Opinion
Case No.: 15-cv-01678-LAB-AGS
04-07-2017
Textron Financial Corp., Plaintiff, v. Michael S. Gallegos, Defendant.
REPORT AND RECOMMENDATION TO:
(1) GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION FOR ASSIGNMENT AND TURNOVER ORDER [Doc. 93], AND
(2) DENY AS MOOT PLAINTIFF'S MOTION TO AMEND ITS CHARGING ORDER [Doc. 92]
Plaintiff has a roughly $22 million dollar judgment against defendant Michael Gallegos. But Gallegos allegedly never paid a dime towards the debt. While Gallegos claims he is destitute, plaintiff argues that he is in fact living a posh lifestyle, driving luxury cars, and paying tens of thousands of dollars each year for his daughters' college tuition. He does this, according to plaintiff, by hiding his assets in various companies and entities in which he has an interest.
Based on these allegations, the Court previously granted a charging order requiring 30 entities to pay any money or property due to Gallegos directly to plaintiff SPE LO Holdings, LLC (as successor-in-interest to Textron Financial Corporation), to satisfy the judgment. [Doc. 85.] SPE LO now seeks: (1) amendment of that charging order to add an additional 24 entities; and (2) assignment of Gallegos's interests in 122 entities—including all 24 in the charging order motion—and a turnover order for records from all those entities.
Gallegos does not oppose the assignment of his interest in the 122 entities. And at yesterday's hearing, both parties agreed that granting that assignment would moot the charging order motion. But Gallegos objects to the turnover order as overbroad, as it would cover records from entities that have allegedly been defunct for decades. Instead, Gallegos suggests that the turnover order be limited to the past four years. At the hearing, SPE LO did not object to such a time limit, and the Court concurs that a time restriction would be useful to avoid waste and expense. Because Judge Burns previously found that Gallegos had "play[ed] coy" and warned him that "the Court won't tolerate a cavalier attitude toward discovery obligations," [Doc. 85], this Court believes that the time limitation should extend to the beginning of this suit, on April 5, 2011.
Thus, this Court recommends:
(1) The motion to amend the charging order be DENIED as moot;
(2) The motion for assignment and for a turnover order be GRANTED in part and DENIED in part, with the motion granted in its entirety except that the turnover order shall be limited to records dating back to April 5, 2011.
Any objection to this Report and Recommendation is due by April 21, 2017. Failure to file an objection may result in waiver of the issue on appeal. Dated: April 7, 2017
/s/_________
Hon. Andrew G. Schopler
United States Magistrate Judge