IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FOR YOUR EASE ONLY, INC.,

Plaintiff, 

v.

CALGON CARBON CORPORATION,

and PRODUCT CONCEPTS

COMPANY, and MARK SCHNEIDER,

Defendants. 

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No. 02 c 7345

Wayne R. Andersen

District Judge

 

MEMORANDUM, OPINION AND ORDER

This case is before the court on plaintiff For Your Ease Only’s (“FYEO”) renewed

motion for a turnover order pursuant to Federal Rule Civil Procedure 69(a). As judgment

creditor on an underlying matter, FYEO claims that it is entitled to payments made by Home

Shopping Network (“HSN”) to Anewco, a successor company of the judgment debtors at issue

in this matter. For the following reasons, the motion [386] is granted. 

BACKGROUND

In February 22, 2007, FYEO obtained a default judgment against Mark Schneider

(“Schneider”) and Product Concepts Company (“PCC”) in the amount of $2.1 million for claims

relating to the sale of anti-tarnish jewelry boxes. In April 2007, FYEO served HSN with a thirdparty citation order to discover assets of Schneider and PCC in accordance with Illinois law, 735

Ill. Comp. Stat. 5/2-1402 (2009). An accompanying citation notice listed one of Schneider’s last

known addresses as Sevenquest. 

FYEO also filed a petition for an order restraining HSN from transferring any property to

the judgment debtors, Schneider and PCC, or to “any entities standing in their shoes, including,
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Sevenquest, LLC, Anewco.” 4/20/07 Petition. The petition informed HSN that the change from

PCC to Sevenquest, and finally to Anewco, was in name only and that FYEO believed the

payments HSN owed to Anewco as of April 20, 2007 were assets of the judgment debtors that

were subject to a lien under Illinois law. Id. At some point while this motion was pending

before the court, HSN made two payments to Anewco for the purchase of the anti-tarnish

jewelry boxes in the amounts of $84,856 and $297,360.

On November 13, 2007, this court denied FYEO’s original motion for turnover regarding

HSN’s payments to Anewco. For an expanded history and more detailed discussion of this

decision, this court’s previous opinion can be found at For Your Ease Only, Inc. v. Calgon

Carbon Corp., 2007 U.S. Dist. LEXIS 83744 (N.D. Ill. Nov. 13, 2007). However, the Seventh

Circuit disagreed with this court and vacated the November 13, 2007 order. See For Your Ease

Only, Inc. v. Calgon Carbon Corp., 560 F.3d 717 (7th Cir. 2009). 

Although the Seventh Circuit embraced this court’s finding that the asset at issue – the

right to payments from HSN for the anti-tarnish jewelry boxes – was fraudulently transferred

from judgment debtor PCC to Sevenquest, the Seventh Circuit disagreed with this court’s

finding of good faith and ultimately concluded that the subsequent transfer of this asset from

Sevenquest to Anewco was not in good faith and was therefore voidable under Illinois law. Id.

at 721-22. The Seventh Circuit then remanded this case “to decide whether HSN violated the

citation by transferring the assets of PCC and Schneider to Anewco.” Id. at 723. 

DISCUSSION

A. Motion for Turnover Standard

The proper service of a citation to discover assets creates a lien on “all personal property

belonging to the judgment debtor in the possession or control of the third party or which
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thereafter may be acquired or come due the judgment debtor and comes into the possession or

control of the third party to the time of the disposition of the citation.” 735 Ill. Comp. Stat. 5/2-

1402(m) (2009). If a third-party violates the restraining provision of the citation, the court may

“enter judgment against him or her in the amount of the unpaid portion of the judgment and costs

allowable under this Section, or in the amount of the value of the property transferred, whichever

is lesser. 735 Ill. Comp. Stat. 5/2-1402(f)(1) (2009).

 The Seventh Circuit found that the transfer of the rights to payment from HSN for the

anti-tarnish jewelry boxes from PCC to, ultimately, Anewco was voidable, and therefore, those

rights are an asset of the judgment creditor. It is, therefore, undisputed that HSN transferred

assets belonging to the judgment debtor after the citation was served. If this court finds that

HSN was aware that the assets being transferred belonged to the judgment debtors, and thus

violated the citation, HSN will be liable for the amount of the value of the property transferred.

B. The Termination Provision of Illinois Supreme Court Rule 277 and Stay Provision

of Federal Rule 62 Do Not Affect the Outcome of this Case

HSN contends that, even if it were liable to FYEO, it is shielded from liability because

FYEO did not preserve its claimed right to HSN payments. Specifically, HSN claims that the

citation that had been served on HSN had terminated by the issuance of the order of this court

pursuant to Illinois Supreme Court Rule 277, and/or FYEO did not seek a stay of judgment

pending appeal under Rule 62 of the Federal Rules of Civil Procedure. The court finds these

arguments unpersuasive. 

First, Illinois Supreme Court Rule 277 provides that a citation is terminated by an order

of the court or terminates automatically six months from the date of respondent’s first personal

appearance pursuant to (1) the citation or (2) a subsequent process issued to enforce the citation. 
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Ill. Sup. Ct. R. 277. HSN claims that the court’s November 13, 2007 order effectively

terminated the citation. Regardless of the validity of this claim, the action which is currently in

dispute – the transfer of money from HSN to Anewco – occurred well before that order was

issued from this court, and within two months of the issuance of the citation, well before the six

month deadline. The citation was clearly still in effect at the time of the transfer of assets from

HSN to Anewco, and HSN was obliged to comply with the citation at that time. 

Second, and for similar reasons, HSN’s reliance on Federal Rule 62 also is misplaced. 

HSN claims that FYEO failed to preserve its claimed right to HSN payments because FYEO

failed to “seek a stay of judgment pending appeal to protect its interest in the underlying

property.” Duncan v. Farm Credit Bank of St. Louis, 940 F.2d 1099, 1102 (7th Cir. 1991). 

When this court’s November 13, 2007 order was issued, there were no payments to stay. The

payments at issue had been made by HSN to Anewco several months prior to the original order

of this court, and thus Rule 62 has no relevance here. Neither Federal Rule 62, nor Illinois

Supreme Court Rule 277 prevents FYEO from seeking a judgment in the amount of the value of

the property transferred while the citation preventing HSN from making those payments was still

in effect. 

C. HSN Violated the Citation When It Transferred Assets to Anewco

HSN contends that it is not liable for the money paid to Anewco because, during the life

of the citation, there was no judicial determination that HSN had possession of assets that

belonged to the judgment debtors. A judicial determination is not a prerequisite for compliance

with the citation. All that Illinois law requires to place a lien on the property is notice that the

payments may be assets of the debtors. See Schak v. Blom, 777 N.E.2d 635, 639 (2002) (“Before
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a judgment creditor may proceed against a third party who is not the judgment debtor, the record

must contain some evidence that the third party possesses assets of the judgment debtor.”).

The Seventh Circuit found that the “record does contain evidence indicating that HSN

may have known that Anewco received the business from Schneider,” but remanded this case to

determine if HSN has any additional evidence that is pertinent. For Your Ease Only, Inc., 560

F.3d at 723. Based upon all of the facts, the court finds that HSN was aware that the assets in

question – the rights to payments by HSN for the anti-tarnish jewelry boxes – may have

belonged to the judgment debtors and, therefore, violated the citation when it transferred those

assets to Anewco.

Although Anewco was not specifically named in the citation notice, FYEO’s petition for

a restraining order, which was served on HSN with the citation, specifically spelled out that

Anewco stood in the shoes of the judgment debtors. While HSN was not required to take

FYEO’s word for it, there is additional evidence indicating that HSN knew that Anewco

received the business from Schneider. HSN understood that Sevenquest was owned by

Schneider, a judgment debtor. The January 11, 2007 letter indicating that the rights to the HSN

payments should be transferred from Sevenquest to Anewco was from Schneider. The

merchandising contract filled out in January 2007 listing Anewco as the vendor indicated that

the change was in name only. Additionally, HSN used the same vendor identification number

and product identification number for Anewco as it had used for PCC and Sevenquest.

HSN’s contention that it was commercially unreasonable, against public policy, and

unfair to make HSN choose between defaulting on payments to Anewco and violating the

citation was expressly rejected by the Seventh Circuit. Id. The Seventh Circuit identified that

HSN had a third choice: it could have placed the money in a private escrow account or paid the
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money into the registry of the court. Id. HSN was aware of this option because it was set forth in

FYEO’s petition for a restraining order. Yet, HSN rejected the escrow option, took a risk and

transferred the money to Anewco. Based upon the evidence presented, it is clear that HSN was

aware that the payments made to Anewco may have been assets of the judgment debtors.

Therefore, when HSN issued payments to Anewco, it violated the citation. 

D. FYEO Is Entitled to Costs but not Interest

FYEO argues that it is entitled to interest related to HSN’s failure to abide by the citation.

We disagree. The court need look no further than 735 ILCS 5/2-1402(f)(1) which provides in

relevant part: “The court may punish any party who violates the restraining provision of a

citation as and for contempt, or if the party is a third party may enter judgment against him or

her in the amount of the unpaid portion of the judgment and costs allowable under this Section,

or in the amount of the value of the property transferred, whichever is lessor.” Notably absent is

any reference to a judgment creditor’s right to recover interest. This court declines to award

FYEO any interest prior to the entry of this judgement. Prior to this Memorandum Opinion and

Order, judgment had not been entered against HSN. Thus, FYEO has no basis which to seek

post-judgement interest from HSN until the entry of this order. 

FYEO also argues that it is entitled to costs associated with the enforcement of the

citation. We agree. Illinois law provides that costs “shall be allowed, assessed and paid in

accordance with the rules, provided that if the court determines, in its discretion, that costs

incurred by the judgement creditor were improperly incurred, those costs shall not be paid to the

judgement creditor.” 735 ILCS 5/2-1402(h). Therefore, FYEO is entitled to costs. 
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CONCLUSION

Because the payments HSN issued to Anewco belonged to the judgment debtors, and

HSN was on notice that Anewco was PCC’s and Sevenquest’s successor in interest, HSN

violated the citation. For all of the reasons set forth in this court’s Memorandum, Opinion and

Order, FYEO’s renewed motion for a turnover order [386] is granted, and judgment is entered in

favor of FYEO and against HSN in the amount of $382,216, plus costs. 

It is so ordered.

___________________________________

 Wayne R. Andersen

United States District Court

Dated: October 6, 2009