Inverultra, S.A. v. Wilson, 449 S.W.3d 339

Background

Inverultra, a Panamanian judgment creditor, registered a New York $1.8M judgment against ZIP Búfalo in Warren Circuit Court and sought garnishment from Union Underwear (Fruit of the Loom), alleged to be the parent of a lessee (Confecciones) paying ZIP Búfalo rent.
Union answered that it owed ZIP Búfalo nothing; ZIP Búfalo moved to quash the garnishment.
Inverultra sought veil-piercing discovery from Union (citing Inter-Tel) and later filed a nulla bona supplemental proceeding under KRS 426.381 after a no-property execution return.
The trial court denied discovery requests and entered a protective order barring discovery into relationships between Union and subsidiaries; it also denied discovery from ZIP Búfalo.
Inverultra petitioned for writs (mandamus/prohibition) under CR 81 to lift the protective order and compel discovery/payments into court; the Court of Appeals denied relief.
The Kentucky Supreme Court affirms denial of extraordinary relief, holding appellate review adequate and no showing of irreparable or ruinous injury warranting CR 81 relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court's protective order/denial of discovery is reviewable by writ (CR 81)	Inverultra: discovery denial prevents enforcement of judgment; appeal is inadequate and discovery may be lost, so mandamus is needed	Trial court/Union: discovery rulings are interlocutory; appeal provides adequate remedy; no special exigency shown	Denied: writ not warranted; ordinary discovery rulings reviewed on appeal absent rare exigency
Whether Inverultra showed "great and irreparable injury" to justify extraordinary relief	Inverultra: denial threatens enforcement and possible loss of evidence/payments	Respondents: no incalculable or ruinous harm; creditor may pursue assets in Honduras or on appeal	Denied: Inverultra failed to show ruinous or irreparable injury
Whether Volvo/Rehm line makes appeals inadequate because of potential loss of evidence	Inverultra: Volvo/Rehm permit CR 81 when discovery stays risk evidence loss	Respondents: Volvo/Rehm were fact-specific outliers; generic risk of loss does not justify mandamus	Held: Volvo/Rehm limited to their facts; generalized claim of possible loss insufficient
Whether KRS 426.381 supplemental proceeding requires compelled discovery from third parties (Union) now	Inverultra: statute authorizes discovery from third parties (bailees/debtors) to locate assets; protective order frustrates that remedy	Respondents: court may limit irrelevant discovery; Inverultra chose to seek recovery against non-debtor third parties and has other remedies	Held: discovery limitation not final barrier to relief; proper to address on appeal if abused discretion

Key Cases Cited

Inter-Tel Techs., Inc. v. Linn Station Props., LLC, 360 S.W.3d 152 (Ky. 2012) (discusses veil-piercing factors and permitted discovery for piercing claims)
Bender v. Eaton, 343 S.W.2d 799 (Ky. 1961) (sets prerequisites for extraordinary writs: no adequate remedy by appeal and great/irreparable injury)
Hoskins v. Maricle, 150 S.W.3d 1 (Ky. 2004) (reaffirms Bender test for prohibition/mandamus and case-by-case adequacy analysis)
Wal-Mart Stores v. Dickinson, 29 S.W.3d 796 (Ky. 2000) (distinguishes discovery orders that compel disclosure from denials; compelled disclosure may justify mandamus)
Volvo Car Corp. v. Hopkins, 860 S.W.2d 777 (Ky. 1993) (granted writ from discovery-denial due to risk that delay would cause loss of discoverable evidence)
Rehm v. Clayton, 132 S.W.3d 864 (Ky. 2004) (lifted a broad discovery stay where lengthy delay threatened loss of evidence; treated as fact-specific)
Meredith v. Wilson, 423 S.W.2d 519 (Ky. 1968) (mandamus granted where there was a concrete risk that key witnesses might die, creating exigency)
Roberts v. Knuckles, 429 S.W.2d 29 (Ky. 1968) (discovery rulings generally interlocutory and not mandamus-appropriate)
Byrd v. Maddox, 233 S.W.2d 990 (Ky. 1950) (same: discovery denials typically reviewed on appeal)