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Dexia Credit Local v. Rogan

March 2, 2009

DEXIA CREDIT LOCAL, PLAINTIFF,
v.
PETER G. ROGAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

MEMORANDUM OPINION AND ORDER

As part of supplementary proceedings to enforce a judgment Peter Rogan, Dexia Credit Local (Dexia) has filed a motion requesting turnover of certain assets. Intervenors Brian, Sara, and Robert Rogan oppose that motion. They have filed jury demands with respect to Dexia's claims. Dexia objects to those jury demands, contending that the Rogans have no right to a jury trial. The parties have submitted briefs and presented oral argument on this issue. This decision memorializes the basis for the Court's oral ruling on February 26, 2009.

Background*fn1

Dexia sued Peter Rogan and others for fraud, conspiracy, and other torts. It eventually obtained a judgment against Peter Rogan in excess of $124 million. Dexia subsequently pursued supplementary proceedings before this Court to satisfy its judgment. This Court entered temporary restraining orders freezing various assets that, Dexia contends belong to, or were fraudulently transferred by, Peter Rogan. Brian, Sara, and Robert Rogan (Peter Rogan's adult children) and Judith Rogan (his wife) then intervened to oppose the freeze orders. The Court ultimately entered preliminary injunctions that had the effect of extending the freeze orders in large part.

On December 8, 2008, Dexia filed, pursuant to the Court's instruction, a renewed motion for turnover pertaining to the assets in which the Rogan children claimed an interest. That motion was addressed to four categories of assets: those held by (1) the Peter G. Rogan Irrevocable Trust; (2) the RPP Finance Trust; and (3) various trusts domiciled in Florida and Belize that Peter Rogan created in the names of each of his children; and (4) assets the Rogan children received from those trusts.

Discussion

1. Robert Rogan

In federal court, a party must make a jury demand, to the extent the party is entitled to a trial by jury, with respect to any issue "no later than 10 days after the last pleading directed to the issue is served." Fed. R. Civ. P. 38(b). In post-judgment proceedings seeking a turnover order, this means that a party asserting a right to a jury must file a jury demand within ten days of being served with the motion for turnover. See Lawyers Title Ins. Corp. v. Dearborn Title Corp., No. 04 C 3277, 1998 WL 801781, at *1 (N.D. Ill. Nov. 12, 1998).

Dexia filed its renewed motion seeking turnover on December 8, 2008, and Robert Rogan's counsel received the motion electronically on or about that same date. He did not file his jury demand until February 25, 2009, long after the ten-day period for doing so had passed. Accordingly, Robert Rogan has forfeited his claim to a jury trial in these proceedings.

2. Sara and Brian Rogan

a. Federal or State Law

The Rogans contend that Illinois law controls whether they are entitled to a jury trial. Dexia maintains that federal law controls but that in any event, Illinois and federal law lead to the same conclusion.

Federal Rule of Civil Procedure 69(a) provides that "[t]he procedure on execution [of a money judgment]-and in proceedings supplementary to and in aid of judgment or execution-must accord with the procedure of the state where the court is located . . . ." Fed. R. Civ. P. 69(a)(1). This does not mean that state law replaces federal procedure wholesale during supplementary proceedings. See Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1226 (7th Cir. 1993) (Rule 69(a) not intended "to borrow the entire procedural law of the state, so that in supplementary proceedings in federal district court in Illinois the judge would apply the Illinois rules of civil procedure and of evidence rather than the counterpart federal rules") (emphasis in original); see also Int'l Fin. Servs. Corp. v. Chromas Techs. Canada, Inc., 356 F.3d 731, 735 (7th Cir. 2004) ("Even where . . . a district court is applying the substantive law of a state, federal procedural law controls the question of whether there is a right to a jury trial."); Mission Bay Campland, Inc. v. Sumner Fin. Corp., 72 F.R.D. 464, 466-67 (M.D. Fla. 1976) (federal law controls the right to a jury trial in supplementary proceedings pursuant to Rule 69(a)). The Rogans have not presented any authority that the right to a jury trial in federal court is controlled by state law, whether in supplementary proceedings or otherwise. Thus the Court will consult federal law to determine whether the Rogans are entitled to a jury trial in these proceedings.

Even if Illinois law applies, the analysis does not change. As detailed below, whether a party is entitled under federal law to a jury trial in supplementary proceedings depends on the type of relief sought by the plaintiff, namely whether it seeks equitable or legal relief. The Illinois statute addressing supplementary proceedings refers to Illinois' garnishment statute for the procedure in situations in which a person claims an interest in the property a judgment creditor seeks to obtain. See 735 ILCS 5/2-1402(g). The garnishment statute in turn provides that trials "shall be conducted as in other civil cases." 735 ILCS 5/12-711(c). Nothing in either of these statutes requires a jury trial. Rather, trials shall be conducted as in other civil cases. Under Illinois law, like federal law, the type of relief sought determines whether a party is entitled to a jury trial in a civil case.*fn2 See e.g., Morris B. Chapman & Assocs., Ltd. v. Kitzman, 307 Ill. App. 3d 92, 106, 716 N.E.2d 829, 842 (1999) (no right to a jury trial where equitable relief is sought). The cases the Rogans cite are ...


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