United States District Court, N.D. Illinois, Eastern Division
FOX VALLEY LABORERS' HEALTH AND WELFARE FUND; FOX VALLEY LABORERS' PENSION FUND; and PAT SHALES, Fund Administrator, Plaintiffs,
v.
HUGH HENRY CONSTRUCTION INC.; HH CONCRETE, INC.; TRACEY BIESTERFIELD; and MICHAEL GALLAGHER, Defendants. GLOBAL BUILDERS, INC., Citation respondent.
ORDER ON PLAINTIFFS' MOTION FOR TURNOVER ORDER
AND MOTION FOR RESTRAINING ORDER
MATTHEW F KENNELLY UNITED STATES DISTRICT JUDGE.
On
November 28, 2018, judgment was entered in favor of the Fox
Valley Laborers' health and welfare and pension funds and
their administrator Pat Shales (collectively the Funds)
against Hugh Henry Construction, Inc., Tracey Biesterfeldt,
and Michael Gallagher in the amount of $301, 162.26, and in
favor of the Funds against HH Concrete, Inc. in the amount of
$454, 657.23. The Funds then issued citations to discover
assets to various entities to attempt to collect on the
judgment.
One of
the citations was issued to Global Builders, Inc. The
citation appears to have been issued on December 14, 2018
(directed to Global Builders' attorney Thomas Herz, Jr.).
See dkt. no. 20. The citation was served at some
point on Global Builders, likely through attorney Herz, but
the record does not establish the date of service. The
citation was concededly served by February 7, 2019-and likely
several days before that-because on that date Global
Builders' owner, Carmen Gratace, appeared for an
examination pursuant to the citation and a citation served in
another lawsuit by the Funds against Hugh Henry, Case No. 16
C 7203. See dkt. no. 34-1 (transcript of citation
examination).[1] The Court will use February 1, 2019 as the
date of service because the Funds have not established an
earlier date.
The
Funds have moved for a turnover order, seeking equipment
belonging to the judgment debtors that the Funds contend is
in the possession of Global Builders. After the motion was
filed, the case was reassigned to the undersigned judge. The
Court held an evidentiary hearing on October 4, 2019. This
constitutes the Court's findings of fact and conclusions
of law.
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 ILCS
5/2-1402(m)(2); Cacok v. Covington, 111 F.3d 52, 54
(7th Cir. 1997). The lien does not arise, however, until the
citation is served. In this case the record does not
establish a date of service earlier than February 1, 2019. So
the question for purposes of the motion for turnover order is
what property of the judgment debtors Global Builders was
holding as of that date.
Hugh
Henry (the term the Court will use to describe the judgment
debtors) was a subcontractor on a construction project on
which Global Builders was the general contractor. The project
was on Roosevelt Road near the Dan Ryan Expressway on
Chicago. Hugh Henry was barred from the job site on October
9, 2019. The evidence does not reflect why, aside from Hugh
Henry principal Michael Gallagher's testimony that the
carpenter's union "removed manpower from the
project." Gallagher testified, credibly, that Global
Builders' owner Carmen Gratace told Gallagher not to come
to the job site and that if he did so Global would call the
police.
As of
October 9, Hugh Henry had a significant amount of
construction equipment and supplies that were physically on
the job site. Gallagher testified, again credibly, that a
small amount of Hugh Henry's property was returned but
that when he asked for the rest, Gratace "mocked [him],
laughed about it," and refused to return anything else.
In his testimony at the hearing, Gallagher gave a detailed
listing of Hugh Henry's equipment and supplies that were
present at the site as of October 9. Gallagher's
testimony was supported by records reflecting Hugh
Henry's purchase of the items, and the Funds also offered
photographs of some of the items that Gallagher took in early
December 2018. Gallagher's testimony regarding what Hugh
Henry left at the site was uncontradicted (Global
Builders' witness William Lumino testified that he had no
specific awareness of what property Hugh Henry left at the
site), and the Court found it credible.
Global
Builders admits that it still possesses some of the property
identified by Gallagher during his testimony, but it contests
its possession of the rest as of the relevant date. Global
Builders' admissions regarding its possession of some of
the items came in the form of interrogatory answers
introduced by the Funds and testimony by Lumino at the
evidentiary hearing.[2]
On the
rest of it, the Funds offered no direct evidence that the
other items identified by Gallagher were still there as of
February. For its part, Global Builders offered testimony by
Lumino, first, that persons purporting to work for Gallagher
came at some point after Hugh Henry was removed from the site
and picked up concrete forms (called Doka forms and Symons
forms). Second, Lumino testified that a significant number of
tools left at the job site were taken by unknown persons over
a period of time. Although this testimony was somewhat
vague-for example, Lumino did not identify any particular
items that were taken-the Court found it credible.
A court
may, in appropriate circumstances, infer or presume one's
continued possession of property from possession of the
property as of a particular point in time. See, e.g.,
Maggio v. Zeitz, 333 U.S. 56, 65-66 (1948); see also
United States v. Rylander, 460 U.S. 752, 761 n.3 (1983).
But here there is plenty to make such an inference
unreasonable or, alternatively, to rebut the presumption.
Hugh Henry's property was on an active construction site,
and it was taking up space. It is reasonable to believe that
once it became clear that Hugh Henry was not returning to the
site, Global Builders, as the general contractor, would have
had as much of Hugh Henry's property as possible moved
offsite so that it would not take up space (which is what
Lumino says Global did). It is also entirely possible, even
likely, that whoever took over the concrete work from Hugh
Henry helped itself to the equipment and forms that had been
left at the site. And then there is Lumino's credible
testimony about tools being stolen. The Court takes no
position regarding whether it was legally appropriate for
Global Builders to refuse to return property to Hugh Henry or
regarding whether, if some of Hugh Henry's property was
taken or used by others, Global is legally responsible to
compensate Hugh Henry for it. But the record does not support
a finding that Global possessed, as of February 1, 2019, any
items beyond those that it has admitted possessing via
interrogatory answer and Lumino's testimony.
For
these reasons, the Court grants the Funds' motion for
turnover only to the extent of the property of the judgment
debtors that Global Builders has stated via interrogatory
response or the testimony of William Lumino that it still
possessed at the relevant time. Plaintiffs' counsel is to
provide Global Builders' counsel a draft order by 12:00
noon on October 15, 2019, Global Builders' counsel is to
provide comments and edits by 12:00 noon on October 16, 2019,
and a joint status report including a draft agreed order, or
alternative versions of a proposed order, is to be filed by
4:30 p.m. on October 16, 2019. The case is set for a status
hearing on October 17, 2019 at 9:30 a.m.
The
Funds have also moved to restrain Global Builders from
disposing of any funds it receives through its lawsuit
against judgment debtors Hugh Henry Construction and Tracey
Biesterfeldt-by judgment, settlement, or otherwise-until this
Court can rule on who has priority of rights to any such
money. The Court grants the motion.[3] See Cacok, 111 F.3d
at 54-55; Kirchheimer Bros. Co. v. Jewelry Mine,
Ltd., 100 Ill.App.3d 360, 362-63, 426 N.E.2d 1110, 1114
(1981). Counsel for the Funds and Global Builders are to
confer and exchange drafts of a proposed order on the same
schedule as noted above and are to include their proposed
order(s) in the status report to be filed by 4:30 p.m. on
October 16, 2019.
Conclusion
The
Court grants plaintiffs' motion for turnover order in
part [34] and grants plaintiffs' motion for restraining
order [50] as more fully described in the body of this order.
The status hearing set for October 15, 2019 is vacated and
reset to October 17, 2019 at 9:30 a.m. Global Builders'
motion to ...