Laborers Pension Trust Fund - Detroit and Vicinity et al v. Telegraph Paving Company, Incorporated

Filing 48

ORDER granting 26 Motion for examination of judgment debtor and restraining transfer of certain property. Signed by District Judge David M. Lawson. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LABORERS PENSION TRUST FUND – DETROIT
AND VICINITY, LABORERS VACATION AND
HOLIDAY TRUST FUND – DETROIT AND
VICINITY, LABORERS METROPOLITAN
DETROIT HEALTH AND WELFARE FUND,
LABORERS ANNUITY FUND – DETROIT AND
VICINITY, and MICHIGAN LABORERS
TRAINING FUND,
Plaintiffs,

Case No. 11-12501
Honorable David M. Lawson

v.
TELEGRAPH PAVING COMPANY, INC.,
Defendant.
___________________________________________/
ORDER GRANTING EX PARTE MOTION FOR EXAMINATION OF JUDGMENT
DEBTOR AND RESTRAINING TRANSFER OF CERTAIN PROPERTY
The matter is before the Court on the plaintiffs’ ex parte motion for examination of defendnat
Telegraph Paving Company, Inc., and restraining transfer of certain property. Judgment against the
defendant was entered by this Court on May 14, 2012 in the amount of $20,015.81.
Under the Federal Rules of Civil Procedure, “[i]n aid of the judgment or execution, the
judgment creditor . . . may obtain discovery from any person — including the judgment debtor —
as provided in these rules or by the procedure of the state where the court is located.” Fed. R. Civ.
P. 69(a)(2). The state of Michigan’s procedure for executing judgments is set forth in Mich. Comp.
Laws § 600.6104 and Mich. Comp. Laws § 600.6116(1). Section 600.6104 delineates the powers
of the court in the proceedings supplementary to judgment. Under that section, the judge has
authority to:

(1) Compel a discovery of any property or things in action belonging to a judgment
debtor, and of any property, money, or things in action due to him, or held in trust
for him;
(2) Prevent the transfer of any property, money, or things in action, or the payment
or delivery thereof to the judgment debtor;
(3) Order the satisfaction of the judgment out of property, money, or other things in
action, liquidated or unliquidated, not exempt from execution;
(4) Appoint a receiver of any property the judgment debtor has or may thereafter
acquire; and
(5) Make any order as within his discretion seems appropriate in regard to carrying
out the full intent and purpose of these provisions to subject any nonexempt assets
of any judgment debtor to the satisfaction of any judgment against the judgment
debtor.
Mich. Comp. Laws § 600.6104. Significantly, “[i]t is not necessary that execution be returned
unsatisfied before proceedings under this chapter are commenced.” Ibid.
The Michigan Revised Judicature Act, Mich. Comp. Laws § 600.6110(1), empowers a judge
to issue a subpoena for the purposes of conducting discovery on judgment-related matters:
Upon an affidavit, showing to the satisfaction of the judge that any person has money
or property of the judgment debtor, or is indebted to him, the judge may issue a
subpoena requiring the judgment debtor or the person or both to appear at a specified
time and place, and be examined on oath, and to produce for examination any books,
papers, or records in his or its possession or control which have or may contain
information concerning the property or income of the debtor.
Mich. Comp. Laws § 600.6110(1).
In addition to broad discovery, the state statute authorizes restraining the transfers of the
debtor’s property for two years:
An order for examination of a judgment debtor may contain a provision restraining
the judgment debtor from making or suffering any transfer or other disposition of,
or interference with any of his property then held or thereafter acquired by or
becoming due to him not exempt by law from application to the satisfaction of the

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judgment, until further direction in the premises, and such other provisions as the
court may deem proper.
Mich. Comp. Laws § 600.6116(1); see also Mich. Comp. Laws § 600.6116(2).
In its ex parte motion, the plaintiffs presented the affidavit of David M. Eisenberg, counsel
for the plaintiffs, in which Eisenberg states that he fears that because “Defendant has not paid this
judgment voluntarily, nor made any meaningful proposal to satisfy the judgment, Defendant may,
among potentially other actions, (i) place its property beyond the reach of this court, (ii) dissipate
assets, or (iii) make preferential payments to creditors other than Plaintiffs, unless restrained from
doing so by order of this court.” The plaintiffs also move for the Court’s authorization for
questioning John Wyke, officer and director of the defendant corporation, under oath and for
ordering the production of documents relative to the debtor’s financial situation. The Court will
grant the plaintiffs’ requests.
Accordingly, it is ORDERED that the plaintiffs’ ex parte motion for examination of
judgment debtor and restraining transfer of certain property [dkt. #26] is GRANTED.
It is further ORDERED that the plaintiffs are authorized to issue a subpoena for a creditor’s
examination of John Wyke.
It is further ORDERED that John Wyke, officer and director of defendant Telegraph Paving
Company, Inc., is to appear at the law offices of Erman, Teicher, Miller, Zucker & Freedman, P.C.
on July 24, 2012 at 10:30 a.m. to give sworn testimony concerning the income, property, or other
means of satisfying the Court’s May 14, 2012 judgment against defendant Telegraph Paving
Company, Inc..

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It is further ORDERED that John Wyke shall bring with him the following books, records,
and papers in his possession, custody, or control as they relate to defendant Telegraph Paving
Company, Inc.:
1.
All checkbooks, check registers, check stubs, canceled checks, bank
statements and other documents whatsoever relating to any deposit, savings,
passbook or like account maintained with a bank, savings and loan association, credit
union or like organization, in which the defendant has, or has had, any interest, at
any time during the three (3) years immediately preceding the date hereof, or date of
cessation of business, whichever is earlier;
2.
Copies of all returns, schedules and forms filed by, or on behalf of, the
defendant with the Internal Revenue Service, State of Michigan, and any municipal
governments, relating to any income received, property owned, business activities,
sale or intangibles tax, of the defendant at any and all times during the period three
(3) years preceding the date hereof or date of cessation of business, whichever is
earlier;
3.

All books of account and accounts receivable ledgers;

4.

List of assets and liabilities;

5.
All contracts of purchase, sale, bills of sale, certificates of title and deeds, and
all other evidences of title or instruments of whatsoever kind or nature, relating to
the purchase, sale or ownership of any property, real or personal, or any interest
therein, purchased, sold or owned by or on behalf of the defendant at any time during
the five (5) years immediately preceding the date hereof or date of cessation of
business, whichever is earlier; and
6.
Copies of all profit and loss statements and balance sheets relating to the
affairs of the defendant prepared by, or on behalf of, said defendant during the period
three (3) years immediately preceding the date hereof or date of cessation of
business, whichever is earlier.
It is further ORDERED that the plaintiffs must serve John Wyke with notice of the
examination on or before July 17, 2012.
It is further ORDERED that defendant Telegraph Paving Company, Inc., and its officers,
directors, employees, and agents, and any third party who receives actual notice of this order, are

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restrained from transferring or disposing of any property of the defendant, whether now owned or
hereafter acquired, except in the ordinary course of business, until further order of the Court. This
order shall not affect the disposition of property that cannot be used to satisfy the judgment by
operation of law.
It is further ORDERED that the defendant may seek relief from the injunction contained in
this order on forty-eight hours notice by filing a proper motion with this Court.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: June 5, 2012
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on June 5, 2012.
s/Deborah R. Tofil
DEBORAH R. TOFIL

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