Judge: Frank M. Tavelman, Case: 19BBCV00119, Date: 2022-08-19 Tentative Ruling

Case Number: 19BBCV00119    Hearing Date: August 19, 2022    Dept: A

ALLEGATIONS:

Plaintiffs Nancy Power ("Nancy") and Michael Power ("Michael", and together, "Judgment Creditors") filed suit against Defendants Bruce Halprin ("Bruce"); 4146 Beck Avenue, LLC, a California Limited Liability Company ("Beck LLC"); Lynbrook Construction, Inc., a California Corporation ("Lynbrook"); and Marcella Halprin a.k.a. Lori Halprin a.k.a. Laura Halprin ("Marcella"), alleging that Plaintiffs entered into a written Residential Purchase Agreement ("Purchase Agreement") with Bruce, through his entity, Beck LLC, for the purchase of a single-family home located at 4146 Beck Avenue, Studio City, California ("Property") for $2,600,000.

Plaintiffs allege that the home on the Property was not complete at the signing of the Purchase Agreement, but that Bruce represented to Plaintiffs that the home would be complete by the fourth quarter of 2017. Plaintiffs allege that Bruce did not complete the home by the fourth quarter of 2017, and that, on March 5, 2018, the parties executed an Amendment to the Escrow Instructions whereby Bruce agreed to pay Plaintiffs $15,000 per month commencing April 15, 2018 for any further delay in delivering the contracted Property to Plaintiffs. Plaintiffs further allege that as of the date of the filing of the instant action, closing has not occurred and Plaintiffs have not been given possession of the Property.

Plaintiff filed a Complaint on February 7, 2019, alleging five causes of action: (1) Fraud; (2) Breach of Contract; (3) Breach of Implied Covenant of Good Faith and Fair Dealing; (4) Disgorgement of Payments Made Under Business & Professions Code § 7031; and (5) Negligence.

HISTORY:

The Court entered default judgment for Judgment Creditors on May 16, 2019.

The Court granted Judgment Creditors’ Motion for Attorneys' Fees on November 12, 2021.

The Court received the Motion for Charging Order filed by Judgment Creditors on June 16, 2022. The Court has not received any opposition or reply.

RELIEF REQUESTED:

Judgment Creditors move for: (1) an order charging the membership interest of Bruce, an individual, in Bedford Avenue LLC, a California Limited Liability Company, with the payment of the unsatisfied amount of the Judgment with an original balance of $340,976.23; (2) an order appointing a receiver with the necessary powers to collect the money due under the Judgment; and (3) any and all other orders necessary to give effect to the charging order.

ANALYSIS:

I.          LEGAL STANDARD

CCP § 708.310 allows the court to transfer a judgment creditor’s transferrable interest in partnerships and other entities. “If a money judgment is rendered against a partner or member but not against the partnership or limited liability company, the judgment debtor's interest in the partnership or limited liability company may be applied toward the satisfaction of the judgment by an order charging the judgment debtor's interest pursuant to Section 15907.3, 16504, or 17705.03 of the Corporations Code.” (CCP § 708.310.)

Corp. Code § 17705.03 provides:

(a) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

(b) To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subdivision (a), the court may do any of the following: (1) Appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made. (2) Make all other orders necessary to give effect to the charging order. (3) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a member, and is subject to Section 17705.02.

(c) At any time before foreclosure under paragraph (3) of subdivision (b), the member or transferee whose transferable interest is subject to a charging order under subdivision (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

(d) At any time before foreclosure under paragraph (3) of subdivision (b), a limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

(e) This title does not deprive any member or transferee of the benefit of any exemption laws applicable to the member's or transferee's transferable interest.

(f) This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest.

II.        MERITS

Judgment Creditors assert that they won a judgment against Judgment Debtors in the amount of $340,976.23. (Decl. Spiwak, ¶ 2.) Judgment Creditors argue that Judgment Debtors have made payments totaling $245,118.97 since the entry of Judgment on May 16, 2019; but have since failed to make any additional payments. (Id. at ¶ 4.) Judgment Creditors further argue that Halprin has a transferrable membership interest in Bedford Avenue LLC, a limited liability company. (Id. at ¶ 3, Exh. 2.)

Judgment Creditors did file a “Notice Pursuant to California Code of Civil Procedure Section 708.230.”   Proof of Service on June 16, 2022, serving Bruce Halprin, as an individual, and in Bedford Avenue LLC.

III.       CONCLUSION

The Court grants the motion.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Plaintiffs/Judgment Creditors Nancy Power and Michael Power's Motion for Charging Order came on regularly for hearing on August 19, 2022, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE MOTION FOR CHARGING ORDER IS GRANTED.

IT IS SO ORDERED.

DATE:  August 19, 2022                               _______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles