Judge: Michael P. Linfield, Case: BC723015, Date: 2022-09-14 Tentative Ruling

Case Number: BC723015    Hearing Date: September 14, 2022    Dept: 34

SUBJECT:                 Motion for an Assignment Order

Moving Party:          Judgment Creditor Hollywood Garden, LLC (“Hollywood”)

Resp. Party:             None

Judgment Creditor Hollywood Garden, LLC’s Motion for an Assignment Order is GRANTED as to provisions (a), (b), (c) and (d) of the proposed Assignment Order.  (See Motion, p. 6:4-20.)

I.           BACKGROUND

On September 24, 2018, Plaintiff Hollywood Garden, LLC filed a complaint against Defendants Ji Li, Yong Bai, and Does 1 through 20, inclusive, to allege the following causes of action:

1.           Breach of Operating Agreement

2.           Breach of Covenant of Good Faith and Fair Dealing

3.           Breach of Fiduciary Duty

4.           Declaratory Relief

On March 3, 2022, the Court granted Plaintiff Hollywood Garden, LLC's motion for terminating sanctions.

On June 7, 2022, the Court issued default judgment for Plaintiff Hollywood Garden LLC against Defendant Ji Li in the amount of $6,546,516.99. (Judgment, p. 2:5-13.) The Court declared that Defendant Yong Bai has no membership interest in Hollywood Garden, LLC and that any interest he purports to hold is void. (Judgment, p. 2:1-4.)

On June 27, 2022, the Court issued a writ of execution that named Ji Li as the Judgment Debtor and listed the total amount due in the amount of $6,582,428.19. (Writ of Execution, p. 1.)

On July 27, 2022, Judgment Creditor Hollywood Garden, LLC moved for a charging order against Judgment Debtor Ji Li, “based upon a judgment entered against Debtor Li, Creditor's reasonable meet and confer attempt with Debtor Li, Debtor Li's refusal to pay the judgment, Debtor Li's admitted ownership of certain limited liability and partnership interests, Debtor Li's refusal to cooperate, Creditor Hollywood's need for the charging order, as well as California Code of Civil Procedure §708.310, et seq.” (Motion, filed July 27, 2022, p. 2:1-5.) Judgment Creditor Hollywood Garden, LLC “requests a charging order and lien for the unpaid balance of the judgment on Debtor Li's interests in the following entities:

a.           Arrowhead Spring Investment Group, LLC

b.           Fox Property Holdings, LLC

c.           Global China TV Media Group, LLC

d.           Henan Yujian Building Management Co., Ltd

e.           Hollywood Garden, LLC

f.            US Medical Group, LLC

g.           Yorba Linda Garden, LLC” (Motion, filed July 27, 2022, p. 2:6-14.)

Judgment Creditor further “requests the Court order each entity and its principals to pay to Creditor's counsel any monies now due or to become due in the future to Debtor Li until the judgment is paid in full with interest or until further order of this Court.” (Motion, filed July 27, 2022, p. 2:15-17.)

On July 29, 2022, Judgment Creditor Hollywood Garden, LLC brought its Ex Parte Application for a Turnover Order in Aid of Execution against Judgment Debtor Ji Li. Hollywood “requests turnover of Debtor Li’s original securities and/or proof of ownership (stock/share certificates) to the Los Angeles County Sheriff’s Department, Civil Division, 1427 West Covina Pkwy., Rm 127, West Covina, CA 91790 in:

a.           AA Sunrise, Inc.

b.           Auspicious International Medical

c.           China TV Media Group (USA), Inc.

d.           Fox Academy, Inc.

e.           Fox Holding USA, Inc.

f.            Fox University, Inc.

g.           Global Business Accelerator, Inc.

h.           Glory Enterprise, Inc.

i.             Henan Yujian Building Management Co., Ltd

j.            HTTV Holding, Inc.

k.           HTTV Media Management, Inc.

l.             J.L. Management & Construction Corporation

m.         PLG Crafts (USA), Inc.

n.           U.S. Noah Technology Corp.

o.           US Longton, Inc.

p.           US Noah Real Estate Corp.

q.           Washington Mutual Resource & Investment Group, Inc.” (Ex Parte App. for a Turnover Order, filed July 29, 2022, p. 2:1-20.)

On August 1, 2022, Judgment Debtor Ji Li opposed Judgment Creditor Hollywood Garden, LLC’s Ex Parte Application.

On August 2, 2022, the Court granted Judgment Creditor Hollywood Garden, LLC’s Ex Parte Application for a Turnover Order in Aid of Execution against Judgment Debtor Ji Li.

On August 15, 2022, Judgment Creditor Hollywood Garden, LLC moved the Court for an assignment order against Judgment Debtor Ji Li.

On August 30, 2022, the Court granted Judgment Creditor Hollywood Garden, LLC’s Motion for a Charging Order against Judgment Debtor Ji Li. “Hollywood requests the Court order Debtor Li and any noticed third party to assign Debtor Li’s present and future income interests in the following sources of payment to Creditor Hollywood until the judgment is paid or until further order of the Court.

a.           AA Sunrise, Inc.

b.           Auspicious International Medical

c.           China TV Media Group (USA), Inc.

d.           Fox Academy, Inc.

e.           Fox Holding USA, Inc.

f.            Fox University, Inc.

g.           Global Business Accelerator, Inc.

h.           Glory Enterprise, Inc.

i.             Henan Yujian Building Management Co.

j.            HTTV Holding, Inc.

k.           HTTV Media Management, Inc.

l.             J.L. Management & Construction Corporation

m.         JWY Group, Inc.

n.           PLG Crafts (USA), Inc.

o.           U.S. Noah Technology Corp.

p.           US Longton, Inc.

q.           US Noah Real Estate Corp.

r.            Washington Mutual Resource & Investment Group, Inc.” (Assignment Motion, p. 2:7-28.)

On September 2, 2022, Judgment Creditor Hollywood Garden, LLC abandoned its appeal as to Defendant Yong Bai only. (Abandonment of Appeal, p. 1.)

The current motion is unopposed.

II.        ANALYSIS

A.          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 dues 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 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 of Civil Procedure section 708.520(a) states, in relevant part: “When an application is made pursuant to Section 708.510 or thereafter, the judgment creditor may apply to the court for an order restraining the judgment debtor from assigning or otherwise disposing of the right to payment that is sought to be assigned.” “The court may issue an order pursuant to this section upon a showing of need for the order.” (Code Civ. Proc., § 708.520(b).) 

“Except as provided in subdivision (b), when a writ, notice, order, or other paper is required to be served under this title on the judgment debtor, it shall be served on the judgment debtor instead of the attorney for the judgment debtor.” (Code Civ. Proc., § 684.020(a).)

B.          Discussion

After providing reference to Judgment Debtor Ji Li’s post-judgment actions, Hollywood “requests the Court issue an assignment order to include the following provisions.

a.           Accounts Receivable: An assignment of all monies now due or to become due in the future up to the amount of the judgment. C.C.P. §708.510(a).

b.           A Direct Assignment: A direct and absolute assignment of the proceeds to Creditor Hollywood. Specialty Labs. Inc. v. Advanced Biomedical, Inc. (In re Advanced Biomedical, Inc.) (Bankr. C.D. Cal. 2016) 547 B.R. 337.

c.           Undisclosed Accounts/Third Parties: Any undisclosed accounts/third parties are included upon receipt of notice of the assignment order. C.C.P. §708.540; Greenbaum v. Islamic Republic of Iran (C.D. Cal. 2008) 782 F. Supp. 2d 893.

d.           Deposit Accounts: An assignment of any deposit account proceeds and/or records in which Debtor Li is a signatory and/or has used funds for his own benefit. In re Estate of Marcos Human Rights Litig. (D. Haw. 1995) 910 F. Supp. 1470.

e.           Accounting. Require that Debtor Li file quarterly reports on his income, if any, subject to the assignment order. This reduces litigation costs and court time as the reporting eliminates having to bring Debtor and third parties into Court to force accountings.

f.            Constructive Trust. Impose a constructive trust on monies due to Creditor under the assignment order. This protects Creditor and Debtor with express rights of a constructive trust/fiduciary, which may already be implied under the assignment statute.” (Assignment Motion, MPA, p. 5:18-28, 6:2-20; Exhibit List, Exs. 1, 2, 21; Sampson Decl., ¶¶ 2-10.)

The Court finds no evidence that Judgment Debtor Ji Li has paid the balance on the $6,546,516.99 judgment.  This motion is unopposed.

The Court GRANTS the motion as to requests (a), (b), (c) and (d) above.

III.     CONCLUSION

Judgment Creditor Hollywood Garden, LLC’s Motion for an Assignment Order is GRANTED as to requests (a), (b), (c) and (d) above.