United States District Court, Northern District of Illinois, E.D
November 30, 1983
RIDGEWOOD INDUSTRIES, INC., A CANADIAN CORPORATION, PLAINTIFF,
RIDGEWOOD INDUSTRIES, U.S.A., INC., A DELAWARE CORPORATION; AMISCO TRADING CORPORATION, AN ILLINOIS CORPORATION; GERALD FINKLE; YARIV HAFT AND MENOSHA GUILAH, DEFENDANTS.
The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
On September 21, 1983, this Court issued Judgment requiring
defendants to pay the plaintiff $195,837.00 in damages.
Presently before the Court is plaintiff's motion for an order
compelling the execution and delivery of assets by the judgment
debtors. Defendants claim that the assets sought by plaintiff
are in fact not their property or are not in their possession.
For reasons set forth below, defendants and any other party are
enjoined from allowing any transfer or disposition of the
property of the judgment debtors. A hearing on these matters
shall be held before United States Magistrate Joan Humphrey
Lefkow to resolve the claims of all interested parties to the
assets in question.
It is settled that a court with jurisdiction over a lawsuit has
jurisdiction to enforce the judgment it has rendered in that
suit; our jurisdiction in this matter thus continues until the
judgment is satisfied. McKee-Berger-Mansueto, Inc. v. Board of
Education, 691 F.2d 828, 831 (7th Cir. 1982). Rendition and
entry of judgment are, of course, prerequisites to the
compulsion of a party to pay. Local P-171 v. Thompson Farms
Co., 642 F.2d 1065, 1067 n. 1 (7th Cir. 1981). According to
Fed. R.Civ.P. 69(a)
[p]rocess to enforce a judgment for the payment of money shall
be a writ of execution, unless the court directs otherwise. The
procedure on execution, in proceedings supplementary to and in
aid of a judgment, and in 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,
existing at the time the remedy is sought, except that any
statute of the United States governs to the extent that it is
applicable. In aid of the judgment or execution, the judgment
creditor or his successor in interest when that interest
appears of record, 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.
Because there is no federal statute prescribing methods for
discovering the hidden assets of a judgment debtor, State law
must be applied in this case. Textile Banking Co. v.
Rentschler, 657 F.2d 844
, 850 (7th Cir. 1981).
Illinois has a statutory citation procedure which enables a
judgment creditor to discover the assets of a judgment debtor
and to compel the application of those assets toward
satisfaction of the outstanding judgment. See Ill.Rev.Stat.
ch. 110, ¶ 2-1402 (1982). Under this statute, the Court is
empowered to enjoin the transfer or other disposition of the
judgment debtor's property. Ill.Rev.Stat. ch. 110, ¶
2-1402(d)(2).*fn1 And insofar as property is claimed by a
person other than the judgment debtor, the Court may require
the claimant to appear and maintain his or her rights. ¶
We believe that a hearing is necessary in the present case, and
that an injunction would be appropriate. Defendant Haft asserts
a 3% interest in real property at 114 South Racine Street in
Chicago, and that his family owns 20% of the property, despite
the listing of a 23.3% interest in this property on his
personal financial statement. Defendant Guilah's 23.3% interest
in the property also appeared on his financial statement, but
he now asserts that he was merely in the process of purchasing
the interest when the statement was completed, and that the
purchase was never realized. At a hearing on these matters,
defendants are to produce original documents concerning the
real property and the trusts involved in it. Haft will also
produce the consent to list the property in his own name which
he asserts his father gave him.
Haft also claimed an interest in real property located in
Haifa, Israel, on his financial statement, but he has since
maintained that the property belongs to his wife, and that she
consented to its listing on Haft's statement. At a hearing,
Mrs. Haft will be able to testify as to this matter, and any
written consent will also be produced. Finally, it may be
necessary at the hearing before Magistrate Lefkow to inquire as
to the status of the accounts receivable, inventory and
miscellaneous property, which defendants claim has either been
supplied to plaintiff or no longer exists.
Accordingly, all persons are enjoined from making or allowing
any transfer or other disposition of, or interference with the
judgment debtors' property. This injunction shall remain in
effect until vacated by the Court at the termination of this
matter. A hearing concerning the aforementioned property shall
be held before Magistrate Lefkow. It is so ordered.