SGR has secured another victory for client the National Grange of the Order of Patrons of Husbandry (“National Grange”) that will significantly advance its collection efforts for a $144,715.70 attorney fee award owed by the California Guild.
On March 9, 2017, Judge Shubb of the Eastern District of California granted the National Grange’s Motion for Assignment Order, holding that that membership dues owed by the Guild’s 83 local chapters and loan repayments from four local chapters are to be paid directly to the National Grange to satisfy the attorney fee award.
The basis of the National Grange’s attorney fee award is the Guild’s “deliberate and willful” violation of the court’s September 2015 injunction order, which prohibited the Guild from using the name and mark GRANGE in any manner. Shortly after the court issued its attorney fee award determination in September 2016, the Guild filed a declaration with the court alleging that it was unable to comply with the court’s order because “most” of its funds were subject to a preliminary injunction issued in a related state court action.
Because the Guild continues to receive funds from its local chapters that could be used to satisfy the National Grange’s award, the National Grange moved for an assignment order, a mechanism where the court requires payments due to the judgment debtor – in this case, the Guild – to be assigned (paid) to the judgment creditor, the National Grange. The National Grange’s motion requested all membership dues and loan repayments not otherwise subject to the state court’s preliminary injunction due to the Guild to be assigned to the National Grange. The court found that these funds are “sufficiently concrete source[s] of payment” and should go towards National Grange’s attorney fee award.
The Guild argued that imposition of the assignment order would put the organization out of operation, but the court dismissed this argument, holding that this “is not in itself an adequate reason to deny [the National Grange’s] Motion.” Similarly, the court discounted the Guild’s argument that an assignment order could not be issued against a nonprofit corporation, noting that it was not aware of any authority that would make the Guild exempt.