HDNet, LLC v. Hambrecht et al

Filing 55

ORDER by Magistrate Judge Jacqueline Scott Corley granting 42 MOTION FOR ASSIGNMENT ORDER AND RESTRAINING ORDER (ahm, COURT STAFF) (Filed on 6/19/2013)

1
2
3
4
5
6
7

IN THE UNITED STATES DISTRICT COURT

8

FOR THE NORTHERN DISTRICT OF CALIFORNIA

9
10

Northern District of California

United States District Court

11
12

HDNET, LLC,
Plaintiff,

13

v.

14
15
16

WILLIAM HAMBRECHT, et al.,

Case No.: C-12-80265 CRB (JSC)
ORDER GRANTING MOTION FOR
ASSIGNMENT ORDER AND
RESTRAINING ORDER (Dkt. No. 42)
REDACTED ORDER

Defendants.

17
18
19

In this judgment debtor action, Plaintiff moves for 1) an assignment of Defendant Hambrecht

20

1980 Revocable Trust’s (“Trust”) interests in various payments, and 2) a restraining order against the

21

Trust, “including its trustees and agents,” prohibiting them “from assigning or otherwise disposing of

22

the right to payment sought to be assigned.” (Dkt. No. 42 at 5-6.) Defendants have not responded to

23

the motion. Pursuant to Civil Local Rule 7–1(b), the Court finds that Plaintiff‘s motion can be

24

decided without oral argument and VACATES the June 20, 2013 hearing. After careful review of the

25

papers submitted in support of Plaintiff’s motion, the Court GRANTS the motion.
DISCUSSION

26
27
28

I.

Assignment Order
Whether or not Plaintiff is entitled to an assignment order is governed by Federal Rule of

1

Civil Procedure 69(a)(1), which in turn makes California law applicable. See Fed. R. Civ. P.

2

69(a)(1) (providing that “[a] money judgment is enforced by a writ of execution, unless the court

3

directs otherwise” and that “[t]he procedure on execution—and in proceedings supplementary to and

4

in aid of judgment or execution—must accord with the procedure of the state where the court is

5

located, but a federal statute governs to the extent it applies”).

may order the judgment debtor to assign to the judgment creditor . . . all or part of a right to payment

8

due or to become due, whether or not the right is conditioned on future developments.” Cal. Code

9

Civ. Proc. § 708.510(a). “[T]he legal standard imposed by § 708.510 does not obligate [a plaintiff] to

10

provide detailed evidentiary support for its request.” UMG Recordings, Inc. v. BCD Music Grp., Inc.,

11
Northern District of California

Under California law, “upon application of the judgment creditor on noticed motion, the court

7

United States District Court

6

2009 WL 2213678, at *3 (C.D. Cal. July 9, 2009).

12

The United States District Court for the Northern District of Texas entered a money judgment

13

in favor of Plaintiff and against Defendants in the amount of $3,680,548.56 plus additional interest.

14

(Dkt. No. 1.) The judgment was registered in this District on November 7, 2012. (Id.) Plaintiff

15

asserts that no payments have been made on the judgment. (Dkt. No. 42-1 ¶ 3.) As of April 25, 2013,

16

the total judgment amount is $3,929,590.32. (Id.) Plaintiff conducted a judgment debtor exam of

17

Defendant William Hambrecht, in which Hambrecht testified to the Trust’s assets as provided in the

18

Trust’s balance sheet.

19

Based on this judgment debtor exam, Plaintiff seeks an assignment order of the Trust’s rights

20

to certain payments from 1) W.R. Hambrecht + Co., LLC, 2) W.R. Hambrecht + Co., Inc., and 3)

21

Hambrecht Partners Holdings, LLC. (Dkt. No. 41-1 ¶ 2.) Specifically, Plaintiff seeks an assignment

22

of payment for a “Note Receivable” from “WRH+Co” in the amount of $3,055,864 and an “Interest

23

Receivable” in the amount of $61,619, as reflected in the Trust’s balance sheet. (See Dkt. No. 42-1 ¶

24

6, Ex. C at p. 2.) Plaintiff, as well as Hambrecht, are unaware whether the “WRH+Co” referred to in

25

the balance sheet is W.R. Hambrecht + Co., LLC or W.R. Hambrecht + Co., Inc. Plaintiff thus

26

appears to seek an assignment of payment from the LLC and the corporation to the extent either of

27

those entities are making payments to the Trust under the note. Because Plaintiff’s request is

28

adequately supported by evidence showing that the Trust is receiving, or is due to receive, payments

2

1

under the note, the Court GRANTS Plaintiff’s motion for an assignment of the payments due from

2

W.R. Hambrecht + Co. LLC or W.R. Hambrecht + Co., Inc. for the “Note Receivable” in the amount

3

of $3,055,864 and the “Interest Receivable” in the amount of $61,619 until such time as the judgment,

4

including accrued interest, is fully satisfied. 1

5

Regarding Hambrecht Partners Holdings, LLC, Plaintiff identifies in the balance sheet

6

$37,000 due to the Trust, which is noted as “Funds [Receivable] – HPH.” (Dkt. No. 42-1 ¶ 7, Ex. C.

7

at 2.) Plaintiff appears to assert that “HPH” is Hambrecht Partners Holdings, LLC. Plaintiff further

8

identifies in the balance sheet $12,685.307 in additional assets from “Hambrecht Partners Holdings,

9

LLC.” (Id.) Although the declaration attached to Plaintiff’s motion identifies both balance sheet

Northern District of California

items, Plaintiff’s proposed order seeks only the $37,000 in Funds Receivable. 2 (See Dkt. No. 42-2 at

11
United States District Court

10

2.) Because Plaintiff’s request is adequately supported by evidence showing that the Trust is

12

receiving, or is due to receive, $37,000 in Funds Receivable from Hambrecht Partners Holdings, LLC

13

the Court GRANTS Plaintiff’s motion for an assignment of those payments until such time as the

14

judgment, including accrued interest, is fully satisfied.

15

II.

16

Restraining Order
Under California Code of Civil Procedure § 708.520, a court may issue an order restraining

17

the judgment debtor from assigning or otherwise disposing of the right to payment that is sought to be

18

assigned “upon a showing of need for the order. The court, in its discretion, may require the judgment

19

creditor to provide an undertaking.” Cal. Code Civ. Proc. § 708.520(b). “[T]here is a relatively low

20

threshold” for “an adequate showing of need for purposes of obtaining a restraining order.” Legal

21

Additions LLC v. Kowalksi, 2011 U.S. Dist. LEXIS 81179, at *7 (N.D. Cal. July 26, 2011); see also

22

UMG, 2009 WL 2213678, at *3 (concluding that the need requirement was satisfied simply because

23
Plaintiff’s proposed order submitted with the motion appears to go beyond the note and interest
identified in the balance sheet. The proposed order requests “all rights to payment of money due or to
become due” from W.R. Hambrecht + Co., Inc and W.R. Hambrecht + Co. LLC, “including but not
limited to” the note and the interest. (Dkt. No. 42-2 at 1-2.) Plaintiff, however, has not identified any
other payments that are due or will become due to the Trust beyond the note and the interest. Thus, to
the extent Plaintiff seeks an assignment of payments in addition to the note and the interest, Plaintiff
has not provided any evidence supporting its request.
2
The proposed order, however, again uses the inadequate “including but not limited to” language
already discussed.
1

24
25
26
27
28

3

1

the judgment debtor had defaulted on the payment program under the settlement agreement and

2

refused to voluntarily satisfy the judgment against it).

3

In light of this low threshold, the Court concludes that a restraining order against the Trust is

4

warranted. The judgment has been entered in this case since November 2012, yet the Trust has failed

5

to make any payment on the judgment to Plaintiff. Further, the Trust has not opposed this motion nor

6

explained why such voluntary payment has not been made. In addition, Plaintiff has provided

7

evidence that suggests that the Trust may attempt to assign or otherwise dispose of the rights to the

8

payments at issue in the absence of a restraining order. (See Dkt. No. 42-1 ¶ 10.)

9
10

Accordingly, the Court GRANTS Plaintiff’s motion for a restraining order against the Trust,
its trustees, and agents.

Northern District of California

United States District Court

11

CONCLUSION

12

For the foregoing reasons, the Court hereby grants Plaintiff’s motion.

13

With respect to the request for an assignment order, IT IS HEREBY ORDERED as follows:

14

That the following rights to payment of Judgment Debtor the Trust be, and hereby are,

15

assigned to the Judgment Creditor, HDNet, until such time as the judgment herein is fully satisfied or

16

this order is amended: 1) payments due from W.R. Hambrecht + Co., LLC or W.R. Hambrecht + Co.,

17

Inc. for the “Note Receivable” in the amount of $3,055,864 and the “Interest Receivable” in the

18

amount of $61,619, and 2) payments due from Hambrecht Partners Holdings, LLC for $37,000 in

19

Funds Receivable.

20

With respect to the restraining order, IT IS HEREBY ORDERED that Judgment Debtor the

21

Trust, its trustees William Hambrecht and Sarah Hambrecht, its agents, servants, employees, and

22

attorneys and all other persons in active concert or participation with any of the forgoing are

23

restrained from assigning or otherwise disposing of the right to payment described above so that the

24

assignment rights to payment may be available for satisfaction of the judgment herein.

25

This Order disposes of Docket No. 42.

26
27

IT IS SO ORDERED.

28

4

1

Dated: June 19, 2013
_________________________________
JACQUELINE SCOTT CORLEY
UNITED STATES MAGISTRATE JUDGE

2
3
4
5
6
7
8
9
10

Northern District of California

United States District Court

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5