Central Progressive Bank v. Adkinson et al
Filing
442
ORDER Granting in Part and Denying without Prejudice in Part Defendant Lee F. Kennedy's Motion 425 for Leave to Deposit Funds with the Court and for an Order Declaring the Judgment Satisfied. Signed by District Judge Halil S. Ozerden on February 13, 2019. (SSC)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
HCB FINANCIAL CORP., et al.
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v.
LEE F. KENNEDY, et al.
PLAINTIFFS
Civil No. 1:10cv559-HSO-JCG
DEFENDANTS
ORDER GRANTING IN PART AND DENYING WITHOUT PREJUDICE IN
PART DEFENDANT LEE F. KENNEDY’S MOTION [425] FOR LEAVE TO
DEPOSIT FUNDS WITH THE COURT AND FOR AN ORDER DECLARING
THE JUDGMENT SATISFIED
BEFORE THE COURT is Defendant Lee F. Kennedy’s Motion [425] for Leave
to Deposit Funds with the Court and for an Order Declaring the Judgment
Satisfied. After due consideration of the record, relevant legal authority, and
Defendant Lee F. Kennedy’s Motion [425], the Court is of the opinion that the
Motion [425] should be granted in part and denied without prejudice in part,
allowing Kennedy to deposit the funds into the registry of the Court, but denying
any declaratory relief that the judgment in this case is satisfied. The Court will
allow Plaintiff HCB Financial Corporation to file any motion to collect on postjudgment attorneys’ fees or costs within thirty (30) days of the date of entry of this
Order. The Court will deny Defendant Lee F. Kennedy’s request for a hearing.
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I. RELEVANT BACKGROUND
This case involves the nonpayment of a Promissory Note, which was
ultimately assigned to Plaintiff HCB Financial Corporation (“HCB”) and personally
guaranteed by Defendant Lee F. Kennedy (“Defendant” or “Kennedy”). On March
14, 2013, this Court granted HCB’s Motion for Summary Judgment and entered a
Final Judgment [139] against Kennedy and in favor of HCB. Order [138]. The
Court then entered an Amended Final Judgment [148] against Defendant Kennedy
for $2,019,495.82, on July 11, 2013. On June 4, 2014, the Fifth Circuit affirmed this
Court’s Order [138] granting summary judgment in favor of HCB and its Amended
Final Judgment awarding $2,019,495.82. USCA Op. [167]. Since entry of the
Court’s Amended Final Judgment on July 11, 2013, HCB has sought discovery
relating to, and has engaged in efforts to collect upon, the judgment. See ECF
Docket, No. 1:10cv559-HSO-JCG.
Kennedy now moves for leave of Court to deposit $2,036,293.60 into the
registry of the Court and for an order declaring that she has satisfied the judgment.
Mot. [425]. In her January 25, 2019, Motion [425], Kennedy argues that she should
be permitted under Federal Rule of Civil Procedure 67 to deposit the full amount of
the Amended Final Judgment, along with accrued post-judgment interest through
the date of her Motion [425] in the amount of $16,797.78. Mot. [425]; Mem. in
Support [426]. HCB responds that: (1) the money Kennedy wishes to deposit is not
in dispute; (2) Kennedy is not entitled to a declaratory judgment stating that she
has satisfied the Court’s Final Judgment; and (3) Kennedy cannot use Rule 67 to
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moot HCB’s subpoenas and other collection efforts. Kennedy replies that she has
made two distinct prayers for relief, one a request to deposit and another a request
for a judicial determination that the judgment has been satisfied. Reply [440] at 1.
In her Reply, Kennedy requests a hearing on her Motion [425]. Id.
II. DISCUSSION
Federal Rule of Civil Procedure 67 permits a party to seek leave of court to
“deposit with the court all or part of the money or thing, whether or not that party
claims any of it.” Fed. R. Civ. P. 67. It is within a district court’s sound discretion
whether to grant such leave to a requesting party. Cajun Elec. Power Co-op., Inc. v.
Riley Stoker Corp., 901 F.2d 441, 445 (5th Cir. 1990); Gulf States Utils. Co. v. Ala.
Power Co., 824 F.2d 1465, 1469 (5th Cir.), amended, 831 F.2d 557 (5th Cir. 1987).
The invocation of Rule 67 is appropriate under the unique facts of this case.
After HCB’s protracted efforts to collect on this judgment, Kennedy now seeks to
tender funds equal to the full amount of the Amended Final Judgment, plus accrued
interest. See Motion [425]; Mem. in Support [426]; Resp. [430]. HCB, however, now
claims that it is also entitled to an unspecified amount for attorneys’ fees relating to
its lengthy post-judgment collection efforts. See Motion [425]; Mem. in Support
[426]; Resp. [430].
HCB spends a significant portion of its Response [430] tracing its efforts to
collect upon the judgment in this case and the majority of it opposing Kennedy’s
request for a declaration that the judgment is satisfied. See Resp. [430]. HCB also
reveals that it has filed a case against Kennedy in another court alleging civil
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claims pursuant to the Racketeer Influence and Corrupt Organizations Act, 18
U.S.C §§ 1961-68, and indicates that continued post-judgment discovery throughout
this case has and will provide a supporting basis for at least some of its claims in
that case. Resp. [430] at 2.
While HCB may be entitled to post-judgment attorneys’ fees related to its
protracted efforts to collect from Kennedy, it is not entitled to use this case as a
discovery vehicle for uncovering evidence to use against Kennedy in another case.
See Motion [425]; Resp. [430]. HCB has, at least in part, created the present
dispute over the funds Kennedy wishes to deposit. See Cajun Elec. Power, 901 F.2d
at 445 (“If the debt had been undisputed (that is, if [the plaintiff] had been willing
to join with [the defendant] in a joint motion to confirm the arbitration award when
it was rendered), the controversy that gave rise to this appeal would never have
arisen in the first place.”). While HCB should be afforded the opportunity to seek
recovery of its attorneys’ fees, it would be unfair to Kennedy to allow HCB to use
this case as a means to continue discovery into other claims when she now seeks to
satisfy the judgment. See id. (considering fairness in affirming a district court’s
order allowing a party to deposit funds).
In light of the foregoing, the Court finds that to the extent Kennedy’s Motion
[425] seeks to deposit the tendered funds into the registry of the Court, it should be
granted. However, because the Court cannot determine whether to award, nor is
there any present motion to seek, attorneys’ fees relating to post-judgment
collection efforts, it will deny without prejudice the portion of Kennedy’s Motion
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[425] that seeks a judicial determination that the judgment is satisfied. The Court
will allow HCB to move for any post-judgment attorneys’ fees within thirty (30)
days of the date of entry of this judgment. Once the Court has adjudicated that
request and Kennedy has paid to HCB any further sums she may owe, if any, the
Court can then entertain a request to deem the judgment satisfied. Finally,
because a hearing is unnecessary in order to resolve this Motion [425], Kennedy’s
request for a hearing will be denied.
III. CONCLUSION
IT IS, THEREFORE, ORDERED AND ADJUDGED that, Defendant Lee
F. Kennedy’s Motion [425] for Leave to Deposit Funds with the Court and for an
Order Declaring the Judgment Satisfied is GRANTED IN PART AND DENIED
WITHOUT PREJUDICE IN PART. Defendant Lee F. Kennedy shall
immediately deposit funds in the amount of $2,036,293.60, representing the amount
of the Amended Final Judgment and post-judgment interest through January 25,
2019, into the registry of the Court. Pursuant to Federal Rule of Civil Procedure
67(b), the Clerk of Court is directed to deposit the funds “in accordance with 28
U.S.C. §§ 2041-42 and any like statute,” and “in an interest-bearing account or
invested in a court-approved, interest-bearing instrument.” The Court DENIES
WITHOUT PREJUDICE Defendant Lee F. Kennedy’s request for a determination
that the judgment is satisfied, and will allow Plaintiff HCB Financial Corporation
to file any motion for post-judgment attorneys’ fees and costs within thirty (30)
days of the date of entry of this Order.
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IT IS, FURTHER, ORDERED AND ADJUDGED that Defendant Lee F.
Kennedy’s request for a hearing is DENIED.
SO ORDERED AND ADJUDGED this the 13th day of February, 2019.
s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE
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