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Republic Bank, Inc., A Utah Corporation v. Ethos Environmental

January 28, 2013

REPUBLIC BANK, INC., A UTAH CORPORATION, PLAINTIFF,
v.
ETHOS ENVIRONMENTAL, INC., A CALIFORNIA CORPORATION, DEFENDANT. MAZUMA CORP., PLAINTIFF AND JUDGMENT CREDITOR BY ASSIGNMENT,
v.
REGENECA, INC., FORMERLY KNOWN AS ETHOS ENVIRONMENTAL, INC., DEFENDANT.



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

ORDER

Pending before the Court are Plaintiff Mazuma Capital Corp.'s "Motion to Enforce Judgment and Writs of Possession and for a Finding of Contempt and for [an] Award of Attorney's Fees and Costs" (Doc. 11), and Third Party Claimant/Petitioner Greenbridge Capital Partners IV, LLC's "Petition for Hearing to Determine Third Party Claim and Disposition of Property" (Doc. 12). Mazuma's motion is DENIED, without prejudice as to enforcement of the judgment and writs of possession, but with prejudice as to the request for a finding of contempt and an award of attorney's fees and cost.

With regard to Greenbridge's motion, the Court finds that an evidentiary hearing is required, and ORDERS that the hearing be held on Monday, April 29, 2013, at 10:00 a.m.

As discussed below, the parties will be expected to present evidence on the following issues:

(1) the date when Republic/Mazuma Capital became aware that Greenbridge, not Ethos, was storing the equipment; (2) the fair rental value of the space where the equipment is being stored from that date to the present; and (3) the monetary value of Greenbridge's failure to mitigate its loss, to be offset against the fair rental value.

I. BACKGROUND

This action was brought pursuant to 28 U.S.C. § 1963, which allows parties to enforce a judgment entered by an out-of-district federal court for the recovery of money or property.

There are several entities involved in this litigation, but only two are presently before the Court: Plaintiff Mazuma Leasing of Utah, LLC ("Mazuma LLC")-a California limited liability company and the current assignee of a judgment of the United States District Court for the District of Utah-and Greenbridge Capital Partners IV, Inc. ("Greenbridge"), the owner of a large industrial building located at 6800 Gateway Park, San Diego, CA 92154 (the "property").

This litigation arises out of a lease agreement between Republic Bank, Inc. ("Republic"), Mazuma LLC's predecessor in interest, and Ethos Environmental, Inc. ("Ethos"). In March 2007, Republic leased certain industrial equipment, including large storage tanks (the "equipment"), to Ethos, and the equipment was installed at the property. At the time the equipment was installed, Ethos owned the property. (Decl. Douglas Petty (Doc. 11-3) ¶ 5; Ex. G.) However, by the time of the District of Utah judgment in 2011, Greenbridge owned the property and was leasing it to Ethos.

In 2009, Republic sued Ethos in the United States District Court for the District of Utah, claiming that Ethos had defaulted on the lease agreement for the equipment (the "Utah litigation").

In December 2010, during the pendency of the Utah litigation, Ethos breached its lease agreement with Greenbridge and abandoned the property.

On March 23, 2011, Magistrate Judge Brooke C. Wells entered a final judgment in the Utah litigation in favor of Republic (the "judgment"), ordering that Republic have and recover the leased equipment . . . ; that Republic is entitled to immediate possession of such equipment, and may sell, re-lease, or otherwise dispose of such equipment as provided in the Lease; and that Ethos immediately surrender such equipment to Republic or its agent.

Republic Bank, Inc. v. Ethos Environmental, Inc., No. 1:09cv24, slip op. at 2 (D. Utah Mar. 23, 2011). Following entry of the judgment, Republic and Ethos entered a settlement agreement on June 10, 2011, pursuant to which Ethos agreed to "immediately return the equipment to Republic by providing access to Republic to pick-up the Equipment and/or for Republic to arrange for shipping of the Equipment at Republic's own expense" (Jensen Decl. (Doc. 11-2) Ex. N at 3 (emphasis added))-notwithstanding the fact that Ethos no longer occupied the property and had breached its lease agreement with Greenbridge six months earlier.

In the months surrounding the June 10, 2011 settlement agreement with Ethos, Republic coordinated with Robert Van Boerum, who represented himself as the Chief Financial Officer for Ethos, to access the equipment for the purposes of inspecting its condition and arranging for its sale. (Peterson Decl. (Doc. 32-3) ΒΆΒΆ 7-15.) Republic communicated with Mr. Van Boerum to arrange for access to the property between April ...


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