Crocker National Bank v. O'DONNELL

Opinion

ASHBY, J.

In February 1978 respondent Crocker National Bank obtained a money judgment against appellant Eugene P. O’Donnell, M.D., based on a promissory note. Respondent unsuccessfully attempted to collect or execute upon the judgment. In January 1979 respondent moved for appointment of a receiver in aid of execution (see Code Civ. Proc., § 564;

Olsan

v.

Comora

(1977) 73 Cal.App.3d 642 [140 Cal.Rptr. 835]), which the court granted when the matter came on for hearing. Appellant appeals from the order appointing the receiver.

The motion for appointment of a receiver in aid of execution was supported by the declarations of John Graham and Dennis Lombardi, who were attorneys for respondent, and the deposition of appellant taken on August 3, 1978, pursuant to court order. (See Code Civ. Proc., §§ 714, 715.) Respondent alleged that the only asset which could be used to enforce the judgment was appellant’s considerable earnings as a physician, but that appellant was using his wholly owned medical corporation as a device to hinder, delay, and defraud his creditors, and that appellant’s conduct had made it impossible for respondent to reach this asset without the aid of a court-appointed receiver.

1

Appellant practices medicine as a professional corporation, Eugene P. O’Donnell, M.D., Inc. He is the sole shareholder. He does not know how to locate his corporate records, there are no corporate minutes since 1977, and he does not know who the directors are. Appellant is paid by the corporation on a sporadic basis when the corporation has the money and appellant needs it. When appellant needs money for personal expenses, he writes a check on the corporate checking account and cashes it. Appellant does not have a personal checking account. Furthermore, according to the declaration of Lombardi, appellant at his further examination in September

[267]

1978 admitted that “he receives his salary by drawing money out of the corporation’s checking account on an as-needed basis” and that “he uses the medical corporation’s bank account as if it were his own.”