Court Opinion

ID: 1766
Source: CourtListenerOpinion
Date Created: 2010-04-16 00:10:04+00
Date Added: 2024-06-11T16:42:02.070353
License: Public Domain

NOT PRECEDENTIAL

                   UNITED STATES COURT OF APPEALS
                        FOR THE THIRD CIRCUIT

                                  No. 09-2946

       STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY;
             STATE FARM FIRE AND CASUALTY COMPANY

                                       v.

            AMERICAN REHAB AND PHYSICAL THERAPY, INC.
             doing business as AMERICAN MEDICAL REHAB;
         RICHARD PRIVITERA; DEAN PARKER; STEVE MOLDOVER

                                            Richard Privitera,
                                                          Appellant

                 On Appeal from the United States District Court
                    for the Eastern District of Pennsylvania
                         (D.C. Civil No. 2-03-cv-05595)
                    District Judge: Hon. Michael M. Baylson

                 Submitted Pursuant to Third Circuit LAR 34.1(a)
                                 April 13, 2010

           BEFORE: FISHER, HARDIMAN and COWEN, Circuit Judges

                             (Filed: April 15, 2010)

                                   OPINION

COWEN, Circuit Judge
       Richard Privitera appeals an order of the District Court enjoining Privitera from

making any monthly expenditures in excess of $6,710 and ordering him to make monthly

payments of $3,700 to State Farm Mutual Automobile Insurance Company (“State Farm”)

on a judgment of $500,000 that State Farm obtained against him. We will affirm.

I.     BACKGROUND

       State Farm obtained a default judgment against Privitera in the amount of

$500,000, which Privitera did not appeal. Subsequently, State Farm pursued post-

judgment asset discovery. Privitera engaged in a variety of dilatory tactics but ultimately

State Farm deposed him and obtained information on his assets. State Farm then moved

for a preliminary injunction enjoining Privitera from making any monthly expenditures in

excess of $6,710 and ordering him to make monthly payments of $3,700 to State Farm

toward satisfaction of the default judgment award.

       The District Court conducted a hearing and concluded that Privitera: (1) withheld

financial information from State Farm, (2) earned approximately $200,000 annually from

his consulting business, (3) structured his lifestyle and expenses in a manner to avoid

accumulating assets to prevent payments to State Farm, (4) lived a luxurious lifestyle in

comparison with the typical debtor, as he rented a home in a gated community and he and

his wife leased expensive vehicles, (5) claimed excessive monthly food expenditures

($1,700), and (6) claimed unnecessary and unsupported monthly entertainment

expenditures ($1,200). The District Court determined that Privitera’s monthly

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expenditures totaled $6,710 and that Privitera could afford to make monthly payments to

State Farm in the amount of $3,700. The District Court granted State Farm’s motion,

thereby ordering Privitera to refrain from making any monthly expenditures in excess of

$6,710 and to commence monthly payments of $3,700.

II.    DISCUSSION

       We “review an order granting a preliminary injunction for abuse of discretion, the

factual findings for clear error, and the determinations of questions of law de novo.”

Bennington Foods LLC v. St. Croix Renaissance Group, LLP, 528 F.3d 176, 178 (3d Cir.

2008). To determine whether to grant a request for a preliminary injunction, district

courts engage in a four-step inquiry evaluating: “(1) whether the movant has shown a

reasonable probability of success on the merits; (2) whether the movant will be

irreparably injured by denial of the relief; (3) whether granting preliminary relief will

result in even greater harm to the nonmoving party; and (4) whether granting the

preliminary relief will be in the public interest.” A.C.L.U. v. Black Horse Pike Bd. of

Educ., 84 F.3d 1471, 1477 n.2 (3d Cir. 1996).

       Privitera contends that the District Court erred at each step. We reject each of his

contentions. First, State Farm undoubtedly has prevailed on the merits of its case. State

Farm obtained a default judgment in its favor, which Privitera did not appeal. There is

nothing left for the parties to litigate with respect to the merits of State Farm’s claims

against Privitera.

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       Second, State Farm would face irreparable harm if the District Court denied its

request for a preliminary injunction. The dilatory and misleading tactics that Privitera

engaged in after he defaulted demonstrate his willingness to evade payment. Further, at

the time Privitera filed this appeal, he had paid nothing to State Farm, despite several

promises of payment, including a check for $25,000 that bounced. The record

demonstrates that a money judgment alone is insufficient motivation for Privitera.

Without this injunction, Privitera would continue to conceal assets and to spend his

disposable income in a manner that would further evade State Farm’s collection efforts.

       Third, the District Court’s order will not result in greater harm to Privitera. The

District Court’s order permits Privitera to continue living in his gated community and

driving his expensive vehicles. Privitera contends that any attempts to enforce the

preliminary injunction by means of contempt proceedings that then result in coercive

incarceration would amount to sending him to “debtor’s prison” due to his inability to

pay. This contention lacks merit. The record clearly demonstrates Privitera’s ability to

pay and the only reason that he would face potential incarceration is if he chose to evade

his obligations to State Farm.

       Finally, the grant of this preliminary injunction is in the public’s interest. The

public has an interest in the enforcement of judgments. Privitera contends that the order

amounts to a de facto garnishment of his wages in violation of 42 Pa. Cons. Stat. § 8127.

Under § 8127, “[t]he wages, salaries and commissions of individuals shall while in the

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hands of the employer be exempt from any attachment, execution or other process . . . .”

42 Pa. Cons. Stat. § 8127 (emphasis added). The plain text of this statute demonstrates

that it does not apply to a judgment creditor’s attempts to obtain payment from wages in

the hands of a judgment debtor. Thus, the order is not in conflict with any public policies

regarding wages.

III.   CONCLUSION

       For the reasons set forth above, we will affirm the District Court’s order granting a

preliminary injunction.

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