Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

For Your Ease Only, Inc. v. Calgon Carbon Corp.

October 6, 2009

FOR YOUR EASE ONLY, INC., PLAINTIFF,
v.
CALGON CARBON CORPORATION, AND PRODUCT CONCEPTS COMPANY, AND MARK SCHNEIDER, DEFENDANTS.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM, OPINION AND ORDER

This case is before the court on plaintiff For Your Ease Only's ("FYEO") renewed motion for a turnover order pursuant to Federal Rule Civil Procedure 69(a). As judgment creditor on an underlying matter, FYEO claims that it is entitled to payments made by Home Shopping Network ("HSN") to Anewco, a successor company of the judgment debtors at issue in this matter. For the following reasons, the motion [386] is granted.

BACKGROUND

In February 22, 2007, FYEO obtained a default judgment against Mark Schneider ("Schneider") and Product Concepts Company ("PCC") in the amount of $2.1 million for claims relating to the sale of anti-tarnish jewelry boxes. In April 2007, FYEO served HSN with a third-party citation order to discover assets of Schneider and PCC in accordance with Illinois law, 735 Ill. Comp. Stat. 5/2-1402 (2009). An accompanying citation notice listed one of Schneider's last known addresses as Sevenquest.

FYEO also filed a petition for an order restraining HSN from transferring any property to the judgment debtors, Schneider and PCC, or to "any entities standing in their shoes, including, Sevenquest, LLC, Anewco." 4/20/07 Petition. The petition informed HSN that the change from PCC to Sevenquest, and finally to Anewco, was in name only and that FYEO believed the payments HSN owed to Anewco as of April 20, 2007 were assets of the judgment debtors that were subject to a lien under Illinois law. Id. At some point while this motion was pending before the court, HSN made two payments to Anewco for the purchase of the anti-tarnish jewelry boxes in the amounts of $84,856 and $297,360.

On November 13, 2007, this court denied FYEO's original motion for turnover regarding HSN's payments to Anewco. For an expanded history and more detailed discussion of this decision, this court's previous opinion can be found at For Your Ease Only, Inc. v. Calgon Carbon Corp., 2007 U.S. Dist. LEXIS 83744 (N.D. Ill. Nov. 13, 2007). However, the Seventh Circuit disagreed with this court and vacated the November 13, 2007 order. See For Your Ease Only, Inc. v. Calgon Carbon Corp., 560 F.3d 717 (7th Cir. 2009).

Although the Seventh Circuit embraced this court's finding that the asset at issue -- the right to payments from HSN for the anti-tarnish jewelry boxes -- was fraudulently transferred from judgment debtor PCC to Sevenquest, the Seventh Circuit disagreed with this court's finding of good faith and ultimately concluded that the subsequent transfer of this asset from Sevenquest to Anewco was not in good faith and was therefore voidable under Illinois law. Id. at 721-22. The Seventh Circuit then remanded this case "to decide whether HSN violated the citation by transferring the assets of PCC and Schneider to Anewco." Id. at 723.

DISCUSSION

A. Motion for Turnover Standard

The proper service of a citation to discover assets creates a lien on "all personal property belonging to the judgment debtor in the possession or control of the third party or which thereafter may be acquired or come due the judgment debtor and comes into the possession or control of the third party to the time of the disposition of the citation." 735 Ill. Comp. Stat. 5/2-1402(m) (2009). If a third-party violates the restraining provision of the citation, the court may "enter judgment against him or her in the amount of the unpaid portion of the judgment and costs allowable under this Section, or in the amount of the value of the property transferred, whichever is lesser. 735 Ill. Comp. Stat. 5/2-1402(f)(1) (2009).

The Seventh Circuit found that the transfer of the rights to payment from HSN for the anti-tarnish jewelry boxes from PCC to, ultimately, Anewco was voidable, and therefore, those rights are an asset of the judgment creditor. It is, therefore, undisputed that HSN transferred assets belonging to the judgment debtor after the citation was served. If this court finds that HSN was aware that the assets being transferred belonged to the judgment debtors, and thus violated the citation, HSN will be liable for the amount of the value of the property transferred.

B. The Termination Provision of Illinois Supreme Court Rule 277 and Stay Provision of Federal Rule 62 Do Not Affect the Outcome of this Case

HSN contends that, even if it were liable to FYEO, it is shielded from liability because FYEO did not preserve its claimed right to HSN payments. Specifically, HSN claims that the citation that had been served on HSN had terminated by the issuance of the order of this court pursuant to Illinois Supreme Court Rule 277, and/or FYEO did not seek a stay of judgment pending appeal under Rule 62 of the Federal Rules of Civil Procedure. The court finds these arguments unpersuasive.

First, Illinois Supreme Court Rule 277 provides that a citation is terminated by an order of the court or terminates automatically six months from the date of respondent's first personal appearance pursuant to (1) the citation or (2) a subsequent process issued to enforce the citation. Ill. Sup. Ct. R. 277. HSN claims that the court's November 13, 2007 order effectively terminated the citation. Regardless of the validity of this claim, the action which is currently in dispute -- the transfer of money from HSN to Anewco -- occurred well before that order was issued from this court, and within two months of the issuance of the citation, well before the six month ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.