Star Ins. Co. v. Risk Marketing Group Inc.
| Citation | 561 F.3d 656 |
| Decision Date | 31 March 2009 |
| Docket Number | No. 08-1377.,08-1377. |
| Parties | STAR INSURANCE COMPANY, a Michigan Corporation, Williamsburg National Insurance Company, a California Corporation and American Indemnity Insurance Company, Limited, a Bermuda Corporation, Plaintiffs-Appellees, v. RISK MARKETING GROUP INCORPORATED, an Illinois Corporation and Cebcor Service Corporation, an Illinois Corporation, Defendants-Appellants. Appeal of Charles E. Stevenson, Don A. Moore, Encompass Financial Solutions, LLC, et al. |
| Court | U.S. Court of Appeals — Seventh Circuit |
John P. McCorry (argued), Attorney, McVey & Parsky, Chicago, IL, for Plaintiffs-Appellees.
Robert Eugene Bennett (argued), Chicago, IL, for Defendants-Appellants/Charles E. Stevenson, Don A. Moore, Encompass Financial Solutions, LLC, et al.
Before BAUER, ROVNER, and EVANS, Circuit Judges.
The United States District Court for the Eastern District of Michigan, Southern Division, entered judgment in the amount of $2,436,290, plus interest, in favor of Star Insurance Company, Williamsburg National Insurance Company, and American Indemnity Insurance Company, Ltd. (collectively, "Plaintiffs") and against Risk Marketing Group, Inc. and Cebcor Service Corp. (collectively, "Defendants"). Plaintiffs registered this judgment, pursuant to 28 U.S.C. § 1963, in the District Court for the Northern District of Illinois and instituted supplementary proceedings to enforce the judgment, pursuant to Federal Rule of Civil Procedure 69 and 735 Ill. Comp. Stat. 5/2-1402 (2007).
In a separate suit, the plaintiffs sued to pierce the corporate veil of the defendant corporations in the same court. Charles E. Stevenson, Don A. Moore, Employ America, LLC, and Encompass Financial Solutions, LLC were also named as defendants in the second suit, based on their respective insider relationships with the corporate defendants and for their failure to observe corporate formalities.
In the collection suit, the plaintiffs filed four motions: (1) to set aside fraudulent transfers; (2) for a preliminary injunction to prevent the disposition of assets; (3) for the appointment of a receiver; and (4) to dissolve the corporate defendants. Defendants failed to respond to these motions even after receiving two extensions of time. Defendants instead filed a motion to consolidate the collection case with the piercing case or, alternatively, to transfer the collection case to the district court judge presiding over the piercing case.
On August 31, 2007, the district court denied the motion to consolidate; it also found that: (1) Defendants fraudulently transferred certain assets to Charles E. Stevenson, Don A. Moore, Employ America, LLC, and Encompass Financial Solutions, LLC; (2) the transferees were in possession of the defendants' property; and (3) ordered the transferees to return the assets within 21 days. The district court also enjoined further disposition of the transferred assets.
On September 21, 2007, the defendants filed a motion requesting the court to reconsider the finding that the transfers were fraudulent. The district court denied the motion on October 1, 2007; it found that the defendants, despite extensions, had not responded to the plaintiffs' motion to set aside the fraudulent transfers and that the motion for consolidation was not an adequate response.
Plaintiffs filed renewed motions for judicial dissolution and for the appointment of a receiver. The district court granted this motion on October 19, 2007; it held that the judgment in the amount of $2,436,290 remained unsatisfied, and that the defendants were (and had admitted to being) insolvent.
The defendants appealed the orders of October 1, 2007 and October 19, 2007. This court questioned whether final and appealable judgments had been entered by the district court and ordered the defendants to show cause why the appeal should not be dismissed for want of jurisdiction or to voluntarily dismiss the appeal. Defendants then voluntarily dismissed the appeals pursuant to Federal Rule of Appellate Procedure 42(b).
Plaintiffs then moved for the entry of the judgment of $2,436,290 plus interest against the transferees for their failure to return the fraudulently transferred assets as ordered by the district court on August 31, 2007. On January 23, 2008, the district court granted this motion and denied the transferees' motion to reconsider on February 6, 2008.
On February 15, 2008, the various defendants and the transferees appealed the district court's orders of: (1) August 31, 2007; (2) October 1, 2007; (3) October 19, 2007; and (4) January 23, 2008.
The defendants and the transferees argue that the district court erred in denying the motion to consolidate since the collection case and the piercing case involved the same judgment and almost identical parties. They also argue that the district court erred in entering judgment against the transferees. Before we address the merit s, a threshold question arises over the scope of our appellate jurisdiction and which of the appealed orders are reviewable.
For purposes of appellate jurisdiction, our review of whether there has been a final order is de novo. Trustees of Pension, Welfare & Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Electric, 223 F.3d 459, 463 (7th Cir.2000). This court has jurisdiction over "appeals from all final decisions of the district courts of the United States . . . except where a direct review may be had in the Supreme Court." 28 U.S.C. § 1291. Generally, the question of whether a decision is final for purposes of § 1291 depends on whether the district court's decision "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Van Cauwenberghe v. Biard, 486 U.S. 517, 521, 108 S.Ct. 1945, 100 L.Ed.2d 517 (1988). Conversely, orders that "specifically contemplate further activity in the district court are generally not final." Pyramid Electric, 223 F.3d at 463 (internal citations omitted). However, "if an order contemplates only ministerial actions by the court, finality may exist." Id.
This final-decision rule postpones the appeal until the final judgment, but in the context of the appeal before us, we are reviewing orders after the entry of a final judgment. Because the judgment against the defendants was not executed—namely, their assets were neither seized nor sold to pay the judgment—the district court issued a series of orders in a post-judgment proceeding to complete the execution of the judgment. Supplementary proceedings to enforce a judgment are treated, for the purposes of appeal, as separate, free-standing lawsuits. Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1224-25 (7th Cir.1993) (citing cases). We treat orders in those proceedings as appealable, to the same extent as in a regular lawsuit. Id.
Leading off with the January 23, 2008 order, where the district court entered judgment against the transferees, no one disagrees that we have appellate jurisdiction to review that order since the notice of appeal was filed on February 15, 2008, see Fed. R.App. P. 4(a), and plaintiffs argue that the orders dated August 31, 2007 and October 1, 2007 were final and immediately appealable when entered, but because the defendants filed their notice of appeal in February 2008, the appeals are untimely and cannot be considered by this court.1
As to the August 31, 2007 order, the plaintiffs are correct that certain aspects of this order were immediately appealable and the appeal untimely. There are several aspects to this order: (1) the grant of Plaintiff's preliminary injunction against the defendants; (2) the set aside of fraudulent transfers and the order to the transferees to turn over those transfers; (3) the denial of Plaintiffs' motions for appointment of a receiver and a judicial dissolution of the defendants; and (4) the denial of the defendants' motion to consolidate the collection case with the piercing case.
The plaintiffs argue that the entire August 31, 2007 order was immediately reviewable because the preliminary injunction contained therein was immediately reviewable, 28 U.S.C. § 1292(a)(1), and also because the turn-over order was immediately reviewable. Laborers' Pension Fund v. Dirty Work Unlimited, Inc., 919 F.2d 491, 493-94 (7th Cir.1990). But labeling the entire order as immediately appealable ignores the discretionary, non-appealable interlocutory order lying within. Here, there are separate orders, derived from separate motions by the parties, contained in one document. But for jurisdictional purposes, what is really at issue is the discretionary denial of the motion to consolidate, an interlocutory order unappealable until final judgment.
The fact that some aspects of the August 31, 2007 order were immediately appealable does not alter the interlocutory nature of the district court's decision to deny consolidation. See Helene Curtis Indus., Inc. v. Church & Dwight Co., Inc., 560 F.2d 1325 (7th Cir.1977) (). After the final order dated January 23, 2008, the defendants timely appealed.
Accordingly, we now have jurisdiction to review the district court's denial of consolidation.
The defendants argue that the district court in the collection case erred when it denied the motion to consolidate the case with the piercing case or, alternatively, transfer the collection case to the judge presiding over the piercing case, since there were abundant similarities between the actions. We review a district court's decision granting or denying a motion to consolidate only for an abuse of discretion. King v. General Elec. Co., 960 F.2d 617, 626 (7th Cir.1992).
A district court may consolidate actions that involve a common question of...
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