Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-mc-80249/USCOURTS-cand-3_13-mc-80249-21/pdf.json

Parties Involved:
Choice Hotels International, Inc.
Plaintiff
Mukesh J. Mowji
Defendant
Anil R. Patel
Defendant
Tarun S. Patel
Defendant
Penta Denver, LLC
Defendant
Penta Hospitality, LLC
Defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CHOICE HOTELS INTERNATIONAL,

INC.,

Plaintiff,

 v.

PENTA DENVER, LLC, PENTA

HOSPITALITY, LLC, TARUN S. PATEL,

MUKESH J. MOWJI, and ANIL R. PATEL,

Defendants. /

No. C 13-80249 WHA

ORDER HOLDING MUKESH

MOWJI IN CONTEMPT AND

ORDER RESCHEDULING

EXAMINATIONS

INTRODUCTION

In this post-judgment-collection matter, a magistrate judge recommended holding

two judgment debtors in contempt for their failure to appear for noticed judgment-debtor

examinations. For the reasons stated herein, the report and recommendation is hereby

ADOPTED. The judgment debtors are HELD IN CIVIL CONTEMPT until they submit to the

judgment-debtor examinations rescheduled herein.

STATEMENT

Previous orders discussed the history of this action so it will not be repeated herein

(Dkt. Nos. 69, 77). The essence of this action is as follows. Plaintiff Choice Hotels

International, Inc. obtained a default judgment for $129,849 (plus post-judgment interest and

costs) against a number of defendants, including Mukesh Mowji and Tarun Patel (collectively,

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the “judgment debtors”), in the District of Maryland. Thereafter, Choice Hotels registered that

judgment here. A December 2013 order referred all matters related to post-judgment collection

in this action to Magistrate Judge Jacqueline Scott Corley.

Shortly after registering the judgment, Choice Hotels moved to charge Tarun Patel’s

interest in Pacific Hospitality, LLC and for assignment of Patel’s interest in future payments

from Pacific Hospitality’s business activities. Choice Hotels served Tarun Patel by mail with

both motions in compliance with Section 708.510 of the California Code of Civil Procedure. 

The undersigned judge granted both motions. Tarun Patel’s interests were charged and assigned. 

Final judgment entered against Tarun Patel. Choice Hotels served him by mail with the order

charging and assigning his interests (Dkt. Nos. 11–14).

Next, Choice Hotels moved to charge Mukesh Mowji’s interest in Lemoore Crossings,

LLC. Choice Hotels served Mowji with the motion via mail. Choice Hotels subsequently

moved for assignment of Mowji’s right to future payments from the business activities of

Pracrea, Inc. The undersigned judge granted Choice Hotel’s charging motion. Final judgment

entered against Mukesh Mowji, but the motion for assignment remained pending (Dkt. Nos. 18,

26–27).

After final judgment entered against Mukesh Mowji, Magistrate Judge Corley filed a

report and recommendation to grant Choice Hotel’s motion for assignment of Mowji’s right to

future payments from Pracrea. Out of an abundance of caution, the undersigned judge ordered

Choice Hotels to attempt personal service of an assortment of filings, including some already

served by mail, on Mukesh Mowji and Pracrea. Choice Hotels personally served Mukesh Mowji

with those documents and with the sworn declaration of Justin Morong detailing successful

personal service. The undersigned judge granted the assignment motion and Mowji’s right to

future payments was thus assigned (Dkt. Nos. 30, 32, 64). 

A pair of August 2014 orders by Magistrate Judge Corley set judgment-debtor

examinations for Mukesh Mowji and Tarun Patel in October 2014 (Dkt. Nos. 46, 47). 

The examination orders stated that failure to appear could result in arrest, punishment for

contempt, or an order requiring payment of reasonable attorney’s fees. Choice Hotels personally

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served the judgment debtors with the examination orders more than ten days before the noticed

examinations — as required by Section 708.110 of the California Code of Civil Procedure — but

both judgment debtors failed to appear on the noticed dates. Mowji and Patel never indicated

that the noticed dates were inconvenient, attempted to reschedule their examinations, or stated

that they could not or would not appear. They simply did not show (Dkt. Nos. 62, 63).

Choice Hotels then moved for an order to show cause why the judgment debtors should

not be held in contempt. The judgment debtors did not respond, despite service of the motion

via mail. Accordingly, Magistrate Judge Corley directed Mukesh Mowji and Tarun Patel to

show cause “why they should not be found in civil contempt based on their failure to follow

the Court’s Examination Orders” (Dkt. No. 77). Neither judgment debtor responded, despite

personal service of the order.

Then, neither judgment debtor showed up at the January 22 hearing on the order to show

cause. A report and recommendation followed. In pertinent part, Magistrate Judge Corley

recommended holding Mukesh Mowji and Tarun Patel in contempt (Dkt. Nos. 81, 82). 

Choice Hotels did not personally serve the judgment debtors with the report and

recommendation until February 2015.

On February 24, 2015, Mukesh Mowji and Tarun Patel appeared in this action for the

first time by timely objecting to the report and recommendation, requesting de novo review,

and moving to set aside the report and recommendation. They made this initial appearance via

counsel, Attorney Heather Norton, from the Law Office of Heather Norton. In support of their

motion and objections, Tarun Patel stated under penalty of perjury that he intends to “fully

cooperate with the present Court proceedings” and that he and Mukesh Mowji “appointed a

business associate, Mr. Jayesh Patel, to act as liaison with Choice Hotels” (Patel Decl. ¶¶ 7–10). 

Neither Mukesh Mowji nor non-party Jayesh Patel filed declarations. 

Choice Hotels timely filed a response. It argues that the judgment debtors’ objections

should be overruled because they neither claimed nor offered proof of their inability to comply

with the examination orders and due to “the absence of any nexus between the random contacts

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by Jayesh Patel and the dates of the failure to appear for examinations” (Dkt. No. 94). This

order follows full briefing and oral argument. 

ANALYSIS

This order reviews Magistrate Judge Corley’s report and recommendation de novo. 

See On Command Video Corp. v. LodgeNet Entertainment Corp., 976 F. Supp. 917, 921

(N.D. Cal. 1997) (Judge Saundra Brown Armstrong). To establish civil contempt, the movant

must show (1) that defendants violated a specific and definite court order; (2) beyond substantial

compliance; (3) not based on a good faith and reasonable interpretation of the order; (4) by clear

and convincing evidence. In re Dual-Deck Video Cassette Recorder Antitrust Litigation,

10 F.3d 693, 695 (9th Cir. 1993). The violation need not be willful as there is no “good faith

exception.”

Here, Mukesh Mowji and Tarun Patel failed to appear before Magistrate Judge Corley

on October 30 and October 31, 2014, despite personal service of the examination orders. 

Those orders specifically stated that failure to appear could result in arrest, punishment for

contempt, or an order requiring payment of reasonable attorney’s fees. Nevertheless, neither

judgment debtor appeared. When an order to show cause followed, neither judgment debtor

responded. Neither judgment debtor appeared at the January 2015 hearing. Accordingly,

Mukesh Mowji and Tarun Patel violated a court order (Dkt. Nos. 53, 57, 79, 80).

Upon such a showing, the burden shifts to the judgment debtors to demonstrate why

they were unable to comply. Federal Trade Commission v. Enforma Natural Products, Inc.,

362 F.3d 1204, 1211 (9th Cir. 2004).

Once Choice Hotels served the judgment debtors with Magistrate Judge Corley’s report

and recommendation (Dkt. Nos. 84, 84-1), Mukesh Mowji and Tarun Patel appeared for the

very first time. Tarun Patel filed a signed, sworn declaration stating that he and Mowji wished

to resolve the matter “amicably.” They had “appointed a business associate, Mr. Jayesh Patel”

to initiate “settlement discussions,” which allegedly began in March 2014. Then, the judgment

debtors did not retain counsel until February 23, 2015. Now, “[w]e both intend to fully

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cooperate with the present Court proceedings, and to adhere to all Court-imposed deadlines,”

Tarun Patel stated (Patel Decl. ¶¶ 7–10). Mukesh Mowji, however, did not file a declaration. 

Both judgment debtors argue that Magistrate Judge Corley’s report and recommendation should

be rejected because she was not “aware” of their “settlement negotiations” and new examination

orders can be issued.

According to the Assistant General Counsel of Choice Hotels, “Jayesh Patel has not been

in negotiations with anyone in the legal department.” Rather, Jayesh Patel “put out feelers to

others in the company” several years ago — feelers that went nowhere — and did not reach out

again until 2015, long after the judgment debtors failed to appear for their noticed examinations

(Kreindler Decl. ¶ 5). 

This order finds that Mukesh Mowji and Tarun Patel were wrong to fail to appear for the

noticed October 2014 examinations and the January 2015 hearing. They were also wrong to fail

to respond to Choice Hotel’s motions and Magistrate Judge Corley’s orders. It is no excuse that

they wished to resolve the matter “amicably” or that they allegedly sought to negotiate a

“settlement” via non-party Jayesh Patel. Accordingly, this order HOLDS MUKESH MOWJI AND

TARUN PATEL IN CIVIL CONTEMPT until such time as they purge their contempt by submitting

to the rescheduled judgment-debtor examinations. Magistrate Judge Corley’s report and

recommendation is hereby ADOPTED. 

The question that remains is what relief, if any, is appropriate. Magistrate Judge Corley

did not recommend any specific relief. Sanctions for civil contempt may be imposed to coerce

obedience to a court order, compensate the party pursuing the contempt action for injuries

resulting from the contemptuous behavior, or both. Ahearn v. International Longshore &

Warehouse Union, 721 F.3d 1122, 1129 (9th Cir. 2013). In contrast, a criminal sanction

generally seeks to punish a completed act of disobedience.

Here, Choice Hotels sought a finding of civil contempt to “hale” the judgment debtors

into court. Now, Attorney Norton represents that her clients, the judgment debtors, intend

to “fully cooperate with the Court’s procedures” and Tarun Patel promises to adhere to “all

Court-imposed deadlines” (Patel Decl. ¶ 10). Since Choice Hotels did not seek any specific

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monetary sanctions and there is no evidence in the record of any specific monetary loss incurred

by the violations, no monetary sanctions will be imposed at this time. 

Rather, to coerce compliance with the examination orders and subpoenas, this order holds

that the judgment debtors must appear to furnish information to aid in enforcement of a money

judgment against them in accordance with the following:

1. Mukesh Mowji and Tarun Patel are ordered to appear for

judgment-debtor examinations before Magistrate Judge Corley on THURSDAY,

APRIL 16, 2015 at 9:00 A.M. in COURTROOM F, 15th Floor, U.S. District Court,

450 Golden Gate Avenue, San Francisco, California. 

2. If either judgment debtor fails to purge his contempt by both

appearing at his rescheduled examination and fully complying with the subpoena,

including Attachment A, the United States Marshal shall arrest and detain him at

a suitable place until such time as he submits to a judgment-debtor examination

and complies with the subpoena. Confinement shall not exceed eighteen months. 

3. Both counsel of record shall personally attend any scheduled

examinations on behalf of their clients. 

In fashioning the sanctions herein, this order stresses that the objective is not to punish. 

Rather, the objective is to induce compliance. Choice Hotels is entitled to conduct

judgment-debtor examinations under California law and FRCP 69. This order gives effect

to that right. 

CONCLUSION

The report and recommendation is hereby ADOPTED. MUKESH MOWJI AND

TARUN PATEL ARE HELD IN CIVIL CONTEMPT until such time as they purge their contempt by

submitting to the above-stated rescheduled judgment-debtor examinations. 

IT IS SO ORDERED.

Dated: April 2, 2015. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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