Judge: Nathan Vu, Case: "Olavarria vs. Nicks Ristorante & Pizzeria, LLC", Date: 2022-11-14 Tentative Ruling

Please Note: The hearing on this matter is scheduled for 8:30 A.M.

Motion for Protective Order

Defendants Elisa Fodera’s and Joe Fodera’s motion for protective order is DENIED in part and GRANTED in part.

The Court ORDERS that Defendant Elisa Fodera’s examination shall be limited to the assets and property of Defendant Nick’s Ristorante & Pizza, LLC dba Nick’s Pizza Ristorante Italiano, including debts owed by Elisa Fodera to Defendant Nick’s Ristorante & Pizza, LLC dba Nick’s Pizza Ristorante Italiano.

The Court ORDERS that the production of documents from Quiana Ramos and Frank Dibella be limited to documents that relate to Defendant Nick’s Ristorante & Pizza, LLC dba Nick’s Pizza Ristorante Italiano and Elisa Fodera’s involvement in Defendant Nick’s Ristorante & Pizza, LLC dba Nick’s Pizza Ristorante Italiano.

All of Defendants Elisa Fodera’s and Joe Fodera’s other requests for protective orders are DENIED

Defendants Elisa Fodera’s and Joe Fodera’s and Plaintiff Blanca Olavarria’s requests for sanctions are DENIED.

Defendants Elisa Fodera and Nick Fodera (Moving Defendants) move for a protective order to prohibiting the third-party judgment debtor examinations of Defendant Elisa Fodera and Third Party Quinna Ramos and Frank Dibella.

Enforcement of Judgments Law

“Detailed statutory provisions govern the manner and extent to which civil judgments are enforceable. In 1982, following the recommendations of the California Law Revision Commission, the Enforcement of Judgments Law (EJL) was enacted. The EJL appears in sections 680.101 through 724.260 and is a comprehensive scheme governing the enforcement of all civil judgments in California.” (Gonzalez v. Toews (2003) 111 Cal.App.4th 977, 980.)

An important component of the ELJ are judgment debtor examinations. “The examination is to uncover all assets the judgment debtor has that could respond to the judgment – to ‘leave no stone unturned in the search for assets . . . .” (Li v. Yan (2016) 247 Cal.App.4th 56, 66, quoting Jogani v. Jogani (2006) 141 Cal.App.4th 158, 172.) “They permit the judgment creditor to examine the judgment debtor, or third persons who have property of or are indebted to the judgment debtor, in order to discover property and apply it toward the satisfaction of the money judgment.” (Imperial Bank v. Pim Electric, Inc. (1995) 33 Cal.App.4th 540, 546–547, citation omitted, emphasis added.)

Thus, a judgment creditor may apply to the trial court “for an order requiring the judgment debtor to appear before the court, or before a referee appointed by the court, at a time and place specified in the order, to furnish information to aid in enforcement of the money judgment.” (Code Civ. Proc., § 708.110, subd. (a).)

A judgment creditor may also apply for “an order directing the third person to appear before the court, or before a referee appointed by the court, at a time and place specified in the order, to answer concerning such property or debt” where the judgment credit shows by affidavit that the third party “has possession or control of property in which the judgment debtor has an interest or is indebted to the judgment debtor in an amount exceeding two hundred fifty dollars ($250)”. (Code Civ. Proc., § 708.110, subd. (a).)

The judgment creditor may also use other methods of discovery, including “written interrogatories (§ 708.020), and requests for production of documents (§ 708.030).” (Moorer v. Noble L.A. Events, Inc. (2019) 32 Cal.App.5th 736, 743.)

A party to the action or a witness to whom a subpoena is issued may make a motion seeking “an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms and conditions as the court shall declare, including protective orders.” (Code Civ. Proc., § 1987.1, subd. (a).)

Examination of Elisa Fodera

On 07/31/2019, this court issued a default judgment in the amount of $225,000 in favor of Plaintiff Blanca Olavarria and against Defendant Nick’s Ristorante & Pizza, LLC dba Nick’s Pizza Ristorante Italiano (LLC Defendant). (ROA #350.)

However, the remaining defendants in this case – Joe Fodera, Elisa Fodera, and Nick Fodera (Individual Defendants) – obtained summary judgment as to some of the causes of action and prevailed at trial as to the remaining causes of action. (ROA #417 at p. 2.) The trial court subsequently denied Plaintiff’s motion to deem the Individual Defendants as alter egos or successors of the LLC Defendant. (Ibid.) The trial court’s rulings on alter ego and successor liability were affirmed on appeal. (Ibid.)

On 06/22/2022 and again on 08/04/2022, Plaintiff filed and served an Application and Order for Appearance and Examination (ORAP) of Elisa Fodera. (ROA #422 & #424.)

Moving Defendants now seek a protective order prohibiting the examination of Elisa Fodera, arguing that there is no judgment against Elisa Fodera, the Court of Appeal affirmed the trial court’s ruling denying imposition of alter ego or successor liability on Elisa Fodera, and Plaintiff has taken no action to amend the default judgment to add Elisa Fodera as a judgment debtor.

This argument fails because Elisa Fodera is being examined not as a judgment debtor under Section 708.110, but as a third person with knowledge of the judgment debtor’s assets under Section 708.120. Plaintiff has met the requirements of Section 708.120 by attaching a declaration asserting that Elisa Fodera “has possession or control of property in which the judgment debtor has an interest.”

Moving Defendants also assert that Elisa Fodera is no longer an operator of Nick’s Pizza, the successor entity to the LLC Defendant. This is irrelevant. Plaintiff is entitled to examine Elisa Fodera regarding the assets of the LLC Defendant, regardless whether Elisa Fodera is currently operating the successor entity Nick’s Pizza. Further, Plaintiff need not take Moving Defendants’ word that Elisa Fodera is no longer involved; that is the point of the examination – to determine whether Elisa Fodera is still involved and has knowledge of the LLC Defendant’s assets.

Moving Defendants also claim that Defendant Joe Fodera has filed for personal bankruptcy and that an automatic stay is in place. However, the automatic stay only applies to efforts to prosecute or enforce claims and judgments against the “debtor” and the property of the debtor’s bankruptcy estate. (See 11 U.S.C., § 362, subd. (a).)

In this case, the “debtor” is Joe Fodera and not Elisa Fodera or LLC Defendant. Plaintiff seeks to enforce the judgment against LLC Defendant and not Joe Fodera, and collect from the assets of the LLC Defendant and not the property of Joe Fodera’s bankruptcy estate. In fact, there is no indication that Plaintiff has even sought to examine Joe Fodera. Thus, the stay applies only to Joe Fodera and his bankruptcy estate and the ORAP served on Elisa Fodera is not stayed. (See Higgins v. Superior Court (2017) 15 Cal.App.5th 973, 981 [automatic stay in bankruptcy applies only to debtor defendant and not non-debtor co-defendant, despite filing of “Notice of Stay of Proceedings”].)

Thus, the examination of Elisa Fodera may go forward. However, the examination should be limited to “Nick’s Ristorante & Pizzeria, LLC’s, assets and . . . the property of the judgment debtor.” Under Section 708.120 and Plaintiff’s affidavit in support of the ORAP, this is the basis for the examination of Elisa Fodera. This would include debts that Elisa Fodera owes to the LLC Defendant, because that is an asset of the LLC Defendant. However, the examination may not seek information regarding Elisa Fodera’s personal finances that are unrelated to the LLC Defendant.

Documents from Elisa Fodera

Moving Defendants also seek a court order prohibiting the production of documents from Elisa Fodera. As an initial matter, Moving Defendants fail to point to any requests for the production of documents served on Elisa Fodera. Moving Defendants refer to a “deposition subpoena and the requests to produce 33 categories of documents” and state that they are attached as Exhibit 1. However, that exhibit consists only of the first ORAP filed on 06/22/2022, which is only 3 pages long and contains no document requests.

In any case, it appears that the issue is moot. Although Moving Defendants do not attach the deposition subpoena or requests to produce, they do attach Elisa Fodera’s responses and objections to the document requests as Exhibit 2. With respect to each of the 33 categories of documents, Elisa Fodera avers that “[a]fter making a diligent search and reasonable inquiry, [Elisa Fodera] indicates that she does not have the requested documents in her possession, custody, and control” and that Joe Fodera may have the documents requested.

Since Elisa Fodera does not have the documents in her possession, custody, and control, she is not required to produce them. (See Code Civ. Proc., § 2031.210, subd. (a)(2) [party may respond to document requests with a “representation that the party lacks the ability to comply with the demand for inspection, copying, testing, or sampling of a particular item or category of item”]; see also Code Civ. Proc., § 2031.230.) No purpose is served by issuing a protective order to prevent the production of documents that the requested party cannot produce and does not need to produce.

Documents from Quiana Ramos and Frank Dibella

Plaintiff served Civil Subpoena (Duces Tecum) for the production of documents upon bookkeeper Quiana Ramos and accountant Frank Dibella. Moving Defendants claim these two persons are “financial records vendors of Defendants JOE FODERA and NICK’S PIZZA.”

Contrary to the implication by Moving Defendants, the subpoenas do not relate to Joe Fodera or Nick’s Pizza. Rather, they seek only documents relating to the “Judgment Debtor,” which is defined as the LLC Defendant, and Elisa Fodera’s involvement in the LLC Defendant. The subpoenas do not make reference to Joe Fodera.

Moving Defendants make the same arguments with respect to the subpoenas served on Quiana Ramos and Frank Dibella that they made with respect to the ORAP Of Elisa Fodera. Because the subpoenas relate to the documents of the LLC Defendant and Elisa Fodera’s involvement with LLC Defendant, and for the reasons stated above, those arguments are rejected.

However, some of the document requests served on Quiana Ramos and Frank Dibella are worded broadly and vaguely enough that they could be interpreted to seek documents relating to Elisa Fodera’s personal finances. Therefore, the court will limit the production of documents to those that relate the LLC Defendant and Elisa Fodera’s involvement in the LLC Defendant, and not to Elisa Fodera’s personal finances.

Sanctions

Both the Moving Defendants and Plaintiff request sanctions with respect to the motion for protective order, ORAP, and subpoenas. If the results of a discovery motion are mixed, the trial court has the discretion to apportion sanctions or award no sanctions on any terms as may be just. (See Mattco Valley Forge v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1437.)

In this case, it would not be just to award sanctions to either party. The majority of Moving Defendants’ objections to the ORAP and subpoenas are without merit. At the same time, Plaintiff should not have worded their requests so broadly and vaguely that they risked impinging on Elisa Fodera’s personal finances.