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.