Judge: James L. Crandall, Case: "Valdezvs.2812OceanBoulevard,LLC", Date: 2022-07-28 Tentative Ruling

Motion for Order to Charge Member’s Interest

Judgment creditor Rodrigo L. Valdez, Jr., moves under Code Civ. Proc. §§ 708.310 and 708.320 et seq. for an order: (1) charging the interest of judgment debtor Stephen Perkins in a limited liability company known as Brianna’s Properties, LLC with payment of the unpaid balance of the judgment entered in this action that currently totals $139,716.68 exclusive of interests and costs; and (2) directing the limited liability company and all members thereof to pay any money or property due or to become due to the judgment debtor directly to the judgment creditor.

CCP Section 708.310 provides:

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 15907.03, 16504, or 17705.03 of the Corporations Code.

Section 708.320 provides:

(a) A lien on a judgment debtor's interest in a partnership or limited liability company is created by service of a notice of motion for a charging order on the judgment debtor and on either of the following:

(1) All partners or the partnership.

(2) All members or the limited liability company.

(b) If a charging order is issued, the lien created pursuant to subdivision (a) continues under the terms of the order. If issuance of the charging order is denied, the lien is extinguished.

The judgment debtor opposes the motion. He contends that a charging order can only be entered against a LLC that is also a party to the underlying action, i.e., also a debtor, citing Evans v. Galardi (1976) 16 Cal.3d 300.

The judgment debtor is incorrect. Evans did not concern an application for a charging order. Rather, the judgment creditor was attempting to levy on the assets of an LLC to which the judgment debtor was a member, and the court did not permit this.

As set forth above, section 708.310 specifically authorizes a charging order against the interest of a member to an LLC when the LLC is not a party to the underlying judgment.

Moreover, in not permitting the levy on the company asset, Evans approved the use of a charging order as an appropriate enforcement method to collect on a judgment against a member of an LLC stating:

[Corporations Code s]ection 15522, subdivision (1), establishes a method by which a creditor of a limited partner may satisfy his claim from the debtor's partnership interest through the use of a so-called charging order. In construing a virtually identical statute applicable to “non-limited” partnerships [citation], this court stated that “charging orders on partnership interests have replaced levies of execution as the remedy for reaching such interests.” [Citation.]

Evans v. Galardi, supra, 16 Cal.3d at p. 310.

RULING: The application of judgment creditor Rodrigo L. Valdez, Jr., for an order: (1) charging the interest of judgment debtor Stephen Perkins in a limited liability company known as Brianna’s Properties, LLC with payment of the unpaid balance of the judgment entered in this action that currently totals $139,716.68 exclusive of interests and costs; and (2) directing the limited liability company and all members thereof to pay any money or property due or to become due to the judgment debtor directly to the judgment creditor is GRANTED.

Moving Party to give notice.

Future hearing dates:

No future hearing dates