Cox Airparts LLC v. Brown et al

Filing 56

ORDER - IT IS ORDERED no later than March 17, 2025, plaintiff shall file a statement establishing the presence of federal jurisdiction and, if appropriate, addressing the impact of the bankruptcy proceedings on the present suit. See attached Order for complete details. Signed by Judge Krissa M Lanham on 3/10/2025. (NSH)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Cox Airparts LLC,
Plaintiff,

10
11

v.

12

Kevin Brown, et al.,

13

No. CV-23-01466-PHX-KML
ORDER

Defendants.

14
15

Plaintiff Cox Airparts LLC concedes the analysis in Renda v. Nevarez, 167 Cal.

16

Rptr. 3d 874 (Cal. Ct. App. 2014), means it is not entitled to the relief requested in its

17

motion for summary judgment. (Doc. 55 at 2.) But Cox argues it is entitled to “an order

18

voiding the fraudulent transfers by MJP Services, LLC, consistent with the principles

19

outlined in [Renda].” (Doc. 55 at 3.) There is a crucial difference between the situation in

20

Renda and the present case that renders unavailable even the more limited relief Cox now

21

seeks.

22

In Renda, Mario Renda had obtained a judgment against Ana Nevarez for more than

23

$800,000. Nevarez did not pay the judgment and Renda believed Nevarez “was transferring

24

assets to sham entities.” Id. at 875. Renda then filed a second suit against Nevarez. In that

25

second suit Renda also named the “sham entities” as defendants. Id. The California trial

26

court “entered a judgment voiding the . . . fraudulent transfers” and the “sham entities”

27

were held liable for those fraudulent transfers. But the trial court refused to enter another

28

monetary judgment against Nevarez. Id. at 876. The California Court of Appeal concluded

1

that was correct because Renda retained his original judgment against Nevarez and there

2

was no basis for a second judgment against Nevarez. The situation in the current case is

3

different.

4

In 2022, Cox obtained a judgment and orders totaling $201,397.50 against Bruce

5

Brown, Kevin Brown, Arizona Aircraft Accessories LLC, Michael Polve, MJP Services

6

LLC, and Warrior Enterprises. (CV-21-2213-PHX-SRB, Doc. 1.) After those defendants

7

failed to pay, Cox filed the present case and named as defendants several (though not all)

8

of the judgment debtors: Kevin Brown, Michael and Andrea Polve,1 and MJP Services

9

LLC. Cox alleged there were fraudulent transfers from MJP to the other named defendants

10

and transfers from MJP to original judgment debtor but current non-party Bruce Brown.

11

(Doc. 51 at 4.) All defendants here, alongside non-party Bruce Brown, have already been

12

held jointly and severally liable for the $201,397.50 judgment and orders. And unlike the

13

second suit in Renda, this suit does not involve independent transfers to any new

14

defendants. That is, there is no new individual or entity similar to the “sham entities” in

15

Renda from which fraudulently transferred funds might be recovered.2 Without additional

16

defendants unrelated to the original judgment, the only possible outcome of the present suit

17

appears to be a second judgment that would provide no relief to Cox. That probable

18

outcome means there likely is a jurisdictional problem: lack of standing.

19

As the party invoking federal jurisdiction, Cox “bears the burden of establishing

20

standing as of the time [it] brought th[e] lawsuit and maintaining it thereafter.” Murthy v.

21

1

22
23
24
25
26
27
28

Andrea Polve was not named as a defendant in the first suit. It appears she is named in
this suit only because of the possibility that community property is at issue. (Doc. 23 at 3).
See Spudnuts, Inc. v. Lane, 676 P.2d 669, 670 (Ariz. Ct. App. 1984) (“[I]f a plaintiff wants
to hold a marital community accountable for an obligation, both spouses must be sued
jointly.”). Cox has not argued the addition of Andrea Polve matters for purposes of the
relief Cox seeks.
2
Cox argues non-party Bruce Brown was the transferee for some of the fraudulent transfers
from MJP. Cox has not explained how the court could void a transfer to Bruce Brown
without him being a defendant in the present case. “Typically, where a creditor alleges a
fraudulent transfer of property from a judgment debtor to a transferee who retains title to
the subject property or who claims an interest in the property or its proceeds, the transferee
is a necessary party to any action seeking to set aside the transfer.” Liberty Mut. Ins. Co. v.
Hawaiya Techs., Inc., No. CV 18-00410 HG-WRP, 2019 WL 13163793, at *3 (D. Haw.
Oct. 7, 2019) (simplified). Even beyond that issue, Bruce Brown is already liable to Cox
for the full amount, meaning Cox can recover directly from Bruce Brown instead of having
any transfers voided and collecting the funds from MJP.
-2-

1

Missouri, 603 U.S. 43, 58 (2024). The familiar requirements for standing include an injury

2

“likely to be redressed by the requested relief.” Haaland v. Brackeen, 599 U.S. 255, 291–

3

92 (2023). Cox’s suit suffers from a redressability problem.

4

“[R]edressability requires that the court be able to afford relief through the exercise

5

of its power, not through the persuasive or even awe-inspiring effect of the opinion

6

explaining the exercise of its power.” Id. at 294 (simplified). “It is a federal court’s

7

judgment, not its opinion, that remedies an injury; thus it is the judgment, not the opinion

8

that demonstrates redressability.” Id. Here, an opinion reiterating that MJP still owes Cox

9

$201,397.50 or outlining how MJP engaged in fraudulent transfers to other original

10

judgment debtors would not provide any substantive relief. If the court were to issue a

11

judgment voiding transfers between jointly and severally liable defendants, it is not clear

12

how that would place Cox in a position any different than its present one. In other words,

13

Cox can already demand MJP pay the full amount of the original judgment and seek

14

recovery from all individuals and entities to whom the fraudulent transfers were allegedly

15

made. A judgment voiding fraudulent transfers like Cox now seeks would not materially

16

change Cox’s legal position vis-à-vis its judgment debtors at all.

17

Cox must therefore establish the presence of federal jurisdiction. If Cox believes

18

federal jurisdiction exists, it must also address whether the automatic stay prevents the

19

court from adjudicating the legality of transfers from MJP to those defendants in

20

bankruptcy proceedings.

21

IT IS ORDERED no later than March 17, 2025, plaintiff shall file a statement

22

establishing the presence of federal jurisdiction and, if appropriate, addressing the impact

23

of the bankruptcy proceedings on the present suit.

24

Dated this 10th day of March, 2025.

25
26
27
28

-3-