Summary
holding that good cause existed within the meaning of 28 U.S.C. § 1963 enabling the plaintiff to register the judgment in another jurisdiction because substantial assets were located there and sufficient assets to satisfy the judgment had not been located within the court's jurisdiction
Summary of this case from Falica v. Advance Tenant ServicesOpinion
00 Civ. 619 (RWS)
November 3, 2003
MEMORANDUM OPINION
Plaintiff, John S. Pereira, as Trustee of Trace International Holdings, Inc. and Trace Foam Sub, Inc. ("Trustee") has moved for an order permitting registration of the final judgment entered in favor of the Trustee against defendants Marshall S. Cogan, Andrea Farace, Frederick Marcus, Robert H. Nelson, Philip Smith and Karl Winters (the "Judgment Debtors") in this matter in New Jersey, Maryland, Florida, and other district courts of the United States pursuant to 28 U.S.C. § 1963. The motion for registration of judgment in other districts is opposed by Judgment Debtors Smith and Winters. For the reasons stated below, the motion is granted. Prior Proceedings
On June 25, 2003, a final judgment was entered in favor of the Trustee against the Judgment Debtors in various amounts. None of the Judgment Debtors has obtained a stay of execution or filed a supersedeas bond pending appeal of the Judgment. Fed.R.Civ.P. 62.
By letter dated August 1," 2003, the Trustee requested permission to register the judgment in New Jersey, Maryland, Florida and other districts so that the Trustee could proceed to seek post-judgment discovery and enforcement of the judgment against assets which the Judgment Debtors may have outside of the Southern District of New York. The letter was treated by the Court as a motion. After a submission of briefs, the motion was deemed fully submitted on September 4, 2003.
The Trustee Has Shown Good Cause to Register the Judgment 28 U.S.C. § 1963 provides that a judgment may be registered "when ordered by the court that entered the judgment for good cause shown," notwithstanding the pendency of an appeal. Donel Corp. v. Kosher Overseers Ass'n of America, Inc., No. 92 Civ. 8377, 2001 WL 1512589, at *1 (S.D.N.Y. Nov. 28, 2001); Woodward Dickerson v. Kahn, No. 89 Civ. 6733, 1993 WL 106129, at *1 (S.D.N.Y. Apr. 2, 1993), (quoting Chicago Downs Ass'n v. Chase. 944 F.2d 366, 372 (7th Cir. 1991)).
While improper transfers or other activity designed to deprive plaintiff of the benefits of the judgment are sufficient to satisfy the requirement of good cause, they are not necessary. "`Good cause' is established `upon a mere showing that the [party against whom the judgment has been entered] has substantial property in the other [foreign] district and insufficient [property] in the rendering district to satisfy the judgment.'" Owen v. Soundview Fin. Group. Inc., 71 F. Supp.2d 278, 278-9 (S.D.N.Y. 1999); Jack Frost Laboratories, Inc. v. Physicians Nurses Manufacturing Corp., 951 F. Supp. 51, 52 (S.D.N.Y. 1997) (quoting Woodward Dickerson v. Kahn, 1993 WL 106129, at *1). The Trustee asserts that "each [Judgment Debtor has] substantial assets that are located outside the Southern District of New York" and that sufficient assets have not been located within this district. Pi. Mem. at 4. The Trustee claims that Judgment Debtor Winters has assets in New Jersey, Nelson has assets in the Eastern District of New York, Smith has assets in Maryland and Marcus has assets in Florida. "Judgment creditors . . . `need not show exact evidence of assets' and registration may be granted upon a `lesser showing.'" Owen 71 F. Supp.2d at 279 (quoting AT T Corp. v. Public Service Enterprises of Pennsylvania, Inc., No. 98 Civ. 6133, 1999 WL 672543, at *6 (S.D.N.Y. Aug. 26, 1999)).
In addition, the Judgment Debtors have not rebutted the Trustee's claim. They have admitted to having assets in other districts and have not denied having insufficient assets in this district. "In the absence of contrary evidence, the affidavit in support of the judgment creditors' motion should be presumed true." Donel, 2001 WL 1512589, at *2;AT T Corp., 1999 WL 672543, at *6. w[The judgment debtor's] careful failure to controvert any of the facts asserted by the judgment creditor permits acceptance thereof for purposes of this motion." Owen 71 F. Supp.2d at 279.
In light of the showing of good cause by the Trustee, the absence of actions such as improper transfers by the Judgment Debtors and the theoretical availability of other sources to obtain the judgment, such as insurance coverage or recoveries from other Judgment Debtors, is irrelevant.
Conclusion
Since the Trustee has established "good cause" within the meaning of 28 U.S.C. § 1963, and the Judgment Debtors have failed to show a basis for denying the Trustee's motion, the motion to register the judgment in other district courts of the United States is granted.