LOUIS DREYFUS COMMODITIES SUISSE, SA v. FINANCIAL SOFTWARE SYSTEMS, INC.
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE GERALD J. PAPPERT ON 7/7/17. 7/7/17 ENTERED AND COPIES EMAILED TO COUNSEL.(jaa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
LOUIS DREYFUS COMMODITIES
FINANCIAL SOFTWARE SYSTEMS,
July 7, 2017
The Court previously granted summary judgment in favor of Louis Dreyfus
Commodities Suisse, SA and against Financial Software Systems, Inc (“FSS”). After
the Court entered judgment, Dreyfus sought to execute the judgment and conducted
post-judgment discovery. Dreyfus now seeks supplemental relief in aid of execution
under Federal Rule of Civil Procedure 69. It requests the production of stocks and
other securities Financial Software Systems owns in third-party, foreign companies.
FFS contends that those securities have always been held outside of Pennsylvania, and
Dreyfus has not alleged otherwise. Because the state-law procedures incorporated by
Federal Rule of Civil Procedure 69 do not permit the requested relief, the Court denies
the motion, without prejudice.
Dreyfus and FSS entered into a software license and maintenance agreement in
1996. See (Summ. J. Mem., at 1, ECF No. 39). Following a dispute under the
agreement, Dreyfus sued FSS in an English Court, which entered a default judgment
after FSS failed to appear. (Id.) Dreyfus sought to enforce that judgment by serving
process on FSS in Pennsylvania. (Id.) Both parties moved for summary judgment.
(ECF Nos. 25 & 30.) FSS argued that Dreyfus did not properly serve FFS with the
English claim form because Dreyfus used a process server instead of a sheriff as
required by Pennsylvania law. (Summ. J. Mem., at 2; Pl.’s Stmt., ¶ 15, ECF No. 25-3.)
Dreyfus, meanwhile, contended that FSS had agreed by contract to submit to the
jurisdiction of English courts and thus could not claim that the English courts lacked
personal jurisdiction over it. (Id.) The Court therefore had to determine whether the
English courts had personal jurisdiction over FSS, which would have allowed Dreyfus
to have its judgment recognized and enforced under Pennsylvania law. (Id.)
The Court ruled for Dreyfus, holding that the default judgment was enforceable
because FFS unambiguously consented to the personal jurisdiction of English Courts in
its agreement with Dreyfus, and there was no dispute that FFS had actual notice of and
opportunity to defend itself in the English action. (Id. at 9.) The Court therefore
granted Dreyfus’s motion on October 9, 2015, (ECF No. 40), and entered judgment on
December 9, 2015, (ECF No. 45).
FSS filed a notice of appeal on December 22, 2015, (ECF No. 46), and Dreyfus
requested a writ of execution against FSS’s property on December 24, (ECF No. 48).
Dreyfus then served interrogatories on FSS and third parties in aid of executing the
judgment. See (ECF Nos. 49–50, 54–56). On January 24, 2017, Dreyfus filed a motion
for supplementary relief in aid of execution. (ECF No. 59.) It seeks to compel FSS to
turn over to the United States Marshall any stocks, bonds and securities it may hold in
Spot Systems, Inc., Financial Software Systems, Pte, Ltd, and Hyperabad Spectrum
Finsoftware Services Private Limited.1 To the extent FFS cannot produce those
securities, Dreyfus seeks to compel the company to issue original or replacement shares
of stock, bonds or securities in those companies. FFS filed its response on February 7,
2017. (ECF No. 60.)
Federal Rule of Civil Procedure 69 governs the execution process in federal
court, including discovery in aid of execution.2 Randall Mfg., LLC v. Pier Components,
LLC, No. 14-0346, 2017 WL 1519498, at *2 (M.D. Pa. Apr. 27, 2017). Rule 69 states:
“The procedure on execution—and in proceedings supplementary to and in aid of
judgment or execution—must accord with the procedure of the state where the court is
located, but a federal statute governs to the extent it applies.” FED. R. CIV. P. 69(a)(1).
The Court must therefore consider the relevant Pennsylvania law in determining
whether to grant Dreyfus’s motion.
Pennsylvania Rule of Civil Procedure 3118 governs relief in aid of execution.
lwhich a judgment has been entered may, before or after the issuance of a writ of
FFS notes that these companies are from California, Singapore and India, respectively. It
also notes that the latter two companies are actually named Financial Software Systems (Singapore)
Pte, Ltd and Hyderabad Spectrum Finsoftware Services Private Limited. (Def.’s Resp., at 3, ECF
Although the Court’s summary judgment decision is pending appeal, district courts retain
jurisdiction to resolve motions in aid of execution where the judgment is not superseded. See
Printing & Paper Trades Auxiliary Workers v. Cuneo E. Press, Inc. of Pa., 72 F.R.D. 588, 590 n.1
(E.D. Pa. 1976).
execution, enter an order against a party or person” by, among other things, enjoining
the transfer, removal or disposition of any security.3 PA. R. CIV. P. 3118(a)(2).
While parts of Rule 3118 appear sweeping, the rule is meant only to preserve the
status quo. Hearst/ABC-Viacom Ent. Servs. v. Goodway Marketing, Inc., 815 F. Supp.
145, 147 (E.D. Pa. 1992). Dreyfus emphasizes that the rule permits the Court to grant
“other such relief as may be deemed necessary and appropriate.” See (Pl.’s Mem., at 3
(quoting PA. R. CIV. P. 3118(a)(6)). And the rule requires only summary proceedings to
grant such relief. Greater Valley Terminal Corp. v. Goodman, 202 A.2d 89 (Pa. 1964).
That broad authority, however, may only be used to maintain the status quo. Id. Thus
where a judgment creditor seeks to compel a judgment debtor to deliver securities into
Pennsylvania “without proof that [the securities were] removed from the court’s
jurisdiction with the intent to prevent execution,” Rule 3118 is “of no avail.” Chadwin
v. Krouse, 386 A.2d 33, 36 (Pa. Super. Ct. 1978).
The relief Dreyfus seeks is beyond the scope of Rule 3118. FFS contends that the
securities at issue have “at all relevant times . . . been located outside of Pennsylvania.”
(Def.’s Resp., at 1, ECF No. 60.) And Dreyfus does not allege that the securities in
question were ever possessed in Pennsylvania. In light of that, the Court will not
utilize the summary proceedings of Rule 3118 to bring those securities into the
Commonwealth. See Chadwin, 386 A.2d at 36. Compare, e.g., Savitsky v. Mazzella, 93
F. App’x 439, 440 (3d Cir. 2004) (upholding grant of motion under Rule 3118 where
judgment creditor “alleged [the judgment debtor] was the sole owner of all shares of
stock in Colonial Investment Company, a Pennsylvania corporation, and that the stock
The Court cannot grant a motion under Rule 3118 without notice and a hearing. PA. R. CIV.
P. 3118(a). Because the relief requested goes beyond the scope of Rule 3118, the Court will not grant
the motion and need not hold a hearing.
was originally possessed by [the judgment creditor], or on his behalf, in Pennsylvania”),
with Chadwin, 386 A.2d at 36 (overturning lower court’s decision to grant a motion
under Rule 3118 where the ruling would “compel[ ] a judgment debtor to bring property
into the state when there is no evidence that it has ever had a Pennsylvania situs”).
The same may be said of Dreyfus’s alternative request.
An appropriate Order follows.
BY THE COURT:
/s/ Gerald J. Pappert
GERALD J. PAPPERT, J.
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