursuant to Section 699.060 and the debtor has not claimed the property within 10 days after notice was served pursuant to Section 699.060, the levying officer shall release the property to the secured party or lienholder making the claim.

(d)A hearing may be had on the third-party claim pursuant to Chapter 4 (commencing with Section 720.310) notwithstanding the release of the property pursuant to this section.

§ 720.280

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

At the time the creditor files an undertaking with the levying officer in response to a third-party claim by a secured party, the creditor shall do all of the following:

(a)File with the levying officer a statement executed under oath that the security interest is invalid, that the security interest is not entitled to priority over the creditor’s lien, or that the amount demanded in the claim exceeds the amount to which the secured party is entitled, for the reasons specified therein.

(b)Serve a copy of the statement on

the secured party. Service shall be made personally or by mail.

(c)Serve a copy of the statement on the debtor. Service shall be made personally or by mail.

§ 720.290

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

(a)If the levying officer receives a sufficient deposit from the creditor, the levying officer shall promptly tender or pay the deposit to the secured party or lienholder who made the third-party claim except that, if the deposit is made by personal check, the levying officer is allowed a reasonable time for the check to clear.

(b)If the tender is accepted, the interest of the secured party or lienholder in the property for which deposit is made passes to the creditor making the deposit and, on distribution of any proceeds under Section 701.810, the creditor who

makes the deposit shall be entitled to the proceeds to the extent of the deposit in the priority of the interest for which the deposit is made.

(c)If the tender is refused, the amount of the deposit shall be deposited with the county treasurer payable to the order of the secured party or lienholder.