* After examining the briefs and the record, we have concluded that oral argument is

unnecessary. Thus, the appeal is submitted on the briefs and the record. See F ED

. R. A PP

. P.

34(a)(2). 

# United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted February 4, 2009 *

Decided February 5, 2009

Before

JOHN L. COFFEY, Circuit Judge

JOEL M. FLAUM, Circuit Judge

DANIEL A. MANION, Circuit Judge

No. 08

‐ 2198

UNITED STATES OF AMERICA,

Plaintiff

‐ Appellee,

v.

JOHN P. MACCHIONE,

Defendant.

Appeal of:

JOANNE MACCHIONE,

Interested Person

. Appeal from the United States District

Court for the Northern District of Illinois,

Eastern Division.

No. 99 CR 269

Elaine E. Bucklo,

Judge

.

O R D E R

Joanne Macchione’s husband, John Macchione, was found guilty of mail fraud and

tax evasion and was ordered to pay one million dollars in restitution. In trying to discover

his assets to satisfy the judgment, the government sought an order compelling Dolores 

### NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

Fed. R. App. P. 32.1No. 08

‐ 2198 Page 2

Veninga, the Macchiones’ tenant, to turn her rental payments over to the government.

Joanne appeared in the district court to object, asserting that she, not John, owned the

property and was entitled to the rental receipts. But the court entered the turnover order,

requiring Veninga to remit to the government the full amount of the rent and denied

Joanne’s motion to reconsider. We conclude that the court abused its discretion in ordering

Veninga to turn over the entire amount because only half of the net rental income (i.e., the

rental payments less the cost of maintaining the house) is John’s property—the other half

belongs to Joanne and cannot be used to satisfy the judgment against John.

John, who was convicted in 2001 and released from prison in December 2003, owns a

rental house with Joanne in Bartlett, Illinois. The house was deeded to the couple as joint

tenants in 1986, and was leased to Veninga in September 2007. John executed the lease, and

Veninga paid the rent to him for the first two months of the lease. Then in November 2007

the government served Veninga with a citation to discover assets. Based on the information

that Veninga provided, the government filed in the district court a motion for a turnover

order asserting that John owned the property and requesting the court to direct Veninga to

pay the rent directly to the clerk of the court. When Veninga received the citation, she

began holding her rent payments in escrow, awaiting the outcome of the proceedings.

John responded by asserting that Joanne “owns the property jointly” with him and

requesting that the district court deny the government’s motion. Joanne moved to intervene

and contended that she, not John, was entitled to the rent. The government opposed her

intervention, however, on the ground that Joanne had refused to comply with document

requests and to appear for a deposition in a separate citation proceeding the government

had commenced against her to discover other of John’s assets. The district court said it

would allow Joanne to intervene only if she appeared for her deposition by a certain date.

The court reasoned that Joanne “could not prove her entitlement to the rents without the

government having the opportunity to question her.” Joanne did not appear for the

deposition, and the district court entered the turnover order, directing Veninga to pay rent

to the clerk of court.

The next week Joanne asked the district court to reconsider the turnover order. The

court held a hearing at which Joanne pointed out that the deed, which she had previously

provided to the government, established that she owned the property in joint tenancy with

John. The government’s attorney agreed that the “property is owned between the two of

them,” but argued that the rental payments belonged to John because he negotiated the

lease and deposited the rental payments. The district court denied the motion to reconsider.No. 08

‐ 2198 Page 3

Joanne’s primary argument here is that the house belongs to her, that she is entitled

to the rental receipts, and that the district court improperly concluded that the rental

payments belonged to John and could be used to satisfy the restitution order. We review

the entry of the turnover order for abuse of discretion. See Divane v. Krull Elec. Co.

, 194 F.3d

845, 848 (7th Cir. 1999). But first we must address a preliminary matter raised by the

government.

The government acknowledges, as it must, that it was unnecessary for Joanne to

obtain the district court’s approval to intervene because she was entitled to appear and

contest the turnover motion as a matter of right. The government may enforce a restitution

order by any means available under federal or state law. See 18 U.S.C. §§ 3613(a), (f);

3664(m)(1)(A); United States v. Kollintzas

, 501 F.3d 796, 800

‐ 01 (7th Cir. 2007). In this case the

government chose to go after John’s assets using the “citation” procedures under Illinois

law. See 735 ILCS 5/2

‐ 1402; Ill. Sup. Ct. R. 277; see also Soc’y of Lloyd’s v. Ashenden

, 233 F.3d

473, 475

‐ 76 (7th Cir. 2000). These procedures allow a judgment creditor to discover non

‐

exempt assets held by the debtor or third parties and to order those assets turned over to the

creditor to satisfy the judgment. 735 ILCS 5/2

‐ 1402(a), (b); Ill. Sup. Ct. R. 277(a), (b); see In re

Farm Credit Bank

, 18 F.3d 413, 416 (7th Cir. 1994); City of Chi. v. Air Auto Leasing Co.

, 697

N.E.2d 788, 791 (Ill. App. Ct. 1998). But the state procedures also require the court to allow

any party who asserts an interest in the property to “appear and maintain his or her right”

to the property. 735 ILCS 5/2

‐ 1402(g). Joanne claims a right to the rental payments the

government sought, and thus she was entitled to appear without filing a motion to

intervene. See Kollintzas

, 501 F.3d at 801 (concluding that in supplementary proceeding to

discover assets under the Fair Debt Collection Practices Act, party claiming interest in

targeted property may participate without formally intervening); In re Farm Credit Bank

, 18

F.3d at 417 (noting policy of “allowing third parties who have an interest in the property at

issue in a supplemental proceeding an opportunity to be heard”).

The government argues, however, that Joanne essentially waived any objection to its

turnover demand by refusing to appear for her deposition as directed by the district court.

We disagree. The district court did not refuse to entertain Joanne’s claim that the rental

receipts rightfully belong to her. Rather, the court concluded that, in the face of the

evidence put forward by the government that John had executed the lease agreement and

received and deposited Veninga’s checks, Joanne could not possibly support her contention

that she was entitled to the rental payments without providing further evidence. And while

the court implied that Joanne’s refusal to be deposed had made providing that evidence

impossible, the court nevertheless evaluated her motion for reconsideration and allowed her

to appear to argue it, which undermines the government’s suggestion that the court deemed

her arguments waived. More importantly, we fail to see the connection between Joanne’s

recalcitrance in a separate citation proceeding and her opposition to the turnover orderNo. 08

‐ 2198 Page 4

directed against Veninga. As the government acknowledges in its brief, each supplemental

proceeding is akin to a separate lawsuit, see Jones

‐ El v. Berge

, 374 F.3d 541, 543 (7th Cir.

2004); ACORN v. Ill. State Bd. of Elections

, 75 F.3d 304, 306 (7th Cir. 1996); Resolution Trust

Corp. v. Ruggiero

, 994 F.2d 1221, 1224

‐ 25 (7th Cir. 1993), and the government has never

explained what relevant information it sought to learn about the rental payments that was

not already included in the record. Joanne supplied the deed to the house, and Veninga

provided a statement and other documentary evidence concerning the lease. We do not

know how any additional information could have been helpful. See Mommaerts v. Hartford

Life & Accident Ins. Co.

, 472 F.3d 967, 968 (7th Cir. 2007) (explaining that “it would make

little sense to enter a default after a case has been decided on the merits” when there was no

prejudice).

We now turn to the question of who gets the rental receipts. Both Joanne and the

government assert full ownership of the payments, but each is only half correct. The deed

evinces that Joanne and John own the property as joint tenants. Their joint tenancy was

formed in 1986—long before John’s 1999 indictment—and there is no hint that the

conveyance was fraudulent or structured to avoid any obligations. Indeed, the government

acknowledged in the district court and in its brief on appeal that the couple owns the

property in joint tenancy. State law tells us what rights each joint tenant has to the rental

payments. See Drye v. United States

, 528 U.S. 49, 58 (1999); Kollintzas

, 501 F.3d at 802. The

government argues that, in Illinois, one joint tenant acting alone can lease the entire

property. See Nat’l Gas & Oil v. Rizer

, 155 N.E.2d 848, 848

‐ 89 (Ill. App. Ct. 1959). This is true

as far as it goes, but it does not follow, as the government contends, that the joint tenant

who signs the lease is entitled to the full amount of the rental receipts. To the contrary, all

joint tenants enjoy all of the benefits of the lease, even if they did not sign it. See Booth v.

Cebula

, 166 N.E.2d 618, 621 (Ill. App. Ct. 1960). The right to receive rent is, of course, one of

those benefits, and each joint tenant is entitled to an equal share of the proceeds. See

Riechmann v. Riechmann

, 283 N.E.2d 734, 736 (Ill. App. Ct. 1972); see also United States v.

Davenport

, 106 F.3d 1333, 1336, 1337 n.5, 1338 (7th Cir. 1997); Capogreco v. Capogreco

, 378

N.E.2d 279, 281 (Ill. App. Ct. 1978) (noting that each of two joint tenants “had a one

‐ half

interest in the land acquired during the marriage”); accord United States v. Craft

, 535 U.S. 274,

280 (2002) (noting common

‐ law right of joint tenants to “enjoy a share of the property’s

income”). On the flip side, joint tenants are responsible for their share of the costs to

maintain the property (e.g., mortgage payments, property taxes, and repairs). See Moniuszko

v. Moniuszko

, 606 N.E.2d 468, 474 (Ill. App. Ct. 1992). There is no evidence in the record

that the government is entitled to anything other than John’s one

‐ half share of the rental

payments less expenses; thus, it must split the proceeds and costs with Joanne. See

Davenport

, 106 F.3d at 1336, 1337 n.5 (noting that husband’s interest in property held in joint

tenancy with wife subject to attachment of a federal lien, but that wife was entitled to

receive proceeds equal to her interest in the property). The district court, therefore, abusedNo. 08

‐ 2198 Page 5

its discretion in ordering Veninga to remit the entire amount of the rental payments to

satisfy the restitution order. See Divane

, 194 F.3d at 848 (noting that it is an abuse of

discretion to base a decision on “an erroneous conclusion of law”). On remand, the district

court should establish a procedure to determine the net income from the rental payments

and transfer half to the government and the other half to Joanne.

VACATED and REMANDED.