Stake Center Locating v. Logix Communications
Filing
246
MEMORANDUM DECISION granting in part and denying in part 235 Motion for Supplemental Proceedings; Stake Center may serve written discovery upon Logix to gain the information it seeks to complete the Application for Writ of Executio n. Logix is ORDERED to provide verified answers within fifteen (15) days after service of the discovery requests. If Logix fails to answer the discovery then Stake Center may renew its motion and the undersigned will be inclined to order Logix to post a bond; denying 238 Motion to Stay ; granting 241 Motion to File Sur-Reply. Signed by Magistrate Judge Brooke C. Wells on 12/5/16. (jlw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
STAKE CENTER LOCATING, INC.,
Plaintiff,
MEMORANDUM DECISION AND ORDER
Case No. 2:13-cv-1090 JNP
v.
District Judge Jill N. Parrish
LOGIX COMMUNICATION, L.P.,
Magistrate Judge Brooke Wells
Defendant.
Pending before the undersigned are Stake Center Locating Inc.’s Motion for
Supplemental Proceedings, 1 Logix Communication, L.P.’s Motion to Stay Enforcement of
Judgment, 2 and Logix’s Motion to Respond to Plaintiff’s Reply in support of their Motion for
Supplemental Proceedings. 3 All these motions surround a money judgment that was “entered in
favor of State Center Locating, Inc. and against Logix Communications, L.P, in the amount of
$700,000.00” 4 As set forth below the court will order Plaintiff to propound interrogatories and
Defendant to provide responses so that Plaintiff may complete the Application for Writ of
Execution.
Standard of Review
Rule 62 Provides in relevant part that “Except as stated in this rule, no execution may
issue on a judgment, nor may proceedings be taken to enforce it, until 14 days have passed after
its entry.” 5 The Rule also provides guidance for when a stay is proper following judgment.
1
Docket no. 235.
2
Docket no. 238.
3
Docket no. 241.
4
Judgement in Civil Case, docket no. 206.
5
Fed. R. Civ. P. 62.
Stay Pending the Disposition of a Motion. On appropriate terms for the opposing
party's security, the court may stay the execution of a judgment—or any
proceedings to enforce it—pending disposition of any of the following motions:
(1) under Rule 50, for judgment as a matter of law;
(2) under Rule 52(b), to amend the findings or for additional findings;
(3) under Rule 59, for a new trial or to alter or amend a judgment; or
(4) under Rule 60, for relief from a judgment or order. 6
Courts consider a set of four factors when determining whether to grant a stay: “’(1)
whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
(2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the
stay will substantially injure the other parties interested in the proceeding; and (4) where the
public interest lies.’” 7 A stay must be on “appropriate terms for the opposing party's security.” 8
Rule 69 provides for enforcement of a money judgment. It states:
(1) Money Judgment; Applicable Procedure. A money judgment is enforced by a
writ of execution, unless the court directs otherwise. 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.
(2) Obtaining Discovery. In aid of the judgment or execution, the judgment
creditor or a successor in interest whose interest appears of record 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. 9
DISCUSSION
At the outset the court addresses Defendant’s Motion to Respond. 10 Defendant seeks to
file a sur-reply to Plaintiff’s reply in support of the Motion for Supplemental Proceedings.
6
Fed. R. Civ. P. 62(b).
7
Nken v. Holder, 556 U.S. 418, 434 (2009) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).
8
Fed. R. Civ. P. 62(b).
9
Fed. R. Civ. P. 69(a).
10
Docket no. 241.
2
Generally a motion consists of a memorandum in support, a memorandum in opposition and a
reply. “No additional memoranda will be considered without leave of court.” 11 Here Defendant
did not file a true motion seeking to file a sur-reply. Rather, Defendant’s sur-reply simply begins
by addressing Plaintiff’s arguments and asks for relief without requesting any leave to file a surreply. Such a filing is not a “best practice” by any stretch of the imagination and in most cases
would result in the court striking the pleading sua sponte. Here, however, given the current
posture of the case and the fact that it would be wise in the court’s view to save the parties time
and money, the court will construe Defendant’ pleading as a motion for leave to file sur-reply
and will grant that request.
I.
Motion for Supplemental Proceedings and Motion to Stay Execution of Judgment
These motions are closely related and the arguments made in behalf and against each
motion are largely the same. As noted previously, judgement has been entered in this case and
Plaintiff seeks to collect on that judgment. Plaintiff requests an order compelling Mr. Mark J.
Johnson, CEO of Logix Intermediate Holding Corporation, to appear in court and answer
questions concerning the judgment debtor’s property and assets. 12 Stake Center also seeks
financial information from Logix including copies of its “Audited Consolidated Balance Sheet”
and an “Unaudited Pro Forma Balance Sheet of Transferee.” 13 Finally, Plaintiff seeks an order
restraining Logix’s property and to forbid any person from “transferring, disposing of, or
interfering with the Logix property so long as the . . . judgment remains unsatisfied or until this
Court issues additional orders or imposes appropriate security measures to protect the
11
DUCivR 7-1(b)(2)(B).
12
See motion p. 2, docket no. 235.
13
Id.
3
creditor.” 14
According to Stake Center, judgment has been entered and a writ of execution
under Federal Rule 69(a) is appropriate given the circumstances in this case. Plaintiff argues that
it needs the requested discovery to execute the writ of execution and identify Logix’s assets.
Logix’s primary resistance to entry of Stake Center’s requested relief revolves around
some outstanding motions in this case: 1) Logix’s Motion for Attorney Fees, which according to
Defendant may offset the judgment against it; 2) its motion for Judgment as a Matter of Law that
could potentially change the outcome in this case; and 3) Logix’s recently filed Motion to Stay
Execution of Judgment that was filed after Stake Center’s motion for supplemental proceedings.
Logix alleges Stake Center’s request to freeze assets is “extremely overbroad” especially since
Logix has in “excess of $869.4 Billion in assets under management.” 15 Finally, Logix asserts
Stake Center’s requests are unduly burdensome particularly on a new CEO, Mr. Johnson. There
is no need for discovery proceedings because “Logix has established an escrow account that
contains more than sufficient funds to cover Stake Center’s judgment, including post-judgment
interest.” 16 This argument is supported by an Affidavit of Ronald W. Henriksen, who is the
former Chairman of Logix Communications, L.P.
The court finds Logix’s Affidavit unpersuasive. It does little to advance Logix’s position
because it contains unsupported statements that provide little useful information. The fact that
someone has “personal knowledge” of an escrow account with alleged sufficient funds to cover
the judgment provides no information about how much is in the account, who has access to it and
whether there are other creditors that have claims to the account. In short Logix’s Affidavit does
14
Id.
15
Op. p. 3, docket no. 237.
16
Id.
4
not meet the standards set forth in Rule 62 that permits a court to stay proceedings to enforce a
judgment.
Logix offers two cases in support of its motion to stay Contract Design Group, Inc.v.
Wayne State Univ., 17 and Adams v. Toyota Motor Corp. 18 Both are readily distinguishable from
the current case, however, because both cases involve judgment debtors with secured financial
situations. One was a public university and the other a large Fortune 500 company with
numerous assets. As noted in the Wayne State University case, “[t]here is a presumption in favor
of requiring a bond if the court grants the stay, but the court can forgo the bond in a limited set of
circumstances.” 19 Such circumstances are not present here.
In looking at the factors to determine whether to grant a stay, Logix has not made a
strong showing that it is likely to succeed on the merits, has failed to demonstrate irreparable
injury, the issuance of the stay has the likelihood of injuring the Plaintiff given Defendants
unsubstantiated financial position and the public interest lies in favor of executing the judgment.
The court therefore will deny the stay and allow judgment proceedings to move forward.
There is a certain merit, however, to Defendant’s arguments regarding burdensomeness
and the court believes there is some middle ground that presents a workable solution for the
parties. In its sur-reply Defendant suggests that Stake Center propound written discovery to
Logix as provided for in Rule 69. Logix claims “[b]y serving Logix with interrogatories, the
information Stake Center seeks could be properly ascertained, and the answers would be
verified.” 20 Presumably this will limit the costs both parties might incur and then Stake Center
17
2014 WL 2892513 (E.D. Mich. June 25, 2014).
18
2015 WL 3742898 (D.Minn. June 15, 2015).
19
Wayne State University, 2014 WL 2892513 *1.
20
Sur-reply p. 3, docket no. 241.
5
may gain the information necessary to complete its Application for Writ of Execution. The court
adopts this proposal and will order Logix to provide answers to discovery.
ORDER
In accordance with the foregoing, it is HEREBY ORDERED that Logix’s Motion to File
Sur-Reply is GRANTED.
IT IS FURTHER ORDERED that Logix’s Motion to Stay is DENIED.
And, IT IS ORDERED that Stake Center’s Motion is DENIED in PART and GRANTED
in PART. Stake Center may serve written discovery upon Logix to gain the information it seeks
to complete the Application for Writ of Execution. Logix is ORDERED to provide verified
answers within fifteen (15) days after service of the discovery requests. If Logix fails to answer
the discovery then Stake Center may renew its motion and the undersigned will be inclined to
order Logix to post a bond.
IT IS SO ORDERED.
DATED this 5 December 2016.
Brooke C. Wells
United States Magistrate Judge
6
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