United States District Court, N.D. Illinois, Eastern Division
July 7, 2004.
BIRDSONG CORPORATION, d/b/a BIRDSONG PEANUTS, Plaintiff,
AUGUST BATTAGLIA, Defendant.
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff and Judgment Creditor, Birdsong Corporation, filed
suit against Defendant and Judgment Debtor, August Battaglia,
seeking to enforce a previously entered judgment. Judgment was
entered against Defendant and in favor of Plaintiff. Presently
before the Court is Plaintiff's Motion for Turnover Order against
the Citation Respondent, Margaret Kaminski, Co-Executor and
Co-Trustee for the Estate of Joseph L. Battaglia ("the Estate").
Joseph Battaglia was the father of Defendant. For the following
reasons, that motion is granted in part and denied in part.
Federal Rule of Civil Procedure 69(a) provides that
supplementary proceedings to enforce a judgment are governed by
both the substantive and procedural law of the state in which the
proceedings are held. Under 735 ILCS 5/2-1402(c)(3), a court may
require any person cited to deliver assets to satisfy a judgment
in whole or in part "when those assets are held under such
circumstances that in an action by the judgment debtor he or she
could recover them in specie or obtain a judgment for the
proceeds." The judgment creditor has the burden "to show that the
citation respondent possesses assets belonging to the judgment
creditor." Mid-Am. Elevator Co. v. Norcon, Inc., 679 N.E.2d 387, 390 (Ill.App.
Ct. 1996). A party seeking a setoff, which allows parties to
apply mutual debts against each other, has the burden of proving
the right exists. In re Clark Retail Enters., Inc., 308 B.R. 869,
895 (Bankr. N.D. Ill. 2004). Whether a setoff should be
granted is an equitable determination for a court to decide. In
re Clark Retail Enters., Inc., 308 B.R. at 895.
A default judgment was entered in favor of Plaintiff and
against Defendant in the amount of $140,539.05 plus post-judgment
interest. Thereafter, a Citation Notice and a Citation to
Discover Assets of August Battaglia was issued to Kaminski. To
date, the full amount of the judgment remains unsatisfied; and
Plaintiff contends that the Estate possesses $118,600.00
belonging to Defendant.
Of this $118,600.00, Defendant loaned the Estate $50,000.00 to
prevent foreclosure on a piece of property which comprises the
Estate's primary asset.
Defendant paid the remaining $68,000.00 to an account in the
name of Joseph Battaglia Realty, which was an account used to pay
mortgages on a building the Estate currently owns. Of this
$68,000.00, there were three separate types of transactions.
First, Quality Midwest Perishable Sales, a sole proprietorship
owned and operated by Defendant, advanced $14,000.00 to keep the
property discussed above out of foreclosure. This $14,000.00
advancement was made through two checks: a $9,000.00 check
provided to Plaintiff and produced in discovery concerning this
matter; and a $5,000.00 check that has never been provided to
Plaintiff by Battaglia despite discovery requests. Second, Defendant and his wife issued two checks out of their
joint account, totaling $44,000.00, to Joseph Battaglia Realty.
This amount includes check number 3207 in the amount of
Finally, Defendant's wife issued three checks, in a total
amount of $10,600.00, to Joseph Battaglia Realty. These checks
were signed by Defendant, who had access to the account used to
issue these three checks.
The Estate does not contest that it owes Plaintiff some money
but, rather, argues that it only owes $17,600.00. According to
the Estate, Plaintiff has double counted $40,000.00 as part of
the $50,000.00 loan from Defendant and part of the $44,000.00 in
checks Defendant and his wife issued to Joseph Battaglia Realty.
Specifically, the Estate argues that check number 3207
constitutes partial payment of the $50,000.00 loan made by
Defendant to the Estate and not, as Plaintiff argues, part of the
$44,000.00 Defendant and his wife advanced to Joseph Battaglia
In support of this proposition, Defendant has submitted an
affidavit which was not notarized or made subjecting Defendant to
the penalty of perjury and, thus, will not be considered. See,
e.g., 28 U.S.C. § 1746; DeBruyne v. Equitable Life Ins. Co.,
920 F.2d 457, 471 (7th Cir. 1990).
Defendant also relies on the affidavit of his sister and
co-executor for the Estate, Kaminski, in support of this
double-counting proposition. However, Defendant testified during
a deposition that the $50,000.00 loan was comprised of a
$42,000.00 check and a $7,000.00 check, both drawn on a
SunAmerica account. A check for $7,142.86, consistent with
Defendant's testimony, was produced and included as Plaintiff's
Reply Exhibit A; however, despite requests by Plaintiff, the other check has never been produced. Generally,
when a deposition is in conflict with an affidavit, "the
affidavit is to be disregarded unless it is demonstrable that the
statement in the deposition was mistaken." Amadio v. Ford Motor
Co., 238 F.3d 919, 926 (7th Cir. 2001) (citation omitted).
Moreover, Kaminski's affidavit, which the Estate does not even
rely on in support of its double-counting theory, fails to rebut
Defendant's deposition testimony because the affidavit does not
establish Kaminski has personal knowledge of this transaction.
See Markel v. Bd. of Regents, 276 F.3d 906, 912 (7th Cir. 2002)
(explaining that affidavits must demonstrate how the affiant is
competent to testify to the matters at issue).
The Estate further argues that $11,000.00 of the funds
identified by Plaintiff were actually rent payments made by the
tenant of the property and collected by Defendant on behalf of
the Estate. Specifically, the Estate contends that check nos.
3132 and 0595, which were drawn on separate accounts and are
attached as part of Plaintiff's Exhibits 9 and 10, respectively,
were actually rent payments made by the tenant of the property
and collected by Defendant on behalf of the Estate.
In support of this contention, the Estate relies on both
Defendant's and Kaminski's affidavits. However, as noted above,
Defendant's affidavit is inadmissible; and Kaminski's affidavit
does not demonstrate that she had personal knowledge of these
alleged rental payments. Furthermore, the Estate has failed to
provide any documentation from the alleged lessor demonstrating
that these payments were made for a rental transaction. Finally,
the Estate's theory is illogical; no explanation has been
provided as to why the alleged lessor paid Defendant instead of Joseph Battaglia or the Estate or as to why the
alleged rent payments were drawn on two separate accounts.
As to the $10,600.00 paid out of the account of Defendant's
wife to Joseph Battaglia Realty, Plaintiff has failed to
demonstrate that Defendant actually possessed these funds.
Defendant's signature on this account demonstrates that Defendant
had authority to convey his wife's funds, but it does not show
that these funds actually belonged to Defendant.
Based upon this evidence, the Estate has failed to meet its
burden, by providing sufficient documentation rebutting
Plaintiff's evidence, that Plaintiff double-counted $40,000.00 or
that Plaintiff wrongly identified $11,000.00 as funds allegedly
paid by lessors to the Estate. However, Plaintiff has failed to
satisfy its burden of proof demonstrating that it is entitled to
the $10,600.00 of funds paid out of the account of Defendant's
wife to Joseph Battaglia Realty. Therefore, the Estate is in
possession of $108,000.00 that Plaintiff may recover.
The Estate also seeks a $50,000.00 setoff against Defendant for
a loan allegedly made by Joseph Battaglia to Defendant. Illinois
recognizes the common law right of setoff, provided that valid
and enforceable offsetting obligations are held in the same
capacity by the respective parties. In re Doctors Hosp. of Hyde
Park, Inc., 337 F.3d 951, 955 (7th Cir. 2003). However, there
has been no showing by the Estate that it has diligently pursued
repayment of this loan from Defendant. Accordingly, as a matter
of equity, the requested setoff is denied. CONCLUSION
For the foregoing reasons, the Plaintiff's Motion for Turnover
Order is granted in part and denied in part. The Estate is
ordered to pay Plaintiff $108,000.00.
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