Icho v. Packetswitch.com, Inc., 2012 WL 4343834 (N.D.Cal., Slip Copy, Sept. 21, 2012). http://goo.gl/JjISZ
United States District Court, N.D. California, San Jose Division.
Robert ICHO, et al., Plaintiffs,
PACKETSWITCH.COM, INC., et al., Defendants.
No. CV 1–20858–LHK (PSG).
Sept. 21, 2012.
Barry K. Tagawa, The Law Office of Barry K. Tagawa, Michael Scott Keck, Law Office of Michael S. Keck, San Francisco, CA, for Plaintiffs.
Steven Ristau, Santa Cruz, CA, pro se.
Perry James Woodward, Terra Law LLP, Theresia C. Sandhu, Law Office of Theresia C. Sandhu, Andrew Winter Olsson, Robinson & Wood, Inc., San Jose, CA, Daniel Michael O'Connell, Bledsoe, Cathcart, Diestel & Pedersen, LLP, Dion N. Cominos, Gordon & Rees LLP, San Francisco, CA, for Defendants.
ORDER DENYING PLAINTIFFS' MOTIONS FOR MISCELLANEOUS POST–JUDGMENT RELIEF
PAUL S. GREWAL, United States Magistrate Judge.
*1 Plaintiffs Robert Icho, et al. ("Plaintiffs") move to enforce their default judgment against individual Defendant M.C. Hammer a/k/a Stanley Burrell ("Burrell"). They seek: (1) an order pursuant to California Civil Procedure Code sec. 708.510(a) assigning all or part of any right to payment due, or to become due to Burrell, arising out of his activities as an entertainer, television and theatrical performer, singer, songwriter, or the like ("assignment order"); (2) an order pursuant to California Civil Procedure Code sec. 708.510(e) restraining Burrell from the sale, alienation, mortgage, lien, encumbrance, advancement, cashing or negotiation, or receipt or exploitation of any rights to payment ("restraining order"); (3) an order pursuant to California Civil Procedure Code sec. 699.040(e) compelling Burrell to turn over all documentary evidence of any and all of his rights to payment to Plaintiffs ("turnover order"); and (4) an order pursuant to California Civil Procedure Code secs. 708.110(a) and 708.250 compelling Burrell to appear before this court on a bimonthly basis to testify about the condition of his finances and to provide documentary evidence to the court evincing the same. FN1
FN1. See Docket No. 211.
Burrell opposes all of the motions.
I. LEGAL STANDARDS
Rule 69(a)(1) states that a money judgment "is enforced by a writ of execution" and that the execution procedure "must accord with the procedure of the state where the court is located" unless a federal statute controls. FN2 No federal statute applies to this type of judgment, leaving California's statutes regarding enforcement of judgments to govern.FN3
FN2. Fed. R. Civ. Proc. 69(a)(1).
FN3. See Cal.Civ.Proc.Code sec. 680.010, et. seq.; see also Credit Suisse v. United States Dist. Ct., 130 F.3d 1342, 1344 (9th Cir.1997).
A. Assignment of Rights to Payment
California Code of Civil Procedure sec. 708.510 provides that "upon 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." Assignment from a third-party obligor is appropriate "where a judgment creditor can identify a person or entity which is obligated to make payment to the judgment debtor, and where that right to payment is assignable." FN4 Section 708.510 does not require "detailed evidentiary support for [the] request," but a judgment creditor must "describe [the sources of the right to payment] with sufficient detail so that [d]efendants can file a claim of exemption or other opposition." FN5 To determine whether an assignment order is appropriate, the court may consider "all relevant factors," including "reasonable requirements of a judgment debtor who is a natural person," "[t]he amount remaining due on the money judgment," and "[t]he amount being or to be received in satisfaction of the right to payment that may be assigned." FN6
FN4. Garden City Boxing Club, Inc. v. Briano, No. 06–1270, 2007 WL 4463264, at *1 (E.D.Cal. Dec.13, 2007).
FN5. Blue Grass Mfg. Co. of Lexington, Inc. v. Beyond A Blade, Inc ., No. MC 10–80248 WHA, 2011 U.S. Dist. LEXIS 70556, at *7 (N.D.Cal. May 5, 2011).
FN6. Cal.Civ.Proc.Code sec. 708.510(c)(1–4).
Plaintiffs seek assignment of any future proceeds "arising out of [Burrell's] activities as an entertainer, television and theatrical performer, singer, songwriter, dancer, promoter, producer, consultant, inventor, investor, lecturer, speaker, publicist, and entrepreneur, or the like." FN7 The request, however, does not identify any specific persons or entities from which Burrell has a right of payment. Plaintiffs argue that they have identified specific sources of payments, but sources such as the sale of Burrell's music catalog and earnings from Burrell's appearance on a reality television show occurred prior to this motion, and Plaintiffs have not shown the likelihood of future earnings from those transactions.FN8 Plaintiffs point to various companies with which Burrell had relationships but those companies either no longer exist or no longer have relationships with Burrell.FN9 As to those companies with which Burrell remains involved, Plaintiffs have not provided any indication that Burrell possesses assignable property as part of those relationships.
FN7. Docket No. 211 at 2.
FN8. See Docket No. 217 at 6.
FN9. See id.
*2 Plaintiffs also rely on Burrell's past concert appearances to assert that Burrell will continue to perform, and that Plaintiffs are thereby entitled to Burrell's remuneration from future, hypothetical performances.FN10 Plaintiffs read section 708.510 too broadly. Section 708.510 allows a judgment creditor to reach a judgment debtor's assignable property, such as payments that are due or will come due, but there must be "some degree of concreteness to the expected payment" for section 708.510 to apply. FN11 The possibility of future concert appearances, without more, is not sufficiently concrete because there is no third-party obligor from which Burrell's right to payment can be assigned.FN12
FN10. Docket No. 217 at 7.
FN11. Passport Health, Inc. v. Travel Med., Inc., No. 09–cv–01753–GEB, 2012 U.S. Dist. LEXIS 53343, at *9 (E.D. Cal., April 13.2012).
FN12. See Garden City Boxing Club, 2007 WL 4463264, at *1 (rejecting plaintiff's motion because it "appears to be for a general assignment of all possible funds due to [d]efendant" and plaintiff "failed to identify any specific source of money to be assigned").
Because Plaintiffs have failed to identify persons or entities from which Burrell has a right of payment, Plaintiffs' motion for an assignment order is DENIED.
B. Restraining Order
California Code of Civil Procedure sec. 708.520 allows a judgment creditor who is applying for an assignment order under Section 708.510 to also apply for a restraining order to prevent the judgment debtor "from assigning or otherwise disposing of the right to payment that is sought to be assigned." Because Plaintiffs have failed to identify assignable property belonging to Burrell that is subject to Section 708.510, their motion for a restraining order under Section 708.520 is DENIED.
C. Turnover Order
Under California Code of Civil Procedure sec. 699.040, a judgment creditor may request an order requiring a judgment debtor "to transfer to the levying officer" either "[p]ossession of the property sought to be levied upon if the property is sought to be levied upon by taking it into custody" or "possession of documentary evidence of title to property of or a debt owed to the judgment debtor that is sought to be levied upon." The statute does not allow turnover of the property or the title to judgment creditors or their counsel.FN13
FN13. See Palacio Del Mar Homeowners Ass'n, Inc. v. McMahon, 174 Cal.App.4th 1386, 1391, 95 Cal.Rptr.3d 445 (2009).
Plaintiffs appear to misunderstand the purpose of sec. 699.040. Plaintiffs seek to have Burrell turn over "any and all documentary evidence of any and all of his rights to payment" including "checks, drafts, money orders, deposits, deposit accounts, bank accounts, savings accounts, [and] stock certificates" among many other types of documents.FN14 Section 699.040 is not, however, a discovery provision that allows judgment creditors to investigate the records of judgment debtors to determine possible sources of income. It is a statutory method to enforce levying procedures by allowing judgment creditors to seek court orders for the turnover of possession or title of levied items to a levying officer.FN15 Section 699.040's limitation of turnover to levying officers evinces that purpose. Plaintiffs do not request turnover of title or custody of levied items. They request turnover of documents that may reveal that Burrell has rights to payments, not levied property, and those documents are not subject to turnover under Section 699.040.FN16
FN14. Docket No. 211 at 2.
FN15. See Law Revision Commission Comments to Cal.Civ.Proc.Code sec. 699.040 (noting Section 699.040 is analogous to Section 482.080, which allows turnover orders when writs of attachment issue, and Section 512.070, which allows turnover orders when writs of possession issue under claim and delivery statute).
FN16. Fed.R.Civ.P. 69(a)(2) provides the recourse Plaintiffs seek. Under Rule 69, judgment creditors are entitled, "in aid of the judgment or execution" to "obtain discovery from any person—including the judgment debtor—as provided in these rules or by the procedure of the state where the court is located." Plaintiffs are welcome to pursue discovery from Burrell either under Fed.R.Civ.P. 26, which governs discovery under the federal rules, or under Cal.Civ.Proc.Code sec. 708.020 (written interrogatories) and sec. 708.030 (inspection of documents). For example, under Rule 26 and Section 708.030, Plaintiffs could seek discovery from both Burrell and Salesforce, Inc., regarding Burrell's September 20, 2012, concert performance at the Dreamforce conference. See "Dreamforce Conference Rocks Out with MC Hammer," NBC Bay Area, Sept. 21, 2012, http:// http://www.nbcbayarea.com/ne
ws/weird/NATL-Weird-News-Phot os-Santa-Edition136182073.html?ssAuto=true. Or, Plaintiffs could seek discovery for the concert Burrell performed September 15, 2012, at the Verizon Wireless Amphitheatre in Irvine. See Jack's 7th Show, 93.1 Jack FM, http:/ / 931jackfm.cbslocal.com/category/jacks–7th–show/ (last visited Sept. 21, 2012).
*3 Because Plaintiffs request documents not subject to Section 699.040 and request those documents be given directly to Plaintiffs' counsel, the turnover motion is DENIED.
D. Order for Bi–Monthly Appearances
California Code of Civil Procedure sec. 708.110 provides that a judgment creditor "may apply to the proper court for an order requiring the judgment debtor to appear before the court ... at a time and place specified in the order, to furnish information to aid in enforcement of the money judgment." "If the judgment creditor has caused the judgment debtor to be examined under this section during the preceding 120 days, the court shall make the order if the judgment creditor by affidavit or otherwise shows good cause for the order." FN17
FN17. Cal.Civ.Proc.Code sec. 708.110(c).
Plaintiffs request that the Court order Burrell to appear bi-monthly for judgment debtor examinations.FN18 Plaintiffs argue that Burrell's "lack of memory and ability to recall [at the initial judgment debtor examination hearing] demonstrates a need for Plaintiffs to have [Burrell] appear more frequently than simply every 120 days," and that without bi-monthly appearances "Plaintiffs would be at a great disadvantage in attempting to identify the accounts and/or accounts receivable which would be subject to levy and execution." FN19
FN18. Docket No. 211 at 3.
FN19. Docket No. 212 at 11.
The purpose of Section 708.110 is to allow thorough and complete evaluation of judgment debtors and "to leave no stone unturned in the search for assets which might be used to satisfy the judgment." FN20 Nothing in its text suggests it is or should be used as authority for monitoring judgment debtors. Plaintiffs have cited no precedents and the Court has found no cases supporting that interpretation of the statute. Moreover, appearances by Burrell before the Court twice per month are not the appropriate solution for Plaintiffs' desire for more information about Burrell's assets and income streams. Instead, Plaintiffs may pursue discovery of Burrell's financial information under Rule 69(a)(2).FN21 If this discovery uncovers evidence providing good cause for further examination of Burrell, Plaintiffs may move at that time to examine Burrell under Section 708.110.
FN20. United States v. Feldman, 324 F.Supp.2d 1112, 1116 (C.D.Cal.2004) (internal citations omitted).
FN21. See Fed. R. Civ. Proc. 69(a)(2) ("In aid of the judgment or execution, the judgment creditor ... may obtain discovery from any person—including the judgment debtor—as provided in these rules or by the procedure of the state where the court is located.").
Plaintiffs also seek an order compelling Burrell to produce "all books, records, papers and files" pursuant to Sections 708.205(a) and 708.130. FN22 Neither of those provisions provides a basis for ordering discovery of a judgment debtor's financial papers.FN23 As noted, Plaintiffs may pursue discovery of Burrell's financial information pursuant to Rule 69(a)(2).
FN22. See Docket No. 212 at 12.
FN23. See Cal.Civ.Proc.Code sec. 708.205(a) ("[A]t the conclusion of a proceeding pursuant to this article, the court may order the judgment debtor's interest in the property in the possession or under the control of the judgment debtor ... to be applied toward the satisfaction of the money judgment if the property is not exempt from enforcement of a money judgment."); sec. 708.130 ("Witnesses may be required to appear and testify before the court or referee in an examination proceeding under this article in the same manner as upon the trial of an issue.").
The Plaintiffs' motion to have Burrell appear bi-monthly to report on his financial condition and to compel production of discovery of his financial documents is DENIED.
Plaintiffs' motions for an assignment order pursuant to sec. 708.510 and for a restraining order pursuant to sec. 708.520 are DENIED. Plaintiffs' motions for a turnover order pursuant to sec. 699.040 and for Burrell to appear bi-monthly before this court pursuant to sec. 708 .110 are DENIED.
*4 IT IS SO ORDERED.
= = = = = = = = J U D G M E N T E N F O R C E M E N T = = = = = = = =
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