Court Opinion

ID: 167835
Source: CourtListenerOpinion
Date Created: 2010-08-14 10:04:31+00
Date Added: 2024-06-11T17:24:54.654971
License: Public Domain

F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                    UNITED STATES CO URT O F APPEALS
                                                                       July 25, 2006
                             FO R TH E TENTH CIRCUIT               Elisabeth A. Shumaker
                                                                       Clerk of Court

    TH E SO CIETY OF LLO YD’S,

               Plaintiff-Appellee,

    v.                                            Nos. 05-4208 & 05-4239
                                                (D.C. No. 2:02-CV-204-TC)
    W ALLA CE R. BENNETT,                                (D. Utah)

               Defendant-Appellant,

         and

    GRA NT R. CA LD W ELL; CA LV IN P.
    GA DD IS; DA VID L. GILLETTE;
    STEPHEN M . HARM SEN; KELLY C.
    HA RM SEN; JAM ES R. KR USE;
    EDWA RD W . M UIR; KENT B.
    PETER SEN ,

               Defendants.

                             OR D ER AND JUDGM ENT *

*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
Before BROR B Y and EBEL, Circuit Judges, and KANE, ** District Judge.

      Defendant Wallace R. Bennett appeals from two orders of the district court

rejecting his efforts to void a garnishee judgment. Exercising our jurisdiction

under 28 U.S.C. § 1291, we affirm. 1

                               Relevant Background

      On M arch 18, 2003, plaintiff The Society of Lloyd’s (Lloyd’s) obtained a

judgment against Bennett based on an award of summary judgment that was

subsequently affirmed by this court. See Soc’y of Lloyd’s v. Reinhart, 402 F.3d

982 (10th Cir.), cert. denied, 126 S. Ct. 366 (2005). Seeking to collect on the

judgment, on June 28, 2004, Lloyd’s served a writ of garnishment on M organ

Stanley, an investment bank where Bennett held a brokerage account.

Accompanying the writ were interrogatories to be answered and filed by M organ

Stanley. The writ advised M organ Stanley that if it did not receive a court order

regarding the writ within sixty days of filing its interrogatory responses, the writ

would expire and could be ignored. Based on the timing of M organ Stanley’s

responses, the writ was to expire on September 7, 2004.

**
      The Honorable John L. Kane, Senior District Judge, United States District
Court for the District of Colorado, sitting by designation.
1
       Pursuant to the parties’ request, we have consolidated cases 05-4208 and
05-4239, as the latter is merely a carbon-copy of the former filed to cure a
jurisdictional defect.

                                         -2-
      On July 14, 2004, Bennett filed objections to the writ of garnishment and

requested a hearing. The hearing was held on August 6, 2004, before a magistrate

judge to whom the case had been referred under 28 U.S.C. § 636(b)(1)(A). The

minute entry from the hearing reflects that the magistrate judge heard arguments

concerning Bennett’s objections to the writ of garnishment, one of which was that

the writ would unduly interfere with his wife’s interest in the account. At some

point during the hearing, the court recessed to allow the parties to schedule

discovery regarding M rs. Bennett’s interest. W hen the court reconvened the

parties had reached a stipulation. The following is a quote from the minute entry:

      Counsel stipulated to the following: M r. Barton to subpoena M organ
      Stanley today and expect production of documents by 8/20/04;
      M r. Bennett to produce all account information requested by
      M r. Barton by 8/20/04; extend the garnishment pending further
      order of the Court; set the matter for status conference prior to
      setting the case for evidentiary hearing.

Aplt. App. at 48 (emphasis added).

      On August 23, 2004, the magistrate judge issued an Order Regarding

Pending Garnishment reflecting his findings from the August 6 hearing. The

magistrate judge overruled all of Bennett’s objections to the writ except for the

objection based on M rs. Bennett’s interest in the account. As to that objection,

the magistrate judge found that discovery into the matter was warranted and that

the parties had stipulated as to the nature and timing of that discovery. “W ith

respect to the status of the Account, the M agistrate Judge [found] that each of the

                                         -3-
parties stipulated and agreed, on the record, that the Account remain frozen until

the current dispute regarding the respective interests of M r. and M rs. Bennett

[was] resolved.” Id. at 148. He therefore found, pursuant to the local civil rules,

that “good cause exist[ed] to stay the release of the W rit of Garnishment.” Id.

      On October 7, 2004, after discovery into M rs. Bennett’s interest was

complete, the magistrate judge ordered counsel for Lloyd’s to prepare a proposed

order and garnishee judgment. It is at this point in the appellate record that

Bennett’s objection to the magistrate judge’s authority first appears. On October

15, 2004, he filed “Specific Objections to a M agistrate Judge Effecting a Final

Irrevocable Disposition” (Id. at 150), alerting the district judge that the magistrate

judge was prepared to sign the garnishee judgment. Bennett argued that the

magistrate judge lacked authority to sign the garnishee judgment and that he had

already exceeded his authority in staying the release of the writ of garnishment.

Lloyd’s conceded that a garnishee judgment is a final and appealable order,

which, absent the parties’ consent, cannot be signed by a magistrate judge under

28 U.S.C. § 636. Lloyd’s also conceded that the parties had not given their

consent to the magistrate judge’s exercise of such power.

      Accordingly, on October 21, 2004, the court revoked its earlier order of

reference and issued a second order of reference, this time under 28 U.S.C.

§ 636(b)(1)(B), which sets forth the procedure for a magistrate judge to hear and

make recommendations concerning certain dispositive matters. On October 25,

                                          -4-
2004, the magistrate judge issued a report pursuant to that section recommending

that a garnishee judgment be entered against M organ Stanley for one-half the net

value of Bennett’s brokerage account. Bennett filed a timely objection to the

report and recommendation under § 636(b)(1)(C). He then filed for bankruptcy

and the case was held in abeyance.

      In response to a request from the bankruptcy court, the district court issued

an order on April 22, 2005, holding that the magistrate judge had not exceeded his

authority under the first order of reference by staying the release of the writ of

garnishment. On M ay 6, 2005, Bennett filed a motion for reconsideration with

respect to the April 22, 2005, order. Before deciding that motion, however, the

court entered a garnishee judgment based on the report and recommendation of

the magistrate judge. On M ay 24, 2005, Bennett filed a motion to reconsider the

garnishee judgment. On July 7, 2005, the court denied Bennett’s motion for

reconsideration with respect to its April 22, 2005, order, reaffirming its decision

that the m agistrate judge had authority to extend the writ of garnishment. On

August 26, 2005, it denied Bennett’s motion to reconsider the garnishee

judgment. This appeal followed.

                                     Discussion

      Based on the time of filing, the district court considered Bennett’s first

motion for reconsideration under Rule 60(b) and his second motion under Rule

59(e) of the Federal Rules of Civil Procedure. We therefore review the court’s

                                          -5-
decision for abuse of discretion. See Adams v. Reliance Standard Life Ins. Co.,

225 F.3d 1179, 1186 n.5 (10th Cir. 2000) (Rule 59(e)); Allender v. Raytheon

Aircraft Co., 439 F.3d 1236, 1242 (10th Cir. 2006) (Rule 60(b)). “Under that

standard, a motion for reconsideration should be granted only to correct manifest

errors of law or to present newly discovered evidence.” Adams, 225 F.3d at 1186

n.5 (quotation omitted). W e review questions of law de novo. Strong v. Laubach,

443 F.3d 1297, 1298 (10th Cir. 2006).

      Bennett’s appeal challenges the district court’s finding that the magistrate

judge acted within his authority in staying the release of the writ of garnishment

and ordering the M organ Stanley account to remain frozen. He argues that

§ 636(b)(1)(A), which he maintains was the only source of the magistrate judge’s

authority, pertains only to non-dispositive, non-injunctive pretrial matters, and

that the magistrate judge’s order extending the writ was a post-judgment grant of

injunctive relief clearly beyond its scope. Therefore, the writ actually expired on

September 7, 2004, and all orders flowing from the writ after that date, including

the garnishee judgment, are invalid.

      Lloyd’s counters that § 636(b)(1)(A ) should not be read literally to

preclude any matter not occurring before trial. It argues that the term “pretrial

matter” as used in § 636(b)(1)(A) was meant to refer to any non-dispositive

matter, whether occurring before, during, or after trial. Lloyd’s contends that the

challenged order was neither injunctive nor dispositive and was therefore within

                                         -6-
the bounds of § 636(b)(1)(A). Alternatively, it argues that authority for the

magistrate judge’s order can be found in the “additional duties” language of

§ 636(b)(3). Furthermore, Lloyd’s argues that the magistrate judge had authority

to extend the writ under § 636(c)(1), because the parties agreed to the extension

on the record.

      Both parties raise interesting and complex arguments concerning the scope

of a magistrate judge’s authority to issue post-judgment orders under the Federal

M agistrates Act. W e need not reach the merits of the arguments, however,

because we can affirm the district court judgment based on the parties’

on-the-record stipulation to extend the writ of garnishment.

      “In this circuit, the rulings of a trial court in accordance with stipulations

that are clear and unambiguous will not be considered erroneous on appeal.”

M ills v. State Farm M ut. Auto. Ins. Co., 827 F.2d 1418, 1422 (10th Cir. 1987)

(quotation omitted). At the August 6, 2004, hearing Bennett clearly and

unambiguously agreed to an extension of the writ pending discovery into

M rs. Bennett’s interest in the account. 2 He now argues that the stipulation was

never intended to broaden the magistrate judge’s authority. This argument,

2
      Contrary to Lloyd’s assertion, the parties did not grant the type of consent
contem plated in § 636(c)(1), which would have authorized the magistrate to
conduct any and all proceedings, including the entry of a final garnishee
judgment. See Colo. Bldg. & Constr. Trades Council v. B.B. Andersen Constr.
Co., 879 F.2d 809, 810 (10th Cir. 1989).

                                          -7-
however, is a red herring because regardless of whether Bennett consented to the

magistrate judge’s general authority, he clearly consented to the very act now

complained of. We have long been “reluctant to relieve parties from the benefits,

or detriments, of their stipulations.” L.P.S. ex rel. Kutz v. Lamm, 708 F.2d 537,

539-40 (10th Cir. 1983). Therefore, we conclude that the parties’ stipulation

regarding the extension of the writ of garnishment waived any objections to the

matter, and the district court did not abuse its discretion in denying Bennett’s

motions for reconsideration.

      The judgment of the district court is AFFIRMED.

                                                     Entered for the Court

                                                     David M . Ebel
                                                     Circuit Judge

                                         -8-