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PHILIPS MED. SYS. v. BRUETMAN

May 28, 1992

PHILIPS MEDICAL SYSTEMS, INTERNATIONAL B.V., a Netherlands corporation, et al. Plaintiffs,
v.
MARTIN E. BRUETMAN, M.D., an Illinois citizen, et al., Defendants.



The opinion of the court was delivered by: BRIAN BARNETT DUFF

 Before the court is Defendant High Tech Medical Parks Development Corporation's motion to quash a Citation to Discover Assets (the "Citation"). The Citation was dated March 5, 1992 and was directed to "Ronald Tash, Esq.," High Tech Medical Parks Development Corporation's Secretary. The motion is denied.

 Background

 On October 3, 1991, Plaintiffs filed their First Amended Complaint. Defendants filed their Second Amended Counterclaim on December 16, 1991.

 The court entered a default judgment in the sum of $ 18,948.043.32 against all four defendants, namely Martin E. Bruetman, High Tech Medical Parks Development Corporation ("High Tech"), High Tech Medical Parks International, N.V. and Alta Technologia Medica, S.A. The order of default judgment was entered on February 18, 1992 and was granted because of the defendants' noncompliance with this court's discovery orders, including Martin Bruetman's fleeing to Argentina in the middle of his deposition. Subsequent to the entry of the order of default judgment, the court stated in open court that if the cause of the default were cured, the default judgment could be vacated. The cause of the default has not been cured as Dr. Bruetman has not returned and has not complied with the court's discovery orders.

 At the time of the entry of the February 18 default judgment, the defendants' Second Amended Counterclaim remained pending. The Second Amended Counterclaim was not dismissed until March 26, 1992 when the court noted that Dr. Bruetman had not returned to Chicago to resume his deposition and had not complied with the court's discovery orders.

 The March 5 Citation was based on the February 18 default judgment. The Citation states that "[a] judgment against Martin E. Bruetman, M.D. and High Tech Medical Parks Development Corporation, was entered on February 18, 1992, in the Northern District of Illinois Eastern Division. To date $ 18,948,043.32 plus interest and costs remains unsatisfied."

 Discussion

 High Tech argues that because the counterclaim remained pending until March 26, the February 18 default judgment was not a final order. Hence, according to High Tech, the March 5 Citation should be quashed.

 Enforcement of judgments in federal court are carried out pursuant Fed.R.Civ.P. 69 which directs that "execution shall be in accordance with the practice and procedure of the state in which the district court is held. . . ." Under Ill.Rev.Stat. ch. 110, § 1402(a), a judgment creditor may prosecute supplementary proceedings for the purpose of examining the judgment debtor to discover assets or income of the debtor not exempt from the enforcement of the judgment. The statute provides that a supplementary proceeding shall be commenced by the service of a citation issued by the clerk. The plaintiffs were proceeding in the manner set forth in Ill.Rev.Stat. ch. 110, P 1402(a). The question is whether they were premature in their efforts to enforce the default judgment.

 Under Illinois law, execution may issue only as to a final judgment. See General Telephone Co. of Illinois v. Robinson, 545 F. Supp. 788, 791 (C.D. Ill. 1982). Alternatively, where the action involves multiple parties or multiple claims, execution may issue only upon an express finding by the court that there is no just reason for delaying enforcement or appeal. See Wilson-Jump Co. v. McCarthy-Hundreiser, 85 Ill. App. 3d 179, 40 Ill. Dec. 230, 405 N.E.2d 1322 (1st Dist. 1980); see also Ill.Rev.Stat. ch. 110A, Rule 304(a). Fed.R.Civ.P. 54(b) permits United States District Courts to make an express finding that there is no just reason for delay when there is judgment on fewer than all claims in an action involving multiple parties or multiple claims.

 Plaintiffs respond by arguing that High Tech has waived the right to challenge the March 5 Citation. In support of that argument, plaintiffs point to the following steps taken by High Tech to comply with the Citation. On March 13, 1992, Mr. Tash responded to the Citation by (1) appearing at the offices of Altheimer and Gray (where the Citation instructed him to appear for examination), (2) producing numerous documents on March 13, as requested in the Citation, (3) agreeing to be sworn in and deposed that day in response to the Citation, and (4) explicitly agreeing to enter and continue the Citation proceedings so that he could produce further documents responsive to the Citation.

 In addition, High Tech has taken the position in litigation that the Order of Default Judgment was a final order. On March 13, 1992, High Tech filed a notice of appeal of the February 18 order, an order it now belatedly argues was not final. High Tech's Jurisdictional Statement filed before the Seventh Circuit as part of its appeal confirmed that High Tech's position was that the default judgment was a final judgment as the appeal sought to invoke the Court of Appeals' jurisdiction pursuant to 28 U.S.C. §§ 1291 and 1294(1). In addition, at the March 26 hearing before this court, High Tech's counsel took the position that the February 18 Order of Default Judgment was a final order. Finally, High Tech did not bring the present motion until April 21, 1992, five and a half weeks after Mr. Tash's compliance with the Citation.

  In support of its waiver argument, Plaintiffs cite In re Wey, 827 F.2d 140 (7th Cir. 1987). In re Wey concerned priorities in a bankruptcy proceeding. In In re Wey, the judgment creditor served a garnishment summons and garnishment interrogatories upon the judgment debtor and the judgment debtor's bank pursuant to a judgment by confession entered by the Illinois Circuit Court. In its judgment order, the Circuit Court reserved the question of attorneys' fees and did not explicitly state pursuant to Illinois Rule 304(a) (the Illinois analog to Fed.R.Civ.P. 54(b)) that the judgment reached was subject to immediate appeal and enforceability. Although the order was arguably non-final because of the reservation of the ...


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