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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

JAMES HAWTHORNE,

Plaintiff,

v.

LINCOLN GENERAL INSURANCE

COMPANY,

Defendant.

___________________________________ /

Case Number: 08-14538

JUDGE PAUL D. BORMAN

UNITED STATES DISTRICT COURT 

OPINION AND ORDER: 

(1) GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT;

AND (2) DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

Before the Court are the parties’ cross-motions for summary judgment: Defendant Lincoln

General Insurance Company’s Motion for Summary Judgment, filed June 19, 2009 (Doc. No. 7),

and Plaintiff James Hawthorne’s Motion for Summary Judgment, filed July 17, 2009 (Doc. No. 10).

The Court heard oral argument on the motions on August 26, 2009. For the reasons stated below,

the Court GRANTS Defendant’s Motion for Summary Judgment and DENIES Plaintiff’s Motion

for Summary Judgment.

I. BACKGROUND

The instant case is a companion case to Hawthorne v. Ingram Trucking and Lincoln General

Insurance Company, No. 08-12325 [hereinafter Hawthorne I]. 

Plaintiff filed the instant garnishment action on October 6, 2008, in Wayne County Circuit

Court. (Notice of Removal, Request and Writ for Garnishment, 10/6/08). The parties stipulated to

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the dismissal of Plaintiff's previously filed garnishment action; Plaintiff was then allowed to file an

amended complaint in Hawthorne I. Defendant removed the second garnishment action to this

Court on October 24, 2008.

On February 9, 2009, the Court held in Hawthorne I that the default judgment entered in

Wayne County Circuit Court is a final judgment recovered against Ingram Trucking for injuries

resulting from negligence, and the Magistrate Judge’s conclusion otherwise was contrary to law.

Order (1) Vacating the Magistrate Judge's November 4, 2008 Order, and (2) Granting Plaintiff's

Motion to Limit Discovery, 7, Feb. 9, 2009, Case No. 08-12325. The Court further held that

Defendant is barred from litigating Ingram Trucking’s negligence liability and precluded from

taking discovery on the liability and damages issues. (Id. at 11).

On April 16, 2009, in light of the Court’s earlier decision that the default judgment Plaintiff

obtained in Wayne County Circuit Court is a final judgment recovered against the insured for

injuries resulting from negligence, the Court granted Plaintiff summary judgment on his MCS-90

claim. Order (1) Granting, in part, and Denying, in part, Plaintiff's Motion for Summary Judgment,

and (2) Denying Plaintiff's Motion to Dismiss, 3-4, April 16, 2009, Case No. 08-12325. 

Thereafter, the Court entered a judgment in Hawthorne I for Plaintiff and against Defendant

Lincoln General Insurance Company, in the amount of $750,000. (Doc. No. 68).

Presently before the Court are the parties cross-motions for summary judgment in Plaintiff's

garnishment action. At issue is whether Plaintiff may garnish, or claw back, the payments for

insurance coverage Ingram Trucking paid to Lincoln General, that formed the basis for Plaintiff

collecting the $750,000 from Lincoln General, in order to satisfy the default judgment a state court

entered against Ingram Trucking.

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II. ANALYSIS

Defendant argues it is entitled to summary judgment because Plaintiff’s garnishment action

is duplicative of his complaint in Hawthorne I, and is barred by res judicata. (Def.’s Mot. 3-4).

Plaintiff responds that the garnishment action is not duplicative of Hawthorne I because the

garnishment action is “based on the fact that Lincoln General rescinded the underlying insurance

policy without repaying the premiums.” (Pl.’s Resp. 3). Plaintiff further argues that res judicata

does not bar this action because the garnishment action is not a subsequent action to the MCS-90

action, the garnishment action does not raise any issue litigated in Hawthorne I, and the operative

facts giving rise to the two actions are different. (Pl.’s Resp. 5). 

Mich. Comp. Laws § 600.4011 authorizes courts to “apply . . . property or obligation, or

both, to the satisfaction of a claim evidenced by contract, judgment of this state, or foreign

judgment.” Postjudgment garnishment actions are governed by MCR 3.101. Nationsbanc Mortgage

Corp v. Luptak, 243 Mich. App 560, 564 (2000). Pursuant to section (D) of MCR 3.101, the clerk

of the court that entered the judgment must issue a writ of garnishment:

[I]f the plaintiff, or someone on the plaintiff’s behalf, makes and files a statement

verified in the manner provided in MCR 2.114(A) stating:

(1) that a judgment has been entered against the defendant and remains unsatisfied;

(2) the amount of the judgment and the amount remaining unpaid;

(3) that the person signing the verified statement knows or has good reason to believe

that

(a) a named person has control of property belonging to the defendant,

(b) a named person is indebted to the defendant, or

(c) a named person is obligated to make periodic payments to the defendant.

Under the court rule, if there is a dispute regarding a garnishee defendant’s liability, the issue

is tried in the same manner as other civil actions. MCR 3.101(M)(1). The plaintiff’s verified

statement made in support of a request for a writ of garnishment serves as the complaint, and the

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garnishee’s disclosure serves as the answer. MCR 3.101(M)(2). The garnishee must reveal its

liability to the principal defendant in the disclosure, but a general denial of liability is sufficient.

MCR 3.101(H)(1). In general, the plaintiff may not recover against a garnishee defendant unless

the principal defendant has a right to recovery. Poelman v. Payne, 332 Mich. 597 (1952).

Plaintiff obtained an uncontested judgment against Ingram Trucking in state court in the

amount of $942,000. When Ingram Trucking did not, and presumably could not, pay the judgment,

Plaintiff filed a garnishment action against Lincoln General, which Lincoln General subsequently

removed to this Court. The parties stipulated to the dismissal of the garnishment action, and

Plaintiff filed an amended complaint asserting a claim based on MCS-90. That case is Hawthorne

I. This Court ultimately granted Plaintiff relief on his MCS-90 claim, which was premised on the

default judgment Plaintiff obtained against Ingram Trucking, which Lincoln General had insured,

and entered a judgment for Plaintiff in the amount of $750,000. The only reason Plaintiff was able

to proceed with a MCS-90 claim was because Plaintiff had already obtained a judgment against

Ingram Trucking, an interstate carrier insured by Lincoln General. This Court has ruled that Lincoln

General is obligated to pay $750,000 of the judgment entered against Ingram Trucking in state court.

Plaintiff is trying to collect even more on the original state court judgment by filing this second

garnishment action. 

If Plaintiff is saying that Defendant Lincoln General was not the insurer of Ingram Trucking

then this Court should withdraw its former judgment in favor of Plaintiff and against Lincoln

General for $750,000. But Plaintiff wants to keep that judgment.

The Court concludes that Plaintiff’s second garnishment action is duplicative of Hawthorne

I, and barred by res judicata. 

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The doctrine of res judicata “bars a subsequent action between the same parties when the

evidence or essential facts are identical.” Sewell v. Clean Cut Mgt, Inc, 463 Mich. 569, 575 (2001).

Res judicata requires that: (1) the prior action was decided on the merits, (2) the decree in the prior

action was a final decision, (3) the matter contested in the second case was or could have been

resolved in the first, and (4) both actions involved the same parties or their privies. Peterson

Novelties, Inc v. City of Berkley, 259 Mich. App. 1, 10 (2003).

Plaintiff’s garnishment claim is a subsequent action between the same parties, based on the

same essential facts. Hawthorne I was decided on the merits. Plaintiff brought a MCS-90 claim

against Lincoln General and, after the issue was fully briefed and argued, this Court granted Plaintiff

summary judgment. Thereafter, this Court entered a judgment on behalf of Plaintiff, which

constitutes a final decision in this case. Also, Plaintiff’s right to garnish the insurance premiums is

an issue that could have been raised and resolved in Hawthorne I. Plaintiff has offered no

reasonable explanation as to why he could not have asserted his right to garnish the insurance

payments in Hawthorne I. In fact, Plaintiff had filed for a writ of garnishment in Hawthorne I, only

to withdraw it voluntarily and file an amended complaint asserting a MCS-90 claim. Nonetheless,

once this Court entered default judgment for Lincoln General on Lincoln General’s third-party

complaint, Plaintiff could have raised this issue. He did not. Lastly, the instant action is predicated

on the same operative facts and involves the same parties as Hawthorne I. Accordingly, Plaintiff’s

garnishment action is barred by res judicata and Defendant is entitled to summary judgment.

In addition, the Court notes that Plaintiff has not shown, either legally or factually, that he

is entitled to step in the shoes of Ingram Trucking and garnish the insurance premiums Ingram

Trucking paid to Lincoln General. Plaintiff’s bare assertion that he is a judgment creditor and,

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therefore, entitled to garnish the insurance premiums is not sufficient proof that Plaintiff has a legal

right to collect the insurance premiums. Therefore, even if Defendant had not met its summary

judgment burden, Plaintiff’s motion for summary judgment would be denied.

III. CONCLUSION

For the reasons discussed above, the Court:

(1) GRANTS Defendant’s Motion for Summary Judgment (Doc. No. 7); and

(2) DENIES Plaintiff’s Motion for Summary Judgment (Doc. No. 10).

SO ORDERED.

S/Paul D. Borman 

PAUL D. BORMAN

UNITED STATES DISTRICT JUDGE

Dated: September 3, 2009

CERTIFICATE OF SERVICE

Copies of this Order were served on the attorneys of record by electronic means or U.S. Mail on

September 3, 2009.

S/Denise Goodine 

Case Manager

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