Celtic Marine Corporation v. James C. Justice Companies, Inc.
Filing
188
ORDER & REASONS: granting in part and denying in part 186 Motion for Order Permitting Registration of Judgment for Enforcement in Other Districts; The Court GRANTS Celtic's request for an order to register the March 6, 2014, and May 28, 20 14 judgments in West Virginia. The Court DENIES Celtic's request for an order permitting registration in Kentucky, Virginia, South Carolina, and other states, but will allow Celtic to refile this motion upon a more convincing showing of good cause. Signed by Judge Carl Barbier on 7/17/14. (sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CELTIC MARINE CORPORATION
CIVIL ACTION
VERSUS
NO: 11-3005
JAMES C. JUSTICE COMPANIES,
INC.
SECTION: "J”(2)
ORDER AND REASONS
Before the Court is Celtic Marine Corporation ("Celtic")'s
Motion
for
Order
Permitting
Registration
of
Enforcement in Other Districts (Rec. Doc. 186)
Judgment
for
and James C.
Justice Co. ("Justice")'s opposition thereto. (Rec. Doc. 187).
The motion was set for hearing on July 16, 2014, on the briefs.
Having
considered
the
motion
and
memoranda
of
counsel,
the
record, and the applicable law, the Court finds that the motion
should be GRANTED IN PART AND DENIED IN PART for the reasons set
forth more fully below.
1
PROCEDURAL HISTORY AND BACKGROUND FACTS
This litigation commenced when Celtic filed suit against
Justice for breach of contract in 2011.1 The matter was resolved
in February 2012 via a settlement agreement. ( Rec. Doc. 9) Then,
in
October
2012,
the
parties
entered
another
settlement
agreement. In January 2013, alleging that Justice had breached
the settlements, Celtic successfully moved the Court to re-open
the matter to enforce the settlement agreements.
(Rec. Docs. 11,
46) Once the Court re-opened litigation, Celtic filed a motion
for entry of judgment wherein it demanded certain sums that can
be divided into seven categories: demurrage, freight, shortfall,
cover and cleaning charges, the "February discount," interest on
past
due
invoices,
and
attorney's
fees.
In
a
partial
final
judgment, dated March 6, 2014, the Court entered a partial final
judgment against Justice that resolved entirely the issues of
freight and shortfall damages and partially resolved the issues
of interest and attorney's fees (Rec. Doc. 145).
Justice filed a notice of appeal (Rec. Doc. 149) of the
March 6, 2014, partial final judgment on April 3, 2014. Finding
no reason to depart from the usual requirement that the judgment
1
The Court is well-acquainted with the facts of this matter, thus only
the pertinent facts are summarized. For a more thorough recitation of the
facts, see the Court's Order and Reasons dated September 18, 2013. (Rec. Doc.
104)
2
debtor post a supersedeas bond to obtain a stay of the judgment's
enforcement during an appeal's pendency, the Court on May 12,
2014, issued an order requiring Justice to post bond in the
amount
of
the
judgment
plus
twenty
percent,
which
the
court
calculated to amount to $2,973,212.20. (Rec. Doc. 172) The Court
gave Justice two weeks within which to post such bond, however,
Justice has failed to do so.
On April 4, 2014, Celtic moved for summary judgment on
unresolved
issues
of
demurrage
and
cover/cleaning
fees,
the
February discount, interest incurred on or after October 1, 2013,
and further attorney's fees. (Rec. Doc. 152) The Court resolved
those issues in its May 28, 2014, partial final judgment. (Rec.
Doc. 177) Justice filed another notice of appeal (Rec. Doc. 185)
on June 27, 2014, restating its intent to appeal the March 6,
2014 judgment and announcing an appeal of the May 28, 2014,
judgment as well as additional orders.
Seeking to enforce the Court's judgments in its favor, on
June 30, 2014, Celtic moved this Court for an order permitting
registration of the March 6, 2014 (Rec. Doc. 145) and May 28,
2014
(Rec.
Doc.
177)
judgments
in
the
district
courts
of
"Kentucky, Virginia, West Virginia, South Carolina, as well as
other
states"
in
which
Justice
3
has
assets.
(Rec.
Doc.
186)
Celtic's motion and Justice's opposition (Rec. Doc. 187) are the
subject of this order.
LEGAL STANDARD
Under 28 U.S.C. § 1963, a judgment creditor may register a
district court's judgment for the recovery of money or property
"when the judgment has become final by appeal or expiration of
the time for appeal or when ordered by the court that entered the
judgment for good cause shown." Id. Although the statute does not
define "good cause," "[c]ourts have interpreted [it to require]
'a mere showing that the defendant has substantial property in
the other [foreign] district and insufficient [property] in the
rendering district to satisfy the judgment.'" HockersonHalberstadt, Inc. v. Nike, Inc., No. CIV.A.91-1720, 2002 WL
511542, at *1 (E.D. La. Apr. 3, 2002) (citing Jack Frost Labs.,
Inc. v. Physicians & Nurses Mfg. Corp., 951 F. Supp. 51, 52
(S.D.N.Y. 1997)). The judgment creditor may make the requisite
"showing" of good cause by asserting in its motion that the
judgment debtor lacks assets in the rendering district and has
substantial assets in the registering district. See Chicago Downs
Ass'n, Inc. v. Chase, 944 F.2d 366, 373 (7th Cir. 1991)(finding
that, in the absence of a bond, the moving party's assertions in
its motion as to a lack of assets in the rendering district and
4
substantial property in other districts constituted "good
cause"); Lear Siegler Servs. v. Ensil Int'l Corp., No. SA-05-CV679-XR, 2010 WL 2594872, at *1 (W.D. Tex. June 23, 2010). A
judgment debtor's refusal to post a supersedeas bond further
supports the existence of good cause. See id.; Henckels & McCoy,
Inc. v. Adochio, No. Civ. 94-3958, 1997 WL 535800, at *2 (E.D.
Pa. July 31, 1997). A court's decision of whether there exists
good cause to allow registration of a judgment not yet final by
appeal lies in the court's discretion. Karaha Bodas Co. v.
Perusahaan Pertambangan Minyak Dan Gas Bumi Negrara, No. Civ.A.
H01-0634, 2002 WL 32107930, at *1 (S.D. Tex. Feb. 20,
2002)(citing Columbia Pictures Television, Inc. v. Krypton Broad.
of Birmingham, Inc., 259 F.3d 1186, 1197 (9th Cir. 2001)).
DISCUSSION
Celtic moves the Court to permit registration of its March
6, 2014, and May 28, 2014, judgments in several districts. Celtic
argues that good cause exists under 28 U.S.C. § 1963 because
Justice failed to post the supersedeas bond to obtain a stay of
the March 6, 2014, judgment; a search
revealed no assets of
Justice in Louisiana; and the search "show[ed] substantial assets
of Justice in West Virginia, and that Justice may also have
assets in Kentucky, Virginia, and South Carolina." Additionally,
5
Celtic
notes
that
Justice
has
previously
represented
to
this
Court that it "is a financially secure company capable of paying"
the
judgment
against
it,
which
further
suggests
that
it
is
possessed of substantial assets.
In opposition, Justice asserts that the Court lacks good
cause. Justice stresses the general rule that only judgments that
have become final
by appeal or by expiration of the time for
appeal may be registered for enforcement in other districts. The
only exception to this rule, the "good cause" exception, exists
"to
protect
judgment
creditors
from
being
prejudiced
by
the
debtor's acts during the delay between judgment and completion of
the appeal." That is, it protects judgment creditors from debtors
who may conceal assets during the pendency of the appeal. Thus,
according
to
Justice,
where
there
are
no
allegations
of
wrongdoing or reasons to suspect future wrongdoing, there is no
"good cause" to permit registration of the judgment before its
finality by appeal.
The
Court
finds
that
there
exists
good
cause
to
permit
Celtic to register the March 6, 2014, and May 28, 2014, judgments
in
West
Virginia,
but
finds
no
such
good
cause
to
permit
registration in Kentucky, Virginia, South Carolina, and other
states. Celtic has shown good cause for registration in West
6
Virginia. First, Justice failed to post a supersedeas bond as
ordered by this Court to stay enforcement of the March 6, 2014,
judgment. Second, Celtic asserts that a search for Justice assets
in
Louisiana
has
revealed
nothing
and
indicates
possesses substantial assets in West Virginia.
that
Justice
Third, although
allegations of wrongdoing would certainly support a finding of
good cause, Celtic need not show such wrongdoing to prove good
cause.
Therefore,
this
Court
will
exercise
its
discretion
to
permit Celtic to register its March 6, 2014, and May 28, 2014,
judgments in West Virginia.
First, Justice has failed to post a supersedeas bond as
ordered by this Court to stay enforcement of the judgment pending
an appeal. (Rec. Doc. 172)
Courts have held that permission to
register a judgment should be "deferred until after a judgment
debtor refuses or fails to post a supersedeas bond." Lear Siegler
Servs., 2010 WL 2594872, at *1. Justice had two weeks following
this Court's May 12, 2014, order in which to post a supersedeas
bond staying enforcement of the March 6, 2014 judgment. It did
not do so. Although this Court did not issue an order requiring
Justice to post a supersedeas bond following the May 28, 2014,
judgment, it will not require Celtic to seek such an order before
permitting
registration
when
Justice's
7
course
of
conduct
indicates such an effort by Celtic would be futile.
Second,
Celtic
Louisiana
and
Virginia.
In
is
its
asserts
that
possessed
of
opposition,
Justice
lacks
substantial
Justice
does
assets
assets
not
in
in
West
refute
these
assertions. The United States Court of Appeals for the Seventh
Circuit has affirmed a finding of good cause based on similar
statements. See Chicago Downs, 944 F.2d at 373. In Chicago Downs,
the Seventh Circuit held that the district court did not abuse
its discretion when it based its finding of good cause upon
assertions in the judgment creditor's motion that the judgment
debtor
lacked
assets
in
the
rendering
district
and
had
substantial assets in the registering district. 944 F.2d at 37172. Similarly, here, Celtic urged Justice's lack of assets in
Louisiana and substantial assets in West Virginia in its motion.
Additionally, Celtic noted Justice's own statements regarding its
substantial
assets
while
opposing
the
requirement
of
a
supersedeas bond. Celtic has shown good cause to register the
judgment in West Virginia. Although it is true that the judgment
creditor in Chicago Downs also noted in its motion that it feared
the judgment debtor would transfer or conceal assets, such a
showing is not required to support a finding of good cause. See
David D. Siegel, Commentary on 1988 Revision, 28 U.S.C. § 1963
8
(West).
Third, contrary to Justice's arguments, a judgment creditor
is not required to allege any wrongdoing on the part of the
judgment
debtor
to
show
that
good
cause
exists
to
permit
registration of a judgment. See Lear Siegler Servs., 2010 WL
2594872, at *1. West's commentary to 28 U.S.C. § 1963 further
supports this view, stating that requiring a judgment creditor to
show that the judgment debtor would conceal assets to prevent
enforcement
would
"require
more
evidence
than
it
is
fair
to
exact" on a judgment creditor who has already won on the merits.
David D. Siegel, Commentary on 1988 Revision, 28 U.S.C. § 1963
(West). As such, Celtic has shown that good cause exists to
permit registration of this Court's March 6, 2014, and May 28,
2014, judgments in West Virginia.
By contrast, Celtic has not shown that there exists good
cause
to
register
the
judgments
in
Kentucky,
Virginia,
South
Carolina, and other states in which Justice "may" have assets.
Celtic has not indicated that it conducted any search revealing
Justice assets in these states. Thus, it has not shown that
Justice has substantial assets in those states. Consequently, it
has not met its burden to show that there exists good cause to
permit registration. See Jack Frost Labs., Inc., 951 F. Supp. at
9
52 (allowing registration only in the state in which judgment
creditor showed the judgment debtor had substantial assets).
Accordingly,
IT IS ORDERED that Celtic Marine Corporation's Motion for
Order
Permitting
Registration
of
Judgment
for
Enforcement
in
Other Districts (Rec. Doc. 186) is hereby GRANTED IN PART AND
DENIED IN PART. The Court GRANTS Celtic's request for an order to
register the March 6, 2014, and May 28, 2014 judgments in West
Virginia.
The
Court
DENIES
Celtic's
request
for
an
order
permitting registration in Kentucky, Virginia, South Carolina,
and other states, but will allow Celtic to refile this motion
upon a more convincing showing of good cause.
New Orleans, Louisiana, this 17th day of July, 2014.
____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
10
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