648 F. App'x 850
11th Cir.2016Background
- Forster, Lacy, and Hirschfeld obtained a default judgment against Nations Funding Source, Inc./Nations Group USA, Inc. (Nations Group) and sought to collect it after post-judgment proceedings stalled.
- The district court previously dismissed the complaint against Nations Group’s owner, Sookrani Narain, without prejudice for failure to meet a post-judgment filing deadline.
- Narain refused to cooperate with post-judgment discovery (failed to complete fact information sheets and to appear for deposition) and allegedly withdrew/depleted the companies’ bank accounts.
- The former employees moved for proceedings supplementary under Fla. Stat. § 56.29 and to implead Narain (including alleging transfers to delay/defraud creditors and asserting an alter-ego claim).
- The district court denied the motion, characterizing it as an attempt to circumvent a sanction; the plaintiffs appealed.
- The Eleventh Circuit vacated and remanded, directing the district court to commence supplementary proceedings, implead Narain for execution against Nations Group, and determine whether it has jurisdiction over the alter-ego claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to proceedings supplementary under Fla. Stat. § 56.29 | Plaintiffs filed the motion and affidavits showing an unsatisfied judgment, identified the court/case, stated the unsatisfied amount, and alleged transfers to hinder collection | District court claimed the motion was an improper attempt to circumvent a prior sanction | Plaintiffs met § 56.29 requirements; the court erred in denying relief and must commence supplementary proceedings and implead Narain |
| Right to implead Narain as transferee / to recover transferred assets | Alleged Narain received or caused transfers to deplete corporate accounts to defeat execution; § 56.29(6)(b) allows impleader on such allegation without further showing | Denied on ground that impleading Narain would circumvent the sanction | Impleader permitted where statutory allegations were made; remand to implead and determine if funds must be disgorged |
| Whether the motion impermissibly sought relitigation of liability or to evade sanctions | Plaintiffs sought only execution-related discovery and relief, not relitigation of ADEA liability | Court viewed motion as an attempt to relitigate or evade sanction | Motion was not an improper relitigation; supplementary proceedings are proper to discover and reach assets |
| District court’s jurisdiction over alter-ego claim against Narain | Plaintiffs argued ancillary jurisdiction/alternate diversity jurisdiction for an alter-ego claim to hold Narain liable for corporate obligations | Concern that suit might be an attempt to impose liability on a person not already liable, raising jurisdictional issues | Court must determine on remand whether (1) ancillary jurisdiction applies under Peacock/Kokkonen standards or (2) original diversity jurisdiction exists (plaintiffs bear burden to show complete diversity and >$75,000) |
Key Cases Cited
- Nat’l Mar. Servs., Inc. v. Straub, 776 F.3d 783 (11th Cir. 2015) (ancillary jurisdiction principles applied post-judgment)
- Molinos Valle Del Cibao v. Lama-Seliman, 633 F.3d 1330 (11th Cir. 2011) (elements for alter-ego liability under Florida law)
- Peacock v. Thomas, 516 U.S. 349 (U.S. 1996) (limits on federal courts’ ancillary jurisdiction to affect third parties)
- Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (U.S. 1994) (ancillary jurisdiction standards for enforcing federal judgments)
- Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242 (11th Cir. 2005) (requirements for invoking diversity jurisdiction)
- Serchay (NTS Fort Lauderdale Office Joint Venture v. Serchay), 710 So.2d 1027 (Fla. Dist. Ct. App. 1998) (impleader under § 56.29 requires no more than statutory showing)
- Young v. McKenzie, 46 So.2d 184 (Fla. 1950) (supplementary proceedings used to discover assets held by third parties)
- Eagerton v. Valuations, Inc., 698 F.2d 1115 (11th Cir. 1983) (ancillary jurisdiction principles)
- Regent Bank v. Woodcox, 636 So.2d 885 (Fla. Dist. Ct. App. 1994) (interpretation of § 56.29 impleader standards)