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Sullivan v. J & D Plumbing, Inc.

United States District Court, Seventh Circuit

May 29, 2013

JAMES T. SULLIVAN, etc., et al., Plaintiffs,
v.
J & D PLUMBING, INC., and JD PLUMBING, INC., Magistrate Judge Young B. Kim Defendants.

MOTION FOR ENTRY OF JUDGMENT AGAINST JOHN E. DUNHAM JR.

REBECCA R. PALLMEYER, District Judge.

NOW COME Plaintiffs, JAMES T. SULLIVAN, etc., et al., by their attorneys, DOUGLAS A. LINDSAY, JOHN W. LOSEMAN, and BRIAN T. BEDINGHAUS, with ROETZEL & ANDRESS, LPA, of counsel, and move this Court pursuant to Fed.R.Civ.P. 69(a), Illinois Supreme Court Rule 277(h), and 735 ILCS 5/2-1402(f)(1) to enter Judgment against JOHN E. DUNHAM JR. ("Dunham"), president of Defendants, J & D PLUMBING, INC., and JD PLUMBING, INC., in the amount of $21, 420.23. In support hereof, Plaintiffs state:

1. On October 30, 2012, Judgment was entered in favor of Plaintiffs and against Defendants, J & D PLUMBING, INC., and JD PLUMBING, INC., jointly and severally, in the amount of $280, 638.82.

2. On March 4, 2013, Plaintiffs served J & D PLUMBING, INC., and JD PLUMBING, INC. with Citations to Discover Assets by service on its president, John E. Dunham Jr. True and correct copies of the Citations, Citation Notices, and completed Affidavits of Service are attached hereto as Exhibit A.

3. On April 17, 2013, Plaintiffs served a Citation to Discover Assets (Third Party) on FIRST MIDWEST BANK ("First Midwest"). A true and correct copy of the Citation, Citation Notice, and certified mailing returned receipt are attached hereto as Exhibit B.

4. In response to the Citation to First Midwest, Plaintiffs received copies of monthly statements for a checking account in the name of JD PLUMBING, INC, including copies of cancelled checks drawn on that account.

5. The First Midwest account statements reveal that $21, 420.23 was transferred from JD PLUMBING, INC.'s checking account after the date the Citation was served on JD PLUMBING, INC, INC. on March 4, 2013. True and correct copies of the March 2013 First Midwest checking account statement for JD PLUMBING, INC., and copies of the checks processed on or after March 4, 2013, are attached hereto as Exhibit C.

6. Specifically, the statements show following transfers occurred after service of the Citation:

Withdrawals/Debits:

Date Withdrawal/Debit Description 3/4/13 $107.29 Purchase at Menards 3/4/13 $100.00 ATM Withdrawal 3/4/13 $2.50 ATM surcharge 3/5/13 $375.00 Preauthorized Debit - Firstnet 3/8/13 $35.00 Overdraft fee for Check #5424 3/12/13 $35.00 Overdraft fee for Check #5424 3/12/13 $375.00 Preauthorized Debit - Firstnet 3/12/13 $375.00 Preauthorized Debit - Firstnet 3/14/13 $375.00 Preauthorized Debit - Firstnet 3/18/13 $200.00 ATM Withdrawal 3/25/13 $15.47 Purchase at vistaprint.com 3/26/13 $316.58 Preauthorized Debit - Golden Rule Ins. Prem.

Checks:

Date Check Amount Payee Cleared Number 3/5/13 5421 $5, 125.00 Brian Cann 3/6/13 5422 $364.39 Auburn Supply Co. 3/6/13 5423 $75.00 Cash 3/7/13 5424 $4, 800.00 John Dunham 3/11/13 5426 $1, 755.00 Denise Marcukaitis 3/11/13 5427 $1, 600.00 Cash 3/13/13 5425 $89.00 Guidance Recovery Service 3/13/13 5428 $3, 750.00 John Dunham 3/15/13 5430 $500.00 Cash 3/18/13 5431 $1, 050.00 Cash

See Exhibit C.

7. Illinois Supreme Court Rule 277(h) provides that "[a]ny person who fails to obey a citation... may be punished for contempt."

8. 735 ILCS 5/2-1402(f)(1) provides in relevant part:

The citation may prohibit the party to whom it is directed from making or allowing any transfer or other disposition or, or interfering with, any property not exempt from the enforcement of a judgment therefrom... belonging to the judgment debtor or to which he or she may be entitled to which may thereafter be acquired by or become due to him or her... The court may punish any party who violates the restraining provision of a citation as and for a contempt...

735 ILCS 5/2-1402(f)(1).

9. The president of a corporation who transfers or permits the transfer of corporate assets in violation of the prohibitions of a citation to discover assets is personally liable for the transfers. Divane v. Sundstrand Electric Co., Inc., No. 03 C 5728, 2004 WL 1323287 at *2 (N.D.Ill. June 14, 2004) (citing City of Chicago v. Air Auto Leasing Co., 297 Ill.App.3d 873 (1988)); see also Laborers' Pension Fund v. Dominic Jr., Inc., No. 02 C 3321, 2003 WL 21310282 * 2-4 (N.D.Ill. June 5, 2003).

10. Dunham violated the restraining provisions of the Citation by transferring and permitting the transfer of $21, 420.23 from the First Midwest checking account of JD PLUMBING, INC., after the date he was served with the Citation.

11. Plaintiffs request that judgment be entered against Dunham in the amount of $21, 420.23, which is the amount of the transfers made after service of the Citation.

12. As of May 29, 2013, after all payments have been applied, a total amount of $280, 947.06 remains due to Plaintiffs, which amount includes $280, 638.82 in judgment principal and $308.24 in judgment interest.

WHEREFORE, Plaintiffs, JAMES T. SULLIVAN, etc., et al., request the Court to enter judgment in favor of Plaintiffs and against JOHN E. DUNHAM JR. in the amount of $21, 420.23, and to award additional relief in favor of Plaintiffs as the Court deems appropriate.

EXHIBIT A

CITATION TO DISCOVER ASSETS

YOUR FAILURE TO APPEAR AS HEREIN DIRECTED MAY CAUSE YOU TO BE ARRESTED AND BROUGHT BEFORE THE COURT TO ANSWER TO A CHARGE OF CONTEMPT OF COURT, WHICH MAY BE PUNISHABLE BY IMPRISONMENT IN THE COUNTY JAIL.

YOU ARE REQUIRED TO DO THE FOLLOWING UPON RECEIVING THIS CITATION UNTIL FURTHER ORDER OF THE COURT IN ACCORDANCE WITH ILLINOIS SUPREME COURT RULE 277(f), OR UNTIL THIS CITATION IS DISMISSED BY THE COURT OR BY STIPULATION:

YOU ARE REQUIRED TO APPEAR at the offices of ROETZEL & ANDRESS, 20 South Clark Street, Suite 300, Chicago, Illinois, on March 14, 2013, at 2:00 p.m., to be examined under oath concerning the property or income of, or indebtedness due or owed to J & D PLUMBING, INC., and JD PLUMBING, INC. ("Judgment Debtors"). This Citation examination shall be conducted by deposition as provided by the rules of this Court for depositions.

YOU ARE REQUIRED TO PRODUCE at the offices of ROETZEL & ANDRESS, 20 South Clark Street, Suite 300, Chicago, Illinois, on or before March 7, 2013, all documents of every nature containing information concerning any assets, property, income of, or any indebtedness due or owed to the Judgment Debtors, including without limitation, documents reflecting the following (for the period from December 1, 2010, to the present, unless indicated otherwise):

(i) All accounts with any banking institution, savings and loan association, or credit union, certificates of deposit, money market and mutual fund accounts, trust accounts and funds, checking accounts, savings accounts, money market accounts, pension plans, and retirement accounts, whether held in the name of a Judgment Debtor or in a Judgment Debtor's name with another person or company, including without limitation, all cancelled checks, all deposited checks, and a copy of each detailed account statement;
(ii) All loans and promissory notes; loan or other financing applications; financial statements and reports;
(iii) All purchase or sale contracts, property listings, deeds, mortgages, trust agreements or assignments, leases, sale/leaseback contracts, and management contracts, made or executed by any Judgment Debtor pertaining to any real estate in which a Judgment Debtor has an interest or has had any interest since December 1, 2010;
(iv) Evidence of all monies owed to Judgment Debtor, whether due, overdue, or to become due to any Judgment Debtor, including but not limited to commissions and accounts receivable;
(v) All minutes, books, and records reflecting or pertaining to the transfer of any real estate between any Judgment Debtor and any persons affiliated with or employed by Judgment Debtor;
(vi) All financial statements, including but not limited to all balance sheets, income statements, statements of cash flow, statements of changes in owners' equity; invoices, check registers, schedule of assets or items, equipment and materials lists, and records reflecting the sale or other disposition of assets by any Judgment Debtor;
(vii) Ownership or investment interests of any Judgment Debtor in any business, property, or other investment;
(viii) All articles of incorporation and any and all amendments made thereto; All Annual Reports filed with any state in which Judgment Debtors are registered to conduct business; All articles of dissolution;
(ix) Ownership or right to any motor vehicle or marine vessel titled under the laws of Illinois or any other state in the USA, together with any copies of any documentary evidence of any loans which are secured by said property, including loan applications, and status of any said loans as of the date of the service of this citation and as of the date of the entry of judgment herein; all vehicle title and registration documents; all documents and contracts reflecting the sale of any vehicle owned by any Judgment Debtor or used by any Judgment Debtor in the course of its business;
(x) Copies of Judgment Debtors' complete business income tax returns, federal and state, including all schedules, for the years 2009, 2010, 2011, and (if filed) 2012;
(xi) Copies of Judgment Debtors' quarterly payroll tax returns for the years 2010, 2011, and 2012; copies of all state quarterly Contribution and Wage Reports;
(xii) Mortgages and/or deeds to real estate; interests in any trust, including land trusts; leases, rentals, properties, installment agreements or plans for any real estate or premises; contracts regarding, or interests in, real estate; insurance policies, including schedules of insured property or items;
(xiii) Property tax bills; quarterly reports and filings for estimated employment, unemployment, sales, and/or use taxes; W-2 and 1099 forms; tax delinquency or lien notices; correspondence to or from the IRS or Illinois Department of Revenue or their agents; and
(xiv) Invoices, sales orders, licenses, license applications, bonds, insurance policies, payment requests, and receipts for all work in progress, work under contract, planned work, and work or projects performed since January 1, 2012.

The undersigned attorney certifies that judgment was entered in favor of Plaintiffs and against J & D PLUMBING, INC. and JD PLUMBING, INC., jointly and severally, on October 30, 2012, in the principal amount of $280, 638.82. The entire balance plus post-judgment interest at the rate of 0.19% per annum remains unsatisfied. As of February 6, 2013, after all credits and set-offs are given, the balance due is $280, 783.45, consisting of (1) principal of $280, 638.82 and (2) interest of $144.63. Interest continues to accrue at a rate of $1.46 per day while the judgment remains unsatisfied.

YOU ARE PROHIBITED from making or allowing any transfer or other disposition of, or from interfering with: (i) any property not exempt from the enforcement of a judgment therefrom, a deduction order or garnishment belonging to any Judgment Debtor; (ii) any such property to which any Judgment Debtor may be entitled; and (iii) any such property that may be acquired by any Judgment Debtor, until further order of the Court or termination of the proceeding.

YOU ARE PROHIBITED from paying over or otherwise disposing of any monies not so exempt which currently are due or owed to, or which are to become due or owed to, any Judgment Debtor until further order of the Court or termination of the proceeding.

THE COURT MAY PUNISH YOU FOR CONTEMPT OF COURT if you violate the foregoing restraining provisions.

CERTIFICATE OF ATTORNEY

1. Judgment in the amount of $280, 638.82 was entered October 30, 2012, against JD PLUMBING, INC., and JD PLUMBING, INC., jointly and severally.
2. Name of Court: United States District Court for the Northern District of Illinois, Eastern Division.
3. Case No. 10 C 7661.

I, the undersigned, certify under penalties as provided by law pursuant to 735 ILCS 5/1-109 to the Court that the foregoing information is true.

CITATION NOTICE

Judgment was entered against J & D PLUMBING, INC., and JD PLUMBING, INC., jointly and severally, on October 30, 2012, in the amount of $280, 638.82. Interest accrues at the annual rate of 0.19%. As of February 6, 2013, a principal balance of $280, 638.82 plus accrued interest remains unsatisfied.

Name of person receiving Citation: JD Plumbing, Inc., c/o John E. Dunham Jr. - president, 28842 S. Ridgeland Ave., Peotone, IL 60468

NOTICE: The Court has issued a Citation against the corporation named above. The Citation directs that corporation to appear in Court or at a deposition at the offices of the judgment creditors' attorney to be examined for the purpose of allowing the judgment creditor to discover income and assets belonging to the judgment debtor or in which the judgment debtor has an interest. The Citation was issued on the basis of a judgment against the judgment debtors in favor of the judgment creditor in the amount stated above. On or after the Court or deposition date shown above, the Court may compel the application of any discovered income or assets toward payment on the judgment. The amount of income or assets that may be applied toward the judgment is limited by federal and Illinois law.

THE JUDGMENT DEBTORS HAVE THE RIGHT TO ASSERT STATUTORY EXEMPTIONS AGAINST CERTAIN INCOME OR ASSETS OF THE JUDGMENT DEBTORS WHICH MAY NOT BE USED TO SATISFY THE JUDGMENT IN THE AMOUNT STATED ABOVE:

(1) Under Illinois or federal law, the exemptions of personal property owned by the debtor include the debtor's equity interest, not to exceed $4, 000 in value, in any personal property as chosen by the debtor; Social Security and SSI benefits; public assistance benefits; unemployment compensation benefits; worker's compensation benefits; veteran's benefits; circuit breaker property tax relief benefits; the debtor's equity interest, not to exceed $2, 400 in value, in any one motor vehicle, and the debtor's equity interest, not to exceed $1, 500 in value, in any implements, professional books, or tools of the trade of the debtor. (2) Under Illinois law, every person is entitled to an estate in homestead, when it is owned and occupied as a residence, to the extent in value of $15, 000, which homestead is exempt from judgment. (3) Under Illinois law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 15% of gross weekly wages or (ii) the amount by which disposable earnings for a week exceed the total of 45 times the federal minimum hourly wage or, under a wage deduction summons served on or after January 1, 2006, the Illinois minimum hourly wage, whichever is greater.

(4) Under federal law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 25% of disposable earnings for a week or (ii) the amount by which disposable earnings for a week exceed 30 times the federal minimum hourly wage.

(5) Pension and retirement benefits and refunds may be claimed as exempt under Illinois law. The judgment debtor may have other possible exemptions under the law. THE JUDGMENT DEBTOR HAS THE RIGHT AT THE CITATION HEARING TO DECLARE EXEMPT CERTAIN INCOME OR ASSETS OR BOTH. The judgment debtor also has the right to seek a declaration at an earlier date, by notifying the clerk in writing at the office of the Clerk of the U.S. District Court, Room 2000, 219 South Dearborn Street, Chicago, Illinois 60604. When so notified, the Clerk of the Court will obtain a prompt hearing date from the court and will provide the necessary forms that must be prepared by the judgment debtor or the attorney for the judgment debtor and sent to the judgment creditor and the judgment creditor's attorney regarding the time and location of the hearing. This notice may be sent by regular first class mail.

EXHIBIT B

CITATION TO DISCOVER ASSETS (THIRD PARTY)

YOUR FAILURE TO ANSWER AS HEREIN DIRECTED MAY. CAUSE YOU TO BE ARRESTED AND BROUGHT BEFORE THE COURT TO ANSWER TO A CHARGE OF CONTEMPT OF COURT, WHICH MAY BE PUNISHABLE BY IMPRISONMENT IN THE COUNTY JAIL.

YOU ARE REQUIRED TO DO THE FOLLOWING UPON RECEIVING THIS CITATION UNTIL FURTHER ORDER OF THE COURT IN ACCORDANCE WITH ILLINOIS SUPREME COURT RULE 277(f), OR UNTIL THIS CITATION IS DISMISSED BY THE COURT OR BY STIPULATION:

YOU ARE COMMANDED TO APPEAR at the offices of ROETZEL & ANDRESS, 20 S. Clark St., Suite 300, Chicago, Illinois, on May 13, 2013, at 3:30 p.m. to be examined under oath concerning all assets, property, and income of, and all indebtedness due or owed to J & D PLUMBING, INC. and JD PLUMBING, INC. ("Judgment Debtors"). This Citation examination shall be conducted by deposition as provided by the rules of this Court for depositions.

Note: Your written answer and production of documents as directed herein is sufficient for your appearance unless you receive a further order to personally appear for examination.

YOU ARE REQUIRED TO PRODUCE at the offices of Roetzel & Andress, 20 South Clark Street, Suite 300, Chicago, Illinois, on or before May 13, 2013, all documents containing information about any assets, property, and income of, and any indebtedness due or owed to the Judgment Debtors, including:

(i) Copies of all detailed account statements (including credit card statements), copies of cancelled checks or printed images thereof; copies of all deposited items or printed images thereof; copies of all account signature cards and amendments thereto [for the period from January 1, 2011, through the date of your response];
(ii) Copies of all account applications, loan and credit applications, financing statements and agreements, and collateral security agreements;
(iii) Copies of all documents evidencing any and all monies owed to Judgment Debtors, or either of them, whether due, overdue, or to become due, including monies held in escrow and earmarked for Judgment Debtors [for the period from January 1, 2011, through the date of your response];
(iv) Copies of all contracts involving Judgment Debtors [in effect during the period January 1, 2011, through the date of your response];
(v) Copies of all other documents that reflect assets of Judgment Debtors, and all other activity occurring on Judgment Debtors' accounts [for the period from January 1, 2011, through the date of your response];
(vi) Copies of all correspondence to and from Judgment Debtors [for the period from January 1, 2011, through the date of your response], and
(vii) The completed Citation Answer, attached hereto.

The undersigned attorney certifies that judgment was entered in favor of Plaintiffs and against J & D PLUMBING, INC. and JD PLUMBING, INC., jointly and severally, on October 30, 2012, in the amount of $280, 638.82. As of April 12, 2013, after all credits and set-offs are given, the balance due is $280, 878.40, consisting of (1) principal of $280, 638.82and (2) interest of $239.58. Interest continues to accrue at a rate of $1.46 per day while the judgment remains unsatisfied.

YOU ARE PROHIBITED from making or allowing any transfer or other disposition of, or from interfering with: (i) any property not exempt from the enforcement of a judgment therefrom, a deduction order or garnishment belonging to any Judgment Debtors (ii) any such property to which a Judgment Debtor may be entitled; and (iii) any such property that may be acquired by a Judgment Debtor, until further order of the Court or termination of the proceeding.

YOU ARE PROHIBITED from paying over or otherwise disposing of any monies not so exempt which currently are due or owed to, or which are to become due or owed to, any Judgment Debtor until further order of the Court or termination of the proceeding.

THE COURT MAY PUNISH YOU FOR CONTEMPT OF COURT if you violate the foregoing restraining provisions.

CERTIFICATE OF ATTORNEY

1. Judgment in the amount of $280, 638.82 was entered October 30, 2012.
2. Name of Court: United States District Court for the Northern District of Illinois, Eastern Division.
3. Case No. 10 C 7661.

I, the undersigned, certify under penalties as provided by law pursuant to 735 ILCS 5/1-109 to the Court that the foregoing information is true.

THIRD PARTY RESPONDENT ANSWER TO CITATION PROCEEDINGS

___________________________________________________________, certifies under penalty of perjury that in regard to the property of the judgment debtors, J & D PLUMBING, INC. and JD PLUMBING, INC., the Citation Respondent files the following answers to this Citation to Discover Assets and is in possession of the following property of the judgment debtors:

I. _____________ Citation Respondent has no property of the judgment debtors in its possession.

II. ____________ Citation Respondent has no knowledge of any assets or income belonging to the judgment debtors.

III. ___________ Citation Respondent has property that belongs or may belong to the judgment debtors as follows:

J & D PLUMBING, INC.

Additional Information Relating to Debtors' Property:

JD PLUMBING, INC.

Additional Information Relating to Debtors' Property:

Citation Respondent/Agent:

Note: A copy of this Answer should be filed with the court, and mailed to Attorney for Plaintiffs/Judgment Creditors and the Judgment Debtors.

CITATION NOTICE

Judgment was entered against J & D PLUMBING, INC., and JD PLUMBING, INC., jointly and severally, on October 30, 2012, in the amount of $280, 638.82. Interest accrues at the annual rate of 0.19%. As of April 12, 2013, a principal balance of $280, 638.82 plus accrued interest remains unsatisfied.

Name of person receiving Citation: First Midwest Bank, Joliet Racich Center, 3800 Rock Creek Blvd., Joliet, IL 60431, Attn: Fraud Dept.

NOTICE: The Court has issued a Citation against the person named above. The Citation directs that person to appear in Court or at a deposition at the offices of the judgment creditors' attorney to be examined for the purpose of allowing the judgment creditor to discover income and assets belonging to the judgment debtors or in which the judgment debtors have an interest. The Citation was issued on the basis of a judgment against the judgment debtors in favor of the judgment creditor in the amount stated above. On or after the Court or deposition date shown above, the Court may compel the application of any discovered income or assets toward payment on the judgment. The amount of income or assets that may be applied toward the judgment is limited by federal and Illinois law.

THE JUDGMENT DEBTORS HAVE THE RIGHT TO ASSERT STATUTORY EXEMPTIONS AGAINST CERTAIN INCOME OR ASSETS OF THE JUDGMENT DEBTOR WHICH MAY NOT BE USED TO SATISFY THE JUDGMENT IN THE AMOUNT STATED ABOVE:

(1) Under Illinois or federal law, the exemptions of personal property owned by the debtor include the debtors' equity interest, not to exceed $4, 000 in value, in any personal property as chosen by the debtors; Social Security and SSI benefits; public assistance benefits; unemployment compensation benefits; worker's compensation benefits; veteran's benefits; circuit breaker property tax relief benefits; the debtor's equity interest, not to exceed $2, 400 in value, in any one motor vehicle, and the debtors' equity interest, not to exceed $1, 500 in value, in any implements, professional books, or tools of the trade of the debtors. (2) Under Illinois law, every person is entitled to an estate in homestead, when it is owned and occupied as a residence, to the extent in value of $15, 000, which homestead is exempt from judgment. (3) Under Illinois law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 15% of gross weekly wages or (ii) the amount by which disposable earnings for a week exceed the total of 45 times the federal minimum hourly wage or, under a wage deduction summons served on or after January 1, 2006, the Illinois minimum hourly wage, whichever is greater.

(4) Under federal law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 25% of disposable earnings for a week or (ii) the amount by which disposable earnings for a week exceed 30 times the federal minimum hourly wage.

(5) Pension and retirement benefits and refunds may be claimed as exempt under Illinois law. The judgment debtors may have other possible exemptions under the law. THE JUDGMENT DEBTORS HAVE THE RIGHT AT THE CITATION HEARING TO DECLARE EXEMPT CERTAIN INCOME OR ASSETS OR BOTH. The judgment debtors also have the right to seek a declaration at an earlier date, by notifying the clerk in writing at the office of the Clerk of the U.S. District Court, Room 2000, 219 South Dearborn Street, Chicago, Illinois 60604. When so notified, the Clerk of the Court will obtain a prompt hearing date from the court and will provide the necessary forms that must be prepared by the judgment debtors or the attorney for the judgment debtors and sent to the judgment creditor and the judgment creditor's attorney regarding the time and location of the hearing. This notice may be sent by regular first class mail.

EXHIBIT C


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