Duchek v. Jacobi

• Decision Date: 29 May 1981
• Docket Number: No. 79-3811,79-3811
• Citation: 646 F.2d 415
• Parties: Frances DUCHEK and Arthur Duchek, Plaintiffs/Appellees, v. Rudolph JACOBI and Elfi Jacobi, Defendants/Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 415

646 F.2d 415

Frances DUCHEK and Arthur Duchek, Plaintiffs/Appellees, v. Rudolph JACOBI and Elfi Jacobi, Defendants/Appellants.

No. 79-3811.

United States Court of Appeals, Ninth Circuit.

Submitted March 11, 1981.

Decided May 29, 1981.

John A. Bergen, Santa Ana, Cal., for defendants-appellants.

Jacob Paull, Los Angeles, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California.

Before MERRILL and TANG, Circuit Judges, and McNICHOLS, ^* District judge.

TANG, Circuit Judge.

This appeal follows the execution and sale of real property in satisfaction of a judgment secured in federal district court against Rudolph and Elfi Jacobi. The Jacobis contend that the confluence of Federal Rule of Civil Procedure 69(a) and California Civil Code §§ 1245, 1247, deprived the district court of jurisdiction to enforce the judgment. We disagree and affirm the district court.

Rudolph and Elfi Jacobi (Jacobi) were the owners and operators of a traveling circus known as the "Rudy Brothers Circus". During the winter months, the circus, its equipment and assets were quartered on real property in Riverside County, California. Part of this property was improved with a residence and the other portion was unimproved and used to store the circus equipment.

Katherina Duchek was killed in a circus accident on July 17, 1963 while in Jacobi's employ. Arthur and Frances Duchek, the husband and daughter of Katherina, brought a diversity action in tort in the Central District of California against Jacobi. Following trial they were awarded the sum of $25,000. After that action had been filed but before judgment was entered, Rudolph Jacobi, apparently without any consideration, conveyed the circus business and all of its assets to his wife Elfi. The Ducheks brought the present action to set aside the transfer of assets as fraudulent. The district court entered a $19,395.77 judgment against Jacobi and an abstract of judgment was recorded in Riverside County. In the meantime, on October 24, 1973, Jacobi recorded a Declaration of Homestead affecting the subject real property.

Following judgment, the district court issued a writ of execution that was subsequently recorded. Duchek then filed in district court for a petition for appointment of appraisers of homestead pursuant to Cal.Civ.Code §§ 1245-1261 (West 1954). After the hearing, and over Jacobi's objections to the jurisdiction of the court, the federal magistrate ordered that three of the four parcels of real property be set aside from the homestead exemption and sold pursuant to the writ of execution. The execution sale was subsequently held and the writ returned.

Jacobi's sole contention on appeal is that the district court did not have jurisdiction to enforce its judgment in setting aside as fraudulent the conveyance from Rudolph to Elfi Jacobi.

Federal Rule of Civil Procedure 69(a) provides in part:

The 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, existing at the time the remedy is sought, except that any statute of the United States governs to the extent that it is applicable.

In observing the mandate of rule 69(a), the district court applied the "procedure and practice" of California, the state in which it sat. The relevant California statutes identified by the court were Cal.Civ.Code §§ 1245, 1247. ¹

Section 1245 provides:

When an execution for the enforcement of a judgment obtained in a case not within the classes enumerated in section (1241) is levied upon the homestead, the judgment creditor may at any time within sixty days thereafter apply to the superior court of the county in which the homestead is situated for the appointment of persons to appraise the value thereof, and if such application shall not be made within sixty days after the levy of such execution the lien of the execution shall cease at the expiration of said period, and no execution based upon the same judgment shall thereafter be levied upon the homestead.

Cal.Civ.Code § 1245 (emphasis added).

Section 1247 provides that "(t)he petition must be filed with the clerk of the superior court". Id. § 1247 (emphasis added).

Jacobi argues that, although the district court otherwise assiduously tracked the appropriate California procedures to enforce the judgment, sections 1245 and 1247 divested the federal district court of jurisdiction to enforce the judgment. In other words, Jacobi argues that rule 69(a) may be construed to eliminate a federal district court's jurisdiction to enforce judgments when the applicable state procedure facially requires that proceedings be held in a state tribunal.

Such an interpretation of rule 69(a) radically distorts the rule's plain language. The rule unmistakably contemplates proceedings in federal court according to state practice and procedure, not jurisdiction in state courts: "(E)xecution 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) (emphasis added).

No other interpretation of Federal Rule of Civil Procedure 69(a) has ever prevailed. That rule 69(a) is one of procedure and practice, not jurisdiction, is made obvious by reference to the advisory notes attending it: "(T)he rule specifies the applicable state law to be that of the time when the remedy is sought, and thus renders unnecessary, as well as supersedeas, local district court rules." Fed.R.Civ.P. 69(a) note (1976) (emphasis added). As we observed in Hamilton v. MacDonald, 503 F.2d 1138 (9th Cir. 1974):

The drafters of the Federal Rules, in merging the two sets of procedures formerly applicable to federal courts sitting in law or equity, did not consider development of an entirely new series of rules on supplementary proceedings worthwhile. They therefore simply continued former practice. As most states had adequate supplementary proceedings to enforce money judgments, Rule 69(a) followed R.S. § 916 in adopting state practice for execution of a money judgment, whether it derived from a formerly legal judgment or equitable decree. Previously available federal remedies to enforce equitable decrees, including writs of assistance, continued, on the other hand, to be available under the terms of Rule 70, without reference to state practice.

Id. at 1148-49 (citation and footnote omitted).

Nothing in this recitation of the purpose behind rule 69(a) remotely suggests that a federal district court must cede jurisdiction to a state tribunal when a literal reading of the applicable state law indicates that enforcement proceedings must be held in a certain state court. Indeed, an in pari materia construction of rules 69(a) and 70 accentuates the absurd results of such a notion. Because enforcement of equitable judgments under rule 70 is not referable to state law, only the enforcement of legal judgments under rule 69 would be potentially susceptible to state court jurisdiction. Surely there is no intent manifest in either rule 69(a) or rule 70 to make federal jurisdiction over enforcement proceedings contingent upon a characterization of a judgment as either legal or equitable.

In the absence of controlling federal statutes, "the district court has the same authority to aid judgment creditors as that provided to state courts under local law." United States ex rel. Goldman v. Meredith, 596 F.2d 1353, 1357 (8th Cir. 1979), cert. denied, 444 U.S. 838, 100 S.Ct. 76, 62 L.Ed.2d 50 (1980). At least one court has specifically found that rule 69(a) cannot be read to relinquish federal jurisdiction, Green v. Benson, 271 F.Supp. 90, 93 (E.D.Pa.1967), and several others have either expressly or tacitly proceeded under the same assumption. See, e. g., Yazoo & M. V. R. R. Co. v. Clarksdale, 257 U.S. 10, 16, 42 S.Ct. 27, 28, 66 L.Ed. 104 (1921) (in resolving a separate jurisdictional question, Court notes that "authority of United States Marshal to make sales upon judgments in the United States Courts and to give title thereby is not drawn into question "); Travelers Ins. Co. v. Lawrence, 509 F.2d 83, 88 (9th Cir. 1974) (court assumes that under Fed.R.Civ.P. 69(a) district court had jurisdiction in mortgage foreclosure sale in Oregon); Weir v. United States, 339 F.2d 82, 84 (8th Cir. 1964) (district court had jurisdiction to apply Arkansas law); Chambers v. Blickle Ford Sales, Inc., 313 F.2d 252, 256 (2nd Cir. 1963) (district court had jurisdiction to apply Connecticut law in rule 69(a) proceeding); Edmonston v. Sisk, 156 F.2d 300, 302 (9th Cir. 1946) (assuming jurisdiction would lie with federal district court, not "county judge", in absence of specific federal law); Mission Bay Campland v. Sumner Financial Corp., 71 F.R.D. 432, 433 & n. 1 (M.D.Fla.1976) (district court asserts federal marshal's jurisdiction under rule 69(a) even though Florida statute authorized "sheriff" to perform the function); Blood v. Munn, 155 Cal. 228, 232, 100 P. 694, 696 (1909) (state court concedes that district court in bankruptcy proceedings has jurisdiction to apply California homestead exemption); cf. Ivor B. Clark Co. v. Hogan, 296 F.Supp. 398, 402 (S.D.N.Y.), modified on other grounds, 296 F.Supp. 407 (1968) (district court in New York, adhering to New York conflict of laws, applies Georgia law rather than ceding jurisdiction to Georgia state courts).

The principal error in Jacobi's argument is the assumption that state law must be applied in a hypertechnical manner in rule 69(a) proceedings. We are not free to pursue such a literalism under rule 69(a) because "state rules are to be applied in a common sense manner and those which make sense only where applied to state courts need not be imported into federal practice." Anderson v. Tucker, 68 F.R.D. 461, 462-63 (D.Conn.1975). Sections 1245 and 1247 are essentially...