Gagan v. SBC Cablevision, et al
Filing
677
OPINION AND ORDER denying 665 Motion ; denying 674 Rule 12(f) Motion to Strike. Signed by Magistrate Judge Andrew P Rodovich on 11/27/12. (mc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
JAMES L. GAGAN,
)
)
Plaintiff
)
)
v.
)
)
SBC CABLEVISION, a limited
)
partnership d/b/a SOUTH
)
HESPERIA CATV; AMERICAN
)
CABLEVISION, INC.; SBC
)
CABLEVISION EAST, a limited
)
partnership d/b/a EAST
)
HESPERIA CATV; RANCHO CUCAMONGA)
CABLEVISION, a limited
)
partnership d/b/a SOUTHEAST
)
HESPERIA; ALLWAVE CABLE
)
CONSTRUCTION CO., INC.; I.C.C. )
FIFTH ASSOCIATES, a/k/a
)
HESPERIA RED, a limited
)
partnership; HESPERIA EMERALD, )
a limited partnership; HESPERIA)
GOLD, a limited partnership;
)
JAMES A. MONROE; HANS D.
)
THEURER; CHARLES M. TRIMBLE;
)
JAMES GOUYD; VICTOR E. SHARAR; )
and MINOT WELD TRIPP, JR.,
)
)
Defendants
)
*******************************)
SBC CABLEVISION EAST d/b/a EAST)
HESPERIA CATV; CHARLES TRIMBLE;)
JAMES GOUYD and VICTOR SHARAR, )
)
Cross-Claimants
)
)
v.
)
)
JAMES L. GAGAN,
)
)
Cross-Defendant
)
CAUSE NO. 2:87 cv 732
OPINION AND ORDER
This matter is before the court on the Motion to Strike
Affidavit and to Dismiss Proceedings Supplemental [DE 665] filed
by the defendant, James A. Monroe, on October 16, 2012, and the
Motion to Strike Reply RE Defendant’s Motion to Strike & Dismiss
Proceedings Supplemental as Late Filed [DE 674] filed by the
plaintiff, James L. Gagan, on November 6, 2012.
For the follow-
ing reasons, both motions are DENIED.
Background
The plaintiff, James L. Gagan, received a judgment in this
court against the defendant, James A. Monroe, in the amount of
$1,710,000.00, plus post-judgment interest at the rate of 5.31%.
Gagan has attempted to collect the judgment for over 15 years,
but the judgment has not been satisfied.
Gagan represents that
he does not believe his current efforts will satisfy the judgment, but he suspects that Monroe has assets, income, profits, or
other non-exempt property which can be applied to the partial
satisfaction of the judgment.
Gagan’s suspicion arises from
large sums of money deposited and subsequently withdrawn from
Monroe’s accounts with JP Morgan Chase and Ally banks.
Gagan
represents that these additional assets contradict Monroe’s
affidavit and, for this reason, requests an examination before
this court.
Gagan filed a motion for proceedings supplemental
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and requested that the court set a hearing and order Monroe to
appear in person to answer questions regarding any assets,
profits, income, and other non-exempt property available to
satisfy the judgment.
The court set a hearing on October 16, 2012, and on that
day, Monroe’s attorney filed a motion to strike the proceedings
supplemental.
Monroe argues that the proceedings supplemental
were not commenced in accordance with Indiana law because this
court lacks jurisdiction since Monroe neither resides nor has
property in Indiana.
Gagan also has commenced proceedings
against Monroe in Arizona, where Monroe resides.
The court held a status conference on the date the proceedings supplemental were scheduled and directed Gagan to file a
response to Monroe’s motion to strike by October 26, 2012, and
for Monroe to file his reply by November 2, 2012.
At the time of
the status conference, Monroe’s attorney was not admitted pro hac
vice and did not have access to the court’s electronic filing
system.
He was unable to attend the status conference, and later
was informed by co-counsel that he had five days to reply after
receiving Gagan’s response.
Monroe’s counsel mistakenly calcu-
lated this to be November 3, 2012.
Monroe’s reply as untimely.
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Gagan moves to strike
Discussion
Federal Rule of Civil Procedure 6(b) states that "the court
may, for good cause, extend the time: . . . (B) on motion made
after the time has expired if the party failed to act because of
excusable neglect."
Counsel must meet the standard for excusable
neglect, a two-pronged inquiry:
First, the moving party must demonstrate that
his failure to meet the deadline was because
of neglect. Neglect exists where the failure
to meet a deadline was because of a simple,
faultless omission to act, or because of
carelessness. Second the moving party must
establish that his failure to act was excusable. Whether a case of neglect was excusable
is an equitable determination that must take
into account all relevant circumstances surrounding the party's failure to act, including the danger of prejudice to the non-moving
party, the length of the delay and its impact
on judicial proceedings, the reason for the
delay, including whether it was within the
reasonable control of the movant, and whether
the movant acted in good faith.
Zingerman v. Freeman Decorating Co., 99
Fed.Appx 70, 72 (7th Cir. 2004) (citing and
quoting Pioneer Inv. Servs. Co. v. Brunswick
Assoc. Ltd. P'ship, 507 U.S. 380, 388, 113
S.Ct. 1489, 123 L.Ed.2d 74 (1993))
See also Jovanovic v. In–Sink–Erator Division of Emerson Electric
Co., 201 F.3d 894, 897 (7th Cir. 2000) (finding the failure to
file a timely motion requesting an extension did not meet the
standard for excusable neglect). "Although attorney carelessness
can constitute 'excusable neglect' . . . attorney inattentiveness
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to litigation is not excusable, no matter what the resulting
consequences the attorney's somnolent behavior may have on a
litigation." Easley v. Kirmsee, 382 F.3d 693, 698 (7th Cir. 2004)
(citing Castro v. Board of Education, 214 F.3d 932, 934 (7th Cir.
2000); Robb v. Norfolk & W. Ry. Co., 122 F.3d 354, 359–60 (7th
Cir. 1997) (internal quotes and cites omitted). See also In re
Plunkett, 82 F.3d 738, 742 (7th Cir. 1996) ("Missing a deadline
because of slumber is fatal."). An attorney relying on excusable
neglect must make a showing or argument convincing the court of
his good faith failure to meet a deadline. Russell v. City of
Milwaukee, 338 F.3d 662, 668 (7th Cir. 2003).
Monroe’s counsel, David H. Carmichael, explained that he
intended to comply with the court ordered deadline but that he
calculated the time to respond incorrectly.
Carmichael relied on
Attorney Michael McIlree’s statement that he had five days from
receiving Gagan’s response brief to file his reply brief, to
which he added three days as permitted by Federal Rule of Civil
Procedure 6 for filings received by mail.
Counsel determined
that his reply brief was due on November 3, 2012.
Because
Carmichael had not been approved to appear pro hac vice and did
not have access to the court’s electronic filing system, he did
not receive notice that the court set a definite deadline of
November 2, 2012.
Carmichael made it clear that he intended to
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comply with the court deadline and that his failure to abide by
the court’s order was the result of neglect.
Carmichael filed
the reply brief only one day late, and because the rules did not
contemplate a response by Gagan, it would be difficult to find
that Gagan suffered any prejudice as a result of this minimal
delay.
For this reason, the court DENIES Gagan’s motion to
strike Monroe’s reply in support of his motion to strike the
proceedings supplemental.
Turning now to the merits of the motion to strike the proceedings supplemental, the parties dispute whether Gagan can
proceed against Monroe because Monroe does not reside in the
territorial jurisdiction of this court.
Monroe argues that
Indiana Code §34-55-8-2 governs proceedings supplemental and
imposes certain procedural prerequisites.
Indiana Code §34-55-8-
2 states in pertinent part:
If, after the issuing of an execution against
property, the execution plaintiff or other
person on the execution plaintiff’s behalf
makes and files with the clerk of any court
of record of any city, county, or township an
affidavit:
(1) stating to the effect that a
judgment debtor, residing in the
territorial jurisdiction of the
court, has property, income, or
profits that the judgment debtor
unjustly refuses to apply toward
the satisfaction of the judgment
. . . the court shall issue a subpoena requiring the judgment debtor
6
to appear before the court at a
specified time and place, to answer
concerning the affidavit.
Territorial jurisdiction is defined as "[j]urisdiction over cases
arising in or involving persons residing within a defined territory."
Black’s Law Dictionary 931 (9th ed. 2009).
Because Monroe lives in Arizona, he does not reside within
the territorial jurisdiction of this court.
Monroe acknowledges
that Indiana Trial Rule 69(E) extends the court’s jurisdiction,
but he argues that it is limited to providing continuing personal
jurisdiction and does not confer either territorial or subject
matter jurisdiction over the judgment debtor.
For these reasons,
Monroe believes that Gagan’s motion for proceedings supplemental
exceeds this court’s jurisdiction.
Indiana Trial Rule 69(E) states in relevant part:
Notwithstanding any other statute to the
contrary, proceedings supplemental to execution may be enforced by verified motion or
with affidavits in the court where the judgment is rendered alleging generally:
(1) that the plaintiff owns the
described judgment against the
defendant;
(2) that the plaintiff has no cause
to believe that levy of execution
against the defendant will satisfy
the judgment;
(3) that the defendant be ordered
to appear before the court to answer as to his non-exempt property
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subject to execution or proceedings
supplemental to execution or to
apply any such specified or unspecified property towards satisfaction
of the judgment; and,
(4) if any person is named as garnishee, that garnishee has or will
have specified or unspecified nonexempt property of, or an obligation owing to the judgment debtor
subject to execution or proceedings
supplemental to execution, and that
the garnishee be ordered to appear
and answer concerning the same or
answer interrogatories submitted
with the motion.
If the court determines that the motion meets
the foregoing requirements it shall, ex parte
and without notice, order the judgment debtor, other named parties defendant and the
garnishee to appear for a hearing thereon or
to answer the interrogatories attached to the
motion, or both.
"Proceedings supplemental may be filed only in the trial court
issuing the underlying judgment."
Rice v. Com’r of the Indiana
Dept. of Envir. Mgmt., 782 N.E.2d 1000, 1004 (Ind. App. 2003).
"The Indiana Courts have held that where a proceeding supplementary to execution is filed in the same Court, under the same
title and cause number as the original action, such proceeding is
regarded as a continuation of that Court's jurisdiction." In re
Great Lakes Steel & Fabricating, 83 B.R. 1015, 1020 (N.D. Ind.
1988).
Rule 69(E) extends the jurisdiction of the court that
8
entered judgment through the proceedings supplemental.
Borgman
v. Aikens, 681 N.E.2d 213, 217 (Ind. App. 1997).
Rule 69(E) was adopted after Ind. Code §34-55-8-2. The Civil
Code Study Commission’s comment sheds light on the intent of Rule
69(E) and states in pertinent part:
Rule 69(E) retains the basic statutes upon
[proceedings supplemental] but introduces
simpler pleadings and procedure. However,
this rule makes some significant changes. For
one thing, the court rendering judgment retains venue or jurisdiction over proceedings
supplemental, contrary to prior law which
fixed venue at the defendant's residence.
Relief is allowed by motion, and the order to
appear in proceedings supplemental is granted
ex parte without hearing, thus clarifying
present procedures. Necessarily, this means
that the remedy is merely a continuation of
the original action both in name and in cause
number.
See also State Farm Mutual Auto Ins. Co. v. Estep, 873 N.E.2d
1021, 1029 (Ind. 2007).
This commentary makes clear that Rule 69 was intended to
ease the burden on the judgment creditor and to allow him to
determine what assets are in the judgment debtor’s possession or
subject to the judgment debtor’s control that can be attached to
satisfy the judgment in the court where the judgment was entered.
See Estep, 873 N.E.2d at 1029.
Rule 69 grants the court continu-
ing jurisdiction, allows the judgment creditor to file a motion
in place of an affidavit, and "abrogates prior law which situated
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venue for proceedings supplemental at the garnishee defendant's
place of residence."
Stocker v. Cataldi, 521 N.E.2d 716, 718
(Ind. App. 1988)(citing Civil Code Study Commission Comments, 4
W. Harvey, Indiana Practice at 441 (1971)).
This court entered judgment, and consistent with Rule 69(E),
Gagan filed a motion for proceedings supplemental alleging the
facts necessary under the Rule.
Monroe contests that Ind. Code
§34-55-8-2 imposes additional requirements and that Monroe also
was required to file an affidavit alleging that he resides in the
territorial jurisdiction of the court.
However, this is contrary
to the purpose of Rule 69(E) as described in the Civil Code Study
Commission’s commentary because it would increase the judgment
creditor’s burden by requiring the judgment creditor to file both
a motion and an affidavit, strip the court of its continuing
jurisdiction, and fix the venue in the county of the defendant’s
residence.
The commentary on Rule 69(E) made it clear that the rule was
passed with the intent to ease the procedures for the judgment
creditor by eliminating the requirement for a judgment creditor
to file an affidavit.
Imposing the affidavit requirement under
Ind. Code §34-55-8-2 would increase the burden by requiring both
a motion and an affidavit.
Furthermore, the affidavit required
by Ind. Code §34-55-8-2 mandates that the judgment creditor’s
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affidavit include that the judgment debtor resides in the county
where the proceedings supplemental are to occur.
The commentary
explained that Rule 69(E) intended to broaden the proper venue
beyond that of the judgment debtor’s county of residence and
permits proceedings supplemental to be filed in the court where
the judgment was entered.
Requiring the judgment creditor to
file an affidavit that states that the judgment debtor resides in
the territorial jurisdiction of the court would render this
purpose futile.
See Borgman, 681 N.E.2d at 219 (explaining that
there is a presumption that the legislature did not enact a
useless provision and was aware of the existing statutes covering
the same topic).
Additionally, Rule 69(E) intended to increase
the court’s jurisdiction.
The proceedings supplemental are to be
treated as a continuation of the original proceedings.
There is
nothing in the rule or applicable case law that demands that the
court re-establish jurisdiction over a case which it has maintained ongoing jurisdiction.
Monroe further complains that Indiana courts have harmonized
Rule 69(E) and Ind. Code §34-55-8-1 et seq., and if read together, Gagan must submit an affidavit stating that Monroe
resides in the territorial jurisdiction to proceed.
Monroe
relies on Rice, arguing that the court relied on both Rule 69(E)
and Ind. Code §34-55-8-1 in its analysis, which indicates that
11
the laws must be construed together. See Rice, 782 N.E.2d at
1004.
However, Rice further supports Gagan’s position.
The Rice
court noted that "proceedings supplemental may be filed only in
the trial court issuing the underlying judgment" and that the
court rendering judgment retains jurisdiction over the proceedings supplemental.
Rice, 782 N.E.2d at 1004.
In Rice, the appellee obtained a judgment in Allen County,
which he domesticated and pursued in Huntington County, where the
judgment debtor’s real property was located.
In determining that
Huntington County was an appropriate county to pursue proceedings
supplemental, the appellate court explained that it found no
error because the appellee already knew where the appellant’s
property was located, and proceedings supplemental in Allen
County would not have reached the property in Huntington County.
Such is not the case here.
Gagan does not know if Monroe has
additional assets, though he suspects him to, or where those
assets currently are located.
Regardless, the suspected assets
are kept in a national bank that has offices and officers within
this court’s jurisdiction.
The Rice court indicated that if the
judgment creditor needed additional discovery to determine where
the assets were located, Huntington County may have been an
inappropriate venue, suggesting that if additional discovery was
12
necessary, it should have occurred in the court that rendered the
judgment.
Rice, 782 N.E.2d at 1004.
Indiana Courts have not always found the Indiana Code to
harmonize with Rule 69(E).
In Myers v. Hoover, 300 N.E.2d 110,
112 (Ind. App. 1973), the parties disputed the statute of limitations for pursuing proceedings supplemental.
Indiana Code §34-1-
2-2 stated that "[t]he following actions shall be commenced
within the periods herein prescribed . . . judgments of courts of
record . . . within ten (10) years . . ."
The court noted that
at the time the statute was passed, proceedings supplemental were
new, independent civil actions.
Myers, 300 N.E.2d at 113.
See
also Lewis v. Rex Metal Craft, Inc., 831 N.E.2d 812, 821 (Ind.
App. 2005).
Rule 69(E) was subsequently passed to give the court
that entered judgment continuing jurisdiction and that proceedings supplemental no longer were separate causes of action.
Myers, 300 N.E.2d at 113. The court explained that the Indiana
Code suggested that the life of a judgment exceeded ten years,
relying on the provision that stated: "[a]fter the lapse of ten
(10) years from the entry of judgment, or issuing of an execution, an execution can be issued only on leave of court."
Code §34-1-34-2.
Ind.
The court further relied on Indiana Code §34-1-
2-14, which stated that every judgment is deemed satisfied after
20 years.
Myers, 300 N.E.2d at 114.
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Because the proceedings
supplemental were a continuation of the initial proceedings, the
court determined that proceedings supplemental were not a commencement of new proceedings, rendering Indiana Code §34-1-2-2
inapplicable and requiring a 20 year, rather than a 10 year,
statute of limitations.
Myers, 300 N.E.2d at 113.
Similar logic leads the court to conclude that Rule 69(E)
renders the requirement that the judgment creditor file an
affidavit stating that the judgment debtor resides in the territorial district inapplicable.
Monroe complains that this court
lacks jurisdiction because he does not reside in the territorial
district as required by Ind. Code §34-55-8-2.
However, Ind. Code
§34-55-8-2 also applies to cases that are opened for the purpose
of executing a judgment on property.
The Myers court distin-
guished newly filed cases with cases subject to the court’s
ongoing jurisdiction, suggesting that statutes that conflict with
the court’s continuing jurisdiction are inapplicable.
Applying
Ind. Code §34-55-8-2 would impose additional requirements not
contemplated by Rule 69(E) for the court to maintain jurisdiction.
This would conflict with the automatic continuing juris-
diction granted by this rule.
This court already has established
jurisdiction, and because proceedings supplemental are an outgrowth of the original proceedings, the court does not need to
re-establish jurisdiction.
Rather, the proceedings are subject
14
to the procedural requirements established by Rule 69(E), which
deals exclusively with proceedings supplemental pursued in the
same court that entered judgment.
Additionally, Indiana Code §34-55-8-2 states that the
affidavit, which requires a statement that the debtor resides in
the territorial district of the court, must be submitted when
"the judgment debtor unjustly refuses to apply [property, income,
or profits] toward the satisfaction of the judgment."
Gagan is
not arguing that Monroe is refusing to apply property or income
to the judgment, rather he is seeking information about Monroe’s
non-exempt assets, which he believes may be more substantial than
Monroe disclosed.
Until Gagan has information about Monroe’s
non-exempt assets, if any, he cannot assess whether Monroe is
refusing to apply the assets to the judgment.
Rather, at this
point, Gagan is proceeding under Trial Rule 69(E) in an effort to
determine what assets, if any, Monroe has that may be attached in
partial satisfaction of the outstanding judgment.
Based on the foregoing reasons, Gagan was not required to
submit an affidavit stating that Monroe was in the territorial
jurisdiction of this court.
It is sufficient that this court has
retained jurisdiction under Trial Rule 69(E) to carry out the
proceedings to determine what non-exempt assets Monroe has
available that may partially satisfy the judgment. Therefore, the
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Motion to Strike Affidavit and to Dismiss Proceedings Supplemental [DE 665] filed by the defendant, James A. Monroe, on October
16, 2012, is DENIED, and the Motion to Strike Reply RE Defendant’s Motion to Strike & Dismiss Proceedings Supplemental as
Late Filed [DE 674] filed by the plaintiff, James L. Gagan, on
November 6, 2012, is DENIED.
ENTERED this 27th day of November, 2012
s/ ANDREW P. RODOVICH
United States Magistrate Judge
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