Judge: Michael Shultz, Case: 21STCV22135, Date: 2025-05-13 Tentative Ruling
Case Number: 21STCV22135 Hearing Date: May 13, 2025 Dept: 40
21STCV22135
Employers Assurance Company v. MedCafe Westwood, LLC
[TENTATIVE] ORDER DENYING MOTION BY
JUDGMENT CREDITOR FOR AN ORDER APPLYING PROCEEDS FROM SALE OF LIQUOR LICENSE(S)
IN SATISFACTION OF JUDGMENT (TRANSFER BY RECEIVER SALE OF INTEREST IN LIQUOR
LICENSE(S) AND INJUNCTIVE RELIEF IN AID OF RECEIVER
I.
BACKGROUND
The complaint
alleges that Plaintiff contracted to provide an insurance policy for worker's
compensation coverage to Defendant. The contract authorized Plaintiff to
conduct an audit of Defendant’s records related to the 2019 policy and
recalculation of the premium. Defendant refused to permit Plaintiff to conduct
an audit and refused to make any further premium payments for the 2019 policy.
Plaintiff subsequently determined that the policy for the period at issue was
$107,144.00 and the additional premium adjustment totaled $74,649.72. Plaintiff
alleges claims for breach of contract.
On March 3,
2025, the court entered judgment by default in Plaintiff’s favor for
$247,256.21.
II. ARGUMENT
Notwithstanding
the title of the motion, Plaintiff requests the appointment of a receiver to
sell a liquor license owned by the judgment debtor to partially satisfy the
judgment. Plaintiff argues that appointing a receiver is the only means of
applying a judgment debtor’s interest in an alcohol beverage license to satisfy
a money judgment.
III. DISCUSSION
The court has
discretion to appoint a receiver to enforce a judgment where the court finds
that it is a reasonable method to “obtain the fair and orderly satisfaction of
the judgment” considering the interests of both the Judgment Creditor and the
Judgment Debtor. (Code
Civ. Proc., § 708.620.) The availability of other remedies does
not, of itself, preclude the use of a receivership, however, the Court must
consider the availability and efficacy of other remedies in determining whether
to employ this extraordinary remedy. (City
& County of San Francisco v Daley (1993) 16 Cal.App. 4th 734, 745.
See Medipro
Med. Staffing LLC v Certified Nursing Registry, Inc. (2021) 60 Cal. App. 5th 622, 628 [due to
extraordinary nature of this remedy and special costs it imposes, judges are
strongly discouraged—although not strictly prohibited—from appointing receiver
unless more intrusive oversight of receiver is necessity because other less
intrusive remedies are either inadequate or unavailable].) A court may make
such an appointment when there are reasonable grounds to believe that the
debtor or third persons have control of property that rightfully should be
subject to execution. (Morand
v Superior Court (1974) 38 Cal. App. 3d 347, 350.) It is an abuse of
discretion, however, for a judge to appoint a receiver to aid the collection of
a money judgment when there is no evidence that the judgment debtor has
obfuscated or frustrated the creditor's collection efforts and no evidence that
less intrusive collection methods are inadequate or ineffective. (Medipro
Med. Staffing LLC v Certified Nursing Registry, Inc., supra, 60 Cal.App.
5th at 624–625, 628–630 [plaintiff's evidence in this case
demonstrated only that it had encountered some difficulty in its initial
efforts to collect on its money judgment; this was insufficient to warrant
appointment of a receiver].)
A judgment
debtor’s interest in an alcohol beverage license may be applied to satisfy a
money judgment by appointing a receiver for that purpose "unless the
judgment debtor shows in the proceeding to appoint a receiver that the amount
of delinquent taxes described in Section 24049 of the Business and Professions
Code and claims of creditors with priority over the judgment creditor pursuant
to Section 24074 of the Business and Professions Code exceed the probable sale
price of the license." (Code
Civ. Proc., § 708.630.)
Plaintiff has
served the judgment debtor, and no opposition is filed.
Plaintiff
does not propose a specific person for appointment. There is no information for
the court to consider to determine whether the proposed receiver is qualified
or able to carry out the proposed enforcement of judgment. (Cal
Rules of Court Rule 3.1177.)
The
appointment of a receiver has nothing to do with applying the sale of such
license to satisfy judgment, which is what the title of Plaintiff’s motion
seeks. While it is clear that the court may appoint a receiver for this
purpose, the receiver “may exercise the powers of the licensee as necessary and
in exercising such powers shall comply with the applicable provisions of
Division 9 (commencing with Section 23000) of the Business and Professions Code
and applicable regulations of the Department of Alcoholic Beverage Control. An
application shall be filed to transfer the license to the receiver and a
temporary retail permit shall be obtained during the pendency of the
transfer." (Code
Civ. Proc., § 708.630.) Judgment creditor offers no authority that
the receiver is entitled to determine the relief requested by Plaintiff, or if
any of those proposed powers comply with applicable provisions of the Business
and Professions Code. In short, there is insufficient authority for the relief
Plaintiff seeks based on the authority and evidence provided.
IV. CONCLUSION
The
Legislative Committee Comments regarding Civil Procedure Section 708.630 states
that "The Alcoholic Beverage Control Act (commencing with Business and
Professions Code Section 23000) provides detailed procedures for the sale of
alcoholic beverage licenses which make a use of a receiver appropriate.” (Code
Civ. Proc., § 708.630, editors notes, citing Mollis
v. Jiffy-Stitcher Co., (1954) 125 Cal.App.2d 236.) Plaintiff does
not provide any of those “detailed procedures.” Accordingly, the motion is
DENIED without prejudice to Plaintiff’s refiling of the motion describing in
more detail why a receiver is required to sell the alcohol beverage license at
issue, and to include information of the qualifications of the proposed
receiver.