Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-04218/USCOURTS-cand-3_07-cv-04218-36/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Default

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ELIZABETH GREWAL,

Plaintiff,

 v.

AMIT CHOUDHURY,

Defendant. /

No. C 07-4218 CRB

ORDER AFFIRMING MAGISTRATE

JUDGE

Choudhury appeals to this Court Judge Larson’s order denying his claims of

exemption and declining to release property. Because this issue can be resolved without the

aid of oral argument, the hearing currently scheduled for May 7 is hereby VACATED.

He makes three arguments, two of which intertwine and are based upon Illinois law. 

First, he argues that Judge Larson erred by failing to exempt from levy the monies found in

Choudhury’s Indian bank accounts. Second, he argues that Judge Larson–and by extension

this Court, since this issue was previously appealed but not ruled upon–erred by failing to

award an exemption based on the value of Choudhury’s car. Choudhury asks this Court to

allow him to keep his car, at which point he would agree not to challenge the levy on the

bank funds. Third, Choudhury argues that Grewal improperly obtained money that had been

held in a bank account in his wife’s name. Choudhury argues that such a transfer was

improper because the Debtor himself had no rights to that property.

Case 3:07-cv-04218-CRB Document 374 Filed 05/05/10 Page 1 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The monetary value of this exemption is approximately $5000, but the other issues in the

Order to Show Cause concerned claims worth many hundreds of thousands of dollars. It is therefore

unsurprising that this Court, and the lawyers involved, were more focused on the more valuable claims.

2

As for Choudhury’s argument with regard to his claimed exemptions under Illinois

law, this Court AFFIRMS Judge Larson’s orders. First, as for the automobile exemption,

Judge Larson first rejected such an exemption in his Order to Show Cause issued on

February 20, 2009. He held that Choudhury failed to present evidence sufficient to support

any of his claimed exemptions, including the exemption based on the value of his car. 

Choudhury appealed that determination to this Court, but it appears this Court never ruled on

it.1

 Choudhury asked Judge Larson to reconsider his ruling on remand, but Judge Larson

declined to do so. Second, Choudhury argues that he is entitled to exempt $4000 of the

assets found in the Indian bank accounts under Illinois law. Judge Larson rejected this

argument, as he was unconvinced that Choudhury is, in fact, entitled to the protection of

Illinois law. 

The pivotal question as to these arguments concerns the application of Illinois law. 

Choudhury is only entitled to the protection of Illinois law if he is domiciled in that state, and

he has presented only minimal evidence of this fact. Judge Larson concluded that

Choudhury failed to meet his burden. For the reasons explained below, this Court agrees,

and so AFFIRMS Judge Larson’s order.

Choudhury’s final argument concerns Grewal’s acquisition of funds held in a First

Republic bank account. Judge Larson concluded that it is improper to consider this issue at

this time, and once again, this Court agrees. Therefore, Judge Larson’s order is AFFIRMED

in its entirety.

BACKGROUND

On August 12, 2008, this Court entered a judgment in favor of Elizabeth Grewal and

against Amit Choudhury of $423,740.00 in compensatory damages and $500,000.00 in

punitive damages. In an attempt to collect on this Judgment, on October 15, 2008, Grewal

caused to be issued a Levy and Writ of Execution to First Republic Bank, seeking transfer of

the funds held in an account under the Choudhury name. On October 16, 2008, this Court

Case 3:07-cv-04218-CRB Document 374 Filed 05/05/10 Page 2 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

referred to Judge Larson Ms. Grewal’s application for a judgment debtor examination. After

Judge Larson issued an amended turnover order, Choudhury filed his Limited Objection to

Levy. Among other things, this objection included an argument that the value of

Choudhury’s car “was exempt pursuant to Section 12-1101(b)&(c) of the Illinois Compiled

Statutes.” Mot. at 3.

On February 20, 2009, Judge Larson issued an Order for Defendant to Appear Before

District Court and Show Cause Why He Should Not Be Held in Contempt. The Contempt

Certification overruled Choudhury’s claimed exemptions, including that relating to his car. 

The certification did so in reliance on the fact that Choudhury had never submitted a

declaration in support of his exemption claims, and so had failed to meet his evidentiary

burden.

On August 11, 2009, this Court issued two orders resolving the Contempt

Certification, but the orders did not focus any attention on Choudhury’s claims of exemption

in his automobile. 

On September 30, 2009, Choudhury appeared for his second judgment debtor

examination. Judge Larson issued his Turnover Order No. 2 in Aid of Execution that same

day. This Turnover Order required Choudhury to turn over the contents of two bank

accounts in India, which amounted to $4,017.65. Choudhury turned over that sum the next

month. However, Choudhury filed an objection to this levy on the ground that $4,000 of

those funds were exempt under Section 12-1101(b) of the Illinois Compiled Statutes. This

objection also made clear that, as remains the case, Choudhury is “willing to waive any

exemption claim in the funds held by the U.S. Marshal if he were instead allowed to assert

that exemption in the [car].” Dkt. #356, ¶ 4. Choudhury also raised once again the issue of

the money levied from the First Republic Bank Account two years earlier.

On March 22, 2010, Judge Larso overruled these objections. Choudhury now appeals.

DISCUSSION

This Court reviews a magistrate’s decision de novo. 

//

Case 3:07-cv-04218-CRB Document 374 Filed 05/05/10 Page 3 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

1. Karen Choudhury’s Bank Account

Judge Larson gave two independent grounds for denying Choudhury’s objection to the

transfer of funds from the First Republic account: First, he noted that the same issue had

previously been rejected by this Court. Second, he found that Karen Choudhury “failed to

follow the proper procedure for filing a third-party claim, and therefore her claim has been

extinguished, whether or not Judge Breyer expressly rejected it at the Show Cause hearing.” 

Dkt. #364, at 2. This Court agrees with Judge Larson’s second holding, and so does not need

to reach the merits of the first. 

This motion comes before the Court on an appeal from a turnover order. The most

recent turnover order, issued on September 30, 2009, concerned the contents of two Indian

bank accounts. See Dkt. #355. The prior turnover order, issued on December 23, 2008,

ordered the transfer of various forms of stock, any assets relating to settlement or proceeds of

settlement between Pinnacle Partners, Inc. and Allante Corporation, any monies held in trust

by law firms who had represented Choudhury, the title to Choudhury’s Mercedes Benz, and

all cash in Choudhury’s possession at the time of the judgment-debtor’s examination. 

Importantly, neither of these Turnover Orders had anything to do with the First Republic

bank account in question. Indeed, the writ of execution issued as to that account was issued

two months before Judge Larson’s first turnover order. Hence, this issue does not come

within the scope of an appeal of the first turnover order, let alone an appeal of the second

turnover order, issued in March of 2010. 

On the contrary, California law provides a separate procedure by which a third party

can assert her “rights in property levied upon by a judgment creditor.” Karen Choudhury

never availed herself of this procedure, and instead has tried to shoehorn the issue into an

appeal of a turnover order that had no relation to the bank account in question. The

procedure further provides that a person making a third-party claim must do so before the

“levying officer . . . [d]elivers possession of the property to the creditor.” Cal. Code Civ.

Pro. § 720.120. That time has clearly passed. Karen Choudhury was given notice of the

Levy on November 19, 2008, and the monies were delivered in mid-January 2009. Her

Case 3:07-cv-04218-CRB Document 374 Filed 05/05/10 Page 4 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

G:\CRBALL\2007\4218\Objection To JL\Order.wpd 5

failure to initiate the proper proceedings despite having adequate notice cannot be remedied

in this forum. This is not to say that Ms. Choudhury’s rights, if she has any, have been

extinguished. See Cal. Code Civ. Proc. § 720.120(b). But they cannot be resolved at this

juncture, in this proceeding. 

2. The Car & The Indian Bank Accounts

While there is much procedural wrangling between the parties as to what was decided

by whom, and why, and whether it remains binding, a threshold question is whether

Choudhury is entitled to avail himself of the protections of Illinois law. The parties agree

that the controlling law is the law of the debtor’s domicile, see, e.g., In re Arrol, 170 F.3d

934 (9th Cir. 1999), but disagree as to whether Choudhury has established that he is

domiciled in Illinois. Judge Larson, for his part, concluded that Choudhury had failed to

meet his burden. Judge Larson noted that Choudhury “was born in India, is a citizen of

Canada, and last year applied for a permit to reside in Switzerland. Domicile is determined

by where one intends to stay. ‘Residence’ in Switzerland implies staying in Switzerland.” 

Dkt. #364, at 7. This Court agrees. Given Choudhury’s systematic failure to submit sworn

statements in support of his claimed exemptions, and his failure to cite to any such

evidentiary support in this appeal, he has failed to submit sufficient evidence to establish his

entitlement to the protection of Illinois law. Therefore, Choudhury’s arguments based upon

exemptions available under Illinois law fail.

CONCLUSION

In sum, Judge Larson’s order below is AFFIRMED in its entirety. 

IT IS SO ORDERED.

Dated: May 5, 2010 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-04218-CRB Document 374 Filed 05/05/10 Page 5 of 5