Virdi v. Brown CA5

California Court of Appeal·Decided September 1, 2026·No. F090235·Unpublished

Opinion

Filed 9/1/26 Virdi v. Brown CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT

MAHEEP VIRDI et al., F090235

Plaintiffs and Respondents, (Super. Ct. No. BCV-22-101851)

v.

KELLY BROWN et al., OPINION Defendants and Appellants.

THE COURT*

APPEAL from an order of the Superior Court of Kern County. Bernard C.

Barmann, Jr., Judge.

Sean Brown and Kelly Brown, in pro. per, for Defendants and Appellants. No appearance for Plaintiffs and Respondents.

-ooOoo-

* Before Hill, P. J., Snauffer, J. and DeSantos, J.

Sean Brown and Kelly Brown (collectively, defendants) appeal from a postjudgment order denying their claims of exemption to levies. Because they have not demonstrated trial court error, we affirm the order.

PROCEDURAL BACKGROUND

On February 9, 2022, Maheep Virdi, M.D., and Rasham Sandhu, M.D., (collectively, plaintiffs) filed a first amended complaint in the Orange County Superior Court on behalf of Organic Energy, LLC (Organic Energy), a California limited liability company, against defendants arising from a failed business venture. The first amended complaint alleges that plaintiffs entered into a partnership with Sean1 to start up Organic Energy (an organic energy product company) with each of the three partners to contribute one-third of the capital to fund it. Plaintiffs invested approximately $1.3 million in Organic Energy, but Sean did not. According to the first amended complaint, Sean abused his position of trust as an officer and managing partner of Organic Energy by misappropriating the $1.3 million capital investment and using all the monies for defendants’ personal benefit, purchasing personal vehicles, paying off personal credit card debt, and making other expenditures that did not pertain to Organic Energy. Based on these allegations, the first amended complaint included causes of actions for civil theft (Pen. Code, § 496), embezzlement, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud, conversion, breach of contract, intentional interference with prospective economic relations, and unfair business practices.

The superior court judge transferred the action to Kern County Superior Court by order dated June 1, 2022. On February 10, 2023, defendants filed their answer to the first amended complaint. Plaintiffs answered defendants’ cross-complaint on April 19, 2023. Thereafter, the trial court granted plaintiffs’ “Motion for Terminating Sanctions, or, in the

1 We refer to defendants by their first names for clarity and convenience, because they share a last name. No disrespect is intended.

Alternative, Issue Evidentiary, and Monetary Sanctions” (boldface & some capitalization omitted) and ordered defendants’ answers to the first amended complaint be stricken, their defaults entered, and Sean’s cross-complaint dismissed on September 2, 2023.

The trial court entered judgment against defendants on December 21, 2023, and ordered them to pay $3,316,125 in actual and treble damages pursuant to Penal Code section 496, subdivision (c); $25,000 in actual damages; $299,913 in attorney fees; $7,789.21 in costs; $173,619.59 in prejudgment interest; $2,967.86 in additional interest; and postjudgment interest at the rate of 10 percent per annum. The abstracts of judgment were entered on January 17, 2024, and reflect a total judgment in the amount of $3,825,414.66.

The court issued writs of execution to the sheriffs of Orange, Kern, San Bernardino, and Los Angeles Counties. On March 18, 2025, the Orange County Sheriff’s Department served an “Execution-Bank Levy” on JPMorgan Chase Bank, National Association (Chase Bank). Sean returned a claim of exemption to the sheriff’s department for the Chase Bank account ending in 5613 on March 27, 2025. He returned a second claim of exemption to the sheriff’s department for Morgan Stanley individual retirement accounts (IRAs) ending in 877, 879, and 881 on April 15, 2025. Kelly returned a claim of exemption to the sheriff’s department for the Morgan Stanley IRA ending in 878 on April 15, 2025. All three claims of exemption described the properties as private retirement accounts exempt from levy pursuant to Code of Civil Procedure section 704.115.2 The boxes indicating the claims were made pursuant to a provision exempting property to the extent necessary for the support of the judgment debtor or his spouse or dependents were not checked, and financial statement forms were not attached.

2 Undesignated statutory references are to the Code of Civil Procedure.

Plaintiffs returned notices of opposition to defendants’ claims of exemption to the sheriff’s department on April 11, 2025,3 and April 29, 2025. Plaintiffs argue in Attachments 6 to the notices of opposition to Sean’s claims of exemption that amounts held in self-employed retirement plans or IRAs are exempt from levy only to the extent necessary to provide for the support of the judgment debtor and the debtor’s spouse and dependents upon retirement, but defendants’ claims of exemption failed to provide any financial analysis showing the funds were necessary for support in retirement.4 Plaintiffs also describe three other IRAs identified by defendants with The Charles Schwab Corporation (Charles Schwab), in 2024: (1) $242.007.60 in Kelly’s name; (2) a Roth account in Sean’s name in the amount of $57,895.43; and (3) a second account in Sean’s name in the amount of $46,960.68.

While the Charles Schwab accounts were initially levied, defendants claimed exemptions for the accounts, and Charles Schwab released the restrictions on the accounts when plaintiffs failed to object to the claims of exemption. These accounts are presumably available to defendants for their retirement needs. However, plaintiffs also argue that defendants received distributions from those accounts that demonstrate the accounts are not being used for retirement as follows: withdrawals totaling $24,000 in 2021 and 2022 from Kelly’s account (ending in 8436); a $25,500 withdrawal in 2022 from Sean’s account (ending in 5364); and withdrawals totaling $439,200 in 2018, 2021, and 2022 from Sean’s account (ending in 9280).

3 Plaintiffs also filed the notice of oppositions to the claims of exemption with the trial court on April 8, 2025, and April 28, 2025. 4 Plaintiff’s oppositions to Sean’s claims of exemption each have an “Attachment 6” that are nearly identical and provide a brief factual history and legal argument supported by five documentary exhibits, including a letter from Charles Schwab relating to four accounts held there and Internal Revenue Form 1099-Rs showing distributions from those accounts. Plaintiffs’ opposition to Kelly’s claim of exemption does not have “Attachment 6” but does have the same documents relating to the Charles Schwab accounts and Internal Revenue Form 1099-Rs.

Plaintiffs further argue that defendants failed to meet their burden of proof that the accounts are exempt because, while defendants described the accounts as IRAs, they failed to provide documentation that the accounts complied with Internal Revenue Service (IRS) rules. For example, defendants have several accounts that they described as IRAs but failed to provide any documentation that proves the nature of the accounts, compliance with IRS regulations at the inception of multiple accounts in 2003, and whether the accounts comply with IRS limits on the annual contribution amounts. Defendants had the burden to provide documentation for each account showing the dates the accounts were established, amounts contributed each year, yearly balances, and yearly withdrawals but failed to do so.

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