Court Opinion

ID: 75702
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:24:40+00
Date Added: 2024-06-11T11:50:29.382918
License: Public Domain

[PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT                          FILED
                             ________________________                U.S. COURT OF APPEALS
                                                                       ELEVENTH CIRCUIT
                                                                         JANUARY 30, 2002
                                    No. 01-13597                        THOMAS K. KAHN
                              ________________________                       CLERK

                          D. C. Docket No. 99-00553-CV-CC-1

LIBERTY MUTUAL INSURANCE
COMPANY,
                                                                          Plaintiff-Appellee,

                                            versus

C-STAFF, INC., THOMAS KEESEE,
                                                                    Defendants-Appellants,

KBAS I, L.L.C., CONTINENTAL
BENEFIT ADMINISTRATORS, INC.,
                                               Third-party Defendants-Appellants.
                              ________________________

                      Appeal from the United States District Court
                         for the Northern District of Georgia
                           _________________________

                                    (January 30, 2002)

Before BLACK and HULL, Circuit Judges, and RYSKAMP*, District Judge.

PER CURIAM:

       *
         Honorable Kenneth L. Ryskamp, U.S. District Judge for the Southern District of Florida,
sitting by designation.
      CERTIFICATION FROM THE UNITED STATES COURT OF
      APPEALS FOR THE ELEVENTH CIRCUIT TO THE SUPREME
      COURT OF GEORGIA, PURSUANT TO ARTICLE VI, SECTION
      VI, PARAGRAPH IV OF THE GEORGIA CONSTITUTION. TO
      THE SUPREME COURT OF GEORGIA AND ITS HONORABLE
      JUSTICES:

      It appears to the United States Court of Appeals for the Eleventh Circuit that

this case involves a question of Georgia law determinative of the case, but

unanswered by controlling precedent of the Supreme Court of Georgia or any other

Georgia court. We therefore certify the question for resolution by the highest court

of Georgia. See Ga. Code Ann. § 15-2-9 (1997); Ga. Sup. Ct. R. 46.

                         I. STATEMENT OF THE CASE

      Appellee Liberty Mutual Insurance Company obtained a $3,722,963.73

judgment against Appellant C-Staff, Inc. in the United States District Court for the

Southern District of Florida. Appellee subsequently sought enforcement of its

judgment in the United States District Court for the Northern District of Georgia,

where C-Staff, Inc. was located. After registering the judgment, Appellee engaged

in post-judgment discovery directed towards C-Staff and various third-parties. The

third-parties included entities believed by Appellee to be recipients of fraudulent

transfers from or alter egos or successors of C-Staff, including Appellants KBAS I,

L.L.C. and Continental Benefits Administrators, Inc. (CBA). Appellee also

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propounded post-judgment discovery on Appellant Thomas Keesee, former

majority shareholder of C-Staff.

      After completing extensive post-judgment discovery, Appellee filed a

motion to commence supplementary proceedings and to implead KBAS I, CBA,

and Thomas Keesee as part of its enforcement action against C-Staff. In its

motion, Appellee requested the district court ultimately to enter a judgment against

the impleaded parties, to vacate any transfers of cash from C-Staff, and to order

any property held by Appellants be held as an asset of C-Staff or in constructive

trust for the benefit of Appellee. The district court granted Appellee’s motion to

commence, and Appellants brought this interlocutory appeal.

                                      II. DISCUSSION

      Federal Rule of Civil Procedure 69(a)1 provides that the procedure for

execution of a judgment for the payment of money shall be in accordance with the

practice of the state in which the district court considering the enforcement action

      1
        Federal Rule of Civil Procedure 69(a) states in pertinent part:
               Process to enforce a judgment for the payment of money shall be a writ of
      execution, unless the court directs otherwise. The procedure on execution, in
      proceedings supplementary to and in aid of a judgment, and in proceedings on and
      in aid of execution shall be in accordance with the practice and procedure of the state
      in which the district court is held, existing at the time the remedy is sought, except
      that any statute of the United States governs to the extent that it is applicable. In aid
      of the judgment or execution, the judgment creditor or successor in interest when that
      interest appears of record, may obtain discovery from any person, including the
      judgment debtor, in the manner provided in these rules or in the manner provided by
      the practice of the state in which the district court is held.

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is located. In this case, Appellee seeks to execute its judgment in the United States

District Court for the Northern District of Georgia. The procedure for execution,

therefore, is governed by the practice of the State of Georgia.

       Georgia statute recognizes the ability of a judgment creditor to enforce its

judgment through writ of execution and also to engage in post-judgment discovery.

See Ga. Code Ann. § 9-11-69 (1994).2 Section 9-11-69, however, does not

expressly authorize the commencement of supplementary proceedings against

third-parties for the enforcement of a judgment. Additionally, neither the parties

nor this Court is aware of any Georgia cases expressly recognizing the right to

initiate such proceedings.3 On appeal, Appellants argue this is an issue of first

       2
         Ga. Code Ann. § 9-11-69 provides in pertinent part:
              Process to enforce a judgment for the payment of money shall be a writ of
       execution unless the court directs otherwise. In aid of the judgment or execution, the
       judgment creditor, or his successor in interest when that interest appears of record,
       may do any or all of the following:
                      (1) Examine any person, including the judgment debtor by
              taking depositions or propounding interrogatories;
                      (2) Compel the production of documents or things; and
                      (3) Upon a showing of reasonable necessity, obtain permission from
              a court of competent jurisdiction to enter upon that part of real property
              belonging to or lawfully occupied by the debtor which is not used as a
              residence and which property is not bona fide in the lawful possession of
              another;
       in the manner provided in this chapter for such discovery measures prior to
       judgment.

       3
        Appellants primarily rely on Couch v. City of Villa Rica, 203 F. Supp. 897 (N.D. Ga. 1962),
in support of their motion to commence supplementary proceedings. Although the plaintiffs in
Couch initiated supplementary proceedings in conjunction with the enforcement of a judgment, the

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impression as no Georgia Supreme Court cases specifically address the issue. We

agree.

 III. QUESTION TO BE CERTIFIED TO THE GEORGIA SUPREME COURT

         We conclude this case involves an unanswered question of Georgia law with

no controlling precedent; accordingly, we certify the following question to the

Georgia Supreme Court for instruction:

         PURSUANT TO O.C.G.A. § 9-11-69, MAY A JUDGMENT
         DEBTOR INITIATE SUPPLEMENTARY PROCEEDINGS TO
         THE EXECUTION OF A JUDGMENT WHEREIN THIRD-
         PARTIES, ALLEGED TO BE FRAUDULENT TRANSFEREES,
         ALTER EGOS OR SUCCESSORS OF A JUDGMENT DEBTOR,
         ARE IMPLEADED AS DEFENDANTS TO THE ACTION?

         In certifying this question, we do not intend the particular phrasing of the

question to limit the Georgia Supreme Court in its consideration of the problem

posed by the case. In order to assist the court’s consideration of this case, the

entire record, along with the briefs of the parties, shall be transmitted to the court.

supplementary proceedings were in the nature of a writ of mandamus. Whereas the Georgia
Supreme Court recognizes the ability of a judgment creditor to seek a writ of mandamus, see
Bradford v. Bolton, 109 S.E.2d 751 (Ga. 1959), Georgia law does not clearly recognize the ability
of a judgment creditor to implead third-parties into a post-judgment enforcement action.
         Appellants primarily rely on Clark v. Cauthen, 520 S.E.2d 477 (Ga. App. 1999), in support
of their argument Georgia law requires judgment creditors to file a direct action against third-parties
rather than institute supplementary proceedings. Although the plaintiff in Clark instituted a direct
action against a third-party as a means of piercing the corporate veil of the judgment debtor, the case
does not mandate use of a direct action. As a result, all that can be inferred from Clark is direct
actions are permissible, not that they are the exclusive means of collecting a judgment against a
third-party.

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QUESTION CERTIFIED.

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