Judge: Curtis A. Kin, Case: 19STCP04088, Date: 2022-10-20 Tentative Ruling
Case Number: 19STCP04088 Hearing Date: October 20, 2022 Dept: 72
MOTION FOR AWARD OF POST-JUDGMENT ATTORNEY FEES,
COSTS, AND INTEREST
MOTION FOR ASSIGNMENT ORDER AND INJUNCTION
MOTON FOR TURNOVER ORDER
AND OTHER RELIEF
Date: 10/20/22
(9:30 AM)
Case: Kristofer J. Kaufmann v.
William E. Rice et al. (19STCP04088)
TENTATIVE RULING:
I.
MOTION FOR AWARD OF POST-JUDGMENT ATTORNEY FEES,
COSTS, AND INTEREST
Judgment creditor Kristoffer J. Kaufmann’s Motion for Award
of Post-Judgment Attorney Fees, Costs, and Interest is CONTINUED.
According to the Order Extending Time to File Opposition and
Reply to Petitioner’s Motion for Post-Judgment Attorney Fees, Costs and
Interest (“Order Extending Time”) entered by the Court on October 6, 2022
pursuant to stipulation, judgment debtor William E. Rice’s deadline to file the
opposition was October 3, 2022. As opposition was filed on behalf of judgment
debtor Rice on October 4, 2022. Nevertheless, the untimely filing does not
serve as a basis to disregard the opposition. (Rule of Court 3.1300(d) [“No
paper may be rejected for filing on the ground that it was untimely submitted
for filing. If the court, in its discretion, refuses to consider a late filed
paper, the minutes or order must so indicate”].) Judgment creditor Kristoffer
J. Kaufmann was able to file a substantive reply on October 6, 2022, even
though Kaufmann had until October 7, 2022 to file the reply, according to the
Order Extending Time. Accordingly, Kaufmann was not prejudiced with the late
filing of the opposition.
However, Rice has been self-represented since his former
counsel substituted out of this proceeding on September 2, 2020. Nithin Kumar,
the attorney who purported to submit the opposition to the instant motion on
behalf of Rice, has not substituted into this proceeding. “The attorney in an action or special
proceeding may be changed at any time before or after judgment or final
determination . . . [u]pon the consent of both client and attorney, filed with
the clerk, or entered upon the minutes.” (CCP § 284(1).) The Court notes that
the stipulation to the Order Extending Time contains a recital that Rice
retained Kumar on September 29, 2022. (10/6/22 Order Extending Time at
1:27-2:1.) Nevertheless, because Rice has not submitted any filing substituting
Kumar into this proceeding as counsel, Kumar is not Rice’s counsel of record.
“Every pleading, petition, written notice of motion, or
other similar paper shall be signed by at least one attorney of record in the
attorney’s individual name, or, if the party is not represented by an attorney,
shall be signed by the party . . . . An unsigned paper shall be stricken unless
omission of the signature is corrected promptly after being called to the
attention of the attorney or party.” (CCP § 128.5.) Because Kumar signed the
opposition and Kumar is not Rice’s attorney of record, the opposition is
subject to striking.
For the sole purpose of clarifying whether this Court shall
strike the opposition or consider it, the Motion for Award of Post-Judgment
Attorney Fees, Costs, and Interest is CONTINUED to November 15, 2022, at 9:30
a.m., in Department 72 (Stanley Mosk Courthouse). If, within five (5) court days hereof, Nithin
Kumar files a Substitution of Counsel for judgment debtor Rice, the Court will
deem the October 4, 2022 opposition timely filed and consider it connection
with the instant motion. Otherwise, the
Court shall strike the October 4, 2022 opposition and rule on the motion as
briefed. No further supplemental
briefing shall be permitted by the parties, unless specifically requested by
the Court. Further, only counsel of
record may be permitted to argue on behalf of Rice at the continued
hearing. If no substitution is made, the
Court will hear from judgment debtor Rice in pro per.
II.
MOTION FOR ASSIGNMENT ORDER AND INJUNCTION
Judgment creditor Kristoffer J. Kaufmann’s Motion for
Assignment Order and Injunction is GRANTED IN PART.
Judgment creditor Kristoffer J. Kaufmann’s request to take
judicial notice of Exhibit D, the Amended Judgment entered in this proceeding
on 2/5/21, is GRANTED, pursuant to Evidence Code § 452(d). The requests are
otherwise DENIED as “unnecessary to the resolution” of the issues before the
Court. (Martinez v. San Diego County Credit Union (2020) 50 Cal.App.5th
1048, 1075.)
Judgment creditor Kristoffer J. Kaufmann seeks an assignment
order whereby judgment debtors’ rights to payments due or becoming due from
specified third parties are assigned to Kaufmann until the judgment entered in
this proceeding is satisfied in full.
The judgment debtors are William E. Rice, VVA-TWO, LLC
(“VVA-TWO”), Triton Community Development, LLC (“Triton”), and TCD Development
Services, LLC (“TCD”). (See RJN Ex. D at 2:1-3.) The specified third parties
are Alliant Capital Ltd., Alpha Barnes Real Estate Services, Community Housing
Assistance, Day Builders, Inc., Donald G. Herman, Duane Henry, Hunt Capital
Partners, Richard D. Narramore, Riverside Charitable Corp., SFC VHV LP, TCD
Hacienda Del Norte, LP, TCD McMullen, LP, TCD WFH Inglewood LP, and VVA-TWO,
LLC. (Creditor’s Appendix of Evidence Ex. A.)
Kaufmann presents Triton’s bank statements obtained during
post-judgment discovery. (Hyam Decl. ¶¶ 19, 20 & Ex. L.) The bank
statements reflect that the specified third parties, except for TCD WFH
Inglewood LP, made payments to Triton, one of the judgment debtors. (Compare
Creditor’s Appendix of Evidence Ex. A with Ex. L [TCD WFH Inglewood LP
not listed in summary tables in Exhibit L].) Because the bank statements do not
evidence any payment from TCD WFH Inglewood LP, this third party shall not be
part of an assignment order.
According to the operative Amended Judgment, Triton and TCD
are alter egos of Rice, one of the original judgment debtors. (RJN Ex. D at
1:21-26.) Further, VVA-TWO was one of the original judgment debtors. (RJN Ex. D
at 1:21-23.)
No opposition was filed disputing Kaufmann’ assertion that
Rice controls VVA-TWO or indicating why an assignment order should not be
imposed on VVA-TWO. Accordingly, even though the bank statements evidence third
parties’ payment to Triton only, the statements may serve as evidence
supporting imposition of an assignment order on all four judgment debtors—Triton,
Rice, TCD, and VVA-TWO.
Accordingly, the motion for assignment order is GRANTED IN
PART, insofar as an order shall issue to the judgment debtors. With respect to
Kaufmann’s request that the Court issue an order assigning the payments from
the judgment debtors to the third parties and directing the third parties to
make payments to counsel for Kaufmann in trust, the Court notes CCP § 708.510
states that, upon successful application: “[T]he 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 . . . ” Of note, CCP § 708.510
does not authorize the Court to issue any order to third parties.
Therefore, pursuant to CCP § 708.510, judgment debtors
William E. Rice, VVA-TWO, LLC, Triton Community Development, LLC, and TCD Development
Services, LLC are ordered to assign to judgment creditor rights to payment from
the following entities: (1) Alliant Capital Ltd.; (2) Alpha Barnes Real Estate
Services; (3) Community Housing Assistance; (4) Day Builders, Inc.; (5) Donald
G. Herman; (6) Duane Henry; (7) Hunt Capital Partners; (8) Richard D. Narramore;
(9) Riverside Charitable Corp.; (10) SFC VHV LP; (11) TCD Hacienda Del Norte,
LP; (12) TCD McMullen, LP; and (13) VVA-TWO, LLC.
“A
right to payment may be assigned pursuant to this article only to the extent
necessary to satisfy the money judgment.” (CCP § 708.510(d).) Kaufmann does not
provide the exact amount of the judgment that remains outstanding. (See Hyam
Decl. ¶ 24 [estimation that outstanding balance on judgment is “more than $9.7
million”].) In its proposed order, Kaufmann shall indicate how much of the
judgment remains pending and provide a supplemental declaration in support
thereof.
Kaufmann
also seeks an order enjoining “Judgment Debtors and Third Parties, and their
agents, employees, attorneys, accountants, and other representatives, and any
and all person(s) acting in concert or participating with any of them . . . from
taking any action to encumber, assign, dispose of, diminish, and/or interfere
with Kaufmann’s rights to payment, any third parties’ compliance with said
Order, or Kaufmann’s receipt of payments under said Order (other than through
filing of pleadings in this action).” (Notice of Mtn. at 2:23-3:3.)
CCP § 708.520(a)
provides, in relevant part: “When an application is made pursuant to Section
708.510 or thereafter, the judgment creditor may apply to the court for an
order restraining the judgment debtor from assigning or otherwise disposing of
the right to payment that is sought to be assigned.” CCP § 708.520(a) does not
allow the Court to enjoin any party other than the judgment debtors. As for the judgment debtor themselves,
however, the Court finds that an injunction as to the judgment debtors is
appropriate given their failure to make payments on the judgment. (Hyam Decl. ¶
24.) Judgment debtors William E. Rice, VVA-TWO, LLC, Triton Community
Development, LLC, and TCD Development Services, LLC are restrained and prohibited from taking
any action to encumber, assign, dispose of, diminish, and/or interfere with judgment
creditor Kristoffer J. Kaufmann’s rights to payment or Kaufmann’s receipt
of payments from the third parties specified above.
Pursuant to CCP § 708.520(d), judgment debtors William
E. Rice, VVA-TWO, LLC, Triton Community Development, LLC, and TCD Development
Services, LLC shall be personally served with the order setting forth the
injunction. Pursuant to the same statute, the order shall also contain a notice
to the judgment debtors that failure to comply with the order may subject the
judgment debtor to being held in contempt of court.
Lastly, non-party Glaser Weil Howard Avchen & Shapiro
LLP (“Glaser Weil”) seeks a provision in the order that the relief granted in
this motion does not limit or interfere with any rights that Glaser Weil has as
a secured creditor. Putting aside for the moment whether Glaser Weil has any standing
to oppose this motion, Glaser Weil’s request is beyond the scope of what is at
issue here. This motion pertains only to
payments to be received from the third parties set forth in Exhibit A to
Kaufmann’s Compendium of Evidence. Glaser Weil is not a third party set forth
in Exhibit A.
For the foregoing reasons, the motion is GRANTED IN PART.
Judgment creditor Kristoffer J. Kaufmann is ordered to submit a proposed order comporting
with the ruling above within five (5) court days hereof.
III.
MOTION FOR TURNOVER ORDER AND OTHER RELIEF
For the reasons that follow, judgment creditor Kristoffer J.
Kaufmann’s Motion for Turnover Order and other relief, field May 11, 2022, is
DENIED in its entirety.
As an initial matter, judgment creditor Kristoffer J.
Kaufmann’s requests to take judicial notice of Exhibit A, the 10/22/21
Assignment Order, and Exhibit C, the 2/5/21 Amended Judgment, are GRANTED,
pursuant to Evidence Code § 452(d). The requests are otherwise DENIED as
“unnecessary to the resolution” of the issues before the Court. (Martinez v.
San Diego County Credit Union (2020) 50 Cal.App.5th 1048, 1075.)
A.
Turnover Order
Citing CCP § 699.040, judgment creditor Kristoffer J.
Kaufmann seeks an order directing judgment debtor William E. Rice to turn over
payments from Synergy Community Development Corporation (“Synergy”). CCP §
699.040(a) states: “If a writ of execution is issued, the judgment creditor may
apply to the court . . . for an order directing the judgment debtor to transfer
to the levying officer . . . (1) Possession of the property sought to be levied
upon if the property is sought to be levied upon by taking it into custody. [¶]
(2) . . . a debt owed to the judgment debtor that is sought to be levied upon.”
Kaufmann’s request for a turnover order is defective.
Kaufmann does not identify the levying officer to whom Rice should transfer
payments. Moreover, Kaufmann does not specifically identify the total amount that
Synergy paid to Rice or total debt that Synergy owes to Rice such that a
levying officer would be able to execute a turnover order.
Kaufmann also seeks an order for Synergy and Step Forward
Community, Inc. (“SFC”) to turnover funds due to Rice now and in the future. As
is the case with Rice, not only did Kaufmann not identify a levying officer,
but Kaufmann does not specifically identify the total debt that Synergy or SFC
owes to Rice such that a levying officer would be able to execute a turnover order.
Moreover, CCP § 699.040 only allows an order to be issued to the judgment
debtor, not any third parties.
The request for a turnover order is not well-taken.
B.
Further Injunction
Kaufmann seeks “an order that enjoins Rice, Synergy, and SFC
from taking action that would divert funds due to Rice.” (Mtn. at 12:4-5.)
However, Kaufmann fails to show the necessity for such an order, as “Kaufmann
believes that the assignment orders served on Synergy and SFC already provide
that injunctive relief.” (Mtn. at 12:5-6.) Accordingly, Kaufmann’s request for
a further injunction is not well-taken.
C.
Order to Show Cause re: Contempt
Kaufmann moves for the setting of an order to show cause
hearing re: contempt against Rice. Kaufmann contends that Rice violated an
assignment order issued on October 22, 2021 by changing his classification with
Synergy as an independent contractor to an employee. (Hyam Decl. ¶ 5 & Ex.
B.)
In applying for an order to show cause re contempt, “[w]hen
the contempt is not committed in the immediate view and presence of the court,
or of the judge at chambers, an affidavit shall be presented to the court or
judge of the facts constituting the contempt, or a statement of the facts by
the referees or arbitrators, or other judicial officers.” (CCP § 1211(a).) The
charging affidavit must set forth the following facts: (1) rendition of a valid
order; (2) respondent’s actual knowledge of the order; (3) respondent’s ability
to comply with the order; and (4) respondent’s willful disobedience of the
order. (Conn v. Superior Court (Farmers Group) (1987) 196 Cal.App.3d
774, 784.) The allegations in the affidavit must be based on factual
statements, and willful disobedience should be shown with evidence that the
respondent had personal notice of the contents of the order.
With respect to the rendition of a valid order, the
assignment order provided that “[a]ll rights of William E. Rice . . . to
payments in excess of $5,000 per month due or becoming due from Synergy
Community Development Corporation…shall be paid to Kristoffer J. Kaufmann . . .
.” (Hyam Decl. ¶ 4 & Ex. A.) The assignment order further stated: “IT IS
FURTHER ORDERED that Judgment Debtors . . . are restrained from taking any
action to encumber, assign, dispose of, diminish, and/or interfere with
Kristoffer J. Kaufmann’s rights to payment from any third parties subject to
this Order, any third parties’ compliance with said Order, or Kristoffer J.
Kaufmann’s receipt of payments under said Order.” (Hyam Decl. ¶ 4 & Ex. A.)
With respect to Rice’s actual knowledge of the order, Kaufmann
references an email that his counsel received from Rice, which stated the
following: “I wanted to make you aware that I became an employee of Synergy I
believe in February of this year and my consulting agreement terminated. My
understanding from Judge Byrdsong at the hearing over my payment from Synergy,
that I was told that my payments last year under the consulting agreement
didn’t fall under the wage garnish laws which was a separate process for wages
as opposed to distributions or payments under the consulting agreement. I am
compensated every two weeks and it works out to roughly the same as before with
the exception of required taxes and fees removed from it. This would therefore
bring an end of the payment of the additional $1,000 per month that Synergy
paid to Mr. Kaufmann via your firm for January.” (Hyam Decl. ¶ 5 & Ex. B.)
By referencing the hearing regarding payments from Synergy
and monthly payments from Synergy to Kaufmann, it appears that Rice may have
actual knowledge of the assignment order and may be able to comply with the
order not to interfere with Kaufmann’s right to payment from Synergy.
However, the email does not speak to any willful
disobedience. Kaufmann maintains that Rice became an employee to interfere with
Kaufmann’s rights to payment from Synergy. Notwithstanding Rice’s arguments
regarding the effect of his status as an employee on a monthly payment of
$1,000 from Synergy, there is no indication from the email that Rice became an
employee of Synergy to “encumber, assign, dispose of, diminish, and/or
interfere with Kristoffer J. Kaufmann’s rights to payment” from Synergy. (Hyam
Decl. ¶ 4 & Ex. A.) The email does not necessarily demonstrate that Rice
asked Synergy to change his status from an independent contractor to an employee.
Rice states only that his consulting agreement terminated.
For the foregoing reasons, Kaufmann’s request for a contempt
hearing against Rice is not well-taken.
D.
Wage Garnishment
Citing CCP § 706.052, Kaufmann requests an order that, to
the extent that wage garnishment applies to wages from Synergy, the garnishment
shall be 50% of Rice’s wages from Synergy. (Notice of Mtn. at 2:15-16.)
CCP § 706.052 sets forth the limits of wage garnishment for
earnings withholdings order for support under CCP § 706.030. CCP § 706.030(a)
defines “withholding order for support” as “an earnings withholding order
issued on a writ of execution to collect delinquent amounts payable under a
judgment for the support of a child, or spouse or former spouse . . .” The operative
Amended Judgment is not an award for support of a child or spouse, but an award
for damages. (Hyam Decl. ¶ 6 & Ex. C.) Kaufmann therefore does not state
legal authority upon which he seeks a wage garnishment of 50%. Contentions
unsupported by citation of authority are disregarded. (Niko v. Foreman
(2006) 144 Cal.App.4th 344, 368; Valov v. Department of Motor Vehicles (2005)
132 Cal.App.4th 1113, 1132.)
Kaufmann’s request for the garnishment of 50% of wages from
Synergy is not well-taken.
E.
Addition of Synergy to Judgment
Kaufmann moves for the addition of Synergy to the Amended
Judgment for the limited purpose of directing to Kaufmann payments that are due
to Rice. “Judgments may be amended to add additional judgment debtors on the
ground that a person or entity is the alter ego of the original judgment
debtor.” (Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012)
212 Cal.App.4th 1181, 1188, quoting Greenspan v. LADT, LLC (2010) 191
Cal.App.4th 486, 508.) “[E]ven if all the formal elements necessary to
establish alter ego liability are not present, an unnamed party may be included
as a judgment debtor if ‘the equities overwhelmingly favor’ the amendment and
it is necessary to prevent an injustice.” (Carolina Casualty Ins. Co. v.
L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1188-89.)
Kaufmann makes no showing that Synergy is an alter ego of
Rice. Moreover, as stated above, Kaufmann makes no showing that Rice’s change
from an independent contractor to an employee at Synergy was the result of any
request from Rice or the purpose of avoiding collections. Accordingly, Kaufmann
fails to show a basis in equity upon which Synergy should be added to the
Amended Judgment.
Kaufmann’s request to add Synergy to the judgment is not
well-taken.
F.
Order of Judgment Debtor Examinations
Kaufmann moves for the setting of an emergency judgment
debtor examination of Rice, Jason Hobson of Synergy, and Duane Henry of SFC and
an order to produce certain documents in the next seven days. Kaufmann cites no
statute providing for the setting of such an “emergency” debtor examination. Moreover, the Court notes this motion requesting
“emergency” debtor examination was made on May 11, 2022. In the many months that have since passed,
Kaufmann could have availed himself of the procedures set forth in CCP §
708.110 et seq.
The request for an order for an emergency debtor exam is not
well-taken.