Choice Hotels International, Inc. v. Dostel Corporation

Filing 26

ORDER TO SHOW CAUSE signed by Magistrate Judge Allison Claire on 11/4/14 ORDERING that Plaintiff/judgment creditor's 24 motion for the issuance of an order to show cause is GRANTED. Defendant/judgment debtor is hereby ordered to appear and S HOW CAUSE why she should not be found in contempt based upon the facts this court has certified. A contempt hearing is SET for 12/15/2014 at 02:00 PM in Courtroom 5 (WBS) before Senior Judge William B. Shubb. The Clerk shall serve a copy of this order on defendant/judgment creditor at the following addresses: Nilakshi Patel, 4518 Maple Plain Avenue, Elk Grove, CA 95758, Nilakshi Patel, 4400 47th Avenue, Suite 104, Sacramento, CA 95824. (Kastilahn, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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CHOICE HOTELS INT’L, INC.,

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Plaintiff,

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No. 2:11-mc-0045 WBS AC

v.

ORDER TO SHOW CAUSE

DOSTEL CORP., ET AL.,

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Defendant.

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Pending before the court is plaintiff/judgment creditor Choice Hotel, Inc.’s (“plaintiff’)

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motion for an order to show cause regarding civil contempt. ECF No. 24. Plaintiff contends that

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defendant/judgment debtor Nilakshi Patel (“defendant”) has refused to comply with the court’s

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February 12, 2014 Assignment Order entered by District Judge William B. Shubb. ECF No. 16

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(“Assignment Order”). Plaintiff seeks an order holding defendant in contempt for failure to abide

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by the Assignment Order. ECF No. 24. Under 28 U.S.C. § 636(b), the undersigned has the

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authority to certify the facts of a party’s contempt to the district court and to issue an order

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directing defendant to show cause before the district judge why she should not be held in

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contempt. See Alcalde v. NAC Real Estate Invs. & Assignments, Inc., 580 F. Supp. 2d 969 (C.D.

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Cal. Aug. 4, 2008). Upon review of the documents in support of the motion and good cause

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appearing therefor, THE COURT FINDS AND ORDERS AS FOLLOWS:

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CERTIFIED FACTS

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On March 31, 2009, plaintiff obtained a judgment against defendant in another district and

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in the amount of $86,668.53. ECF No. 24 at 2. The judgment has been registered in this district

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for enforcement. Id. According to plaintiff, the judgment total as of December 4, 2013 is

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$89,134.31. Id. Defendant did not agree to satisfy the judgment and on October 17, 2013

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plaintiff sought an assignment order to enforce the judgment from defendant’s commercial real

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estate activities. ECF No. 11.

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On January 3, 2014, the magistrate judge assigned to this action issued findings and

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recommendations recommending the motion for assignment order be granted and relief granted as

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follows:

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The right of Defendant/Judgment Debtor Nilakshi Patel to payment
of money due or to become due from their business activities as the
landlord/owner of that certain commercial real property, and
improvements thereon, commonly known as “Universal Plaza,” and
located at 4400 47th Avenue, Sacramento, California 95824 APN
039-0052-048, be assigned to Plaintiff/Judgment Creditor Choice
Hotels International Inc. with payment to “Aires Law Trust
Account fbo Choice Hotels International Inc.,” at 180 Newport
Center Drive, Suite 260, Newport Beach, California 92660, to the
extent necessary to satisfy the judgment entered in this action in
full, which as of December 4, 2013, is $89,134.31.

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ECF No. 14. On February 12, 2014, the findings and recommendations were adopted in full.

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ECF No. 16. Defendant/judgment debtor Nilakshi Patel was served with the order on February

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12, 2014. See ECF No. 17.

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On May 12, 2014, plaintiff filed a motion for issuance of an order to show cause regarding

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contempt for defendant’s failure to comply with the court’s Assignment Order directing rents

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from the property at issue be paid to the judgment creditor. ECF No. 18.

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On June 27, 2014, the undersigned issued an order and order to show cause ordering

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defendant to show cause in writing within twenty-one days from the issuance of the order why

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she should not be punished for contempt for failure to abide by Judge Shubb’s February 12, 2014

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Assignment Order. ECF No. 21. Defendant was served by mail with the court’s order and order

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to show cause.

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The time for responding to the court’s order to show cause has passed and defendant has
not responded to the court’s order or otherwise appeared in this action.

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FURTHER CONTEMPT PRODCEEDINGS ARE WARRANTED

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On November 3, 2014, plaintiff renewed its motion for issuance of an order to show

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cause, arguing that defendant has failed to abide by the court’s orders. ECF No. 24. Plaintiff

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argues, inter alia, that

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[N]o rent from the tenants occupying the Real Property has been
paid over by Defendant/Judgment Debtor Nilakshi Patel . . . [,] [n]o
accounting has been rendered by Defendant/Judgment Debtor
Nilakshi Patel, . . . [and] [n]o indication has been given that rent
payments by the tenants have universally ceased[.]

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Id. at 2.

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Magistrate judges must refer contempt proceedings to district judges. See 28 U.S.C.

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§ 636(e); Bingman v. Ward, 100 F.3d 653, 656-57 (9th Cir. 1996). A magistrate judge may

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investigate whether further contempt proceedings are warranted and, if so, may certify such facts

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to a district judge and issue an order directing a party (or counsel) to show cause before the

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district judge why he should not be held in contempt.. 28 U.S.C. § 636(e); see also Alcalde, 580

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F. Supp. 2d at 971 (“Contempt proceedings are instituted by the issuance of an Order to Show

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Cause [] why a contempt citation should not issue and a notice of a date for the hearing.”) (citing

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Schwarzer, Tashima & Wagstaffe, Federal Civil Procedure Before Trial at ¶ 11:2316).

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Where contempt is sought to compensate an aggrieved party for failure of an adverse

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party to comply with court orders, the asserted contempt is civil in nature. United States v. Asay,

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614 F.2d 655, 659 (9th Cir. 1980).1 Civil contempt sanctions are intended to coerce compliance.

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Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994). To find civil

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contempt: “. . . the court need only (1) have entered a clear and unambiguous order, (2) find it

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established by clear and convincing evidence that the order was not complied with, and (3) find

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that the alleged contemnor has not clearly established his inability to comply with the terms of the

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order.” Huber v. Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995). There need not be a willful

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On the other hand, where contempt is imposed to vindicate the authority of the court following
a completed act of disobedience, and the contemnor has no opportunity to purge himself of
contempt, the contempt is criminal in nature. Bingman, 100 F.3d at 655–56.
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violation of the order in order for the court to find civil contempt. Asay, 614 F.2d 661; see also

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United States v. Laurins, 857 F.2d 529, 534 (9th Cir. 1988).

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As demonstrated by the facts certified above, it appears that defendant has wilfully

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violated the court’s Assignment Order assigning her rights to payment of money from her

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business as the landlord/owner of the “Universal Plaza” commercial property to plaintiff to satisfy

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the judgment. The Assignment Order was clear and unambiguous, and clear and convincing

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evidence establishes that defendant has wilfully failed to comply with the order. Defendant was

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served by mail with the court’s Assignment Order and there is no indication that defendant was

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unable to comply with the order.

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For these reasons, further contempt proceedings are warranted.

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Accordingly, IT IS HEREBY ORDERED that:

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1. Plaintiff/judgment creditor’s motion for the issuance of an order to show cause, ECF

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No. 24, is granted;
2. Defendant/judgment debtor is hereby ordered to appear and show cause why she should
not be found in contempt based upon the facts this court has certified;

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3. A contempt hearing is set before Judge Shubb on December 15, 2014 at 2:00 p.m.;

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4. The Clerk of the Court shall serve a copy of this order on defendant/judgment creditor

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at the following addresses:

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Nilakshi Patel, 4518 Maple Plain Avenue, Elk Grove, CA 95758

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Nilakshi Patel, 4400 47th Avenue, Suite 104, Sacramento, CA 95824

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DATED: November 4, 2014

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