West Hills Farms, LLC v. ClassicStar, LLC et al, No. 5:2006cv00243 - Document 821 (E.D. Ky. 2013)

Court Description: MEMORANDUM OPINION & ORDER: (1) Dfts Geostar Corporation, Ferguson, and Robinson's Emergency Motion to Vacate Temporary Injunction or, in the Alternative, Stay the Temporary Injunction and Hearing (818) in case 5:06-cv-00243-JMH-REW, (2528) in case 5:07-cv-00353-JMH-REW[DE 818] is GRANTED IN PART and DENIED IN PART; (2) That paragraphs 1, 2, and 3 of the Court's August 16, 2013, Order, (816) in case 5:06-cv-00243-JMH-REW, are VACATED; (3) That all post-judgment discovery disputes in this matter are REFERRED to Magistrate Judge Robert E. Wier for all necessary proceedings and orders for resolution. Signed by Judge Joseph M. Hood on 8/23/2013. Associated Cases: 5:07-cv-00353-JMH-REW, 5:06-cv-00243-JMH-REW(STC)cc: COR
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY CENTRAL DIVISION at LEXINGTON WEST HILLS FARMS, LLC, ) ) ) ) ) ) ) ) ) Plaintiff, v. CLASSICSTAR, LLC, et al., Defendants. Civil Case No. 06-cv-243-JMH MDL NO. 1877 MEMORANDUM OPINION & ORDER *** The Court, having considered Defendants Geostar Corporation, Tony Ferguson, and Thom Robinson s Emergency Motion to Vacate Temporary Injunction or, in the Alternative, Stay the Temporary Response Injunction to Information and Plaintiffs and Asset Hearing Emergency Freeze [DE 818] Motion Injunction as for well as its Post-Judgment [820] and being adequately advised, concludes that it has authority to enter the injunctive relief requested by Plaintiffs if, ultimately, the instant case demands such presented to the Court. relief on the facts which are Accordingly, it declines to afford the relief requested by Defendant s Motion to Vacate, at least in part, as set forth below. First and foremost, this matter is sought and litigated post-judgment. Plaintiffs are Defendants are judgment debtors. judgment creditors, and The Court does not believe that Plaintiffs most recent and post-judgment motion actually 1 asks this Court to substitute equitable relief for the money judgment it equitable sought relief and obtained. solely on the Rather, grounds Plaintiffs that the seek means of obtaining the legal relief to which they are now entitled to by virtue of this Court s judgment -- execution on the judgment by use of law to jurisdictions reach around judgment the country debtors are point to afford them meaningful relief. assets in insufficient various at this They argue that the legal ability to execute on the judgment, alone, is insufficient to afford them relief because they believe Defendants seek to waste, dissipate, or secret their assets in order to frustrate Plaintiffs ability to recover on the judgment obtained. preliminary injunction that they seek from this Court The would serve as no more than a temporary stop-gap measure to insure that no waste or dissipation of assets frustrates their efforts to obtain any legal remedy to which they are due. In this post-judgment context and on the request for relief made by Plaintiffs, it is irrelevant whether Plaintiffs could have obtained equitable relief on their claim instead of a money judgment. The fact of the matter is that the money judgment was obtained, and this Court may issue effectuate that order of judgment. all necessary orders to Clearly, this Court may not have jurisdiction over the assets sought, depending on where they are located, but it has jurisdiction over the defendants 2 who may waste, dissipate, or secret those assets. the Court appreciates Defendants Thus, while well-articulated position against the imposition of equitable relief in the pre-judgment phase of proceedings based arguments no longer apply. upon a civil RICO claim, those The Court reaches no conclusion on whether a pre-judgment equitable remedy in the form of an asset freeze was available to Plaintiffs in this matter. Ultimately, the Court concludes that it has authority to issue any necessary injunctive jurisdiction as set forth above. relief in aid of its See, e.g., Meyers v. Moody, 723 F.2d 388 (5th Cir. 1984) (approving use of post-judgment preliminary injunction to freeze assets where waste, dissipation, or transfer of assets by [judgment debtor had] a direct impact on appellee s potential ultimate recovery ). Thus, the question for this Court is not whether it may enter a preliminary injunction freezing assets, for the Court concludes that it does, but whether it should do so in this instance. Plaintiffs must bear the burden required for entry of a preliminary injunction under Fed. R. Civ. P. 65 and demonstrate their (1) likelihood of success on the merits; (2) whether [they] will injunction; suffer (3) irreparable whether issuance injury of a without a preliminary preliminary injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuance of a preliminary 3 injunction. McNeilly v. Land, 684 F.3d 611, 615 (6th Cir. 2012) (citing American Imaging Services, Inc. v. Eagle Picher Indus., Inc. (In re Eagle Picher Indus., Inc.), 963 F.2d 855, 858 (6th Cir.1992); Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 441 (1974). At the end of the day or at least by the end of the hearing scheduled in this matter, Plaintiffs must demonstrate to this Court on Defendants what grounds have they already wish the Court in some engaged to conclude sort of that waste, dissipation, or secreting of assets or that there is a real likelihood detriment that of they the will ability engage of in actions -- legal the such process to to the afford Plaintiffs the relief due under the judgment obtained from this Court. While the burden is on Plaintiffs to do so, Defendants are welcome to short cut the process of litigating this matter by providing some sort of assurance acceptable to Plaintiffs that they will not waste, dissipate, or secret their assets, whether through posting some sort of bond or voluntarily placing assets in an appropriate account, etc. Further, with respect to some parties failure to respond adequately to post-judgment discovery requests, Defendants have provided a response to the Plaintiffs argument that they have failed to adequately respond to 4 post-judgment discovery indicating that they believe they are justified in responding as they have. The Court shall refer that and any other post- judgment discovery dispute in this matter to Magistrate Judge Robert E. Wier for all necessary proceedings and orders for resolution in due time. While the Court still expects that the parties will engage in discovery in good faith, the Court shall vacate paragraphs 1, 2, and 3 of its August 16, 2013, Order [DE 816], allowing the issue of Plaintiffs motion to compel raised in their August 7, 2013, Order to remain pending until such time as the parties can present the discovery dispute raised by Plaintiffs Motion and Defendant s response to the Magistrate Judge for resolution. Accordingly, IT IS ORDERED: (1) and Thom That Defendants Robinson s Geostar Emergency Corporation, Motion to Tony Ferguson, Vacate Temporary Injunction or, in the Alternative, Stay the Temporary Injunction and Hearing [DE 818] is GRANTED IN PART and DENIED IN PART; (2) That paragraphs 1, 2, and 3 of the Court s August 16, 2013, Order [DE 816] are VACATED; (3) That all post-judgment discovery disputes in this matter are REFERRED to Magistrate Judge Robert E. Wier for all necessary proceedings and orders for resolution. This the 23rd day of August, 2013. 5