United States District Court, N.D. Illinois, Eastern Division
SYED RIZVI, Individually, and PRIME BUILDERS & DEVELOPMENT, INC., an Illinois Corporation, Plaintiffs,
MIRZA ALIKHAN, Defendant, THE ALLSTATE CORPORATION aka, ALLSTATE INDEMNITY COMPANY, Third Party Respondent.
MEMORANDUM OPINION AND ORDER
THOMAS M. DURKIN, District Judge.
The Court entered a default judgement against Mirza Alikhan, R. 14, based on a complaint filed by Syed Rizvi and Prime Builders & Development, Inc. ("Plaintiffs"), alleging that Alikhan failed to fully pay for repairs Plaintiffs made to Alikhan's house after it was damaged in a fire. See R. 1. In an effort to enforce that judgment, Plaintiffs have now moved for a turnover order against The Allstate Corporation pursuant to 735 ILCS 5/2-1402(c). See R. 26. For the following reasons, Plaintiffs' motion is denied.
After Plaintiffs completed the repairs to Alikhan's house, Alikhan made a partial payment to the Plaintiffs, R. 1 ¶ 8, using funds he received from Allstate pursuant to an insurance policy. R. 26 at 3 (¶ 9). He then made two additional payments, totaling $85, 679.64, leaving $89, 637.64 unpaid. R. 1 ¶ 8.
Prior to filing the instant action, Plaintiffs commenced two actions in this District against Allstate in an attempt to recover this unpaid money: 12 C 2174 and 14 C 2182. See R. 26 ¶ 12. Case 12 C 2174 was dismissed because Plaintiffs failed to show that Allstate was a party to the original contract to repair Alikhan's house, see 12 C 2174, R. 31 at 5 (July 9, 2013), and Plaintiffs voluntarily dismissed case 14 C 2182, R. 31 (Aug. 21, 2014).
In this case, Plaintiffs sued Alikhan directly, and the Court entered a default judgment against him. R. 14. Plaintiffs then served Allstate with a citation to discover assets pursuant to Federal Rule of Civil Procedure 69 and 735 ILCS 5/2-1402. R. 15. In response, Allstate stated that it has no assets belonging to Alikhan, and that Alikhan has no claims pending with Allstate. R. 33.
Despite this response, Plaintiffs filed the instant motion for turnover order, asking the Court to direct Allstate to turnover insurance proceeds to Plaintiffs. R. 26. At a status hearing on January 8, 2015, the Court raised the issue of subject matter jurisdiction because Plaintiffs and Allstate are all Illinois domiciliaries. The Court also specifically directed the parties to address Travelers Property Casualty v. Good, 689 F.3d 714 (7th Cir. 2012), and its significance for subject matter jurisdiction in this case. Plaintiffs filed a brief on this issue arguing that the Court has subject matter jurisdiction, R. 29, but Allstate did not respond. Despite Allstate's inexplicable failure to respond, the Court is required to "enforce limits on subject-matter jurisdiction no matter what litigants do or concede, " Myrick v. WellPoint Inc., 764 F.3d 662, 665 (7th Cir. 2014), because subject matter jurisdiction "can never be forfeited or waived." Rodas v. Seidlin, 656 F.3d 610, 622 (7th Cir. 2011).
Plaintiffs contend that because Allstate made a partial payment to Plaintiffs on behalf of Alikhan pursuant to an insurance policy, the Court should order Allstate to "turnover" the full amount of the default judgment against Alikhan. Plaintiffs, however, do not explain how this comports with the relevant statute governing turnover orders under Illinois law, 735 ILCS 5/2-1402. That statute provides the following, in relevant part:
(a) A judgment creditor... is entitled to prosecute supplementary proceedings for the purposes of examining the judgment debtor or any other person to discover assets or income of the debtor... and of compelling the application of non-exempt assets or income discovered toward the payment of the amount due under the judgment. A supplementary proceeding shall be commenced by the service of a citation....
(c) When assets or income of the judgment debtor not exempt from the satisfaction of a judgment, a deduction order or garnishment are discovered, the court may, by appropriate order or judgment:
(3) Compel any person cited, other than the judgment debtor, to deliver up any assets so discovered, to be applied in satisfaction of the 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 ...