Next Level Ventures LLC v. Avid Holdings Ltd

Filing 2

ORDER Denying Application for Writ of Execution re 1 Application for Writ of Execution, signed by Judge Lauren King. (RE)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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NEXT LEVEL VENTURES LLC,
v.

Plaintiff,

CASE NO. 2:23-mc-00052-LK
ORDER DENYING APPLICATION
FOR WRIT OF EXECUTION

AVID HOLDINGS LTD.,
Defendant.

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This matter comes before the Court on Plaintiff Next Level Ventures, LLC’s Application

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for Writ of Execution. Dkt. No. 1. For the reasons set forth below, the Court denies the application.

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I.

BACKGROUND

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Plaintiff Next Level Ventures (“NLV”) sells vaping devices and accessories to end users,

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and Defendant Avid Holdings Ltd. (“Avid”) designs, develops, and produces those devices

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through relationships with third-party manufacturers. Next Level Ventures, LLC v. Avid Holdings

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Ltd., No. 2:22-cv-1083-JCC, 2023 WL 3382539, at *1 (W.D. Wash. May 11, 2023). Their

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relationship eventually deteriorated and NLV filed an arbitration demand and statement of claims

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with the International Center for Dispute Resolution (“ICDR”). Id. at *1–2. The arbitrator awarded
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NLV $892,020.25, 12% interest per annum, and declaratory and injunctive relief regarding the

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parties’ performance under their distribution agreement. Id. at *2. NLV filed suit to confirm the

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arbitration award, and on May 11, 2023, the Court issued an order granting NLV’s motion to

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confirm an arbitration award, denying Avid’s motion to vacate the award, and awarding NLV

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$892,020.25 plus 12% interest per annum. See generally id. at *1–5. Avid has appealed the

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judgment, Next Level Ventures, LLC v. Avid Holdings Ltd., No. 2:22-cv-1083-JCC, Dkt. No. 40

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(W.D. Wash. June 9, 2023), but has not moved to stay it.

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On June 23, 2023, NLV filed this action for a writ of execution contending that Avid has

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not paid any portion of the judgment. Dkt. No. 1 at 1–2. NLV seeks a writ directed to the United

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States Marshal to take into possession and sell Avid’s non-exempt personal property in an amount

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sufficient to satisfy the judgment. Dkt. No. 1-2 at 1–2. NLV’s proposed writ states that such

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property includes, but is not limited to, “[a]ll rights to and ownership interests in, held, or claimed

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by AVID in any and all intellectual property, including but not limited to any and all trademarks,

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copyrights, patents and/or trade secrets along with their associated goodwill;” “[a]ll contract rights

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belonging to or that may be claimed by AVID from any contract(s) to which AVID is a party” or

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beneficiary; and “[a]ll claims, counterclaims, causes of action, choses in action, rights of payment,

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claims to offset, claims to recoupment, and/or rights to compensation of every kind and nature

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which AVID may have against” NLV including but not limited to claims asserted in the prior

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arbitration and another currently pending arbitration. Id. at 2–3. Avid has not appeared in this

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matter.

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II. DISCUSSION

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Under Federal Rule of Civil Procedure 69, a money judgment may be enforced by a writ

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of execution. Fed. R. Civ. P. 69(a)(1). That rule provides that “[t]he procedure on execution—and

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in proceedings supplementary to and in aid of judgment or execution—must accord with the
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procedure of the state where the court is located, but a federal statute governs to the extent it

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applies.” Id. 1 The Court therefore looks to Washington law, which generally allows money

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judgments to be enforced by execution: “All property, real and personal, of the judgment debtor

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that is not exempted by law is liable to execution.” Wash. Rev. Code § 6.17.090; Hendricks &

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Lewis PLLC v. Clinton, 766 F.3d 991, 996 (9th Cir. 2014); Johnson v. Dahlquist, 225 P. 817, 818

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(Wash. 1924). The statute also specifically provides that “intangible personal property may be

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levied on[.]” Wash. Rev. Code § 6.17.160(7).

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The property listed in the proposed writ is not exempted by statute. Wash. Rev. Code

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§ 6.15.060. And courts have permitted writs of execution against some legal claims, patents, and

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copyrights. See, e.g., Hendricks & Lewis PLLC, 766 F.3d at 997 (unless an exception applies, a

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creditor can execute a writ of execution against patents and copyrights); Woody’s Olympia

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Lumber, Inc. v. Roney, 513 P.2d 849, 853–54 (1973) (a writ of execution can be levied against a

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medical malpractice claim). However, NLV has not cited any case law in support of its application,

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and it is not clear that it is entitled to, the writ it seeks against Avid’s contracts, trademarks, trade

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secrets, and arbitration rights, especially to the extent those assets are implicated in Avid’s appeal

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or in other ongoing proceedings. Dkt. No. 1-2 at 2–3; see Next Level Ventures, LLC v. Avid

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Holdings, Ltd., No. 23-35404 (9th Cir.); Next Level Ventures, LLC v. AVID USA Techs. LLC, No.

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2022-0699-MTZ (Del. Ch.); In the Matter of Certain Oil-Vaping Cartridges, Components Thereof,

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& Prod. Containing the Same Comm'n Opinion, USITC Inv. No. 337-TA-1286.

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Nor is it clear that NLV is entitled to a writ against Avid’s “claims, counterclaims, causes

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of action, choses in action, rights of payment, claims to offset, claims to recoupment, and/or rights

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to compensation of every kind and nature which AVID may have against” NLV. Dkt. No. 1-2 at

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The Court has “ancillary or supplemental jurisdiction for supplementary proceedings to enforce its judgment.”
Wright & Miller, 12 Fed. Prac. & Proc. Civ. § 3013 (3d ed.).

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3. If NLV were granted that writ, and if it purchased those rights at the subsequent sale, NLV

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would wind up on “both ends of [the] lawsuit” and arbitration with potentially “grossly inequitable

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result[s].” Paglia v. Breskovich, 522 P.2d 511, 514 (Wash. Ct. App. 1974). The proposed writ is

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broad enough to encompass Avid’s appeal of the underlying judgment confirming the arbitration

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award. Dkt. No. 1-2 at 3. “[A]llowing one party to destroy the opposing party’s appeal by

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becoming its owner through enforcement of the very judgment under review is fundamentally

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unjust.” MP Med. Inc. v. Wegman, 213 P.3d 931, 936 (Wash. Ct. App. 2009).

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It is also unclear whether the Court has authority to issue a writ directed to Avid’s property

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when its “last known addresses” are in Hong Kong and China and the application does not specify

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whether the subject property is located in Washington. Dkt. No. 1-2 at 2; see Office Depot Inc. v.

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Zuccarini, 596 F.3d 696, 700 (9th Cir. 2010) (“Once it has been determined by a court of

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competent jurisdiction that the defendant is a debtor of the plaintiff, there would seem to be no

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unfairness in allowing an action to realize on that debt in a State where the defendant has

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property[.]”). And finally, the proposed writ directs law enforcement officials to both take

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possession of and sell the listed property, but NLV has not given pre-sale notice to the debtor. Dkt.

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No. 1-2 at 2; see also Wash. Rev. Code § 6.17.130 (requiring notice to the judgment debtor prior

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to sale); id. § 6.21.020 (requiring pre-sale notice and describing procedures). Accordingly, NLV

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is not entitled to the requested writ.
III. CONCLUSION

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For the foregoing reasons, the Court DENIES NLV’s application for a writ of execution.
Dkt. No. 1.
Dated this 14th day of November, 2023.

A

Lauren King
United States District Judge
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