Assignment Orders Creditor Debtor Judgment Enforcement Collection California

Adkisson's CREDITOR DEBTOR LAW An Overview of Creditor-Debtor Law and Judgment Enforcement Techniques

CAUTION STATE LAW VARIANCES

Judgment enforcement law is notoriously non-uniform between the various states.

 

 

Assignment Order - 2020 - California - Optronics

 

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,

 

v.

 

NINGBO SUNNY ELECTRONIC CO., LTD., et al., Defendants.

 

Case No. 5:16-cv-06370-EJD

 

Signed 05/08/2020

 

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

 

*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 *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 *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 *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 *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 *1 (C.D. Cal. July 21, 2010) (“The Court may only compel acts by third parties over whom it has personal jurisdiction.”).

 

*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 *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 *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.

 

RECENT ARTICLES BY JAY ADKISSON

 

2017.05.16 ... No, There Is No Important Public Policy Exception To Recognizing A Sister-State Judgment

2016.8.28 … Registered Agent Sanctioned $234,983 For Helping Ex-Husband Hide Documents Abroad In Sergeeva

2016.7.24 … Sham Mortgage Loan Flops In Pivaroff

2016.7.17 … Wyly's Private Annuities Not Exempt Under Texas Exemption Law Says Bankruptcy Court

2016.6.12 … How Olins' Antique Collection Led Him To Prison For Cheating Civil Creditors

2016.4.30 … 529 Savings Accounts Not Exempt In California Under O'Brien

2016.2.28 … Repatriation Order for Offshore Assets Denied in Lewis

-----

For More Articles click here

 

SITE PAGES

 

ABOUT JUDGMENTS - Overview of judgments as they relate to judgment enforcement.

 

Collecting Default Judgments - Special considerations for default judgments.

 

Form of Judgment for Collection - Getting the form of judgment right can make collection easier, and getting it wrong more difficult.

 

Judgments On Appeal - Is a judgment enforceable when it is being appealed? Maybe. Appeal bonds a/k/a supercedeas bonds also discussed.

 

 

JUDGMENT ENFORCEMENT DISCOVERY - It's difficult to collect against the debtor's assets unless you find them, and it can be difficult to find them.

 

Private Investigation - Non-judicial methods of investigating the debtor's assets and affairs, including database searches and the use of private investigators.

 

Written Discovery - Some states allow for written discovery to be propounded to a debtor, which is a good way to start accumulating information from the debtor, or at least what the debtor claims is his assets.

 

Debtor Examinations - The traditional way of obtaining information from a debtor, which is to haul them into court, sit them down at a table, and ask questions point-blank about assets and income.

 

Third-Party Examinations - Means of obtaining discovery from third-parties about the debtor's assets and affairs.

 

 

JUDGMENT ENFORCEMENT REMEDIES - The primary methods for taking assets and income away from the debtor.

 

Judgment Liens and Abstracts of Judgment - Ways of freezing assets so that they cannot be easily transferred away pending execution.

 

Writ of Execution - This document authorizes the Sheriff to make collections on behalf of the debtor, and some other stuff.

 

Writ of Garnishment - Used to collect wages and against income streams in some states.

 

   Federal Wage Garnishment Law (FWGL) - 15 U.S.C. sec. 1671 provides nationwide wage exemption.

 

Writ of Levy - The remedy that allows the Sheriff to grab the asset and auction it off on the courthouse steps.

 

Charging Orders - The "exclusive" remedy against a debtor/member's interest in a partnership, limited partnership, or limited liability company.

 

Assignment Orders - An order used to intercept income streams, such as advertising revenues, royalty payments, etc.

 

Creditor Suits - Actions taken against a third-party who has possession of an asset that is still titled in the name of a debtor, or who has violated some other enforcement process.

 

Receivers - Often the end-game strategy to take a difficult debtor down, by having the court appoint a neutral with all the powers of the debtor, such as to sell season football tickets, or dissolve corporations.

 

 

OTHER JUDGMENT ENFORCEMENT THEORIES - While technically not "remedies", these bodies of law are often used in judgment enforcement proceedings.

 

Alter Ego and Veil Piercing - Cutting through corporations, trusts, and LLCs which are simply the debtor himself in another form.

 

Voidable Transactions (was Fraudulent Transfer and Fraudulent Conveyances) - Used where title has been transferred to a third-party.

 

 

OPINIONS -- Interesting opinions in creditor-debtor law.

 

Debtor Examinations

     Kyne v. Eustice, 215 Cal.App.2d 627, 30 Cal.Rptr. 391 (1963).

Garnishment/Wage Exemptions

     In re Foster, 556 B.R. 233 (Bk.E.D.Va., 2016).

Trusts

     Church Joint Venture, L.P. v. Blasingame, 2020 WL 284527 (6th Cir., Jan. 21, 2020).

 

LAGNIAPPE - A potpourri of stuff.

 

OTHER INFORMATIONAL WEBSITES

BY JAY ADKISSON

 

  • Jay Adkisson - More about Jay D. Adkisson, background, books, articles, speaking appearances.

 

  • Captive Insurance - Licensed insurance companies formed by the parent organization to handle the insurance and risk management needs of the business.

 

  • Asset Protection - The all-time best-selling book on asset protection planning by Jay Adkisson and Chris Riser.

 

  • Voidable Transactions - Discussion of the Uniform Voidable Transactions Act (a/k/a 2014 Revision of the Uniform Fraudulent Transfers Act) and fraudulent transfer law in general.

 

  • Private Retirement Plans - An exploration of a unique creditor exemption allowed under California law which can be very beneficial but is often misused.

 

  • Charging Orders - The confusing remedy against a debtor's interest in an LLC or partnership is explained in reference to the Uniform Partnership Act, the Uniform Limited Partnership Act, and the Uniform Limited Liability Company Act.

 

  • Protected Series - An examination of the single most complex statutory legal structure yet created, with particular reference to the Uniform Protected Series Act of 2017.

 

  • California Enforcement of Judgments Law - Considers the topic of judgment enforcement in California, including the California Enforcement of Judgments Law and other laws related to California creditor-debtor issues.

 

  • Anti-SLAPP Laws - A collection of and commentary about Anti-SLAPP laws and significant court decisions on the subject within the United States, with special California Anti-SLAPP section.

 

Contact Jay Adkisson:

 

Phone: 702-953-9617     Fax: 877-698-0678     jay [at] jayad.com

 

Unless a dire emergency, please send me an e-mail first in lieu of calling to set up a telephone appointment for a date an time certain.

 

Las Vegas Office: 6671 S. Las Vegas Blvd., Suite 210, Las Vegas, NV 89119, Ph: 702-953-9617, Fax: 877-698-0678. By appointment only.

 

Newport Beach Office: 100 Bayview Circle, Suite 210, Newport Beach, California 92660. Ph: 949-200-7773, Fax: 877-698-0678. By appointment only.

 

Social Media Contact: Twitter and LinkedIn

 

Admitted to practice law in Arizona, California, Nevada, Oklahoma and Texas

 

© 2020 by Jay D. Adkisson. All Rights Reserved. No claim to original government works. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site https://creditordebtor.com  Contact Jay Adkisson by phone to 702-953-9617, by fax to 877-698-0678, or by e-mail to jay [at] creditordebtor.com