Judge: Elaine Lu, Case: 20STCV02732, Date: 2023-10-03 Tentative Ruling

Case Number: 20STCV02732    Hearing Date: October 3, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

On January 22, 2020, Plaintiff Hedgefog Research, Inc. (“Plaintiff”) filed the complaint in this action against Defendant Precision Ocular Metrology, LLC (“Defendant”) for (1) Breach of Contract, (2) Fraud, (3) Negligent Misrepresentation, (4) Common Counts for Goods Sold and Received, and (5) Unjust Enrichment.  These causes of action arise out of the purchase by Judgment Debtor of eight sMap3d devices.  On July 27, 2020, the Court entered a default judgment against Defendant and in favor of Plaintiff  in the total amount of $124,314.17.

On September 11, 2020, Plaintiff filed an ex parte application for an appointment of a receiver which the Court denied on September 16, 2020.  (Minute Order 9/16/20.)  On September 17, 2020, Plaintiff filed a notice motion for an appointment of a receiver which the Court denied on October 13, 2020.  (Minute Order 10/13/20.)  On February 8, 2021, Plaintiff again filed a motion for appointment of receiver which the Court again denied on March 19, 2021.  (Minute Order 3/19/21.)  On June 25, 2021, Plaintiff filed a motion for an assignment order which the Court granted on January 24, 2022.  (Order 1/24/22.)

On August 31, 2023, Plaintiff filed the instant renewed motion for an appointment of a receiver.  No opposition has been filed.

Discussion

            Plaintiff seeks an appointment of a receiver to enforce the monetary judgment against Defendant. 

            As a preliminary matter, while entitled a motion for an appointment of receivership, “the name of the motion is not controlling. The requirements for a motion for reconsideration ‘apply to any motion that asks the judge to decide the same matter previously ruled on.’”  (R & B Auto Center, Inc. v. Farmers Group, Inc. (2006) 140 Cal.App.4th 327, 373.)  The Supreme Court is clear in that “a party may not file a written motion to reconsider that has procedural significance if it does not satisfy the requirements of section 437c, subdivision (f)(2), or 1008. The court need not rule on any suggestion that it should reconsider a previous ruling and, without more, another party would not be expected to respond to such a suggestion.”  (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108.)  Therefore, “[u]nless the requirements of section 437c, subdivision (f)(2), or 1008 are satisfied, any action to reconsider a prior interim order must formally begin with the court on its own motion.”  (Ibid.)

            Here, Plaintiff has previously requested an appointment of a receivership three times which the Court has denied three times.  (Minute Orders 9/16/20, 10/13/20, 3/19/21.)  As Plaintiff seeks the same relief that has been previously denied, the requirements for a renewed motion must be fulfilled.  (Le Francois, supra, 35 Cal.4th at p.1108.)  Pursuant to Code of Civil Procedure section 1008(b), “A party who originally made an application for an order which was refused … may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.”  (Ibid., [Italics added].)  “A motion for reconsideration must be based on new or different facts, circumstances or law [Citation], and facts of which the party seeking reconsideration was aware at the time of the original ruling are not ‘new or different.’”  (In re Marriage of Herr (2009) 174 Cal.App.4th 1463, 1468.) 

            Here, the only new facts that Plaintiff raises are that Plaintiff has made some other attempts at enforcing the judgment.  As detailed below, these attempts are insufficient to warrant the appointment of a receivership.

            “By statute, a court ‘may’ appoint a receiver ‘[a]fter judgment’ ‘pursuant to the Enforcement of Judgments Law’ (§ 564, subd. (b)(4)), and the Enforcement of Judgments Law (§ 680.010 et seq.) empowers a court to appoint a receiver ‘to enforce the judgment where the judgment creditor shows that, considering the interests of both the judgment creditor and the judgment debtor, the appointment of a receiver is a reasonable method to obtain the fair and orderly satisfaction of the judgment’ (§ 708.620).”  (Medipro Medical Staffing LLC v. Certified Nursing Registry, Inc. (2021) 60 Cal.App.5th 622, 627.)  However, “the appointment of a receiver is a very ‘drastic,’ ‘harsh,’ and costly remedy that is to be ‘exercised sparingly and with caution.’ [Citations.]  Due to the ‘extraordinary’ nature of this remedy and the special costs it imposes, courts are strongly discouraged—although not strictly prohibited—from appointing a receiver unless the more intrusive oversight of a receiver is a ‘necessity’ because other, less intrusive remedies are either ‘ “inadequate or unavailable.” ’[Citations.]” (Id. at p.628.)

In light of the sheer number of enforcement mechanisms for collecting money judgments under the Enforcement of Judgments Law (which range from levies to liens to wage garnishment (§§ 695.010 et seq., 697.010 et seq., 699.010 et seq., 699.510 et seq., 706.020 et seq.); accord, Tucker, supra, 70 Cal.App.2d at p. 773, [“ordinarily a judgment creditor is able to collect money ... by way of garnishment or levy of execution”]), appointment of a receiver is rarely a “necessity” and, as a consequence, “may not ordinarily be used for the enforcement of a simple money judgment.” (Jackson, supra, 253 Cal.App.2d at p. 1040; accord, White v. White (1900) 130 Cal. 597, 599, [receiver may not be appointed to collect a money judgment under section 564, subdivision (b)(3)].) Instead, the appointment of a receiver to enforce a money judgment is reserved for “exceptional” circumstances where the judgment creditor's conduct makes a receiver necessary—and hence “proper.” (Jackson, at p. 1041; Olsan v. Comora (1977) 73 Cal.App.3d 642, 647; Daley, supra, 16 Cal.App.4th at p. 744.) This occurs when the judgment debtor has frustrated the judgment creditor's collection efforts through obfuscation or through otherwise contumacious conduct that has rendered feckless the panoply of less intrusive mechanisms for enforcing a money judgment.

(Medipro Medical Staffing LLC, supra, 60 Cal.App.5th at p.628.)

            Here, the Court has entered a simple money judgment against Defendant, and the evidence Plaintiff presents fail to demonstrate exceptional circumstances supporting the drastic and extreme remedy Plaintiff seeks.  Here, the primary steps Plaintiff has taken to enforce the judgment have been three consecutive motions to appoint a receivership, which the Court has denied.  (Minute Orders 9/16/20, 10/13/20, 3/19/21.)  Plaintiff’s Counsel claims that he has served written discovery to Defendant, which Defendant ignored.  (Friedman Decl. ¶ 3.)  Plaintiff’s Counsel was able to obtain $23,240.00 to partially satisfy the judgment from a third party through a writ of execution.  (Friedman Decl. ¶ 4.)  Plaintiff’s Counsel claims that he is unable to conduct a judgment debtor examination because Defendant and all of its relevant personnel reside more than 150 miles from this courthouse.  (Friedman Decl. ¶ 3.)

            In its memorandum, Plaintiff further claims that the assignment order “was entirely ineffective as [Defendant] has and continues to move his income via different business entities and never resulted in any payments.”  (Motion at p.2:25-27, [italics added].)  Notably, Defendant is an entity and not an individual.  Thus, it is unclear who Plaintiff is referring to by the term “his.”  Moreover, Plaintiff has failed to present any evidence to support this claim; a memorandum is not evidence, and “the court must disregard ‘facts’ contained in an unverified statement.”  (Smith, Smith & Kring v. Superior Court (Oliver) (1997) 60 Cal.App.4th 573, 578.)

            These alleged facts do not show exceptional circumstances warranting the appointment of a receiver to enforce the money judgment.  As Plaintiff’s evidence demonstrates, Defendant is no longer active.  (Mikaelian Decl. ¶ 2.)  A defunct, inactive company’s failure to respond to written discovery does not evidence an intentional act to frustrate Plaintiff’s attempts to enforce the judgment. 

            Similarly, Plaintiff’s failure to obtain a judgment debtor examination based on distance is not an exceptional circumstance warranting the appointment of a receiver.  Since the inception of the instant action, Plaintiff has known that Defendant is a New Mexico limited liability company with a principle place of business in New Mexico.  (Complaint ¶ 2.)  Therefore, Plaintiff should have been aware that Plaintiff would likely need to enforce any money judgment by enforcing the judgment in New Mexico – where the principle place of business and presumably Defendant’s relevant personnel would be.  The final determinations by the courts of one state are entitled to full faith and credit in the courts of its sister states.  (U.S. Const. art. IV, § 1.)  “New Mexico courts have long given full faith and credit to judgments of sister states, unless the judgment is void.”  (Jordan v. Hall (N.M. Ct. App. 1993) 115 N.M. 775, 777.) 

            In light of the enforceability of the instant judgment in New Mexico where Defendant and Defendant’s relevant personnel presumable are, it is enigmatic why Plaintiff has not attempted to enforce the judgment in that jurisdiction.  Rather, Plaintiff has repeatedly attempted to invoke the extreme measure of a receivership in the instant Court to collect on a simple money judgment. 

            In sum, Plaintiff fails to present the necessary exceptional circumstances for the extreme remedy Plaintiff seeks.  Accordingly, the instant motion is DENIED.

CONCLUSION AND ORDER

Based on the foregoing, Plaintiff/Judgment Creditor Hedgefog Research, Inc.’s renewed motion for the appointment of a receivership is DENIED.

Moving Party to give notice and file proof of service of such.

DATED: October ___, 2023                                                   ___________________________

                                                                                          Elaine Lu

                                                                                          Judge of the Superior Court