The National Grange of the Order of Patrons of Husbandry v. California State Grange

Filing 189

ORDER signed by Senior Judge William B. Shubb on 3/9/2017 GRANTING IN PART and DENYING IN PART 178 Plaintiff's Motion for Order of Assignment. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NATIONAL GRANGE OF THE ORDER
OF PATRONS OF HUSBANDRY,
Plaintiff,

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CIV. NO. 2:14-676 WBS DB
ORDER RE: MOTION FOR ASSIGNMENT
ORDER

v.
CALIFORNIA GUILD, formerly
doing business as “California
State Grange,”
Defendant.

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On September 12, 2016, the court ordered defendant

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California Guild (“Guild”) to pay plaintiff National Grange of

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the Order of Patrons of Husbandry $144,715.70 in attorneys’ fees

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(“fees order”).

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Plaintiff now moves for an order assigning it the right to

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collect payments due to defendant from its local chapters to

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satisfy the court’s fees order.

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(Sept. 12, 2016 Order (Docket No. 154).)

(Pl.’s Mot. (Docket No. 178.)

Plaintiff brought this action against defendant for
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trademark infringement, false designation of origin, and unfair

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competition under the Lanham Act.

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court granted summary judgment to plaintiff on July 14, 2015,

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(July 14, 2015 Order (Docket No. 60)), and enjoined defendant

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“from using marks containing the word ‘Grange’” on September 29,

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2015 (“September 2015 order”), (Sept. 29, 2015 Order (Docket No.

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85)).

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(Compl. (Docket No. 1).)

The

On April 20, 2016, the court found defendant in
“deliberate and willful” violation of the September 2015 order

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(“April 2016 order”).

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Pursuant to 15 U.S.C. § 1117(a), the court awarded plaintiff

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attorneys’ fees incurred from various motions and affidavits it

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had filed for the purpose of enforcing the September 2015 order.

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(See id. at 38-39.)

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(Apr. 20, 2016 Order (Docket No. 138).)

On September 12, 2016, the court determined the amount

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of fees awarded under the April 2016 order to be $144,715.70.

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(Sept. 12, 2016 Order at 23.)

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plaintiff the fees awarded and “file an affidavit with the court

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confirming payment within fourteen (14) business days.”

The court ordered defendant to pay

(Id.)

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On September 19, 2016, defendant filed a declaration

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stating that it “is unable to comply with the [court’s] Fee[s]

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Order” because “[m]ost of the funds [it holds] are subject to a

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preliminary injunction issued in [a] State Court Action” the

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parties are involved in.

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Decl.”) ¶¶ 2, 4 (Docket No. 155).)

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defendant does not dispute, that defendant has not paid any

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portion of the court’s fees order to date.

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(“Pl.’s Mem.”) at 4 (Docket No. 178-1); McFarland Decl. ¶ 2.)

(Decl. of Robert McFarland (“McFarland

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Plaintiff claims, and

(Pl.’s Mot., Mem.

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Plaintiff now moves for an order assigning it the right

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to collect “all payments due or to become due to defendant” from

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eighty-three of its local chapters to satisfy the court’s fees

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order.

(Pl.’s Mot. at 1.)

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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).

Fed. R. Civ. P.

Under California Civil Procedure Code

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section 708.510 (“section 708.510”), “the court may order the

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

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part of a right to payment due or to become due, whether or not

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the right is conditioned on future developments . . . .”

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

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

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Cal.

In considering whether to issue an assignment order

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under section 708.510, the court “may take into consideration all

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relevant factors,” including “the reasonable requirements of the

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judgment debtor who is a natural person,” other “[p]ayments the

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judgment debtor is required to make,” “the amount remaining due

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on the money judgment,” and “[t]he amount being received or to be

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received in satisfaction of the right to payment that may be

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assigned.”

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Int’l, Inc. v. Dostel Corp., M.C. No. 2:11–45 WBS GGH, 2013 WL

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

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assignment order does not demand “[d]etailed evidentiary

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

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creditor must describe the source of the right to payment with

Cal. Civ. Proc. Code § 708.510(c); Choice Hotels,

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While a motion for an

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“some degree of concreteness,” Icho v. PacketSwitch.com, Inc.,

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Civ. No. 01–20858 LHK PSG, 2012 WL 4343834, at *2 (N.D. Cal.

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Sept.21, 2012).

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Plaintiff identifies two types of payments made by

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defendant’s local chapters to defendant: (1) membership dues, and

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(2) loan payments.

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(Pl.’s Mem. at 1.)

With respect to membership dues, plaintiff represents

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that local chapters paid dues to defendant in 2016 and “are

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expected to continue to pay dues to [defendant]” going forward.

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(Decl. of Holly Lance (“Lance Decl.”) ¶¶ 3-4 (Docket No. 178-2).)

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Defendant does not dispute that it received dues in 2016 and will

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continue to receive dues going forward.

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5, 8 (stating that defendant received “$14,259.64 in membership

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dues” for the previous quarter and referring to dues as a

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“continuing source[] of income” for defendant).)

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bylaws confirm that the dues defendant receives are paid by local

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chapters.

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(Docket No. 181-1).)

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to defendant are a sufficiently concrete source of payment to

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justify an assignment order.

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(See McFarland Decl. ¶¶

Defendant’s

(See Pl.’s Reply Ex. A, Cal. Guild Bylaws ¶ 10.3
The dues paid by defendant’s local chapters

With respect to loan payments, plaintiff represents

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that four of the eighty-three local chapters listed in its Motion

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“are making regular loan payments to [defendant].”

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¶ 5.)

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from local chapters in 2016, (see McFarland Decl. ¶ 7), but

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opposes the assignment of future loan payments on grounds that

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there is currently a preliminary injunction in the parties’ state

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court action requiring that such payments be “paid into escrow,”

(Lance Decl.

Defendant does not dispute that it received loan payments

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(see Def.’s Opp’n at 2 (Docket No. 180)).

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Plaintiff correctly notes, however, that the state

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court injunction is limited to payments made pursuant to loans

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that originated on or prior to April 5, 2013, when the parties

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split off from each other.

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181); Def.’s Opp’n Ex. 1, State Ct. Prelim. Inj. Order at 1-2

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(Docket No. 180).1)

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notes indicating that defendant made loans to local chapters

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after April 5, 2013.

(See Pl.’s Reply Ex. B, Promissory Notes

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(Docket No. 181-1).)

Plaintiff only seeks assignment of payments

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made pursuant to post-April 5, 2013 loans.

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Because defendant has provided no evidence indicating that

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payments made pursuant to post-April 5, 2013 loans are subject to

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any encumbrance, the court finds that such payments are also

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sufficiently concrete to justify an assignment order.

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(See Pl.’s Reply at 2-3 (Docket No.

Plaintiff has provided copies of promissory

(Pl.’s Reply at 2.)

The factors set forth in section 708.510(c) indicate

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that an assignment order is proper here.

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any part of the court’s $144,715.70 fees order to date and has

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not alerted the court to any judgments or assignments, save the

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state court injunction discussed above, that it is required to

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satisfy.

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Defendant has not paid

Defendant states in its Supplemental Opposition that
assigning payments from its local chapters to plaintiff will put

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The court hereby takes judicial notice of the state
court’s preliminary injunction order pursuant to Federal Rule of
Evidence 201. See U.S. ex rel. Robinson Rancheria Citizens
Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992)
(Federal courts “may take notice of proceedings in other courts,
both within and without the federal judicial system, if those
proceedings have a direct relation to matters at issue.”).
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it out of operation.

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188).)

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of operation, however, is not in itself an adequate reason to

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deny plaintiff’s Motion.

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FiberLight, LLC, No. 14-CV-00728-SI, 2016 WL 7188008, at *4 (N.D.

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Cal. Dec. 12, 2016) (granting section 708.510 motion despite

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potential that assignment of payments “will . . . impair the

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[debtor] company’s ability to manage ongoing operations”);

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Innovation Ventures, LLC v. N2G Distrib., Inc., No. SACV 12-717

(Def.’s Supplemental Opp’n at 2 (Docket No.

That the court’s assignment order may put defendant out

See Telecom Asset Mgmt., LLC v.

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ABC (EX), 2014 WL 10384606, at *5 (C.D. Cal. May 1, 2014)

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(granting section 708.510 motion despite debtor’s representation

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that assignment of payments will “drive [him] out of business”

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and “extinguish[]” such payments).

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Defendant also suggests in its Supplemental Opposition

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that its nonprofit status should somehow exempt it from section

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708.510’s reach.

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the court is not aware of a case that has directly addressed

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section 708.510 in the context of nonprofit organizations,

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nothing in section 708.510, or any authority that the court has

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found, exempts nonprofit organizations from section 708.510’s

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reach.

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(See Def.’s Supplemental Opp’n at 3.)

While

Because other factors set forth in section 708.510(c)

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justify an assignment order here, and because the membership dues

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and payments made pursuant to post-April 5, 2013 loans discussed

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in this Order are sufficiently concrete sources of payment, the

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court will grant plaintiff’s Motion with respect to membership

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dues and payments made pursuant to post-April 5, 2013 loans.

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court will deny plaintiff’s Motion to the extent it seeks
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The

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assignment of other payments local chapters may owe to defendant,

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which plaintiff did not specifically address in its Motion.

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UMG Recordings, Inc. v. BCD Music Grp., Inc., No. CV07-05808 SJO

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FFMX, 2009 WL 2213678, at *2 (C.D. Cal. July 9, 2009) (noting

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that “failure to identify . . . specific assets” may be grounds

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for denial of assignment).

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See

IT IS THEREFORE ORDERED that plaintiff’s Motion for an

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assignment order be, and the same hereby is, GRANTED IN PART as

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follows:

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(1)

All membership dues due to defendant now or in the

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future from the local chapters listed on pages one

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through four of plaintiff’s Motion (Docket No. 178) are

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hereby assigned to plaintiff to the extent necessary to

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satisfy the court’s fees order (Docket No. 154).

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(2)

All payments due to defendant now or in the future

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pursuant to loans defendant made after April 5, 2013 to

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the local chapters listed on pages one through four of

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plaintiff’s Motion are hereby assigned to plaintiff to

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the extent necessary to satisfy the court’s fees order.

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(3)

Defendant is hereby enjoined from assigning or

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otherwise disposing of the payments discussed in (1)

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and (2) to any other person or entity until it has

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satisfied the court’s fees order.

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(4)

Plaintiff’s Motion is DENIED in all other respects.

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(5)

Counsel for plaintiff shall serve a copy of this Order

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on the local chapters listed on pages one through four

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of plaintiff’s Motion.

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Dated:

March 9, 2017

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