Reiseck v. Universal Communications of Miami, Inc.
141 F. Supp. 3d 1295
S.D. Fla.2015Background
- Reiseck obtained a $284,078.86 federal judgment in S.D.N.Y. (against Ruderman, Universal Communications, Blue Horizon) and registered that judgment in the Southern District of Florida.
- Reiseck sought post-judgment supplementary proceedings under Fla. Stat. §56.29(6)(b) and a writ of execution; the U.S. Marshal levied assets at Ruderman’s Aventura residence, including items Ruderman claimed belonged to trusts.
- Ruderman filed objections to the writ, a Florida state-court complaint to invalidate the registered judgment, and later amended that complaint to challenge the levy and seek damages for negligent execution.
- The district court initially denied Reiseck’s motion to implead the trustee and for proceedings supplementary because the court questioned subject-matter jurisdiction and conversion from a miscellaneous to a civil case; the parties moved for reconsideration.
- On reconsideration the court analyzed (1) whether it had ancillary jurisdiction to conduct supplementary proceedings to void alleged fraudulent transfers to trusts, and (2) whether Colorado River abstention in favor of the state-court case was warranted.
- The court granted reconsideration in part: it reopened the matter as a civil case, found ancillary jurisdiction and that statutory prerequisites were satisfied, impleaded trustee Steven A. Schwartz under Fla. Stat. §56.29, and ordered him to show cause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ancillary jurisdiction to conduct supplementary proceedings in Florida to void alleged fraudulent transfers of debtor's assets to trusts | Reiseck: federal court has ancillary jurisdiction (analogous to National Maritime) to enforce its registered federal judgment by disgorging fraudulently transferred assets | Ruderman: court lacks ancillary jurisdiction because the underlying judgment was rendered in a different federal district; supplemental proceedings should be in state court | Court: Ancillary jurisdiction exists to conduct supplementary proceedings under Rule 69 and 28 U.S.C. §1963; Gullet and Compton support enforcement of out-of-district federal judgments via ancillary proceedings in this district; granted impleader |
| Statutory prerequisites for Florida supplementary proceedings (Fla. Stat. §56.29) | Reiseck: she filed an unsatisfied writ and the required affidavit listing the third party; those prerequisites suffice to implead third parties | Ruderman: (implicit) additional showing required or jurisdictional defects | Court: §56.29(1) prerequisites satisfied (unsatisfied writ + affidavit); no other showing required to implead third parties; proceed |
| Colorado River abstention (should federal court defer to state-court action) | Reiseck: federal courts have a near-absolute duty to exercise jurisdiction; state case is not parallel and abstention is improper | Ruderman: court should abstain because state case arose first and involves the same execution-related events | Court: Abstention improper. Cases are not sufficiently parallel (different issues), and on balancing Colorado River factors (convenience, piecemeal litigation, order/progress of proceedings, law to be applied, adequacy of state forum) the balance favors exercising jurisdiction |
| Impleading trustee and scope of relief against third party | Reiseck: implead trustee under §56.29 to declare transfers fraudulent and recover transferred assets for execution | Ruderman: trustee and levy issues belong in state court; third parties may have bona fide purchaser defenses | Court: Trustee Steven A. Schwartz is impleaded; ordered to show cause within 20 days why assets in his possession should not be declared fraudulently acquired; set schedule for supplementary proceedings |
Key Cases Cited
- National Maritime Servs., Inc. v. Straub, 776 F.3d 783 (11th Cir. 2015) (ancillary jurisdiction supports third-party supplementary proceedings to disgorge fraudulently transferred assets)
- Gullet v. Gullet, 188 F.2d 719 (5th Cir. 1951) (garnishment/ancillary proceedings in Florida enforcing a judgment registered from another district are permissible)
- Compton v. Societe Eurosuisse, S.A., 494 F. Supp. 836 (S.D. Fla. 1980) (district court enforced a judgment registered from another district via Florida supplementary procedures)
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (U.S. 1976) (abstention doctrine; federal courts may in narrow circumstances defer to parallel state proceedings)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (framework for Colorado River abstention and consideration of whether federal court will have nothing further to do)
- Ambrosia Coal & Constr. Co. v. Pages Morales, 368 F.3d 1320 (11th Cir. 2004) (six-factor Colorado River abstention analysis)
- Jackson-Platts v. Gen. Elec. Capital Corp., 727 F.3d 1127 (11th Cir. 2013) (no principled distinction between garnishment and supplementary proceedings for removal/ancillary jurisdiction analysis)