Enterprise Bank v. Saettele

• Decision Date: 05 October 1992
• Docket Number: No. 91-0616C(6),91-0787C(5).,91-0616C(6)
• Citation: 804 F. Supp. 1111
• Parties: ENTERPRISE BANK, Plaintiff, v. Gustave J. SAETTELE and Laura Saettele, Defendants. LANDMARK BANK OF ST. CHARLES COUNTY, Plaintiff, v. Gustave J. SAETTELE and Laura Saettele, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

804 F. Supp. 1111

ENTERPRISE BANK, Plaintiff, v. Gustave J. SAETTELE and Laura Saettele, Defendants.

LANDMARK BANK OF ST. CHARLES COUNTY, Plaintiff, v. Gustave J. SAETTELE and Laura Saettele, Defendants.

Nos. 91-0616C(6), 91-0787C(5).

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

October 5, 1992.

John S. Sandberg, Elkin L. Kistner, Sandberg, Phoenix & von Gontard, St. Louis, Mo., for Enterprise Bank.

Armstrong, Teasdale, Schlafly, Davis & Dicus, Paul N. Venker, St. Louis, Mo., for Landmark Bank of St. Charles County.

Jerome F. Raskas, Peter H. Love, Raskas, Ruthmeyer, Pomerantz, Wynne, Garavaglia & Susman, The Stolar Partnership, Charles Alan Seigel, Michael A. Fisher, E. Michael Murphy, St. Louis, Mo., for Gustave and Laura Saettele.

MEMORANDUM

GUNN, District Judge.

This matter is before the Court to consider the motions and issues pertinent to the consolidated causes Enterprise Bank v. Saettele, No. 91-0616C(6) and Landmark Bank v. Saettele, 91-0787C(5) as well as those motions arising exclusively from the cause Enterprise Bank v. Saettele, No. 91-616C(6).

1. Issues before the Court in the Consolidated Causes: Validity of Landmark Bank of St. Charles County's Attachment

On March 29, 1991, Enterprise initiated an action in this Court against Gustave and Laura Saettele. Enterprise Bank v. Saettele, No. 91-616C(6).¹ Soon thereafter, Landmark Bank of St. Charles County also filed suit against the Saetteles in this Court and on September 20, 1991 it moved for prejudgment attachment. Landmark Bank v. Saettele, 91-787C(5).² The Court entered an order of attachment that very day before the Saetteles received notice of Landmark's motion.

On October 18, 1991, the St. Louis office of Oppenheimer & Company responded to the garnishee interrogatories served upon it by Landmark, acknowledging that it maintained a securities trust account owned by Gustave Saettele. The contents of the account included cash reserves and shares of Landmark Bancshares Corporation stock, now known as Magna Group, Inc. The shares of stock were in the name of Oppenheimer, their existence being indicated by entries in Oppenheimer's books and records rather than by certificates in Oppenheimer's possession. Moreover, no certificates dedicated to Gustave Saettele existed, either because the stock existed in uncertificated, book entry form at the time in question or because the certificates were maintained in an account at the Depository Trust Company (DTC) in New York which holds securities certificates in a fungible mass.

On December 17, 1991, after a jury trial, the Court entered judgment in favor of Enterprise and against the Saetteles in the amount of $800,000, plus interest and costs. Within weeks, Enterprise began its efforts to satisfy its judgment. One avenue Enterprise pursued was intervention in Landmark's action for the purpose of challenging Landmark's attachment. On February 18, 1992, the Court entered an order granting summary judgment in favor of Landmark, awarding it $1,198,811.95, plus interest, attorneys' fees and costs, and denying Enterprise's motion to intervene.

Enterprise then registered its judgment in New York and sought to garnish shares of stock supposedly in the possession of DTC and that Landmark had previously attached in Missouri. This action prompted Landmark to request the Court to enjoin Enterprise's New York activities. The Court granted Landmark's request, simultaneously granting Enterprise's motion to consolidate the two cases for purpose of resolving the ongoing dispute regarding the validity of the attachment. The Court ordered Enterprise and Landmark to brief this matter.

After briefing the issue of the validity of the attachment, Landmark filed a motion, captioned in part as a motion to reconsider, set aside and/or vacate the Court's order of consolidation. This motion primarily challenges the propriety of Enterprise contesting Landmark's attachment at this time. Enterprise filed a response and Landmark replied thereto. Because review of this motion would not affect the outcome of the issue at hand, the Court will not address the arguments Landmark advances in its motion.

Enterprise advances a two-pronged challenge to Landmark's attachment. First, Enterprise contends that the entire pre-judgment attachment affected by the Court's order of September 20, 1991, violates the Due Process and Equal Protection Clauses of the Missouri and United States Constitutions as well as the Privileges and Immunities Clause of the United States Constitution. Second, Enterprise argues that the shares of stock in question are not attached despite the Court's order because Landmark never seized the certificates as required by Missouri law.³

The Court believes that Enterprise's attack is untimely. Enterprise moved to intervene in the Landmark Bank proceeding prior to final judgment in that cause but was denied intervention. Rather than appealing the decision to deny intervention, see Edmondson v. Nebraska ex rel. Meyer, 383 F.2d 123, 127-28 (8th Cir.1967) (reviewing denial of intervention), Enterprise inappropriately takes issue with it here. See Cheyenne River Sioux Tribe of Indians v. United States, 338 F.2d 906, 911 (8th Cir. 1964), cert. denied, 382 U.S. 815, 86 S.Ct. 34, 15 L.Ed.2d 62 (1965) (citing failure to appeal order refusing intervention as preventing tribe from bringing an independent action to vacate prior order because not allowed to intervene).

Even if Enterprise's constitutional challenge, specifically limited to subsection 1 of Missouri's attachment statute, Mo. Rev.Stat. § 521.010(1), is timely and appropriate under Missouri Supreme Court Rules, the Court does not have jurisdiction to consider it. Subsection 1 provides for prejudgment attachment without a hearing "where the defendant is not a resident of this state." Mo.Rev.Stat. § 521.010(1). However, Missouri law also permits prejudgment attachment without a hearing "where the defendant is about to remove his property or effects out of this state, with the intent to defraud, hinder or delay his creditors." Mo.Rev.Stat. § 521.010(5).

Landmark's motion for writ of attachment cited the non-resident provision exclusively, relying on the Saetteles' Florida residency. The affidavit accompanying Landmark's motion for writ of attachment, however, states Landmark's concern that the Saetteles were in the process of selling assets located within the state, with the intent to move the proceeds out of the state. Landmark also offers a copy of a newspaper article from September of 1991 discussing the Saetteles' sale of a large portion of their Landmark stock and represents that the Court's attention was directed to this article before the attachment order was signed. Thus, the information available to the Court at the time of the attachment arguably satisfies both subsection 1 and 5 of the Missouri attachment statute. The parties do not dispute that subsection 5 is constitutional. See Connecticut v. Doehr, ___ U.S. ___, 111 S.Ct. 2105, 2115, 115 L.Ed.2d 1 (1991). Accordingly, the Court does not have jurisdiction to consider a constitutional challenge addressed solely to the subsection that relies on the party's residency in a foreign state. See United States v. Raines, 362 U.S. 17, 20-21, 80 S.Ct. 519, 522-23, 4 L.Ed.2d 524 (1960) (federal courts do not have jurisdiction to anticipate a question of constitutional law in advance of the necessity of deciding it). For similar reasons, the Court will not decide Enterprise's claims that the statute violates the Missouri Constitution.

Furthermore, Enterprise lacks standing to assert that the statute violates the federal Constitution. Without standing, a litigant is not entitled to have the Court reach a decision on the issue he brings before it. Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975). This limitation applies not only to claims contained in a complaint but also to each issue advanced by way of motion. See O'Connor v. Jones, 946 F.2d 1395, 1400 (8th Cir.1991).

Enterprise maintains that it has standing to assert the Saetteles' constitutional rights. The standing doctrine, however, consists of a constitutional and a prudential element. Warth, 422 U.S. at 498, 95 S.Ct. at 2205. In Article III, section 2, the Constitution limits federal court jurisdiction to "cases or controversies," while the prudential facet of the standing inquiry focuses on whether the litigants are the proper proponents of the particular legal rights on which they base their suit. Singleton v. Wulff, 428 U.S. 106, 112, 96 S.Ct. 2868, 2873, 49 L.Ed.2d 826 (1976). Ordinarily an individual does not have standing to assert the rights of third persons. Carter v. Romines, 560 F.2d 395, 395 (8th Cir.1977), cert. denied, 436 U.S. 948, 98 S.Ct. 2854, 56 L.Ed.2d 790 (1978). This presumption, however, may be waived by Congress, Defenders of Wildlife, Friends of Animals & Their Environment v. Hodel, 851 F.2d 1035, 1039 (8th Cir.1988), or be outweighed by the fundamental rights which would be denied. Carter, 560 F.2d at 396. State law, however, cannot create such a waiver when violation of federal law is at issue. Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 262 n. 8, 97 S.Ct. 555, 561 n. 8, 50 L.Ed.2d 450 (1977); Carter, 560 F.2d at 396. None of the narrow exceptions to the general presumption against the assertion of rights by a third-party applies here. See Carter, 560 F.2d at 396 (citing exceptions). Moreover, Enterprise neither enjoys a close relationship with the third-party, the Saetteles, nor do third-parties in general suffer from a hindrance to their ability to assert these defenses. See Powers v. Ohio, ___ U.S. ___, 111 S.Ct. 1364, 1370-71, 113 L.Ed.2d 411 (1991). Enterprise is not a proper proponent of the Saetteles' constitutional defenses to the prejudgment attachment.

Enterprise alternatively claims that at a minimum Landmark's garnishment of Gustave...