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