Case Number: EC036498 Hearing Date: February 09, 2015 Dept: NCD
TENTATIVE RULING (2/9/15)

EC 036498
VERDUGO BANKING COMPANY v. THE JOSEPH A. SEMBER and ADA A. SEMBER FAMILY TRUST

Motion for Leave to Intervene

TENTATIVE:
Pacific Western Bank’s UNOPPOSED Request for Judicial Notice is GRANTED.

Motion of proposed intervenor Arden Management, LLC for Leave to Intervene is DENIED.

Proposed intervenor’s objection to plaintiff’s opposition is OVERRULED. The court in its discretion has considered the timely filed and served opposition papers, noting that the moving party was not prejudiced by the service of the opposition by regular mail, as the opposition was admittedly obtained in what the court finds was sufficient time prior to the deadline for filing to respond to the merits of the arguments set forth, which the court finds are significant and persuasive.

Motion is denied without prejudice to Arden pursuing its rights, remedies and procedures available under Code of Civil Procedure section 724.101, et seq., to seek partial satisfaction of the judgment in this action, as permitted by the stipulation for entry of alternator order of dismissal with reservation of rights in case No. BC 546841. See RFJN, Ex. 15, para. 5(b).

BACKGROUND:
Moving Party: Proposed Intervenor Arden Management, LLC
Responding Party: Successor in Interest Plaintiff Pacific Western Bank

RELIEF REQUESTED:
Leave to intervene to conduct discovery and file a motion to compel partial satisfaction of judgment.

SUMMARY OF FACTS:
Plaintiff Verdugo Banking Company brought this action against defendants Ada Sember and Joseph Sember, and their family trust alleging that they had breached a Commerical Guaranty of Loan Agreements plaintiff entered into with borrower Jasco Products, Inc.

On November 13, 2003, a Judgment by Stipulation was entered in favor of plaintiff and against defendants in the sum of $328,780.67.

On December 16, 2005, plaintiff filed an Acknowledgement of Partial Satisfaction of Judgment, acknowledging the receipt of $50,000.00 in partial satisfaction of the judgment.

On May 2, 2012, the judgment was renewed, in the sum of $514,666.75.

ANALYSIS:
Substantive
CCP section 387 provides:
“(a) Upon timely application, any person, who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in the action or proceeding. An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff…
(b) If any provision of law confers an unconditional right to intervene or if the person seeking intervention claims an interest relating to the property or transaction which is the subject of the action and that person is so situated that the disposition of the action may as a practical matter impair or impede that person’s ability to protect that interest, unless that person’s interest is adequately represented by existing parties, the court shall, upon timely application, permit that person to intervene.”

Permissive intervention under this section is allowed in the discretion of the court provided:
• The non party has a direct and immediate interest in the litigation;
• The intervention will not enlarge the issues in the case; and
• The reasons for intervention outweigh any opposition by the existing parties.
Truck Ins. Exchange v. Superior Court (1997) 60 Cal.App.4th 342, 346; Weil & Brown, Civ. Proc Before Trial § 2:414.

Whether the interest is sufficiently “direct” must be decided on the facts of each case, but CCP § 387 is to be construed liberally in favor of intervention. Simpson v. Redwood Co. v. State of California (1987) 196 Cal.App.3d 1192, 1201.

The prospective intervenor, Arden Management, LLC, argues that it recently purchased property previously owned by the judgment debtor at a foreclosure sale, and that a dispute exists as to whether the property was released from an abstract of judgment in a prior refinance transaction, in which $50,000 from that transaction was paid to judgment creditor. The file shows that an Acknowledgement of Partial Satisfaction of Judgment was filed by plaintiff in that amount on December 16, 2005. It appears that the intervenor has a direct interest in the enforcement of the judgment in this action as against real property it now owns, and the continuing validity of the abstract of judgment.

In addition, the prospective intervenor argues that it is a party entitled to intervene by statute, specifically, CCP § 724.110, which pertains to a demand for delivery of an acknowledgement of partial satisfaction of judgment in the enforcement of judgments, and provides in pertinent part:
(b) If the judgment creditor does not comply with the demand within the time allowed, the judgment debtor or the owner of the real or personal property subject to a judgment lien created under the judgment may apply to the court on noticed motion for an order requiring the judgment creditor to comply with the demand. The notice of motion shall be served on the judgment creditor. Service shall be made personally or by mail. If the court determines that the judgment has been partially satisfied and that the judgment creditor has not complied with the demand, the court shall make an order determining the amount of the partial satisfaction and may make an order requiring the judgment creditor to comply with the demand.”
(emphasis added).

The opposition by plaintiff’s successor in interest, Pacific Western Bank, argues that the matter is res judicata because Arden attempted to file another civil action to determine the effect of the abstract of judgment, which was ultimately voluntarily dismissed with prejudice. However, the order dismissing the other complaint states, “such dismissal shall not constitute adjudication insofar as Plaintiff’s (Arden’s) rights, remedies and procedures available under Code of Civil Procedure section 724.101, et seq., to seek partial satisfaction of the Judgment in the Verdugo Action; and the current dismissal with prejudice of the Arden Action shall in no way effect, impair or impact same.” [RFJN, Ex. 15, para. 5b].

Pacific Western accordingly stipulated that Arden could seek partial satisfaction in this matter.

The fundamental issue is whether it is necessary for Arden to formally intervene in this matter in order to pursue such a remedy, as Pacific Western argues that by intervening, Arden attempts to seek remedies not available in a proceeding to seek partial satisfaction, such as damages and costs of suit. Pacific Western points out that under the statute governing acknowledgment of partial satisfaction, and as pointed out in the Law Revision Commission Comments to that section, “Unlike the procedure to compelling the judgment creditor to deliver an acknowledgment of full satisfaction of judgment, Section 724.110 does not provide a sanction for failure to comply with the demand…” It appears then that the remedy the parties agreed would be left to Arden does not contemplate any sanction, damages or affirmative judicial relief other than an order requiring a judgment debtor to comply with a demand. Pacific Western relies on case law under which the procedures for seeking acknowledgement of satisfaction of judgment are subject to express statutory procedures, which are considered the exclusive means of obtaining acknowledgement of satisfaction of judgment. See Quintana v. Gibson (2003) 113 Cal.App.4th 89, 93-94.

Pacific Western also makes an argument that to the extent the intervenor seeks affirmative relief here in the form of a judicial determination that the abstract no longer operates as a lien on the property, such a claim would apparently be barred by the applicable statutes of limitations, and the five year rule for bringing a matter to trial. Of course, these arguments could be asserted in a demurrer to any complaint in intervention.

As noted above, in response to these significant concerns raised in the opposition, Arden has objected to the timely filed and served opposition on the ground it was served by mail and not overnight delivery. This suggests that Arden is in fact seeking by this intervention to pursue remedies not contemplated by the parties’ previous stipulation and the previous court order. It appears rather that Arden should properly be permitted to pursue a motion for partial satisfaction under the statute, and to engage in stipulated discovery, and, if eventually necessary, to seek court ordered discovery.

Based on the showing now before the court, the motion to intervene is denied, without prejudice to the proposed intervenor seeking partial satisfaction of judgment pursuant to statute