Judge Bruce G. Iwasaki, Case BC663174 2023-04-20 Tentative Ruling

Tentative Ruling: The Court grants Defendant Davis’s motion to quash the order to appear for a judgement debtor examination.

Plaintiff and judgment creditor Douglas A. Bagby (Bagby) obtained a court order for Defendant and judgment debtor Joseph Daniel Davis (Davis) to appear for a judgment debtor examination in this Court. Davis moves to quash that order pursuant to Code of Civil Procedure sections 708.200 and 708.160(b) on the grounds that he neither resides in nor has a place of business in Los Angeles County, or within 150 miles of the place of examination. The Court concludes that Davis has met his burden of establishing those facts. The motion to quash is granted.

In May 2017, Bagby filed a complaint against Davis for legal malpractice and breach of contract based on Davis’s representation of Bagby in a personal injury action.

On September 25, 2018, the Court entered a default judgment awarding Bagby $27,146,021.41, and Davis appealed. While the appeal from the default judgment was pending, on November 1, 2018, Bagby obtained an order to appear for examination, which required Davis to appear in the trial court for a judgment debtor examination on March 13, 2019.

On January 24, 2020, the Court of Appeal held that the default judgment was void to the extent it exceeded the $5 million demand in the complaint. The Court of Appeal remanded the matter, where Bagby elected to accept an amended default judgment of $5 million in favor of Bagby and against Davis. On July 23, 2020, the Court entered the amended default judgment.

On August 13, 2020, Bagby recorded an abstract of judgment for the July 23, 2020 amended judgment in Riverside County, where Davis owned a real property located in Indian Wells.

On February 3, 2023, Davis filed this instant motion to quash the order for examination seeking his appearance at judgment debtor examination proceedings scheduled for March 1, 2023. On February 14, 2023, Bagby filed an opposition. On February 22, 2023, Davis filed a reply declaration.

On March 1, 2023, the Court heard oral arguments on this motion and ordered parties to file supplemental briefings. Davis filed a supplemental brief on April 3, 2023, and Bagby filed a response on April 10, 2023. On April 14, 2023, Davis filed a supplemental reply.

Code of Civil Procedure section 708.160(b) limits a court’s ability to compel examination of a judgment debtor who resides or has a place of business outside the county where the court is located unless it is less than 150 miles from the courthouse. It provides: “A person sought to be examined may not be required to attend an examination before a court located outside the county in which the person resides or has a place of business unless the distance from the person’s place of residence or place of business to the place of examination is less than 150 miles.” (Code Civ. Proc., § 708.160, subd. (b).)

Evidence Code section 500 establishes that the moving party generally has the burden of proof. It states: “Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.” (Evid. Code, § 500.)

Bagby requests judicial notice of Davis’s Opposition to Bagby’s Motion for an Assignment and Restraining Order; and Declaration of Joseph D. Davis filed September 30, 2020. The Court grants Bagby’s request.

The issue here is whether the Court can compel Defendant Davis’s appearance at a judgment debtor examination in Los Angeles. Davis contends that Code of Civil Procedure section 708.160, subdivision (b) prohibits his attendance because he neither resides, nor has a place of business, in Los Angeles County or within 150 miles of the place of examination at the Mosk Courthouse.

A. Davis has the burden of proving that his residence and place of business excuse him from submitting to the examination.

Davis, as the moving party, bears the burden of proof unless otherwise provided by law. He offers no reason why the burden is not his. Thus, under Evidence Code section 500, Davis has the burden in proving that he does not reside or have a place of business in Los Angeles County or less than 150 miles from the courthouse.

Davis argues that residency as used in Code of Civil Procedure section 708.160(b) should be interpreted to mean “domicile” because the statute intended to prevent judgment debtors from being unduly burdened by traveling more than 150 miles from their home or business.

Davis cites a Florida statute, but that provision does not guide our decision. Davis cites to California law which establishes that “domicile” is “the most settled and permanent connection, the place where he intends to remain, and to which, whenever he is absent, he has the intention of returning, but which the law may also assign to him constructively,” while “residence” is “any factual place of abode of some permanency, more than a mere temporary sojourn.” (Smith v. Smith (1955) 45 Cal.2d 235, 239.) Davis argues that his “temporary sojourn” to California for medical operations and recovery does not establish residence.

Davis provides evidence to show that he severed ties with California, and does not live in Los Angeles County or within 150 miles of the courthouse. According to Davis, in June 2020, he leased a house in Florida, cancelled his California driver’s license and obtained a Florida driver’s license, canceled his California voter registration. and registered to vote in Florida. (Davis Decl. ¶¶ 17a-17d.) He also shipped his vehicle and some personal belongings to Florida and registered his car there. (Id. ¶ 17c.) Additionally, he notified government agencies of his change in address such as the Social Security Administration/Medicare and the IRS, opened a new bank account in Florida, changed his address for various subscriptions, and informed the California State Bar of his change in address. (Id. ¶¶ 17d-17h.) Finally, he provides a declaration of domicile for Florida as well as pictures with family. (Id. ¶¶ 17i-17j.)

Concerning Davis’s presence in California in mid-June 2022, he characterizes his stay as a “mere temporary sojourn.” Davis underwent open heart surgery and stayed in California from June 2022 to December 2022 for recovery and rehabilitation. (Reply p. 2:16-21; Davis Decl. ¶¶ 20-35.) Davis attended 30 rehabilitation sessions from August 4, 2022 to December 5, 2022 in California (Davis Decl. ¶ 22) and moved in with family friends during this time until he returned to Florida on December 22, 2022 (Id. ¶ 23). In January 2023, he again went to California to have dinner with his children (Id. ¶ 32) and to meet with his attorney and assist in preparation of this instant motion. (Id. ¶ 34.) During this time, he also went to his former residence to pack and move personal possessions (Id. ¶ 35). His credit card statements during August 2022 to January 2023 show purchases made in both California and Florida.

In his reply to Bagby’s opposition, Davis provides additional evidence to establish Florida as his residence. Davis shows his Florida utility bills, internet, and television provider (Davis Supp. Decl. ¶ 5, Exhib. A); a photo of his red Tesla in Florida residence (id. at ¶ 7, Exhib. B); a shipping invoice of his Tesla (id., Exhib. C); a lease agreement for Florida residence providing owner would pay utilities (id. ¶ 8); and photographs of Davis in Florida with family (id. ¶ 9, Exhib. E). Davis explains that he drove his Tesla back to California for surgery (id. ¶ 10) and that the reason he was not able to provide a declaration of any friends or neighbors in Florida is because he is closest with his landlady who is currently out of the country and unavailable to produce a declaration (id. ¶ 11).

Davis’s declaration establishes that he closed down his law practice by the terminating office lease and informed the California State Bar of his change of address to Florida. (Davis Decl. ¶ 17h.) Davis also raises the insufficiency of Bagby’s evidence, particularly on his reliance on a hearsay statement to establish that Davis continued to pay rent on his Pasadena office.

Bagby argues that a person may be a resident of and do business in California even if domiciled in another state, noting that the statute does not require “domicile.” Bagby states that “domicile” under California law is very different from “residence,” citing the Residency and Sourcing Technical Manual published by the Franchise Tax Board, which defines a resident as “every individual who is in this state for other than a temporary or transitory purpose; and every individual domiciled in this state who is outside the state for a temporary or transitory purpose.” (R&TC Section 17014(a).)

Bagby argues that Davis resides in California because Davis has maintained his membership at the Toscana Country Club where he plays golf multiple times per week and because Davis failed to provide any reliable evidence transferring his Tesla vehicle to Florida. (Opp. p. 9:10-18.) Bagby also points out that Davis’s credit card bills show very few charges in Florida and many charges in Pasadena, Californiaa. (Id. at p. 7:19-23.) Bagby challenges the sufficiency of Davis’s evidence and argues the absence of evidence sufficient to establish his lack of residence in California. (Id. at p. 3-8, 9-13.) Bagby argues that there is no evidence that Davis actually lived in the Florida house, that he actually opened bank accounts in Florida, that he was actually in Florida other than for his mother’s birthday, or that he made credit card purchases in Florida at any time after June 2020. (See Opp. p. 3-6.)

Bagby argues that Davis maintains his business in California as he continues to operates his law practice from the same Pasadena law office he has had for decades and continues to use the same legal secretary he has for over 30 years. (Opp. ¶ 6:25-28, 7:1-4.) Bagby points to the declaration of Robert Torosian, a legal assistant, to establish that Davis continued to rent his law office in California. (Id.)

Davis contends that “domicile” and “residence” should be used interchangeably, but that is too sweeping a statement. “Domicile” is normally the more comprehensive term. “Residence” “connotes any factual place of abode of some permanency, more than a mere temporary sojourn.” (Smith v. Smith, supra, 45 Cal. 2d 235, 239.) “[R]esidency and domicile are not always synonymous.” (Estate of Wardani (2022) 82 Cal.App.5th 870, 883.) “‘[A] person may have only one domicile at a given time, but he may have more than one physical residence separate from his domicile, and at the same time.’ [Citation.] To determine the meaning of ‘residence,’ it is necessary to look at the purpose of each act. [Citation.] For example, as the Supreme Court observed in Smith, residence is synonymous with domicile in construing the Probate Code’s venue statute. [Citation.] By contrast, residency takes on a more factual meaning in other statutes, ‘contemplating an actual, as distinguished from a constructive or legal residence.’ [Citation.]” (Ibid.)

The Court concludes that Code of Civil Procedure section 708.160, subdivision (b) refers to actual physical residence, not constructive residence. In contrast to a statute that establishes venue, or a basis to impose taxes, section 708.160 balances a creditor’s interest in information with a debtor’s interest in not being compelled to travel an undue distance in a post-judgment proceeding. For the statute in question, one’s actual residence is a place of some permanency that is not temporary or transitory. Thus, even assuming that Davis is domiciled in Florida and in theory may still reside in Los Angeles County, the evidence that he does so is lacking.

The Court finds that Davis neither resides in Los Angeles County nor within150 miles of the place of the judgment debtor examination. Davis has sufficiently established that his residence and domicile are Florida, that he severed his ties with California, and his presence in California after his move to Florida was for the temporary purpose of undergoing heart surgery and rehabilitation.

Although Davis’s credit card statements during the period of August 2022 to January 2023 show there were many purchases in California, there were also purchases in Florida. Davis need not make purchases only in Florida to establish his residence there. Furthermore, Davis’ purchases in California are explained by his temporary stay due to his medical treatment..

Bagby argues that Davis’s claims are likely false, The Court finds that Bagby’s evidence is insufficient to refute Davis’s showing. Although Bagby contends that Davis’s evidence lacks specificity, the Court gives greater weight to Davis’s showing because it is consistent with cutting ties with this state, and the explanations for temporary physical presence in Southern California are credible. Traveling to California for a hospital stay does not connote the type of permanency that results in establishing residence.

Similarly, Davis no longer maintains a place of business in Los Angeles County or within150 miles of the courthouse. Davis sufficiently shows this with evidence that he closed his law practice in Pasadena, no longer pays rent in the Pasadena building, and changed his address to Florida for his account with the California State Bar.

Bagby’s evidence is insufficient as it relies on an inadmissible hearsay statement lacking in foundation. Additionally, Bagby merely points to Davis’s lack of evidence such as the absence of communications with Davis’s landlord showing he stopped paying rent, a declaration from his secretary, or any other pertinent documents. Even if Davis’s case could be bolstered by the inclusion of additional evidence, the Court finds that Davis satisfies his burden in showing he does not have a place of business for purposes of Code of Civil Procedure section 708.160(b).

The Court grants Davis’s motion to quash the order for examination pursuant to California Code of Procedure section 708.200.

Department 58