Crestwood Capital Corp. v. Andes Indus., CV-15-00600-PHX-NVW
| Decision Date | 11 December 2019 |
| Docket Number | No. CV-15-1810-PHX-NVW,No. CV-15-00600-PHX-NVW,No. CV-15-00604-PHX-NVW,CV-15-00600-PHX-NVW,CV-15-00604-PHX-NVW,CV-15-1810-PHX-NVW |
| Parties | Crestwood Capital Corporation, Plaintiff and Judgment Creditor, v. Andes Industries Inc., Defendant and Judgment Debtor. Garnishee: PCT International, Inc. Devon Investment, Inc., Plaintiff and Judgment Creditor, v. Andes Industries, Inc., Defendant and Judgment Debtor. Garnishee: PCT International, Inc. Andes Industries, Inc., and PCT International, Inc., Plaintiffs and Judgment Debtors,, v. EZconn Corporation and eGTran Corporation, Defendants and Judgment Creditors. Garnishee: PCT International, Inc. |
| Court | U.S. District Court — District of Arizona |
Plaintiffs and Judgment Creditors Crestwood Capital Corporation ("Crestwood") and Devon Investment, Inc. ("Devon") purport to withdraw their respective supplements to their replies to Andes Industries, Inc.'s ("Andes") Objection to Writ of Garnishment (Doc. 382, CV-15-00600; Doc. 113, CV-15-00604), along with the supporting declarations and exhibits thereto (Docs. 382-1, 382-2, CV-15-00600; Docs. 113-1, 113-2, CV-15-00604) without explanation. Those attempted withdrawals are rejected. Moreover, a withdrawal would have no significance anyway.
A. Background and the Pending Matters
The only matters before the Court for decision are: Judgment Debtor Andes' Objection to Writ of Garnishment and Request for Hearing in Crestwood Capital Corporation v. Andes Industries, Inc., No. CV-15-00600 (Doc. 359); Andes' Objection to Writ of Garnishment and Request for Hearing in Devon Investment, Inc. v. Andes Industries, Inc., No. CV-15-00604 (Doc. 90); and Andes' Objection to Writ of Garnishment and Request for Hearing in Andes Industries, Inc. and PCT International, Inc. v. EZconn Corporation and eGTran Corporation, No. CV-15-01810 (Doc. 76) (together, the "Objections"). The garnishing creditors, Crestwood, Devon, EZconn Corporation, and eGTran Corporation are collectively referred to as the Judgment Creditors.
These actions are three of six related, previously-consolidated, actions that havebeen the subject of over a dozen substantive orders of the Court and a half-dozen decisions of the Court of Appeals.
Briefly, four of the actions were brought on loans of nearly $9 million and unpaid invoices of $6.6 million (plus pre-judgment interest). The debtors brought the other two actions to offset those liabilities with other claims of the debtors. Summary judgment was granted in favor of the lender or seller and against the borrower or purchaser in the four collection actions and in favor of the lender or seller against all the offset claims. The Court of Appeals affirmed all the judgments in the six actions, save for two relating to attorneys' fees awards.
The Objections concern Judgment Creditors' attempts to collect on their judgments by garnishing Andes' shares in garnishee PCT International, Inc. ("PCT"), Andes' wholly owned subsidiary. The Court held oral argument on the Objections on November 6, 2019 (Doc. 381, CV-15-00600; Doc. 112, CV-15-00604; Doc. 115, CV-15-01810). The substantive dispute is whether Nevada law, under which Andes' shares in PCT would be exempt from execution, or Arizona law, under which they would not be exempt, applies. At the oral argument, the Court rejected the Judgment Creditors' contention that Rule 69(a)(1), Federal Rules of Civil Procedure, mandates the application of Arizona law to the exemption question but also made clear that Arizona substantive law applies under Arizona's choice of law rules (though not under the force of Rule 69).
At the oral argument, Andes and PCT also pressed the point, first raised in their reply briefs, that Andes (the alleged holder of the stock certificate), and not PCT (the issuing corporation), is the proper garnishee of the stock interest, relying on the case of Tryon v. Silverstein, 10 Ariz. App. 25, 455 P.2d 474 (Ct. App. 1969). On November 19, 2019, Crestwood and Devon each filed a Second Supplement to their respective replies to Andes Industries, Inc.'s Objection to Writ of Garnishment, along with supporting declarations and exhibits (Docs. 382, 382-1, 382-2, CV-15-00600; Docs. 113, 113-1, 113-2, CV-15-00604), which presented intervening Arizona statutes that overturned the holding of Tryon and re-established that garnishment of a certificated share in corporatestock may be addressed to the issuing corporation, even if the stock certificate is held by another person. (In effect, the garnishment can be addressed to either the issuing corporation or the holder of the certificate, with some differences in effect.) Crestwood and Devon also presented evidence that PCT's directors and officers are the same as Andes'. Those facts are contained in judicially noticeable records of the Arizona Corporation Commission.
Unbeknownst to the Court, on ...
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