Kentucky Petroleum Operating LTD v. Golden et al
Filing
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MEMORANDUM OPINION & ORDER: 1) KPO's motion to quash R. 65 is DENIED WITHOUT PREJUDICE; 2) If KPO wishes to renew its motion to quash it must do so by Friday, June 13, 2014; 3) If KPO elects not to renew its motion the Court will order any property or proceeds of any debt belonging to KPO in Sunoco's possession applied upon the judgment pur Ky.Rev.Stat § 425.501(5); 4) By Friday, June 13, 2014, the KPO Entities must also file a sur-reply that addresses the le gal arguments made by 7921 and Macar in their reply brief in support of their motion for sanctions; 5) In the future, the Court will deny w/o prejudice any motion filed without adequate, on-point citations to precedent or other legal authority. Sur Reply due by 6/13/2014.) Signed by Judge Amul R. Thapar on 5/30/2014.(RC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
LONDON
KENTUCKY PETROLEUM
OPERATING, LTD.,
Plaintiff,
v.
MAX L. GOLDEN, et al.,
Defendants.
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Civil No. 12-164-ART
MEMORANDUM OPINION
& ORDER
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Over a year ago, Macar Investments, LLC (“Macar”) and 7921 Energy, LLC
(“7921”) instituted an arbitration proceeding against Kentucky Petroleum Operating, LTD
(“KPO”). See R. 32 at 2. The arbitrator ultimately determined that KPO and Kentucky
Petroleum Operating, LLC (collectively, “the KPO Entities”) had breached various
agreements with Macar and 7921. Id. The arbitrator awarded Macar and 7921 damages and
interests in certain wells and leases. Id. Macar and 7921 then moved this Court to enter
judgment upon the arbitration award, id., which the Court did. Id. at 5; R. 33.
Since then, Macar and 7921 have sought to enforce the Court’s judgment through a
variety of means. E.g., R. 37; R. 63. The two motions currently pending in this case arise
from their attempts to collect the money owed to them. See R. 63; R. 65. Because neither
motion complies with the briefing requirements for federal court, the Court will deny KPO’s
motion to quash a garnishment order, R. 65, and will order a sur-reply on 7921 and Macar’s
motion to hold the KPO Entities in contempt, R. 63.
I.
Briefing Requirements in Federal Court
Before reaching the parties’ motions, a quick primer on the briefing requirements for
motions filed in federal court is necessary. The Court has already advised the parties of the
inadequacy of their briefing on more than one occasion. When Max and Andrew Golden
moved for summary judgment on KPO’s claims, R. 28, the Court ordered supplemental
briefing, explaining that the “parties’ briefs rel[ied] on a hodgepodge of federal and state law
and drift[ed] between discussions of claim and issue preclusion.” R. 32 at 3. Later, when
7921 and Macar moved for an order directing Sunoco Partners Marketing Terminals, LP
(“Sunoco”) and Seminole Energy Services, LLC, to take certain actions, R. 37, the Court
noted that the movants had entirely “failed to carry their burden.” R. 59 at 2. Their motion
did not “cite a single legal authority—case, statute, or even treatise—justifying their
demands.” Id. Because federal courts “‘cannot write a party’s brief, pronounce [themselves]
convinced by it, and so rule in the party’s favor,’” the Court denied the motion without
prejudice. Id. (quoting Xue Juan Chen v. Holder, 737 F.3d 1084, 1085 (7th Cir. 2013)).
The parties’ failure to carry their burden has three principal effects.
First, it
effectively places the Court in an inquisitorial posture—which is anathema to our adversarial
system of adjudication. See Xue Juan Chen, 737 F.3d at 1085. Second, it prejudices the
parties themselves. The lack of input from the parties compromises the Court’s ability to
issue the thoughtful, informed opinions that justice requires.
Third, it wastes judicial
resources, since the Court must hunt down information that the parties should have provided.
Bearing these considerations in mind, the Court will turn to the two motions filed by the
parties.
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II.
KPO’s Motion to Quash the Court’s Order for Writ of Garnishment
Soon after the Court issued its judgment in this matter, 7921 applied for an order of
garnishment against Sunoco. R. 60. The Clerk of the Court issued a garnishment order,
R. 62, pursuant to Rule 69 of the Federal Rules of Civil Procedure and Ky. Rev. Stat.
425.501(1). The order required that Sunoco hold and safely keep $50,929.41 plus interest
belonging to KPO. R. 62. According to an affidavit filed by Andrew Golden, a managing
member of 7921, this sum represents the overriding royalty interest to which 7921 is entitled
under the arbitration award, as confirmed by this Court’s judgment.
R. 61-1.
KPO
immediately moved to set aside, vacate, or quash the order. R. 65. KPO has not adequately
briefed this motion, such that the Court can fairly determine whether its claims have merit.
Therefore, the Court will deny its motion without prejudice.
The Court has “inherent power to enforce its judgment.” Virgo v. Riviera Beach
Assocs. LTD, 20 F. App’x 348, 350 (6th Cir. 2001) (quoting Peacock v. Thomas, 516 U.S.
349, 356 (1996) (internal quotation marks omitted)). Rule 69 provides the mechanism to do
so. Specifically, Rule 69 permits the Court to enforce a money judgment by a writ of
execution or by another means that it selects. Fed. R. Civ. P. 69(a)(1). Because this Court
sits in Kentucky, it must generally follow Kentucky procedural law for execution or
proceedings supplementary to and in aid of execution. Id. In Kentucky, parties may seek a
writ of garnishment as a method of executing judgments. See Wade v. Poma Glass &
Specialty Windows, Inc., 394 S.W.3d 886, 895 (Ky. 2012). Consequently, the Court has
authority to oversee garnishment proceedings via Rule 69. Travelers Cas. & Surety Co. v.
Whitehouse-Franklin, L.L.C., No. 06-5554, 2007 WL 247894, at *3 (6th Cir. 2007)
(describing the use of Kentucky’s garnishment procedures pursuant to Rule 69); Charles A.
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Wright et al., 12 Federal Practice & Procedure: Federal Rules of Civil Procedure § 3012
(2d ed. 2014) [hereinafter Wright & Miller] (describing garnishment as a supplementary
proceeding to assist in the protection and enforcement of federal judgments).
The Court may only do so, however, if it previously rendered a money judgment,
rather than a judgment for a specific act. See Wright & Miller § 3011. Compare Fed. R.
Civ. P. 69(a) (referring only to money judgments), with Fed. R. Civ. P. 70 (referring to the
performance of specific acts). In its motion to quash the writ of garnishment, KPO denies
the existence of a money judgment in this case. R. 65 at 1. KPO points out that the
arbitration award, as confirmed by the judgment, frames the amount owed to 7921 in terms
of percentages, not fixed sums, and involves calculations that are subject to contestation. Id.
at 3–4. But KPO cites no case law or other authority to explain why a judgment written in
these terms does not qualify as a money judgment. See id. For the reasons described above,
the Court declines to play the role of attorney and will deny KPO’s motion without prejudice.
III.
7921 and Macar’s Motion to Hold the KPO Entities in Contempt
Similar principles apply to 7921 and Macar’s motion to hold the KPO Entities in
contempt for their alleged failure to obey this Court’s lawful orders. R. 63. After the Court
entered judgment in favor of 7921 and Macar, it also issued an order directing KPO to make
all assignments to 7921 and Macar required by the arbitration award. R. 39 at 2. 7921 and
Macar now complain that the KPO Entities did not make one of the four required
assignments. R. 63 at 2. 7921 and Macar also claim that the KPO Entities failed to pay
overriding royalty interests due to them under the terms of the arbitration award and the
Court’s judgment. Id. at 3. Even worse, they allege that the KPO Entities actively sought to
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prevent them from receiving payment. Id. at 3–6. These allegations, if true, are certainly
troubling.
Once again, however, the basic briefing requirements for motions in federal court
cause 7921 and Macar’s downfall. In support of their motion, 7921 and Macar cite precisely
one case, from another jurisdiction, which has limited bearing on the issues implicated by
their motion. Id. at 6 (citing SEC v. Hyatt, 621 F.3d 687 (7th Cir. 2010)). Their reply brief,
in contrast, is replete with citations—and sets forth arguments not initially raised in the
motion.
See R. 71.
The KPO Entities have had no opportunity to respond to these
arguments. Due to the gravity of 7921 and Macar’s allegations, the Court will order a surreply. See Key v. Shelby County, 551 F. App’x 262, 265 (6th Cir. 2014) (citing Seay v. Tenn.
Valley Auth., 339 F.3d 454, 481 (6th Cir. 2003)) (explaining that a sur-reply may be
warranted where a reply brief contains new arguments and a nonmovant’s ability to respond
has been vitiated). Once the motion becomes ripe, the Court will set a hearing date if it finds
that 7921 and Macar have made colorable arguments in favor of civil contempt. See United
States v. Conces, 507 F.3d 1028, 1043 (6th Cir. 2007) (requiring notice and an opportunity to
be heard before holding a party in civil contempt).
Accordingly, it is ORDERED that:
(1)
KPO’s motion to quash, R. 65, is DENIED WITHOUT PREJUDICE.
(2)
If KPO wishes to renew its motion to quash, it must do so by Friday, June 13,
2014. In its renewed motion, it must brief the following issue, providing
precedent or other legal authority to support its position: Whether, under
federal law, the Court’s judgment in this case qualifies as a money judgment,
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see Fed. R. Civ. P. 69(a), or a judgment for performance of a specific act, see
Fed. R. Civ. P. 70(a).
(3)
If KPO elects not to renew its motion, the Court will order any property or the
proceeds of any debt belonging to KPO in Sunoco’s possession applied upon
the judgment pursuant to Ky. Rev. Stat. § 425.501(5).
(4)
By Friday, June 13, 2014, the KPO Entities must also file a sur-reply that
addresses the legal arguments made by 7921 and Macar in their reply brief in
support of their motion for sanctions. Once this motion is ripe, the Court will
schedule a hearing as necessary.
(5)
In the future, the Court will deny without prejudice any motion filed without
adequate, on-point citations to precedent or other legal authority.
This the 30th day of May, 2014.
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