United States District Court, C.D. California
HENDRICKS & LEWIS PLLC, a Washington professional limited liability company, Plaintiff,
GEORGE CLINTON, an individual, Defendant.
KATHERINE HENDRICKS, HENDRICKS & LEWIS PLLC, Seattle, Washington, MARY H. HAAS, DAVIS WRIGHT TREMAINE LLP, Los Angeles, California, Attorneys for Plaintiff, HENDRICKS & LEWIS PLLC.
[PROPOSED] FINDINGS AND CONCLUSIONS ON MOTION FOR ASSIGNMENT ORDER, RESTRAINING ORDER, AND DOCUMENT TURNOVER ORDER
OTIS D. WRIGHT, II, District Judge.
This matter originally came before the Court on Plaintiff and Judgment Creditor Hendricks & Lewis PLLC's ("H&L") Motion for Assignment Order, Restraining Order, and Turnover Order filed on December 27, 2010. ( See ECF No. 5.) The Court denied H&L's motion on September 27, 2011, and H&L appealed. (ECF Nos. 171, 193.) In response to the Order of the Ninth Circuit directing this Court to provide its reasons for denying H&L's motion ( see ECF No. 251), on March 27, 2014, the Court stated that if the matter was remanded, the Court would reconsider its prior order and would grant H&L's motion (ECF No. 252). On April 15, 2014, the Ninth Circuit therefore remanded this matter for further proceedings. (ECF No. 254.) At the Court's direction, the parties provided supplemental briefing on H&L's motion and having considered that briefing as well as the parties' original briefing and argument on the motion, the Court makes the following findings of fact and conclusions of law.
II. FINDINGS OF FACT.
1. On May 28, 2010, the United States District Court for the Western District of Washington entered judgment in favor of H&L and against Defendant and Judgment Debtor George Clinton for $1, 675, 639.82. Pursuant to 28 U.S.C. § 1963, H&L registered that judgment in this District on August 10, 2010. (ECF No. 1.)
2. As of December 10, 2010, H&L had collected a total of $47, 925.79 on the judgment from executions and levies in the United States District Courts for the Western District of Washington and the Northern District of California. As of September 12, 2014, the amount collected on the judgment totaled $395, 989.76, leaving a balance due of $1, 304, 340.72, including accrued interest. H&L has not received any payments on the judgment since April 2013, when it collected $20, 409.20 from a garnishment of Clinton's royalties from Broadcast Music, Inc. ("BMI") in the United States District Court for the Middle District of Tennessee.
3. All of the payments collected on the judgment to date have been the result of H&L's judgment enforcement actions. Clinton has made no voluntary payments on the judgment unconnected to H&L's judgment enforcement efforts since the judgment was entered in May 2010.
4. H&L has two other pending judgment enforcement actions. One involves an order from the United States District Court for the Western District of Washington appointing a receiver and directing the sale of four copyrights in sound recordings owned by Clinton that is currently on appeal. The other action involves claims relating to H&L's June 2013 garnishment of Clinton's BMI royalties in the United States District Court for the Middle District of Tennessee.
5. On December 27, 2010, H&L filed a Motion for Assignment Order, Restraining Order, and Turnover Order seeking an order assigning to it royalty payments due or to become due Clinton from specific third parties and Clinton's business entities under CAL. CIV. PROC. CODE § 708.510. H&L also sought an order restraining Clinton from assigning or otherwise disposing of those rights to payment sought to be assigned under CAL. CIV. PROC. CODE § 708.520 and requiring him to provide documentation of those rights to payment under CAL. CIV. PROC. CODE § 699.040. (ECF No. 5.)
6. In its original motion, H&L sought an assignment of Clinton's royalty payments due or to become due from the following third-party payors: UMG entities (Universal Music Group, Inc.; Universal Music Group; and UMG Recordings, Inc.); Capitol Records entities (Capitol Records; Capitol Records Group; Capitol Records, Inc.; Capitol Records, LLC; and Capitol Records North America); EMI entities (EMI Music; EMI Music North America; EMI-Stone Diamond Music Corporation; EMI Music Publishing; EMI Longitude Music; and EMI Group Limited); BMI; Cafepress.com; Evan M. Greenspan, Inc. License Trust; Jobete Music Company, Inc.; AARC, Royalty Distribution; and SoundExchange. (ECF No. 5.)
7. H&L's motion also sought an assignment of royalties due from the following Clinton entities: P-Funk, Inc. (a California entity); Clijo Productions, Inc. (a California entity); Disc and Dat, Inc. I (a California entity); Disc and Dat, Inc. II (a California entity); What Production Company, Inc. (a Florida entity); Tick Free Music Publishing, Inc. (a Florida entity); The Dog In Me, Inc. (a Florida entity); The C Kunspyruhzy, LLC (a Florida entity); PFunk Nation Celebration, Inc. (a Florida entity); Egmitt (a Michigan entity); A Scoop of Poop Productions, Inc. (a Michigan entity); and Exoskeletol Music (a trade name). (ECF No. 5.)
8. At the time H&L filed its original motion in December 2010, all of the Clinton entities, with the exception of The C Kunspyruhzy, LLC, were suspended or dissolved. In June 2014, Clinton reinstated A Scoop of Poop Productions, Inc., a Michigan corporation, which had been administratively dissolved for 16 years, since July 1998. All of the other Clinton entities remain suspended, dissolved, or otherwise inactive as of September 9, 2014, with the exception of The C Kunspyruhzy, LLC, which remains active.
9. In its supplemental briefing on its assignment motion, H&L refined its request for relief and now seeks an assignment only of the royalties due or to become due to Clinton-directly or indirectly through his entities-from the following third-party royalty payors: (i) UMG entities (Universal Music Group, Inc.; Universal Music Group; and UMG Recordings, Inc.); (ii) Capitol Records entities (Capitol Records; Capitol Records Group; Capitol Records, Inc.; Capitol Records, LLC; and Capitol Records North America); (iii) EMI entities (EMI Music; EMI Music North America; EMI-Stone Diamond Music Corporation; EMI Music Publishing; EMI Longitude Music; and EMI Group Limited); and (iv) SoundExchange.
III. CONCLUSIONS OF LAW.
1. H&L's judgment was registered in this District under 28 U.S.C. § 1963 and it therefore has "the same effect as a judgment of the district court of the district where registered and may be enforced in like manner." 28 U.S.C. § 1963. Under FED. R. CIV. P. 69, California law governs this judgment enforcement proceeding.
2. In California, all property of the judgment debtor is subject to enforcement of a money judgment absent a statutory exemption. CAL. CIV. PROC. CODE § 695.010(a); Ford Motor Credit Co. v. Waters, 166 Cal.App.4th Supp. 1, 8, 83 Cal.Rptr.3d 826 (2008).
3. Under California judgment enforcement law, 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[.]" CAL. CIV. PROC. CODE § 708.510(a). Royalties and "[p]ayments due from a... copyright" are rights to payment that may be assigned under Section 708.510. CAL. CIV. PROC. CODE § 708.510(a)(4), (5).
4. All relevant factors may be considered in determining whether to order an assignment and the amount of the assignment, including: (a) "[t]he reasonable requirements of a judgment debtor who is a natural person and of persons supported in whole or in part by the judgment debtor;" (b) "[p]ayments the judgment debtor is required to make or that are deducted in satisfaction of other judgments and wage assignments, including earnings assignment orders for support;" (c) "[t]he amount remaining due on the money judgment;" and (d) "[t]he amount being or to be received in satisfaction of the right to payment that may be assigned." CAL. CIV. PROC. CODE § 708.510(c).
5. The judgment debtor may claim that rights to payment sought to be assigned are exempt but must do so "by application to the court on noticed motion filed not later than three days before the date set for the hearing on the judgment creditor's application for an assignment order." CAL. CIV. PROC. CODE § 708.550(a). To support an exemption claim, the judgment debtor must execute an affidavit containing all matters set forth in CAL. CIV. PROC. CODE § 703.520(b), including a "description of the property claimed to be exempt, " a "financial statement if required by Section 703.530, " a "citation of the provision of this chapter or other statute upon which the claim is based, " and a "statement of the facts necessary to support the claim." CAL. CIV. PROC. CODE § 703.520(b)(3)-(6).
6. Section 703.530 requires a financial statement if the debtor claims an exemption "pursuant to a provision exempting property to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor[.]" CAL. CIV. PROC. CODE § 703.530(a). Section 703.530(b) specifies the required content of the financial statement, including "[a]ll sources and the amounts of earnings and other income of the judgment debtor and the spouse and dependents of the judgment debtor" and a "list of the assets of the judgment debtor and the spouse and dependents of the judgment debtor and the value of such assets." CAL. CIV. PROC. CODE § 703.530(b)(3)-(4).
7. "Failure of the judgment debtor to make a claim of exemption is a waiver of the exemption." CAL. ...