Judge Shirley K. Watkins, Case LC104978 2022-10-14 Tentative Ruling

Judge: Shirley K. Watkins, Case: LC104978, Date: 2022-10-14 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: LC104978 Hearing Date: October 14, 2022 Dept: T

TENTATIVE RULINGS ON MOTIONS TO QUASH

1. MOTION TO QUASH SUBPOENA TO D&G ESCROW BY JUDGMENT DEBTOR ALEXANDER EVEREST IS DENIED. THE EVIDENCE PRESENTED BY THE JUDGMENT CREDITOR IS COMPELLING BASED ON THE EVIDENCE BELOW. JUDGMENT CREDITOR HAS A RIGHT TO TRACE THE OWNERSHIP OF THE PROPERTY.

The facts set forth in the opposition showing relevance of the information sought includes:

Principal Management Services, LLC, a Montana entity (“PMS”), is believed to be solely owned and operated by Judgment Debtor, Alexander Everest. This is based on documents received pursuant to a subpoena issued to Stewart Title of California and Umpqua Bank. (Decl. Shem-Tov, ¶¶ 3-4.) The documents received from Stewart Title of California concern the same transaction as the documents sought from the escrow company here.

On July 31, 2018, the Property was purchased by Judgment Debtor, and, on his request, title was taken in the name of PMS. (Decl. Shem-Tov, ¶5.)

On May 6, 2019 (while this matter was pending and a few months before trial), PMS transferred the Property to Kenneth Carver. The quitclaim deed was executed by Judgment Debtor as the managing member of PMS. (Decl. Shem-Tov, ¶6.) It is believed that Mr. Carver paid no consideration for this transfer, making the transfer fraudulent as to Judgment Debtor’s creditors. In fact, Mr. Carver testified that he did not recall this transfer. (Decl. Shem-Tov, ¶7.) Mr. Carver also testified that he did not recall paying property taxes, insurance premiums or utility bills while he owned the Property. He further testified that the Property was being rented, but that Judgment Debtor was collecting the rents and that he, Mr. Carver, did not recall receiving any rental income. (Decl. Shem-Tov, ¶8.)

On November 30, 2021, Mr. Carver transferred the Property to Lake Encino Holdings, LLC, a Delaware entity (“LEH”). Mr. Carver confirmed that the signature on the quitclaim deed transferring title from himself to LEH is his signature. (Decl. Shem-Tov, ¶9.) LEH is owned by Judgment Debtor. This is based on documents produced in response to a subpoena issued to Umpqua Bank. (Decl. Shem-Tov, ¶10.)

According to the quitclaim deed, this transfer was without consideration: “This is a bonafide gift and the grantor received nothing in return.”

THE MOTION TO QUASH IS DENIED.

CCP section 1987.2 allows the court, in its discretion, to award reasonable expenses incurred in opposing a motion to quash made without justification. The court may also award sanctions for "making without substantial justification, an unmeritorious objection to discovery," as was done here. CCP section 2023.010. Here, the court orders, pursuant to CCP sections 1987.2 and 2023.010, that Park LLP pay the reasonable amount of $1,260, payable by check or money order to the Client Trust Account of Netzah & Shem-Tov, Inc, 15260 Ventura Blvd., Suite 1850, Sherman Oaks, CA 91403 by 12/1/2022, on the grounds of discovery abuse and unmeritorious objections made with no substantial justification and the grounds stated in the opposition. The court finds that this amount is reasonable after using the lodestar method, finding that the amount expended was reasonable and necessary for this motion.

GOOD CAUSE HAVING BEEN SHOWN, IT IS SO ORDERED.

CLERK OF THE COURT TO GIVE NOTICE.

2. MOTION TO QUASH SUBPOENA TO VAL-CHRIS BY JUDGMENT DEBTOR ALEXANDER EVEREST IS DENIED. THE EVIDENCE PRESENTED BY THE JUDGMENT CREDITOR IS COMPELLING THAT THE PROPERTY WAS OWNED BY JUDGMENT DEBTOR'S COMPANY, AND A DEED OF TRUST WAS RECORDED IN FAVOR OF THE DEPONENT, VAL-CHRIS, ON WHICH THE JUDGMENT DEBTOR OBTAINED A LOAN. JUDGMENT CREDITOR HAS A RIGHT TO TRACE THOSE FUNDS AND THE OWNERSHIP OF THE PROPERTY.

The facts set forth in the opposition showing relevance of the information sought includes:

On July 31, 2018, the Property was purchased by Judgment Debtor, and, on his request, title was taken in the name of PMS. (Decl. Shem-Tov, ¶¶ 4-5.)

On July 31, 2018, a deed of trust was recorded upon the Property in favor of Val-Chris Investments, Inc., the witness to whom the subpoena here was issued. (Decl. ShemTov, ¶6.) Based on this deed of trust, Judgment Debtor (or PMS) received a loan in the amount of $1,121,250. This is despite Judgment Debtor claiming in these proceedings that he has no bank accounts and no money with which to pay the judgment.

According to Judgment Creditor, it issued this subpoena to Val-Chris Investments, Inc. in an effort to investigate Judgment Debtor’s finances and assets, and satisfy the judgment entered in this case in 2019. It asserts that the subpoena seeks production of documents related to a loan secured on certain real property which Judgment Creditor believes belongs to Judgment Debtor but that has been transferred to Kenneth Carver, allegedly in his attempts to avoid creditors. The court finds that requested documents are non-privileged and relevant to Judgment Creditor’s attempts to satisfy the judgment.

THE MOTION TO QUASH IS DENIED.

Additionally, judgment in this case was entered on 10/28/2019 and plaintiff's assignee, judgment creditor, has been attempting to locate assets to attach to satisfy the judgment. Judgment Debtor Alexander Everest has filed a motion to quash on virtually every subpoena seeking to obtain business records of business with which he is affiliated. There was no reasonable basis for the motion and the court finds that it was filed in bad faith and with the intent to delay the collection process. The objections raised by defense counsel in the motion to quash, virtually identical in every other motion to quash filed against other similar subpoenas, are unmeritorious.. The most concerning of these objections is the allegation that the documents are unrelated to the Judgment Debtor Alexander Everest. The facts supporting the opposition are well stated in the opposition and are within the knowledge of Mr. Everest. The attorneys for Mr. Everest are responsible for their motion and reply. CCP section 1987.2 allows the court, in its discretion, to award reasonable expenses incurred in opposing a motion to quash made without justification. The court may also award sanctions for "making without substantial justification, an unmeritorious objection to discovery," as was done here. CCP section 2023.010. Here, the court orders, pursuant to CCP sections 1987.2 and 2023.010, that Park LLP pay the reasonable amount of $1,125, payable by check or money order to the Client Trust Account of Netzah & Shem-Tov, Inc, 15260 Ventura Blvd., Suite 1850, Sherman Oaks, CA 91403 by 12/1/2022, on the grounds of discovery abuse and unmeritorious objections made with no substantial justification and the grounds stated in the opposition. The court finds that this amount is reasonable after using the lodestar method, finding that the amount expended was reasonable and necessary for this motion.

GOOD CAUSE HAVING BEEN SHOWN, IT IS SO ORDERED.

CLERK OF THE COURT TO GIVE NOTICE.