V2Solutions, Inc. vs. MIADVG, LLC

In this case, the judgement debtor examination of Respondent's CEO took place in Orange County as permitted under Code of Civil Procedure section 708.160, the third party from which payment is sought, Tax Rise, Inc., prevailed on a Motion to Change Venue in a previous proceeding because it has its principal place of business in Orange County, and the Master Services Agreement between Petitioner and Respondent was entered into and the obligation to make payment was to be performed in Orange County.

Additionally, the California Law Review Commission specifically identifies Code of Civil Procedure section 708.160 as an exception to Code of Civil Procedure section 680.160 when assessing courts of similar jurisdiction in other counties for purposes of establishing venue for

a judgment debtor examination. (1982 Creditors’ Remedies Legislation, 16 Cal. L. Revision Comm’n Reports 1001, 1198 (1982)). Although Commission materials are not conclusive, they are, “...considered legislative history, are declarative of legislative intent, and are entitled to great weight in construing statutes.” (Redevelopment Agency v. Metropolitan Theatres Corp. (1989), 215 Cal.App.3d 808, 812; People v. Williams (1976) 16 Cal.3d 663, 667-68; Hale v. Southern Cal. IPA Med. Group, Inc. (2001), 86 Cal.App.4th 919, 927).

Finally, Code of Civil Procedure section 708.205(a) allows for the court that conducts a judgement debtor examination to, “...order the judgement debtor’s interest in the property in the possession or under control of the judgement debtor or the third person or a debt owed by the third person to the judgement debtor to be applied toward the satisfaction of the money judgement...” (Code Civ. Proc., § 708.205, subd. (a)). The rationale behind section 708.205(a) provides its own procedural context which suggests that the court conducting the judgement debtor examination is uniquely positioned to order an enforcement measure of this kind.

In light of this factual and procedural context, this court finds that the context of this case permits an exception to Code of Civil Procedure section 680.160 and allows these motions to be considered by the Orange County Superior Court. Especially since the Santa Clara Superior Court has not yet reached the issue of enforcing the judgement that resulted from the arbitration. Therefore, this court may assess the merits of the motions for an Assignment Order and Order Restraining Assignment by Judgement Creditor.

Code of Civil Procedure section 708.510(a) establishes that a judgement debtor may be ordered to assign to the judgement creditor payments including, but not limited to: “(1) Wages due from the federal government that are not subject to withholding under an earnings withholding order. (2) Rents. (3) Commissions. (4) Royalties. (5) Payments due from a patent or copyright. (6) Insurance policy loan value.” (Code Civ. Proc., § 708.510, subd. (a)). Although payments from a third party based on a subscription do not fall directly within these categories, section 708.510(a) specifically states that it is not exhaustive.

Therefore, the payments from Tax Rise to MIADVG may be assigned to satisfy the unpaid judgement to V2Solutions. In determining whether an assignment order should be made, Code of Civil Procedure section 708.510(c) establishes several factors to consider including: “(1) The reasonable requirements of a judgement debtor who is a natural person and of persons supported in whole or in party by the judgement debtor. (2) Payments the judgement debtor is required to make or that are educated in satisfaction of other judgements

and wage assignments, including earnings assignment orders for support. (3) The amount remaining due on the money judgement. (4) The amount being or to be received in satisfaction of the right to payment that may be assigned.” (Code Civ. Proc., § 708.510, subd. (c)). Since there is over $3 million owed, and MIADVG appears to have been actively exhausting bank accounts prior to the performance of bank levies, and MIADVG brings in $113,000 - $125,000 per month from Tax Rise, there are sufficient grounds to grant the Assignment Order.

Under Code of Civil Procedure section 708.520(b), an order restraining judgement debtor from assigning or disposing of the right to payment sought to be assigned may be issued upon a showing of need for the order. (Code Civ. Proc., § 708.520, subd. (b)). Essam Abdullah is the CEO of both Tax Rise, Inc. and MIADVG which means he can terminate payments from Tax Rise to MIADVG. Mr. Abdullah has indicated plans to stop payments between Tax Rise and MIADVG. These facts are evidence that MIADVG has an intent to dispose of its right to receive payments from Tax Rise which V2Solutions seeks to assign.

V2Solution has demonstrated the need for this order to restrain MIADVG from disposing of its right to payment from Tax Rise. Petitioner’s Motion for Assignment Order and Motion for Order Restraining Assignment by Judgement Debtor are GRANTED.