The Honorable Charles A. Shaw, United States District Judge for the Eastern 1

District of Missouri.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 97-2243

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Alfred E. Harre; Bernice E. Harre; *

David Bening, *

*

Plaintiffs/Appellees, *

* Appeal from the United States

v. * District Court for the Eastern

* District of Missouri.

Arthur G. Muegler, *

* [UNPUBLISHED]

Defendant/Appellant, *

*

Rita D. Glover; Donald V. Nangle, *

*

Movants/Appellants. *

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Submitted: July 30, 1997

Filed: August 20, 1997

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Before BOWMAN, HANSEN, and MURPHY, Circuit Judges.

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PER CURIAM.

After David Bening and Alfred Harre were unable to collect separate judgments

of $260,000 each against Arthur Muegler, they moved in the district court for a 1
Although appellants' brief states that Glover died on November 30, 1996, the 2

notice of appeal was filed on May 8, 1997.

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creditor's bill or equitable garnishment on Muegler's portion of a contingency fee owed

him and Donald Nangle for legal work on behalf of Rita Glover. The district court

granted the motion and ordered that Muegler's portion of the legal fees be paid to Harre

and Bening. Muegler, Nangle, and Glover appeal. We affirm. 2

In January 1996, appellees Harre and Bening obtained judgments against

Muegler on their claims of fraud and misrepresentation. The judgments were later

affirmed in Harre v. Muegler, 113 F.3d 909 (8th Cir. 1997), but appellees were

meanwhile unable to collect on them and moved for a creditor's bill and equitable

garnishment. Appellees alleged that Muegler was concealing property and assets and

had insufficient property to satisfy the judgments and that they had tried to collect

through various writs of execution which were all returned unsatisfied. They asserted

that Muegler and Nangle had been representing Glover in several cases which had been

consolidated in which she sought to collect life insurance proceeds from policies on her

late husband, that those life insurance proceeds had been interpleaded and were in the

custody of the clerk of the district court, and that Muegler was scheduled to receive

fees from the insurance proceeds for his representation of Glover. 

The district court held a preliminary hearing and entered a preliminary order in

May 1996 enjoining the clerk of court from paying any of the interpleaded funds until

further order. It also ordered Muegler, Glover, and Nangle to appear to respond to the

allegations in the motion and indicated that the merits of the motion for a creditor's bill

would be decided after they appeared and discovery was had.

The final hearing on the motion was held in September 1996. Harre and Bening

produced evidence that Muegler had admitted in his deposition taken in July of 1996

that he had worked on the Glover cases in the district court, had been the attorney of

record in one of the cases, and had filed and signed over thirty pleadings. The
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testimony of Muegler and Nangle from a separate trial was also presented in which they

described the typical manner in which they worked together and how they split fees.

That testimony showed that Muegler customarily received between 50 and 75 percent

of the contingency fee when he worked on a case with Nangle, even if he had not been

a party to the contingency fee agreement, and that Muegler had already received

payment for representation of Glover concerning the life insurance policies in a state

court case. Muegler and Nangle did not produce any evidence to dispute the allegations

and did not supply requested information concerning Muegler's assets and ability to

satisfy the judgments. They argued that there could be no equitable garnishment

because there were no records detailing Muegler's work or payment received and that

appellees had failed to follow procedural requirements. 

Before the district court ruled on the motion, Glover's counsel successfully

obtained from Judge Catherine Perry an order for default judgment and payment in one

of the insurance cases. That case had been transferred to Judge Perry in September

1996, and in spite of the earlier order of Judge Shaw not to disburse the interpleaded

funds, the clerk paid out approximately $37,000 of the funds on January 31, 1997

pursuant to Judge Perry's order of the previous day. 

In March 1997, Judge Shaw granted a creditor's bill, vacating his preliminary

order, finding that Muegler was entitled to 50% of the contingency fee for his

representation of Glover, and ordering that any portion of the interpleaded funds which

represented fees Muegler was scheduled to receive should be paid to Harre and Bening

to satisfy their judgments.

Muegler, Nangle, and Glover appeal, arguing that the district court erred in

granting the creditor's bill to enforce the judgments. They argue that the district court

did not have jurisdiction over the motion for a creditor's bill, they were not given proper

notice, the elements necessary to impose a creditor's bill were not established, the

district court orders violated their constitutional rights, and they should have been
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awarded attorney fees for defending against the motion. Harre and Bening respond that

the district court complied with the necessary jurisdictional and procedural

requirements for granting a creditor's bill and that the evidence in the record supports

its order.

In the absence of a controlling federal statute, a district court "has the same

authority to aid judgment creditors in supplementary proceedings as that which is

provided to state court under local law." H.H. Robertson Co. v. V.S. DiCarlo Gen'l

Contractors, Inc., 994 F.2d 476, 477 (8th Cir. 1993) (quotations and citations omitted).

A creditor's bill is an appropriate remedy under Missouri law and enables a judgment

creditor to trace the value of goods and services to satisfy a judgment. Id. It "serves

to fill the void created where the normal processes of law are found to be inadequate."

Linder v. Hawkeye-Security Ins. Co., 472 S.W.2d 412, 414 (Mo. 1971) (en banc).

A careful review of the record shows that the district court did not err in finding

it had jurisdiction and granting the motion for a creditor's bill. Muegler, Nangle, and

Glover received notice of the motion for a creditor's bill on the interpleaded insurance

funds, and they were given ample opportunity to respond to the allegations in the

motion and to present evidence on whether the creditor's bill should be granted. See

id. at 478. There were valid judgments against Muegler, and he had repeatedly failed

to produce requested information concerning the location and amount of his assets.

Appellees had been unable to collect their judgments. There was substantial evidence

to support the finding that Muegler was entitled to receive fees for his representation

of Glover out of any life insurance proceeds she collected and that a creditor's bill

should be granted on those funds to satisfy the outstanding judgments against him. See

Shockley v. Harry Sander Realty Co., 771 S.W.2d 922, 925 (Mo. Ct. App. 1989).
Muegler has also raised several issues concerning the granting of the preliminary 3

order in aid of execution, but since that order has been vacated and the underlying

claim has been decided on the merits, those issues are moot. See Abdalla v. INS, 43

F.3d 1397, 1398-99 (10th Cir. 1994). Similarly, Muegler's motion to strike appellees'

brief and supplementary appendix need not be addressed since the unsatisfied writs of

execution about which he complains have not been considered on this appeal.

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Muegler has not made a showing on his constitutional claims, and since the

district court did not err in granting the creditor's bill appellants' request for attorney

fees is moot. The order of the district court is therefore affirmed. 3

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.