on behalf of terra holdings i'll see the issue this morning the first issue concerns a order supplementing judgment that was issued against terrell holdings who at the time that this order was entered was a nine party to the case and the order added terror as a judgement dead or with join to this act does not provide for this type of relief the statute healthfully tells us what its purpose is at m c l six hundred point six one two eight which is to assist a judgment credit are in reaching the assets of the debtor to satisfy the judgment of the debtor in the green and the gallows or case subsequently the michigan court of appeals has told us that you can i use this statute to to recover judgment against a third party there is a remedy the gallagher case it's what you do is you file a new action and you assert piercing the corporate veil alter ego and you have the opportunity to prove your  case if that is what was attempted to be done here than the p s k was completely misused now i'm reconsideration the district court noted that in this case we have a alleged fraudulent transfer and rightly so if that was alleged then the court referred to a decision by this court in presidential facility and rely on that distinguished it from green and said it could enter the judgment against terror i'm the entire amount this is where again the court overstepped what the statute says and what this court reviewed was that the procedure is this if there is a fraudulent alleged fraudulent transfer the creditor can bring the evidence to the district court if the district court thinks that there may be a transfer in avoidance of the judgment the party can then be added to the action the the interest of the parties can be adjudicated the party that's been added has the right to request a jury trial and then the judgment is limited to the asset that is allegedly conveyed in avoidance and again this court noted this specifically it put no one in that presidential facility case so here what we really have is a denial of due process in this case taro was not added to the complaint was that serve with you complaint or that this motion was not added to the action did not have the opportunity to assert its position with respect to the ask that do not have the opportunity to request a jury trial and even if all those things have taken place the judgment exceeded the amount of the transferred assets and therefore would ask that you vacate the order supplementing judgment as i read all of your headings and so on it seems that your attack was soley on paragraph two where it says your ad it is a judgment debtor and made jointly and severally liable and we're going to have to parse out the different paragraphs but i'm i right about that site there's six numbered paragraphs but your both your headings and then in your reply brief you said well they say it's something else but the issue is whether the court well i don't think that terra holdings should be any part of their judgment anywhere because tara did not receive due process so  there should not be a judgment in any respect as to tara and that is so are you saying that includes paragraph four which refers to two moneys that have been paid to terror under the str management agreements that would make you a party would make you jointly and severally liable no it could not because if the issue then i will give you i think it's there's some confusion when you you're prohibited from assigning or transferring the management agreement to anyone else you object to that as well the word terror appeared i think i don't place as but all of your attacks seem to be on paragraph two so that's what i'm trying to distinguish now i would also say that the that second paragraph is improper as well i don't see how tara can as to tara i don't see how terror can be told to do anything or not do anything until terror is properly brought into the action to determine if it has received any improper assets now the court may or may not be able to make some restrictions as to strathmore and whether strathmore can receive management fees or can't i'm not here to argue that but i don't think that the court can make any rulings as to tara until tara is brought into the action and given an opportunity to defend it is not a party to the judgement the court has no jurisdiction over tara at this point ok i mean i think you only reason i raise that is that i did not read your your brief as making as broad a claim as you just did that because there's no jurisdiction whatsoever nothing in the order could apply to tara as opposed to the heading of we shouldn't be a judgment debtor and we shouldn't be jointly and severally libel is the reason i raised it but you're saying that you wouldn't you would now make the argument that there's no that you are appealing any kind any anything that the word terror appears in the order yes it was a i think the focus of my argument was that terra cannot be made a party to this judgement until it is there are things in there things in the order that are different from making us a general party and that's why i'm making the distinction made maybe it's a distinction without a difference maybe your argument really was that broad but that's why i wanted to if you know what it is i think could be differently could be directed to strathmore rather then if if appropriate rather than to tara thank morning mornings thomas eckhart appearing on behalf of defendant upon strasse more with regard to strathmore the issue is rather straightforward question is what is the application of the mission court rules in this case where the plaintiff creditor had filed garnishments garnishments were filed against these bear creek and cities who are not parties to this case disclosures were timely filed they indicated that no monies were owed and that was the end of it until the motion was filed for supplementary proceedings some months later but the michigan court rules with regard to garnishment procedures are very clear that if they questioned the disclosures they had the ability and in fact the obligation to request discovery of the garnishee defendants they didn't do that they could have asked for deposition they didn't do that they could have submitted in iraq the tories they didn't do that without doing that then the disclosures that said that no money was owed are presumed to be correct supplementary proceeding it was too late to do so now even if they had filed serve discovery then they were obligated under three point one one to  join the parties in a proceeding and go to trial and three point one zero one am one specifically requires that the parties be given an opportunity for trial it be the defendant the garnishee defendants here who are not a party to this proceeding so we would submit that basically when the court here is interpreted in applying michigan law in this case the michigan court rules that the on the date that we signed them we had already paid last month's bills and we haven't yet got next month's bills so we don't owe them anything no strathmore was not being paid and was not due to be paid therefore they were correct and that would have been shown if the plaintiff had proceeded as they should have by submitting discovery and then if there was still dispute by bringing the case to trial and a lot allowing the garnishee defendants to defend themselves so you're saying bear creaks explanation i don't know if they're here to explain it bear creek sexual nation for having made that disclosure is what that we were just going to pay them sometime in the distant future and therefore we don't know them anything at that point in time strathmore wasn't doing any work and wasn't doing any money and in fact they were not being paid but they they were not being paid had not been paid were never going to be paid they were never going to be paid at that point in time and therefore why should they have been on notice that they were going to be paid in the future then if you're saying that they should have contested these disclosures you're saying the disclosures are true is closures were true that  that would have been if if the predator's of like a question of what's the meaning of is is but your position seems to be that the the disclosures were true but nevertheless they should have attacked them they just closures were true they could have attacked them by submitting discovery or breaking the garnishee defendants into the case your position that attack that had been futile because they were true you're sort of trying to use the non existing i think that that moment of money to say they could never try to get some money nothing could never try to get some money from the defendant just that the garda she defendants did not know any money at that time and they did not afford the proper opportunity nor did the district court for the proper opportunity of the court rule to to fight their challenge of that but the relationship between own all up the line i understand that those statements have been made those that has never been shown and i would say that that is not correct because bear creek and cities are separate entities with separate partners that are howell but tara is the sole owner of strathmore that is true so forth for tax purposes it would be considered the same and so it's a separate sense that it's a separate legal and right now and i understand that but that the whole issue from both sides is money flows has flown to tara that the other side thinks should have flown to strap more than to them so so they claim and what i'm asserting is that what we should have had was our was our day in court if they were challenging that money was owed with regard to the garnishments then we should have had a trial rathmore what it was a party to all of this right right but the car she defendants were not and but you're defending you're sort of you're blocking you're blocking defense is the with regard to the garnishments not with regard to the judgment they have a valid judgment here but when you say to the garnishment that both the prospect of in retrospect no because i think that they could they could read garnish  whatever parties they chose as far along as they decided to follow the court rules that applied to garn thank you thank you court of capital i don't expect to use all my time so if i digress for a couple minutes understand that i'm not going to be spending too much time up here i'd like to begin by thanking the court for scheduling oral argument fairly quickly i don't know if that's something that these judge this panel did but it was a very short delay in my client appreciates it this case illustrates why a lot of people can be cynical at times about the justice system i think all of the members of this panel at one point before you were on the bench had clients to report to judge certain i think you alluded to that earlier today i trust the corps can understand that sometimes it's frustrating to try to explain to a client why it is that they can't collect a judgment that they got fair and square more than two years ago now and all the defendant is doing is trying to avoid paying it using the corporate form i don't hold my friends at the other table responsible they seem like nice folks they're just doing their job representing clients who want to speed things up file you're saying claim against terror i'm not sure how that would speed things up and i think judge enough understood i'm sorry i wouldn't speak because i have a judgment right now which is all i need and if this court affirms then that's even speedier than filing  claim they'll pearson claim and that's the point i think judge enough understood this is a motion for supplemental proceeding that we she has very broad discretion on what she can do we would submit it entitle her to do exactly what she did the only thing the only argument they've raised judge biogs you're right the only argument that tara raises is that they shouldn't have been made a judgment creditor all they're attacking is paragraph two of the judgment no other part of the judgment is something that she wasn't permitted to do under the statute they're just saying that part of it shouldn't have been done and that makes me nervous you have i mean i suppose if you win the veil piercing claim i suppose if you need to win it maybe that helps you would respect this judgment but i do get the idea that if they're assessing your liability and they're saying things about what you did or didn't do it's odd that you want to party i'm sorry i don't understand i mean one of the points she was making is it's not just that one paragraph because there are other parts of what the district court did that assess determine liability with respect to tara why is that proper if terror was not a party to the case that the judge the mainly what she did is she required funds that were being paid runnels being paid by bear creek to be paid to  dan rather than to terra that's not something that that's not something that she needed to name them as a judgment debtor to be able to do she's entitled order bear creek to pay these runnels to violent that doesn't  argument that this is not aimed at that their argument is aimed only at the fact that she officially named them as a judgment debtor but that to me is a separate issue from whether these runnels can be ordered paid by bear creek to a capital and the in the statute six one hundred four gives her discretion to do exactly that in paragraph two and paragraph three that's exactly the type of thing that she's permitted to do but even the part that they complain about i have to know this until today there's never been any suggestion that the court didn't have personal jurisdiction over terra holdings there's never been any suggestion that they didn't get a notice and an opportunity to be heard there's never been any mention of due process the only argument they made in the briefs and the only argument they made below is that this specifics section of the statute didn't explicitly allow her to name them as a judgment debtor they were given the opportunity to present the argument they were deprived of any process much less any due process and they never complained about jurisdiction this is the quintessential argument based on a technicality which is precisely what they've been doing all along so any arguments that you've heard today about lack of jurisdiction are without merit and they've been waived but i would also say even the part that they complain about which is the paragraph or two that names them as a judgment debtor judge nuff recognized that the green case was distinguishable they basically put all the kurds in the green case that said in that case it was improper for the judge to name and nonparty as a judgment debtor theory but the court in green also recognize that there were allegations of fraud conduct of the type in that case that there are in this case she distinguished green on that basis and i think she was right and this court recognizes same in the presidential case in the footnote the miss could tell the talked about green is distinguishable when there aren't allegations of fraud like conduct as there are here if you don't buy that my only other argument on green would be to say that you shouldn't follow it on the grounds that it's not a michigan supreme court case we don't know if the michigan supreme court would follow it it seems extraordinarily inefficient that you would require  someone in nevada capital shoes when they have given proper notice on a veil piercing theory they've given the other entity tera holdings an opportunity to participate they've got notice an opportunity to be heard to make the case that restrains the bear creek entities and i guess they haven't tried to appeal that right second when we one that we've been primarily focusing on the third and fourth ones refer to various  that have to be paid within five days of the entry of the order was that were those parts stayed or were those put payments made or where did they stand i think i think they were stayed ok order does go to tara as well and does affect their interest wouldn't you say if you look at them separately to me for i mean certainly it impacts terra holdings but i don't think their argument is aimed at paragraph four because all paragraph four says is money paid to terra holdings relating to the bear creek entities should instead be paid to a bank capital saying that's been studied so it would appear other know what they what they would say but that money is piling up and has been we don't know is it being paid to tara and they have it i don't know i don't know but if you said in the same way five you know says it keeps them from transferring the management agreement to somebody else to keep it out of your hands well i think i still think their argument is aimed only at the specific ruling naming them as a judgment debtor you're right judge biogs that these paragraphs impact them but i don't think they paragraph or ordering money to be paid to us rather than to them is something that's something the judge had discretion to do under other provisions of six one hundred four she's entitled to order money to be paid to us rather than the sole owner of strathmore mind you without even naming them as a judgment debtor i don't think they have to be a judgment debtor for to do that you want to see anything about yeah i guess i don't really understand the argument i had my reaction was the same is what i think yours was judged based on your questions which is they said at one point in time they didn't owe money fine the judge ordered money to be paid in the future owed are paid in the future is to be paid to have on capital she doesn't need to challenge the disclosure is in response to the garnishments to render that ruling the one has nothing to do with the other that's why i said in my brief in stressed moore's appeal that i really think their argument is a non sequitur they don't cite any authority for the proposition that if at that point in time nothing is owed which was false by the way based on their own statement in the bankruptcy form but at a point in time nothing is owed that doesn't mean that sometime in the future the judge a judge can order them to pay money that's owed in the future to this entity to a capital and it goes back to some extent to what the meaning of is is whether or not the disclosures were true at the time they were made it is neither here nor there she was entitled to order the  relief that she did with regard to strathmore in bear creek entities which as you noted have an appeal so that's all i have to say about this i don't have any  yeah i don't have anything more to say on that mainly i'm i was focusing on the terrible ling's argument which whether because green is distinguishable or whether because it's wrong this court should affirm or last thing i would say if you can think of anything else that i haven't brought up is any other reason to affirm if we just were to just say reverse or strike her grip too would you really be any worse off it's an excellent good thank you for reminding that was the other point i want to talk about it was in my outline i forgot about it obviously that would be better and i think that's all they're asking for and that wouldn't be as bad as reversing the the entire thing outright it makes me nervous that they don't want to be a judgment debtor that they're working so hard just to avoid that paragraph but again that is the only time to my mind that's the only target of their argument and if you did that it still leaves these other provisions in place i would just urge you not to do that because it's in all likelihood going to make it more difficult for us to collect this judgment and i think judge enough had the discretion to do what she did that's the other point i  think the standard of review is abuse of discretion for the reasons i've laid out in my brief strathmore push back on that i don't think tara holdings did but the discretion is broad it includes the type of relief that she ordered here and i would urge the court if there's any way to affirm to allow us to collect a judgment that was owed a long time ago we would be we would be we would be pleased so if the court isn't any questions i think that's all i have and i will sit down thank you i guess the one point i would like to make here is i heard the due process is not really the issue here and i would disagree i think due process is the whole issue here  and it appears that i did not hear argument a strong argument today that taro should be jointly and severally live on the whole judgment but there appears to still be a strong argument regarding and i would suggest that that procedure needs to be followed as your brief use the words due process or cite the fourteenth amendment or fifth amendment obvious looking at your table of contents so forth i i know i have due process in there did i cite the amendment perhaps not i think though that we can look at the statute itself and say that  think it's a due process issue but even if we just look at the statute itself and say was the statute followed or wasn't it it was not it says out of procedure this court in presidential facility reviewed that procedure and the mi