ORDER
THIS CAUSE came before the Court on Plaintiff, Lynore Reiseck’s (“PlaintiffFs]”)
I. BACKGROUND
A. The New York Litigation
On October 29, 2014, Plaintiff obtained a Judgment [ECF No. 1] in the amount of $284,078.86 against Ruderman, Universal Communications, and Blue Horizon in the action styled Reiseck v. Universal Communications of Miami, Inc. et al., Case No. 1:06-CV-00777-LGS-JCF, in the U.S. District Court for the Southern District of New York (“S.D.N.Y. Case”). The S.D.N.Y. Case began in 2004, when Plaintiff filed suit in New York state court against Defendants, alleging wrongful withholding of overtime pay in violation of the federal Fair Labor Standards Act and New York state law. (See S.D.N.Y. Case, Mar. 19, 2014 Opinion & Order (“S.D.N.Y. Order”) [ECF No. 152] l).
On July 12, 2013, counsel for Ruderman, Universal Communications, and Blue Horizon moved to withdraw, advising the court those three defendants had discharged his firm. (See id. 2). On July 16, 2013, the court granted the motion and ordered Universal Communications and Blue Horizon to retain new counsel by July 29, 2013. (See id.). On July 23, 2013, Ruderman informed the court he did not intend to defend the claims against him. (See id.). On August 22, 2013, the court ordered Universal Communications and Blue Horizon to show cause at a hearing why they should not be found in default and judgment should not be entered against them on the issue of liability. (See id.). Universal Communications and Blue Horizon failed to appear by counsel at the show cause hearing. (See id.).
On December 13, 2013, Plaintiff filed a motion for default judgment against Ru-derman, Universal Communications, and Blue Horizon. (See id. 3). The court set a show cause hearing on the matter, which it
B. The Florida Litigation
1. Registering the Judgment
According to Ruderman, in January 2015, he received a “Notice of Entry of Foreign Judgment With Attached Affidavit” that appeared to have been filed in Florida state court, but upon further diligence, he was unable to confirm with the Florida state court or with Plaintiffs prior counsel whether the Nptice had in fact been filed. (Suppl. Memo -1; see also Objection ... (“Objection”) [ECF No. 7] 2 n.l). Thus, “in an abundance of caution,” Ruderman filed a complaint to invalidate foreign judgment (“complaint”) [ECF No. 34-2] in Florida state court in the case styled Ruderman v. Reiseck, Case No. 2015-002927-CA-01 (the “State Court Case”). (Suppl. Memo 1-2). The complaint alleged Plaintiff failed to comply with Florida’s procedural requirements for filing a judgment in state court, and it sought to invalidate the Judgment on substantive, grounds. (See generally compl.). The complaint also requested enforcement of ;the Judgment be stayed pending a determination on the merits of the claims. (See generally id.). According to Reiseck, she “was nbt served with the initial summons and complaint” and did not receive “proper notice” of the State Court Case until June 5,2015. (Reply 8).
Meanwhile, on March 6, 2015, about four months after the Judgment was entered, Plaintiff registered the Judgment in this District. (See [ECF No.. 1]). On that same day the Clerk of Court issued a Writ of Execution [ECF No. 5] with respect to property in this District belonging to Ru-derman, ..Universal Communications, and Blue Horizon. On .April 1, 2015, Ruder-man first appeared in this action and, without filing a motion seeking affirmative relief, filed the Objection to the Writ of Execution, arguing (1). Plaintiff failed to comply with Florida’s procedural rules for filing a judgment in- state court and. (2) “the Writ of Execution is invalid and unenforceable as to Ruderman” based on three exemptions. (Objection 1-2). Plaintiff responded to the Objection on April 10, 2015 (see Opposition ... [ECF -No. 8]), and on April 20,2015, Ruderman filed a Reply ... [ECF No. 9],'
2. The Levy
On May 7, 2015, Plaintiff filed a sealed Ex-Parte Motion for ■ Break Order ... [ECF No. 11], which the Court granted (see Sealed Break Order [ECF No. 13]), directing the U.S. Marshal to execute'and enforce the Writ of Execution with respect to assets owned by Ruderman located at his residence in Aventura,- ■ Florida (the “Aventura Property”). (See Suppl. Memo 2). On May 11, 2015, the U.S. Marshal appeared at the Aventura Property and
During the levy, Ruderman filed an Emergency Motion to, Stay Levy/Execution and Request for Immediate Hearing (“First Emergency Motion”) [ECF . No. 14], seeking to stay the levy pending an adjudication of the issues raised in the Objection. Later that same day, Ruder-man filed an Emergency Motion to Enforce Agreement and Restore the Status Quo (“Second Emergency Motion”) [ECF No. 15], stating counsel for' Ruderman and counsel for Plaintiff discussed Ruderman’s objections during the levy and' reached an agreement whereby Ruderman would wire $579,000.00 (about double the amount of the Judgment) to counsel for Plaintiff in exchange for Plaintiffs stay of the levy and return of all assets seized during' the levy. (See id. '2-3). The agreement would remain in effect until the Court adjudicated Ruderman’s objections or the parties reached a settlement. (See id. 3).
According to Ruderman, despite, his adherence-'to the agreement, Plaintiffs counsel “refused to stop the levy and executed on significant assets located at the [Aventura] Property,” including artwork that was “clearly delineated” as owned by the Trusts in paperwork Ruderman’s counsel reviewed.with Plaintiffs counsel. (Id. 3-4 (alteration added)). Plaintiffs counsel “seized hundreds of thousands of dollars-worth of assets from the [Aventura] Property and, in addition, ha[d] $579,000;00 in his trust account.” (Id. 4 (alterations added; emphasis’ omitted)). Once Ruder-man’s counsel found out the U.S. Marshal left the Aventura Property with the assets, Ruderman’s counsel immediately contacted Plaintiffs counsel at his office, only to learn he had already left for the day. (See id.).- The Second Emergency Motion therefore asked the Court to, among other things,- enforce the parties’ purported agreement in order “to restore the status quo.” (Id.).
The next morning, on May 12, 2015, Plaintiff filed a Response ... [ECF No. 16] in opposition to the Second Emergency Motion, explaining Plaintiff levied on the assets despite the agreement the parties attempted to reach because, by about 4:00 p.m. the previous day, and despite his efforts, Plaintiffs counsel was unable to confirm, receipt of the wire transfer of funds Ruderman’s counsel had purportedly made. (See id. 3). A few hours after Plaintiff filed her response brief, the parties filed a Joint Statement ... [ECF No. 20], advising Plaintiffs counsel confirmed receipt of the funds and the parties agreed the seized assets would be returned to the Aventura Property. (See id. 1). Still on the same day, the Court held a hearing per the parties’ request, during which the Court denied the First Emergency Motion as moot and granted the Second Emergency Motion. (See May 12 Order [ECF No. 23]).
3. Post-Levy Proceedings
On May 18, 2015, Ruderman filed a Motion to Re-Open- Case and Convert to Civil Action (“Motion to Re-Open”) [ECF No. 25], in order to commence “[f]urther proceedings ... with regard to Plaintiffs attempted execution of the [Judgment] as well as in connection with the [objections raised by Ruderman.” (Id. 2 (alterations added)). As Ruderman later explained, the “Motion to Re-Open was for the purpose of asserting a counterclaim against Reiseck for negligent execution of the ... Judgment, among other things.” (Suppl.
On May 27, 2015, the Court held a hearing on the parties’ motions (see [ECF No. 31]),' during which the Court sua sponte inquired into (1) the legal basis upon which the Court would convert this case from a miscellaneous case to a civil case,' if the Court were to grant the Motion to ReOpen; and (2) the basis for subject-matter jurisdiction over the supplementary proceedings. Plaintiff and Ruderman did not offer satisfactory responses, and the Court therefore denied both motions, advising the parties they could seek reconsideration provided they adequately address the concerns raised by the Court at the hearing. (See May 27 Order).
The day following the hearing, Ruder-man filed an amended complaint [ECF No. 37-2] in the State Court Case. The amended complaint seeks (1) a declaratory judgment determining “whether the levy was appropriate in light of Ruderman’s filed Objections, which had not yet' been adjudicated by the District Court, as well as the Agreement between the parties;” and (2) damages for negligence in how the Writ of Execution was enforced during the levy, premised in part on the allegation “many items were damaged during the levy and, in fact, it has been subsequently determined that various items (owned by third-parties) are missing.” (Id. Counts I, II). The relief Ruderman sought in the complaint does not seem to appear in the amended complaint.
Reiseck was served with the amended complaint on June 5, 2015 (see Resp. ¶ 6)— the same day she filed the instant Motion in this case, seeking reconsideration of the Court’s denial of her Motion .for Proceedings Supplementary. (See generally■ Mot.).
II. LEGAL STANDARD
“Courts have distilled three major grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of pew evidence; and (3) the need to correct clear error or manifest injustice.” . Instituto de Prevision Militar v. Lehman Bros., Inc.,
III. ANALYSIS
' Plaintiff requests seeks the Court reconsider denial of the Motion for Proceedings Supplementary, arguing the Court has ancillary jurisdiction over the’ supplementary proceedings. (See generally Mot.). Ru-derman does not seek reconsideration of the Court’s denial of his Motion to ReOpen; rather, he agrees with Plaintiff the Court has ancillary jurisdiction over Plain
A. Supplementary Proceedings
The Court cannot grant Plaintiffs request for supplementary proceedings unless it has jurisdiction to conduct them. This is because federal courts are “‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,’ and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am. Tobacco Co.,
Plaintiff commenced this case by registering the Judgment in this District. Under 28 U.S.C. section 1963, “[a] judgment in an action for the recovery of money or property entered in any ... district court ... may be registered by filing a certified copy of the judgment in any other district— ” Id. (alterations added). “A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner.” Id. The Judgment thus may be enforced in the Southern District of Florida as if it were a judgment rendered here, notwithstanding the fact it was issued in the Southern District of New York.
Plaintiff, however, has not simply registered the Judgment and obtained a writ of execution. Plaintiff seeks, pursuant to Federal Rule of Civil Procedure 69(a)(1), to commence supplementary proceedings under Florida Statute section 56.29(6)(b),
When any gift, transfer, assignment or other conveyance of personal property has been made or contrived by the judgment debtor to delay, hinder, or defraud creditors, the court shall order the gift, transfer, assignment or other conveyance to be void and direct the sheriff to take the property to satisfy the execution. This does not authorize seizure of property exempted from levy and sale under execution or property which has passed to a bona fide purchaser for value and without notice. Any person aggrieved by the levy may proceed under [sections] 56.16-56.20.
Id. (alteration added).
Plaintiff contends the Court has ancillary jurisdiction over the requested supplementary proceedings under the reasoning the Eleventh Circuit applied in National Maritime Services, Inc. v. Straub,
Ancillary jurisdiction exists in two circumstances: (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees. The latter category encompasses a broad range of supplementary proceedings involving third parties to. assist in the protection and enforcement of federal judgments — including attachment, mandamus, garnishment, and the prejudgment avoidance of fraudulent conveyances. But ancillary jurisdiction does not extend to a new lawsuit to impose liability for a judgment on a third party.
Id. at 786-87 (internal quotation marks and citations omitted).
:The plaintiff in National Maritime, commenced supplementary proceedings under Florida Statute section 56.29(6)(b) (the same statute under which Plaintiff in the instant action seeks relief) to collect on a judgment by voiding the- defendant’s fraudulent, transfer of assets to an im-pleaded third party. See id. at 785. The undersigned sua sponte raised the issue of whether it had subject matter jurisdiction over the supplementary proceedings and found it had ancillary jurisdiction. See id. The Eleventh Circuit affirmed because by limiting the third party’s liability to. the proceeds the defendant fraudulently transferred to-the, third party, the plaintiff “sought to disgorge [the third party] of a fraudulently transferred asset, not to impose liability for a judgment on [the] third party.” Id. at 787 (alterations added).
National Maritime is factually distinct from the instant case, because in National Maritime, the same Court that originally rendered the judgment was asked to enforce it in the supplementary proceeding. See id. at 785. The parties here, although agreeing there is subject matter jurisdiction, offer no authority establishing ancillary jurisdiction exists in a case in which a federal court in one district is asked to conduct supplementary proceedings to enforce a judgment originally rendered -in another district. Nevertheless, a former Fifth Circuit case, Gullet v. Gullet,
In Gullet, the former Fifth Circuit upheld the use of garnishment proceedings in the Southern District of Florida conducted pursuant to Florida statute to collect on a judgment originally rendered in the District Court for the District of Columbia but registered in this District. See id. at 720-21. In. so holding, the court of appeals recognized the district court had the power to conduct the “ancillary” proceeding pursuant to the then-current versions of Federal Rule of Civil Procedure 69 and 28 U.S.C. section 1963. Id. The fact Gullet involved garnishment proceedings, whereas the instant case involves supplementary proceedings under section 56.29(6), is, at least with respect to subject matter jurisdiction, a distinction without a difference. Cf. Jackson-Platts v. Gen. Elec. Cap. Corp.,
Indeed, in Compton v. Societe Eurosuisse, S.A.,
Satisfied subject matter jurisdiction exists, the Court also finds Plaintiff is entitled to supplementary proceedings: Section 56.29(1) indicates “the two jurisdictional prerequisites for supplementary proceedings are (1) an unsatisfied writ of execution, and (2) an affidavit averring that the ■ writ is valid and unsatisfied along with a list of persons to be im-pleaded.” Gen. Trading Inc. v. Yale Materials Handling Corp.,
B. Abstention
The Court’s subject matter jurisdiction notwithstanding, Ruderman argues the Court “should abstain from presiding over this supplementary proceeding in favor of the state court.” (Suppl. Memo 4). The Supreme Court has stated there is a “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them.” Colo. River Water Conservation Dist. v. United States,
“A threshold requirement for application of the Colorado River [abstention] doctrine is that the federal and state cases be sufficiently parallel.” Acosta v. James A. Gustino, P.A.,
Ruderman and Plaintiff ■ are the only named parties in the State Court Case (see generally am. compl.), and they are also the only parties who have-appeared in this case. At the same time, the trustee for the Trusts is an impleaded defendant in this case, -and still other parties are named
According to Rudérman, both eases “clearly arise from [Plaintiffj’s Execution of the ... Judgment.” (Suppl. Memo 6 (alterations added)). While both cases do involve Plaintiffs execution of the Judgment, that is not the end of the inquiry. The State Court Case concerns the limited question of whether the Writ of Execution was properly enforced during the levy. This case, in contrast, concerns not only the Writ of Execution but also supplementary proceedings regarding Ru~ derman’s allegedly fraudulent transfer of assets to the Trusts. Further, if the last several' months are any indication of what the future holds, this case may involve additional proceedings to aid in execution of the Judgment. It is fairly clear resolution of the State Court Case would not leave the Court with “nothing further to do,” Moses H. Gone Mem’l Hosp.,
Assuming this case is parallel to the State Court' Case, see Jackson-Platts,
(1) whether one of the courts has assumed, jurisdiction over property, (2) the inconvenience of the federal forum, (3) the potential for piecemeal litigation, (4) the order in which the fora obtained jurisdiction, (5) whether state or federal law will be applied,-and (6) the adequacy of the state court to protect the parties’ rights. -
Ambrosia Coal,
The parties are correct the first factor — jurisdiction over property — is neutral here. See Jacksoñ-Platts,
As for the third factor — the potential for piecémeal litigation — according to Ruder-man, “[t]his ’case presents the danger of piecemeal litigation because both the State Court Case and the instant action arise out of the same set of operative facts relating to. execution of the' Foreign Judgment.” (Suppl.-Memo 8 (alteration added)). 'As an initial matter, Ruderman’s .characterization of .the operative facts- of the cases is
Of course, neither case would exist if not for the years-long litigation that took place in New York and the subsequent registration of the Judgment in this District. And perhaps some issues in one case will have preclusive effect on issues in the other (the parties’ briefing on this question is conclu-sory and unsupported). Nevertheless, the operative facts and legal issues in the two cases are not so duplicative as to warrant the Court’s abstention:
Although the dual proceedings in this instance will likely result in some unremarkable repetition of efforts and possibly some piece-by-piece decision-making, there is no indication that piecemeal litigation poses any greater waste or danger here than it does in the vast majority [of] federal cases with concurrent state counterparts. As we have emphasized, federal courts are almost invariably obligated to exercise otherwise valid jurisdiction over such cases.
Ambrosia Coal,
Next, Ruderman argues the fact the State Court Case was filed first weighs in favor of abstention. While the order in which the fora obtained jurisdiction is relevant, “[w]hat matters is not so much the chronological order in which the parties initiated the concurrent proceedings, but the progress of the proceedings and whether the party availing itself of the federal forum should have acted earlier.” Id. at 1142 (alteration added; internal quotation marks and citation omitted). “This factor, as with the other Colorado River factors, is to be applied in a pragmatic, flexible manner with a view to the realities of the case at hand.” Moses H. Cone Mem’l Hosp.,
The fact the State Court Case was filed one month before the instant action is unremarkable given the instant action was commenced by the registering of a Judgment rendered in a federal case that began over ten’ years ago. Plaintiff does not completely exaggerate in asserting “it is outrageous of [Ruderman] to claim that both cases are in the early phases of litigation.” (Reply 5 (alteration added)). Furthermore, even if the progress of the instant action is measured separately from the S.D.N.Y. Case, this action still has progressed more than the State Court Case given the parties’ extensive motion practice. The State Court Case, by contrast, has had a couple of filings as well as a hearing regarding the postponement of discovery (see id. 5-6); thus, “no substantial proceedings” have taken place. Moses H. Cone Mem’l Hosp.,
Yet another fact lessens the significance of the earlier filing of the State Court case by one month: the complaint originally filed in the State Court Action sought to invalidate the Judgment on the ground Plaintiff erroneously registered the Judgment in Florida state court. The amended complaint in the State Court Case, upon which Ruderman premises his abstention arguments, was filed almost three months after this case was filed, and is predicated almost entirely on the levy — an event that occurred as a product of the litigation in the instant case. Thus, the current iteration of the State Court Case is little more than an off-shoot of this federal case. When assessed pragmatically and realistically, the fourth factor, like the second and third, cuts against abstention.
Ruderman argues the fifth factor— whether state or federal law applies— weighs in favor of abstention because state law will govern Plaintiffs supplementary proceeding. (See Suppl. Memo 8-9). “But this factor favors abstention only where the applicable state law is particularly complex or best left for state courts to resolve.” Jackson-Platts,
Ruderman concedes the sixth factor— the adequacy of the state court to protect the parties’ rights — is neutral, but Ruder-man also argues the instant suit is a “vexatious” and “reactive” filing given it commenced after the State Court Case. (Suppl. Memo 9-10). Common sense says there is nothing vexatious or reactive about a .plaintiff enforcing a federal judgment in a federal court after litigating a case for over a decade, only to find funds for the judgment she is owed are nowhere to be found.
Further,- while ■ the State Court Case originally challenged the procedure by which Plaintiff registered the Judgment as well as the validity of the Judgment, Ru-derman withdrew those claims when he filed the amended complaint, effectively rendering the original purpose of the State Court Case a non-issue today. Ruderman does still complain Plaintiff frustrated his attempt to obtain a stay of enforcement of the Judgment in state court (relief Ruder-man sought in the complaint before it was amended), but Ruderman only has himself to blame: Plaintiff was not properly served with notice of the State Court Case until June 5, 2015, and the docket for the
If anything, the amended complaint in the State Court Cáse is' a reactive and vexatious filing: Ruderman attempted to assert those claims in this case via the Motion to Re-Open, was frustrated in his efforts to do so, and was given leave to seek reconsideration; instead of seeking reconsideration, he filed his claims in state court and now attempts to use those state court proceedings to foreclose further action in this case. Given state courts, unlike federal courts, are courts of general jurisdiction, the Colorado River exception would swallow the. rule if all the exception required was a defendant’s assertion of claims in state court he could have asserted in an ongoing federal proceeding. Cf Ambrosia Coal,
Finally, the parties do not address “whether the concurrent cases involve a federal statute that evinces a policy favoring abstention,” id. at 1331 (citing Colo. River,
Having conducted “a careful balancing of: the important factors as. they apply in [this] case, with the balance heavily weighted in favor of the exercise of jurisdiction,” Moses H. Cone Mem’l Hosp.,
IV. CONCLUSION
Given the foregoing analysis, reconsideration of the May 27 Order’s denial of Plaintiffs Motion for Proceedings Supplementary is warranted. In sum, the Court has ancillary jurisdiction over the supplementary 'proceedings Plaintiff seeks to commence, those supplementary proceedings are warranted, and abstention is not proper. It is therefore ORDERED AND ADJUDGED that the Motion [ECF No. 33] is GRANTED in part as follows:
1. The Clerk of. Court is directed to mark this case as “OPEN,” and properly designate it a “CIVIL” case rather than a “MISCELLANEOUS” case. Plaintiff is responsible for paying the Clerk any difference in the filing fee.
2. Third party Steven A. Schwartz, as trustee for the Trusts, is impleaded pursuant to Florida Statute section 56.29 for the purpose of supplementary post-judgment proceedings in aid of execution.
3. Plaintiff shall serve a copy of this Order on Steven A Schwartz and submit proof of such service to the Court within ten (10) calendar days of the date of this Order.
4. Steven A. Schwartz shall respond, within 20 days from the date of service, to this Order showing cause why the assets now in his possession and control, transferred to him by Defendant, Carl Ru-derman, should not be declared fraudulently acquired.
5. Within ten (10) .calendar days of a response from Steven A Schwartz, the parties shall file a scheduling report containing their proposed schedule for resolution of these post-judgment supplementary proceedings.
DONE AND ORDERED, in Miami, Florida, this 18th day of August, 2015.
Notes
. Ruderman, Universal Communications, Blue Horizon, Gollan, Lurie, and Bernstein are referred to collectively as "Defendants.”
. The S.D.N.Y. Order is attached as Exhibit A to the Motion for Proceedings Supplementary.
. "The procedure on execution — and in proceedings supplementary to and in aid of judgment or execution — must accord with the procedure of the state where the court is located— ” Fed. R. Civ. P. 69(a)(1) (alterations added).
. Assuming, for the sake of argument, both cases are "at equal stages of litigation,” that nevertheless does not weigh in favor of abstaining. Jackson-Platts,