Fehlhaber v. Fehlhaber

• Decision Date: 18 December 1981
• Docket Number: No. 81-5338,81-5338
• Citation: 664 F.2d 260
• Parties: Verone Marin FEHLHABER, Plaintiff-Appellant, v. Fred Robert FEHLHABER, Robert Fred Fehlhaber, (Substituted party defendant for deceased defendant), Defendant-Appellee. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 260

664 F.2d 260

Verone Marin FEHLHABER, Plaintiff-Appellant, v. Fred Robert FEHLHABER, Robert Fred Fehlhaber, (Substituted

party defendant for deceased defendant), Defendant-Appellee.

No. 81-5338

Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

Dec. 18, 1981.

Greenbaum, Wolff & Ernst, Saul J. Morgan, Woodrow "Mac" Melvin, Jr., Miami, Fla., for plaintiff-appellant.

Linwood Cabot, Fort Lauderdale, Fla., Max Fink, Beverly Hills, Cal., R. Stephen Duke, Paul Newlon, New York City, for defendant-appellee.

Fowler, White, Burnett, Hurley, Banick & Strickroot, Ronald P. Weil, Miami, Fla., for Sun Bank.

Appeal from the United States District Court for the Southern District of Florida.

Before RONEY, KRAVITCH and CLARK, Circuit Judges.

KRAVITCH, Circuit Judge:

Verone Marin Fehlhaber appeals from a federal district court order denying her discovery during a stay of execution of judgment, and granting appellee a protective order. Appellant contends the district court lacked jurisdiction to enter this order, or alternatively, that the district court abused its discretion in denying discovery. We reject appellant's contentions and affirm the district court.

This appeal arises from a course of divorce litigation between appellant and her husband, Fred Robert Fehlhaber, now deceased (decedent). The parties were married in 1961 and in 1967 moved to Florida. In April, 1974, appellant moved to California and instituted an action in California state court for separate maintenance ¹; this action resulted in a $9.9 million award to appellant. Appellant then returned to Florida and brought a diversity suit in federal district court for the Southern District of Florida to enforce the California judgment. The court granted summary judgment for appellant; that judgment is now on appeal to this court. ²

Upon entry of the judgment, decedent moved the district court for a stay of execution pending appeal, and requested under Fed.R.Civ.P. 62 that the court set a reduced supersedeas bond. The court held a full evidentiary hearing on decedent's assets, and on August 1, 1979, entered an order granting the stay conditioned upon posting a $1.5 million bond. ³ The court also enjoined the decedent from transferring any of his stocks or bonds, or revoking the Fehlhaber trust. The stay finally became effective on March 11, 1980, when posting of the bond was completed. When appellant requested further discovery after the effective date of the stay, decedent moved for a protective order. On March 12, 1981, the district court denied appellant the requested discovery and granted the protective order. This appeal followed. ⁴

Appellee argues as a preliminary matter that the March 12 order is not an appealable final order under 28 U.S.C. § 1291, and that we therefore lack jurisdiction to hear this appeal. In United States v. McWhirter, 376 F.2d 102, 104-05 (5th Cir. 1967), however, the court specifically held that a district court order denying discovery in aid of execution was an appealable final order. ⁵ See First Federal Savings & Loan Ass'n v. Fisher, 544 F.2d 902, 902 n.2 (5th Cir. 1979). We therefore proceed to consider the merits of appellant's claims.

Appellant first argues that the district court lacked jurisdiction to deny discovery and enter a protective order. While appellant concedes that the court retains jurisdiction to enforce the stay of execution, she argues that the March 12 order was a "modification" of the stay and that the court lacks power to make such a modification. See Draper v. Davis, 102 U.S. 370, 26 L.Ed. 121 (1880); In re Federal Facilities Realty Trust, 227 F.2d 651 (7th Cir. 1955).

Under Fed.R.Civ.P. 69, "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" unless a federal statute controls. Under Florida law, "a supersedeas has the effect to suspend all further proceedings in relation to a judgment superseded...." Pennsylvania Threshermen & Farmers' Mutual Casualty Insurance Co. v. Barrett, 174 So.2d 417, 418 (Fla.App.1965). See Bacon v Green, 36 Fla. 313, 18 So. 866 (1894). While we have found no Florida case specifically holding that a stay of execution also stays discovery in aid of execution, discovery is a "proceeding in relation to a judgment" under Florida law, see generally Fla.R.Civ.P. 1.560; Wilde v. Wilde, 237 So.2d 203 (Fla.App.1970), and thus ordinarily would come within the stay.

Appellant nevertheless bases her "modification" argument on a statement in the August 1, 1979, stay order that "the stay as to discovery is hereby vacated," and a conversation between the trial judge and attorneys for the appellee during the bond hearing to the effect that the trial court was "inclined" to permit appellant discovery while the appeal was in progress. ⁶ After reviewing the record, however, we conclude that appellant's arguments are based on a misinterpretation of the facts surrounding the stay. The trial court had earlier entered a stay of discovery when, after the initial entry of judgment in March, 1979, decedent moved for a rehearing under Fed.R.Civ.P. 59. The phrase in the August 1, 1979, stay of execution order that "the stay as to discovery is hereby vacated" obviously referred to this earlier stay and not to the subsequent stay of execution. Appellant, moreover, appears to have overlooked the significance of the terms of the August 1 stay order. Because the stay was conditioned upon posting a $1.5 million supersedeas bond, appellant was free to engage in discovery until the supersedeas was posted, and in fact did so. ⁷ Once the stay became effective, however, "all proceedings" in aid of execution, including discovery, came to a halt. Finally, the conversation cited by appellant between the trial judge and attorneys for the decedent merely shows that at that time the trial judge was inclined to permit discovery but reserved a definite ruling on the issue. The conversation does not support a claim that the trial court somehow modified the terms of the August 1 stay order by denying discovery at a later time.

Appellant's second argument is that even if the trial judge had jurisdiction to deny discovery, given the circumstances in this case, especially that the bond posted was only 15% of the judgment, the denial of discovery was an abuse of discretion. We disagree. Under Fed.R.Civ.P. 69(a), a judgment creditor "may obtain discovery from any person, including the judgment debtor, in the manner provided in these rules or in the manner provided by the practice of the state in which the district court is held." Both federal and Florida law commit the scope of discovery to the sound discretion of the trial judge. E. g., Citizens for a Better St. Clair County v. James, 648 F.2d 246, 251 (5th Cir. 1981); Orlowitz v. Orlowitz, 199 So.2d 97, 98 (Fla.1967). Here the court held a full adversary hearing on decedent's assets and found his net worth to be substantially less than the amount of the judgment. ⁸ After this hearing, the court set bond at $1.5 million, but also enjoined the decedent from making practically any significant financial transaction which could imperil the assets subject to...