Enterprise Bank v. Magna Bank of Missouri

• Decision Date: 16 August 1995
• Docket Number: No. 4:94CV01411 GFG.,4:94CV01411 GFG.
• Citation: 894 F. Supp. 1337
• Parties: ENTERPRISE BANK, Plaintiff, v. MAGNA BANK OF MISSOURI, Defendant.
• Court: U.S. District Court — Eastern District of Missouri

894 F. Supp. 1337

ENTERPRISE BANK, Plaintiff, v. MAGNA BANK OF MISSOURI, Defendant.

No. 4:94CV01411 GFG.

United States District Court, E.D. Missouri, Eastern Division.

August 16, 1995.

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COPYRIGHT MATERIAL OMITTED

John S. Sandberg, Lyndon P. Sommer, Sandberg and Phoenix, St. Louis, MO, for plaintiff Enterprise Bank.

Douglas R. Sprong, Paul N. Venker, Armstrong and Teasdale, St. Louis, MO, for defendant Magna Bank of Missouri.

MEMORANDUM AND ORDER

GUNN, District Judge.

This matter is before the Court on various motions, including Magna Bank's ("Magna") motion for summary judgment. Document 14. For the reasons set forth below, the motion for summary judgment is granted.

Enterprise Bank ("Enterprise") commenced this action in the Circuit Court for the City of St. Louis, launching a collateral attack on the validity of a prejudgment attachment obtained by Magna of property then owned by Gustave and Laura Saettele ("the Saetteles") in Landmark Bank v. Saettele, No. 91-787C(5) (E.D.Mo.).¹ Magna removed the action to this Court.

In the amended complaint, Enterprise alleges that (1) Mo.Rev.Stat. § 521.010(1), which authorizes prejudgment attachment based solely on an individual's out-of-state residence, violates the Due Process and Equal Protection Clauses of the Fourteenth Amendment, the Privileges and Immunities Clause of article IV, § 2 of the United States Constitution, and the corresponding provisions of the Missouri Constitution; (2) the prejudgment attachment cannot be sustained under Mo.Rev.Stat. § 521.010(5), which allows for attachments based on exigent circumstances; (3) the attachment was ineffective as to Landmark stock owned by the Saetteles because Missouri law at the time did not permit attachment of stock by garnishment; and (4) the prejudgment attachment deprived Enterprise of its Due Process right to satisfy its judgment against the Saetteles.

A brief summary of the procedural history of this case is necessary. On March 29, 1991, Enterprise initiated an action in this Court against the Saetteles. Enterprise Bank v. Saettele, No. 91-616C(6) ("Enterprise action").² On April 15, 1991, Landmark Bank also filed suit against the Saetteles in this Court. Landmark Bank v. Saettele, No. 91-787C(5) ("Landmark action").³ On September 20, 1991, Landmark moved for and obtained a prejudgment attachment of the Saetteles' property. Landmark issued garnishments in aid of attachment to various entitles, including Oppenheimer & Co., Inc. Oppenheimer & Co. maintained a securities trust account owned by Gustave Saettele, which included cash reserves and shares of Landmark Bancshares Corporation stock. Pursuant to the garnishment, the United States Marshal levied Oppenheimer & Co. on September 26.

Thereafter, on December 17, 1991, Enterprise procured a judgment of over $800,000 against the Saetteles, which it swiftly attempted to satisfy.⁴ On January 3, 1992, Enterprise obtained a lien on real property the Saetteles owned in St. Louis County. Enterprise then registered its judgment in New York and sought to garnish shares of Landmark stock supposedly in the possession of the Depository Trust Corporation (DTC), which Landmark had previously attached in Missouri. This action prompted Landmark to request an injunction halting Enterprise's New York activities. This Court granted the injunction and granted Enterprise's motion to consolidate the two cases to resolve the dispute regarding the validity of Landmark's prejudgment attachment. See Enterprise Bank v. Saettele, 804 F.Supp. 1111, 1113 (E.D.Mo.1992).

This Court subsequently ruled that (1) Enterprise was barred from bringing an independent action due to its failure to appeal the denial of its motion to intervene in the Landmark action; (2) the Court lacked jurisdiction to consider Enterprise's constitutional attack on Mo.Rev.Stat. § 521.010(1) because the attachment was valid under Mo.Rev.Stat. § 521.010(5); (3) Enterprise lacked standing to challenge the attachment; and (4) the garnishment of Gustave Saettele's account at Oppenheimer was effective as to the Landmark stock. Id. at 1114-15. The United States Court of Appeals for the Eighth Circuit vacated this Court's judgment on the ground that this Court lacked jurisdiction to consolidate the two cases. Enterprise Bank v. Saettele, 21 F.3d 233 (8th Cir.1994). The opinion did not address the merits of this Court's other rulings. Id. at 233-37.

Before addressing the merits of Magna's motion for summary judgment, the Court must resolve two preliminary issues raised by Enterprise. The first issue is whether the Court will take judicial notice of pleadings from the two prior cases in this Court and a bankruptcy case pending in the United States Bankruptcy Court for the Middle District of Florida, styled In re Gustave J. & Laura E. Saettele, No. 92-13727-9P7. Magna requested that the Court take judicial notice pursuant to Federal Rules of Evidence 201(c). Document 15. Enterprise maintains the request is overbroad and does not state with particularity the adjudicated facts the Court should judicially recognize. Document 21.

A Court may take judicial notice of records of related proceedings before the same Court. MacMillan Bloedel, Ltd. v. Flintkote Co. 760 F.2d 580, 587-88 (5th Cir. 1985); In re Kroh, 87 B.R. 1004, 1005 (Bankr.W.D.Mo.1988); Green v. Wyrick, 428 F.Supp. 732, 735 (W.D.Mo.1976). Accordingly, the Court will take judicial notice of the records of the two earlier actions in the Eastern District of Missouri for the purpose of establishing the facts leading up to this action. (Most of these facts are not in dispute.) The Court will also take judicial notice of the two orders entered in the bankruptcy proceeding in order to recognize the judicial acts taken and the subject matter of that litigation. See United States v. Jones, 29 F.3d 1549, 1553 (11th Cir.1994).

Second, Enterprise asserts that it has not had sufficient time to conduct the discovery necessary to respond adequately to Magna's motion for summary judgment. Magna's motion was filed on December 30, 1994. Document 14. On January 17, 1995, Enterprise requested that the Court grant it 90 days following the Court's ruling on Enterprise's motion to remand to respond to Magna's motion for summary judgment. Enterprise maintained that it needed the time to conduct "a limited amount of discovery" to determine whether the Saettele's stock was certificated or uncertificated. Document 19 at 2. Alternatively, Magna requested 20 days to respond following the Court's ruling on the motion to remand. Id. at 3. On January 18, the Court ordered Enterprise to respond to the summary judgment motion 20 days after the Court ruled on the motion to remand. Document 20. The Court denied the motion to remand on February 23, 1995. Document 25. Enterprise filed its response to Magna's motion for summary judgment on March 15, 1995. Document 31.

Thus, Enterprise had over two months to conduct discovery on this one issue while the motion for summary judgment was pending. The Court concludes that this is a sufficient period, given that this same issue was the subject of discovery in the prior action. Moreover, Enterprise has failed to show what specific facts further discovery might unveil. See Humphreys v. Roche Biomedical Lab., Inc., 990 F.2d 1078, 1081 (8th Cir. 1993); Dempsey v. Arco Oil & Gas Co., 809 F.Supp. 437, 438 (E.D.La.), aff'd, 980 F.2d 1444 (5th Cir.1992).

Having disposed of the preliminary issues, the Court now turns to Magna's motion for summary judgment. In support of its motion, Magna argues: (1) Enterprise lacks standing to challenge the constitutionality of the prejudgment attachment; (2) this action is foreclosed because Enterprise failed to appeal the denial of its motion to intervene; (3) Enterprise's constitutional claims are based on hypothetical facts or lack merit; and (4) Magna's garnishment of the stock was proper.

Summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The Court views the evidence and the inferences which may be drawn therefrom in the light most favorable to the nonmoving party. Adkison v. G.D. Searle & Co., 971 F.2d 132, 134 (8th Cir.1992). The moving party has the burden of showing the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

1. Standing

Magna contends that Enterprise lacks standing to challenge the constitutionality of the attachment statute as it was applied against the Saetteles. As a general rule, an individual or entity does not have standing to assert the constitutional rights of third parties. Singleton v. Wulff, 428 U.S. 106, 114, 96 S.Ct. 2868, 2874, 49 L.Ed.2d 826 (1976); Carter v. Romines, 560 F.2d 395, 395 (8th Cir.1977) (per curiam), cert. denied, 436 U.S. 948, 98 S.Ct. 2854, 56 L.Ed.2d 790 (1978). This rule is not jurisdictional, however, and it may be disregarded when necessary to protect fundamental rights. Irving v. Clark, 758 F.2d 1260, 1267 (8th Cir.1985), aff'd, 481 U.S. 704, 107 S.Ct. 2076, 95 L.Ed.2d 668 (1987). "The Supreme Court has suggested two factors to be considered in determining when the third-party rule should be suspended: the relationship of the litigant to the person whose right he seeks to assert, and the ability of the third party to assert his own right." Id. Neither factor supports dispensing with the general rule in this case.

First, Enterprise did not have a close relationship with the Saetteles. They were adversaries in litigation concerning the Saetteles' default on a personal guaranty. Second, the Saetteles were capable of protecting their rights to the property Magna sought by prejudgment attachment. The...