Tentative Ruling

Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
NDS LLC vs Rey Cruz
Case No: 1241636
Hearing Date: Wed Nov 06, 2019 9:30

Nature of Proceedings: Order Charging Member’s Interest

TENTATIVE RULING: Plaintiff’s motion for order charging defendant’s interest in RKC Media Group, LLC, a limited liability company, is granted as set forth herein.

BACKGROUND:

This is a credit card collection action. Plaintiff NDS, LLC (“NDS”) is the owner of a credit card account issued to defendant Rey H. Cruz (“Cruz”). Cruz breached the credit card agreement by failing to make the payments due on the account. On October 13, 2006, NDS filed its complaint for breach of credit card agreement, money lent, and account stated. On February 26, 2007, a default judgment in the amount of $21,058.94 was entered in favor NDS and against Cruz. The judgment was renewed on July 26, 2012, in the amount of $32,473.15, including post-judgment interest. On January 15, 2015, NDS assigned all of its rights, title, and interest in the money judgment to Fidelity Creditor Service, Inc. (“Fidelity”). On August 26, 2019, Fidelity re-assigned the judgment back to NDS.

NDS now moves the court for an order charging defendant’s membership interest in a limited liability company with payment of the unpaid judgment, plus accrued interest, pursuant to Code of Civil Procedure Section 708.310 and Corporations Code Section 17705.03. The name of the limited liability company is RKC Media Group, LLC. There is no filed opposition to the motion.

ANALYSIS:

The court may issue an order charging a judgment debtor’s interest in a limited liability company with payment of the unsatisfied amount of the judgment creditor’s judgment. Code of Civil Procedure Section 708.310 provides:

“If a money judgment is rendered against a partner or member but not against the partnership or limited liability company, the judgment debtor’s interest in the partnership or limited liability company may be applied toward the satisfaction of the judgment by an order charging the judgment debtor’s interest pursuant to Section 15907.3, 16504, or 17705.03 of the Corporations Code.”

Corporations Code Section 17705.03 pertains specifically to limited liability companies and provides, in relevant part:

“On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor’s transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.”

On February 26, 2007, NDS obtained a default judgment against Cruz in the amount of $21,058.94. (Judgment, filed 2-26-07.) The judgment was renewed on July 26, 2012 in the amount of $32,473.15. (Renewed Judgment, filed 7-26-12.) On January 15, 2015, NDS assigned all of its rights, title, and interest in the judgment to Fidelity, who on August 26, 2019, re-assigned the judgment back to NDS. (Assignment of Judgment, filed 8-26-19.) No amount of the judgment has been paid and the current balance due on the judgment is $32,473.15, plus interest at the rate of 10% per annum from and after July 26, 2012, which equates to approximately $8.89 per day until the judgment is paid in full. (Schulman Dec., ¶4.)

NDS recently discovered that Cruz is a member of the California limited liability company known as RKC Media Group, LLC (“RKC”), a digital marketing agency located at 5055 University Drive, Santa Barbara, California 93111. (Schulman Dec., ¶5, Ex. 1.) Pursuant to Code of Civil Procedure Section 708.310 and Corporations Code Section 17705.03, NDS requests that the court issue an order directing that Cruz’s interest in RKC be applied towards satisfaction of the judgment and further directing that RKC and all members of the company pay any sums or property now or hereafter due Cruz directly to NDS until the total amount of its unsatisfied judgment, with interest thereon, is paid in full.

The motion for order charging Cruz’s interest in RKC will be granted. RKC and all members of the company are ordered to pay any sums or property now or hereafter due Cruz directly to NDS until the total amount of its unsatisfied judgment, together with interest, is paid in full.