Equal Employment Opportunity Commission v. Northern Star Hospitality, Inc.

Filing 307

ORDER granting 305 Motion for Leave to File a Reply Brief and 306 Motion for Hearing. Defendant Northern Star Properties, LLC's response to plaintiff Equal Employment Opportunity Commission's reply brief is due October 28, 2015. Motion Hearing set for 10/30/2015 at 10:00 AM. Signed by District Judge Barbara B. Crabb on 10/26/2015. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,
ORDER
Plaintiff,
12-cv-214-bbc
v.
NORTHERN STAR HOSPITALITY
D/B/A SPARX RESTAURANT;
NORTHERN STAR PROPERTIES, LLC;
AND NORTH BROADWAY HOLDINGS,
INC.,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This long-closed case is before the court on plaintiff Equal Employment Opportunity
Commission’s motion to garnish defendant Northern Star Properties, LLC’s funds held in
an account at Dairy State Bank. Defendant objects to the garnishment, dkt. #300, arguing
that Rice Lake Harley-Davidson, Inc. is the owner of the funds in the bank under a Wis.
Stat. Ch. 409 and the Control of Deposit Account Agreement signed by debtor Northern
Star Properties, LLC (Properties), secured party Rice Lake Harley-Davidson, Inc. and Dairy
State Bank. Defendant contends that plaintiff’s effort to collect money held at Dairy State
Bank should be barred because that money belongs to Rice Lake Harley-Davidson, Inc., a
company owned by Chris Brekken, who is also the owner of Properties, and Rice Lake is a
secured creditor with priority over plaintiff.

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As plaintiff points out in its reply, dkt. #303, Rice Lake lines up behind plaintiff
under the federal priority statute, 31 U.S.C. § 3713(a), and is therefore not entitled to any
money held at the bank unless and until the judgment awarded plaintiff in this case is
satisfied. Plaintiff adds that, by asserting Rice Lake’s interests, Properties adds weight to the
pre-trial finding in this case, dkt. #152, that Rice Lake and Properties are not independent,
but may be considered as one entity. This is borne out by the evidence that has come to
light since trial showing that Chris Brekken or companies controlled by him have been
moving accounts from one bank account to another and using different corporate entities
as the purported owners of the various accounts—all in an effort to avoid fulfilling
Properties’ obligation to pay the judgment awarded against it after trial. It appears that
defendant has continued to ignore corporate formalities as it did prior to the trial in this
case, see Op. & Order, dkt. #152, and that it is engaged now in a campaign to hinder, delay
and defraud plaintiff as plaintiff tries to collect its judgment.
Despite the unusual amount of time that has been devoted to the attempted
enforcement of the judgment in this case, I conclude that it is necessary to have yet another
hearing. Accordingly, I will grant the motion of both parties to that effect and will hold a
hearing on Friday, October 30, 2015 at 10:00 a.m. The parties may call witnesses and
adduce evidence, as well as argue their claims.
Defendant should bear in mind that it faces a significant challenge in proving that it
has complied with the orders of this court or that the funds held by Dairy State Bank fall
within any exemption to garnishment by plaintiff that might be available to defendant under

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26 U.S.C. § 6334, 38 U.S.C. § 1562(c) or 15 U.S.C. § 1673. This is particularly the case
in light of its failure to even suggest that it has a defense of this sort. It should also keep in
mind that if it appears that it or any of the companies owned by Chris Brekken have
attempted to evade the orders of this court, the court will consider the imposition of any
sanctions available in the law. The parties should come to the hearing prepared to discuss
what those might be.

ORDER
IT IS ORDERED that a hearing will be held at 10:00 a.m., Friday, October 30, 2015.
FURTHER, IT IS ORDERED that defendant Northern Star Properties, LLC’s request to file
a response to plaintiff Equal Employment Opportunity Commission’s reply brief is
GRANTED; defendant may have until noon on October 28, 2015 to do so.
Entered this 26th day of October, 2015.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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