Judge: Katherine Chilton, Case: LAM16K10602, Date: 2023-04-19 Tentative Ruling

Case Number: LAM16K10602    Hearing Date: April 19, 2023    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 issued preventing Judgment Debtor Lawrence Montgomery from assigning or otherwise disposing of his right to payments received from E.L. Investment Development Group, LLC.  Lastly, Creditor’s request for an accounting from Debtor every two months 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 April 16, 2023.               [   ] Late                      [X] None

REPLY:                     None filed as of April 16, 2023.               [   ] Late                      [X] None

ANALYSIS:

I.                Background

On August 23, 2016, Plaintiff American Contractors Indemnity Company (Plaintiff” or “ACIC”) filed an action against Defendant Lawrence Montgomery (“Defendant”).

On November 16, 2016, Default Judgment was entered against Defendant.

On June 24, 2021, Plaintiff/Judgment Creditor filed a Memorandum of Costs After Judgment.

A Writ of Execution was filed on July 15, 2021.

On September 7, 2022, the Court denied Defendant/Debtor’s Motion to Quash, filed on July 5, 2022.  (9-7-22 Minute Order.)

On January 18, 2023, Plaintiff/Creditor ACIC 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 (“Motion”).

II.              Legal Standard

Code of Civil Procedure § 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 § 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 ACIC seeks an assignment order “directing payments made by E.L. Investment Development Group, LLC or out of E.L. Investment Development Group, LLC’s account(s) to Judgment Debtor…to be assigned to ACIC, to the extent necessary to fully pay and satisfy the judgment entered in this case on November 16, 2016.”  (Mot. p. 2.)  ACIC also requests that the Court order Montgomery to turn over any payments made by or out of E.L.’s accounts to him to ACIC.  (Ibid.)  Moreover, ACIC 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 Montgomery’s income payments from E.L. Investment Development Group, LLC or out of E.L. Investment Development Group, LLC’s account(s) and all rights to payment thereunder.”  (Ibid.)

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. at p. 3.)

On November 16, 2016, judgment was entered in favor of Creditor ACIC and against Debtor Montgomery in the amount of $13,299.12.  (Murray Decl. ¶ 2, Ex. 1.)  Judgment Creditor’s counsel states that Debtor has not made any payments toward the ACIC judgment and there remains an outstanding balance of $26,102.88, including post-judgment attorney’s fees and costs and interest.  (Murray Decl. ¶¶ 7-8, Ex. 5; 1-18-23 Mem. of Costs.)

Counsel explains that “Montgomery is listed as a member of and agent for service of process for E.L Investment Development Group, LLC” in the company’s Statement of Information.  (Murray Decl. ¶ 3, Ex. 2.)  Moreover, on June 3, 2022, ACIC issued a Deposition Subpoena to Citibank, N.A. for production of business records related to E.L.  (Ibid. at ¶ 4.)  Debtor attempted to quash the subpoena and, in his motion, admitted to having an interest in E.L.  (Ibid. at ¶ 5, Ex. 3.)  Debtor’s motion was denied, and Citibank produced the records, which show that Montgomery received checks for the total amount of $35,000 from E.L. for “real estate investment.”  (Ibid. at ¶ 6, Ex. 4; Mot. p. 4.)  ACIC argues that a wage garnishment would be ineffective because Montgomery “does not take a regular wage or work a regular wage-paying job.”  (Mot. p. 5.)  ACIC requests an order that E.L. send all payments due to Montgomery directly to Creditor’s counsel at Lanak & Hanna, P.C., 625 The City Drive South, Suite 190, Orange, California 92868.  (Murray Decl. ¶ 9.)

            Creditor also argues that “it is vital that the Court restrain [Montgomery] from attempting to assign the rights to or otherwise dispose of the payments that ACIC now seeks to be assigned.”  (Mot. p. 6.)

            Finally, Creditor requests that the Court use its discretionary powers under Code of Civil Procedure § 187 to order “Montgomery to file and serve an accounting on the first of every other month, with supporting documentation.”  (Mot. p. 7.)  Given that Montgomery is one of three people associated with E.L., “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 Montgomery 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 that Debtor may be receiving payments from E.L. Investment Development Group, LLC.  Thus, the Court makes the following orders.

Creditor’s request for an assignment order for payments to Debtor from E.L. Investment Development Group, LLC is GRANTED.  Creditor’s request for an order restraining Debtor from assigning his rights to payments received from E.L. or otherwise disposing of that income is GRANTED.  Finally, Creditor’s request 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, is 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 issued preventing Judgment Debtor Lawrence Montgomery from assigning or otherwise disposing of his right to payments received from E.L. Investment Development Group, 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.