Unreported / Non-Citable
Background
This case arose from the fraudulent misappropriation of Plaintiff Maximiliaan Unger’s funds by Defendants. On February 26, 2025, the Court entered a final judgment of $3,600,000 plus interest against Defendants Daniel Morris and the Morris + D’Angelo general partnership (Dkt. No. 84). On December 16, 2025, the Court granted summary judgment against Defendant Patrick D’Angelo, holding him liable for the partnership judgment as if he were a partner (Dkt. No. 99), and entered final judgment against him in the same amount (Dkt. No. 100). The judgment remains outstanding at over $4.1 million with interest. To satisfy the judgment, Unger moved under California Code of Civil Procedure § 708.510 to compel D’Angelo to assign two deeds of trust on Morris’s Oregon property (15261 SE Anderson Road, Damascus, OR 97089) and associated loan documents. The First Deed of Trust was assigned to D’Angelo as trustee of his revocable living trust on March 20, 2026, and the Second Deed of Trust was executed in D’Angelo’s favor on June 14, 2023. A Loan Modification Extension Agreement confirmed a $700,000 outstanding balance on the First Deed of Trust as of April 2026. D’Angelo did not respond to the motion.
The Court’s Holding
The Court granted Unger’s motion to enforce the judgment. Applying Federal Rule of Civil Procedure 69 and California enforcement law, the Court found that D’Angelo’s beneficial interests in the two deeds of trust and associated loan rights are property subject to execution and not exempt. Under Cal. Code Civ. Proc. § 708.510, the Court may order assignment of a judgment debtor’s right to payment. The Court weighed the statutory factors: D’Angelo presented no evidence of financial circumstances or reasonable requirements; the judgment exceeds $4.1 million and has been unpaid for over ten months; and the deeds of trust represent the only known non-exempt assets of any judgment debtor. The Court also granted a restraining order under § 708.520, finding a low threshold for need satisfied by the fraudulent origin of the debt and D’Angelo’s failure to voluntarily pay. The Court ordered D’Angelo to: (1) execute and return the proposed assignment of deeds of trust within 21 days; (2) provide copies of all loans and notes related to the Oregon property within 21 days; (3) refrain from disposing, transferring, or encumbering any interest in the property; and (4) turn over any funds received from Morris or others pertaining to the property within 21 days. The motion to file a supplemental brief (Dkt. No. 112) was also granted.
Key Takeaways
- A judgment creditor in federal court sitting in California may use Cal. Code Civ. Proc. § 708.510 to obtain an assignment order compelling a judgment debtor to assign rights to payment, including beneficial interests in deeds of trust and associated promissory notes.
- Deeds of trust and their underlying loan obligations are inseparable under Cal. Civ. Code § 2936; assignment of the deed of trust carries the note and payment rights with it.
- The statutory factors under § 708.510(c) favor assignment where the judgment debtor offers no evidence of financial hardship, the judgment is large and long-outstanding, and the assigned rights are the only known collectible assets.
- A restraining order under § 708.520 requires only a low showing of need; fraudulent conduct underlying the judgment and the debtor’s non-payment suffice.
- The Court’s order includes affirmative duties to execute assignment documents, disclose loan records, refrain from encumbering the assets, and turn over any payments already received.
Why It Matters
This order demonstrates the practical application of California’s assignment-order statute (§ 708.510) in federal post-judgment enforcement proceedings. It confirms that a judgment debtor’s beneficial interest in a deed of trust on a third party’s property—here, the debtor’s former partner’s Oregon real estate—is reachable as non-exempt property. The decision illustrates how courts evaluate the § 708.510(c) factors when the debtor defaults entirely, and it shows the complementary use of § 708.520 restraining orders to preserve the assigned rights pending transfer. The ruling also reinforces that under California law, the deed of trust and the secured note travel together, simplifying the creditor’s recovery.