Zurich American Insurance Company v. Staffing Concepts National, Inc. et al

Filing 305

ORDER granting 298 Motion for miscellaneous relief, specifically Commence Proceedings Supplementary, Implead Third Parties, and Issue Statutory Notice to Appear. Signed by Magistrate Judge Amanda Arnold Sansone on 10/16/2018. (Attachment: # 1 Exhibit) (BEE)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ZURICH AMERICAN INSURANCE
COMPANY,
Plaintiff,
v.

Case No.: 8:14-cv-775-T-23AAS

STAFFING CONCEPTS NATIONAL,
INC. et al.,
Defendants.
_____________________________________/
ORDER
Zurich American Insurance Company (“Zurich”) seeks an order invoking
supplementary proceedings in this action, impleading third parties, and for issuance
of a notice to appear. (Doc. 298).
I.

Background
Zurich initiated this breach of contract action against Leasing Resources of

America 4, Inc. (“Leasing Resources 4”) and sixteen other defendants. (Doc. 1). A
jury entered verdicts in favor of Zurich and against Leasing Resources 4 on eleven
counts for a total amount of $4,072,726, and judgments were entered on the verdicts.
(Docs. 162, 173, 178). The court entered a subsequent judgment against Leasing
Resources 4 in the additional amount of $666,686 for pre-judgment interest. (Doc.
264). Thus, Zurich ultimately obtained judgments against Leasing Resources 4 in
the total amount of $4,739,412. Currently, $4,592,583 remains outstanding on the
judgments. (Doc. 298, Exs. 1, 2).

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Zurich alleges that John Edward Hardin (“Hardin”), as Leasing Resources 4’s
alter ego, holds or controls property that is not exempt from execution, and has
obligations to Leasing Resources 4 that may be available to satisfy the judgments.
(Doc. 298, Ex. 2). Likewise, Zurich alleges, Cohesive Networks, Inc. (“Cohesive”), as
Leasing Resources 4’s successor, holds or controls property that is not exempt from
execution, and has obligations to Leasing Resources 4 that may be available to satisfy
the judgments. (Id.).
Zurich seeks to commence proceedings supplementary to hold third parties
Hardin and Cohesive liable for the judgments against Leasing Resources 4 as its alter
ego and successor, respectively. (Docs. 298, 304). Leasing Resources 4, Hardin, and
Cohesive oppose Zurich’s motion. (Doc. 301).
II.

Analysis
A.

Proceedings Supplementary

Rule 69 instructs “the procedure on execution [of a money judgment]—and in
proceedings supplementary to and in aid of execution—must accord with the
procedure of the state where the court is located,” unless a federal statute applies.
Fed. R. Civ. P. 69(a)(1). Under Florida law, judgment creditors who file a motion and
an affidavit stating that they hold an unsatisfied judgment or judgment lien are
entitled to proceedings supplementary to execution. Fla. Stat. § 56.29(1). Therefore,
all that is required to initiate proceedings supplementary is that “the judgment
creditor have an unsatisfied judgment and file an affidavit averring that the
judgment is valid and outstanding.” Fundamental Long Term Care Holdings, LLC v.

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Estate of Jackson ex rel. Jackson-Platts, 110 So. 3d 6, 8 (Fla. 2d DCA 2012); Longo v.
Associated Limousine Servs., Inc., No. 4D17-516, 2018 WL 527016, at *3 (Fla. 4th
DCA Jan. 24, 2018) (“[B]ecause the judgment creditor submitted a motion and
affidavit in compliance with section 56.29(1), the trial court erred in denying
proceedings supplementary altogether.”).
Zurich’s senior litigation specialist Bohdan Gursky and its outside counsel
Julie L. Young declare that Leasing Resources 4 failed to satisfy the judgments, and
that the vast majority of the judgments against Leasing Resources 4 “remain valid
and outstanding.” (Doc. 298, Exs. 1, 2). Therefore, the requirements of Fla. Stat. §
56.29(1) are satisfied and Zurich is entitled to proceedings supplementary to
execution.
B.

Description of Third Parties’ Property in Affidavit and Notice to
Appear

Section 56.29(2) of the Florida Statutes “governs the process for bringing third
parties into proceedings supplementary.” Longo, 2018 WL 527016, at *3, *4; see
Kennedy v. RES-GA Lake Shadow, LLC, 224 So. 3d 931, 933 (Fla. 1st DCA 2017)
(citations omitted) (“After a party initiates proceedings supplementary, a creditor
may pursue assets held by the debtor, assets of the debtor held by another, or assets
that have been fraudulently transferred to another. But the rights of any third-party
interest-holders must be accounted for by impleading them into the proceeding and
allowing them to defend their interests.”). The first sentence in Section 56.29(2)
requires the Section 56.29(1) motion or a supplemental affidavit “describe any
property of the judgment debtor not exempt from execution in the hands of any person
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or any property, debt, or other obligation due to the judgment debtor which may be
applied toward the satisfaction of the judgment.” Upon the judgment creditor filing
this motion and affidavit, the court shall issue a “Notice to Appear,” which “must
describe with reasonable particularity the property, debt, or other obligation that may
be available to satisfy the judgment.” Fla. Stat. § 56.29(2) (emphasis added).
Leasing Resources 4 argues Zurich does not describe with reasonable
particularity the property that may be available to satisfy the judgments. (Doc. 301,
pp. 3-6). For support, Leasing Resources 4 cites KHI Liquidation Trust v. S&T
Painting, No. 8:17-mc-133-T-35JSS, 2018 WL 1726435 (M.D. Fla. Apr. 10, 2018). In
KHI, the court decided the notices to appear did not adequately describe the property
available to satisfy the judgment because the notices broadly referred to “any
property.” Id. at *2. The court allowed movants to amend the notices to appear and
ultimately granted the motion and issued the more detailed notices. Id. at *4. The
more detailed notices to appear issued in KHI are nearly identical to those at issue
here. (See Doc. 298, Ex. 3; Doc. 304, Ex. 2).
The notice to appear procedure under section 56.29(2) advises third parties like
Hardin and Cohesive of their property, debt, or other obligation due to the judgment
debtor that may be available to satisfy the judgment. The notice to appear also must
advise the third parties of their opportunity to present defenses, must indicate to the
third parties that discovery consistent with the rules of civil procedure is available,
and must advise the third parties they have a right to a jury trial. Fla. Stat. §
56.29(2).

Zurich’s proposed Notices to Appear in Proceedings Supplementary

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describe the property at issue with reasonable particularity and also otherwise
comply with Section 56.29(2). (Doc. 298, Ex. 3).
III.

CONCLUSION
Accordingly, Zurich’s Motion to Commence Proceedings Supplementary,

Implead Third Party, and Issue Statutory Notice to Appear (Doc. 298) is GRANTED.
Zurich may file and serve its impleader complaint. The issued Notices to Appear are
attached to this order and may be served in accordance with Fla. Stat. § 56.29(2).
ORDERED in Tampa, Florida on October 16, 2018.

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