## 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. 07

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- 1044 O RL A ND O R ES I DE NCE, L TD ., Plai nt i f f

-Appe l l e e/ Cros s -Appe l l ant, v. GP C RE DIT C O ., LLC , et al.,

D efend a nts-A pp ella nts, C ross-A pp ellees

. N o. 07

- 4051 S US AN B. N E L S ON, Plai nt i f f

-Appe l l ant, v. O RL A ND O R ES I DE NCE, L TD ., e tal ., D efend a nts-A pp ellees

.

A pp ealsfr o m the United S t ates Di strictC our t fo r the E astern Di stricto f Wisc onsin
. No s. 04- C-439, 07- C-436

—Rudo lphT. Rand a, Chief Ju dge

.
A RG UE D D ECE MBE R 10, 2008

— D ECI DE D J AN UA RY 22, 20092 N os. 07

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- 1044 Befo re P OSNER, K ANN E , a nd R OV NER, C ircu it Judges . P OSNER, Cir cu i tJudg e . F o r 2 2 y ea r s th es e par ti es a nd th ei r pr ede ce ss o r s ha ve be enl i ti g at i ng, i n n um er o us l aw sui ts i n differ ent c ourt s, a d isp u te ove r a pi ece of pr o per tyi n N ash vi l l e. W e wer e to l d a t ar g um en t w i thout contr adic ti on that the par ti es have ex p en ded $3 m i l l i on i n l ega l fees , a fi gure thatexce eds any re asonab l e e sti m ate o fthe am ount i n con tr overs y. Yet such behav i orneed notbe i rr ati onalo r a product o fspi te o r e ve n o fb ad l ega l a dvi ce . A r at i o na l l i ti g an t, ha ving e xp e nd e d $ X i n unsuccessful eff or ts to preva il, yet havi ng a ddi t i o na l l i t i g a t i o n opti ons that he can pur su e, wi l l c o m par e th e co sto ftho se opti o ns t o the e xp e c t e d b e ne fi t, di s r e g a r di ng the $ X h e h as sp en t a lread y. That i s a sunk cos t

— a co st he cannotr eco ver by anythi ng he does a n d t h er ef or e a co st that w i l l not i nfl uence hi s be havi or( i fhe is ra tio nal )
. S ti l l, fro m an ov er all so c ial st an d p oin t, th e m o n ey sp en t o n th is l i t i g a t i on

— w hi ch w e ca nnot qui te end today, m uch as w e would l i ke to

— is e x c es siv e. B u t o u r d ec isio n w ill bring the end w i thi n si ght. I n the early 1980 s a di spute ar ose betw een S am uel H ar dig e a nd K en n eth Nels on. The di spute was se ttl ed b y H ar d ige ’s g ivin g N els on ’s c om p an y, N as h ville R es id en c e C or p or at ion (N R C ), a h ot el p ro p er ty in N as h ville i n exchange f ora prom i sso rynot e o fN RC secured by the proper ty and pay abl e i n October 1986 to on e of H ar di g e’ s co m pan i es , Or l an do Re si d ence , Lt d. NRC f ai l ed to pa y the no te whendue a nd t wo months l ate r Orl ando sued N RC on the note i n fed er al d i str i ctN os. 07

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cour t in Tennessee , bas i ng fed er al j uri sdic ti on o n di ve r si tyo fc i ti ze ns hi p. NRC r es po nde d b y c o nv eying th e prop erty t o N ash vil le Lod ging C om p an y (N L C ), an ot h er co rp or at ion co n tr olle d by N els on , an d N L C in turn t ra nsfer re d the pro pertyto M etr i c Par tner s Gro w th Sui te I n ve stors i n 198 9. The f ol l owing yea r, the federa l dist ri ct c ourtente re d j u d gm en t agai nst NR C fo r the f ace am ount o fthe note , pl us i nter est
. I n 19 92 O rlan d o b r o ug ht suit in a Ten ne ssee ch an cery co ur t ag ains t N RC, NLC, Nel so n, a nd M et r i c, c l ai m i ng that the tr ansfer of the proper ty by N RC to N LC , an d by NLC t o Met r i c , wa s a fr a ud ul e nte ff o r tt o pr e v e ntOr l a nd o f ro m co l lecti ng o n the j ud gm ent that i t had o btained in federal cou rt. I n 19 9 5 , after a trial, the ch an cery c o u r te n t e r e d j u d g me n tf o r O r l a n d o o f$ 5 0 1 , 9 3 4 i n c o mpensato rydam age s a nd $8 50, 000 i n pun i ti ve dam age s. The de fen dan ts a p p eal ed. One o fthe a ppel l an ts ’ a r g um ents w as that Orl ando did not h av e standi ng to sue. T h er e w er e t w o e n tit i e s n am ed O rla n d o R es id en c e, L td ., o ne o fwhi chwas o wned 9 8 per ce ntb y Har di g e an d the o th er1 00 pe r ce nt, a nd the a ppel l an ts c l ai m ed th atthe Orl ando enti ty that own ed the prom i sso rynot e o n whi c h th e s u i t wa s b a s e d wa s n o t th e o n e th a t wa s th e pl aint i ff

- appe l l ee i n the l i ti g at i o n a nd ther efo r e ha d no sta nd i ng to sue. The Tennesse e co urt ofappeals rej ecte d the a rgum ent o n the grou n d that Tennesse e l aw i s no t concerned w i th such t ri fl es as dist i ngui shi ng be tw een tw o com m onl y ow n ed, i denti cal l y nam ed enti ti es. O rlando Re s i de nc e, Lt d. v. Nas hvi l l eLo dgi ng Co. , 1 9 9 6 WL 7249 15, at* 2 ( Tenn. A pp . Dec. 18 , 19 96 ). T h ey were as Twee dl edu m a nd Twee dl ede e. But p r o ce edingt o the4 N os. 07

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m erits the cou rt found e r r o r s in the ch an cery cou rt’s d ec isio n an d rem an d ed for a n ew tria l. S ho r t l y befo r e the c o ur to fa pp e a l s ’ de c i s i o n, Or l a nd o had m ove d the chancer y cour t to or der the hote l pro perty sol d t o sat i sfy Orl ando’s j ud gm ent, the cour t had o rder ed th e sal e, an d a t th e sa l e Or l an do ha d pur ch as ed th e proper ty f or$1 00, 000. W hen the cour t o fappeal s r eve rs ed th e j udg m en t i n the fr au dul en t co nv ey an ce s ui t, the defen dan ts a sked th e ch an ce r y c o ur t to s eta si de th e s a l e ; the y al so re ne we d the i r a r g ume nttha tOr l a nd o lac ke d st an d in g. T h e ch an c er y cou rt rej ec te d b ot h th eir argu m en ts. So the d efend an ts again a p p ealed

. Th e cou rt ofappeal s, i nvoking the doctr in e ofl aw o fthe case , r efus ed to c o ns i derthe de fen dan ts’ r en ewe d a r g um en t th at O rland o l acke d stan d ing an d w en t on to affi rm th e ch an ce r y c o ur t’ s dec i si o n r efusi ngt o s eta si de th e sa le. O r l ando Re s i de nc e, Lt d. v. Na shv illeLo dgi ng Co. , 19 99 W L 10405 44, at * 4 (Ten n. A p p . N ov. 17, 1999). T h e n ew tria l th at th e c ou rtof ap p ea ls h ad ord er ed in th e fi r s ta p p e a l w a s h e l d i n 2 0 0 0 , a n d th e j u r y r e t u r ne d a ver dicti n f avo r ofOrl ando for $7 97, 615. The j ud ge gave the defendants a cre dito f$1 00, 000, the am ount that O rla nd o had agr eed to pay f orthe proper ty ( f or m er ly N L C ’s) a t t h e j u d icia l s ale . O n a p p ea l, th e c ou rtof ap p ea ls he l d tha t th e j udi ci als al e ha d b ee n pr o pera nd s o the defe nd ants w er e e nti tl ed to no m or e forthei r proper ty i nt er es t th anOr l and o h ad ag r ee d t o pa y a t th e sa l e. The co ur t fur th err ul ed th atNRC ’ s co nv ey an ce o fthe pr o per tyt o NLC ha d i nde ed be enfr au dul en t, b utthe cour t r em anded the c as e to the chancer y c ourtf oranN os. 07

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- 1044 5 evi denti ar y hea ring o n the defe nd ants’ st atu te o fl i m i tatio n s d efe n se . O r l ando Re s i de nc e, Lt d. v. Nas hvi l l eLo dgi ng Co
. , 104 S. W
. 3d 848 (Ten n. A p p . 2002). B ac k in 1 99 9 N L C h ad gra n te d a se c u rit y in te re st in i ts perso n al pr oper ty to anothe r enti ty contr ol l ed by Kenne thNel so n, GP Cr ed it C o. , i n e xc ha ng e f o r a l o an . N LC ’ s p er so nal pro pertyi ncl ud ed a l aw sui t a gainst M etr i c ( to w hi ch, re cal l, N LC had c onvey ed th e h ote l proper ty i n 198 9) i n Tennessee
. I n 200 1, GP Creditf or ecl ose d i ts secur i ty i nter esti n N L C ’s p er sonalpro perty an d bo ug htthe pr o per tya t th e f o r ec l o su r e sa l e, i nc l udi ng th e suit agains t M e t ric. Orlan d o pe rsu ad ed the ch an cery co ur t to a ppo i nta r ec ei ve r t o ho l d a ny p roce eds o fthe M etric suit tha t N L C m ig ht obtain, to pay O rland o’s j udg m en t ag ains t N LC. GP Cr edi t r es po nde d b y fi l in g a d iversity suit i n a fed eral court in W iscons in, G P C red it’ s d om icile , to c lea r its ti t l e t o t h e M et ric su it. W e u p h eld the di str i ct j ud ge’ s j ud gm ent in favor ofGP Credit, r ul i ngtha t GP Cr edi t o wned the s ui t f r ee a nd c l ea r o fa ny c laim b y O r l an d o. G P C redit C o ., LL Cv. O rla nd o R esiden ce, Ltd

. , 349 F.3d 976 ( 7th Cir. 2003). I n 200 4, pursuant to the Tennes se e c ou rto fappeal s’ re m and, Orl an d o’s f ra ud ule nt co nveya nce s uitwas aga i n re tr i ed, and aga i n Orl ando w on

— an d a g ain the chancer y c ourtr efused to r eco nsi der the ea rl i er r ulings on Orl ando’s st anding to sue. Because K enneth N el son r efus ed to puti n a pe r so na l appea r an ce a t th e tr i al, the j ud ge entere d a defa ultj ud gm ent in f avo r ofOrl ando, an d th e c ou rtof ap p ea ls a ffirm ed

. O r l ando Re s i de nc e, Lt d. v. Nas hv i l l eL odgi n g Co
. , 2 1 3 S .W
. 3d 855 (Ten n. A p p . 2006).6 N os. 07

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- 1044 Or l a nd o a tl a s th a d s o l i d f i na l j ud g men t s a g a i ns tNRC , N LC, a nd Kenne thNel so n. The chal l enge w as to co l l ect these j ud gm ents. To that en d O rla n d o h ad br ou gh t t h e p re se n t s u it, orig in ally in the Ten n es see chancer y c ourt, ag ai nst NL C, GP Credi t, K enneth N el son and his w ife Susan, and H ayve nhurst Pensi on & Profi t S haring Pl an, cl ai m i ng tha t Kenneth N el son an d N LC had m ade fra ud ule nt co nveya nces to the o the r de f endant s i n a n e ff o r tt o p r e v e ntOr l a nd o from c o llecting its j ud gm en t. G P C red it coun tercl ai m ed, c l ai m i ngunj us t en r i chm en t (f o r whi chi t so ug ht re sti tuti on) , i ntenti onali nter fer en ce with a b usi ness re latio nshi p, and sl ander o fti tl e. ( I t l ate r add ed an ad d iti o na l r es ti tu ti o n c l ai m . ) The de fen dan ts r emov ed th e sui t t o federa l di str i ct c ourto n t he bas i s o fdi ver si ty of ci ti zenshi p, and that cour t then tr ansfer re d the ca se to a federa l di str i ct c ourti n W i sco nsi n. The di str i ct j ud ge rej ecte d both of O rland o’s clai m s and G P Cred it’ s cou nt erc laim s, and both si des have appeal ed. S usan N el son filed a se p ar at e s u it in th e s am e d ist ric t c ou rtt o q u iettit le to he r property s o tha t i t ca nno t be s ei ze d t o pa y the j udg m en t ag ains t th e defen dan ts in Or l an do ’ s su i t. The dist ri ct j ud ge dism i sse d that s uit, and she appeal s. We b e g i n wi th O r l a n d o ’ s a p p e a l

. T wo y e a r s a ft er we i ssued o ur deci sio n i n GP C re dit ’ s qui et- ti tl e s uitag ai nst Orl ando, Orl ando obt ai ned a d ef aul t j ud gm ent fro m th e ch an cery cou rt i n T en ne ssee aga inst G P C red it. Orl ando cl ai m ed that GP Credi t was an a l tereg o ofKenn eth Ne l s o n a nd theref or e l i a b l e o n hi s deb tt o Or l a nd o . GP Credi t arg u es thatthe chancer y c ourtdi d not hav e j uri s-N os. 07

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- 1044 7 dict i on t o i ssue the def au lt j u d gm ent b ecause i t was a j ud gm ent in re m

— th e res being the l aw sui t a gainst Me t r i c , w h i c h h a d b e e n th e p r o p e r t y o fN L C
. A s we ex p lai ne d i n ou r dec isi on (see 349 F.3d a t 9 81), th e site ofa re s tha tc o ns i s t s o fa l a ws ui ti s the o wne r ’ s do mici l e. Because G P Credi t was the o w ner ofthe l aw sui t, i ts dom i ci l e a nd ther ef or e th e site o fthe l aw sui t were W i sconsin. The di str i ct j ud ge i n the prese nt ca se thought that to al l ow O rl ando to o btain the proce eds o fthe M et ric l aw sui t w oul d b e i nconsi ste nt w i th our d ec i si on hol ding that GP Cred it ow ns the sui t fre e a nd cl earo f any c l ai m s byOrl ando. Th e j ud ge wa s wr o ng . T he b a s i s o n whi c h Or l a nd o s e e k s t o a dd GP Cr e di ta s a de fe nd a nti s no ttha tOr l a nd o own s the M etr i c la w sui t but that GP Credi t i s the al tereg o ofKenn eth Nels on

— wh i c h we d i d n ’ tkn o w w h e n we i ssued o ur deci si on

— so that proper ty of GP C redit, i ncl ud i ng the re f or e the M etr i c l aw sui t, i s a vai l abl e for sa ti sf ac ti o n o fOr l and o ’ s j udg m en t ag ains t N el so n. The defa ultj ud gm ent e stabl i shed thi s, and , by suing G P Credi t, Orl ando i s s i m plytr yi ng to co l l ect i ts j ud gm ent a gainst N el so n fr o m Nel so n’ s al te r e g o . Tha t i s en ti r ely prop er, a nd s o i t s c l a i m s ho ul d n o th a v e b e e n di s mi s s e d. W e t u rn to G P C re d it’s c ou n te rc laim s. T h e firs t is th at it i s en ti tl ed to restituti o n o f$ 3. 3 m i l l i o n, i ts e xt r av ag an t est i m ate o f the val ue o fN LC ’ s pro pertyi nter estthat w as exti ngui shed at t h e j ud i ci alsa l e o fthe proper ty to Orl ando f or $100 , 000 l o these m any yea rs ago. Rem em ber that GP Cred it acqui re d N LC ’ s per sonalpro perty, wh i ch i nc l ude s l egal cl ai m s su cha s th e cl ai m t o the v al ue o fthe8 N os. 07

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- 1044 proper ty. But re m em bertoo that the Tennes see co urt of appeal s hel d that the j ud i ci al sal e w as proper an d that N LC ( and hence GP Credi t) w as enti tl ed to o nl y $ 100, 000, the p r o c e e ds o fthe s a l e . T ha tr ul i ngexti ng ui s he d G P Credi t’ s cl ai m byo perat i on o fr es j ud i cata
. GP Cr edi t co nt es ts thi s co nc l us i o n, a r g ui ng th atthe ch an cery cou rt nev er acq uired j urisd iction of O rland o’s sui t a gai nst NL C becaus e the wrong Orl ando Resi dence, L t d

. h a d s u e d , a m i s t a k e th a tu n d e r T e n n e s s e e l a w m ay have depri ved t h e cour t o fsubj ect- m att erj uri sdic

ti on

— th ou gh w e d ou b t it
. O sbo rn v . M a rr, 127 S. W
. 3d 737, 740 ( Tenn. 2004 ) , hol ds that sta nd i ng to sue i s a j uri sdic

ti onalpre re quis i te, but a co nfusi on be tw een a l tereg os h a r d l y r i s e s t o th e l e v e l o fa n ab s e n c e o fs t a n d i n g . No m at te r ; the que st i o n o fs ta ndi ngha d b ee n l i ti g at ed, a nd an swe r ed i n Or l an do ’ s f av o r b y the c ha nc er y c o ur t an d the answ erupheld bythe Tennesee cour t o fappeal s, wh i ch i n a s ubsequent a pp ealr efused to per m i t the issue to b e r e l i t i g a t e d. GP Credi t a rgues that a deci si on bya court th at l acks su bj ec t- m at te r j ur i sdi ct i o n c an al ways b e attac ked coll ateral l y, but that i s no t t rue ei ther ; and anyway, i fTennesse e w oul d not per m i t i ts j ud gm ent t o be a tta cked co l l ate ra l l y, the federa l co urt w oul d be bo und

. 28 U .S
. C. § 1 738; M a rrese v. A m erica n A ca dem y o f O rtho pa edic Su rg e o ns, 47 0 U
. S. 373 (1985). I fa cour t o fco m peten t j uri sdic ti on

— a co urt author i zed to deci de the ki nd o fcas e in w hi ch the j uri sdictio nal qu esti o n a r i se s ( whi chi s true o fthe Te nne ss ee c ha nceryN os. 07

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- 1044 9

cour t)

— re so lve s a j u ris d ict ion al iss u e in a f u ll an d fair hear i ng, thatr eso l uti on i s e nti tl ed to the sam e co l l ate ra l es to p p el e ffec t t h at a r u l i n g on a su b st an tiv e is su e w ou ld b e e n tit led to . E .g., U nde r wri t e rs Nat i onal As s uran ceCo. v. N orth C arolina Life& A cci dent & Health Ins
. Gua ranty Ass ’n , 45 5 U .S. 6 9 1 , 7 06 -07(19 82 ); D ur f e ev. D uke, 37 5 U.S
. 10 6, 11 1-1 5 (1 96 3); Sto ll v. G o t t l i eb , 305 U
. S. 165, 171-72 (1938 ); Tenne ss eeex re l. Size m orev. Surety Bank, 20 0 F
. 3d 373, 38 1 (5t h C ir. 20 00 ) (T en n es se e la w ); U nite d Sta te s ex rel
. Robi ns on Ranch e r i a C i t ize ns C oun ci l v. Bor ne o, Inc . , 97 1 F
. 2d 244, 25 0 ( 9th Ci r. 19 92)
. Other w ise there w oul d be nothi ngt o pr ev en t th e i nc es sa ntr el i ti g at i o n o fthe sam e j uri sdic ti onalchal l enges bythe sam e par ti es ( or p a r t i e s i n p r i v i t y w i th th e m)

— whi chi s j us t whatthe defen dan ts a r e at te m pti ng. ( F o r a no th era tt empt, a nd anothe r j ud i ci alr ebuff, se e GP C reditCo. , LL C v. O r l ando Res i de nc eLt d. , N o. 01

- CV

- 2294, pp. 9- 11 ( S. D. Cal. S ept. 20 , 20 07 ).) M any c ase s g o fur therand h ol d that i fa cour t o fco m petent j uri sdic ti on “ deci des a case o n the m er i ts afteran ad versarial presen tation, th e j ud gm en t can not be coll ateral l y a t t a c k e d” e v e n i f the parti es f ai l ed “to add re ss j uri sdic ti on full y o r cog entl y. ” U nited St at e s v. County of

Cook, 167 F.3d 381 , 388 (7th C ir. 1999). (Bu t here the y di d. ) “ A pa r t y tha th a s h a d an opp ortuni tyto l i ti gat e the quest i on o f s u b j ec t-m at te r j uri sdic ti on m ay not
. . . re open that qu est i on in a col l ate ra l attacku pon an advers e j ud gm ent. ” Ins uranc eCorp. of Ir e l and, Lt d. v. C o m pa gn ie des B a ux ites de G ui n ee, 45 6 U .S. 69 4, 70 2 n . 9 ( 1982 ) ( em phasi s a dd ed ) ; se e Chic otCounty Drai nage D i s t ri ctv. Baxt e rSt at eBank, 308 U .S. 37 1 (1 94 0); Bel l v.10 N os. 07

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- 1044 Eas t man Kod akCo
. , 21 4 F
. 3d 798, 80 1 ( 7th Ci r. 2 00 0) ( “to al l o w a g r o u n d th a t c a n b e a d e q u a t e l y p r e s e n t e d i n a dir ect appeal to be m ade the basi s o fa col l ate ra l at tack woul d op en the do o r t o unt i m ely a ppea l s . . . . The l osi ng p a r t y c o ul d r e s e r v e the g r o un d u nt i l h e h a d pr esen t e d i t u ns uc cess full y to the d istri ct cou rt i n th e form of a R ule 60(b) m o t io n . T ha t is not perm itted ”); St e r l i ng v. U nited Sta tes , 8 5 F.3d 1225 , 1 230-31 (7th C ir. 1996) (conc urringo pini on) ( “thi s s al utar y a pp ro ach exi sts bec ause th er e is a ne ed for fin alit y in th e law , an d fin alit y w o u ld be di sse rv ed i f courts had to r eexam i ne the j uri sdic ti onal basi s o fev er y pr i orj ud gm ent b ef or e g i vi ng it precl usi ve effect”). These ca ses ( and the R es tate m ent (Second) of Judgm ents § 1 2 an d com m ent a ( 1982 ) ) r el ax the nor m alr ule o f col l ate ra l es toppel

— that the i ssue i n questi on, the iss ue a par tyw an ts to pr ev en t be i ngr eo pen ed, ha ve b ee n “ ac tu
al l y l i ti gat ed. ” Id ., § 2 7
. T he y do thi s b e c a us e a n a t t e mpt to i nval id ate a j ud gm ent i s f arm or e pr obl em ati c than an att em pt m er el y to re l i ti gat e an i ssue that m igh t have been but was not l i ti gat ed i n a previ ous c ase the j ud gm ent in w hi ch r em ai ns i n f or ce. A ga in st a v er ita b le m ou n ta in of au th or ity , G P C re d it ci tes D un ha m v. Stitz berg, 20 1 P. 2d 1000 (N
. M
. 19 48) , wh i ch re fu se d to giv e p re c lu siv e e ffec t t o a 20 -ye ar -old deci si on bya p ro bate co urt that had exceeded i ts j uri sdict i on by deter m i ni ng ti tl e to re ales tat e. But that w as an ex am p le of a de ci si o n b y a c o ur t th at, unl i k e th e Tennessee chancer y c ourt , w as not a co urt com petent to m ak e s u c h a d et er m in at ion . Th e o p in ion ex p lain ed t h at “itN os. 07

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- 1044 11 i s a m att ero fco m m on kn ow ledge that [ i n N ew M exi co] proba te proce edi ngs ar e usual l y ex parte ; that p robate j ud ges i n thi s s tat e a re , with few exce pti ons, notl aw yer s, and m any a re i gnor ant a nd notfi tte d fo r the o ffi ce. Oft en they si gn pre pared o rder s and d ecr ees w i thout re ading ; o r i f r ea d , then w i thout und er sta nd i ng the i m port
. I fi n f act these co urts had the j uri sdic ti on assert ed, i t would be ex ercised i n m ost cas es w ithou t any real t r ia l to d eterm i ne the facto fhei rs hi p. ” Id

. at10 14. ( GP Credi t neg l ecte d to m enti on that D unh am h as be en ov er ru led , In re C onley’s Wil l , 27 6 P. 2d 906, 90 9 ( N
. M
. 19 54)
. The gr ound w as that the pr obat e c ou rt di d have the j uri sdic ti on that D unh am h eld it d id n oth av e.) I t i s tr ue , a s we no te d e ar l i er, c iti ng s ec ti o n 1 73 8 o fthe J ud i ci alCode and the M arrese d ecis i on, thata sta te i s fre e to deci de how m uch orh ow l i ttl e r especti ts j ud gm ents shoul d be g i ven in subsequen t c ases, and other sta tes and the federa l co urts ar e bo und to gi ve thos e j u d gm ents the sam e e ffe c ti n the i r c a s e s . T he de fe nd a nt s i ns i s ttha t th e Te nne ss ee c o ur ts pl ac e no l i m i ts a t al l o n the r el i ti g at i o n o fi ss ue s o fs ubj ec t- m at te r j ur i sdi ct i o n, b utno c as es su p p or t t h at ins ist en c e. Ten ne s s e e D ept
. of H um an Serv ices v. G o uv itsa , 735 S. W
. 2d 452, 457 (Te nn . A p p . 1987), did deny p re cl usi ve effect to the deci si on o fa cour t that lac ke d su b j ec t-m at te r j u ris d ict ion , bu t t h e o p in ion is si l ent o n w hethert h e iss ue o fj uri sdic ti on had bee n or co ul d ha ve b ee n l i ti g at ed i n the e ar l i erc ase. And the op inion r e lie d on an ol d de cision by the Sup rem e C ou rt of T en n es se e, Br own v. Brown , 281 S. W
. 2d 492 (Ten n. 1955), w hi ch m i g htwe l l n o tb e f o l l o we d t o da y, a s i tr e fl e cts the o l d rather than t h e m oder n vi ew o fthe appropri ate12 N os. 07

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- 1044

sco pe ofco l l ate ra l at tack s o n j ud gm ents. S ee Res t at e m ent, sup ra , § 12, co m m ent a. N o m att er ; ifthe Suprem e Cour t o f Tennessee would eve n to day r ej ect the Res t at e m e ntr ule , ther e i s no i nd i cati on that i t would g o furtherand al l ow the i ssue to be l i ti gat ed ove r and overand ove r aga in , a s th e d efe n d an ts h av e t rie d to d o. Tenne ss eeex re l. Siz em o re v. Su r e ty Bank, sup ra , 2 00 F
. 3d at3 81 , i s to the co nt r ar y ; a nd i n G o e kev. Woods , 7 7 7S
. W. 2 d 3 4 7, 3 5 0 ( T e n n . 1 9 8 9 ) , t he S u p r e me C o u r t o f T e n n e s s e e e n d o r s e d , a lb e i t i n di c t u m, the a pp l i c at ion o fco l l ate ra l es toppelto questi ons of j u ris d ict ion : “ R es judi cata appli es to questi ons ofj uri sdic

ti o n, i fj ur i sdi ct i o n i s l i ti g at ed o r de te r m i ne d b y the cour t. The precl usi ve effect of a dism i ssa l f or l ack o f j u ris d ict ion is, ho w ev er , l im ite d to th e m at te rs ac tu ally deci ded , and i s no t bind i ng as to al l m att er s which cou ld h ave be en rai sed ” (ci tation om itted ). GP Cr e di t ’ s n e xtc ou nt e r c l a i m, wh i c h c ha r g e s Or l a nd o w i th to rt i ous inter fer ence w i th an advantage ous b usiness r e l a t i o n s h i p , g r o ws o u to fo u r p r e v i o u s d e c i s i o n . Aft e r we confi rm ed GP Credi t’ s ti tl e to the l aw sui t aga i nst M et ric fre e of Orl ando’s cl ai m s, M etr i c offer ed to set tl e the s u it for $6 50 ,00 0 if O rla n d o w ou ld d iss olv e t h e re c eiv er s h ip th at th e c h an c er y c ou rtin T e n n es se e h ad cr ea te d to h old the pr oce eds o fthe sui t, in w hic h O rla nd o ass er ted an in t e r e st . Or lan d o re fu se d , th e s u it w as se tt led for on ly $150 , 000, and GP Cred it see k s the differen ce from Orl an do

. The c l ai m i s f r i vo l o us , e ve n i fo ne a ss um es ( an d w hy not? ) th at a se ttlem en t betw een com m ercial en terp rises could be d eem e d a b us iness relationsh ip for p urposes o fthe tor t. I t i s har dly tort i ous c onduct m er el y t o r efus e to i nc urthe e xpe ns e o fdi ss o l vinga r ec ei ve r sh i p; theN os. 07

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- 4051 , 08

- 1044 13 b e ne fi to fdi s s o l ut i o n w oul d ha v e b e e n e nt i r e l y t o GP C re d it, s o it s h ou ld h av e s ou gh t t h e d iss olu tio n . Th er e is no evi den ce tha t Or l an do e ve n kne w ab o utM et r i c’ s set tl em ent o fferto GP Credita n d the co nd i ti on a tta ched to i t. A nd i t would nothave bee n i n Orl ando’s i nt er est to blo c k t h e set tle m en t. It h as a j u d gm en t th at G P C re d it is an al tereg o ofKenn eth Nels on, ag ai nst whom i t has a m oneyj ud gm ent; the m or e GP Credi t ob tained fro m M etric i n a s ett l em ent, the l ar gerthe potenti alpoolo f as se ts o uto fwhi chOr l an do c o ul d s at i sfy i ts j udg m ent aga i nst GP Credi t. A nyw ay Orl ando had a v al i d i nter est in th e m ain te n an c e o f t h e re c eiv er sh ip . W e h ad ord er ed it d iss olv ed be c au se O rla n d o h ad n o in te re st in t h e M et ric su it. B u t we w er e no t a w ar e that GP Credi t was an a l ter ego o fN el son

— whi c h Or l a nd o g a v e a l e g i t i mat e i nt er est i n any set tl em ent that M etr i c m ade with GP Credi t. GP C r e d i t ’ s s l a n d e r o ft i t l e c o u n t e r c l a i m f a i l s f o r t he s a me r e a s o n: Or l a nd o h a d a v a l i d r e a s o n t o que s t i o n GP Cre di t ’ s r i g htt o k e e p the p r o c e e ds o fa s e t t l e men twi th M etr i c. G P Cred it’ s last cou nt erclaim seeks restitut ion of a $1 50 , 00 0 bo nd tha t N LC ha d b ee n r equi r ed to po sti n the M et r i c l aws uit
. NLC depo si te d the mone y i n the Tennesee chancery c ou rt, and the cour t g ave the m oney to Orl ando afterthe defa ultj ud gm ent th at deter m i ned th at G P C re d it is a n alt er eg o of K en n et h N els on . G P C re d it co nt en ds th atthe b o nd b el o ng s to it by vi r tu e o fo ur dec i si o n uph o l di ngi ts qui et
- ti tl e action, a nd tha t th e ch an ce r y c o ur t di d no t have j uri sdi ct i o n t o i ss ue the def au l t j udg m en t be ca us e i t was a jud gm en t i n r em ( th e14 N os. 07

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- 1044 bon d being th e res) a nd the site of a res tha t con sists of a law su it i s, as w e kn ow , th e ow n er ’s d om icile

. G P C r e d it w as the o w ner of th e l aw sui t, and hence o fthe bond that i t po st ed i n the s ui t, a nd i ts d om i ci l e i s W i sc o ns i n. But thi s r eas oni ng o ver l oo ks the f act that the b ondhad bee n d ep os ite d in t h e T en n es se e c ou rt ; t h e r e s w as th u s in Tennessee , notW i sco nsi n. A s we exp lain ed, the basi s o n w hi ch Orl ando w as gi ven the bo nd m oneywas not that O rla n d o ow n ed th e M et ric law su it b u t t h at G P C re d it is the a l tereg o ofKenn eth N els on, so that anypro pertyo f GP Credi t i s f ai r gam e f or sat i sfyi ng Orl ando ’s j ud gm en t ag ains t N el so n. W e turn l ast to Susan N el son’ s sui t. A s par t o fi ts eff or ts to co l l ec t i ts j udg m en t, Orl an do br o ug hta sui t i n a Wi sc o nsi n sta te cour t t o est abl i sh thatpro pertythatM rs . N el son c laim s t o b e h er ow n is ac tu ally p ro p e r t y o w n ed j oin tly w i th herhusband and thus i s a vai l abl e t o pay a j ud gm en t a ga in st h im . W is. St at . § 80 3.0 45 (3); Cour tyar d Cond om iniu m A ss’n, Inc. v. D rap er, 6 2 9 N. W
. 2 d 3 8 , 4 2 ( W i s . App
. 2001 )
. That s uiti s pending

. A fteri t was fi l ed, M rs . N el son bro ught herpre sent sui t t o quiettit l e to her proper ty

— that is, to es tabl i sh thati t r eal l y i s herpro pertyr atherthan bei ng j oi ntl y o w ned w i th h er h usband. The di str i ct j ud ge dism i sse d the s uitbe c au se w hen two i n re m sui ts i nv o l vingthe sa m e r es ar e pe ndi ngi n di ffer en t co ur ts the cour t in w hi ch the se c on d suit w as fi l ed m ust di sm i ss i ts su it. P enn G ene ral C asualty Co. v. Co m m onw ealth of Pennsylva nia ex rel. Sc hn a der, 294 U .S. 18 9, 19 5

- 96 (19 35 ); Kli nev. BurkeCo n s t r u c ti on Co ., 26 0 U .S. 22 6, 22 9 (1 92 2); U nited State s v. $506 , 231 in U
. S. C urrency, 12 5 F
. 3d 442, 44 7- 48 ( 7thN os. 07

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- 1044 15 Cir
. 19 97)
. W e a re gi ven n o re aso n to depart f ro m that sensibl e r ule

. T o s u m m ar ize , th e jud gm en t of t h e d ist ric t c ou rtis re ve rs ed ins ofa r as it rejec te d O rla n d o’s alt er eg o c laim a g a i ns tGP Cr e di tb uti n a l l o the r r e s pe c t s i s a ffi r med

. The ti m e has co m e t o pu t an end to the defe nd ants’ stubb o r n e ff o r ts t o pr ev en t Or l an do fr o m o bt aini ngthe re l i efto w hi ch i t i s enti tl ed. The dist ri ct j ud ge shoul d gi ve consi derat i on t o enj oi n ing the defendants fro m further m aneuver s t o evade the j u d gm ents that Orl ando has obt ai ned against them

. Th e au th or i ty f ori ssui ng such a n i nj uncti on ( a “ bi l l o f p eace, ” a s i t i s ca l l ed) i s wel l es tablish ed . See , e.g., A ll endaleM utual Ins. C o . v. Bu ll D ata Sy s t e m s , Inc ., 10 F.3d 42 5, 43 1 (7 th C ir. 19 93 ); N e wby v. E nro n C o rp ., 54 2 F.3 d 4 63 , 472 -73 (5t h C ir. 20 08 ); Saf i r v. U
. S. Li ne s , Inc ., 79 2 F .2d 19 , 24 (2d C ir. 19 86 ); M o lsk i v. E verg reen D yn a sty C o rp . , 50 0 F
. 3d 1 047, 10 56- 59 ( 9th Ci r. 20 07) ( per cu riam ). A FF I R MED I N P ART, R EV ER S ED I N P ART, AND R EMA NDE D W I T H D I R EC T I ONS .

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