Luck v. Klayman
2017 Ohio 8231
| Ohio Ct. App. | 2017Background
- Luck obtained a $325,500 state-court judgment against Klayman in 2011; that judgment remains unsatisfied.
- Klayman later obtained a $181,000 federal judgment against his former employer, Judicial Watch, in 2013.
- Luck filed a creditor’s bill in Cuyahoga Common Pleas (2014) seeking to enjoin Judicial Watch from paying Klayman so proceeds could apply to her 2011 judgment.
- Luck served discovery including Request for Admission No. 4 asking Klayman to admit he had no assets sufficient to satisfy Luck’s judgment; Klayman objected and failed to comply with a court order to answer.
- The trial court deemed the request admitted and granted summary judgment for Luck under R.C. 2333.01 (creditor’s bill), finding all three statutory elements satisfied.
- Klayman appealed, raising jurisdictional (federal/state conflict), privacy/discovery, and fraud/collateral-attack arguments; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state court may enjoin payment of proceeds from a federal judgment to satisfy a state judgment | Luck: R.C. 2333.01 permits subjecting a judgment debtor’s interest in any judgment to satisfy a creditor’s judgment | Klayman: State court lacks power to restrain federal-court proceedings and Supremacy Clause protects his right to federal judgment proceeds | Court: State court can encumber the debtor’s equitable interest (proceeds) under R.C. 2333.01; no Supremacy conflict; affirmed |
| Whether Klayman’s financial privacy barred discovery/admissions about his assets | Luck: Financial status is directly relevant to the third element of a creditor’s bill; discovery proper under Civ.R. 26 | Klayman: Asserted a broad right to financial privacy to avoid disclosure | Court: No privilege or rule exempts his financial information; admission deemed admitted; discovery appropriate |
| Whether Luck’s 2011 judgment is invalid due to fraud (collateral attack) | Luck: 2011 judgment is final and previously affirmed on direct appeal; not subject to collateral attack absent fraud or lack of jurisdiction | Klayman: Asserts ongoing appeals and alleges fraud to challenge validity | Court: No evidence of fraud or lack of jurisdiction; prior direct appeal rejected Klayman’s challenges; collateral attack fails; affirmed |
Key Cases Cited
- Donovan v. Dallas, 377 U.S. 408 (state courts cannot restrain federal-court proceedings)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (standard for de novo review of summary judgment)
- Union Properties, Inc. v. Patterson, 143 Ohio St. 192 (creditor’s bill can reach assets not reachable by execution)
- Lakeshore Motor Freight Co. v. Glenway Indus., 2 Ohio App.3d 8 (state court may encumber proceeds of a pending federal claim but may not usurp prosecution rights)
- Fed. Deposit Ins. Co. v. Willoughby, 19 Ohio App.3d 51 (final judgments are conclusive and not subject to collateral attack)
- Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375 (final judgments are meant to be final; collateral attack exceptions limited to fraud or lack of jurisdiction)