California Enforcement Of Judgments Law
East Jordan (2018)
East Jordan Plastics, Inc. v. Suzhou Xincheng Gardening Material Co., Ltd., 2018 WL 1806699 (C.D.Cal., Feb. 13, 2018).
United States District Court, C.D. California.
EAST JORDAN PLASTICS, INC., Plaintiff,
SUZHOU XINCHENG GARDENING MATERIAL CO.,LTD., Defendant.
Case No. CV 17-5638 VAP(JC)
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
[DOCKET NO. 15]
Honorable Jacqueline Chooljian UNITED STATES MAGISTRATE JUDGE
*1 This Report and Recommendation is submitted to the Honorable Virginia A. Phillips, Chief United States District Judge, pursuant to the August 15, 2017 Notice of Referral of Matter to the Magistrate Judge.
I. SUMMARY AND BACKGROUND
On November 18, 2016, the United States District Court for the Western District of Michigan entered a $1,231,019.60 default judgment ("Judgment") in favor of Plaintiff/Judgment Creditor East Jordan Plastics, Inc. and against Defendant/Judgment Debtor Suzhou Xincheng Gardening Material Co., Ltd. (Dkt. No. 2). The Judgment reflects that the foregoing amount includes the principal balance amount of $1,137,223.04 plus interest having accrued according to the terms of the relevant Arbitration Award in the amount of $86,944.41 plus costs in the amount of $6,852.15, with interest to continue accruing at the statutory rate until paid in full. (Dkt. No. 2). The Judgment was registered in this Court on January 12, 2017. (Dkt. No. 2).
On August 2, 2017, Plaintiff/Judgment Creditor filed a Motion for Assignment Order and for Order Restraining Judgment Debtor ("Motion")1 which requests that the Court order that (1) the rights to payments that are due or that become due to Defendant/Judgment Debtor from any and all purchases of products of Defendant/Judgment Debtor by third parties ("Third Parties"), including three specified Third Parties ("Specified Third Parties"),2 be assigned to Plaintiff/ Judgment Creditor; (2) the Third Parties direct any such payments to counsel for Plaintiff/Judgment Creditor, with such payments being applied to the Judgment until such Judgment is fully satisfied or the Court otherwise orders; (3) the Third Parties account monthly for all such funds; and (4) Defendant/Judgment Debtor be restrained directly or indirectly from encumbering, assigning, or disposing of the rights to payments that are due or that become due to Defendant/Judgment Debtor from the Third Parties.3 (Dkt. 15). The Motion was accompanied by a proof of service which reflects that Plaintiff/Judgment Creditor served the Motion by mail on Defendant/Judgment Debtor and the Specified Third Parties. (Dkt. 15-3).
*2 On September 5, 2017, this Court held a hearing on the Motion. Joshua P. Friedman appeared on behalf of Plaintiff/Judgment Creditor. (Dkt. 19). No appearance was made on behalf of Defendant/Judgment Debtor or the Third Parties. (Dkt. 19). At the conclusion of the hearing, the Court directed Plaintiff/ Judgment Creditor to file a supplemental brief and submitted the matter for decision. (Dkt. 19). On September 11, 2017, Plaintiff/Judgment Creditor filed a Supplemental Brief in Support of Motion for Assignment. (Dkt. 20). No opposition to the Motion or other briefing has been submitted by Defendant/ Judgment Debtor or the Third Parties.
Based on the submissions and arguments made in connection with the Motion, and on the pertinent facts and law, this Court recommends that the Motion be granted in part and denied in part as detailed below.
A judgment creditor may bring an action to enforce a judgment in any district court. Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1123 (9th Cir. 2010) (citation omitted). When a final judgment from one district court is registered with another district court, the registered judgment must be treated like any other judgment entered by the registering court. Id. (citing 28 U.S.C.§ 1963); see also Global Money Management v. McDonnold, 2009 WL 3352574, *4 (S.D. Cal. Oct. 15, 2007) (28 U.S.C. § 1963 is one method by which a judgment creditor may enforce a judgment against a nonresident judgment debtor).
Rule 69(a)(1) of the Federal Rules of Civil Procedure applies to post-judgment proceedings and directs that proceedings in aid of judgments or the execution thereof are governed by state law – here, California law.
A. Request for Assignment Order
Pursuant to Section 708.510, of the California Code of Civil Procedure: "[U]pon application of the judgment creditor on noticed motion, the court may order the judgment debtor to assign to the judgment creditor ... all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments, ...." Cal. Code Civ. P. § 708.510(a). The notice of motion must be served on the judgment debtor "personally or by mail." Cal. Code Civ. P. § 708.510(b). In determining whether to order an assignment or the amount of an assignment, the court may take into consideration all relevant factors, including the amount remaining due on the money judgment. Cal. Code Civ. P. § 708.510(c). A right to payment may be assigned under the foregoing provisions "only to the extent necessary to satisfy the money judgment." Cal. Code Civ. P. § 708.510(d). Accounts receivable constitute assignable property. Innovation Ventures, LLC v. N2G Distributing, Inc., 2014 WL 10384606, *4 (C.D. Cal. May 1, 2014) (citing Legislative Committee Comment to Cal. Code Civ. P. § 708.510).
A court may require a judgment debtor subject to its personal jurisdiction to assign its rights to payment to a judgment creditor, even if the assignable property is located outside of California. See Innovation Ventures, LLC, 2014 WL 10384606 at *3 (citations omitted); UMG Recordings, Inc. v. BCD Music Group, Inc., 2009 WL 2213678, *4 (C.D. Cal. July 9, 1009) (when court has personal jurisdiction over defendant, it also has jurisdiction over defendant's property; court may properly issue order directing defendant to assign defendant's rights to payment from third parties to judgment creditor), amended in non-pertinent part, 2011 WL 798901 (C.D. Cal. Feb. 25, 2011), aff'd, 509 Fed. Appx. 661 (9th Cir. 2013); Global Money Management, 2009 WL 3352574 at *4 (same) (citations omitted). Further, the assignment order contemplated by Section 708.510 includes a court order that assigns a right to payment outright (not simply an order directing the judgment debtor to do so). A. Ahart, California Practice Guide: Enforcing Judgments and Debts ¶ 6:1442.6 (2017) (citing In re Advanced Biomedical, Inc., 547 B.R. 337, 340-42 (Bankr. E.D. Cal. 2016), aff'd, 2016 WL 7188651 (9th Cir. BAP 2016)); Mentor Capital, Inc. v. Bhang Chocolate Company, Inc., 2017 WL 3335767, *3 (S.D. Cal. Aug. 4, 2017) (citing same).
*3 While a motion for an assignment order does not require detailed evidentiary support, a party seeking an assignment order is required to identify the intended source that is obligated to make payments to the judgment debtor. See UMG Recordings, Inc., 2009 WL 2213678 at *2-*3 (citations omitted).
Here, the Motion is adequately supported by evidence showing that Defendant/Judgment Debtor is likely receiving, or is due to receive payments from the Specified Third Parties. See Friedman Decl. ¶ 5. However, the Motion does not identify any of the other Third Parties. In light of the foregoing, and taking into consideration all relevant factors, including the amount remaining due on the money judgment, the Motion should be granted to the extent it seeks an assignment order relative to payments that are due or that become due to Defendant/Judgment Debtor from the Specified Third Parties and should be denied without prejudice to the extent it seeks an assignment order relative to payments that are due or that become due to Defendant/Judgment Debtor from the other Third Parties.
B. Request for Third Party Accounting
Plaintiff/Judgment Creditor also requests an order directing the Third Parties, including the Specified Third Parties, to account monthly for funds in issue. Such request should be denied because Plaintiff/Judgment Creditor cites no authority which would support its entitlement to such an accounting. Indeed, counsel for Plaintiff/Judgment Creditor essentially conceded at the hearing that denial of this portion of the Motion would be appropriate.
C. Request for Restraining Order
When an application is made pursuant to Section 708.510 of the California Code of Civil Procedure, or thereafter, a judgment creditor may apply to the court for an order restraining a judgment debtor "from assigning or otherwise disposing of the right to payment that is sought to be assigned." Cal. Code Civ. Proc. § 708.520(a). Such application shall be made on a noticed motion if the court so directs or a court rule so requires, but otherwise may be made ex parte. Cal. Code Civ. Proc. § 708.520(a). The court may issue such an order upon a showing of need therefor. Cal. Code Civ. Proc. § 708.520(b). The threshold for showing need is "low." Innovation Ventures, LLC, 2014 WL 10384606, at *6-*7 (citation omitted). Any such order must be personally served upon the judgment debtor and must contain a notice to the judgment debtor that "the failure to comply with the order may subject the judgment debtor to being held in contempt of court." Cal. Code Civ. Proc. § 708.520(d).
Here, the Motion should be granted to the extent it seeks an order restraining Defendant/Judgment Debtor from assigning or otherwise disposing of the right to payment from the Specified Third Parties. As noted above, the Judgment was entered in the rendering district on November 18, 2016 and, at least as of August 2, 2017, no payments had been made to Plaintiff/Judgment Creditor. See Friedman Decl. ¶ 3. It is reasonable to infer that Defendant/Judgment Debtor will dispose of any payments it receives from the Specified Third Parties without paying Plaintiff/Judgment Creditor unless it is restrained from doing so. See Friedman Decl. ¶ 7.
IT IS THEREFORE RECOMMENDED that the District Judge (1) approve and accept this Report and Recommendation; (2) grant in part and deny in part the Motion as detailed herein; (3) order that all payments due or that become due to Defendant/Judgment Debtor from the Specified Third Parties be assigned to Plaintiff/Judgment Creditor and that any such payments be directed to counsel for Plaintiff/Judgment Creditor, with such payments being applied to the Judgment until the Judgment is fully satisfied or the Court otherwise orders; and (4) order that Defendant/Judgment Debtor be restrained from assigning or otherwise disposing of the right to payment from the Specified Third Parties.
Slip Copy, 2018 WL 1806699
The Motion is accompanied by a supporting Declaration of Joshua P. Friedman ("Friedman Decl.").
The Specified Third Parties are (1) Costa Farms LLC; (2) HC Growers/The HC Companies; and (3) BFG Supply Co.
Plaintiff/Judgment Creditor noticed the Motion for hearing before this Court for September 5, 2017 at 9:30 a.m. (Dkt. No. 15). However, the notice accompanying the Motion confusingly referred both to the courtroom of the previously assigned Magistrate Judge (Courtroom 540) and the courtroom of the currently assigned Magistrate Judge (Courtroom 20). Accordingly, on August 21, 2017, this Court issued an order clarifying that the hearing would take place on September 5, 2017 at 9:30 a.m. in the currently assigned Magistrate Judge's Courtroom, and directing the Plaintiff/Judgment Creditor to serve such order upon the Defendant/Judgment Debtor, personally or by mail. (Dkt. 17). On August 23, 2017, Plaintiff/Judgment Creditor filed a proof of service reflecting that on August 23, 2017, the foregoing order had been served upon the Defendant/Judgment Debtor and the Specified Third Parties by mail.
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East Jordan Plastics, Inc. v. Suzhou, Xincheng Gardening Material Co., Ltd., 2018 WL 1806709 (C.D. Cal, Mar. 12, 2018).
United States District Court, C.D. California.
EAST JORDAN PLASTICS, INC., Plaintiff,
SUZHOU XINCHENG GARDENING MATERIAL CO., LTD., Defendant.
Case No. CV 17-5638 VAP(JC)
ORDER ACCEPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE; (2) GRANTING IN PART AND DENYING IN PART MOTION FOR ASSIGNMENT ORDER AND FOR ORDER RESTRAINING JUDGMENT DEBTOR; (3) ASSIGNING JUDGMENT DEBTOR'S RIGHTS TO PAYMENT TO JUDGMENT CREDITOR; AND (4) RESTRAINING JUDGMENT DEBTOR FROM TRANSFERRING SAID PAYMENT RIGHTS TO ANY OTHER PERSON OR ENTITY
[DOCKET NO. 15]
HONORABLE VIRGINIA A. PHILLIPS CHIEF UNITED STATES DISTRICT JUDGE
*1 The Court has reviewed the Motion of Plaintiff/Judgment Creditor East Jordan Plastics, Inc. for Assignment Order and for Order Restraining Judgment Debtor ("Motion"), the submissions in connection with the Motion, and all of the records herein, including the Judgment in favor of Plaintiff/Judgment Creditor East Jordans Plastic, Inc. ("Plaintiff/Judgment Creditor") and against Defendant/ Judgment Debtor Suzhou Xincheng Gardening Material Co., Ltd. ("Defendant/ Judgment Debtor) which was entered in the United States District Court for the Western District of Michigan and has been registered in the Central District of California ("Judgment"), and the February 13, 2018 Report and Recommendation of United States Magistrate Judge ("Report and Recommendation"). The Court approves and accepts the Report and Recommendation.
IT IS HEREBY ORDERED THAT:
1. The Motion is granted in part and denied in part as detailed in the Report and Recommendation.
2. The rights to payments due or to become due to Defendant/Judgment Debtor from Costa Farms LLC, HC Growers/The HC Companies, and BFG Supply Co. (collectively "Third Parties") are assigned to Plaintiff/Judgment Creditor until such time as the Judgment is fully satisfied or this order is amended.
3. The Third Parties shall be provided with a Notice of Assignment Order by Plaintiff/Judgment Creditor, which Notice shall also be filed with this Court. All payments due or that become due to Defendant/Judgment Debtor by the Third Parties shall be paid to counsel of record for Plaintiff/Judgment Creditor – Joshua P. Friedman and Associates, Inc., 23679 Calabasas Road, #377, Calabasas, California, 91302 – to be applied to the Judgment until the Judgment is fully satisfied or this order is amended.
4. Defendant/Judgment Debtor is restrained and prohibited from encumbering, assigning or disposing of the rights to payments due or that become due to Defendant/Judgment Debtor from the Third Parties.
NOTICE IS HEREBY GIVEN THAT FAILURE BY THE DEFENDANT/JUDGMENT DEBTOR TO COMPLY WITH THIS ORDER MAY SUBJECT THE DEFENDANT/JUDGMENT DEBTOR TO BEING HELD IN CONTEMPT OF COURT.
IT IS SO ORDERED.
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QUICK LINKS TO STATUTES AND MORE
TITLE 9. ENFORCEMENT OF JUDGMENTS 680.010-724.260
DIVISION 1. DEFINITIONS AND GENERAL PROVISIONS 680.010-694.090
CHAPTER 1. Short Title and Definitions 680.010-680.380
CHAPTER 2. General Provisions 681.010-681.050
CHAPTER 3. Period for Enforcement and Renewal of Judgments 683.010-683.320
ARTICLE 1. Period for Enforcement of Judgments 683.010-683.050
ARTICLE 2. Renewal of Judgments 683.110-683.220
ARTICLE 3. Application of Chapter 683.310-683.320
CHAPTER 4. Manner of Service of Writs, Notices, and Other Papers 684.010-684.310
ARTICLE 1. Service on Attorney of Creditor or Debtor 684.010-684.050
ARTICLE 2. Manner of Service Generally 684.110-684.140
ARTICLE 3. Proof of Service 684.210-684.220
ARTICLE 4. Application of Chapter 684.310
CHAPTER 5. Interest and Costs 685.010-685.110
CHAPTER 6. Enforcement After Death of Judgment Creditor or Judgment Debtor 686.010-686.020
CHAPTER 7. Levying Officers 687.010-687.050
CHAPTER 8. Enforcement of State Tax Liability 688.010-688.110
ARTICLE 1. Enforcement Pursuant to Warrant or Notice of Levy 688.010-688.050
ARTICLE 2. Enforcement of Judgment for Taxes 688.110
CHAPTER 9. Enforcement of Support Judgments 689.010-689.050
CHAPTER 10. Enforcement of Judgments by Labor Commissioner 690.020-690.050
CHAPTER 20. Transitional Provisions 694.010-694.090
DIVISION 2. ENFORCEMENT OF MONEY JUDGMENTS 695.010-709.030
CHAPTER 1. General Provisions 695.010-695.221
ARTICLE 1. Property Subject to Enforcement of Money Judgment 695.010-695.070
ARTICLE 2. Amount to Satisfy Money Judgment 695.210-695.221
CHAPTER 2. Liens 697.010-697.920
ARTICLE 1. General Provisions 697.010-697.060
ARTICLE 2. Judgment Lien on Real Property 697.310-697.410
ARTICLE 3. Judgment Lien on Personal Property 697.510-697.670
ARTICLE 4. Execution Lien 697.710-697.750
ARTICLE 5. Other Liens Created by Enforcement Process 697.910-697.920
CHAPTER 3. Execution 699.010-701.830
ARTICLE 1. General Provisions 699.010-699.090
ARTICLE 2. Writ of Execution and Notice of Levy 699.510-699.560
ARTICLE 3. Property Subject to Execution 699.710-699.720
ARTICLE 4. Methods of Levy 700.010-700.200
ARTICLE 5. Duties and Liabilities of Third Persons After Levy 701.010-701.070
ARTICLE 6. Sale and Collection 701.510-701.680
ARTICLE 7. Distribution of Proceeds of Sale or Collection 701.810-701.830
CHAPTER 4. Exemptions 703.010-704.995
ARTICLE 1. General Provisions 703.010-703.150
ARTICLE 2. Procedure for Claiming Exemptions After Levy 703.510-703.610
ARTICLE 3. Exempt Property 704.010-704.210
ARTICLE 4. Homestead Exemption 704.710-704.850
ARTICLE 5. Declared Homesteads 704.910-704.995
CHAPTER 5. Wage Garnishment 706.010-706.154
ARTICLE 1. Short Title; Definitions 706.010-706.011
ARTICLE 2. General Provisions 706.020-706.034
ARTICLE 3. Restrictions on Earnings Withholding 706.050-706.052
ARTICLE 4. Earnings Withholding Order for Taxes 706.070-706.084
ARTICLE 5. Procedure for Earnings Withholding Orders and Exemption Claims 706.100-706.109
ARTICLE 6. Forms; Employer’s Instructions 706.120-706.129
ARTICLE 7. Administration and Enforcement 706.151-706.154
CHAPTER 6. Miscellaneous Creditors’ Remedies 708.010-709.030
ARTICLE 1. Written Interrogatories to Judgment Debtor 708.010-708.030
ARTICLE 2. Examination Proceedings 708.110-708.205
ARTICLE 3. Creditor’s Suit 708.210-708.290
ARTICLE 4. Charging Orders 708.310-708.320
ARTICLE 5. Lien in Pending Action or Proceeding 708.410-708.480
ARTICLE 6. Assignment Order 708.510-708.560
ARTICLE 7. Receiver to Enforce Judgment 708.610-708.630
ARTICLE 8. Collection of Judgment Where Judgment Debtor Is Creditor of Public Entity 708.710-708.795
ARTICLE 9. Enforcement Against Franchise 708.910-708.930
ARTICLE 10. Other Enforcement Procedures 709.010-709.030
DIVISION 3. ENFORCEMENT OF NONMONEY JUDGMENTS 712.010-717.010
CHAPTER 1. General Provisions 712.010-712.070
CHAPTER 2. Judgment for Possession of Personal Property 714.010-714.030
CHAPTER 3. Judgment for Possession of Real Property 715.010-715.050
CHAPTER 4. Judgment for Sale of Property 716.010-716.030
CHAPTER 5. Other Judgments 717.010
DIVISION 4. THIRD-PARTY CLAIMS AND RELATED PROCEDURES 720.010-720.800
CHAPTER 1. Definitions 720.010-720.030
CHAPTER 2. Third-Party Claims of Ownership and Possession 720.110-720.170
CHAPTER 3. Third-Party Claim of Security Interest or Lien 720.210-720.290
CHAPTER 4. Hearing on Third-Party Claim 720.310-720.430
CHAPTER 5. Creditor’s Demand for Third-Party Claim by Secured Party or Lienholder 720.510-720.550
CHAPTER 6. Third-Party Undertaking to Release Property 720.610-720.660
CHAPTER 7. Undertakings 720.710-720.800
DIVISION 5. SATISFACTION OF JUDGMENT 724.010-724.260
CHAPTER 1. Satisfaction of Judgment 724.010-724.100
CHAPTER 2. Acknowledgment of Partial Satisfaction of Judgment 724.110-724.120
CHAPTER 3. Acknowledgment of Satisfaction of Matured Installments Under Installment Judgment 724.210-724.260
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OTHER CALIFORNIA LAW OF NOTE IN JUDGMENT ENFORCEMENT
Form of Judgments ~ CCP 664-674
Amending Judgments ~ CCP 187
Lis Pendens ~ CCP 405
Sister State Judgments ~ CCP 1710.10-1710.65
Foreign Country Judgments ~ CCP 1713-1724
Mortgage Foreclosures ~ CCP 725a-730.5
Assignment for Benefit of Creditors ~ CCP 1800-1802
TRANSFERS IN DEFRAUD OF CREDITORS
California Uniform Voidable Transactions Act ~ Civil Code 3439.01-14
Conveyance Of Personal Property Without Delivery ~ Civil Code 3440-3440.09
Undertaking In Voidable Transaction Action ~ Civil Code 3445-3449
Protection of Beneficial Interests (Spendthrift Protection) ~ Probate Code 15300-15309
Revocable and Self-Settled Trusts ~ Probate Code 18200 and 18201
Visit our California Enforcement of Judgments Case Law Collection
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