Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 OPTRONIC TECHNOLOGIES, INC, 8 Case No. 5:16-cv-06370-EJD Plaintiff, 9 ORDER DENYING MOTION FOR 10 v. FURTHER CLARIFICATION NINGBO SUNNY ELECTRONIC CO., Re: Dkt. No. 644 1 LTD., et al., a 2 Defendants.

13 On April 22, 2020, Plaintiff Optronic Technologies, Inc. (“Orion”) filed a Motion for

14 || Further Clarification or, in the Alternative, for Order Declaring an Assignment of Assets to Orion

3 15 (the “Motion’’). Dkt. No. 644. On April 27, 2020, non-party Celestron Acquisition LLC GO 16 |} (“Celestron Acquisition”) filed a response opposing the motion (“Opposition”). Dkt. No. 647.

17 || Having considered the parties’ briefs, the Motion is DENIED. Z 18 On January 17, 2020, this Court issued an Order granting in part and denying in part 19 || Orion’s motion for assignment and turnover. Dkt. No. 559 (the “Assignment Order”). On January 20 || 24, 2020, Celestron Acquisition filed a motion for clarification of that order, seeking to clarify 21 || whether the accounts receivable owed by Celestron Acquisition’s wholly-owned foreign 92 || subsidiary—Celestron Global—are covered by the Assignment Order. Dkt. No. 564. On April 3 20, 2020, this Court granted Celestron Acquisition’s motion for clarification (“Order”). Dkt. No. 643. The Order stated: 5 Because the Court does not find that it has personal jurisdiction over Celestron Global, the Court may not compel Celestron Global to pay Orion. 7 Instead, and consistent with the parties’ agreement that the accounts 28 || CASE NO.: 5:16-CV-06370-EJD ORDER DENYING MOTION FOR FURTHER CLARIFICATION

1 receivable are, in fact, owed to Orion, the Court orders Ningbo Sunny to 2 assign its rights to payment from Celestron Global to Orion. 3 Lee 4 The Court clarifies that pursuant to the Assignment Order and consistent 5 with the discussion herein, Defendant Ningbo Sunny is HEREBY 6 ORDERED to assign to Orion all of its accounts, account receivable, rights 7 of payment of money, contingent rights, contract rights, deposits and 8 deposit accounts, claims against third parties, monies due from third parties, 9 Bushnell Holdings, Celestron Acquisition, Celestron Global, Hawke Sport 10 Optics LLC, Meade Instruments Corp., and Olivon Mfg. Group Ltd. up to 11 the amount of the partial judgment entered in this action in favor of Orion 12 and against Judgment Debtor on December 5, 2019 (Dkt. No. 518). 13 Order, p. 5. 14 Orion now requests that the Court “clarify that the [Order] assigned the $728,779 and any 3 15. || other property described in the [Order] to Orion, or alternatively issue an Order declaring that all 16 || Such property is ‘directly assigned’ to Orion.” Motion, p. 2. 5 17 Although “[a] court may clarify its order for any reason,” Wahl v. Am. Sec. Ins. Co., No. 5 18 08-0555-RS, 2010 WL 2867130, at *3 (N.D. Cal. July 20, 2010), “the clarification process 19 || presumes some legitimate need supporting relief, such as the existence of ambiguity or confusion 29 || that can be corrected with further explanation.” Padgett v. Loventhal, No. 5:04-cv-03946-EJD, 71 2015 WL 13753300, at *1 (N.D. Cal. May 13, 2015). No such ambiguity or confusion exists here. The Order makes clear that the Court has no authority to directly assign the assets held by 3 third-party Celestron Global to Orion or to order Clestron Global to turn assets over to Orion, as Orion requests. While the Court has authority under § 708.510(a) to order @ party over which it 95 has personal jurisdiction to assign assets to a judgment creditor, the Court does not have the 26 authority to “compel acts by third parties over whom it does not have personal jurisdiction.” 57 Glob. Money Mgmt. v. McDonnold, No. 06-cv-34, 2009 WL 3352574, at *4 (S.D. Cal. Oct. 15, 28 || CASE NO.: 5:16-CV-06370-EJD ORDER DENYING MOTION FOR FURTHER CLARIFICATION

1 2009); see also Hardy v. Hardy, 164 Cal.App.2d 77, 79 (1958) (while the court of one state cannot 2 || “directly affect title’ to property in another state, it can, through its coercive powers, compel a 3 || party before it to act in relation to property not within its territorial jurisdiction) (emphasis 4 || added); Cadence Design Sys., Inc. v. Pounce Consulting, Inc., No. 17-cv-04732, 2019 WL 5 3413476, at *3 (N.D. Cal. July 29, 2019) (“courts agree that third parties ‘may be ordered to 6 deliver or pay over [ | property directly to the judgment creditor . . . or to assign rights to payment 7 to the judgment creditor . . . only if [the nonresident third parties] . . . [are] subject to the g California court’s personal jurisdiction.”) (citing Rutter Group Cal. Prac. Guid. Enf. J. & Debt Ch. 9 6G-5, 7 6:1435 (2019)); Revenue Enhancement Consultants, Inc. v. Mantra Films, Inc., No. 10-cv-

10 02726 ABC, 2010 WL 11463906, at *1 (C.D. Cal. July 21, 2010) (“The Court may only compel acts by third parties over whom it has personal jurisdiction.”). " Orion does not attempt to argue that this Court has personal jurisdiction over Celestron Global. Rather, Orion broadly argues that any assignment order under Cal. Civ. Proc. Code § 708.510 “assigns the subject property to the judgment creditor by operation of law.” Motion, p. 2. It cites In re Advanced Biomedical, Inc., No. AP 14-01275-MW, 2016 WL 7188651, at *4 (B.A.P. 15 9th Cir. Dec. 2, 2016) for this proposition. In that case, the court upheld the validity of a state 16 court order that directly assigned “rights to payment of money due or to become due” to the VY judgment-creditor. /bid. The Court did not address whether a court could directly assign assets 18 || held by third parties outside of the court’s jurisdiction, or whether the court could compel those 19 |) third parties to pay the judgment-creditor. In fact, the court clarified that “[n]othing in the 20 Assignment Order purports to impact the rights of any person or entity obligated to pay.” Ibid. 21 There is no question that the funds Celestron Global is holding are owed to Orion. 22 || Celestron Acquisition has repeatedly professed its willingness to pay the funds to Orion. To the 23 extent Celestron Acquisition argues that the Order “does not permit Celestron Acquisition to 24 || deliver the funds to Orion absent Ningbo Sunny’s Assignment,” this is a mischaracterization of the 25 Order. Opposition, p.5. This Court was not presented with the question of whether Celestron 26 || Global was at liberty to transfer the funds absent a court order and did not opine on that question 27 || inthe Order. The Order merely stated that this Court could not compel Celestron Global to do so 28 || CASE NO.: 5:16-CV-06370-EJD ORDER DENYING MOTION FOR FURTHER CLARIFICATION

1 if it otherwise refuses. See Glob. Money Mgmt., 2009 WL 3352574, at *4 (“The Court can only 2 || order [defendant] to assign his rights in and to the property or payments. If the third parties do not 3 make payment to [plaintiff], Plaintiff will have to bring an action against them in a court that has 4 || personal jurisdiction over them.”). 5 The Court acknowledges that Ningbo Sunny has failed to comply with this Court’s orders 6 in the past. However, the Order itself is not ambiguous in directing to Ningbo Sunny to do so. If 7 Ningbo Sunny fails to comply with the Order by assigning its accounts receivable and other assets g covered by the Order to Orion, Orion may bring an appropriate motion for contempt. 9 IT IS SO ORDERED. Dated: May 8, 2020 sD. 11 EDWARD J. DAVILA 12 United States District Judge

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