Landstar Global Logistics, Inc. v. Robinson & Robinson, Inc.

216 Cal.App.4th 378

156 Cal.Rptr.3d 687

LANDSTAR GLOBAL LOGISTICS, INC., Plaintiff and Respondent,

v. ROBINSON & ROBINSON, INC., Defendant;Wells Fargo Bank, N.A., et al., Interveners and Appellants.

D060829

Court of Appeal, Fourth District, Division 1, California.

Filed May 16, 2013

See 8 Witkin, Cal. Procedure (5th ed. 2008) Enforcement of Judgment, § 305.

APPEAL from orders of the Superior Court of San Diego County, Michael S. Groch, Judge. Reversed. (Super.Ct. No. 37–2010–00094559–CU–EN–CTL).

Pillsbury WinthropShaw Pittman, Kevin Fong, San Francisco, William B. Freeman, Los Angeles, and Matthew S. Walker, San Diego, for Intervener and Appellant Wells Fargo Bank, N.A.

Loeb & Loeb, Lance N. Jurich, Los Angeles, and Benjamin Valerio, for Intervener and Appellant David P. Stapleton, court-appointed receiver for Robinson & Robinson, Inc.

No appearance for Plaintiff and Respondent.

IRION, J.

In this appeal from postjudgment orders directing issuance of a letter rogatory requesting registration of judgment liens against properties of the judgment debtor in Mexico and restraining the debtor from transferring its right to payment upon the sale of those properties, we must decide two issues of first impression in California. First, may a court request the registration of judgment liens in a foreign country via a letter rogatory issued pursuant to the Inter– American Convention on Letters Rogatory? Second, may a court issue an order restraining the disposition of a right to payment pursuant to Code of Civil Procedure section 708.520 when it has not previously or simultaneously issued an order assigning the right to payment pursuant to section 708.510 of that code? ¹ We answer both questions in the negative and therefore reverse the challenged orders.

I.BACKGROUND

A. The Litigation Against Robinson & Robinson, Inc.

There are three lawsuits pertinent to the issues involved in this appeal:

First, Landstar Global Logistics, Inc. (Landstar) filed an action in the San Diego County Superior Court to domesticate and enforce a judgment it had obtained against Robinson & Robinson, Inc. (Robinson) in Florida. The trial court (Hon. Michael S. Groch) entered a judgment and issued a writ of execution. The postjudgment orders challenged on appeal were issued in this action.

Second, in a separate and subsequent action filed in the San Diego County Superior Court, Wells Fargo Bank, N.A. (Wells Fargo) sued Robinson and several affiliates after they had defaulted on secured loans and ceased business operations. At Wells Fargo's request, the trial court (Hon. William S. Cannon) appointed David P. Stapleton to act as receiver for Robinson and its affiliates.

Third, Wells Fargo also filed an action in Mexico against Robinson and some of its Mexican affiliates. The Mexican court granted Wells Fargo judicial liens on real property owned by a trust of which Robinson was a beneficiary. The parties to the Mexican litigation later entered into a settlement agreement under which Robinson agreed to sell its Mexican realty; to pay the proceeds to Wells Fargo; and, after a certain time period, to transfer to Wells Fargo title to any properties that remained unsold.

B. Landstar's Motion for Issuance of a Letter Rogatory and a Restraining Order

In its action against Robinson, Landstar moved the trial court for three orders as part of its efforts to enforce the judgment. Landstar requested: (1) an order issuing a letter rogatory requesting that the Mexican authorities register the judgment liens issued by the trial court; (2) an assignment order transferring to Landstar Robinson's rights to receive proceeds from the sale of Mexican real property held in trust for Robinson; and (3) a restraining order prohibiting Robinson from transferring those rights to anyone else.

Landstar sought issuance of the letter rogatory pursuant to the Inter–American Convention on Letters Rogatory (Inter–American Convention on Letters Rogatory (Apr. 15, 1980) 28 U.S.C.A. (2006) foll. § 1781, pp. 594–598 (hereafter, Convention)),² to which the United States and Mexico are signatories ( Laino v. Cuprum S.A. de C.V. (N.Y.App.Div.1997) 235 A.D.2d 25, 28, 663 N.Y.S.2d 275, 276 ). Landstar asserted a letter rogatory was appropriate because the trial court had entered a judgment against Robinson, and Landstar was “seeking to collect on that judgment.” Specifically, Landstar sought to have judgment liens registered in Mexico in order to perfect security interests in Robinson's right to receive the proceeds of the sale of real property located in Mexico and held in trust for Robinson.

Landstar sought the assignment and restraining orders pursuant to provisions of California's statutory scheme for enforcing judgments. (See §§ 708.510, 708.520.) Landstar claimed it was entitled to these orders because Robinson had the right to receive proceeds from the sale of certain real property located in Mexico, that right should be assigned to Landstar up to the amount of the judgment, and Robinson should be prohibited from disposing of that right.

Wells Fargo and Stapleton intervened in Landstar's action against Robinson to oppose the motion. They argued: (1) the Convention does not authorize issuance of a letter rogatory to enforce a domestic judgment in a foreign country; (2) Landstar had no right to the requested assignment and restraining orders; and (3) Landstar's motion impermissibly interfered with the receivership, Wells Fargo's Mexican lawsuit, and its first-priority security interests.

In its reply papers, Landstar argued the request for a letter rogatory was a procedurally proper attempt to provide notice that it claimed a right to property that may be owned by Robinson. It withdrew its request for an assignment order. Nevertheless, Landstar contended its “ancillary” request for a restraining order was proper because it simply sought “to maintain the status quo” by ensuring that whatever property rights Robinson possessed were not transferred to avoid Landstar's judgment.

The trial court granted Landstar's motion insofar as it requested issuance of a letter rogatory and a restraining order. The letter rogatory requested that the appropriate judicial authority in Mexico order the registration of judgment liens on real and personal property owned by Robinson, including Robinson's rights as the beneficiary of a trust holding title to real property located in Mexico. The court also issued an order restraining Robinson from assigning or otherwise disposing of its rights concerning the Mexican property held in trust for its benefit. At the request of Wells Fargo and Stapleton, the court stayed issuance of the letter rogatory pending this appeal, but refused to stay the restraining order.

II.DISCUSSION

Wells Fargo and Stapleton argue the trial court erroneously issued the letter rogatory and the restraining order. Specifically, they contend the Convention does not authorize issuance of a letter rogatory designed to enforce a judgment, and section 708.520 does not authorize issuance of a restraining order in the absence of a corresponding assignment order issued under section 708.510. We agree with both contentions for the reasons set forth below.

A. The Trial Court Erred by Issuing the Letter Rogatory

We first consider whether the trial court erroneously issued the letter rogatory that Landstar requested. A letter rogatory is a document from one court to a foreign court requesting the foreign court's assistance in performing a judicial act. (22 C.F.R. § 92.54 (2013); Lantheus Medical Imaging, Inc. v. Zurich American Ins. Co. (S.D.N.Y.2012) 841 F.Supp.2d 769, 775.) Here, Landstar moved for an order issuing a letter rogatory pursuant to the Convention on the ground that the registration of the judgment liens it was requesting was a procedural act of a merely formal nature expressly authorized by article 2(a) of the Convention. For reasons we shall explain, we disagree.

Our determination whether the letter rogatory requested by Landstar and issued by the trial court was authorized by the Convention “begins with its text” (Medellín v. Texas (2008) 552 U.S. 491, 506, 128 S.Ct. 1346, 170 L.Ed.2d 190), which is “the ultimately dispositive source of judicial decisionmaking” (Mitsubishi Materials Corp. v. Superior Court (2003) 113 Cal.App.4th 55, 69, 6 Cal.Rptr.3d 159). Section II of the Convention defines its scope and consists of two articles. Article 2 states in pertinent part:

“This Convention shall apply to letters rogatory, issued in conjunction with proceedings in civil and commercial matters held before the appropriate judicial or other adjudicatory authority of one of the States Parties to this Convention, that have as their purpose:

“a. The performance of procedural acts of a merely formal nature, such as service of process, summonses or subpoenas abroad....” (Convention, 28 U.S.C.A., supra, foll. § 1781, p. 595.)

Article 3 states: “This Convention shall not apply to letters rogatory relating to procedural acts other than those specified in the preceding article; and in particular it shall not apply to acts involving measures of compulsion.” ( Ibid.) Thus, we must determine whether the letter rogatory that Landstar sought was, as it convinced the trial court, an authorized request for performance of “procedural acts of a merely formal nature” ( ibid.); or whether the letter was, as Wells Fargo and Stapleton argued in the trial court and argue again on appeal, an unauthorized request for performance of “acts involving measures of compulsion” ( ibid.).

The Convention does not define the phrase “procedural acts of a merely formal nature” or the phrase “acts involving measures of compulsion.” (Convention, 28 U.S.C.A., supra, foll. § 1781, p. 595.) We therefore apply general rules of construction applicable to treaties to determine their meaning. The terms of a treaty “must be fairly construed.” (Valentine v. United States ex rel. Neidecker (1936) 299 U.S. 5, 11, 57 S.Ct. 100, 81...