Case Number: EC050461 Hearing Date: May 23, 2014 Dept: B

Motion for Order Directing Sale

This case arises from the claim of Plaintiff, Xerox Corp., that the Defendant, Hairlocs Extension System, Inc. breached a lease agreement by failing to make payments for Xerox’ equipment. A default was entered against the Defendant on September 15, 2009. A default judgment of $112,916.56 was entered against the Defendant on February 11, 2010.

On December 28, 2012, a notice of assignment was filed to provide notice that the Plaintiff, Xerox Corp., had assigned its right and interest in the judgment to Dreamcatchers International, Inc. for a payment of $11,291.66. Dreamcatchers is a competitor of Hairlocs in the business of providing hair extensions.

On January 31, 2013, the assignee, Dreamcatchers International, Inc., appeared with an ex parte application for an order to prohibit the transfer of three patents and one trademark held by the Defendant. In addition, the assignee requested an order appointing a receiver to manage the intellectual properties. The Court issued a temporary restraining order to prohibit the Defendant from transferring the intellectual property.

In addition, the Court appointed a receiver, Theodore Phelps, on June 20, 2013. The receiver was appointed to manage, evaluate, and sell three patents and a trademark owned by the Defendant. The receiver sold the property for $70,000 and on March 28, 2014, the Court confirmed the sale.

This hearing concerns the receiver’s request for an order directing him to sell other assets, which include a domain name, telephone number, and customer list. The receiver states facts indicating the manner in which he appraised the assets and he states that his appraisal has resulted in him setting the value of the assets at the following amounts:

1) $7,500 for the domain name;
2) $2,500 for the telephone number; and
3) $10,000 for the customer list.

The receiver seeks a Court order directing him to sell the assets at a public auction.

The receiver is an agent of the Court and not of any party. CRC rule 3.1179(a). The receiver acts as a ministerial officer, agent, and a temporary caretaker of the property for the Court. Gill v. Rich (2005) 128 Cal. App. 4th 1254, 1267. The receiver represents the Court appointing the receiver and the receiver is the medium through which the Court acts. Id.

The Court appointed the receiver in this action to enforce a judgment. The Enforcement of Judgments Law, enacted at CCP section 680.010 to 724.260, includes procedures for appointing a receiver to enforce a judgment in CCP sections 708.610 to 708.630. CCP section 708.620 provides that the Court may appoint a receiver to enforce the judgment where the judgment creditor shows that, considering the interests of both the judgment creditor and the judgment debtor, the appointment of a receiver is a reasonable method to obtain the fair and orderly satisfaction of the judgment. CCP sections 701.510 to 680 identify the procedures for sale of property for the purpose of satisfying a judgment, e.g., the procedures for the notice of sale.

The receiver has provided evidence to demonstrate that he made a valuation of the assets. The receiver now seeks instructions authorizing him to sell the property. The receiver has complied with the order appointing him as a receiver.

Therefore, the Court issues instructions to the receiver that he may sell the property in order to satisfy the judgment.