Judge Lynne M. Hobbs, Case Number: 20STCV04957, Date: 2024-05-23 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 20STCV04957, Date: 2024-05-23 Tentative Ruling

Case Number: 20STCV04957 Hearing Date: May 23, 2024 Dept: 61

FITNESS CLUB MANAGEMENT, INC., vs WG OXNARD, LLC, AND DOES 1 -50,

TENTATIVE

Defendant WG Oxnard, LLC’s Motion to Compel Plaintiff Fitness Club Management, Inc. to File Acknowledgment of Satisfaction of Judgment is DENIED without prejudice.

Plaintiff to give notice.

DISCUSSION

“When a money judgment is satisfied, the judgment creditor immediately shall file with the court an acknowledgment of satisfaction of judgment.” (Code Civ. Proc. § 724.030.)

If no such notice of satisfaction is filed, the judgment debtor may demand that the judgment creditor file the proper notice. (Code Civ. Proc. § 724.050, subd. (a), (b).)

If the judgment creditor does not comply with the demand within the time allowed, the person making the demand may apply to the court on noticed motion for an order requiring the judgment creditor to comply with the demand. The notice of motion shall be served on the judgment creditor. Service shall be made personally or by mail. If the court determines that the judgment has been satisfied and that the judgment creditor has not complied with the demand, the court shall either (1) order the judgment creditor to comply with the demand or (2) order the court clerk to enter satisfaction of the judgment.

(Code Civ. Proc. § 724.050, subd. (d).) A judgment creditor who fails to comply “without just cause,” the judgment creditor “is liable to the person who made the demand for all damages sustained by reason of such failure and shall also forfeit one hundred dollars ($100) to such person. Liability under this subdivision may be determined in the proceedings on the motion pursuant to subdivision (d) or in an action.” (Code Civ. Proc. § 724.050, subd. (e).)

Defendant WG Oxnard, LLC (Defendant) argues that following the entry of the stipulated judgment on June 22, 2021, the parties executed a letter agreement on November 29, 2021, to allow Plaintiff to purchase the business, with Defendant required to make certain payments to facilitate this purchase, after which an acknowledgment of satisfaction of judgment would be entered. (Stanton Decl. ¶¶ 2–7, Exh. D.) Defendant claims that it has performed all obligations requisite to satisfaction of judgment in this agreement, but that Plaintiff Fitness Club Management, Inc. (Plaintiff) has failed to file an acknowledgement of satisfaction, despite Defendant’s demand that it do so. (Stanton Decl. ¶ 8; Spiwak Decl. ¶¶ 3–4.)

Plaintiff in opposition notes that Defendant has filed another action alleging that Plaintiff has breached the same post-judgment agreement that Defendant alleges it has satisfied (RJN Exh. 1, WG Oxnard LLC v. Fitness Club Management, LASC Case No. 24STCV00215), and that Plaintiff in a cross-complaint seeks rescission of this agreement based on Defendant’s alleged fraudulent concealment of the fact that much of the gym equipment in the business’s possession had been lost in a break-in. (RJN Exh. 2, ¶¶ 11–12, 31–34.) Plaintiff thus argues that the merits of Defendant’s present motion are the subject of a previously filed and still-pending action, meaning this court ought not to grant the motion. (Opposition at pp. 4–5.)

Plaintiff presents good cause to deny the motion for the present. Defendant is entitled to an order compelling the filing of an acknowledgement of satisfaction “[i]f a money judgment has been satisfied.” (Code Civ. Proc. § 724.050, subd. (a).) Defendant here claims to have satisfied the judgment only on the basis of its satisfaction of the terms of a post-judgment agreement between the parties, an agreement that is now the subject of a pending action, and which Plaintiff alleges was fraudulently induced. Defendant in reply does not contest these facts, or argue that its satisfaction of the judgment is actually not in dispute. Defendant merely argues that it will be prejudiced by a failure to grant the motion (because a live judgment impedes its ability to obtain financing) and because Plaintiff may still seek relief under the agreement in the other action if an acknowledgement of satisfaction is filed here. (Opposition at pp. 2–3.) But Plaintiff’s cross-complaint alleges that this agreement is void because of Defendant’s fraud. (RJN Exh. 2, ¶¶ 26–37.) The very basis upon which Defendant seeks satisfaction of judgment here is therefore in dispute.

Accordingly, the motion is DENIED without prejudice.