2018-00241648-CU-EN

HSBC Bank, a National Association vs. Kulwinder Gill

Nature of Proceeding: Motion to Vacate Entry of Sister State Judgment or to Stay Enforcement

Filed By: Latini, John M.

Defendants’ motion to vacate entry of sister state judgment or alternatively, for stay of

enforcement is ruled on as follows.

Although the notice of motion provided notice of the court’s tentative ruling system as required by Local Rule 1.06(D), the notice does not comply with that rule. Moving counsel is directed to review the Local Rules, effective 1/1/2019.

Factual Background

In June 2018 plaintiff obtained in Ohio a money judgment of over $145,000 against defendants and thereafter obtained entry of a sister state judgment here in California.

Defendants now move pursuant to Code of Civil Procedure §1710.40 to vacate the entry of this sister state judgment or alternatively, pursuant to §1710.50 for a stay of enforcement of the sister state judgment on the grounds that defendants are currently appealing the underlying judgment in Ohio and that such judgment is therefore not yet final.

Plaintiff opposes, arguing that defendants have cited no valid ground on which to vacate the California’s entry of a sister state judgment, the judgment in Ohio is final inasmuch as the trial court there has fully disposed of all issues presented to it, and the mere fact the Ohio judgment is on appeal does not mean it is not final for purposes of enforcement. However, plaintiff concedes defendants are proceeding with an appeal in Ohio but since they have not sought a stay of enforcement in Ohio, this court should deny a stay here unless defendants post security equal to the amount of the outstanding judgment.

Analysis

Code of Civil Procedure §1710.40(a) provides in its entirety:

A judgment entered pursuant to this chapter may be vacated on any ground which would be a defense to an action in this state on the sister state judgment, including the ground that the amount of interest accrued on the sister state judgment and included in the judgment entered pursuant to this chapter is incorrect.
(Underline added for emphasis.)

Code of Civil Procedure §1710.50 provides in its entirety:

(a) The court shall grant a stay of enforcement where:

(1) An appeal from the sister state judgment is pending or may be taken in the state which originally rendered the judgment. Under this paragraph, enforcement shall be stayed until the proceedings on appeal have been concluded or the time for appeal has expired.

(2) A stay of enforcement of the sister state judgment has been granted in the sister state. Under this paragraph, enforcement shall be stayed until the sister state stay of enforcement expires or is vacated.

(3) The judgment debtor has made a motion to vacate pursuant to Section 1710.40. Under this paragraph, enforcement shall be stayed until the judgment debtor’s motion to vacate is determined.

(4) Any other circumstance exists where the interests of justice require a stay of enforcement.

(b) The court may grant a stay of enforcement under this section on its own motion, on ex parte motion, or on noticed motion.

(c) The court shall grant a stay of enforcement under this section on such terms and conditions as are just including but not limited to the following:

(1) The court may require an undertaking in an amount it determines to be just, but the amount of the undertaking shall not exceed double the amount of the judgment creditor’s claim.

(2) If a writ of execution has been issued, the court may order that it remain in effect.
(3) If property of the judgment debtor has been levied upon under a writ of execution, the court may order the levying officer to retain possession of the property capable of physical possession and to maintain the levy on other property.
(Underline added for emphasis.)

This court holds that defendants have not established the existence of a valid basis to vacate California’s entry of a sister state judgment against them. In short, they have failed to identify any specific ground which would constitute a defense to an action in this state on the sister state judgment. While the moving papers assert in substance that Ohio judgment is not final because it is currently on appeal and then cite the 1974 Law Revision Commission Comment on §1710.40 [indicating “Common defenses to enforcement of a sister state judgment include…the judgment is not final and unconditional (where finality means that no further action by the court rendering the judgment is necessary to resolve the matter litigated);…”], defendants have not established that there are any further proceedings either currently necessary or anticipated in the Ohio trial court which rendered the judgment against defendants and the fact that defendants have filed an appeal of the Ohio trial court’s proceedings essentially confirms that “no further action by the court rendering the judgment is necessary to resolve the matter litigated.” In short, the 1974 Law Revision Commission Comment does not in this court’s view entitle defendants to an order vacating the sister state judgment simply because they are pursuing an appeal of the Ohio trial court’s judgment.

However, even plaintiff concedes that the existence of this appeal of the Ohio judgment does entitle defendants to a mandatory stay of execution pursuant to Code of Civil Procedure §1710.50(a)(1). Under the express language of Code of Civil Procedure §1710.50(c), a stay on the execution of the judgment shall be “on such terms and conditions as are just” and although this subdivision does not set forth any particular standard for determining what may be “just,” this court now holds that especially in the absence of an order from the Ohio trial or appellate court it would be just and reasonable under the circumstances to grant defendants a stay conditioned on their posting security equal to one-half of the principal amount of the outstanding judgment against them.

Conclusion

Based on the foregoing, defendants’ motion to vacate the entry of sister state judgment in DENIED but their alternative motion for a stay of execution will be GRANTED on the condition defendants post security equal to one-half of the principal amount of the outstanding judgment.

Pursuant to CRC Rule 3.1312, defendants to prepare a formal order granting a stay on plaintiff’s execution on the judgment, which will be signed upon proof of defendants’ posting of the requisite security.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.)