Cadena et al v. A-E Contracting LLC et al

Filing 89

RULING Granting 81 MOTION to Appoint Receiver of Rents filed by Luis Alberto Flores, Edwin Cadena, Roman Aguire, Rodolfo Rivera, Fernando Casano. 6 pages. Signed by Judge Holly B. Fitzsimmons on 11/21/13.(Esposito, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

EDWIN CADENA, ET AL
v.
A-E CONTRACTING, LLC and
AKBAR ETEMADFAR

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: CIV. NO. 3:08CV574 (WWE)
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RULING ON MOTION FOR APPOINTMENT OF RECEIVER OF RENTS
Plaintiffs are five laborers who brought this action against
defendants Akbar Etemadfar, and the company of which he is sole
principal and owner, A-E Contracting, LLC. This action was
commenced on April 16, 2008. [Doc. #1]. Plaintiffs allege that
the defendants failed to pay them wages owed,

including regular

and overtime wages, in violation of the Fair Labor Standards Act,
29 U.S.C. §201, et seq., and Connecticut wage laws, Conn. Gen.
Stat. §31-58, et seq.

A default judgment (corrected) in the

amount of $26,938.53 was entered against the defendants on
September 22, 2009.

[Doc. #31].

In subsequent proceedings the

Court denied defendants’ motion to reopen and awarded plaintiffs
additional attorney’s fees in the amount of $2,133. [Doc. #55,
56].
Plaintiffs have made several attempts to execute on the
total judgment of $29,071.53, which have been unsuccessful.


Plaintiff placed judgment liens up to the amount of the
unsatisfied judgment on two properties belonging to the
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defendants: 4 France Street, Norwalk, which is owned by
defendant A-E Contracting, LLC, and 151 Dannel Drive,
Stamford, which is owned by defendant Akbar Etemadfar.


On May 22, 2013, this Court presided over an
examination of judgment debtor at which defendant Akbar
Etemadfar appeared. The defendant’s repeated refusal to
answer questions regarding his assets and those of his
company resulted in the Court finding Etemadfar in
contempt with a remand to the custody of the United
States Marshals Service. [Doc. #80]. Only after
Etemadfar was held in the lock-up for several hours and
received the assistance of legal counsel did Etemadfar
return to court and agree to answer questions.



In testimony provided under oath, Etemadfar claimed
that the residential property at 4 France Street,
Norwalk, which is listed as belonging to defendant A-E
Contracting, LLC, actually belongs to a cousin who
lives in San Francisco, California. Similarly,
Etemadfar claimed that residential property at 151
Dannel Drive, Stamford, which is listed on land records
as belonging to him, also belongs to his cousin.
Edemadfar further testified that the residential units
at these addresses were leased and tenants paid monthly
rents, but he played no role in collecting the rents
and had no control over the funds.



After the examination, the Court ordered defendants to
produce records that would support the assertion that
these properties, and the rents received on these
properties, did not belong to defendants.



On May 28, 2013, the Court granted plaintiff’s Motion
for Disclosure of Assets, directing that defendants
Etemadfar and A-E Contracting, LLC provide financial
documentation that would assist plaintiffs in locating
assets to satisfy judgment. [Doc. #79]. The Order of
Disclosure was served on defendants’ counsel, on or
about May 28, 2013.



To date, defendants have not complied with the Court’s
order to disclose assets.

At the hearing on November 20, 2013, Etemadfar again argued,
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through his counsel, that the properties held in the defendants’
names were owned by a cousin who resides in San Francisco.1
[Doc. #88]. Defendants offered no evidence to support his
contention. Because the land records for the two properties show
that defendants are the sole owners, there is no evidence that
the properties belong to anyone other than the defendants, and
efforts to obtain responsive information about defendants’ assets
has proven futile, plaintiffs now move for Appointment of
Receiver of Rents seeking an order to facilitate satisfaction of
the judgment and payment of costs.

[Doc. #81].

The Court finds that defendants have been non-responsive to
plaintiffs’ efforts to identify assets that could satisfy the
judgment at the examination on May 22, and continuing to November
20, 2013.

Defendants’ failure to comply with the Court’s order

for disclosure of assets evidences the kind of evasive and
obstructive tactics that support the appointment of receiver of
rents to satisfy the judgment.
Based on the current record, plaintiffs’ Motion for
Appointment of Receiver of Rents [Doc. #81] is GRANTED in
accordance with Conn. Gen. Stat. §52-504.
This Court has authority to appoint a temporary receiver.
Pursuant to 28 U.S.C. §636(b)(1), and Rule 1 of our Local Rules
Defendant Etemadfar appeared with counsel at the November 20
hearing. [Doc. #87]. No attorney has appeared for the corporate
defendant.
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for United States Magistrate Judges, district judges may refer to
magistrate judges matters for hearing and determination or for
hearing and recommendation. A motion for injunctive relief is
referred pursuant to the latter, 28 U.S.C. §636(b)(1)(A). Unlike
injunctive relief, however, the appointment of a temporary
receiver under Connecticut law is not dispositive of the rights
and obligations of the parties. Instead it is akin to the
granting of a Prejudgment Remedy (“PJR”), for which magistrate
judges in Connecticut have authority to exercise the Court’s
jurisdiction.

Aetna Life Ins. Co. v. Tooth Savers Dental

Servs., No. 3:96CV570 (GLG), 1997 WL 102453 (D. Conn. Feb. 4,
1997).

A motion to appoint a receiver is not a motion for

injunctive relief not is it one of the “other specified motions”
listed in 28 U.S.C. §636(b)(1)(A), which limits the authority of
magistrate judges.

“While the relief granted plaintiff has

interfered with defendants’ use of their bank accounts, we do not
find that such prejudgment remedy constitutes “injunctive
relief.”

Tooth Savers,

1997 WL 102452, at *2 . Our Circuit

Court has adopted this reasoning. Tooth Savers,

1997 WL 102452,

at *2 (“orders granting, denying, continuing or vacating
attachments are not injunctions.”
(citing Inter-Regional Financial Group v. Hashemi, 562 F.2d 152,
154, (2d Cir. 1997), cert. denied,

434 U.S. 1046 (1978); Feit &

Drexler, Inc. v. Drexler, 760 F.2d 406, 412 (2d Cir. 1985)).
As a non-dispositive ruling, this Order Appointing Receiver
is reviewable pursuant to the “clearly erroneous” standard, an
Order of the Court unless reversed or modified by the district
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Judge upon application timely made.

28 U.S.C. §636(b)(1)(A);

Fed. R. Civ. P. 6(a), 6(e) and 72(a); and Rule 72 of the Local
Rules for United States Magistrate Judges.
Under Connecticut General Statute §52-504, a Court has
authority to appoint a receiver.2

In Connecticut,

“[t]he

application for a receiver is addressed to the sound legal
discretion of the court, to be exercised with due regard to the
relevant statutes and rules.”

Masterson v. Lenox Realty Co., 127

Conn. 25, 33 (1940); Potter v. Victor Page Motors Corp., 300 F.
885, 888 (D. Conn. 1924) (district court has inherent power to
appoint a receiver under the law of the state of Connecticut as
interpreted by its highest court); see also Burnrite Coal v.
Briquette Co. v. Riggs, 274 U.S. 208, 212 (1927) (“[a] federal
district court may, under its general equity powers independently
of any state statute, entertain a bill of a stockholder against
the corporation for the appointment of at least a temporary
receiver in order to prevent threatened diversion of loss of
assets through gross fraud and mismanagement of its officers.”).

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Section 52-504 states,
When any action is brought to or pending in the
superior court in which an application is made
for the appointment of a receiver, any judge of
the superior court, when such court is not in
session, after due notice given, may make such
order in the action as the exigencies of the case
may require, and may, from time to time, rescind
and modify any such order. The judge shall cause
[her] proceedings to be certified to the court in
which the action may be pending, at its next
session.

Conn. Gen. Stat. §52-504.
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Plaintiff’s counsel will consult with counsel for defendant
and propose a qualified person to act as receiver, together with
proposed conditions such as a bond, and compensation to be paid.
The Court will enter an order of appointment upon receipt of
counsels’ report.

ENTERED at Bridgeport this 21st day of November 2013.

__/s/____________________
HOLLY B. FITZSIMMONS
UNITED STATES MAGISTRATE JUDGE

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