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Plunket v. Estate of Doyle

January 12, 2009

ANDREA PLUNKET, PLAINTIFF,
v.
ESTATE OF DAME JEAN CONAN DOYLE, ET AL., DEFENDANTS.
ESTATE OF DAME JEAN CONAN DOYLE, ET AL., PETITIONERS,
v.
PANNONIA FARMS, INC., AND ANDREA PLUNKET, RESPONDENTS.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

OPINION and ORDER

Petitioners and Judgment Creditors Estate of Dame Jean Conan Doyle, Geoffrey Michael Pooley, and Charles Foley (collectively, "Judgment Creditors") ask the Court (1) for a judgment on the pleadings declaring Respondent and Judgment Debtor Andrea Plunket ("Judgment Debtor") the rightful and/or beneficial owner of Respondent Pannonia Farms, Inc. ("Pannonia"), and (2) to appoint a receiver to sell shares in Pannonia's stock to satisfy Judgment Creditors' judgment against Judgment Debtor (the "Enforcement Motion"). For the reasons below, to the extent the Court has jurisdiction to hear Judgment Creditors' Enforcement Motion, it is DENIED.

I. Background

The Enforcement Motion stems from a copyright infringement action brought by Judgment Debtor against Judgment Creditors. The Court granted Judgment Creditors' motion to dismiss that action. Judgment Creditors then moved the Court to grant them attorneys' fees and costs pursuant to 17 U.S.C. § 505, which the Court granted in the amount of $135,521.04 (the "judgment debt").

On June 9, 2008, Judgment Creditors filed the Enforcement Motion (1) seeking a special proceeding and judgment, pursuant to Federal Rule of Civil Procedure 69, New York Civil Practice Law and Rules ("CPLR") § 5225(b), and New York Debtor and Creditor Law ("DCL") § 276, declaring Judgment Debtor the rightful and/or beneficial owner of Pannonia based on her (a) dominance and control of Pannonia, and (b) fraudulent conveyance of assets to Pannonia; and (2) seeking appointment and authorization of a Receiver, pursuant to CPLR § 5228, to take possession of and sell shares of Pannonia's stock in order to pay the judgment debt.

In support, Judgment Creditors contrast Judgment Debtor's deposition testimony indicating that she has no income or assets (and has had none since the early 1980s),*fn1 with her deposition testimony stating that she resides in a home owned by Pannonia and is Pannonia's sole officer.*fn2 (Enforcement Mot. 4-6.) They also believe that she operates and manages a luxury bed and breakfast, which, according to Judgment Debtor's testimony is owned by Pannonia. (Id. at 5.) Based on this, Judgment Creditors allege that Judgment Debtor has fraudulently hidden her assets and income from creditors by leaving ownership of Pannonia in her daughter's name while using its assets and finances. (Id. at 3-4.)

Judgment Debtor, in her Opposition to the Enforcement Motion ("Opposition"), denies that she fraudulently conveyed assets or is the rightful and/or beneficial owner of Pannonia.*fn3 Judgment Debtor contends that her father transferred Pannonia to her daughter (his granddaughter) in 1982, and provides evidence in support of this contention.*fn4 (Opp'n 3, Ex. 1.) She acknowledges that she runs Pannonia's bed & breakfast, but argues that she does so in order to pay Pannonia's taxes, maintenance, and improvements. (Id.) She also states that her husband, not she, has a lease to a Pannonia-owned home, which he was granted as consideration for loans he made to Pannonia. (Id.)

Judgment Debtor also argues that there is nothing fraudulent about her financial arrangements. Instead, she states that, "[f]or religious and philosophic reasons, I [Judgment Debtor] renounced owning material possessions during the 1980[]s." (Opp'n 2.)

Judgment Creditors Reply by arguing that Judgment Debtor has failed to dispute any material facts and by asking the Court for a judgment on the pleadings. (Reply 3.)

II. Discussion

The Court lacks jurisdiction to hear Judgment Creditors' beneficial ownership claim, but does have jurisdiction over their efforts to recover assets Judgment Debtor allegedly fraudulently conveyed to Pannonia. For the reasons stated below, the Court finds that the pleadings and papers before the Court do not support Judgment Creditors' fraudulent conveyance claim. Accordingly, the Court enters judgment for Judgment Debtor and against Judgment Creditors in this special proceeding.

A. The Court's Jurisdiction

Although the Court has jurisdiction over supplementary proceedings to enforce its judgments, the Court lacks jurisdiction over supplementary proceedings that seek to impose liability on a third-party to the original litigation through alter ego or veil piercing theories.

Federal Rule of Civil Procedure 69(a) ("Rule 69"), provides a mechanism for parties to seek the Court's aid in executing its judgments. However, the parties can not use proceedings pursuant to Rule 69 to impose liability on a third-party to the original litigation. A federal court has an "inherent power to enforce its judgments." Peacock v. Thomas, 516 U.S. 349, 357 (1996). Pursuant to this power, the Supreme Court has "approved [district courts'] exercise of ancillary jurisdiction over a broad range of supplementary proceedings involving third parties to assist in the protection and enforcement of federal ...


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