United States District Court, N.D. California
ORDER HOLDING MUKESH MOWJI IN CONTEMPT AND ORDER RESCHEDULING EXAMINATIONS
WILLIAM ALSUP, District Judge.
In this post-judgment-collection matter, a magistrate judge recommended holding two judgment debtors in contempt for their failure to appear for noticed judgment-debtor examinations. For the reasons stated herein, the report and recommendation is hereby ADOPTED. The judgment debtors are HELD IN CIVIL CONTEMPT until they submit to the judgment-debtor examinations rescheduled herein.
Previous orders discussed the history of this action so it will not be repeated herein (Dkt. Nos. 69, 77). The essence of this action is as follows. Plaintiff Choice Hotels International, Inc. obtained a default judgment for $129, 849 (plus post-judgment interest and costs) against a number of defendants, including Mukesh Mowji and Tarun Patel (collectively, the "judgment debtors"), in the District of Maryland. Thereafter, Choice Hotels registered that judgment here. A December 2013 order referred all matters related to post-judgment collection in this action to Magistrate Judge Jacqueline Scott Corley.
Shortly after registering the judgment, Choice Hotels moved to charge Tarun Patel's interest in Pacific Hospitality, LLC and for assignment of Patel's interest in future payments from Pacific Hospitality's business activities. Choice Hotels served Tarun Patel by mail with both motions in compliance with Section 708.510 of the California Code of Civil Procedure. The undersigned judge granted both motions. Tarun Patel's interests were charged and assigned. Final judgment entered against Tarun Patel. Choice Hotels served him by mail with the order charging and assigning his interests (Dkt. Nos. 11-14).
Next, Choice Hotels moved to charge Mukesh Mowji's interest in Lemoore Crossings, LLC. Choice Hotels served Mowji with the motion via mail. Choice Hotels subsequently moved for assignment of Mowji's right to future payments from the business activities of Pracrea, Inc. The undersigned judge granted Choice Hotel's charging motion. Final judgment entered against Mukesh Mowji, but the motion for assignment remained pending (Dkt. Nos. 18, 26-27).
After final judgment entered against Mukesh Mowji, Magistrate Judge Corley filed a report and recommendation to grant Choice Hotel's motion for assignment of Mowji's right to future payments from Pracrea. Out of an abundance of caution, the undersigned judge ordered Choice Hotels to attempt personal service of an assortment of filings, including some already served by mail, on Mukesh Mowji and Pracrea. Choice Hotels personally served Mukesh Mowji with those documents and with the sworn declaration of Justin Morong detailing successful personal service. The undersigned judge granted the assignment motion and Mowji's right to future payments was thus assigned (Dkt. Nos. 30, 32, 64).
A pair of August 2014 orders by Magistrate Judge Corley set judgment-debtor examinations for Mukesh Mowji and Tarun Patel in October 2014 (Dkt. Nos. 46, 47). The examination orders stated that failure to appear could result in arrest, punishment for contempt, or an order requiring payment of reasonable attorney's fees. Choice Hotels personally served the judgment debtors with the examination orders more than ten days before the noticed examinations - as required by Section 708.110 of the California Code of Civil Procedure - but both judgment debtors failed to appear on the noticed dates. Mowji and Patel never indicated that the noticed dates were inconvenient, attempted to reschedule their examinations, or stated that they could not or would not appear. They simply did not show (Dkt. Nos. 62, 63).
Choice Hotels then moved for an order to show cause why the judgment debtors should not be held in contempt. The judgment debtors did not respond, despite service of the motion via mail. Accordingly, Magistrate Judge Corley directed Mukesh Mowji and Tarun Patel to show cause "why they should not be found in civil contempt based on their failure to follow the Court's Examination Orders" (Dkt. No. 77). Neither judgment debtor responded, despite personal service of the order.
Then, neither judgment debtor showed up at the January 22 hearing on the order to show cause. A report and recommendation followed. In pertinent part, Magistrate Judge Corley recommended holding Mukesh Mowji and Tarun Patel in contempt (Dkt. Nos. 81, 82). Choice Hotels did not personally serve the judgment debtors with the report and recommendation until February 2015.
On February 24, 2015, Mukesh Mowji and Tarun Patel appeared in this action for the first time by timely objecting to the report and recommendation, requesting de novo review, and moving to set aside the report and recommendation. They made this initial appearance via counsel, Attorney Heather Norton, from the Law Office of Heather Norton. In support of their motion and objections, Tarun Patel stated under penalty of perjury that he intends to "fully cooperate with the present Court proceedings" and that he and Mukesh Mowji "appointed a business associate, Mr. Jayesh Patel, to act as liaison with Choice Hotels" (Patel Decl. ¶¶ 7-10). Neither Mukesh Mowji nor non-party Jayesh Patel filed declarations.
Choice Hotels timely filed a response. It argues that the judgment debtors' objections should be overruled because they neither claimed nor offered proof of their inability to comply with the examination orders and due to "the absence of any nexus between the random contacts by Jayesh Patel and the dates of the failure to ...