Fifth Third Bank v. Scheibli

Filing 38

MEMORANDUM AND ORDER RE: MOTION FOR ASSIGNMENT ORDER signed by Senior Judge William B. Shubb on 8/26/14 ORDERING that plaintiff's motion for an assignment order be, and the same hereby is, GRANTED. IT IS FURTHER ORDERED that: (1) All paymen ts due to defendant Michael Scheibli now or in the future from his client Lori Stillie and any rights to payment in connection with In re Greg Hawes, Case No. 12-33158 (E.D. Cal. B.R.) are HEREBY ASSIGNED to plaintiff Fifth Third Bank to the extent necessary to satisfy the judgment in this matter; (2) Defendant Michael Scheibli is HEREBY ENJOINED from assigning any payments from Lori Stillie or in connection with In re Greg Hawes, Case No. 12-33158 to any other person or legal entity until the judgment owed to plaintiff Fifth Third Bank is satisfied; and (3) The Clerk of the Court shall serve a copy of this Order on Lori Stillie and provide notice of this Order to the United States Bankruptcy Judge presiding over In re Greg Hawes, Case No. 12-33158. (cc USBC, CFS) (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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FIFTH THIRD BANK,
Plaintiff,

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CIV. NO. 2:12-427 WBS AC
MEMORANDUM AND ORDER RE: MOTION
FOR ASSIGNMENT ORDER

v.
MICHAEL SCHEIBLI and INDERJIT
GREWAL,
Defendants.

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----oo0oo----

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On February 8, 2013, the court entered judgment in this

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action pursuant to a settlement agreement between plaintiff Fifth

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Third Bank and defendants Inderjit Grewal and Michael Scheibli.

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Plaintiff now moves for an order assigning it the right to

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collect payments due to Scheibli in order to satisfy the

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judgment.

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I.

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Factual and Procedural History
Plaintiff brought this action to recover a $500,000

deposit held in escrow by defendants in connection with a failed
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real estate transaction.

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reached a settlement whereby plaintiff agreed to accept $175,000

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on a negotiated payment schedule--or $350,000 if defendants

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failed to comply with that schedule--in satisfaction of its

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claims against defendants.

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memorialized this settlement in an Agreed Final Judgment entered

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on February 8, 2013.

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(See Docket No. 1.)

(Docket No. 29.)

The parties

The court

(Id.)

Prior to the entry of judgment, defendants paid $25,000
to plaintiff in partial satisfaction of the judgment.

(Moul

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Decl. ¶ 4 (Docket No. 32).)

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however, plaintiff alleges that defendants have not made any

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payments.

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owed on the judgment is now $325,665.40.

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(Id. ¶ 5.)

Since the court entered judgment,

According to plaintiff, the total amount
(Id. ¶ 6.)

Although Scheibli has not made any payments since

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February 2013, plaintiff indicates that Scheibli is an attorney

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and has the resources to pay the judgment debt.

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His client, Lori Stillie, divorced her husband, Greg Hawes, and

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brought a dissolution action in Shasta County Superior Court.

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(Id. ¶ 8; id. Ex. B.)

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couple’s community property at $302,618, ordered Hawes to pay

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$4,000 per month in child support, and awarded her $75,000 in

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attorney’s fees and costs.

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(See id. ¶ 7.)

The court valued Stillie’s share of the

(Id. Ex. B.)

Hawes then declared bankruptcy, and Stillie filed a

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proof of claim in the bankruptcy court.

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Chapter 12 plan of adjustment, Hawes agreed to pay Stillie

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$400,000 in satisfaction of the judgment in the dissolution

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action.

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collect up to $75,000 from Stillie, and moves for an order

(Id. Ex. A.)

(Id.)

As part of his

Plaintiff anticipates that Scheibli will

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assigning it the right to collect that payment in partial

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satisfaction of its judgment against Scheibli.

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II.

(Docket No. 32.)

Discussion

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Federal Rule of Civil Procedure 69(a)(1) provides that

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proceedings in aid of judgment or execution must comply with the

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law of the state where the court is located.

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69(a)(1); Credit Suisse v. U.S. District Court, 130 F.3d 1342,

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1344 (9th Cir. 1997).

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the judgment debtor to assign to the judgment creditor . . . all

Fed. R. Civ. P.

Under California law, “the court may order

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or part of a right to payment due or to become due, whether or

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not the right is conditioned on future developments . . . .”

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Cal. Civ. Proc. Code § 708.510(a); Peterson v. Islamic Republic

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of Iran, 627 F.3d 1117, 1130-31 (9th Cir. 2010).

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In considering whether to issue an assignment order,

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the court may take into account “all relevant factors,” including

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the reasonable requirements of the judgment debtor, other

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payments the judgment debtor is required to make, the amount

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remaining due on the money judgment, and the amount being

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received, or to be received, in satisfaction of the right to

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payment that may be assigned.

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Choice Hotels, Int’l, Inc. v. Dostel Corp., M.C. No. 2:11-45 WBS

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GGH, 2013 WL 1324280, at *1 (E.D. Cal. Apr. 2, 2013).

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request for an assignment order does not demand “[d]etailed

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evidentiary support,” Choice Hotels, 2013 WL 1324280 at *1, a

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judgment creditor must describe the source of the right to

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payment with “some degree of concreteness.”

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PacketSwitch.com, Inc., Civ. No. 01-20858 LHK PSG, 2012 WL

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4343834, at *2 (N.D. Cal. Sept. 21, 2012).

Cal. Civ. Proc. Code § 708.510(c);

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While a

Icho v.

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Here, plaintiff represents that defendants owe

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$325,665.40 on the judgment including accrued interest and costs.

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(Moul Decl. ¶ 6.)

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pay Scheibli for his services in connection with the dissolution

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proceedings against Hawes.

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not certain that Scheibli will receive the full $75,000 awarded

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by the Shasta County Superior Court in attorney’s fees and costs,

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the source of the right to payment is nonetheless sufficiently

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concrete to justify an assignment order.

Plaintiff also indicates he expects Stillie to

(See id. ¶¶ 8-11.)

Although it is

See, e.g., Choice

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Hotels, 2013 WL 1324280, at *2-3 (assigning plaintiff right to

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collect proceeds generated through the use of defendant’s real

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estate license); Trs. of Screen Actors Guild-Producers Pension

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Plan v. See You In September, LLC, Civ. No. 09-4230 AHM AJWx,

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2010 WL 5245960, at *1 (C.D. Cal. Dec. 16, 2010) (assigning right

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to collect proceeds from a specific film); Legal Additions LLC v.

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Kowalski, Civ. No. 08-2754 WMC, 2011 WL 3156724, at *4 (N.D. Cal.

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July 26, 2011) (assigning right to collect proceeds from a

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specific book).

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The factors set forth by section 705.810(c) also

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suggest that an assignment order is appropriate.

Defendants are

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$325,665.40 in arrears on the judgment and have not made any

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payments since the court entered judgment.

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Scheibli has not alerted the court to other payments he is

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required to make or provided any other reason an assignment order

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is unwarranted.

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debtor’s failure to satisfy a judgment debt, many federal courts

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have held that an assignment order is appropriate.

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Choice Hotels, 2013 WL 1324280, at *2; AmeriPride Servs., Inc. v.

(Moul Decl. ¶¶ 5-6.)

Under similar circumstances involving a judgment

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See, e.g.,

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Valley Indus. Serv., Inc., Civ. No. 2:00-113 LKK JFM, 2012 WL

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3913081, at *5 (Sept. 7, 2012); UMG Recordings, Inc. v. BCD Music

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Grp., Inc., Civ. No. 07-5808 SJO FFMx, 2009 WL 2213678, at *3

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(C.D. Cal. July 9, 2009).

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plaintiff’s motion for an assignment order.1

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Accordingly, the court will grant

IT IS THEREFORE ORDERED that plaintiff’s motion for an
assignment order be, and the same hereby is, GRANTED.

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IT IS FURTHER ORDERED that:

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(1) All payments due to defendant Michael Scheibli now

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or in the future from his client Lori Stillie and any rights to

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payment in connection with In re Greg Hawes, Case No. 12-33158

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(E.D. Cal. B.R.) are HEREBY ASSIGNED to plaintiff Fifth Third

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Bank to the extent necessary to satisfy the judgment in this

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matter;

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(2) Defendant Michael Scheibli is HEREBY ENJOINED from

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assigning any payments from Lori Stillie or in connection with In

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re Greg Hawes, Case No. 12-33158 to any other person or legal

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entity until the judgment owed to plaintiff Fifth Third Bank is

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satisfied; and

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(3) The Clerk of the Court shall serve a copy of this

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Order on Lori Stillie and provide notice of this Order to the

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United States Bankruptcy Judge presiding over In re Greg Hawes,

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Case No. 12-33158.

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Scheibli indicated at oral argument that he believed an
assignment order was inappropriate because he has other
obligations to be paid out of the attorney’s fee award in In re
Greg Hawes that will soon become due. However, the court’s
assignment of Scheibli’s right to payment does not suggest that
Fifth Third Bank will enjoy priority over other, more senior
creditors who claim an interest in the attorney’s fee award.
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Dated:

August 26, 2014

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