West Hills Farms, LLC v. ClassicStar, LLC et al

Filing 885

MEMORANDUM OPINION & ORDER: (1) (2587 in 5:07-cv-00353-JMH-REW, 866 in 5:06-cv-00243-JMH-REW) MOTION Motion For Declaration That Certain Property (1) Is Owned By Judgment Debtor John Parrott Or (2) Was Fraudulently Transferred By Judgment is DENIED; (2) (2597 in 5:07-cv-00353-JMH-REW, 875 in 5:06-cv-00243-JMH-REW) MOTION to Continue and extend time to file Reply to obtain further evidence in support of motion is DENIED AS MOOT. Signed by Judge Joseph M. Hood on 2/29/2016.Associated Cases: 5:07-cv-00353-JMH-REW, 5:06-cv-00243-JMH-REW(STC)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRCT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON

IN RE CLASSICSTAR MARE LEASE
LITIGATION
WEST HILLS FARMS, LLC, et al.,
Plaintiffs,
v.
CLASSICSTAR, LLC, et al.,
Defendants.

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MDL No. 1877
Master File:
Civil Action No. 07-353JMH

Civil Action No.
5:06-CV-243

MEMORANDUM OPINION & ORDER

***

This matter is before the Court upon Plaintiffs Motion for a
Declaration that Certain Property Is Owned by Judgment Debtor John
Parrott or was Fraudulently Transferred by Judgment [DE 866], to
which Defendant John Parrott objects [DE 872]. In lieu of a Reply,
Plaintiff has filed a Motion to Continue [DE 875] consideration of
that Motion for Declaration in order that they might collect more
evidence through discovery to support their request for relief
rather than litigate the matter piecemeal.

For the reasons which

follow, Plaintiff’s Motion for a Declaration will be denied, and
Plaintiff’s Motion to Continue will be denied as moot.
Plaintiffs believe that Defendant John Parrott has used his
legal training to manipulate his financial affairs to hide his

assets from his judgment creditors, including transferring funds
to his ex-wife, Judy I. Parrott, and Jude Investments, LLC, during
the course of this and other litigation concerning Defendant
Parrott’s involvement with the conspiracy alleged in this action
and which was the subject of criminal proceedings.

Plaintiffs

seek a declaration that certain money and securities transferred
by Defendant Parrott to his ex-wife and Jude Investments were
fraudulently conveyed such that Defendant Parrott is the owner of
the property and the funds should be subject to execution in this
matter.

Plaintiffs seek, in the alternative, a declaration that

the property was transferred for no consideration and the transfers
are voidable as they violate the rights of Defendant Parrott’s
creditors.
Plaintiffs rely on Federal Rule of Civil Procedure 69 and the
Court’s inherent authority to enforce its own judgment to provide
this Court with subject matter jurisdiction over this matter.
Certainly,

as

they

point

“ancillary

jurisdiction

out,

over

federal

a

broad

district

range

of

courts

have

supplementary

proceedings involving third parties to assist in the protection
and

enforcement

of

federal

judgments

–

including

attachment,

mandamus, garnishment, and the prejudgment avoidance of fraudulent
conveyances.” Peacock v. Thomas, 516 U.S. 349, 351 and 356 (1996)
(citations

omitted)

(“We

have

reserved

the

use

of

ancillary

jurisdiction in subsequent proceedings for the exercise of a
2

federal

court’s

inherent

power

to

enforce

its

judgments.”).

Arguably, the Court would have jurisdiction over Defendant John
Parrott in an action for relief as described and might, if asked,
have jurisdiction over his ex-wife and Jude Investments.

There

is, however, no reason to make that determination because the cause
of action has not been brought against those parties before this
Court.
The

Court

appreciates

that

Plaintiffs

would

enjoy

the

convenience of obtaining relief from this Court, before which the
judgment it seeks to enforce was obtained, but ultimately agrees
with Defendant Parrot that, under the circumstances a motion under
Rule 69 cannot provide the relief that Plaintiffs seek.

First and

foremost, Judy Parrott and Jude Investments are not parties to
this action nor does the Court immediately see how they might be
brought before this Court in the absence of a new action.

As

Parrott points out, “fraudulent transfer” is, in its own right, a
cause of action in Kentucky and other jurisdictions, including
Florida and the U.S. Virgin Islands, under which law Defendant
theorizes

that

Plaintiff’s

might

seek

redress.

Even

if

a

declaratory action founded on such a cause of action could provide
the appropriate relief, this Court may “may declare the rights and
other

legal

relations

of

any

interested

party

seeking

such

declaration” pursuant to 28 U.S.C. § 2201 only “upon the filing of
an appropriate pleading.”

28 U.S.C. § 2201; see Federal Rule of
3

Civil

Procedure

complaint,

7

answer

(listing
to

a

types

of

complaint,

“pleadings,”

answer

to

a

limited

to

counterclaim

designated as a counterclaim, answer to a crossclaim, third-party
complaint, answer to a third-party complaint, and reply to an
answer); see, e.g., Ledbetter v. Knox Cty., Tenn, No. 3:05-CV-248,
2006

WL

354200,

at

*1

(E.D.

Tenn.

Feb.

15,

2006)

(denying

plaintiff’s motion for declaratory relief because no “pleading”
had been filed seeking declaratory relief pursuant to 28 U.S.C. §
2201).
Absent an amendment to the Complaint or a request for relief
through some other appropriate pleading, which Plaintiffs do not
seek, this Court will not entertain their request for relief.

Nor

does the Court suggest that it would look favorably upon a request
for amendment.
Accordingly, IT IS ORDERED:
(1)

that the Motion for a Declaration that Certain Property

Is Owned by Judgment Debtor John Parrott or Was Fraudulently
Transferred by Judgment [DE 866] is DENIED.
(2)

that Plaintiffs’ Motion to Continue [DE 875] and to

extend time to file a Reply in order to obtain further evidence in
support of its motion is DENIED AS MOOT.
This the 29th day of February, 2016.

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