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LANKLER SIFFERT & WOHL, LLP v. ROSSI

United States District Court, S.D. New York


July 21, 2004.

LANKLER SIFFERT & WOHL, LLP, DECISION STRATEGIES, L.L.C., DECISIONQUEST, INC., LEXECON INC., WILLIAM PURCELL, STEVE THEL, DONNA M. HITSCHERICK, and CORNERSTONE RESEARCH, INC., Plaintiffs,
v.
A. CAL ROSSI, JR., BASIC CAPITAL MANAGEMENT, INC. and GENE PHILLIPS, Defendant. A. CAL ROSSI, JR. and BASIC CAPITAL MANAGEMENT, INC., Third-Party Plaintiffs, v. AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY, Third-Party Defendant.

The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

Plaintiffs Lankler, Siffert & Wohl LLP ("LSW"), Decision Strategies, L.L.C., ("Decision Strategies"), DecisionQuest, Inc. ("DecisionQuest"), Lexecon, Inc. ("Lexecon"), Steve Thel ("Thel") and Donna M. Hitscherich ("Hitscherich") (collectively, the "Moving Plaintiffs") move for an order pursuant to 28 U.S.C. § 1963 directing the registration of the amended judgments of each of the Moving Plaintiffs against the defendants A. Cal Rossi, Jr. ("Rossi") and Basic Capital Management ("BCM") (collectively, the "Defendants") in the United States District Court for the Northern District of Texas. For the reasons set forth below, the Moving Plaintiffs have shown good cause to register the judgment. However, registration of the judgment will be deferred to allow the Defendants an opportunity to post a supersedeas bond.

Prior Proceedings

  Plaintiffs filed their complaint in this action on December 19, 2002, alleging non-payment of attorneys' fees and other related fees. The Moving Plaintiffs' motion for partial summary judgment on their account stated claim was granted on October 10, 2003. See Lanker, Siffert, Wohl v. Rossi, 287 F. Supp.2d 398 (S.D.N.Y. 2003). On March 19, 2004, the Court granted the request of BCM and Rossi to amend the judgments to reflect the federal post-judgment rate of interest and granted the request of the Moving Plaintiffs to certify the judgment pursuant to Federal Rule of Civil Procedure 54(b). See Lanker, Siffert & Wohl v. Rossi, 02 Civ. 10055, 2004 WL 541842 (S.D.N.Y. Mar. 19, 2004). The amended judgments were entered on April 22, 2004.

  The Moving Plaintiffs filed the instant motion on May 25, 2004, and the motion was taken on submission on June 30, 2004.

  Moving Plaintiffs Have Shown Good Cause to Register the Judgment

  28 U.S.C. § 1963 provides that a judgment may be registered "when ordered by the court that entered the judgment for good cause shown," notwithstanding the pendency of an appeal. Donel Corp. v. Kosher Overseers Ass'n of America, Inc., 92 Civ. 8377, 2001 WL 1512589, at *1 (S.D.N.Y. Nov. 28, 2001); Woodward & Dickerson v. Kahn, 89 Civ. 6733, 1993 WL 106129, at *1 (S.D.N.Y. Apr. 2, 1993).

  While improper transfers or other activity designed to deprive plaintiff of the benefits of the judgment are sufficient to satisfy the requirement of good cause, they are not necessary. "`Good cause' is established `upon a mere showing that the [party against whom the judgment has been entered] has substantial property in the other [foreign] district and insufficient [property] in the rendering district to satisfy the judgment.'" Owen v. Soundview Fin. Group, Inc., 71 F. Supp.2d 278, 278-9 (S.D.N.Y. 1999); Jack Frost Laboratories, Inc. v. Physicians & Nurses Manufacturing Corp., 951 F. Supp. 51, 52 (S.D.N.Y. 1997), (quoting Woodward & Dickerson, 1993 WL 106129, at *1)).

  The Moving Plaintiffs have stated in an affidavit that they have had asset searches performed both inside and outside the State of New York. The searches have uncovered no real property or bank accounts of either Defendant located within New York. However, the searches revealed both real property and bank accounts of one or both Defendants located in the State of Texas, among other jurisdictions. "Judgment creditors . . . `need not show exact evidence of assets' and registration may be granted upon a `lesser showing.'" Owen 71 F. Supp.2d at 279 (quoting AT&T Corp. v. Public Service Enterprises of Pennsylvania, Inc., 98 Civ. 6133, 1999 WL 672543, at *6 (S.D.N.Y. Aug. 26, 1999)).

  The Defendants have confirmed that BCM has over $100 million in assets, including in the Northern District of Texas. The Defendants have not submitted any evidence of assets in the State of New York, but instead argue that the Defendants have "a good faith and well grounded claim and cause of action against American International Specialty Lines Insurance Company, the recovery of which will satisfy Movants orders." Defendants Brief at 5. However, "the theoretical availability of other sources to obtain the judgment, such as insurance coverage or recoveries from other Judgment Debtors, is irrelevant." Pereira v. Cogan, 00 Civ. 619, 2003 WL 22510410 (S.D.N.Y. Nov. 4, 2003).

  The Defendants have therefore not rebutted the statements regarding the location of assets. "In the absence of contrary evidence, the affidavit in support of the judgment creditors' motion should be presumed true." Donel, 2001 WL 1512589, at *2; AT&T Corp., 1999 WL 672543, at *6. "[The judgment debtor's] careful failure to controvert any of the facts asserted by the judgment creditor permits acceptance thereof for purposes of this motion." Owen 71 F. Supp.2d at 279. The Moving Plaintiffs have therefore shown good cause to register the judgment in the Northern District of Texas.

  The Defendants Are Permitted to File a Supersedeas Bond

  The Defendants request that in the event that the court finds good cause to register the judgment, permission to register the judgment should be deferred until after it has refused or failed to post a supersedeas bond. See Cheminova v. Griffin LLC, 182 F. Supp.2d 68, 80 (D.D.C. 2002) (mandating such a procedure because "[i]n most cases, the bond will provide sufficient protection of the judgment creditor's interest."). Because the Defendants have stated their intention to post a bond, the registration of the judgment will be deferred 14 days from the issuance of this opinion. If no bond has been posted by that time, the judgment may be registered.

  The amount of the bond shall be sufficiently large to satisfy the full amount of the judgment plus the interest which will accrue for at least one year from the date of the entry of the amended judgments. According to the calculations of the Moving Plaintiffs, that amount is $1,421,092.28. Further, as suggested by the Moving Plaintiffs, the Defendants, if they choose, may also post a single supersedeas bond encompassing the amount of the judgment in a related case before this court, FTI Consulting, Inc. v. Rossi, 03 Civ. 4033. Partial summary judgment was entered against Defendants Rossi and BCM on substantially similar grounds on February 25, 2004. See FTI Consulting, Inc. v. Rossi, 03 Civ. 4033, 2004 WL 359378 (S.D.N.Y. Feb. 25, 2004).

  Conclusion

  For the reasons stated above, the Moving Plaintiffs have shown good cause pursuant to 28 U.S.C. § 1963 for the registration of its judgment against the Defendants in the Northern District of Texas. However, registration of the judgment shall be deferred 14 days from the issuance of this Opinion to allow the Defendants to file a supersedeas bond. Defendants may also combine the amount of the bond in this case with the amount of the judgment plus interest in FTI Consulting, Inc. v. Rossi.

 

It is so ordered.
20040721

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