Trustees Of The San Diego Electrical Pension Trust v. Commwave, Inc.

Opinion

TRUSTEES OF THE SAN DIEGO Case No.: 22-cv-01556-RSH-KSC ELECTRICAL PENSION TRUST; TRUSTEES OF THE SAN DIEGO ORDER GRANTING APPLICATION ELECTRICAL HEALH AND WELFARE FOR EXAMINATION OF STANLEY TRUST; and SAN DIEGO ELECTRICAL FRANCIS SEKERKE OFFICER OF INDUSTRY ADMINISTRATIVE JUDGMENT DEBTOR [ECF No. 19] Plaintiffs, v. COMMWAVE, INC., a California corporation, Defendant. Before the Court is Plaintiffs/Judgment Creditors Trustees of San Diego Electrical Pension Trust, Trustees of the San Diego Electrical Health and Welfare Trust, and San Diego Electrical Industry Administrative Corporation (collectively, “Judgment Creditors”) Application for Examination of Stanley Francis Sekerke Officer of Judgment Debtor Commwave (the “Application”). [ECF Nos. 19, 19-1 at 2 ¶ 2.] For the reasons set forth below, the Court GRANTS the Application. On January 26, 2024, the Court entered Judgment in favor of Judgment Creditors and against Commwave Inc. (“Judgment Debtor”) in the amount of $42,102.64. [ECF Nos. 14, 19-1 ¶ 2.] The Judgment has not been vacated or reversed, and the full amount, exclusive of post judgment interest, remains outstanding. [Id.] On August 13, 2024, Judgment Creditors filed the instant Application for an order directing the appearance of Stanley Francis Sekerke as the Chief Executive Officer of Judgment Debtor. [ECF No. 19.] Judgment Creditors also request production of certain documents “subject to the ownership and control of Judgment Debtor and Mr. Sekerke.” [Id.] Federal Rule of Civil Procedure 69 authorizes federal courts to enforce a money judgment by writ of execution. Fed. R. Civ. P. 69 (a). Rule 69 provides “[t]he procedure on execution—and in proceedings supplementary to and in aid of judgment or execution— must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.” Id. Thus, in ruling on a Judgment Creditors’ Application, the Court follows California’s statutory provisions for the enforcement of judgments, known collectively as the Enforcement of Judgments Law, as set forth in California Code of Civil Procedure sections 680.010 through 724.260. Section 708.110 of the California Code of Civil Procedure authorizes a judgment creditor to conduct a judgment debtor examination and provides as follows: (a) The judgment creditor may apply to the proper court for an order requiring the judgment debtor to appear before the court, or before a referee appointed by the court, at a time and place specified in the order, to furnish information to aid in enforcement of the money judgment.

(b) If the judgment creditor has not caused the judgment debtor to be examined under this section during the preceding 120 days, the court shall make the order upon ex parte application of the judgment creditor.

(c) If the judgment creditor has caused the judgment debtor to be examined under this section during the preceding 120 days, the court shall make the order if the judgment creditor by affidavit or otherwise shows good cause for the order. The application shall be made on noticed motion if the court so directs or a court rule so requires. Otherwise, it may be made ex parte.

(d) The judgment creditor shall personally serve a copy of the order on the judgment debtor not less than 30 days before the date set for the examination. Service shall be made in the manner specified in Section 415.10. Service of the order creates a lien on the personal property of the judgment debtor for a period of one year from the date of the order unless extended or sooner terminated by the court.

(e) Except as provided in section 708.111, the order shall contain the following statement in 14-point boldface type if printed or in capital letters if typed: “NOTICE TO JUDGMENT DEBTOR. If you fail to appear at the time and place specified in this order, you may be subject to arrest and punishment for contempt of court and the court may make an order requiring you to pay the reasonable attorney's fees incurred by the judgment creditor in this proceeding. The Court finds good cause to grant Judgment Creditors’ Application. Judgment Creditors state the purpose of the examination is to determine “the location and identification of all assets of the Judgment Debtor.” [ECF No. 19-1 ¶ 5.] This purpose is permitted under California law governing judgment debtor proceedings. See Cal. Civ. Proc. Code § 708.110(a) (i.e., to “furnish information to aid in the enforcement of the money judgment.”). Moreover, Judgment Debtor appears to reside or have a place of business within the geographical limitations imposed by California’s judgment debtor statute.1 Cal. Civ. Proc. Code § 708.160(b) (“A person sought to be examined may not be required to attend an examination before a court located outside the county in which the person resides or has a place of business unless the distance from the person’s place of residence or place of business to the place of examination is less than 150 miles.”). The court may properly order an examination requiring Mr. Sekerke, as Judgment Debtor’s officer, to appear on behalf of Judgment Debtor. See Cal. Civ. Proc. Code § 708.150 (b) (“If the order to appear for an examination requires the appearance of a specified individual, the specified 1 Judgment Creditors report Mr. Sekerke “resides and/or does business in San Marcos, California” but are silent on the location of Judgment Debtor Commwave Inc. [ECF No. 19-1 ¶ 3.] The Court notes the Writ of Execution provides an address for Judgment Debtor individual shall appear for the examination and may be accompanied by one or more officers, directors, managing agents, or other persons familiar with the property and debts of the corporation, partnership, association, trust, limited liability company, or other organization.”). Finally, the Application is properly brought on an ex parte basis because Judgment Creditors have not examined Judgment Debtor within the last 120 days. [ECF No. 19-1 ¶ 4.]; Cal. Civ. Proc. Code § 708.110(b). Accordingly, the Court GRANTS Judgment Creditors’ Application for a judgment debtor examination. Judgment Creditors also seek an order “directing the production of certain documents subject to the ownership and control of Judgment Debtor”2 on the grounds “the current financial statements and records of Commwave Inc., a California corporation, are necessary for a complete examination to be conducted.” [ECF No. 19, 19-2 ¶ 5.] “For a debtor’s examination to be effective, a judgment creditor will generally need to review documents relating to the debtor’s assets.” Lee v. Swansboro Country Prop. Owners Assn., 151 Cal. App. 4th 575, 581 (2007). Judgment Creditors, however, do not provide authority for inclusion of an order for production of documents in an initial order requiring an appearance of a judgment debtor for examination under section 708.110. Moreover, under California law, such documents generally may be obtained by a demand for inspection under section 708.030 or “serv[ing] the debtor with both a notice of hearing and a subpoena duces tecum outlining the documents to produced.” Id.; Li v. Yan, 247 Cal. App. 4th 56, 65 (2016) (“[A] judgment creditor may obtain documents from a judgment debtor either by subpoena duces tecum or by a discovery request for production.”). Judgment Creditors seek documents related to Judgment Debtor’s assets, which may be properly subpoenaed from Judgment Debtor under California procedural law for production at the debtor’s examination.

2 Judgment Creditors also seek production of documents subject to the ownership of Mr. Based on the foregoing, IT IS HEREBY ORDERED: 1. Mr. Sekerke as Chief Executive Officer for Judgment Debtor Commwave, Inc. must appear for an examination to furnish information to aid in enforcement of the money judgment on: Date: October 23, 2024 Time: 10:00 AM Appearance: In Person Location: United States District Court, Southern District of California James M. Carter and Judith N. Keep U.S. Courthouse 333 W. Broadway San Diego, CA 92101 Proceedings will be held in JURY ASSEMBLY ROOM 230, located on the Lobby Level of the Courthouse. 2. Judgment Creditor must personally serve this order by a sheriff, marshal, or registered process server upon the Judgment Debtor within thirty (30) days prior to the date set for the examination and must file a proof of service with the Court. NOTICE TO JUDGMENT DEBTOR: IF YOU FAIL TO APPEAR AT THE TIME AND PLACE SPECIFIED IN THIS ORDER, YOU MAY BE SUBJECT TO ARREST AND PUNISHMENT FOR CONTEMPT OF COURT AND THE COURT MAY MAKE AN ORDER REQUIRING YOU TO PAY THE REASONABLE ATTORNEY’S FEES INCURRED BY THE JUDGMENT CREDITOR IN THIS PROCEEDING.° Dated: September 13, 2024 VA rf ale, My. x7 HON. MICHELLE M. PETTIT 46 United States Magistrate Judge This notice is furnished pursuant to California Code of Civil Procedure § 708.110(e).