MEMORANDUM AND ORDER ON PLAINTIFF BOARD OF COMMISSIONERS OF STARK COUNTY, OHIO'S MOTION FOR REDELIVERY OF GOODS (#8, filed 4/12/02)
I. The Facts
The Board of Commissioners of Stark County, Ohio (" the Board" or "theplaintiff") contracted with the defendants, Cape Stone Works, Inc., andStephen Lonsdale (collectively, "Cape Stone" or "the defendants") tosupply specifically cut stones to rebuild the clock tower of the StarkCounty courthouse in North Canton, Ohio. According to the contract, CapeStone was to deliver 324 pieces of stone. Of the 324, 124 have beendelivered; 200 have not. The stones are located on Cape Stone's premisesin Harwichport, Massachusetts.
When Cape Stone failed to fulfill the terms of the contract, the Boardsued the defendants in the United States District Court for the SouthernDistrict of Ohio. The Complaint (#19, Exh. A) contained claims forbreach of contract, unjust enrichment and fraud and sought money damagesin the amount of $232,847.00 and that the ". . . Court order specificperformance of the parties' contract." Id. The defendants did not respondto the summons and were defaulted. A Judgment Entry Granting Default(#19, Exh. B) wasentered January 10, 2001. The Judgment provided, in pertinent part:
It is herein ORDERED, ADJUDGED and DECREED that judgment is hereby granted in favor of Plaintiff, Board of Commissioners of Stark County, Ohio against the Defendants, Cape Stone Works, Inc., and Stephen Lonsdale, on all counts of Plaintiff's complaint for breach of contract, unjust enrichment and fraud. Therefore, it is hereby an order of this Court that judgment is entered against Cape Stone Works, Inc. and Defendant Stephen Lonsdale, separately and individually, in the amount of $327,148.54.
IT IS SO ORDERED.
The judgment was registered in the United States District Court for theDistrict of Massachusetts on December 5, 2001. (#1) First Execution[s](##2 & 3) were issued the same day and were served on December 6, 2001.The defendants did not pay over the amount of the executions. Id. OnApril 12, 2002, the Board filed a motion for a preliminary injunction torestrain the defendants from "altering, selling, disposing, dissipatingand/or removing" the stone. (#6) On April 19, 2002, Judge Wolf deniedthe motion without prejudice and directed that the defendants be servedand respond to the motion within seven days. Service was made on April22, 2002. (## 12 & 13) The defendants have not responded in any manner.
On May 9, 2002, Judge Wolf referred the motion for a preliminaryinjunction to the undersigned for a Report and Recommendation. A Reportand Recommendation was issued on May 10, 2002 recommending that apreliminary injunction be issued. Objections by the defendants to theReport and Recommendation were due within ten days (see28 U.S.C. § 636(b)(1)(B)) but none were filed. The undersigned hasbeen informed that Judge Wolf issued the injunction today pendingcompletion of supplementary process.
On April 12, 2002, in addition to filing the motion for a preliminaryinjunction, the plaintiff filed the instant motion entitled Plaintiff[`s]Motion for Redelivery of Goods (#8) together with a memorandum insupport. (#9) The motion requests that the Court act pursuant toFed.R.Civ.P. 69, Mass.Gen.L. c. 214, § 3 and Rule 65.2,Mass.R.Civ.P., and ". . . enter an order requiring [Cape Stone] tore-deliver the stone products currently in its possession, custody andcontrol relative to the Stark County Courthouse . . ." or,alternatively, ". . . to allow Plaintiff to take possession of said stoneproducts." (#8)
The Court ordered the Board to brief the motion further, which has beendone. The matter is now in a posture for resolution.
II. Analysis
While it is true that the Ohio federal court complaint contained claimsfor breach of contract, unjust enrichment, and fraud and sought as aremedy, "[t]hat this Court order specific performance of the parties'contract," (#19, Exh. A), the plain fact is that the judgment did notcontain any order to that effect. (#19, Exh. B) The judgment contains noequitable relief whatever, and, therefore, must be deemed to be "ajudgment for the payment of money" which is governed by Rule 69(a),Fed.R.Civ.P., rather than a judgment which "directs a party . . . toperform [] a specific act" which is governed by Rule 70, Fed.R.Civ.P.
Rule 69(a), Fed.R.Civ.P., provides, in pertinent part, that:
Process to enforce a judgment for the payment of money shall be a writ of execution unless the court directs otherwise.
Plaintiff's counsel takes the position that the clause "unless the courtdirects otherwise" permits the Court to grant equitable relief, includinga "redelivery" of the goods. That is not the case. The First Circuithas held that:
The "otherwise" clause is narrowly construed. See Combs [v. Ryan Coal Co.], 785 F.2d [970] at 980 [(11 Cir., 1986)]. It does not authorize enforcement of a civil money judgment by methods other than a writ of execution, except where "well established principles [so] warrant." 13 J. Moore, Moore's Federal Practice ¶ 69.02, at 69-5 to -7 (3d ed. 1997); see also Hilao v. Estate of Marcos, 95 F.3d 848, 854 (9th Cir. 1996).
Aetna Casualty and Surety Co. v. Markarian, 114 F.3d 346, 349 (1 Cir.,1997) (footnote omitted).
To the same effect is Shuffler v. Heritage Bank, 720 F.2d 1141, 1148 (9Cir., 1983) (quoting 7 J. Moore and J. Lucas, Moore's Federal Practice ¶69.03[2] (2d ed. 1982). See also Gabovitch v. Lundy, 584 F.2d 559, 560-1(1 Cir., 1978). "Ordinarily, the equitable remedies provided underRule 70 are not appropriate in enforcing a money judgment." Spain v.Mountanos, 690 F.2d 742, 744-5 (9 Cir., 1982).
When do ". . . established principles . . . warrant" the use of othermethods? One treatise suggests the situation in which ". . . execution isan inadequate remedy." 13 Moore's Federal Practice, § 69.02 (3ded.). See United States v. Gritz Brothers Partnership, 868 F. Supp. 254,256-7 (E.D.Wis., 1994) citing Robbins v. Labor Transportation Corp.,599 F. Supp. 705, 707 (N.D.Ill., 1984). But this is not the law of theFirst Circuit. In the Aetna case, the First Circuit gave same examplesof situations in which "established principles . . . warrant" the use ofother methods, writing:
One such situation is where an action for contempt has been instituted for failure to pay an obligation imposed by statute in order to enforce the public policies embodied in the statutory scheme. See, e.g., McComb v. Jacksonville Paper Co., 336 U.S. 187, 193-5, 69 S.Ct. 497, 500-01, 93 L.Ed. 599 (1949). Another is where there has been a congressional determination to provide the government with the ability to seek a writ of ne exeat in furtherance of enforcing a tax obligation. See, e.g., 26 U.S.C. § 7402(a). A third is where the judgment is against a state which refuses to appropriate funds through the normal process provided by state law. See, e.g., Spain v. Mountanos, 690 F.2d 742, 744-5 (9th Cir, 1982); Gary W. v. Louisiana, 622 F.2d 804, 806 (5th Cir. 1980). In contrast, the size of the award and the difficulties in enforcing the judgment due to the location of the assets and the uncooperativeness of the judgment debtor are not the types of extraordinary circumstances which warrant departure from the general rule that money judgments are enforced by means of writs of execution than by resort to the contempt power of the courts. See Hilao, 95 F.3d at 855.
Aetna, 114 F.3d at 349, n. 4.
It is thus clear that a writ of execution is the only means by whichthe plaintiff may enforce the money judgment. However, Rule 69(a),Fed.R.Civ.P., also provides that:
The procedure on execution, in proceedings supplementaary to and in aid of execution, shall be in accord with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought . . .
Emphasis added.
Thus, if Massachusetts law provides that redelivery of goods ispermissible "in aidof execution," there would be a basis for ordering redelivery.
The statute cited by the plaintiff, Mass.Gen.L. c. 214, § 3, doesnot provide such a basis for "redelivery" of goods in aid of execution ofa money judgment. Mass.Gen.L. c. 214, § 3(1) provides a cause ofaction for ". . . the redelivery of goods or chattels taken or detainedfrom the owner"; however, there is nothing to indicate that that remedyis available in aid of execution of a money judgment.1 Similarly,Rule 65.2, Mass.R.Civ.P., provides a prejudgment remedy for redelivery ofgoods pending a trial on the merits of a claim under Mass.Gen.L. c. 214,§ 3, but there is nothing in Massachusetts law which would supportthe proposition that the remedy is available post-judgment "in aid ofexecution" of a money judgment.
Massachusetts law does provide a procedure pursuant to whichsupplementary process proceedings may be used to discover a debtor'sassets and enter orders requiring that such assets be used to satisfy ajudgment, including that goods be conveyed to the judgment creditor. SeeMass.Gen.L. c. 224, § 14 et seq.; see also Geehan v. TrawlerArlington, Inc., 371 Mass. 815, 817-18, 359 N.E.2d 1276, 1278 (1977)(supplementary process could issue against an insurance company which wasnot a party to obtain moneys to satisfy a money judgment against itsinsured for a liability without the necessity of the judgment creditorfiling a separate action to reach and apply).2 Section 14 ofMass.Gen.L. c. 224 provides a mechanism through which a creditor mayrequire a debtor to appear in court and be questioned under oath abouthis assets. If he fails to appear after proper notice, the court mayenter orders in his absence. See Mass.Gen.L. c. 224, § 15. If,after a full hearing, the Court finds the debtor has non-exemptproperty, "the court may order him . . . to produce it . . .; or may orderthe debtor to execute, acknowledge if necessary, and delivery[sic] to thejudgment creditor . . . a transfer, assignment, or conveyance thereof . . ."Mass.Gen.L. c. 224, § 16. If the debtor does not redeem personalproperty within sixty days,
it shall be sold forthwith at public auction, unless in the transfer, conveyance or assignment thereof it was otherwise provided, and the proceeds, after deducting the expenses of such care, custody and sale, shall be applied to the payment of said judgment and costs, and the excess, if any, remaining after such payments, shall be paid to the debtor; or the creditor may take said property at a valuation to be fixed by the debtor in the transfer, assignment or conveyance and apply such amount in payment as aforesaid.
Mass.Gen.L. c. 224, § 17(emphasis added). Thus, although the statutecited by the plaintiff does not provide it with the remedy it seeks, theprovisions of Mass.Gen.L. c. 224 may.
In light of the foregoing, the Court will deny the motion forredelivery of goods as drafted.3 If the plaintiff wishes to availitself of the remedies afforded by Mass.Gen.L. c. 224, it shall file anapplication for supplementary process in the instant case (M.B.D.01-10442) with a request that a summons issue. Upon receipt the Courtwill summon the defendants to appear before it to be examined under oathas to their ability to pay the judgment. If the defendants fail toappear, the Court will entertain requests from the plaintiff to issueorders, including orders pursuant to Mass.Gen.L. c. 224, § 15. Ifthe defendants do appear, the Court will hold a full hearing and thenentertain requests by the plaintiff for appropriate orders.
III. Order
It is ORDERED that the Plaintiff Board of Commissioners of StarkCounty, Ohio's Motion for Redelivery of Goods (#8) be, and the samehereby is, DENIED without prejudice to invoking the supplementary processprocedures of the Massachusetts statutes.
1. In addition, the Court has grave doubts that an action pursuant toMass.Gen.L. c. 214, § 3(1) is the appropriate means to obtain theproperty on the facts of this case. The cause of action provided in thatstatute is one of "equitable replevin." Galdston v. McCarthy, 302 Mass. 36,18 N.E.2d 331 (1938). To bring such a claim, the plaintiff must be the"owner" of the goods or chattels. In the situation such as in theinstant case in which goods purchased pursuant to a contract have beenpaid for but not delivered, the buyer is not at this time the owner of thegoods. See Mass.Gen.L. c. 106, § 2-401(2)(b).
2. The Supreme Judicial Court in Geehan wrote that "The purpose [ofRule 69, Mass.R.Civ.P.] was to equip the court with all the traditionalcourt of equity." Geehan, 371 Mass. at 817-8, 359 N.E.2d at 1278. This ismade plain by the SJC's statement that:
Federal courts have employed Rule 69 to enforce money judgments against assets not reachable by execution without insisting on a separate creditor's bill. Green v. Benson, 271 F. Supp. 90, 93 (E.D.Pa., 1967). Cf. Chambers v. Bickle Ford Sales, Inc., 313 F.2d 252, 256 (2d Cir. 1963); O'Keefe v. Landow, 289 F.2d 465, 466 (2d Cir. 1961).
Id.
However, to the extent that it can be argued that the Supreme JudicialCourt construes the "otherwise" clause of Rule 69, Mass.R.Civ.P., broaderthan Rule 69, Fed.R.Civ.P., this Court is bound by the federal rule asconstrued by the First Circuit in the Aetna case.
3. The Court cannot help but note that this matter could have beenhandled rather easily if the default judgment in Ohio had provided forall of the relief sought in the Complaint, particularly the prayer forrelief in the form of specific performance of the contract. If thejudgment had included an order that the defendants perform the contractto the extent of requiring delivery of the completed stone to theplaintiff, Rule 70, Fed.R.Civ.P., would have provided a legallyuncomplicated way for the plaintiff to obtain the relief it seeks.