In re Miller (First Community Bank v. Gaughan)

Under California’s conflicts of law rules, California law governed execution of a judgment on the husband’s guaranty against the Arizona couple’s jointly owned San Francisco apartment.  FCB obtained a judgment on a guaranty against husband in Arizona federal court.  FCB registered the judgment in federal court in California and attempted to execute on a San Francisco co-op apartment which husband and wife held nominally as joint tenants.  Under Arizona law, the couple’s community property would be exempt from execution of judgment on a guaranty signed by only one of them, and the co-op having been acquired during marriage would be treated as community property for this purpose.  This decision holds, however, that under California’s governmental interest and comparative impairment approach to conflict of laws, California law should apply here, allowing the creditor to execute against the husband’s interest, as co-tenant in the co-op, but preventing the bank from reaching the wife’s co-tenancy interest in the co-op, thus granting her some of the protection that she would have under Arizona law.

Ninth Circuit Court of Appeals (Korman, J., sitting by designation); March 31, 2017; 2017 WL 1192205

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