## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

____________ N os. 06

- 1955 & 06

- 2357 L ABO RERS ’ P EN S I ON F UND , etal. , P la intif fs-A pp ellees , v. P AVEMENT M AI NT EN ANC E , I NC ., an d J OS EP H T. H AUGHEY, D efend a nts-Ju dg m ent D ebto rs, MAT L EA S I NG, I NC ., Res pond e nt

-Appe l l ant, MB F INANCIAL B ANK, A dv erse Cla im a nt-A pp ellee.

____________ Appeals from the United St ates District Court fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 02 C5603

—Jam es B. Z agel, Judg e.

____________ A RG UE D D ECE MBE R 4, 2007

— D ECI DE D A UGUS T 29, 2008

____________
Befo re R IPPLE, M A NI ON, a nd W OO D , C ircu it Judges. W OO D , C ircu it Judge. M A T L ea si ng, I nc. , chal l enges an o r dere nt er ed bythe d istr i ctc o ur t dur i ngpo st
-j udg m en t2 N os. 06

- 1955 & 06

- 2357 col l ecti on pro ceedi ngs. Those proce edi ngs s tem m ed f ro m a m oneyj ud gm ent a gai nst Pav em ent M ai ntenance, I nc. (“PM I ”), on PM I ’s defau lt, i n favor of the thre e plaintiff s i n the l i ti gat i on: Labor er s’ Pensi on F und , Labor er s’ W el f ar e F und, a nd J ames S. J o r g en so n, the F unds ’ Adm i ni strat or . W e r eferto the pla i nti ff s a s “ the F und s”; co l l ecti ve l y, the y make up th e fi r sts eto fa ppel l ee s be f o r e us . The othe r appell ee, M B Fi nanci alBank, ente re d t he post

j ud gm ent pr oce edi ngs in the dist ri ct c ourtas an a dvers e cl ai m ant. M B Fi nanci alhas a per f ecte d secur i ty i nter est i n PM I ’ s a ss et s; i ts i nter esthas pri or i ty ove r the F und s’ i nter esti n thos e a sse ts. B u t t h e a p p elle es are n ot (atlea st n ow ) p u rs u in g P M I, whi c h i s no t e v e n a pa r t y t o thi s a pp e a l

. I ns t e a d, they w oul d l i ke to col l ect f ro m M A T Leasi ng, a thi rd- party re sp ondent i n the dist ri ct c ourtand the appell ant her e. Acco rd ing to th e F unds a nd M B F i na nc i al, M AT Lea sing w as i nd ebte d to PM Iatthe ti m e j u d gm ent was e nter ed ag ains t PM I
. F o l l o wi ng tr adi ti o na l pr i nc i pl es o fg arni sh

m ent, the cre dit or s t o w hom PM I owes m oney ar e a tte m pti ng to co l l ect that debt fro m M A T Leasi ng. On M ar ch 8, 20 06, the d ist ri ct c ourtente re d an or der fi nd i ngtha tMA T Le a s i ngdi d o we mo ne y t o P M Ia nd , afte r inc o r po r at i nga few o ff se ts , i t ca l cul at ed th e amoun t ofdebt at $242 , 647. 75. On A pri l 20 , 20 06, the cour t o rder ed M AT Lea singt o tur n o ve r th at amoun t to M B F i na nc i al, the advers e cl ai m ant and pri or i ty cre dit or . M A T Leasi ng has a p p e a l e d j u dg men t s i n f a v o r o fth e F u n d s a n d o fMB F i n a n c i a l ; w e a ffi r m.N os. 06

- 1955 & 06

- 2357 3 I O n A p r i l 1 8 , 2 0 0 1 , MB F i n a n c i a l e x t e n d e d c r e di tt o P MI i n the p rinci pals um o f$ 40 0, 00 0. M B F i na nc i alfi l ed th e docum ents re quir ed to se cure its in ter estand then, o n A ug us t 1, 2001 , prop erly p erfected i t by fi lin g a U C C -1 fi na nc ing state m en t. A s w e hav e note d , M B Fi na nc ial ’s pri or ity o verthe Funds’ inter esti n PM I ’ s a sse ts i s undis

pu t e d. I n the m eanti m e, fro m 20 00 to 2003 , M A T Leasi ng was toil ing a w a y on a j ob it had obtained to perform repa irs o n c e r t a i n C h i c a g o s t r e e t s b y r e p l a c i n ga s p h a l t
. MAT Leasi ng rem ove d the or i gi nal asph al t and subcontra cted t o PM Ithe r epl ac emen t pa vi ngwor k

. PMI r epl ac ed th e as ph a l tu s i ngi t s o wn e qu i pme nta nd c r e w o fu ni o ni zed lab or er s. P M I d id n ot ow n an y t ru c ks , h o w e v e r , an d so it pu rchas ed the tr ucki ng se rv ice s requi re d to pickup f re sh asphal t fro m a supp l i er and tra nsporti t t o the j ob si te f ro m a co m pan y c al l ed M
. T. Tran si t. M AT Lea singa nd M

. T. Tr an si t wer e o wned i n pa r t byM i ch ae l S
. Ta di n, Sr. , a nd hi s s o n, Mi c ha e l S
. T a di n, J r. A t PM I ’ s j o b s i t e s , J o s e ph H aughey supervi sed PM I ’ s w or k. H aughey w as a par tner i n P M Ia nd the pr i m ar y c ont act per so n b etwee n P M Ia nd i ts contr acto rs , M A T Leasi ng and M

. T. Tra nsi t. W h ile th e re p av in g p r oje c t w as goin g on , PM I ex p er ienced m yr i ad fi nanci aldi ffi cu lties. I ts re cor ds w er e a m es s, i ts i nvoi ces w er e inaccurat e, and i t had tr ouble m aki ng paym ents to M
. T. Tra nsi t f ori ts tr ucki ng se rv i ces. I tf a i l e d t o ma k e t i me l y p a y me n t s o n i t s l o a ns f r o m MB Fi nanci alo r to m ake ti m el y c ontr ibuti ons to the F u nd s, w hi ch pro vi ded co ver age to PM I ’ s e m plo yees. Despi te4 N os. 06

- 1955 & 06

- 2357 th es e pr o bl ems a nd i ts a w arenes s o fthe m , M AT Lea sing c ontinued to dealwith PM I
. Those deal i ngs o ccurr ed pri m ar i l y in the f or m o f“handshake agr eem ents” betw een M AT Lea sing ’ s he ad o fo per at i o ns , M ike Ta di n, J r . , a nd H aughey, PM I ’ s 5 0% o w ner and he ad o fo perat i ons. W hen ask ed at an ev i denti ar y hea ri ng ab out these ag re em ents, Tadin cou ld n ot re cal l the detai l s, but he affi rm ed that they w er e enti re l y verbal ; no w ri tte n d oc um ents e x i s tt o me mo r i a l i z e th e m. On A ugust 7, 20 02, the Funds fi l ed the com pla i nt that st ar te d the pr es en t ca se . The y b eg anb y s ui ngPMI i n the N o r th ern Di st ri cto fI l l i no i s f o r de l i nque ntc o nt r ibut i o ns and an audit

. A n am ended com pla i nt f ol l owed o n J uly10 , 20 03 , a ddi ngPMI ow ner Haughe y a s a defen dan t. F o ur m ont hs l ater, on N ovem be r 6 , 2003, the d istri ct cou rt enter ed a def au l t j ud gm ent a gai nst PM Iand H aughey a nd i n f a v o r o fthe F un ds , i n the a mou nto f$ 5 9 , 9 7 5
. 47. Therea fter, the Funds ini ti ate d post-j ud gm ent pr oceedi ngs purs uant to F ED . R. C IV . P. 69 ( a) , wh i ch i nstr ucts d ist rict co urts to f ol l ow the l aw o fsupplem entar y pr oce eding s o fthe s ta te i n whi chthe y s it. The pa r ti es a nd d ist ric t c ou rtac c or d in gly p ro c ee d ed u n d er th e Illino is s t a t u t e g o v e r n i n g s u p p l e me n t a r y p r o c e e d i n g s , 7 3 5 I LCS 5/2- 1402
. The Funds sent ci tat i ons to disc over assets to seve ra l com panie s, se eking to fi nd out i fany oftho se thi rd part i es o we d mo n e y t o P MI

— for if th ey d id , Ru le 6 9(a ) an d Il lin ois l a w wo ul d e nt i t l e the F un ds t o r e c o v e r the a mou nt s o we d. W i th tho se ci tat i ons sti l l p ending, M B Fi nanci alappeare d i n th e di st r i c tc o u r to n Ma r c h 2 3 , 2 0 0 4 , t o a s s e r ti t s o wnN os. 06

- 1955 & 06

- 2357 5 i nter esti n PM I ’ s a sse ts. I t cl ai m ed, and the Funds did not d ispu te, th at it held a sec u r ed , perfect ed i nt erest in PM I ’s as se ts wi thpri o r i tyo ve r tha t o fthe F unds

. Two m o nths l ate r, o n M ay 25, 2004, the dis tr i ct c ourtente re d an A gr eed Order provi ding that ( 1) M B F i nanci al ’ s secur ed int er est w as p er f ecte d, val i d, and enf or ceabl e, with fi rs t pr i or i ty o ve r PMI ’ s as se ts ; ( 2) the F unds ’ r i g ht s wer e va l i d a nd en f o r ce ab l e but su bo r di na te to M B F i na nc i al ’ s; a nd ( 3) the ci ta ti o ns fi l ed bythe F unds , a nd a ny a dd iti o na l c i ta ti o ns that th ird p ar ti es m i ght fi l e, would r em ai n i n fullf or ce an d effect u n d e r Il li nois Sup rem e C ou rt Ru le 277(f ), “Supple m entar y Pr oce edi ngs, ” a nd any re cove ri es obt a i ne d f r o m tho s e c i t a t i o ns wo ul d a pp l y fi r s t t o the debt o wed t o M B F i na nc i al, a nd the n t o the de btdue t o the Funds. T wo w e e k s l a t e r , o n J u n e 2 , 2 0 0 4 , a t t o r n e y s f o r MB Fi nanci alwrote a l ett erto M A T Leasi ng, se eking to co l l ect o n accou nt s receivable tha t M B Fi na nc ialbeli eved w ere owe d fr om M A T Leasi ng to PM I
. ( A l ett eral so w ent t o M
. T. Tr an si t, b utb ec au se the matt er s r el ating to M
. T. Transi t ar e not pertinent to thi s appeal, w e do not disc uss the m fur the r . ) Th e l e t t e r n o t e d tha t“ whi l e [ PMI ’ s ] r e c o r ds of i nvoi ces ar e com ple te, re cor ds of paym ents m ad e to [ PM I ] ar e no t, and ther ef or e we ar e unsure o fthe actual b a l a n c e o u t s t a n d i n g . ” T h e l e t t e r r e q u e s t e d c o p i e s o fMAT Leasi ng’ s paym ents on these “o utsta nd i ng ac counts r ec ei vabl e, ” butM AT Lea singdi d no tob l i g e. The f o l l o wi ng m onth, on J uly 7, 2004 , the Funds i ssued a ci tation to disc ove r ass ets to M A T Leasi ng; M A T Leasi ng di d not re spond to the c i ta tio n n ordi d i t co m ply, and so o n October13 , 20 04, the Funds fi l ed a m oti on f orr ule to s how6 N os. 06

- 1955 & 06

- 2357

c a u s e wh y th e th i r d

- p a r t y c i t a t i o n re s p o n d e n tMAT Le a s i ng a nd i t s Pr e s i de nt, M i c ha e l Ta di n, s ho ul d not be hel d i n contem p t f orthe f ai l ure to com ply

. The m oti on al so ask ed the cour t t o or der th e c ita ti on r espondents t o pay the att or neys’ f ees and c ost s that the Fun d s in curr ed i n b r i ng i ngthe mot i o n. The dis tr i ct c ourtgr anted the F u nd s’ m oti on o n J an ua ry 1 1, 2005 , a nd s eta r ul e to s ho w ca us e he ar i ng f orJ anuary27 , 2 00 5. The hear i ng was conducted as a st atus he ar i ng, a nd a s i t co nc l ude d, an o th ers ta tu s he ar i ng was s etf o r Apri l 2 8, 2 00 5. Co uns elf o r M A T Le as i ng en tered his app earan ce on A p ril 15, 2005
. Fou r d ays later, th e F un d s fi led a m otion for tu rnov er of M A T Le asing’s ass ets , al ong w i th a noti ce f orpre sentm ent o fthatm oti on atthe he ar i ngs ch edu l ed f o r Apri l 2 8. W he n th at he ar i ng conve ned, the d i str i ct j ud ge enter ed the Funds’ m oti on f ortur novero fM A T L ea sing’s ass ets
. S eve ra l addit i onal p os tp on em en ts to ok p lac e o ve r th e n ex t few m on th s, u n til o n J u l y 7 th e c o u r t s e t a n e v i d e n t i a r y h e a r i n gf o r S e p t e mber7, 20 05. A t th e hear i ng, the parti es f ocuse d on the questi on w hetherM A T Leasi ng ow ed m oneyto PM Iand , i fso , how m uch

. Two wi tn es se s te st i fi ed: Tho m as M ur r ay( Pr es i den t an d the oth er 5 0 % ow ne r ofPM I ) an d M ichae l T ad in, Jr. (head of op erations for M A T Le asing). T h e d istri ct cou rt took t h e i ssue und eradvi sem ent, and on M ar ch 8, 20 06, i t g ra nted the Funds’ m ot ion fortur novero fM A T Leasi ng’ s ass ets and found that the am ount of th e d eb t w as $242 , 647. 75. M A T Leasi ng fi l ed i ts noti ce of appeal from that or der on A p ri l 5, 20 06; thi s a pp ealwas docket ed asN os. 06

- 1955 & 06

- 2357 7 N o . 0 6- 19 55
. The n onA pr i l 17, M B Fi na nc i alm o ve d i n the dist r i c t c o ur t f o r a n o r de r r e qu i r i ng M AT Le a s i ng t o pay th e amoun t o fmone y sp ec i fi ed i n the c o ur t’ s M ar ch8 or der. The co urt gr anted thatm ot ion three days l ate r, o n A pri l 20 . M A T L eas i ng fi l ed a s eco nd not i ce o fappeal f r o m tha t dec isi o n; i t was do ck et ed as No. 0 6- 23 57; a nd we c o n s o l i d a t e d th e t wo a p p e a l s f o r o u r r e v i e w.

II M AT Lea singo ff er s th r ee r ea so ns f o r r eversi ngthe di st r i ctc o ur t’ s r ul i ng s. F i r st, M AT Lea singa r g ue s th atthe dist r i c tc o ur t“ l o s t ” i t s s ubj e c t
- mat t e r j ur i s di c t i o n o ver these post
-j ud gm ent c ol l ecti on pro ceedi ngs o n J un e 1 3, 2005 , b ec ause the F und s a nd M B Fi nanci alf ai l ed to com p ly w ith th e requ irem en ts of I ll in o is S up rem e C ou rt Rule 277 ( f ) , w hi ch p ro vi des fo r “auto m ati c te rm i nati on” of col l ecti on p ro ceedi ngs a ftersi x m onths unle ss the t ri al cour t g ra nts a n extens i on. Se cond, as sum i ng the di str i ct co ur t was no t di ve st ed o fi ts subj ec t- m at te r j ur i sdi ct i o n, M AT Lea singc o nt en ds th atthe co ur t e r r ed i n c o nc l udi ng th a tMAT L e a s i n go we d a n y mo n e y t o P MI
. L a s t l y, MAT Lea singc l ai m s th atev en ifi t o wed mone y t o PMI , the di st r i ctc o ur t cl ea r l y e r r ed i n i ts c al cul ation o fthe amoun t. W e addr es s ea cha r g um en t i n tur n.

A W e fi r stc o ns iderM AT Lea sing ’ s ar g um en t th atthe dist ri ct c ourtl osti ts subj ect- m att erj uri sdic ti on i n thes e p o s t
-j u d g me n t p r o c e e d i n g s b y o p e r a t i o n o f I l l i n o i s S up re m e C ou rtR u le 2 77 (f), w h ich p ro vid es :8 N os. 06

- 1955 & 06

- 2357 (f) W h en P roc ee d in g T erm in ated

. A pro ceedi ng under this r ul e co nt i nue s unt i l t er m i na te d b y mot i o n o fthe j ud gm ent c re dit or, o rd ero fthe cour t, o r sat i sf acti on ofthe j ud gm ent, but t e r m i nat e s au t om at i ca l l y 6 m o nths f ro m the date o f( 1) the re sponde n t’ s fi rs t per sonal appe ar an ce pur su an t to the c i ta ti o n o r ( 2) the r es po nd en t’s fi rs t per sonalappeara nce pursuant to subsequent proc ess i ssued to enf or ce the ci tat i on, wh i chever i s soo ne r . The c o ur t m ay, ho wev er, g r an t ex te ns i o ns beyo nd the 6 m onths, as j usti ce m ay re quir e. Orders f or the p a y men to fmo ne y c o nt i nu e i n e ff e c tn o t wi ths t a nd

i ng the ter m i nati on of the proce edi ngs unti l the jud gm ent i s s ati sfi ed orthe cour t o rder s o ther w i se. (Em phasi s add ed. ) M A T Leasi ng conte nd s that th is “a ut o m at i c te r m i na ti o n” pr o vi si o n i s j ur i sdi ctio na l, a nd th atthe di st r i ctco ur t the r efo r e l o sti ts a utho r i tyt o he arthe case wh en i t a l l owed m or e than si x m onths to el apse b e t we e n T a d i n ’ s fi r s ta ppea r a n c e ( o n b e h a l fo fMAT Leasi ng) o n Decem ber13 , 20 04, and i ts rul i ng o n M ar ch 8, 2006
. Rule 27 7, i n M A T Leasi ng’ s v iew , r equi re s us to fi nd thatthe dist ri ct c ourt ’ s j uri sdic ti on “ expir ed” on J un e 1 3 , 2 005, si x mon ths a ft e rT a di n i ni t i a l l y a pp e a r e d. T h e F u n d s an d M B Fin an c ial re sp on d th at R u le 2 77 is nothi ng m or e than a p ro ceduralm echani sm by wh i ch postj ud gm ent c ol l ecti on pro ceedi ngs c an te rm i nate if they tak e t oo l ong an d r es ulti n prej ud i ce t o orhar ass m ent o f the j ud gm ent debt or . S ee TM Ryan Co. v. 53 50 S. Sh or e, LL C, 836 N
. E
. 2d 803, 810 (I ll

. A p p . Ct
. 2005). M A T Le a s i ngh a s n o s up po r tf o r i t s s t r i c tj ur i s di c t i o na l th eo r y . I t ha s not sh ow n us a sing l e i ns ta nc e i n whi chaN os. 06

- 1955 & 06

- 2357 9 sta te rul e o fpro cedure h as been per m i tte d to dive st a fed er al c ou rtof su b j ec t-m at te r j u ris d ict ion , an d th er e is c e r t a i n l y n o th i ng i n F ED . R. C IV . P. 69 (a) t h at w ou ld supp or t s uch an outc om e. S ee F ED . R. C IV . P. 82 ( rul es “do notexte nd o r l i m i t the j uri sdic ti on o fthe dist ri ct courts ”); 28 U
. S. C. § 2 072. The di str i ct c ourt ’ s s ubj ectm at te r j uri sdic ti on was bas ed on the federa l

- questi on st atut e, 2 8 U. S
. C. § 1 331; th e fede r alque st i o ns b efo r e th e c o u r ta r o s e u n d e r t he Emp l o y e e R e t i r e me n tI n c o me Se curi ty A ct ( “ERIS A ”) , i n part i cul arthe provi si ons that e nt i t l e d the F un ds t o the i r c o nt r ib ut i ons . S e e 2 9 U. S
. C. §§ 1132 ( e) ( 1) , 11 45, and 185 ( a)
. The di str i ct c ourthad anci l l ar y j uri sdic ti on ove r the pos t-j ud gm ent pr oce edi ngs, a nd F ED . R. C IV . P. 6 9( a) di r ec te d i t to s ta te l aw f o r the m ech an i cs o fthe col l ecti on pro cess . S tat e r ule s o fpro cedur e ca nno t ne g ate subj ec t- m at te r j ur i sdi ct i o n a r i sing f r o m a fede r als ta tu te a nd fede r alque st i o n. A l though we coul d sto p th er e, w e a dd thatM A T Leasi ng ’ s as se r ti o n tha t Rul e 27 7( f ) s o m eh o w ca us ed th e dist ri ct c ourt to l ose i ts subj ect- m att erj uri sdic ti on i gnor es th e w ellestablished princ iple that “j ur is d ic tion is d eterm in ed by th e fa c ts th at ex ist w h en th e s u it is filed .” Oly mpi a Exp r e s s , In c . v . L i n e eAe r e eI t al i an e, S
. P. A. , 50 9 F
. 3d 34 7, 3 49 ( 7th Ci r . 2 00 7) ( ci tingD ol eFo od Co. v. Pat r i cks on , 538 U
. S. 46 8, 47 8 ( 2004 ) )
. A s O lym pia E xp ress e x p l a i ne d, “j urisd iction usu all y refers to a cou rt’s auth ority to en tertai n a case , ra ther than to proce du ra l i nci dents. ” Id. at 350. I fj ur i s d i c t i o n e x i s t s a tth e o u t s e to fa s u i t, s u b s e q u en t proce du ra l ev ents w i l l notdi vestthe cour t o fthato ri gi nal j u ris d ict ion . See , e . g. , Ka n ou s ev . M ar ti n , 5 6 U
. S. 19 8, 20 8 ( 1854 ); S mith v. Wi dman Tr u c ki n g & Ex c av at i n g, Inc. , 6 27 F.2d 792 , 798-99 (7th C ir. 1980).10 N os. 06

- 1955 & 06

- 2357 Furthe r und er m i ni ng M A T Leasi ng’ s pos i ti on that R u le 2 77 (f) se ts a j u ris d ict ion al, ra th er th an p ro c ed u ra l, re quir em ent i s th e w ay i n w hi ch i t has bee n appli ed by Illino is a n d fed er al c ou rt s. C ou rt s ha ve ad op te d a flex ible approach to the r ule

. S ee Le vi nev. Pas ca l , 2 3 6 N. E. 2d 425, 43 1 ( I ll

. A p p . Ct. 1 96 8)
. S i nc e th e r ul e do es no t aff ec t th e f edera l co urt’ s j u ris dict i on, i ts benefi ts coul d be f or f ei ted o r wa i v e d

. He r e , MAT L e a s i n gh a s a tl e a s tf o r f e i t e d a ny com pla i nt bas ed on f ai l ure to com plywit h t h e rul e, be c a us e i tf a i l e d t o p r e s e ntthi s a r g ume ntt o the di s t r i ct c ou rt . W e m igh t e ve n find th at M A T L ea sin g im p licit ly w ai ved the poi nt ent i re ly b y continuing i ts acti ve parti ci pat i o n i n the di stric t co ur t pr o ce eding s l o nga fte r the ass er ted “e xpir ati on date ” o fJ une 13, 20 05. E ven i f w e w ere incli ne d to overlook M A T Le asing’s f or f ei ture , i t would s ti l l l ose , because I l l i noi s co urts do not apply Rule 277 i n th e rig i d w ay M A T Leasi ng has advoc a t e d. I l l i no i s c o ur t s a r e u nwi l l i ng to t e r mi na t e p r o c e e di n g s u n d e r th i s p r o v i s i o n wh e r e th e “ e x t e n s i o n [ s ] c o mpla i ned of” were en tered atthe parti es’ ag re em ent o r at th e requ est of th e p a r ty cu rrently ch all en ging th e cou rt’s author i ty, o r w here the extension s d id not l ead to har ass m en t o ft h e c om p lain in g p ar ty . See , e . g. , N at ’ l Bank o f A l b a n y P a rk v . New berg, 28 9 N
. E.2 d 197, 20 1 ( I l l

. A pp . Ct. 1 9 7 2 )
. I ti s s i g ni f i ca n tth a tth e e x p i r a t i o n d a t e th a tMAT L ea sin g a d v o c a t es oc c u rre d aft er M A T L ea sin g h ad its elf caused, r equeste d, orag re ed to m ult i ple co nti nuances and dela ys i n the proce edi ngs. I t i s o dd , atbes t, that M A T L ea sin g is t ry in g t o b en efit from m or e t h an six m onths’ del ay i n the re sol uti on o f thi s ca se, wh en m uch of that del ay re sul ted fro m i ts own r eq u es ts f oro r acqui es-N os. 06

- 1955 & 06

- 2357 11

ce nc e i n mor e ti m e. The r e i s no e vi den ce tha t M AT Lea sing h as suff er ed any prej ud i ce, har ass m ent, o r i nj usti ce a s a re su lt of t h e d ela ys . Th e c om p an y w as affo rd ed am p le opportunity t o be he ar d and nev er c h all enged the l ength o ft i m e i nv o l ve d unt i l a fte r fi l i ngthi s appe al

. F o l l o wi ng ei t h e r t h e Illino is c as es or c om m on se n se , th er e is n o c all to apply Rule 277( f ) i n the ci rcum sta nces ofthi s ca se. Both st ate and federa l co urts co nstr ue Rule 27 7 l iber al l y. W e ha ve no t f o und e xa m pl es o fc as es wher e a r ev i ewi ng cour t f ound th at a l ower co urt’ s r uling was i nval i d as a re sul t of Rule 277( f ) ’ s oper ati on. The text of th e ru le su p p or ts thi s i nt er pr et at i o n. I t sa y s th atde spi te the s i xm o nth l i m i t, “ [ t] he c o ur t m ay. . . g r an t ex te ns i o ns b ey o nd th e 6 m on th s, as j u st ice m ay req u ire .” N ot h in g in th e ru le re quir es a par ty to see k orr equest an exte nsi on fro m th e c ou rtin o rd er to av oid te rm i n a t i o n . Ra th er , th e ru le al l ows the court to “gran t ex te nsi ons . . . as j usti ce m ay r equi r e. ” M AT Lea singi s si m pl y i nc o r r ec t to s aytha t th e “pl ai n l anguage ” o fRule 27 7( f ) r equi re s the pl ai nti ff s t o see k a n extens i on, and i ts att em p t to gr aft s uch a r equi re m ent o nto the r ule i s without m er i t. E ven un d er M A T L easing ’s th eory of the rule, it app ears tha tthe di s t r i c tc o ur tdi d e no ugh t o g r a ntthe k i nd o f extensi on that the rul e contem pla tes
. In the A gr eed Order e nt e r e d o n M a y 2 5 , 2 0 0 4 , the c o ur ts t a t e d: T h e c ita tio n s filed h er ein by L ab or er s, an d an y a d d itio n al t h ird p ar ty cit at ion s is su ed by L ab or er s s h all r e mai n i n fu l l f o r c e a n d e ff e c tp u r s u a n tt o S u p r e me Court Rule 277( f ) , and any re coveri es obt ai ned ther ef r o m shal l b e appl i ed fi r stt o the i nde bt edn es s due to M B and then to the i nd ebte dn ess due Labor er s.12 N os. 06

- 1955 & 06

- 2357 This or der e xpressl y r efer re d to Rule 277( f) , not i ng tha t th e ci tat i ons i ssued i n thi s pro ceedi ng would co nti nue to have fulleffect und erthatpro vi si on. Thi s s tat em ent, com bi ned w i th the co urt’ s wri tte n or d er s e nter i ng ea ch co nt i nua nc e o fthe pr o ce eding s, pr o babl y s at i sfy the rul e’ s con d iti on that a j ud ge m ay extend the proce edi ngs beyo nd si x m onths. W e ca n detectno basi s f orfi nd i ng, as M A T Leasi ng urge s, that the dist ri ct cour t had no autho ri ty to enterthes e or ders. The di str i ct c ourthad subj ect- m att er j uri sdic ti on under 28 U .S.C. § 1331 , and i t di d not l ose th at p ow er th ro u gh an yt h in g a ss oc iat ed w ith Il lin ois Suprem e Cour t Rul e 2 77( f )
. W e there f or e m ove o n to M A T Leasi ng’ s a rgum ents on the m er i ts.

B M A T Leasi ng’ s t w o re m ai ni ng chal l enges bo th deal sol el y with the val i dity o fthe dist ri ct c ourt ’ s f actual fi nd i ngs, wh i ch w e wil l r eve rs e o nl y f orcl earerror . S ee M cM ah on F oo d Corp. v . Bu rge rDai ry Co
. , 10 3 F
. 3d 1307( 7th Cir
. 19 96)
. M A T Leasi ng firs t chal l enges the fi nd i ng tha t i t ow ed any m oneyatal l to PM I ; sho uld we rej ect that ar gum ent, i ts l astr eso rti s a chal l enge to the dist ri ct c o ur t ’ s ca l c ul a t i o n o fthe a mou nto we d. We c o nc l ud e that nei therfi nd i ng was cl ear l y e rr oneo us. T o s u p p or t it s p os itio n th at it ow e d n o m o n ey to P M I, M A T L ea sin g a ss er ts im p lau sib ly th at th er e is “n o e vid en c e” of an y in d e b te d n es s fro m M A T L ea sin g t o P M I; it als o c on te n d s t h at th e d is t r ict co u rt ’s o rd er s a re inv alid because the exi ste nce o fthe debt i s “ substa nti al l y di spu ted. ” Contra ry t o the c l ai m thatther e i s no ev i denceN os. 06

- 1955 & 06

- 2357 13 ofany debt, the re cor d rev eal s co n siderabl e e vi dence of th e deb t, i nc l udi ngPMI ’ s co m put err ec o r ds an d the tes ti m ony ofP M IPre si dent Thom as M urr ay. M urr ay te st i fi ed th ata cc o r di ngt o PMI ’ s r ec o r ds, M AT Lea sing owed PMI a t o t a l o f$ 2 3 6 , 0 0 7
. 4 0 f o r s e r v i c e s r e nd e r e d, w hi ch r em ained unp ai d at the ti m e o fthe Se ptem ber20 05 h ea rin g. M u rra y a lso te st i f ied to th e s ta tu s o f sp ec ific in vo ice s, in c lu d in g In vo ice 74 3, w h i c h r efle c te d an ad d iti onal$57, 710 owed to PM I
. The exi ste nce o fthe debt was est abl i shed at the he ar i ng byM urr ay ’s testi m ony and by i nv o i ce s k ept in the o r di na r y c o ur se o fb us i ne ss a nd gener ate d fr om PM I ’ s co m pu terr eco rds. I ti s no t a b l e th a tMA T L e a s i n gd o e s n o ta r g u e th a tP MI f ai l ed to r ender ser vi ces to M A T Leasi ng f orwh i ch m oney w as owed

. I nstea d, i t conte nd s that i t had a n arr an gem en t w ith P M I th at offs et its ob liga tio n s t o p a y P M I. Speci fi cal l y, M A T Lea sin g ar gues that i t a pp l i ed re cei vabl es that i t o w ed PM Ito PM I ’ s ba l ance w i th M

. T. Tra nsi t, the t rucking co m pany. M A T Leasi ng’ s cl ai m i s that i ts use offund s o w ed to P M I to pay o ffPM I ’ s o therdebts eff ectively can celled ou t the am ou nt that M A T Le asing oth erw i se w oul d hav e owed

. But M A T Leasi ng’ s o nl y e vi dence ofany such ar ra ngem ent with PM I i s Tadin’ s tes ti m ony at the he ar i ng r ega rdin g h is s er i es of“handshake agr eem en ts ” wi thHaughe y . As we no te d e ar l i er, Ta di n conce ded th atthos e ag r ee m en ts wer e ve rba l o nl y, tha t no wri tt endo cument s ex i st to ex pl ain o r s uppo r t th em, a nd th at ev en he co ul d no t r ec al l th e det ai l s o f th em . The di st r i ctc o ur t w eighe d the e vi den ce b efo r e i t an d c o nc l u d e d th a tth e r e was “ n o c r e d ib l e e v i d e n c e th a tP MI agr eed to any re du cti on ofthe value [ofits ] i nvoi ces, ” no r14 N os. 06

- 1955 & 06

- 2357

w as th er e a n y e vid en c e t o s u p p or t M A T L ea sin g’s cla im th at i t was ent i tl ed to o ff seti ts i nd ebte dn ess to PM Iby tr an sfe rrin g m o n ies to M .T . Tr an sit . I t w as w ell w ith in th e di st r i ctc o ur t’ s di sc r et i on to a cc o r d m i ni m alwei g ht to Tadin’ s t est i m ony, part i cul ar l y where M A T Leasi ng had am ple op p ortuni ty to cal lJ ose ph H aughey

— the per son p u rp or te d ly on th e oth er en d of t h es e h an d sh ak e d ea ls

— to tes ti fy about the a l l ege d adj ustm ents i n paym ent that und er l i e M A T Leasi ng’ s cl ai m , but i t decl i ned to do so

. W e add th att o the e xt en t M AT Lea singa rgue s, o n the b as is of la n gu ag e in 73 5 IL C S 5 /2 -14 02 (th e Illino is s t a t u t e th a tgo ve r n s p o s t
-j u d g me n tp r o c e e d i n g s ) th a twe sh o ul d i nv al i dat e th e di st r i ctc o ur t’ s o r der s b eca us e th e d eb t ’ s e x ist en c e w as “s u b st an tia lly d isp u te d ,” th e a p p ell ees co rr ectl y poi nt o ut thatthe part s o fthe sta tute that apply to thi rd- partyr espondents l i ke M A T Leasin g (a s oppose d to j ud gm ent debt or s s uch as PM I ) do notev en m enti on the not i on o fa “subst anti a ldi s pu t e. ” Com pare 735 I LC S 5/2- 1402 ( c) ( 1) , p er taini ng to the j ud gm ent debt or and i m pli cating the i dea ofan obl i gat i on t hat “ i s no t su bsta nt ia lly disp ut ed , ” w ith § 1402(c)(3) an d ( c)(4), perta i ni ng to part i es othe r than the j ud gm ent debt or an d conta i ni ng no such l anguage , i nstea d author i zing co urts to “ [ c] o m pela ny pe rson ci te d, o th ertha n the j udg m en t debtor, to del i verup any a sse ts so disc ove re d” d u ringa post-j ud gm ent c ol l ecti on proce edi ng ( ( c) ( 3) ) , and to “[ e] nterany or der upon o r j u d gm ent a gai nst the per son c i t e d tha tc o ul d b e e nt e r e d in a nyg a r ni s hmen tp r o c e e ding” ((c) (4))
. Al l o fth i s l e a d s t o th e c o n c l u s i o n th a tth e a r g u m en t that M A T Leasi ng ra i ses base d o n a “ substa nti aldi spute”N os. 06

- 1955 & 06

- 2357 15

ove r the a m ount o w ed i s irrel evant
. A s the appel l ees po i nt o ut, th e ve r y pur po se o f th e ev i den ti ar y hea rin g w as to re sol ve the que st ion w hetherM A T Leasi ng o w ed m oneyto PM Iand, ifso, h ow m uch. M A T Leasi ng di d not o ppo se th e he ar i ng, an d th e di st r i ct co ur t co nd uc ted the proce edi ng j ust a s i t shoul d hav e: i t a ccepted and w ei ghed the evi dence off er ed by both parti es, m ade cr edibi l i ty j ud gm ents w here nece ssa ry, and m ade f actual fi nd i ngs base d o n the evi dence and the re cor d bef or e i t. W e ca nnot co nc l ud e th atthe di st r i ctc o ur t cl ea r l y e r r ed i n fi ndi ng th at M A T L ea sin g ow ed a d eb t t o P M I. I n its fina l attem p t to un d erm ine th e district cou rt’s d e c i s i o n, M AT Lea s i n ga r g u e s th a te v e n i fi td i d o we m on e y t o P M I, th e d ist ric t c ou rtco m m itt ed cle ar err or in i ts cal cul ati on o fthe am ount, wh i ch i t pl aced at $242 , 647. 75. The di str i ct c ourt ’ s c alcul ati on a ccounted f o r som e o f th e cr edi ts a nd o ff se ts tha t M AT Lea sing advocat ed, but M A T Lea sin g conte nd s o n appeal that ther e ar e si x cate gor i es of add i ti onal cre dit s that th e d istr i ctc o ur t sh o ul d ha ve a ppl i ed to fur th err edu ce the am ount o fthe debt. W e hav e r evi ew ed the parti es’ br ief s, the r eco rd, and the dist ri ct c ourt ’ s thor ough e xplanat i on ofhow and w hy i t ca l cul ate d the am ount that M A T Le asi ng’ s o w ed, and w e a re s at isfi ed that the c ourtdi d not cl ea r l y e r r i n r ea ch i ngi ts fi ndi ng s. I nde ed, i t appe ar s to us th at th e “cred its” M A T L easing now urge s us to ap p ly are e i th e r u t t e r l y i r r e l e v a n tt o th e d e b to we d fr o m MAT L ea sin g t o P M I ( e . g. , c h e c k s T a d i n p a i d t o H a u g h e y f o r P MI buttha t H au g he y to o kf o r hi s per so na l us e; a nd the t u r n ov er ord er for a ss et s o f an ot h er co m p an y, P ac ific Co ns t r uc t i o n) , o r the r e i s , a s the di str i ct c o ur tf o un d,16 N os. 06

- 1955 & 06

- 2357 i n s u ffi c i e n te v i d e n c e i n th e r e c o r d t o s u p p o r tth e m ( e .g. , th e o ff s e t s f o r o r a l a g r e e me n t s th a t T a d i n s a y s h e ma de w ith H au gh ey). * * * The j ud gm ent o fthe dist ri ct c ourti s A FFI RMED .

8- 29- 08