Judge: Gary Y. Tanaka, Case: 19TRCV00855, Date: 2023-02-21 Tentative Ruling
Case Number: 19TRCV00855 Hearing Date: February 21, 2023 Dept: B
LOS ANGELES SUPERIOR COURT –
SOUTHWEST DISTRICT
Honorable Gary Y. Tanaka Tuesday, February 21, 2023
Department B Calendar No. 1
PROCEEDINGS
Project
One-Fifty, LP v. Ashok B. Patel, et al.
19TRCV00855
1. Project One-Fifty, LP’s Motion to Charge Member’s
Interest in Limited Liability Company and to Appoint Receiver
TENTATIVE RULING
Project One-Fifty, LP’s Motion to
Charge Member’s Interest in Limited Liability Company and to Appoint Receiver is
denied.
Background
Plaintiff filed this action on
September 27, 2019. Plaintiff alleges that Defendant breached the commercial
real property lease agreement. On October 20, 2022, the parties entered into a
stipulated judgment. On November 9, 2022, an amended judgment was entered by
the Court.
Motion for Charging Order
A judgment creditor may make a
motion for a charging order in the Court that entered the judgment. Corporations Code § 17705.03(a); CCP §
708.310. Code Civ. Proc., § 708.310 states: “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.”
Corp. Code, § 17705.03 states, in
relevant part: “(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.”
A lien on a judgment debtor’s
interest in a partnership or LLC is created by service of a notice of motion
for a charging order on the judgment debtor and either (1) all or the
partnership, or (2) all members or the LLC.
CCP § 708.320(a).
Plaintiff moves for an order to:
“(1) Charge Defendants’ membership
interests in Jaydair2 Hospitality LLC, a limited liability company (“LLC”),
with payment of the unpaid judgment in this action.
(2) Direct the LLC and all members to pay all money or
property due or to become due to Defendants directly to Plaintiff’s attorney
until the judgment plus accrued interest and costs are fully paid.
(3) Appoint a receiver of the share of the
distributions due or to become due to Defendants from the LLC to distribute to
Plaintiff.” (Notice of Motion, page 1,
lines 21-27).
Defendants filed no written opposition to the motion. Plaintiff
contends that Jaydair2 Hospitality LLC owns the property at 4501 W. Imperial
Highway, Inglewood, CA and operates the LAX Stadium Inn, valued at $4,592,080. (Decl., Robert Gentino, Ex. 1.) Plaintiff shows that Ashok B. Patel is the
managing member of this LLC. (Id. at Ex.
2.) Therefore, Plaintiff’s motion for a
charging order charging the transferrable interest of judgment debtor Ashok B.
Patel, only, in Jaydair2 Hospitability LLC was potentially available to be granted.
However, the Court notes that Plaintiff also
makes reference to other purported members of the LLC such as Kusum Patel and Vabor
Bhai Patel. However, Kusum Patel is not
a judgment debtor. As to Vabor Bhai Patel, Plaintiff makes no showing that this
individual is a member of the LLC. Thus,
the request to charge all “members” of the LLC with payment is denied. In addition, subsequent to the filing of this
motion, Plaintiff filed an Acknowledgement of Satisfaction of Judgment as to
Ashok B. Patel. Thus, any attempt to charge the transferrable interest of this
debtor is now moot. Therefore, the Court
cannot enter an order charging the transferrable interest of judgment debtor
Ashok B. Patel. The motion to charge all “members’” interests and to order the
LLC and all members to make payment is denied.
Plaintiff’s request for the appointment of a receiver
is also denied. A receivership is a harsh, time-consuming, expensive, and potentially
unjust remedy. A receivership is only
available only when less drastic alternative remedies, such as an injunction,
writ of possession, attachment, lis pendens, etc. are not adequate. A receiver should not be appointed unless it
is absolutely essential and there is no other remedy that could be utilized. City & County of San Francisco v. Daley (1993)
16 Cal.App.4th 734, 745; Medipro Med. Staffing LLC v. Certified Nursing
Registry, Inc. (2021) 60 Cal.App.5th 622, 628-29. “A receivership is warranted in only
exceptional cases. Id. “The court
may 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.” Code Civ. Proc., § 708.620. Plaintiff has failed to establish that the
appointment of a receiver is necessary to carry the judgment into effect. The only evidence submitted, in the form of
the declaration of Robert Gentino, is silent as to the purported request for a
receivership. In addition, the Court
notes that Plaintiff has not even set forth the name of the proposed receiver
and a declaration from the proposed receiver for the Court to even evaluate the
credentials of the proposed receiver.
Plaintiff is ordered to give notice of this ruling.