U.S. BANK NATIONAL ASSOCIATION VS. NICK KEROS

Tentative Rulings

Case Number: GC044662    Hearing Date: November 08, 2019    Dept: A

U.S. Bank (assignee Republic Funding) v Keros

Motion for Charging Order

ALLEGATIONS:

Judgment Debtor Nick Keros (“Keros”) entered into a stipulated judgment with Plaintiff U.S. Bank National Association (“Plaintiff”) on April 23, 2012, in the amount of $2,450,000.00.

PRESENTATION:

Assignee Republic Funding Group, LLC (“Republic”) filed the instant motion for a charging order on October 04, 2019. Keros opposed the motion on October 28, 2019, and a reply brief was submitted on October 30, 2019.

RELIEF REQUESTED:

Republic moves for a charging order transferring any money or property due or becoming due to Keros in the following limited liability companies:

1. 7846 West Granito Drive, LLC;

2. Trousdale US Aussie, LLC;

3. Thrasher NK, LLC;

4. Runyon NKMS, LLC;

5. 2545 Bowmont, LLC; and

6. 9464 Beverlycrest, LLC.

DISCUSSION:

Standard of Review – Pursuant to Code of Civ. Proc. §708.310, “[i]f a money judgment is rendered against a partner or member but not against the partnership or limited liability company, the judgment debtor’s interest in the partnership or limited liability company may be applied toward the satisfaction of the judgment by an order charging the judgment debtor’s interest pursuant to Section 15907.3, 16504, or 17705.03 of the Corporations Code.”

Standing – Keros argues that Republic lacks standing under the theory that the chain in title of the assignment to Republic violated California law for failure of the out-of-state companies acknowledging the transfer of the debt to properly register as conducting business in the State of California – thus barring them from commencing or maintaining the instant enforcement action against Keros. Opposition, 4:3-8 (citing to United Medical Management Ltd. v. Gatto (1996) 49 Cal. App. 4th 1732; Corp. Code §2203; and Rev. & Tax Code §23301.

Keros’ argument lacks merit, as Corp. Code §191(c)(1) exempts “[m]aintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes” from the definition of transacting intrastate business that would place the matter at issue regarding the standing of the various corporations. Specifically, there is nothing before the Court that Republic, like United Medical Management Ltd., separate to filing the action, engaged in activities that would subject it to the filing and fee requirements provided in Corp. Code §2203. See United Medical Management Ltd. v. Gatto (1996) 49 Cal. App .4th 1732, 1738 (“On June 29, 1994, UMML qualified to transact intrastate business and was so certified by the Secretary of State on July 11, 1994.”). As far as the Court can tell, the only interaction Republic has with the state is the instant litigation, and because the sole act of “[m]aintaining or defending any action or suit …” is exempted from the definition of intrastate commerce. To the extent that Kero is arguing that the transfers themselves constitute ‘intrastate commerce’ to which the various business entities were required to maintain a legal presence in the state in order to execute an enforceable, contractual transfer, the Court finds that such transactions also fall within the ambit of Corp. Code §191(c)(1).

Accordingly, Keros’ opposition on the basis of Republic’s standing to enforce the stipulated settlement is without merit.

Interest in the LLCs – Keros next argues that Republic has failed to submit evidence of Keros’ interest in the six LLCs subject to the instant motion. Specifically, Keros argues that because the document provided refer to Keros as either a manager or member, the Court should find that there was not the “substantial evidence” required to meet the standard under Code of Civ. Proc. §708.310. The Court first notes that the case relied upon by Keros, Textron Fin. Corp. v. Gallegos (S.D. Cal. Oct. 7, 2015) No. 15CV1678-LAB (DHB), is an unpublished federal case that Keros may not use to support his argument. Next, the Court considers that Keros’ status as either a member or manager of the LLCs is sufficient basis for the Court to issue an order compelling the transfer of “money or property due or becoming due” pursuant to Keros’ work as a manager, or status as a member. Indeed, Keros’ status as either a manager or a member is substantial evidence that there is compensation upon which judgment may be satisfied, or else property upon which judgment may be satisfied.

Accordingly, Keros’ objection on the basis of failure to establish Keros’ interest in the LLCs is overruled.

For the reasons stated above, the Court will grant the motion.

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RULING: GRANT

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Assignee Republic Funding Group, LLC’s Motion for Charging Order came on regularly for hearing on November 08, 2919, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE MOTION IS GRANTED.

DATE: _______________ _______________________________

JUDGE