Judge: Upinder S. Kalra, Case: BC680509, Date: 2023-02-23 Tentative Ruling
Case Number: BC680509 Hearing Date: February 23, 2023 Dept: 51
Tentative Ruling
Judge Upinder
Kalra, Department 51
HEARING DATE: February
23, 2023
CASE NAME: Bernice Cheng v. Coastal LB Associates,
LLC et al.
CASE NO.: BC680509
MOTION
FOR CHARGING ORDERS
MOVING PARTY: Petitioners Caroline Cheng Jones and Diana Cheng
RESPONDING PARTY(S): None as of
February 21, 2023.
REQUESTED RELIEF:
1.
An order granting
the motion for charging orders as to the beneficial interest of Bernice Cheng
in Obispo
Associates, LLC, and Coast LB Associates LLC
TENTATIVE RULING:
1. Motion
for Charging Orders Against Beneficial Interests of Bernice Cheng in Obispo
Associates, LLC, and Coast LB Associates LLC is GRANTED.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
On October 20, 2017, Plaintiff filed a Complaint, and on
February 20, 2018, the operative First Amended Complaint (“FAC”) for:
1. involuntary dissolution of Coastal LB Associates, LLC;
1. involuntary dissolution of Clary Associates, LLC;
1. involuntary dissolution of Obispo Associates, LLC;
and
1. partition.
On March 22, 2018, Defendants filed
a Motion to Compel Arbitration.
On March 23, 20218, Defendant Arlene
Cheng filed an Answer.
On May 21, 2018, Defendants Coastal
LB Associates, LLC, Caroline C. Jones, Diana Cheng, et al. filed an Answer.
On July 17, 2019, Plaintiff filed a
Second Amended Complaint.
On September 4, 2019, Defendants
filed a Motion to Confirm Award of Court-Appointed Appraisers and Order Buyout.
On October 15, 2019, Plaintiff filed
a Third Amended Complaint.
On November 14, 2019, Defendants
Coastal LB Associates, LLC, Caroline C. Jones, Diana Cheng, et al. filed an
Answer.
On January 7, 2020, Plaintiff Arlene
Cheng filed a Notice of Appeal.
On January 8, 2020, Plaintiff
Bernice Cheng filed a Notice of Appeal.
On July 31, 2020, the Court entered
a Notice that the Appellate Order Dismissing the Appeal.
On August 10, 2021, Defendants filed
a Motion for Summary Judgment.
On September 1, 2021, the Court of
Appeal Opinion was entered, confirming the majority appraisal awarded and sett
final buyout price.
On December 6, 2021, Defendants
filed a Motion for OSC Re: Contempt.
On December 23, 2021, Plaintiff
filed a Request for Dismissal.
The current Motion for Charging
Order was filed on October 13, 2022. No opposition has been filed as of
February 21, 2023.
LEGAL STANDARD
California Code of Civil Procedure, §
708.310 provides the following:
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.
California Code of Civil Procedure, §
708.320 provides the following:
(a) A lien on a judgment debtor's
interest in a partnership or limited liability company is created by service of
a notice of motion for a charging order on the judgment debtor and on either of
the following:
(1) All partners
or the partnership.
(2) All members or
the limited liability company.
(b) If a charging order is issued,
the lien created pursuant to subdivision (a) continues under the terms of the
order. If issuance of the charging order is denied, the lien is extinguished.
Corporations Code §
17705.03 provides the following:
(a) 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.
(b) To the extent necessary to
effectuate the collection of 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.
ANALYSIS:
Petitioners Caroline Cheng Jones
and Diana Cheng move the Court to enforce two separate orders. Two money
judgments were ordered against Respondent Bernice Cheng: the first on August 5,
2022, for $3,326.00, and another on August 5, 2022, for $5,937.35, totaling
$9.263.55. (Dec. Einwwechter ¶ 3-4, Ex. A & B.) Respondent has failed to
pay this amount.
Under CCP §
708.310 and Corporate Code § 17705.03, Petitioners, as judgment creditors, can
enforce money judgments through a motion such as this one. This money judgment
orders are valid as they were ordered by the Court in August 2022. Moreover,
under CCP § 685.010(a), “interest accrues at the rate of 10 percent per annum on
the principal amount of a money judgment remaining unsatisfied.” (Motion 3: 18-19.)
Interest presently is minimal since the orders were entered in August 2022, but
“such interest will continue to accrue until the judgments are paid in full.”
(Motion 3: 21-22.)
Here, the
Court finds that despite requests for payments based on the August 2022 orders,
Respondent has failed to pay. Thus, under Corporations Code § 17705.03, the
court can enter a charging order for unsatisfied amount. The facts indicate
that Respondent Bernice Cheng is 24% owner of Obispo Associates, LLC and Coast
LB Associates. (Dec. Einwechter ¶ 6.) Therefore, the Motion for Charging Order
is GRANTED, as to the total $9,263.35.
Conclusion
For the foregoing reasons, the
Court decides the pending motion as follows:
Motion for Charging Order against Judgement Debtor’s Interest
in Obispo Associates, LLC and Coast LB Associates is GRANTED.
Moving party to give notice.
IT IS SO ORDERED.
Dated: February 23, 2023 ___________________________________
Upinder
Kalra
Judge
of the Superior Court