Holman v. Village of Alorton

Filing 7

MEMORANDUM AND ORDER, the Court affirms the July 31, 2013 order of the bankruptcy court which denied Holman's motion to reopen the bankruptcy case. The Court further directs the Clerk of Court to enter judgment accordingly. Signed by Judge J. Phil Gilbert on 10/30/2013. (jdh)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
LARKIN HOLMAN, Independent Administrator
of the Estate of Taymond Freeman,
Appellant,
Case No. 13-cv-925-JPG
Appeal from Bankr. Case No. 05-30055

vs.
VILLAGE OF ALORTON,
Appellee.

MEMORANDUM AND ORDER
This matter comes before the Court on appellant Larkin Holman’s appeal of the bankruptcy
court’s order dated July 31, 2013, in which it denied Holman’s motion to reopen appellee Village of
Alorton’s (“Alorton”) Chapter 9 bankruptcy case. Holman brings this action in his capacity as the
Independent Administrator of Taymond Freeman’s estate. Holman filed his brief (Doc. 3). Alorton
filed its brief (Doc. 4) to which Holman replied (Doc. 6). For the following reasons, the Court
affirms the bankruptcy court’s order.
1. Facts
On May 31, 1999, Thomas McGowan, an Alorton police officer, shot Taymond Freeman
causing him permanent damage to his leg. McGowan’s use of force was determined to be without
cause, and Freeman obtained a judgment against McGowan on March 23, 2005, in the amount of
$978,874.40. Alorton indemnified McGowan in this claim. George Ripplinger of Ripplinger &
Zimmer, LLC, Holman’s attorney in the instant appeal, represented Freeman in obtaining his
judgment against McGowan.
Alorton subsequently filed a Chapter 9 bankruptcy in which Freeman was the largest creditor.
The plan provided that Freeman would receive $600,000, payable in installments of $2,500.00 for

twenty years beginning five years after confirmation of the bankruptcy plan. On December 14, 2006,
the bankruptcy court confirmed the plan and entered an order closing the case.
Meanwhile, in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois,
Stacey Goodlow obtained a default judgment of $346,000, plus statutory interest accruing at the rate
of $31,176.00 per year, against Freeman. See Goodlow v. Freeman, St. Clair County, Illinois, Case
No. 06-L-531. It appears the state court case arose from damages Goodlow suffered after Freeman
beat her. On July 23, 2007, pursuant to a citation to discover assets, the state court ordered Alorton
to pay Goodlow the amounts it was to pay Freeman under the bankruptcy plan until Goodlow’s state
court judgment was satisfied.
This state court order would prevent Ripplinger from collecting his agreed upon attorney’s
fees in Freeman v. McGowan, the case in which Freeman obtained his $978,874.40 judgment.
Accordingly, on October 2, 2008, Ripplinger, on behalf of Freeman, filed a petition to vacate the
default judgment in state court arguing that service on Freeman was defective.1 On January 14,
2009, the state court denied the petition to vacate, but altered the judgment as follows: (1) Alorton
would pay Goodlow and her attorneys a maximum of $400,000; (2) Alorton would pay Ripplinger &
Zimmer a maximum of $200,000; and (3) Alorton would pay 2/3 of its monthly payments to
Goodlow and 1/3 to Ripplinger & Zimmer. This state court judgment significantly reduced the
amount of attorney’s fees Ripplinger would receive from Alorton’s plan payments. As Ripplinger
noted in the hearing on the motion to reopen, “[p]art of the reason we’re here, quite frankly, is that
[Ripplinger’s] fifty percent contract was cut to thirty [percent]” by the state court. Doc. 120, p. 7 in
bankruptcy case. Ripplinger did not receive a copy of the order altering the state court judgment
until after the time to appeal had expired.

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The state court order refers to Ripplinger & Zimmer as a proposed intervenor. Doc. 102-4 in bankruptcy case.
However, any filings by Ripplinger & Zimmer in the state court case are not before this Court.

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Freeman was murdered on March 12, 2009, and the state court appointed Holman, Freeman’s
father, as Independent Administrator of Freeman’s estate. On July 9, 2013, Holman, represented by
Ripplinger, filed a motion to re-open the bankruptcy case pursuant to 11 U.S.C. § 350, arguing the
state court lacked jurisdiction to modify the bankruptcy court’s order. Specifically, Holman
contended the state court had altered the bankruptcy plan by ordering Alorton to make its monthly
payments to Goodlow rather than directly to Freeman. On July 31, 2013, the bankruptcy court
denied Holman’s motion.
Holman now appeals the July 31, 2013, order of the bankruptcy court in which it denied his
motion to reopen the bankruptcy. Holman argues the bankruptcy court abused its discretion when it
found the state court had jurisdiction to modify the bankruptcy court’s order. In response, Alorton
argues that a contractual relationship arose between Alorton and Freeman, and the state court had
jurisdiction to enter its order distributing Alorton’s payments to Goodlow and Ripplinger & Zimmer.
The Court will now consider whether the bankruptcy court’s order denying Holman’s motion to
reopen was an abuse of discretion.
2. Analysis
A bankruptcy “case may be reopened in the court in which such case was closed to
administer assets, to accord relief to the debtor, or for other cause.” 11 U.S.C. § 350(b); Redmond v.
Fifth Third Bank, 624 F.3d 793, 798 (7th Cir. 2010) (quoting In re Zurn, 290 F.3d 861, 864 (7th Cir.
2002) (The bankruptcy court may reopen a bankruptcy for “the correction of errors, amendments
necessitated by unanticipated events that frustrate a plan’s implementation, and the need to enforce
the plan and discharge.”)). “The decision to reopen a bankruptcy case is within the broad discretion
of the bankruptcy court.” Redmond, 624 F.3d at 798. In deciding whether to reopen a bankruptcy
case, the court may consider the following factors: “(1) the length of time that the case has been
closed; (2) whether the debtor would be entitled to relief if the case were reopened; and (3) the

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availability of nonbankruptcy courts, such as state courts, to entertain the claims.” Id. The district
court reviews a bankruptcy court’s denial of a motion to reopen for abuse of discretion. Id.
The Court initially notes that approximately seven years have passed since Alorton’s
bankruptcy was closed. Further, Freeman and Ripplinger & Zimmer knew of the state court order
directing Alorton to make payments directly to Goodlow for nearly five years before Holman moved
the bankruptcy court to reopen the case.
Even if the bankruptcy court had reopened the case, Holman would not be entitled to relief.
After confirmation of a plan, a contract, enforceable in state court, arises between the creditor and the
debtor pursuant to the terms of the plan. Ernst & Young LLP v. Baker O’Neal Holdings, Inc., 304
F.3d 753, 755 (7th Cir. 2002). Under Illinois state law, a judgment debtor may proceed against a
third party when there is evidence that the third party possesses the judgment debtor’s assets. 735
ILCS 5/2-1402(a); Ericksen v. Rush Presbyterian St. Luke’s Med. Ctr., 682 N.E.2d 79, 84 (Ill. App.
Ct. 1997). The state court then has jurisdiction to order the third party to produce those assets in
satisfaction of the state court judgment. Id.
That is what happened in this instance. Alorton, pursuant to the contractual relationship
arising from the bankruptcy plan, possessed Freeman’s assets. The state court ordered Alorton to
produce those assets to satisfy Goodlow’s judgment against Freeman. As Judge Meyers noted in the
hearing on Holman’s motion to reopen, the state court order did not alter the terms of the
confirmation plan. Doc. 120, pp.14-15 in bankruptcy case. Alorton was making payments pursuant
to the plan, and Freeman was receiving the credits for those payments. As Judge Meyers explained,
“[t]he fact that the creditor is not actually receiving the cash is of no moment.” Id. After state
appellate relief was foreclosed, Holman actually sought an order from the bankruptcy court
overruling the state court’s decision so he may receive his agreed upon attorney’s fees. The RookerFeldman doctrine, however, prohibits federal courts from exercising appellate jurisdiction over state
court decisions. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284-85 (2005);
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District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Trust Co.,
263 U.S. 413 (1923). Accordingly, Holman would not have been entitled to relief if the case had
been reopened.
Finally, state courts were available to hear Holman’s claim. After the state court ordered
Alorton to pay all funds to Goodlow, Freeman successfully motioned the state court to amend that
order resulting in a portion of the payments ordered paid to Ripplinger & Zimmer. Holman and
Ripplinger & Zimmer thus gained some relief from the state court, just not the full relief they sought.
Relief was available from the state trial court’s order in an Illinois appellate court. Ripplinger &
Zimmer, however, were not given notice of the state court order until after the time to appeal had
expired. The federal courts, however, do not provide a forum to hear claims upon the expiration of
appellate deadlines in state courts.
Based on the aforementioned factors, the Court concludes that the bankruptcy court did not
abuse its discretion when it denied Holman’s motion to reopen the bankruptcy case.
3. Conclusion
For the foregoing reasons, the Court AFFIRMS the July 31, 2013 order of the bankruptcy
court which denied Holman’s motion to reopen the bankruptcy case. The Court further DIRECTS
the Clerk of Court to enter judgment accordingly.
IT IS SO ORDERED.
DATED: October 30, 2013
s/ J. Phil Gilbert
J. PHIL GILBERT
DISTRICT COURT

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