Judge: Mel Red Recana, Case: BC444702, Date: 2024-09-23 Tentative Ruling

Case Number: BC444702    Hearing Date: September 23, 2024    Dept: 45

Superior Court of California

County of Los Angeles

Hearing date: September 23, 2024

Moving Party: Plaintiff Alfredo Garcia

Responding Party: None

Motion for Order Reassigning Judgment Back to Alfredo Garcia        

The Court considered the moving papers. Opposition and reply papers were not filed.

            The motion is GRANTED.

Background

            On August 31, 2010, Plaintiff Alfredo Garcia (Plaintiff) sued Defendants Jun H. Lee, Hye J. Lee (Defendants), and Does 1 through 20, inclusive, for $4,000.00 in relief based on violations of the Unruh Civil Rights Act. (Civ. Code §§ 51, 52.)

            On April 4, 2011, the court entered default judgment as to Plaintiff’s claim against Defendants in the amount of $4,330.00, including $4,000.00 in damages and $330.00 in attorney’s fees. And on May 6, 2011, Plaintiff filed an Acknowledgement of Assignment of Judgment with the court, stating that Plaintiff was assigning his right, title, and interest in the judgment consisting of $4,330.00 to a third-party collections service, Ex Parte Collection Services, LLC (Assignee). (Civ. Proc. § 673; Acknowledgement of Assignment of Judgement, p. 2:1–3.)

            On July 5, 2016, Assignee filed a Memorandum of Costs After Judgment seeking an additional $3,244.51, including $968.00 in post-judgment costs, which consisted of $25.00 for preparing and issuing an abstract of judgment, $33.00 for recording and indexing such abstract of judgment, $900.00 in attorney’s fees for work from July 5, 2014 through July 5, 2016, and $10 in statutorily authorized costs, as well as $2,276.51 in accrued interest on the original, unpaid judgment.

            On April 17, 2020, Assignee filed another Memorandum of Costs After Judgment seeking an additional $5,353.05, including $1,443.00 in post-judgment costs, which consisted of the $968.00 previously prayed for and $475.00 in attorney’s fees for work from May 1, 2018 through April 12, 2020, as well as $3,910.05 in accrued interest on the original, unpaid judgment.

On April 17, 2020, Assignee also filed a Renewal of Judgment for $9,728.05, including $4,330.00 in the original judgment, $1,443.00 in the cited post-judgment costs, $3,910.05 in accrued interest, and $45.00 in costs for filing the renewal application. On April 28, 2020, the court approved Plaintiff’s application for the Renewal of Judgment.

On October 1, 2020, the California Secretary of State suspended Assignee’s powers and privileges based on nonpayment of taxes to the Franchise Tax Board. (Declaration of Alfredo Garcia (Garcia Decl.) ¶ 3; Exh. 1; Exh. 2.)

Discussion

On August 16, 2024, Plaintiff filed the instant motion seeking to reassign right, title, and interest in the judgment from Assignee back to Plaintiff. Plaintiff contends that, because of Assignee’s disenfranchisement by the California Secretary of State, Assignee is no longer able to fulfill its obligation to collect or enforce the judgment on Plaintiff’s behalf. (Exh. 2; Exh. 3; see Rev. & Tax. Code, § 23301; Reed v. Norman (1957) 48 Cal.2d 338, 342; Bourhis v. Lord (2013) 56 Cal.4th 320, 324; Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1603-1604; Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221 Cal.App.4th 304.) Despite this impossibility of performance, Plaintiff contends that Assignee has repeatedly failed to respond to Plaintiff’s requests to reassign judgment back to Plaintiff. (Exh. 3.) Accordingly, Plaintiff contends that the court has authority, in equity, to issue an order reassigning the judgment back to Plaintiff because, if not, the judgment will be null and void. Assignee has entered no opposition.

California courts have inherent equitable and statutory powers and jurisdiction to enforce and compel obedience to their judgments, orders, and process. (Code Civ. Proc. §§ 128(a)(4), 177, 187.; Security Trust & Sav. Bank v. Southern Pac. R.R. Co. (1935) 6 Cal.App.2d 585, 588; Brown v. Brown (1971) 22 Cal.App.3d 82, 84; Blueberry Properties, LLC v. Chow (2014) 230 Cal.App.4^th 1017, 1020–21; Goldman v. Simpson (2008) 160 Cal.App.4th 255, 263-264; Tide Water Associated Oil Co. v. Superior Court (Los Angeles) (1955) 43 Cal.2d 815, 825; Phillips, Spallas & Angstadt, LLP v. Fotouhi (2011) 197 Cal.App.4th 1132, 1142-1143; Yolanda's, Inc. v. Kahl & Goveia Comm'l Real Estate (2017) 11 Cal.App.5th 509, 514; Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.App.5th 582, 597-598; Torjesen v. Mansdorf (2016) 1 Cal.App.5th 111, 118.)

            Further, a creditor who assigns his rights and interests in collection to an assignee still “retains an equitable interest in the thing assigned.” (Clark v. Andrews, (1952) 109 Cal.App.2d 193, 199; National Reserve Co. of America v. Metropolitan Trust Co. of Cal. (1941) 17 Cal.2d 827, 831; Rauer's Law & Collection Co. v. Higgins (1946) 76 Cal.App.2d 854, 857.) Such assignment of rights to a collection assignee creates a fiduciary relationship between assignor and asignee. (Cross v. Bonded Adjustment Bureau (1996) 48 Cal.App.4th 266, 276-277; Harrison v. Adams (1942) 20 Cal.2d 646, 650.) Under California law, such a relationship binds “one of the parties … to act with the utmost good faith for the benefit of the other party.” Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 29, internal citations and quotations omitted.) Ultimately, “whether the defendant breached that duty towards the plaintiff is a question of fact.” (Marzec v. Public Employees’ Retirement System (2015) 236 Cal.App.4th 889, 915, internal citation omitted.)

            Here, justice requires that Plaintiff’s right, title, and interest in the judgment filed April 4, 2011 be reassigned back to Plaintiff from Assignee. As stated in Cross, it is well established under California law that the assignment of a right in judgment to a collection agency creates a fiduciary relationship between the assignor and assignee, and protects the assignor’s equitable interest in the judgment. (Cross, supra, at 276–77.) Further, like in Cross, Assignee Ex Parte Collections Agency failed to take appropriate actions in line with the basic obligations of agency, including an obligation to obey requests to cancel the relationship upon multiple requests of the original interest holder when the assignee is in material breach of its obligations. (Id. at 282.)

At present, Plaintiff’s evidence demonstrates that Assignee is in material breach of its obligations because it is legally unable to perform, but, despite this material breach, has repeatedly failed to respond to Plaintiff’s demands to reassign the judgment back to Plaintiff. (Exh. 3; Garcia Decl. ¶¶ 3–8.) Further, such material breach has caused the Court’s judgment to be rendered null and void in effect because no party has the legal right to collect on the judgment.

Therefore, in the interest of justice, the court GRANTS Plaintiff’s motion to order reassignment of the judgment back to Plaintiff.

            It is so ordered.

Dated: September 23, 2024

_______________________

MEL RED RECANA

Judge of the Superior Court