Cellspin Soft, Inc. v. Fossil Group, Inc. et al
Filing
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ORDER Granting Defendants' 110 111 117 118 Ex Parte Application for a Debtor's Examination. Judgment Debtor Exam set for 2/21/2019 01:30 PM. Signed by Judge Kandis A. Westmore on 11/21/2018. (kawlc2, COURT STAFF) (Filed on 11/21/2018)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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CELLSPIN SOFT, INC.,
Plaintiff,
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United States District Court
Northern District of California
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Case No. 17-cv-05933-YGR (KAW)
v.
FOSSIL GROUP, INC., et al.,
Defendants.
ORDER GRANTING DEFENDANTS'
EX PARTE APPLICATION FOR A
DEBTOR'S EXAMINATION
Re: Dkt. Nos. 110, 111, 117, 118
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On October 17, 2018, Defendants Fossil Group, Inc. and Misfit Inc. filed an ex parte
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application requesting an order that Plaintiff Cellspin Soft, Inc. appear for a debtor's examination.
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(Defs.' Mot. for Debtor's Exam, Dkt. No. 110; Dkt. No. 111). Defendants were previously
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awarded $100,000 in attorney's fees, and have since obtained a writ of execution. (Dkt. Nos. 101,
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108.) The case was then referred to the undersigned for post-judgment/collections actions. (Dkt.
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No. 114.) On October 31, 2018, Plaintiff filed an opposition. (Plf.'s Opp'n, Dkt. No. 115.) On
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November 7, 2018, Defendants filed their reply. (Defs.' Reply, Dkt. No. 116.) On November 20,
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2018, Defendants filed the same ex parte application requesting a debtor's exam, but for February
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21, 2019. (Dkt. Nos. 117, 118.)
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Federal Rule of Civil Procedure 69(a)(2) provides that a judgment creditor "may obtain
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discovery from any person -- including the judgment debtor -- as provided in these rules or by the
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procedure of the state where the court is located." Under California law, a "judgment creditor may
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apply to the proper court for an order requiring the judgment debtor to appear before the court . . .
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at a time and place specified in the order, to furnish information to aid in enforcement of the
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money judgment." Cal. Code of Civ. P. ยง 708.110(a); see also Hooser v. Superior Ct. of San
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Diego Cty., 84 Cal. App. 4th 997, 1002 (2000) ("Pursuant to the statutory procedure, the judgment
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creditor may obtain an order requiring the judgment debtor to appear before the court, or a court-
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appointed referee, to furnish information that will aid in the enforcement of the money
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judgment"), disapproved on other grounds by Williams v. Superior Court, 3 Cal. 5th 531, 557
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(2017).
In opposing the request for a debtor's examination, Plaintiff does not dispute that there is a
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valid judgment. Instead, Plaintiff first argues that Defendants served interrogatories that went
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"beyond requests for information relating to the existence of transfer of Cellspin's assets or
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relating to property Cellspin has, or may acquire in the future, that may be available to satisfy
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Defendants' judgments." (Plf.'s Opp'n at 9.) Specifically, Plaintiff takes issue with the
interrogatories' definition of "You" and "Your," which was defined to include Plaintiff and
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United States District Court
Northern District of California
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Plaintiff's agents, representatives, attorneys, or anyone authorized or purportedly authorized to act
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on Plaintiff's behalf, as well as owners, managers, members, partners, limited partners, or parent
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entities. (Id.; see also id., Exh. 1 at 2.) Defendants respond that information about Plaintiff's
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managers or principals is necessary because there may be a basis to obtain judgments against the
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individuals, arguing that "the corporate form cannot be used as a shield to insulate owners against
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liability for their own tortious conduct or tortious conduct they control." (Defs.' Reply at 4.)
The Court agrees that questions about Plaintiff's managers or principles may be relevant to
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determining what assets are available to pay a judgment. Likewise, information as to corporate
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structure and formalities are relevant to determining if Plaintiff's managers or principles may be
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held liable, such as under an alter ego theory. Otherwise, as Defendants point out, if Plaintiff was
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"[t]o come to court . . . as an undercapitalized entity seeking monetary damages against defendant
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companies," this would "improperly skew[] the playing field, as only one side of the case bears
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nearly the entire risk of litigation."1 (Defs.' Reply at 5.)
The Court does, however, find that questions regarding Plaintiff's attorneys would be
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overbroad. Defendants provide no explanation for why Plaintiff's attorneys specifically could be
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held liable for the judgment. Therefore, questions regarding the assets or other personal or
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Notably, Plaintiff asserts that it has no money to file a supersedeas bond, yet apparently has the
assets to afford multiple appeals. (See Plf.'s Opp'n at 2.)
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financial information of Plaintiff's attorneys are not appropriate.
Second, Plaintiff argues that Defendants' request for an examination is premature because
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there is an appeal. (Plf.'s Opp'n at 13.) Plaintiff theorizes that Defendants are trying to obtain
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Plaintiff's patents in order to stop the appeals. (Id.) The Court disagrees. Again, Defendants have
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a valid judgment, and are entitled to a judgment debtor exam to determine what assets are
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available to pay the judgment. Further, Defendants have not yet sought Plaintiff's patents to
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satisfy the judgment. Therefore, Plaintiff's concerns about Defendants' alleged motivations for
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obtaining the patents is premature.
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Third, Plaintiff suggests that the Court should stay post-judgment enforcement proceedings
during the pendency of the appeals. (Plf.'s Opp'n at 14.) Again, Plaintiff is primarily concerned
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United States District Court
Northern District of California
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with the possibility that Defendant may obtain Plaintiff's patents. (Id.) As explained above, this is
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premature, and not a reason to stay post-judgment proceedings. Plaintiff provides no authority
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that would otherwise suggest a stay is necessary, particularly where Plaintiff has failed to file a
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supersedeas bond.
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Accordingly, the Court GRANTS Defendants' ex parte application and ORDERS Plaintiff
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to appear for a debtor's exam before this Court, located at 1301 Clay Street, Oakland, California
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94612, on February 21, 2019 at 1:30 p.m. During this debtor's examination, Defendants may not
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ask questions about the personal assets or financial information of Plaintiff's counsel.
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IT IS SO ORDERED.
Dated: November 21, 2018
__________________________________
KANDIS A. WESTMORE
United States Magistrate Judge
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