Yokozeki v. Carr-Locke

Filing 102

Magistrate Judge Marianne B. Bowler: ORDER entered. MEMORANDUM AND ORDER Re: Supplementary Process Proceeding; Motion for Constructive Trust (Docket Entry # 83 ); Motion for Sanctions Against Defendant's Counsel (Docket Entry # 94 ). An or der directing defendant to make partial or full payment on judgment under sections 15 and 16 of chapter 224 is DENIED without prejudice at this time. Plaintiff may submit a new application at any time in the event she wants to continue to pursue a c ollection of the judgment through supplementary process. The motion to impose a constructive trust (Docket Entry # 83 ) is DENIED without prejudice. The motion for sanctions (Docket Entry # 94 ) is ALLOWED. On or before April 14, 2017, plaintiff shall file an affidavit of the reasonable attorney's fees and costs plaintiff incurred to file and to argue the motion for sanctions. (Patton, Christine)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
SHIMAKO YOKOZEKI,
Plaintiff,
v.

CIVIL ACTION NO.
13-12587-MBB

ALAN H.L. CARR-LOCKE,
Defendant.
MEMORANDUM AND ORDER RE:
SUPPLEMENTARY PROCESS PROCEEDING;
MOTION FOR CONSTRUCTIVE TRUST (DOCKET ENTRY # 83);
MOTION FOR SANCTIONS AGAINST DEFENDANT’S COUNSEL
(DOCKET ENTRY # 94)
March 28, 2017
BOWLER, U.S.M.J.
Pending before this court is:

(1) a motion filed by

plaintiff Shimako Yokozeki (“plaintiff”) seeking to impose a
constructive trust on certain property of defendant Alan H. L.
Carr-Locke (“defendant”) consisting of six vehicles in order to
pay a judgment entered in this case (Docket Entry # 83); and (2)
a motion for sanctions under Fed.R.Civ.P. 11 (“Rule 11”) filed by
plaintiff (Docket Entry # 94) against defendant.1

A

supplementary process finding regarding defendant’s ability to
pay the judgment also remains outstanding.
BACKGROUND
On July 24, 2015, a final judgment entered awarding

1

Although the caption of the motion refers to sanctions
against defendant’s counsel, the body of the motion seeks
sanctions against defendant.

plaintiff the amount of $117,663, prejudgment interest in the
amount of $25,028.37, postjudgment interest under 28 U.S.C. §
1961 and costs under Fed.R.Civ.P. 54(d)(1) against defendant.

To

date, defendant has not paid any portion of the judgment.
On March 4, 2016, this court issued a writ of execution on
the judgment commanding defendant to pay plaintiff the amount of
$145,625.54, a figure consisting of the above items, including
$2,934.17 in costs.2

On March 7, 2016, this court allowed

plaintiff’s motion to appoint a special process server to serve
the writ of execution.

(Docket Entry ## 76, 78).

On March 8,

2016, plaintiff filed an application for supplementary process
under Massachusetts General Laws chapter 224 (“chapter 224”),
section 14.

(Docket Entry # 79); see Fed.R.Civ.P. 69.

The

application:
request[ed] that this Court enter an order (1) allowing its
Application for Supplementary Process; (2) setting a date
for an examination of the Debtor, Alan H.L. Carr-Locke,
relative to his property and ability to pay the judgment
against him in this case in full or by partial payment from
time to time; and (3) issuing the Notice of Examination in
the form set forth in Exhibit B.
(Docket Entry # 79) (underlining omitted).

On April 6, 2016,

this court allowed the application for supplementary process,
issued a notice of examination as requested, and set an
examination date of May 19, 2016.

(Docket Entry # 80).

The

notice commanded defendant to appear in court on that date and to

2

The writ thereby established the amount of costs.
2

submit to an examination of his property and ability to pay the
judgment.

On April 8, 2016, defendant’s counsel purportedly

emailed plaintiff’s counsel informing him that defendant’s
counsel would “‘accept service for’” defendant’s supplementary
process proceeding.

(Docket Entry # 94-1).

On May 2, 2016, this

court rescheduled the examination to May 26, 2016 at 2:45 p.m.
(Docket Entry # 82).
On May 10, 2016, plaintiff filed the motion requesting this
court to impose a constructive trust on the six vehicles
purportedly purchased by defendant and titled in the name of
Ragnhild Hovlund (“Hovlund”), his “life partner” and with whom he
has two children.

(Docket Entry # 69, p. 79).3

Shortly

thereafter, this court set a hearing on the motion and any other
pending motion for May 26, 2016 at 2:15 p.m.

(Docket Entry #

85).
At the time of the trial, Hovlund resided with defendant at
a residence in Walpole, Massachusetts.
78-79).

(Docket Entry # 69, pp.

She testified that she drove a 1992 Mercedes 300TD

station wagon titled in her name and had driven the car for a
long time.

(Docket Entry # 69, pp. 84-85).

She also stated

there were “two other registered cars in” her name and two other
cars in storage.

(Docket Entry # 69, p. 85).

3

In contrast to Hovlund’s trial testimony above, defendant
testified that he had “lived together separately” with Hovlund
“[f]or many years.” (Docket Entry # 70, p. 12).
3

Hovlund is identified as president, treasurer, secretary and
director of Informed Decisions LLC in the corporation’s articles
of organization filed with the Secretary of State of the
Commonwealth of Massachusetts.
(Docket Entry # 70, pp. 41).

(Docket Entry # 69, pp. 87-88)

Incorporated in Massachusetts in

September 2013, the company existed previously albeit not as a
Massachusetts corporation, according to defendant.
# 69, pp. 86-88, 104-105).

(Docket Entry

At trial, Hovlund could not identify

the business of the corporation and she had no duties at the
corporation notwithstanding her titles.

(Docket Entry # 69, pp.

87-88).
On May 26, 2016, this court heard oral argument on the
motion for a constructive trust and an amended motion to dismiss
for lack of jurisdiction filed by defendant.
83, 88).

(Docket Entry ##

The latter motion asserted there was no jurisdiction

for the supplementary process proceeding because plaintiff had
not served defendant with a summons as required under section 14
of chapter 224.

(Docket Entry # 88).

Grounded on the improper

filing of the amended motion to dismiss, the motion for sanctions
argues that summons was not required in light of the notice of
examination, the discretionary language of section 14, and the
aforementioned acceptance of service by defendant’s counsel.
This court also heard argument on the supplementary process
matter on May 26, 2016.

At the close of the proceedings, this

court took the motions (Docket Entry ## 83, 88) and the
4

supplementary process matter under advisement.

Neither defendant

nor Hovlund testified at the May 26, 2016 examination.

Although

plaintiff’s counsel referred to Hovlund’s and defendant’s
deposition testimony a number of times, he did not offer the
depositions into evidence during the May 26, 2016 supplementary
process proceeding.

Plaintiff’s counsel also made a number of

other cogent, well-stated arguments but did not provide evidence
to support them at the proceeding.
The following day, plaintiff filed a proposed supplementary
process order that included a finding that defendant has $1,000
available per month to pay rent for an office and a business
storage space that is not necessary because defendant does not
work.

(Docket Entry # 89).

support the finding.
retired.

Plaintiff did not cite evidence to

At trial, Hovlund described defendant as

(Docket Entry # 69, p. 80).

During trial, defendant

testified that he had an office in South Boston and paid either
$20,000 or $30,000 a year in rent.

(Docket Entry # 70, p. 7).

He also testified that he closed an office in Boston in 2013.
(Docket Entry # 69, p. 142).

The proposed order additionally

states that defendant had paid his attorney at the time
approximately $35,000 in legal fees over a 22-month time period.4
As stated in court on May 26, 2016 and recited in the proposed

4

Plaintiff’s counsel also made this assertion at the May
26, 2016 proceeding but did not provide evidence to support it.
5

order, plaintiff submits that defendant can therefore make
partial payments in the amount of $2,500 a month on the debt.
(Docket Entry # 89).
On September 9, 2016, Informed Decisions LLC entered into a
one-year lease of a residential suite at Wellesley Place in
Wellesley, Massachusetts.

(Docket Entry # 98-1).

At the request

of Informed Decisions LLC, it paid the annual rent of $37,200 in
advance of the September 10, 2016 start date of the lease.
(Docket Entry # 98-1).

A wire transfer of $37,200 from an

account under the names of Andrew and Elizabeth Carr-Locke in a
bank in the United Kingdom to Wellesley Place LLC took place
shortly before the term of the lease commenced.
98-1, p. 7) (Docket Entry # 98-2).

(Docket Entry #

Plaintiff alleges (Docket

Entry # 98, ¶ 8) that Andrew Carr-Locke is defendant’s brother.
At his deposition, defendant purportedly provided an exhibit
allegedly from his brother that indicated that he owed defendant
the sum of £735,723 as of April 30, 2016.5
3).

(Docket Entry # 98-

The occupants of the suite consist of defendant, Hovlund,

Christian Carr-Locke, and Alexander Carr-Locke.

(Docket Entry #

98-1).
DISCUSSION
I.

Supplementary Process

5

Defendant characterizes the funds as a loan whereas
plaintiff maintains the funds are defendant’s property held by
his brother.
6

Unless the court directs otherwise, a money judgment entered
in a federal court is enforced by a writ of execution.
Fed.R.Civ.P. 69(a)(1).

Under Rule 69, the procedure on execution

and in aid of judgment “must accord with the procedure of the
state where the court is located.”

Rule 69(a)(1), Fed.R.Civ.P.

(emphasis added); see Aetna Casualty & Surety Co. v. Markarian,
114 F.3d 346, 350 (1st Cir. 1997); Gabovitch v. Lundy, 584 F.2d
559, 561 (1st Cir. 1978) (“overall intent of Rule 69(a) is to
limit both the procedure for obtaining process and the effect of
writs to that available under state law”).
In Massachusetts, after a judgment creditor files an
application for supplementary process, “[a] summons may then
issue requiring the judgment debtor to submit to” the
“examination under oath as to his ‘property and ability to pay.’”
In re Birchall, 913 N.E.2d 799, 807 (Mass. 2009).

Defendant did

not testify at the rescheduled May 26, 2016 examination.
Defendant’s counsel appeared and stated, not under oath, that
defendant had a number of other debts, including $140,000 to a
private school, and lacked the ability to pay the judgment.

No

testimony or other evidence was taken at the May 26, 2016
examination.
The judgment creditor has the burden of proof at the hearing
to show that defendant has the ability to pay the judgment,
excluding non-exempt property.

Mass. Gen. Laws ch. 224, § 16;

accord In re Birchall, 913 N.E.2d at 807, 811.
7

Section 16 of

chapter 224 provides that:
If after a full hearing at which the creditor shall have the
burden of proof the court finds that the debtor has property
not exempt . . ., the court may order him or it to produce
it, or so much thereof as may be sufficient to satisfy the
judgment . . . ; or if after such hearing the court finds
that the debtor is able to pay the judgment in full or by
partial payments, the court may order the debtor to pay the
judgment.
Mass. Gen. Laws ch. 224, § 16 (emphasis added).

At the

discretion of the court, “[t]he examination may be oral or in
writing.”

Mass. Gen. Laws ch. 224, § 15.

In light of the lack

of written evidence or testimony at the hearing as required under
sections 15 and 16 of chapter 224, plaintiff did not meet her
burden.

See Mass. Gen. Laws ch. 224, §§ 15, 16; In re Birchall,

913 N.E.2d at 807 (noting that judgment creditor “bears the
burden of proof”); see also Aetna Casualty & Surety Co. v.
Markarian, 114 F.3d at 349 (paraphrasing Gabovitch v. Lundy, 584
F.2d at 560).

The subsequently filed status report almost nine

months after the May 26, 2016 examination and after this court
took the supplementary process matter under advisement is not
part of the examination.
Plaintiff may renew the application for supplementary
process at any time, however, and seek to admit the recent
evidence of the lease, the bank account, the wire transfer, and
any other evidence at a future examination.

See Mass. Gen. Laws

ch. 224, § 18 (if “proceedings are dismissed, the creditor, shall
not, within one year . . . , file a new application against the
8

same debtor . . . , unless the court otherwise orders”) (emphasis
added); Mass. Gen. Laws ch. 224, § 15 (“[e]ither party may
introduce additional evidence” at the examination); see generally
Mass. Gen. Laws ch. 224, §

16 (“court may at any time renew,

revise, modify, suspend or revoke any order made in any
proceedings”); Board of Commissioners of Stark County, Ohio v.
Cape Stone Works, Inc., 206 F.Supp.2d 100, 105 (D.Mass. 2002)
(denying motion to deliver goods and advising plaintiff of
remedies and process afforded under section 224 if plaintiff
chooses to file supplementary process application).

The

dismissal of the application is therefore without prejudice and
may be renewed at any time.
II.

Motion for Constructive Trust
As noted, plaintiff seeks a constructive trust on six

vehicles which plaintiff claims are defendant’s property.
(Docket Entry # 83).

The motion initially asserts that a

constructive trust is an equitable tool to prevent unjust
enrichment resulting from fraud or other circumstances.

(Docket

Entry # 83) (quoting Maffei v. Roman Catholic Archbishop of
Boston, 867 N.E.2d 300, 312 (Mass. 2007)).

The motion also

relies on the supplementary process proceeding and the ability to
require the judgment debtor (defendant) to deliver or convey nonexempt property to the judgment creditor (plaintiff).
Entry # 83).

(Docket

In addition to other arguments, defendant opposes

9

the constructive trust on the grounds that the title holder of
these cars, Hovlund, is not a party and that a constructive trust
only arises when plaintiff confers a benefit on defendant.
(Docket Entry # 84).

Hovlund did not file an opposition to the

motion.
Turning to the first basis for the motion, “A constructive
trust is a flexible tool of equity designed to prevent unjust
enrichment resulting from fraud, a violation of a fiduciary duty
or confidential relationship, mistake, or ‘other circumstances’
in which a recipient’s acquisition of legal title to property
amounts to unjust enrichment.”

Maffei v. Roman Catholic

Archbishop of Boston, 867 N.E.2d at 312.

Courts in Massachusetts

regard The Restatement (Third) of the Law of Restitution and
Unjust Enrichment (the “Restatement”) as authoritative on the
issue of constructive trust.

See Shehan v. Schlegal, 2014 WL

5486251, at *1 (Mass.App.Ct. Oct. 31, 2014) (quoting Restatement
§ 55).

The Massachusetts Supreme Judicial Court also adopts

language which closely tracks that of the Restatement on the
issue of constructive trust.

See Mickelson v. Barnet, 460 N.E.2d

566, 568 (Mass. 1984) (embezzler “became a constructive trustee
of the money and its traceable proceeds”).
Under the Restatement, constructive trust is not confined to
a buyer-seller relationship and it “permits the claimant to
assert ownership of (i) specifically identifiable property for

10

which the defendant is liable in restitution or (ii) its
traceable product by the rules of §§ 58-59.”
cmt. g; see Mickelson, 460 N.E.2d at 568.

Restatement § 55

The first scenario

arises when the property on which a claimant seeks to impose a
constructive trust is the same property in dispute in the
underlying litigation.

See Restatement § 55 cmt. g.

The second

scenario arises when the property in dispute in the original
litigation or the proceeds from its disposal has been commingled
with defendant’s other property.

See Restatement § 55 cmt. g.

Section 59, to which comment g to section 55 refers, provides
that, “If property of the claimant is deposited in a common
account or otherwise commingled with other property so that it is
no longer separately identifiable, the traceable product of the
claimant’s property may be identified in . . . property acquired
with withdrawals from the commingled fund, or a portion thereof .
. ..”

Restatement § 59.

In this scenario, even if direct

identification of a claimant’s asset is impossible, section 59
creates “tracing fictions,” giving claimant “the ability to trace
the claimant’s assets” when “there have been intermediate
withdrawals from a commingled fund.”

Restatement § 59 cmt. d.

These are also known as the “tracing rules.”

Restatement § 59

cmt. a.
With respect to the first scenario set out in comment g of
section 55 in the Restatement, defendant’s purported purchase of

11

the six vehicles6 has an insufficient relationship to any
misconduct of defendant for which he “is liable in restitution.”
Restatement § 55, cmt. g.

The transactions in which defendant

allegedly paid for the vehicles and registered them in Hovlund’s
name were not the basis for which the jury found defendant liable
to plaintiff.
Plaintiff’s constructive trust claim fares no better under
the tracing rules.

Plaintiff bears the burden to trace the money

defendant fraudulently received from plaintiff to the alleged
purchase of the six vehicles in question.

See Maffei, 867 N.E.2d

at 312; see also Restatement §§ 55 cmt. g & 59.

At this time,

the record fails to establish that defendant used any part of the
money defendant received from plaintiff to purchase the six
vehicles in question.
With respect to the second aspect of the motion which relies
on section 16 of chapter 224, plaintiff fails in her burden to
show that the six vehicles are defendant’s property.
Gen. Laws ch. 224, § 16.

See Mass.

As explained in Roman numeral I, there

is a lack of sufficient evidence to find that defendant has nonexempt property and an ability to pay all or part of the
judgment.

This ruling does not foreclose plaintiff from seeking

to establish that one or more of the vehicles constitutes non-

6

At the May 26, 2016 hearing, defendant’s counsel stated,
without objection, that defendant purchased the vehicles in 2005.
12

exempt property of defendant at a future supplementary process
proceeding.

A denial of the motion for a constructive trust

without prejudice is therefore appropriate.
III.

Motion for Sanctions
Plaintiff grounds the motion for sanctions on the May 24,

2016 filing of the amended motion to dismiss.
94).

(Docket Entry #

Plaintiff contends that defendant filed the motion to

unnecessarily delay the supplementary process proceeding.

She

also submits that the legal contentions are not warranted by
existing law or a nonfrivolous argument to extend such law and
the factual contentions lack evidentiary support.

(Docket Entry

# 94).
The amended motion to dismiss argued that plaintiff did not
serve defendant with a summons for the May 26, 2016 examination.
(Docket Entry # 88).

The motion further asserted that section 14

of chapter 224 requires a summons served at least seven days
prior to the May 26, 2016 proceeding.

(Docket Entry # 88).

After taking the motion under advisement at the May 26, 2016
hearing, this court denied the motion on May 27, 2016 for reasons
stated in plaintiff’s opposition and during oral argument.
Plaintiff served defendant with the Rule 11 motion on May
25, 2016.

(Docket Entry # 94-2).

Rule 11(c)(2) allows a non-

movant to withdraw the challenged motion within 21 days of
service, i.e., June 15, 2016.

Fed.R.Civ.P. 11(c)(2).

13

Defendant

filed a motion to withdraw the amended motion on June 16, 2016,
i.e., 22 days after service of the Rule 11 motion.
# 93).

(Docket Entry

He therefore does not fall within the protection of Rule

11(c)(2).
Rule 11(b) authorizes “sanctions on a party or lawyer for
advocating a frivolous position, pursuing an unfounded claim, or
filing a lawsuit for some improper purpose.”

CQ Intern. Co.,

Inc. v. Rochem Intern., Inc., USA, 659 F.3d 53, 60 (1st Cir.
2011); see Fed.R.Civ.P. 11(b).

Section 14 of chapter 244 states

that, “Upon the filing of” an “application, a summons may issue,
requiring the judgment debtor to appear at a time and place named
therein and submit to an examination relative to his or its
property and ability to pay.”

Mass. Gen. Laws ch. 244, § 14

(emphasis added); accord In re Birchall, 913 N.E.2d at 807.

The

plain language of the statute uses the discretionary term “may”
to state that “summons may issue.”
14.

Mass. Gen. Laws ch. 244, §

“‘The word “may” in a statute commonly imports discretion.’”

Begelfer v. Najarian, 409 N.E.2d 167, 174 (Mass. 1980).

As a

result, neither existing law nor a nonfrivolous argument to
extend it exists to justify the argument in the amended motion to
dismiss that, “Issuance and service of summons” on “[d]efendant
is a requirement in order for this court to have jurisdiction
over the [d]efendant.”
chapter 224).

(Docket Entry # 88) (citing section 14 of

Rule 11 sanctions are therefore warranted for the

14

violation of Rule 11(b)(2).
In addition, the notice of examination issued by this court
on April 6, 2016 “commanded [defendant] to appear” and submit to
the examination.

(Docket Entry # 80).

This court issued the

notice of examination through the Electronic Case Filing system
and thereby served defendant’s counsel with the notice.

See

Fed.R.Civ.P. 5(b); LR. 5.4 (governing “filing and service by
electronic means”) (capitalization and bolding omitted).

As an

order by this court commanding defendant to appear at the
examination, the notice of examination serves the same function
as a summons.

See also Jackpot Provision Co., Inc. v. Lamb, 2007

WL 2163992, at *1 n.3 (Mass.App.Ct. 2007) (observing that
Mass.R.Civ.P. 4(a), which addresses summons to commence action,
“speaks in terms of service of the summons—a form of process
defined as ‘original process’” and, “under Black’s Law
Dictionary, supra, process includes a writ of execution, also
termed ‘final process’”).

Although defendant objects to

sanctions because the notice of examination states that, “‘The
creditor has applied for a summons for you to appear and to
submit to an examination’” (Docket Entry # 95), the next sentence
“commanded” defendant “to appear” before this court “to submit to
such an examination.”

(Docket Entry # 80).

Finally, defendant’s

counsel accepted service of a subpoena for defendant to appear at
the hearing.

(Docket Entry # 94-1) (Docket Entry # 95)

15

(acknowledging that defendant’s counsel accepted service of
witness subpoena for defendant to appear at supplementary process
hearing).
Rule 11(c) authorizes sanctions against a “party that
violated” Rule 11(b).

Fed.R.Civ.P. 11(c)(1).

Sanctions “must be

limited to what suffices to deter repetition of the conduct or
comparable conduct by others similarly situated.”
11(c)(3).

Fed.R.Civ.P.

A sanction may consist of “an order directing payment

to the movant of part or all of the reasonable attorney’s fees
and other expenses directly resulting from the violation.”

Fed.

R.Civ.P. 11; see, e.g., Kersey v. Becton Dickinson and Co., 2016
WL 4492867, at *3 (D.Mass. Aug. 25, 2016) (allowing Rule 11
sanctions motion and “award[ing] reasonable attorney’s fees and
costs incurred in bringing [the] motion”) (unpublished).
Defendant is therefore ordered to pay the reasonable attorney’s
fees and costs plaintiff incurred to file and to argue the motion
for sanctions (Docket Entry # 94).

Plaintiff shall prepare and

file an affidavit of such attorney’s fees and costs on or before
April 14, 2017.
CONCLUSION
An order directing defendant to make partial or full payment
on judgment under sections 15 and 16 of chapter 224 is DENIED
without prejudice at this time.

Plaintiff may submit a new

application at any time in the event she wants to continue to

16

pursue a collection of the judgment through supplementary
process.

The motion to impose a constructive trust (Docket Entry

# 83) is DENIED without prejudice.
(Docket Entry # 94) is ALLOWED.

The motion for sanctions

On or before April 14, 2017,

plaintiff shall file an affidavit of the reasonable attorney’s
fees and costs plaintiff incurred to file and to argue the motion
for sanctions.

/s/ Marianne B. Bowler
MARIANNE B. BOWLER
United States Magistrate Judge

17