Optronics Technologies, Inc. v. Ningbo Sunny Electronic Co., 2020 WL 2306531 (N.D.Cal., May 8, 2020).
United States District Court, N.D. California, San Jose Division.
OPTRONIC TECHNOLOGIES, INC., Plaintiff,
NINGBO SUNNY ELECTRONIC CO., LTD., et al., Defendants.
Case No. 5:16-cv-06370-EJD
Attorneys and Law Firms
Jeffrey Michael Theodore, Matthew Brooks Borden, Ronald James Fisher, Jonas Noah Hagey, BraunHagey & Borden LLP, San Francisco, CA, for Plaintiff.
David Raymond Garcia, Helen Cho Eckert, Leo David Caseria, Sheppard Mullin Richter & Hampton LLP, Los Angeles, CA, Dylan Ian Ballard, Joy O. Siu, Michael W. Scarborough, Nadezhda Nikonova, Sheppard, Mullin, Richter & Hampton LLC, San Francisco, CA, Thomas J. Dillickrath, Sheppard Mullin Richter and Hampton LLP, Washington, DC, for Defendants.
ORDER DENYING MOTION FOR FURTHER CLARIFICATION
Re: Dkt. No. 644
EDWARD J. DAVILA, United States District Judge
PAGE_1 On April 22, 2020, Plaintiff Optronic Technologies, Inc. ("Orion") filed a Motion for Further Clarification or, in the Alternative, for Order Declaring an Assignment of Assets to Orion (the "Motion"). Dkt. No. 644. On April 27, 2020, non-party Celestron Acquisition LLC ("Celestron Acquisition") filed a response opposing the motion ("Opposition"). Dkt. No. 647. Having considered the parties' briefs, the Motion is DENIED.
On January 17, 2020, this Court issued an Order granting in part and denying in part Orion's motion for assignment and turnover. Dkt. No. 559 (the "Assignment Order"). On January 24, 2020, Celestron Acquisition filed a motion for clarification of that order, seeking to clarify whether the accounts receivable owed by Celestron Acquisition's wholly-owned foreign subsidiary—Celestron Global—are covered by the Assignment Order. Dkt. No. 564. On April 20, 2020, this Court granted Celestron Acquisition's motion for clarification ("Order"). Dkt. No. 643. The Order stated:
Because the Court does not find that it has personal jurisdiction over Celestron Global, the Court may not compel Celestron Global to pay Orion. Instead, and consistent with the parties' agreement that the accounts receivable are, in fact, owed to Orion, the Court orders Ningbo Sunny to assign its rights to payment from Celestron Global to Orion.
The Court clarifies that pursuant to the Assignment Order and consistent with the discussion herein, Defendant Ningbo Sunny is HEREBY ORDERED to assign to Orion all of its accounts, account receivable, rights of payment of money, contingent rights, contract rights, deposits and deposit accounts, claims against third parties, monies due from third parties, Bushnell Holdings, Celestron Acquisition, Celestron Global, Hawke Sport Optics LLC, Meade Instruments Corp., and Olivon Mfg. Group Ltd. up to the amount of the partial judgment entered in this action in favor of Orion and against Judgment Debtor on December 5, 2019 (Dkt. No. 518).
Order, p. 5.
Orion now requests that the Court "clarify that the [Order] assigned the $728,779 and any other property described in the [Order] to Orion, or alternatively issue an Order declaring that all such property is 'directly assigned' to Orion." Motion, p. 2.
Although "[a] court may clarify its order for any reason," Wahl v. Am. Sec. Ins. Co., No. 08-0555-RS, 2010 WL 2867130, at PAGE_3 (N.D. Cal. July 20, 2010), "the clarification process presumes some legitimate need supporting relief, such as the existence of ambiguity or confusion that can be corrected with further explanation." Padgett v. Loventhal, No. 5:04-cv-03946-EJD, 2015 WL 13753300, at PAGE_1 (N.D. Cal. May 13, 2015). No such ambiguity or confusion exists here.
The Order makes clear that the Court has no authority to directly assign the assets held by third-party Celestron Global to Orion or to order Clestron Global to turn assets over to Orion, as Orion requests. While the Court has authority under § 708.510(a) to order a party over which it has personal jurisdiction to assign assets to a judgment creditor, the Court does not have the authority to "compel acts by third parties over whom it does not have personal jurisdiction." Glob. Money Mgmt. v. McDonnold, No. 06-cv-34, 2009 WL 3352574, at PAGE_4 (S.D. Cal. Oct. 15, 2009); see also Hardy v. Hardy, 164 Cal.App.2d 77, 79 (1958) (while the court of one state cannot "directly affect title" to property in another state, it can, through its coercive powers, compel a party before it to act in relation to property not within its territorial jurisdiction) (emphasis added); Cadence Design Sys., Inc. v. Pounce Consulting, Inc., No. 17-cv-04732, 2019 WL 3413476, at PAGE_3 (N.D. Cal. July 29, 2019) ("courts agree that third parties 'may be ordered to deliver or pay over [ ] property directly to the judgment creditor ... or to assign rights to payment to the judgment creditor ... only if [the nonresident third parties] ... [are] subject to the California court's personal jurisdiction.' ") (citing Rutter Group Cal. Prac. Guid. Enf. J. & Debt Ch. 6G-5, ¶ 6:1435 (2019)); Revenue Enhancement Consultants, Inc. v. Mantra Films, Inc., No. 10-cv-02726 ABC, 2010 WL 11463906, at PAGE_1 (C.D. Cal. July 21, 2010) ("The Court may only compel acts by third parties over whom it has personal jurisdiction.").
PAGE_2 Orion does not attempt to argue that this Court has personal jurisdiction over Celestron Global. Rather, Orion broadly argues that any assignment order under Cal. Civ. Proc. Code § 708.510 "assigns the subject property to the judgment creditor by operation of law." Motion, p. 2. It cites In re Advanced Biomedical, Inc., No. AP 14-01275-MW, 2016 WL 7188651, at PAGE_4 (B.A.P. 9th Cir. Dec. 2, 2016) for this proposition. In that case, the court upheld the validity of a state court order that directly assigned "rights to payment of money due or to become due" to the judgment-creditor. Ibid. The Court did not address whether a court could directly assign assets held by third parties outside of the court's jurisdiction, or whether the court could compel those third parties to pay the judgment-creditor. In fact, the court clarified that "[n]othing in the Assignment Order purports to impact the rights of any person or entity obligated to pay." Ibid.
There is no question that the funds Celestron Global is holding are owed to Orion. Celestron Acquisition has repeatedly professed its willingness to pay the funds to Orion. To the extent Celestron Acquisition argues that the Order "does not permit Celestron Acquisition to deliver the funds to Orion absent Ningbo Sunny's Assignment," this is a mischaracterization of the Order. Opposition, p. 5. This Court was not presented with the question of whether Celestron Global was at liberty to transfer the funds absent a court order and did not opine on that question in the Order. The Order merely stated that this Court could not compel Celestron Global to do so if it otherwise refuses. See Glob. Money Mgmt., 2009 WL 3352574, at PAGE_4 ("The Court can only order [defendant] to assign his rights in and to the property or payments. If the third parties do not make payment to [plaintiff], Plaintiff will have to bring an action against them in a court that has personal jurisdiction over them.").
The Court acknowledges that Ningbo Sunny has failed to comply with this Court's orders in the past. However, the Order itself is not ambiguous in directing to Ningbo Sunny to do so. If Ningbo Sunny fails to comply with the Order by assigning its accounts receivable and other assets covered by the Order to Orion, Orion may bring an appropriate motion for contempt.
IT IS SO ORDERED.