Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-00075/USCOURTS-casd-3_05-cv-00075-7/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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- 1 - 05CV75 WQH (CAB)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

HOKOJITSUGYO COMPANY, LTD.,

Plaintiff,

CASE NO. 05CV75 WQH (CAB)

ORDER REQUESTING FURTHER

vs. BRIEFING

FEDERAL INSURANCE COMPANY,

Defendant.

HAYES, Judge:

Pending before the Court are the applications for disbursement of judgment proceeds pursuant

to CAL. CODE CIV. P. §§ 708.410 et seq. filed by Otay Project, LLC (Doc. # 302), Century Surety

Company (Doc. # 303), and Duckor, Spradling, Metzger & Wynne (Docs. # 291, 304).

BACKGROUND

On December 13, 2004, Plaintiffs Hokojitsugyo Company, Ltd. (Hoko) and David Blackburn

(Blackburn) filed a Complaint against Defendant Federal Insurance Company (Federal) for breach of

contract and bad faith in the California State Superior Court in San Diego, California. See (Doc. # 1).

On January 14, 2005, Defendant Federal removed the case to this Court. (Doc. # 1). 

On December 12, 2005, Plaintiffs filed a First Amended Complaint terminating Plaintiff

Blackburn, and adding as a Plaintiff 350 West Ash, LLC (350 W.A.). (Doc. # 34). The First

Amended Complaint asserted claims for breach of contract, breach of the implied covenant of good

faith and fair dealing, negligent infliction to prospective economic advantage, and declaratory relief.

(Doc. # 34). 

Case 3:05-cv-00075-WQH-CAB Document 310 Filed 06/05/08 Page 1 of 3
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- 2 - 05CV75 WQH (CAB)

On January 26, 2006, Defendant Federal moved for summary judgment on each of the claims

asserted by Hoko and 350 W.A. (Doc. # 43). On May 1, 2006, the Court granted Defendant’s motion

for summary judgment with respect to all of the claims asserted by Plaintiff 350 W.A., as well as with

respect to Plaintiff Hoko’s claims for declaratory relief and negligent infliction to prospective

economic advantage. (Doc. # 101). As of May 1, 2006, only Plaintiff Hoko’s claims for breach of

contract and breach of the implied covenant of good faith and fair dealing remained pending in this

action. See (Doc. # 101).

On January 11, 2008, Plaintiff Hoko served an Offer of Compromise pursuant to CAL. CODE

CIV.P. § 998 upon Defendant Federal for $999,999.00. See (Docs. # 298, 300). On January 25, 2008,

Defendant Federal accepted Hoko’s Offer of Compromise. See (Doc. # 300).

On January 28, 2008, Century Surety Company (Century) filed a notice of judgment lien

against 350 W.A. and Blackburn. (Doc. # 273). On January 31, 2008, Duckor, Spradling, Metzger

& Wynne law corporation (Duckor) filed a notice of judgment lien against Blackburn. (Doc. # 288).

On February 21, 2008, Duckor filed a notice of contractual lien for attorneys’ fees against 350 W.A.

and Blackburn. (Doc. # 291). On February 27, 2008, Otay Project, LLC (Otay) filed a notice of

contractual lien against Blackburn and 350 W.A. (Doc. # 293). Otay’s notice also claimed “a security

interest in any funds paid to Blackburn, 350 W.A., or Hokojitsugyo Company, Ltd.” (Doc. # 293 at

1).

On April 15, 2008, the Court entered Judgment in favor of Hoko and against Federal in the

amount of $999,999.00. (Doc. # 300). The Court ordered enforcement of the judgment to be held in

abeyance pending adjudication of the rights of the lien holders. (Doc. # 300). On April 15, 2008, the

Court set a briefing schedule for application to the court for judgment proceeds pursuant to the

California judgment lien statutes, CAL. CIV. CODE §§ 708.410 et seq. (Doc. # 301).

On April 28, 2008, claimants Century, Otay, and Duckor filed applications for judgment

proceeds. (Docs. # 302, 303, 304). 

REQUEST FOR FURTHER BRIEFING

On April 15, 2008, this Court set a briefing schedule to allow the lien claimants to apply to the

Court for judgment proceeds pursuant to California’s judgment lien statutes, CAL. CIV. CODE §§

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- 3 - 05CV75 WQH (CAB)

708.410 et seq. California’s judgment lien statutes permit “a judgment creditor who has a money

judgment against a judgment debtor who is a party to a pending action or special proceeding” to

obtain a statutory judgment lien in the pending action or special proceeding. CAL. CODE CIV. P. §

708.410(a) (emphasis added); Brown v. Superior Court, 116 Cal. App. 4th 320, 326 (2004); see also

Abatti v. Eldridge, 103 Cal. App. 3d 484, 487 (1980) (judgment creditor can reach interests of

judgment debtor even if judgment debtor is defendant, as opposed to plaintiff, in pending action or

special proceeding); Fleet Credit Corp. v. TML Bus Sales, 65 F.3d 119, 121-122 (9th Cir. 1995)

(same).

The judgment in this case is in favor of a single party, Plaintiff Hoko. Each of the judgment

and contractual liens in this case names either 350 W.A. or Blackburn as the judgment debtor. See

(Docs. # 273, 288, 291, 293). The docket in this case, however, reflects that neither 350 W.A. nor

Blackburn are parties in this case. See (Docs. # 1, 34, 101). Accordingly, the Court hereby requests

further briefing which addresses whether this Court has the power to adjudicate judgment or

contractual liens against persons or companies who are not parties to this case. In addition, and

assuming the Court has the power to adjudicate liens against non-parties, the Court requests additional

briefing addressing whether this Court has the power to adjudicate contractual liens in this proceeding.

See Brown, 116 Cal. App. 4th at 330-31.

Any party or lien holder may file a brief responsive to this Order on or before Friday, June

13, 2008. If a party or lien holder chooses to file a brief, the brief shall be no longer than 10 pages.

IT IS SO ORDERED.

DATED: June 5, 2008

WILLIAM Q. HAYES

United States District Judge

Case 3:05-cv-00075-WQH-CAB Document 310 Filed 06/05/08 Page 3 of 3