Pou Chen Corporation v. Mts Products

Defendants, cross-complainants and appellants MTS Products (MTS) and Ben Hsia (Hsia) appeal from a postjudgment order granting a motion by plaintiff, cross-defendant and respondent Pou Chen Corporation (Pou Chen) to offset an outstanding $12.8 million judgment against Pou Chen obtained by the MTS defendants (the MTS judgment) with approximately $24.1 million of an outstanding and unpaid judgment against the MTS defendants that Pou Chen acquired by assignment from GBM International, Inc. (GBMI), and BHE Group Inc. (BHE). The MTS defendants contend the trial court erred by granting the motion to offset because three existing contractual hens on the MTS judgment should have been given equitable priority over the BHE/GBMI judgment. We affirm the trial court’s order.

BACKGROUND

Global Brands Manufacture Ltd. (GBM) is an electronics manufacturer in China that wanted to sell products to Wal-Mart. Hsia is the president and sole shareholder of MTS, a California corporation and an approved Wal-Mart vendor. In 2003, GBM and MTS entered into negotiations concerning a proposed business relationship to sell products to Wal-Mart.

In September 2003, GBM formed GBMI as a wholly owned…