American Employers Insurance Co. v. Sybil Realty, Inc., Civ. A. No. 9427
| Decision Date | 30 June 1967 |
| Docket Number | Civ. A. No. 9427,9582. |
| Citation | 270 F. Supp. 566 |
| Parties | AMERICAN EMPLOYERS INSURANCE COMPANY et al. v. SYBIL REALTY, INC., et al. SYBIL REALTY, INC., et al. v. AMERICAN EMPLOYERS INSURANCE COMPANY et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
Edward F. Wegmann, New Orleans, La., for Roy Gottlieb, Liquidator of King Brothers Construction Co., Inc.
David L. Hermann, Frank J. Peragine, and William W. Messersmith, III, New Orleans, La., for Underwriters.
On September 20, 1963, a judgment was rendered in this Court in favor of American Employers Insurance Company, et al and against Richard A. King, et al in the sum of $170,000.00 plus interest and costs.
On January 9, 1964 American Employers Insurance Company, et al, (hereafter referred to as Underwriters) as judgment creditors of Richard A. King obtained a writ of execution against Richard A. King and pursuant to this writ of execution King Brothers Construction Company, Inc. was made garnishee. In answer to interrogatories propounded by the garnisher, the garnishee denied that Richard A. King was employed by it or that it had any property or funds in its possession belonging to Richard A. King.
On February 7, 1964, Underwriters filed a motion to traverse the answers to the interrogatories given by the garnishee King Brothers Construction Company, Inc.
As a result of the evidence adduced at the hearing on this motion to traverse, a judgment was rendered in favor of Underwriters and against King Brothers Construction Company, Inc. as garnishee. This judgment was entered September 30, 1964. The Court, at that time found that Richard A. King was in the employ of King Brothers Construction Company, Inc. and ordered that corporation as garnishee to pay to the garnishers, the judgment creditors of Richard A. King, twenty per cent of $1,987.00 monthly, which was twenty per cent of Richard A. King's average monthly compensation. This amount was to be applied in satisfaction of the judgment rendered on September 20, 1963. The payments ordered were made retroactive to the date of service of the interrogatories on the garnishee, and were to continue until the judgment rendered on September 20, 1963 was satisfied or until further order of the Court.
On October 23, 1964, on joint motion of all counsel, the garnishee, King Brothers Construction Company, Inc. deposited $10,000.00 in the registry of the Court and obtained the release of other assets which had been seized by Underwriters.
On December 31, 1964 a motion of the garnishee for a new trial and for a stay order was denied.
On January 15, 1965 Underwriters were allowed to withdraw $7,886.40, upon a showing that this amount had accrued under the terms of the court's judgment of September 30, 1964.1
On April 19, 1966 the United States Court of Appeals, Fifth Circuit, affirmed this Court's judgment of September 30, 1964.
On September 2, 1966 this Court upon the ex parte motion of Underwriters rendered a supplemental judgment against King Brothers Construction Company, Inc. as garnishees in the amount of $7,812.38 which was the accrued amount under the terms of the September 30, 1964 judgment for the period January 11, 1965 through August 31, 1966. In conjunction with this supplemental judgment Underwriters were allowed to withdraw $1,980.30 from the registry of the Court which was the balance remaining out of the original $10,000.00 deposited in the registry of the Court by King Brothers Construction Company, Inc. after payment of certain Marshal's fees.
Now before the Court is a motion by Roy Gottlieb, the liquidator of King Brothers Construction Company, Inc. to cancel and set aside the judgment of September 30, 1964 against King Brothers Construction Company, Inc. as garnishee, to cancel, annul and set aside the supplemental judgment and order rendered on September 2, 1966 in favor of Underwriters and for an order staying execution of, or any proceedings to enforce the judgment of September 2, 1966 until the instant motion has been decided.
The stay order requested was made by this Court on November 28, 1966.
A hearing was held on December 7, 1966 at which both the liquidator and a certified public accountant under whose direction an audit of King Brothers Construction Company, Inc. was made, testified.
It is undisputed and, the testimony and documentary evidence produced at the hearing on this motion confirms, that King Brothers Construction Company, Inc. is in fact in liquidation and that Roy Gottlieb is the duly appointed liquidator.
Mr. Gottlieb testified unequivocably that Richard A. King, the judgment debtor herein has no interest whatsoever in King Brothers Construction Company, Inc. and has had no interest or received any compensation from King Brothers Construction Company, Inc. since at least July 12, 1965, the date Roy Gottlieb was appointed as liquidator.
The movers also point out that the audit reports indicate that Richard A. King last drew a salary as an officer of the King Brothers Construction Company, Inc. in August of 1963 and that the last disbursement from Richard A. King's drawing account with King Brothers Construction Company, Inc. was in January of 1964.
Because of this evidence the mover argues that King Brothers Construction Company, Inc.'s liability as garnishee ceased as of the date that the employment of Richard A. King by the garnishee had terminated.
Underwriters argue first that the evidence adduced at the hearing of this motion, which was introduced subject to objection was inadmissible since it sought to explain and establish matters which occurred prior to the filing of the instant motion.
Their argument in this regard is two fold. They first contend that Louisiana Revised Statutes, Title 13, § 3923 provides only for an order affecting the continuance of a judgment against a garnishee but makes no provisions for retroactive effect of any relief from a prior judgment sought by a garnishee because of a change in the relationship between the garnishee and the judgment debtor. Section 3923 reads as follows:
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