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RUNAWAY DEVELOPMENT GROUP v. PENTAGEN TECHNOLOGIES INT'L

November 7, 2005.

RUNAWAY DEVELOPMENT GROUP, S.A., Plaintiff(s),
v.
PENTAGEN TECHNOLOGIES INTERNATIONAL LIMITED, ET AL., Defendant(s).



The opinion of the court was delivered by: JOHN SPRIZZO, District Judge

MEMORANDUM OPINION AND ORDER

The present controversy involves the question of whether judgment creditor Pentagen Technologies International Ltd. ("Pentagen" or "creditor") may obtain by motion in the above-captioned action an Order of Turnover for computer software allegedly in the possession of third-party transferee United States of America ("Government" or "transferee") pursuant to Article 52 of the New York Civil Practice Law and Rules. Because this motion is the improper vehicle for seeking this relief, and because Pentagen is barred, for a variety of reasons, from seeking this relief from the Government, this Court denies Pentagen's motion.

BACKGROUND

  This action, which was commenced in 1991, involved a dispute about the ownership of the MENTIX software program. That dispute was settled by a 1993 Stipulation and Order in which plaintiff Runaway Development Group, S.A. and its affiliates consented to entry of judgment against them and agreed to deliver to Pentagen all copies of MENTIX and its documentation. See Stipulation and Orders for Amendment of Pleadings and Judgments, dated Aug. 2, 1993.

  Emboldened by its success in this action, Pentagen proceeded to bring a number of suits against, inter alios, CACI International, Inc. ("CACI"), Pentagen's former business associate, alleging copyright infringement, conversion, and violations of the False Claims Act, see, e.g., United States ex rel. Pentagen Techs. Int'l, Ltd. v. CACI Int'l Inc., No. 96-7827, 1997 U.S. Dist. LEXIS 12244, 1997 WL 473549 (S.D.N.Y. Aug. 18, 1997); Pentagen Techs. Int'l, Ltd. v. CACI Int'l Inc., Nos. 93-8512, 94-441, 94-8164, 1996 U.S. Dist. LEXIS 9903, 1996 WL 435157, at *1-7 (S.D.N.Y. Aug. 2, 1996); United States ex rel. Pentagen Techs. Int'l Ltd. v. CACI Int'l Inc., No. 94-2925, 1995 U.S. Dist. LEXIS 17512, 1996 WL 11299 (S.D.N.Y. Jan. 4, 1996); CACI Int'l Inc. v. Pentagen Techs. Int'l, Ltd., No. 93-1631-A, 1994 WL 1752376, 1994 U.S. Dist. LEXIS 21457, at *1-11 (E.D. Va. June 16, 1994), and the Government, alleging abuse of process, conversion, and copyright infringement, see, e.g., Pentagen Techs. Int'l Ltd. v. United States, 175 F. 3d 1003 (Fed. Cir. 1999); Pentagen Techs. Int'l Ltd. v. United States, No. 01-3078, 2002 WL 465308, 2002 U.S. Dist. LEXIS 5030 (S.D.N.Y. Mar. 26, 2002); Pentagen Techs. Int'l Ltd. v. United States, 103 F. Supp. 2d 232 (S.D.N.Y. 2000).

  Despite bringing "a seemingly endless series of lawsuits," Pentagen, No. 01-3078, 2002 U.S. Dist. LEXIS 5030, at *4, before no less than seven federal judges, Pentagen failed in each of its attempts to show that CACI or the Government infringed or converted the MENTIX software. See, e.g., id. at *4-8; Pentagen Techs. Int'l Ltd. v. United States, 172 F. Supp. 2d 464, 468-70 (S.D.N.Y. 2001). Finally, by Memorandum Opinion and Order dated November 5, 2001, this Court, faced with Pentagen's "vexatious litigation strategy and needless occupation of judicial resources," enjoined Pentagen from filing further litigation without permission of the Court. Pentagen, 172 F. Supp. 2d at 474.

  Faced with an inability to bring another suit, and armed with allegedly new evidence that purports to show that the Government received an alternative version of MENTIX which it has failed to return, see Mem. in Supp. at 2-9, Pentagen breathed new life into this action by filing a motion, dated April 29, 2005, in which it seeks to force the Government to return "all versions of software known as MENTIX in the possession of the United States," id. at 1. The Government submitted a response dated June 7, 2005, and the Court heard Oral Argument on creditor's Motion on July 18, 2005.

  DISCUSSION

  Pursuant to Federal Rule of Civil Procedure 69(a) "[t]he procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held." Fed.R.Civ.P. 69(a). Article 52 of the New York Civil Practice Law and Rules governs the enforcement of judgments in New York, and therefore is applicable here. See N.Y.C.P.L.R. art. 52; Alliance Bond Fund, Inc. v. Grupo Mexicano De Desarrollo, S.A., 190 F. 3d 16, 20, 21 n. 4 (2d Cir. 1999).

  Section 5225 sets forth the procedures for the return of property. Under section 5225(a), a judgment creditor can seek turnover of property held by the judgment debtor "[u]pon motion" in the original action. N.Y.C.P.L.R. 5225(a). However, when the property sought is in the possession of someone other than the judgment debtor, the judgment creditor must follow the procedure set forth in section 5225(b), which requires that the creditor "commence an action against the person in possession," Alliance Bond Fund, Inc., 190 F.3d at 21, instead of merely filing a motion in the original action, see N.Y.C.P.L.R. 5225(b); David D. Siegel, Practice Commentaries, N.Y.C.P.L.R. 5225, at 264-65 (McKinney 1997) (explaining that subsection (b) requires a special proceeding "bearing its own caption").

  In this case, the Government contends that "Pentagen cannot proceed by mere motion against the Government to enforce its judgment against Runaway" and therefore "Pentagen's motion should be denied. Mem. in Opp'n at 15.

  This Court agrees. Pentagen now seeks the turnover of the MENTIX software from the Government, a non-party to this action. Because Rule 69(a) of the Federal Rules of Civil Procedure dictates that state procedures be followed, and because section 5225(b) is applicable to this situation, Pentagen is required to commence a new action against the Government in order to attain the sought-after relief. Therefore the present motion is an improper vehicle for seeking this relief and must be denied.

  In addition to this procedural defect, the Government asserts that a number of additional bars preclude the relief that Pentagen seeks. The Government argues that any suit based on this subject matter would be barred by sovereign immunity and by the doctrines of claim and issue preclusion.

  Under the doctrine of sovereign immunity, the "United States, as sovereign, is immune from suit save as it consents to be sued." United States v. Sherwood, 312 U.S. 584, 586 (1941). The United States has consented to suit pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 702, which provides for "final agency actions to be reviewed by federal courts if there is a claim `that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority,' and the relief ...


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