Judge: Peter A. Hernandez, Case: KC070500, Date: 2022-09-20 Tentative Ruling

Case Number: KC070500    Hearing Date: September 20, 2022    Dept: O

The hearing on Plaintiff/Judgment Creditor Art Weiss, Inc.’s Motion for Charging Order is CONTINUED to November 29, 2022 at 9:30 a.m.

Background   

Plaintiff Art Weiss, Inc. (“Plaintiff”) alleges as follows: Plaintiff is the owner of the real property located at 13450 Brooks Drive, Unit A, Baldwin Park, CA 91706 (“Premises”). On or about May 23, 2017, Plaintiff leased the Premises to Defendant NRD, LLC (“NRD”) for a two-year term; Defendant Avshalom Cohen aka Abe Cohen (“Cohen”) executed a guaranty on that date. NRD returned possession of the Premises before the expiration of the lease, failed to pay rent, and failed to repair and maintain the Premises and other necessary systems of the Premises.

On March 10, 2020, Plaintiff filed a First Amended Complaint, asserting causes of action against NRD, Cohen and Does I-III for:

1.                  Common Counts

2.                  Breach of Contract

3.                  Breach of Written Guaranty

On February 16, 2021, NRD’s and Cohen’s defaults were entered; that day, Plaintiff dismissed Does I-III, without prejudice.

On May 26, 2021, default judgment was filed.

On June 14, 2021, an abstract of judgment was issued. On January 31, 2022, a writ of execution was issued.

Legal Standard

“If a money judgment is rendered against a partner or member but not against the partnership or limited liability company, the judgment debtor’s interest in the partnership or limited liability company may be applied toward the satisfaction of the judgment by an order charging the judgment debtor’s interest pursuant to Section 15907.03, 16504, or 17705.03 of the Corporations Code.” (Code Civ. Proc., § 708.310.)

“On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor’s transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.” (Corp. Code § 17705.03, subd. (a).)

“To the extent necessary to effectuate the collection or distributions pursuant to a charging order in effect under subdivision (a), the court may do any of the following: (1) Appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made. (2) Make all other orders necessary to give effect to the charging order. (3) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a member, and is subject to Section 17705.02.” (Corp. Code § 17705.03, subd. (b).)

Discussion

Plaintiff/Judgment Creditor (“Judgment Creditor”) moves the court for an order charging Cohen’s interest in the limited liability company known as Bezrat Hashem, LLC (“Bezrat Hashem”) and directing Bezrat Hashem to pay any distributions made to Cohen to Judgment Creditor in order to satisfy the judgment entered by the court in this action. Judgment Creditor’s motion indicates that it is supported by a declaration from its counsel (Motion, 2:5); however, the court is not in receipt of same.

Accordingly, the court will briefly continue the hearing on the motion, to November 29, 2022 at 9:30 a.m. Counsel for Judgment Creditor is to file and serve the referenced declaration forthwith.

Counsel for Judgment Creditor is to provide notice.