Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.

Background

Optronic Technologies, Inc., which the opinion also calls “Orion,” had obtained a partial judgment against Ningbo Sunny Electronic Co., Ltd. Orion later served Celestron Acquisition LLC with a notice of levy seeking accounts receivable that Celestron Acquisition owed to Ningbo Sunny and directing payment to Orion.

The court had also issued an earlier assignment order under California law assigning to Orion accounts receivable due to Ningbo Sunny from “Celestron.” Celestron Acquisition asked the court to clarify whether that reference included accounts receivable owed by Celestron Global, its wholly owned subsidiary. The motion stated that Celestron Global was a private company organized under United Kingdom law. Orion opposed clarification, arguing that the earlier order and levy already required turnover of the accounts.

Celestron Acquisition did not dispute Orion’s entitlement to $728,779 in accounts receivable balances and did not object to turning over the accounts. Ningbo Sunny did not object to the motion and, through counsel, stated that it did not intend to take a position.

Analysis

The court explained that Federal Rule of Civil Procedure 60(a) permits a court to correct an omission or clarify an order when ambiguity or confusion exists. The court agreed that it was unclear whether “Celestron” in the assignment order referred to both Celestron Acquisition and Celestron Global, particularly because Celestron Global was a foreign entity. The court therefore concluded that clarification was warranted.

Federal Rule of Civil Procedure 69(a) permits enforcement of a judgment by attaching property under the law of the state where the federal court sits. Under California Code of Civil Procedure section 708.510(a), a court may order a judgment debtor to assign all or part of a right to payment to the judgment creditor.

The court held that it had authority to order Ningbo Sunny, over which there was no dispute that the court had personal jurisdiction, to assign its rights to payment from third parties, even if those third parties or the property were outside California. But the court also explained that it could not compel acts by a third party unless that third party was subject to the court’s personal jurisdiction.

The record did not provide enough information to establish personal jurisdiction over Celestron Global. The court noted that Celestron Acquisition asserted that Celestron Global operated internationally from the United Kingdom, while Orion pointed to common ownership, shared officers, a shared accounting system, and control by Celestron Acquisition. The court found those facts insufficient to establish personal jurisdiction over Celestron Global.

Disposition

The court granted the Motion for Clarification. It clarified that Ningbo Sunny was ordered to assign to Orion all of its accounts, accounts receivable, rights to receive money, contingent rights, contract rights, deposits and deposit accounts, claims against third parties, and money due from third parties involving Bushnell Holdings, Celestron Acquisition, Celestron Global, Hawke Sport Optics LLC, Meade Instruments Corp., and Olivon Mfg. Group Ltd., up to the amount of the partial judgment entered in Orion’s favor on December 5, 2019.

The order did not direct Celestron Global itself to pay Orion because the court did not find that it had personal jurisdiction over that company.