Textron Financial Corporation v. Spanish Springs II, LLC

Wolverine contends that AKRO is not a legitimate arms-length creditor, but is owned by the King’s son, John G. King (JGK) and John E. King’s longtime business partner, and that John E. King and Carole King along with their son have engaged in a sham arrangement to shield their assets and prevent Wolverine from collecting on its judgment. AKRO contends that it is a legitimate creditor and is not part of any sham or improper scheme. AKRO further contends that it is Wolverine that is abusing the system.

Wolverine moved for leave to intervene in the action to seek to challenge the ORAP lien, which the Court granted. Wolverine filed its complaint in intervention on September 17, 2025. It does not appear the complaint in intervention has been served.

Wolverine previously challenged the ORAP lien in the San Francisco court, but that challenge was denied on the grounds that it was a collateral attack on this Court’s order, and that this court did not lack fundamental subject matter jurisdiction to enter the order such that it was void ab initio.1

Motions.

Now before the Court are two competing motions: 1) Wolverine’s motion to terminate AKRO’s ORAP lien; and 2) AKRO’s motion to extend its ORAP lien. Both motions are opposed.

Wolverine contends that AKRO’s lien should be terminated 1) on grounds that the lien on the federal judgment was entered in excess of this Court’s authority and therefore is void and invalid; and 2) that AKRO’s lien is a sham controlled by an insider for the benefit of its purported judgment debtors.

AKRO meanwhile seeks to extend its lien, contending that it has been diligently pursuing collection efforts but that its judgment remains unsatisfied.

As set forth above, service of an ORAP creates a lien on the personal property of the judgment debtor for a period of one year from the date of the order unless extended or sooner terminated by the court.” (Code Civ. Proc., § 708.110(d).) Thus, the lien will expire on its own absent an affirmative order of the Court extending the lien.

Neither the parties nor the Court identified any authority discussing the extension or termination of an ORAP lien beyond the statutory mandate, and it appears the decision is in the Court’s discretion.

The practice guide advises that “if the judgment creditor has not collected the full amount of its judgment, consider filing a timely motion to extend the duration of the lien beyond one year. The motion should include evidence that (i) the judgment creditor has diligently pursued collection of

1 Wolverine also filed involuntary bankruptcy petitions against John E. King and Carole King that were ultimately dismissed.

the judgment and (ii) any other liens held by the judgment creditor do not reach all of the judgment debtor's nonexempt personal property.” (Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2025) ¶ 6:1306.)

AKRO submits declarations from counsel, and from John E. King to show its efforts to collect on the judgment.

The Court Lacked Authority to Enter the ORAP.

For examination proceedings under California’s Enforcement of Judgments Law, “[t]he judgment creditor may apply to the proper 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(a).) A “judgment” is defined as a “judgment, order, or decree entered in a court of this state.” (Code Civ. Proc., § 680.230, emphasis added; see Code Civ. Proc., § 680.110 [definitions in tit. 9, div. 1, ch. 1, which includes § 680.230, govern the interpretation of tit. 9, which contains § 708.110].)

Code of Civil Procedure section 708.110 allows the issuance of a debtor’s examination order only to enforce judgments issued by courts of this state, which a federal court is not. The Court therefore was not authorized to issue an ORAP based upon the federal judgment.

When a judgment is registered in California under the California Sister State Money Judgments Act, it shall have the same effect as an original money judgment of the California court and may be enforced or satisfied in like manner. (Code Civ. Proc., § 1710.35.) However, the California Sister State Money Judgment Act does not apply to federal court judgments, which cannot be registered for enforcement under that act. (Code Civ. Proc., § 1710.10(c); see also Comment thereto [unlike the Uniform Act which applies to all state and federal judgments entitled to full faith and credit, section 1710.10(c) applies only to judgments of sister state courts which require the payment of money]; Ahart, Cal.

Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2025), ¶ 6:1802.1.) However, a federal judgment can be enforced by the district court in which the judgment was entered, or by registration within another district court. (See 28 U.S.C. §1963; Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2025) ¶ 6:1848.)

Under Federal Rule of Civil Procedure section 69, subdivision (a)(1), [t]he procedure on execution--and in proceedings supplementary to and in aid of judgment or execution--must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.” (Fed. Rules Civ.Proc., rule 69, 28 U.S.C.) That “rule unmistakably contemplates proceedings in federal court according to state practice and procedure, not jurisdiction in state courts.” (Duchek v. Jacobi (9th Cir. 1981) 646 F.2d 415, 417.) While that case does not foreclose concurrent state court jurisdiction to enforce a federal judgment, a plain reading of the relevant California statutes above shows that here the Court lacked authority to order the debtor’s examination.

AKRO highlights that under the venue provision for debtor examinations, Code of Civil Procedure section 708.160, subdivisions (b) and (c), an examination must take place in the court in which the money judgment is entered, but cannot be more than 150 miles from the place the examinee resides or has a place of business, and that “[i]f a person sought to be examined does not reside or have a place of business in the county where the judgment is entered, the superior court in the county where the person resides or has a place of business is a proper court for examination of the person.” AKRO contends that here, the examinee does not reside or have a place of business less than 150 miles from any district court, therefore the proper court for the examination would be the San Luis Obispo Superior Court.

Wolverine responds that this is merely a venue provision, and while California law is organized by counties and superior courts, that organization is not used in the federal district courts, therefore that provision is inapplicable. Wolverine contends that the judgment should be enforced in any district court in the Central District of California, where the judgment was entered, or registered under 28 U.S.C. section 1963 in another district. Wolverine notes that there is a federal courthouse for the Eastern District in Fresno, California, less than 150 miles from San Luis Obispo.

The Court, which is a court of general jurisdiction, does not find that it lacked fundamental subject matter jurisdiction to enter the debtor’s examination order. However, the Court does find that its examination order was not authorized under Code of Civil Procedure section 708.110 and therefore is voidable. (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 661 [When a court has fundamental jurisdiction, but acts in excess of its jurisdiction, its act or judgment is merely voidable].)

The Court declines to extend the ORAP lien and the ORAP lien shall be terminated.

Because the Court finds it was without authority to enter the ORAP, it need not discuss the parties other arguments or evidentiary objections.

ORDER (PROPOSED)

AKRO’s motion to extend its ORAP lien is denied.

Wolverine’s motion to terminate the ORAP lien is granted.

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