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Global Money Management v. McDonnold

October 15, 2009

GLOBAL MONEY MANAGEMENT, PLAINTIFF,
v.
STEVEN B. MCDONNOLD, DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER (1) GRANTING MOTION FOR ASSIGNMENT ORDER; (2) GRANTING MOTION FOR ORDER CHARGING INTEREST; (3) DENYING MOTION FOR PRODUCTION; AND (4) GRANTING IN PART AND DENYING IN PART CLAIM FOR EXEMPTIONS

Plaintiff/Judgment Creditor Global Money Management ("GMM") here moves for an Order Charging Interest and Production of Books and Records Against Defendant/Judgment Debtor Steven B. McDonnold ("McDonnold") [Docket No. 52]. GMM additionally moves for an Assignment Order [Docket No. 51]. McDonnold has also filed a Motion Asserting Claim of Exemptions [Docket No. 62]. For the reasons explained below, the Court GRANTS Plaintiff's Motion for an Assignment Order and GRANTS Plaintiff's Motion for an Order Charging Interest. The Court DENIES Plaintiff's Motion for Production of Books and Records. Lastly, the Court GRANTS in part and DENIES in part the Defendant's Claim of Exemptions.

I. BACKGROUND

On or about March 11, 2004, the Securities and Exchange Commission filed a Complaint against GMM in the Southern District of California. (Sampson Decl. ¶ 7.) The Court appointed Charles LaBella the receiver for GMM. (Id.)

On or about March 13, 2004, LaBella caused GMM to file a voluntary Chapter 11 bankruptcy petition with the United States Bankruptcy Court in the Southern District of California. (Sampson Decl. ¶ 8.) GMM initiated several bankruptcy adversary proceedings, including one against McDonnold. (Sampson Decl. ¶ 9.)

On March 27, 2006, this Court granted McDonnold's motion to withdraw the reference [Docket No. 6].

On February 27, 2008, the Court granted partial summary judgment in Plaintiff's favor. The Court denied Defendant's motion for summary judgment.

On June 24, 2008, the parties filed a stipulation for judgment in the amount of $2,063,314.00. The Court entered judgment in favor of Plaintiff against Defendant in the amount of $2,063,314.00 on July 9, 2008.

On April 13, 2009, Plaintiff filed (1) a Motion for Assignment Order and (2) a Motion for an Order Charging Interest and Production of Books and Records. On May 22, 2009, Defendant filed Oppositions to both Motions. On May 29, 2009, Plaintiff filed Replies as to both Motions.

On June 2, 2009, Defendant filed a Motion Asserting Claim of Exemptions. Plaintiff filed Objections to this Motion on June 4, 2009. On June 10, 2009, Defendant filed a Reply.

On June 26, 2009, Defendant filed a Consolidated Sur-Reply to Plaintiff's Motion for an Assignment Order and Plaintiff's Motion for an Order Charging Interest.

II. DISCUSSION

The Court considers together Plaintiff's Motion for Assignment Order, Plaintiff's Motion for an Order Charging Interest and Production of Books and Records, and Defendant's Motion Asserting Claim of Exemptions. GMM claims that McDonnold has failed and/or refused to pay any monies on the judgment entered by the Court on July 9, 2008. GMM brings its Motions to secure payment of the judgment. Defendant filed a Claim of Exemptions to exempt certain income from assignment.

A. Motion for an Assignment Order

Plaintiff moves for an assignment order pursuant to Federal Rule of Civil Procedure 69(a) and California Civil Procedure Code § 708.510. Section 708.510(a) states: Except as otherwise provided by law, upon application of the judgment creditor on noticed motion, the court may order the judgment debtor to assign to the judgment creditor . . . all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments.

Plaintiff seeks an order requiring Defendant to assign his potential interest in: (1) payments now due or to become due to him from any services provided to the Stanley (2003) Limited Partnership (the "Stanley (2003)") or contractual agreements with third party Power Air Corporation (formerly known as Fortune Partners, Inc.); (2) payments in any money or property now due or to become due to him as a discretionary beneficiary of the Stanley Trust; and (3) payments now due or to become due in accounts receivables, royalties, bonus plans, stock options, stocks, bonds, insurance proceeds severance payments, deferred compensation, and/or contract receivables due him from third party Stewart Industries, Inc. Plaintiff also asks the Court to direct third parties served with notice to pay any and all monies due under its proposed assignment order directly to Plaintiff's counsel.

Defendant opposes Plaintiff's Motion for an Assignment Order on two grounds. First, Defendant argues that the Court may not exercise jurisdiction over him for collection purposes since he is not a resident of California and the properties as to which Plaintiff seeks an assignment of rights to payment are located outside of California. Second, Defendant contends that the Plaintiff's proposed order improperly seeks to compel nonresident third parties to perform certain acts. Defendant also claims that he has no present or future rights to payment from the Stanley Trust.

As explained in more detail below, the Court first finds that it may exercise personal jurisdiction over Defendant and compel him to act in relation to his nonresident properties. Second, the Court determines that it does not have jurisdiction to directly require nonresident third parties to perform certain acts. Third, the Court applies Section 708.510(c) and finds it appropriate to assign Defendant's rights to ...


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