AVT New York v. Olivet University

Filing 163

MEMORANDUM DECISION AND ORDER granting in part and denying in part 153 Plaintiff's Motion for Discovery from Dover Greens, LLC and to Prohibit Transfer of Property. Signed by Magistrate Judge Daphne A. Oberg on 11/18/22. (dla)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
MEMORANDUM DECISION AND
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S
MOTION FOR DISCOVERY FROM
DOVER GREENS, LLC AND TO
PROHIBIT TRANSFER OF PROPERTY
(DOC. NO. 153)

AVT-NEW YORK, L.P., a Utah limited
partnership,
Plaintiff,
v.
OLIVET UNIVERSITY, a California
corporation,

Case No. 2:18-cv-00782

Defendant.

District Judge Jill N. Parrish
Magistrate Judge Daphne A. Oberg

Before the court is an Ex Parte Motion for Discovery from Dover Greens, LLC and to
Prohibit Transfer of Olivet University’s Property, filed by Plaintiff (and judgment creditor)
AVT-New York, L.P. 1 AVT seeks an order compelling Dover Greens, LLC, a nonparty foreign
entity, to respond to post-judgment discovery in an effort to collect on AVT’s outstanding
default judgment against defendant (and judgment debtor) Olivet University. 2 AVT also seeks
an order prohibiting Dover Greens from transferring any Olivet property in its possession until
the judgment is paid. 3 While post-judgment discovery is broadly permitted as to a judgment-

1

(Pl.’s Ex Parte Mot. for Disc. from Dover Greens and to Prohibit Transfer of Olivet’s Property
(“Mot.”), Doc. No. 153.)
2

(See id. at 3.)

3

(Id. at 7–8.)
1

debtor’s assets and finances, it is more restricted as to a third party’s assets and finances.
Therefore, the motion is granted in part and denied in part. 4
BACKGROUND
On January 7, 2019, the court entered a default judgment against Olivet in the amount of
$4,901,413.34. 5 AVT represents that as of May 31, 2022, $5,466,172.85 remained due
(factoring in post-judgment interest but excluding attorney fees and costs). 6 AVT is engaged in
ongoing efforts to collect on the judgment and gather information related to Olivet’s assets. 7
These efforts include judgment-debtor examinations in Utah and California 8 and writs of
garnishment against Olivet’s assets issued to various financial institutions. 9
Through its efforts, AVT learned Olivet has membership interests in four New York
limited liability companies (“LLCs”) which may help satisfy the outstanding judgment. 10 To this

4

This ruling is based on the parties’ written memoranda; no hearing is necessary. See DUCivR
7-1(g).
5

(See J. Against Olivet Univ., Doc. No. 13; Corrected J. Against Olivet Univ., Doc. No. 24
(correcting judgment date only).)
6

(Mot. 2, Doc. No. 153.)

7

(See Pl.’s Ex Parte Mot. for Disc. and to Prohibit Transfer of Olivet’s Property 1–4, Doc. No.
155 (summarizing AVT’s efforts to collect on its judgment).)
8

(See Mot. 4, Doc. No. 153; see also Order Granting Mot. for J. Debtor Exam, Doc. No. 21;
Order Granting Second Exam Mot., Doc. No. 29; Order Granting Third Exam Mot., Doc. No.
80.)
9

(See Mot. 4, Doc. No. 153; see also PayPal Writs of Garnishment, Doc. Nos. 87, 89; JP Morgan
Chase Bank Writ of Garnishment, Doc. No. 92; Wells Fargo Writ of Garnishment, Doc. No. 94;
Bank of America Writ of Garnishment, Doc. No. 96.)
10

(Mot. 2, 5, Doc. No. 153; see also Pl.’s Mot. for Charging Order 2, Doc. No. 114 (identifying
New York as the location of the LLCs).)
2

end, AVT served a charging order on the LLCs, one of which is Dover Greens. 11 As a result,
Olivet’s interest in Dover Greens was charged to the payment of the unsatisfied judgment. 12
Despite the charging order, AVT contends it has not received a single payment from Dover
Greens that otherwise would have been distributed to Olivet. 13
According to AVT, Olivet’s publicly available 990 IRS form indicates Dover Greens had
assets of $32,624,191 and an income of $1,094,264 in fiscal year 2020. 14 AVT asserts that
public records show Dover Greens owns substantial real property, which operates as a campus
for Olivet, in the state of New York. 15 Consequently, AVT believes any assets of Olivet held by
Dover Greens will be the most efficient means of obtaining a substantial payment on the
judgment. 16 For these reasons, AVT seeks post-judgment discovery from Dover Greens and an
order prohibiting Dover Greens from transferring any Olivet assets it may possess. 17
AVT filed this motion ex parte, without serving it on Dover Greens. 18 No response or
opposition has been filed.

11

(Charging Order, Doc. No. 145; Returns of Service, Doc. Nos. 148–150, 152.)

12

(Charging Order, Doc. No. 145.)

13

(Mot. 2, 4, Doc. No. 153.)

14

(Id. at 5.)

15

(Id.)

16

(Id. at 2.)

17

(Id. at 2–3.)

18

The motion was served on Olivet. (See Certificate of Service, Mot. 10, Doc. No. 153.)
3

LEGAL STANDARDS
Rule 69 of the Federal Rules of Civil Procedure provides that procedures and proceedings
“supplementary to and in aid of judgment or execution [] must accord with the procedure of the
state where the court is located.” 19 The rule permits a judgment creditor to obtain discovery
from any person pursuant to these federal and state rules. 20 Moreover, Rule 64 specifies that
judgment creditors may use every remedy “under the law of the state where the court is located
. . . for seizing a person or property to secure satisfaction of the potential judgment.” 21
Where this court is located in Utah, Utah’s rules apply. Under Rule 64 of the Utah Rules
of Civil Procedure, courts “may conduct hearings as necessary to identify property and to apply
the property toward the satisfaction of the judgment or order. Witnesses may be subpoenaed to
appear, testify and produce records.” 22 Utah’s Rule 64 also authorizes courts to “permit
discovery” 23 and to restrain or “forbid any person from transferring, disposing or interfering with
the property.” 24

19

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

20

Fed. R. Civ. P. 69(a)(2).

21

Fed. R. Civ. P. 64(a).

22

Utah R. Civ. P. 64(c)(2).

23

Id.

24

Utah R. Civ. P. 64(c)(3).
4

ANALYSIS
A. AVT May Seek Post-Judgment Discovery Related to Olivet’s Assets Under Rule 45
AVT’s request for post-judgment discovery from Dover Greens is contemplated under
Rule 69 of the Federal Rules of Civil Procedure and Rule 64 of the Utah Rules of Civil
Procedure. 25 The harder questions are whether AVT’s discovery requests are too broad in scope,
and whether production should be ordered based solely on AVT’s ex parte motion or whether
AVT should, instead, proceed with discovery by subpoena under Rule 45 of the Federal Rules of
Civil Procedure. 26
The scope of post-judgment discovery is broad, 27 as it is governed by Rule 26 of the
Federal Rules of Civil Procedure. 28 Under Rule 26, “[p]arties may obtain discovery regarding
any nonprivileged matter that is relevant to any party’s claim or defense.” 29 In the postjudgment context, the discovery sought must be “relevant to the existence or transfer of the

25

See Fed. R. Civ. P. 69(a)(2) (“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.”); Utah R. Civ. P. 64(c)(2) (authorizing courts to “permit discovery” in postjudgment proceedings).
26

See Fed. R. Civ. P. 45.

27

See United States v. Conces, 507 F.3d 1028, 1040 (6th Cir. 2007) (describing the scope of
post-judgment discovery as “very broad”); F.D.I.C. v. LeGrand, 43 F.3d 163, 172 (5th Cir. 1995)
(same); Mountain Dudes, LLC v. Split Rock, Inc., No. 2:08-cv-00940, 2013 U.S. Dist. LEXIS
141856, at *5 (D. Utah Sept. 29, 2013) (unpublished) (“The rules governing discovery are to be
accorded a broad and liberal treatment. This is true whether the discovery is part of pretrial or
post-judgment proceedings.” (internal quotation marks omitted) (citation omitted)).
28

See Republic of Arg. v. NML Capital, Ltd., 573 U.S. 134, 139 (2014).

29

Fed. R. Civ. P. 26(b)(1).
5

judgment debtor’s assets.” 30 Although post-judgment discovery extends to nonparties, it is
limited to the financial affairs and assets of the judgment debtor. 31 Post-judgment discovery of a
nonparty’s assets may also be permitted “upon a somewhat heightened showing of necessity and
relevance.” 32 This heightened showing requires the moving party to present evidence of
concealed or fraudulent transfers or an alter ego relationship between the nonparty and the
judgment debtor. 33

30

ZooBuh, Inc. v. Better Broad., LLC, No. 2:11-cv-00516-DN, 2017 U.S. Dist. LEXIS 62061, at
*4 (D. Utah Apr. 24, 2017) (unpublished).
31

See Mountain Dudes, 2013 U.S. Dist. LEXIS 141856, at *5–7 (stating “there is no doubt that
third parties can be examined in relation to the financial affairs of a judgment debtor” while also
recognizing that “disclosure concerning the assets of a nonparty is not generally contemplated by
the federal rules”); see also Democratic Republic of Congo v. Air Cap. Grp., LLC, No. 12-civ20607, 2018 U.S. Dist. LEXIS 2943, at *6 (S.D. Fla. Jan. 8, 2018) (unpublished) (“While the
scope of discovery directed at judgment debtors is broad, third parties are generally only
examined as to the judgment debtor’s assets and are not required to disclose their own assets.”
(internal quotation marks omitted)).
32

Mountain Dudes, 2013 U.S. Dist. LEXIS 141856, at *6.

33

See id. (“[C]ourts have permitted [] discovery [of nonparty assets] upon a somewhat
heightened showing of necessity and relevance—i.e., at least some demonstration of concealed
or fraudulent transfers or alterego relationship with the judgment debtor.” (internal quotation
marks omitted)); see also Allstate Ins. Co. v. Orthopedic, P.C., No. 122MC00016JPHMJD, 2022
U.S. Dist. LEXIS 42485, at *10 (S.D. Ind. Mar. 9, 2022) (unpublished) (“Non-party discovery
may be permitted where [the] relationship between judgment debtor and nonparty is sufficient to
raise a reasonable doubt about bona fides or transfer of assets.” (internal quotation marks
omitted) (alteration in original)); Democratic Republic of Congo, 2018 U.S. Dist. LEXIS 2943,
at *6–7 (“[A] third-parties’ assets may be discoverable upon a heightened showing of necessity
and relevance, meaning at least some demonstration of concealed or fraudulent transfers or alter
ego relationship with the judgment debtor, is generally warranted.” (internal quotation marks
omitted)); Nat’l Union Fire Ins. Co. v. Van Waeyenberghe, 148 F.R.D. 256, 257 (N.D. Ind. Apr.
19, 1993) (“There is authority for restricting discovery requests directed to third parties seeking
information about their assets and financial affairs.” (emphasis omitted)).
6

AVT seeks information about the financial affairs of Olivet, but it also seeks substantial
information about nonparty Dover Greens’ assets and financial status 34 with no showing these
requests are related to Olivet. AVT seeks discovery from Dover Greens in the form of document
requests and depositions. 35 Specifically, AVT requests documents across the following
categories:
1. Bank statements from any bank accounts held by Dover Greens, individually or
collectively, from January 1, 2019 through the present;
2. Dover Greens’s tax returns for 2019, 2020, and 2021;
3. Dover Greens’s profit and loss statements for 2019, 2020, and 2021 (audited if so
prepared);
4. Dover Greens’s balance sheets as of June 30, 2019, June 30, 2020, June 30, 2021, and
June of 2022 (audited if so prepared);
5. Dover Greens’s property ownership records, titles, loan documents, invoices, and list
of inventory or assets showing whether Dover Greens owns the assets or is leasing the
assets and, if leasing, from whom Dover Greens is leasing the asset;
6. Documents reflecting Dover Greens’ company and ownership structure;
7. Documents showing any distributions made to or from Olivet;
8. Documents showing any payment made to or from Olivet;
9. Documents showing any transfer of any asset to or from Olivet. 36
And AVT seeks to conduct depositions on the following topics:
1. Any property leased by AVT to Olivet that is on any property owned by Dover
Greens that Olivet has not returned to AVT;
2. Dover Greens’ corporate structure, including but not limited to identification of
all members of Dover Greens and identification of its officers.
3. Distributions and payments made to Olivet dating back to January 1, 2019.
4. Bank statements of Dover Greens, dating back to January 1, 2019.
5. Dover Greens’ assets and liabilities dating back to January 1, 2019. 37

34

(See Mot. 5–6, Doc. No. 153.)

35

(Id.)

36

(Id. at 6.)

37

(Id. at 5.)
7

To the extent AVT requests that Dover Greens be ordered to produce information on
Dover Greens’ own assets and finances, its request is denied. AVT has not made a heightened
showing justifying its request for a nonparty’s financial and asset information. For instance,
AVT has not demonstrated Dover Greens acts as Olivet’s alter ego or that it made concealed or
fraudulent transfers to Olivet (or on Olivet’s behalf). For this reason, any request for discovery
which is not limited to Olivet’s assets is improper. Document request categories one through six
improperly seek information pertaining to Dover Greens’ financial affairs and assets, rather than
Olivet’s 38—as do deposition topics two, four, and five. 39 Accordingly, AVT cannot seek this
information in post-judgment discovery. Only document request categories seven through nine
and deposition topics one and three relate to Olivet’s assets, as opposed to Dover Greens’.
Accordingly, only discovery related to these categories and topics is permissible. Where AVT
has not satisfied the heightened standard justifying discovery of nonparty finances and assets, it
cannot seek discovery as to Dover Greens’ finances and assets.
Next, AVT has asked the court to order Dover Greens to produce the specific discovery it
seeks, 40 rather than simply asking the court to permit it to pursue post-judgment discovery from
Dover Greens. Significantly, AVT filed this motion ex parte; 41 Dover Greens received no notice

38

(Id. at 6.)

39

(Id. at 5.)

40

(See id. at 5–6, 8 (stating, “Dover Greens should be ordered to designate its officers and
employees, who are competent to testify, and are ‘most knowledgeable,’ to prepare for and give
testimony regarding the following deposition topics,” “AVT requests the Court to order Dover
Greens to produce certain categories of documents at least fourteen days before the deposition,”
and “AVT respectfully requests that the Court grant its Motion, and to order Dover Greens to
produce the above-requested documents [and] to attend a deposition and answer questions
regarding the above-requested topics”) (emphasis added).)
41

(See generally id.)
8

and had no opportunity to object or otherwise be heard. While Rule 69 contemplates postjudgment discovery against nonparties, it is common for this discovery to proceed via subpoenas
under Rule 45 of the Federal Rules of Civil Procedure. 42 Permitting AVT to initiate postjudgment discovery through subpoenas will ensure Dover Greens receives notice and has a
chance to be heard. Moreover, Rule 45 sets out Dover Greens’ obligation to comply with
subpoenas and establishes procedures for objecting. 43 The rule also outlines steps for AVT to
follow in the event it seeks to compel Dover Greens’ production, inspection, or deposition under
any subpoenas. 44
In short, AVT’s motion is denied to the extent it asks the court to compel production by
Dover Greens. However, AVT is authorized to pursue post-judgment discovery related to
Olivet’s assets from Dover Greens (document request categories seven, eight, and nine, and
deposition topics one and three). AVT may pursue this discovery by way of subpoenas under
Rule 45.

42

Cf. ZooBuh, 2017 U.S. Dist. LEXIS 62061, at *1 (evaluating a Rule 69 post-judgment
discovery request on a nonparty where subpoenas had been served on the nonparty); W. Vision
Software, L.C. v. Process Vision, LLC, 2015 U.S. Dist. LEXIS 27850, at * 3–4 (D. Utah Mar. 6,
2015) (unpublished) (applying requirements of Rule 45 to a motion to compel a third party to
appear for a deposition pursuant to Rule 69); see also Democratic Republic of Congo, 2018 U.S.
Dist. LEXIS 2943, at *4 (evaluating a Rule 69 post-judgment discovery request on a third party
after “[p]laintiff ha[d] subpoenaed documents for the purpose of determining whether the
Debtors transferred assets to any of the Non-Parties and to what extent the Non-Parties may be
the Debtors’ successors or alter egos”); FTC v. Trudeau, No. 5:12MC352012, U.S. Dist. LEXIS
160545, at *4 (N.D. Ohio Nov. 8, 2012) (unpublished) (evaluating Rule 69 post-judgment
discovery against a third party after plaintiff “initiated post-judgment discovery, serving a
subpoena upon [the nonparty]”).
43

See Fed. R. Civ. P. 45.

44

See Fed. R. Civ. P. 45(d)(2)(B)(i) (“At any time, on notice to the commanded person, the
serving party may move the court for the district where compliance is required for an order
compelling production or inspection.”).
9

B. AVT’s Request to Restrain Any Assets of Olivet in Dover Greens’ Possession is
Unsupported
AVT next asks the court to prohibit Dover Greens from transferring any assets of Olivet’s
in its possession. 45 This request is denied because it is not properly supported.
Rule 64 of the Utah Rules of Civil Procedure authorizes courts to restrain or “forbid any
person from transferring, disposing or interfering with [] property” that may be used to satisfy a
judgment. 46 AVT contends this “any person” language authorizes the court to prevent Olivet
and third parties like Dover Greens from transferring property. 47 AVT cites Securities and
Exchange Commission v. Bliss 48 in support of its position. 49 AVT characterizes the Bliss court’s
holding as allowing “a court to require a third party to sit for an examination to collect assets of a
judgment debtor and . . . to prevent third parties from transferring assets.” 50 But the Bliss court
ultimately denied the request to restrain assets under Utah’s Rule 64(c)(3) for two reasons. First,
the court concluded a magistrate judge could not make that determination under Rule 69-1(b) of
the District of Utah’s Local Rules of Civil Practice. 51 Second, the Bliss court denied the request

45

(Mot. 7–8, Doc. No. 153.)

46

Utah R. Civ. P. 64(c)(3).

47

(Mot. 7, Doc. No. 153.)

48

No. 2:15-cv-00098-RJS, 2021 U.S. Dist. LEXIS 81445 (D. Utah Apr. 27, 2021) (unpublished).

49

(Mot. 7, Doc. No. 153.)

50

(Id.)

51

Bliss, 2021 U.S. Dist. LEXIS 81445, at *7–8; see also DUCivR 69-1(a).
10

because the moving party did not file a “proper affidavit” with its motion seeking restraint, as
required by the same rule. 52
The Bliss court’s approach is consistent with this district’s local rule governing postjudgment supplemental proceedings. Although the local rule permits a judgment creditor to
“request that the debtor or other person be ordered to refrain from alienation or disposition of the
property or assets in any way detrimental to the [judgment creditor]’s interest,” it specifies this
request must be made “on proper affidavit.” 53 AVT’s motion is deficient and must be denied
because AVT did not file any affidavit with its motion.
CONCLUSION
AVT’s ex parte motion seeking discovery from Dover Greens and to prohibit the transfer
of Olivet’s property 54 is granted in part and denied in part. The motion is GRANTED insofar as
AVT seeks to pursue post-judgment discovery from Dover Greens. AVT is authorized to
subpoena Dover Greens pursuant to Rule 45 of the Federal Rules of Civil Procedure. But the
subpoenas must be limited to document request categories seven through nine and deposition
topics one and three. The motion is DENIED as to document request categories one through six
and deposition topics two, four, and five because AVT has not met the heightened standard

52

Bliss, 2021 U.S. Dist. LEXIS 81445, at *8.

53

DUCivR 69-1(a).

54

(Doc. No. 153.)
11

justifying discovery of the financial affairs of a nonparty. The motion is also DENIED insofar as
it asks the court to prohibit the transfer of any assets of Olivet’s in Dover Greens’ possession.
DATED this 18th day of November, 2022.
BY THE COURT:
_____________________________
Daphne A. Oberg
United States Magistrate Judge

12