Judge: Katherine Chilton, Case: 18STLC08285, Date: 2022-11-07 Tentative Ruling

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Case Number: 18STLC08285     Hearing Date: November 7, 2022    Dept: 25

PROCEEDINGS:      MOTION FOR ORDER OF ASSIGNMENT OF PAYMENTS, FOR ORDER RESTRAINING JUDGMENT DEBTOR FROM ASSIGNING OR OTHERWISE DISPOSING OF THE RIGHT TO PAYMENT, FOR ORDER COMPELLING ACCOUNTINGS  

MOVING PARTY:   Judgment Creditor American Contractors Indemnity Company

RESP. PARTY:         None

MOTION FOR ASSIGNMENT ORDER

(CCP §§ 708.510, 708.520)

TENTATIVE RULING:

Judgment Creditor American Contractors Indemnity Company’s Motion is GRANTED AS SET FORTH HEREIN.  A restraining order is also issued preventing Judgment Debtor Peter DeMaria from assigning or otherwise disposing of his right to payments received from Steelblox, LLC.  Lastly, Judgment Creditor’s request for an accounting from Debtor on the first of every other month to ensure compliance with the Court’s orders is GRANTED.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300)                 OK

[X] Correct Address (CCP §§ 1013, 1013a)                                                 OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b))                     OK

OPPOSITION:          None filed as of November 3, 2022                        [   ] Late                      [X] None

REPLY:                     None filed as of November 3, 2022                        [   ] Late                      [X] None

ANALYSIS:

I.                Background

On June 8, 2018, Judgment Creditor American Contractors Indemnity Company (“Creditor” or “ACIC”) filed an action against Judgment Debtor Peter DeMaria (“Debtor” or “DeMaria”) for breach of contract and common counts.  Following Debtor’s failure to respond, default was entered against him on August 23, 2018.  (8-23-18 Request for Entry of Default.)  On September 25, 2018, default judgment of $18,552.17 was entered against Debtor.  (9-25-18 Judgment.)  Creditor mailed a notice of entry of judgment to Debtor on October 9, 2018.  (10-10-18 Notice of Entry of Judgment.)

On July 26, 2022, Creditor filed the instant Motion for Order of Assignment of Payments, for Order Restraining Judgment Debtor from Assigning or Otherwise Disposing of the Right to Payments, and for Order Compelling Accountings (the “Motion”).

No opposition has been filed.

II.              Legal Standard

            Code of Civil Procedure, section 708.510(a) states, in relevant part:

(a) Except as otherwise provided by law, upon application of the judgment creditor on noticed motion, the court may order the judgment debtor to assign to the judgment creditor or to a receiver appointed pursuant to Article 7 (commencing with Section 708.610) all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments, including but not limited to the following types of payments:

(1) Wages due from the federal government that are not subject to withholding under an earnings withholding order.

                        (2) Rents.

                        (3) Commissions.

                        (4) Royalties.

                        (5) Payments due from a patent or copyright.

                        (6) Insurance policy loan value.

            (Code Civ. Proc., § 708.510(a).) (Italics added.)

Code of Civil Procedure section 708.510(c), further provides:

[I]n determining whether to order an assignment or the amount of an assignment pursuant to subdivision (a), the court may take into consideration all relevant factors, including the following:

(1) The reasonable requirements of a judgment debtor who is a natural person and of persons supported in whole or in part by the judgment debtor.

(2) Payments the judgment debtor is required to make or that are deducted in satisfaction of other judgments and wage assignments, including earnings assignment orders for support.

(3) The amount remaining due on the money judgment.

(4) The amount being or to be received in satisfaction of the right to payment that may be assigned.

            (Code Civ. Proc., § 708.510(c).)

Construing all the applicable statutes together, it seems clear that the “assignment order” contemplated by Code of Civil Procedure § 708.510, et seq. must include a court order that assigns a right to payment outright (not simply an order directing the judgment debtor to do so).

The Court may also issue “an order restraining the judgment debtor from assigning or otherwise disposing of the right to payment that is sought to be assigned” “upon a showing of need for the order.” (Code Civ. Proc., § 708.520(a), (b).)

III.            Discussion

Judgment Creditor’s counsel provides his declaration stating that Debtor has not made any payments toward the ACIC judgment and there remains an outstanding balance of $27,784.35, including post-judgment attorney’s fees, costs, and interest.  (Mot. p. 2; Murray Decl. ¶¶ 2, 12-13, Ex. 9.)

            Creditor seeks an assignment order directing payments due from Steelblox LLC’s accounts to Debtor “to the extent necessary to fully pay and satisfy the judgment entered in this case on September 25, 2018.”  (Mot., pp. 1-2.)  ACIC also moves for an order restraining Debtor or “any servant, agent, employee, attorney, or anyone else acting on his behalf, or jointly with him, from encumbering, assigning, disposing or spending any portion of Mr. DeMaria’s income payments from Steelblox, LLC or out of Steelblox, LLC’s account(s) and all rights to payment thereunder.”  (Ibid. at p. 2.)  Finally, ACIC requests that the Court use its discretionary power under Code of Civil Procedure § 187 to compel Debtor to provide an accounting, every other month, to monitor his activity and ensure compliance with the Court’s orders.  (Ibid.)

            On September 25, 20218, the Court entered default judgment against Debtor for $18,552.17.  (Ibid. at p. 3, 9-25-18 Judgment.)  Despite its attempts, Creditor has not been successful in collecting the judgment from Debtor.  (Mot. p. 3.)  ACIC believes that Debtor is receiving payments from Steelblox LLC based on communications with its founder, CFO, and Agent for Service of Process Alfred Harris and because DeMaria is listed on the company’s website as the Co-Founder and CEO.  (Ibid.; Murray Decl. ¶ 3, Ex. 2.)

            Creditor states that on April 25, 2022, the Ventura County Sheriff’s Office served Steelblox LLC with ACIC’s Earnings Withholding Order.  (Mot. p. 4; Murray Decl. ¶ 4.)  Steelblox LLC failed to return the employer’s return, so the Sheriff sent a Request for Employer Return on May 16, 2022.  (Ibid.; Murray Decl. ¶ 4, Ex. 3.)  Steelblox did not respond, so on June 8, 2022, ACIC sent a demand letter for the return via certified mail to Steelblox LLC’s Agent for Service of Process, Alfred Harris.  (Mot. p. 4; Murray Decl. ¶¶ 5-6, Ex. 5.)  Harris signed the domestic return receipt on June 11, 2022, and returned it to Creditor’s counsel, but did not provide the employer’s return.  (Mot. p. 4; Murray Decl. ¶¶ 6-7; Ex. 5.)  On July 5, 2022, ACIC, through its counsel’s paralegal, sent an email to Steelblox LLC with the ACIC’s demand letter and request that the employer’s return be completed and returned to the Sheriff’s Office and Creditor’s counsel.  (Mot. p. 4; Murray Decl. ¶ 7, Ex. 6.)  On July 6, 2022, Harris responded stating that DeMaria is not a W2 employee of Steelblox LLC.  (Murray Decl. ¶ 8, Ex. 7.)  Harris did not respond to follow emails.  (Murray Decl. ¶ 9, Ex. 8.)  Creditor argues that since DeMaria is not a W-2 employee, an earnings withholding order would be an ineffective means of collecting the judgment.  (Mot. p. 4.)

            Creditor also argues that DeMaria is being paid by Steelblox and “it is vital that the Court restrain him from attempting to assign the rights to or otherwise dispose of the payments that ACIC now seeks to be assigned.”  (Mot. pp. 5-6.)  According to Creditor, “no other assignment of the right to receive the payments Mr. DeMaria is receiving herein exist, nor is there any other assignment of the right to receive those payments which was in existence prior to ACIC’s judgment.”  (Murray Decl. ¶ 11.)

            ACIC requests an order that Steelblox LLC send all payments due to DeMaria directly to Creditor’s counsel at Lanak & Hanna, P.C., 625 The City Drive South, Suite 190, Orange, California 92868.  (Murray Decl. ¶ 14.)

            Finally, Creditor requests that the Court use its discretionary powers under Code of Civil Procedure § 187 to order “DeMaria to file and serve an account on the first of every other month, with supporting documentation.”  (Mot. p. 6.)  Given that Mr. DeMaria is one of four people associated with Steelblox LLC, “there is a significant threat that it would be impossible to determine if payments, of the type sought to be assigned here, were improperly paid to Mr. DeMaria when, in reality, those payments should have been applied to ACIC’s judgment.”  (Ibid.)  Creditor believes this would be a more effective and efficient method than continuously conducting a judgment debtor’s examination.  (Ibid.)

            Based on the above, the Court finds it appears Debtor may receive payments from Steelblox LLC.  Thus, Creditor’s request for an assignment order for payments to Debtor from Steelblox LLC is GRANTED.  Creditor’s requests for an order restraining Debtor from assigning his rights to payments received from Steelblox LLC or otherwise disposing of that income and for an accounting from Debtor every other month to ensure compliance with the Court’s orders pursuant to the Court’s discretionary powers under Code of Civil Procedure § 187 are also GRANTED.

IV.           Conclusion & Order

For the foregoing reasons,

Judgment Creditor American Contractors Indemnity Company’s Motion is GRANTED AS SET FORTH HEREIN.  A restraining order is also issued preventing Judgment Debtor Peter DeMaria from assigning or otherwise disposing of his right to payments received from Steelblox, LLC. Lastly, Creditor’s request for an accounting from Debtor every two months to ensure compliance with the Court’s orders is GRANTED.

Moving party is ordered to give notice.