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Harris v. JT Hospitality, Inc.

United States District Court, N.D. California, San Jose Division

June 26, 2019

MIKEL HARRIS, Plaintiff,
JT HOSPITALITY, INC., et al., Defendants.



         Before the Court is Plaintiff's Motion to Enforce Judgment (“Motion”). Motion, ECF 102. The Court heard oral argument on Plaintiff's Motion on June 20, 2019 (“the Hearing”). For the reasons below and as stated on the record at the Hearing, Plaintiff's Motion is GRANTED as to Plaintiff's alternative request to order non-party TEJ, LLC to pay the amount owed, collectively with Defendants, and to amend the judgment to add TEJ, LLC.

         I. BACKGROUND

         In this Americans with Disabilities Act (“ADA”) action, Plaintiff Mikel Harris and Defendants JT Hospitality, Inc., dba Days Inn & Suites Santa Cruz, Pravin Patel and Naina Patel entered into a Court Enforceable Settlement Agreement (“Settlement Agreement”) on January 30, 2018. ECF 63. As part of the Settlement Agreement, Defendants agreed to pay Plaintiff and his counsel of record a total of $85, 000 in damages, attorney's fees, litigation expenses, and costs, on or before February 27, 2018. See Settlement Agreement ¶ 14.

         On March 2, 2018, Plaintiff filed a Motion to Enforce the Settlement Agreement for Failure to Pay by Defendants. ECF 71. On May 15, 2018, the Court granted Plaintiff's motion to enforce the settlement agreement, thus ordering Defendants to pay $85, 000 to Plaintiff pursuant to the Settlement Agreement. See Order on Plaintiff's Motion to Enforce Settlement Agreement, ECF 88. Also on May 15, 2018, the Court entered Judgment in favor of Plaintiff and against Defendants consistent with the terms of the parties' Settlement Agreement. See Judgment, ECF 89. However, Defendants have yet to pay the amount owed Plaintiff. See Clefton Decl. ¶ 2, ECF 102-1. On January 17, 2019, Plaintiff filed the instant Motion to Enforce Judgment, pursuant to Federal Rules of Civil Procedure 70 and 71. See Motion at 2, ECF 102.


         Federal Rule of Civil Procedure 70 provides relief for judgment creditors who require court assistance to enforce a judgment involving the performance of a specific act by the judgment debtor. See Fed. R. Civ. P. 70. Meanwhile, Federal Rule of Civil Procedure 71 provides that “[w]hen an order grants relief for a nonparty or may be enforced against a nonparty, the procedure for enforcing the order is the same as for a party.” Fed.R.Civ.P. 71. In other words, Rule 71 permits the Court to enforce a judgment against non-parties who are on notice. See Peterson v. Highland Music, Inc., 140 F.3d 1313, 1323-24 (9th Cir. 1998) (“Rule 71 was intended to assure that process be made available to enforce court orders in favor of and against persons who are properly affected by them, even if they are not parties to the action.”) (internal quotation and citation omitted).


         Plaintiff submits public records showing that Defendant Pravin Patel transferred ownership of the subject property located at 600 Riverside Avenue, Santa Cruz, California, from Defendant JT Hospitality, Inc. to non-party TEJ, LLC on July 28, 2017, approximately six months prior to execution of the parties' Settlement Agreement. See Clefton Decl. ¶ 8; Ex. 2 to Clefton Decl., ECF 102-1. The public records submitted by Plaintiff reveal that non-party TEJ, LLC is controlled by Defendant Pravin Patel. See Clefton Decl. ¶ 9; Ex. 3 to Clefton Decl., ECF 102-1.

         Plaintiff also points out that on June 14, 2018, approximately one month after the Court entered Judgment against Defendants, JT Hospitality, Inc. filed a certificate of dissolution with the California Secretary of State, stating that “[t]he corporation never incurred any known debts or liabilities, ” see Certificate of Dissolution, Ex. 7 to Clefton Decl., ECF 102-1. Defendants Naina Patel and Pravin Patel signed this Certificate of Dissolution. See Id. Therefore, Plaintiff argues, Defendants “perjured themselves to the State of California” because at the time of dissolution Judgment (ECF 89) had been entered against JT Hospitality, Inc. See Motion at 4.

         Based on these circumstances, Plaintiff's Motion requests an order “disgorging TEJ, LLC, of its interest in the Hotel property and vesting title with a third party to sell the hotel so that relief may be effectuated, ” or, in the alternative, “[directing] the Defendants collectively, and [] TEJ, LLC, specifically, to pay the judgment owed . . . . [and] amend[ing] the judgment to add TEJ, LLC.” See Motion at 6-7. Neither Defendants nor non-party TEJ, LLC filed an opposition to Plaintiffs Motion. However, Defendant Pravin Patel appeared at the Hearing. As discussed below and at the Hearing, the Court finds that Plaintiffs alternative request for relief is warranted on the instant record.

         First, non-party TEJ, LLC had notice of Plaintiff s Motion. Defendant Pravin Patel is listed as TEJ, LLC's agent for service of process, see Ex. 3 to Clefton Decl., and Plaintiff served the instant Motion on Mr. Patel, see Proof of Service, ECF 103. Moreover, non-party TEJ, LLC appears to be “legally identified with” Mr. Patel. See Peterson, 140 F.3d at 1323-24; see also Ex. 3 to Clefton Decl. Accordingly, TEJ, LLC had notice of Plaintiff s Motion and an opportunity to respond.

         Second, the Court finds that enforcement of judgment against non-party TEJ, LLC is appropriate pursuant to Rule 71. At the Hearing, Mr. Patel represented that the subject property was owned by TEJ, LLC at the outset of this litigation and remains owned by TEJ, LLC to date. Thus, whether Mr. Patel's assertion of the ownership timeline is true, or whether the subject property was later transferred to TEJ, LLC as Plaintiff alleges, TEJ, LLC is appropriately subject to judgment against it, collectively with ...

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