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Comerica Bank v. Esshaki

United States District Court, E.D. Michigan, Southern Division

June 11, 2018

COMERICA BANK, Plaintiff,
v.
JAMES ESSHAKI, ET AL., Defendants.

          George Caram Steeh District Judge.

          OPINION AND ORDER

          R. STEVEN WHALEN UNITED STATES MAGISTRATE JUDGE.

         Before the Court is Plaintiff's Renewed Ex Parte Motion for Orders Prohibiting Transfer of Assets and Compelling Creditor's Examinations [Doc. #64], which was referred for hearing and determination under 28 U.S.C. § 636(b)(1)(A). For the reasons and under the terms set forth below, the motion is GRANTED.

         I. FACTS

         The Defendants are signators and guarantors of loans from Plaintiff Comerica Bank. They defaulted on these obligations; Plaintiff filed breach of contract claims, and on September 7, 2017, the Court entered judgment against the Defendants, jointly and severally, in the amount of $344, 558.62, plus accrued interest in the amount of $21, 325.93 as of July 17, 2017, plus $1, 779.09 in late fees, plus costs and attorney fees.

         The full amount of the judgment is unsatisfied. James Esshaki appeared for a creditor's exam on December 1, 2017, but Plaintiff terminated that proceeding, claiming that Mr. Esshaki “repeatedly and without merit objected to answering basic questions about his financial situation....”

         Plaintiff now seeks an order compelling the continuation of a creditor's exam, to be held in the United States Courthouse under judicial supervision, and to prohibit the transfer of non-exempt assets.

         II. LEGAL PRINCIPLES RE: POST-JUDGMENT PROCEEDINGS

         Under Fed.R.Civ.P. 69(a)(1), “[a] money judgment is enforced by a writ of execution.” Further, “[t]he procedure on execution-and in proceedings supplementary to and in aid of judgment or execution-must accord with the procedure of the state where the court is located.” Id. Michigan law provides the mechanisms to enforce monetary judgments. See M.C.R. 2.6 21 (“When a party to a civil action obtains a money judgment, that party may, by motion in that action or by a separate civil action...obtain relief supplementary to judgment under MCL 600.6101-600.6143.” “[T]he scope of postjudgment discovery is very broad.” Unites States v. Conces, 507 F.3d 1028, 1040 (6thCir. 2007), quoting F.D.I.C. v. LeGrand, 43 F.3d 163, 172 (5th Cir. 1995). Fed.R.Civ.P. 69(a)(2) provides that a judgment creditor “may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located.”

         The statutory provisions incorporated in M.C.R. 2.621(2) give the court an expansive range of authority. Under M.C.L. § 6104(1), a court may compel discovery of any property of the judgment debtor or any property due or held in trust for the debtor. Under subsection (2) of that statute, a court may “[p]revent the transfer of any property, money, or things in action, or the payment or delivery thereof to the judgment debtor.” Under M.C.L. § 600.6110(1), a court can order the judgment debtor to “appear at a specified time and place” for a creditor's examination. A judgment creditor is entitled to “a very thorough examination of the judgment debtor.” Credit Lyonnais, S.A. v. SGC Int'l, Inc., 160 F.3d 428, 430-31 (8th Cir.1998) (quoting Caisson Corp. v. County West Bldg. Corp., 62 F.R.D. 331, 335 (E.D.Pa.1974)), and “the presumption should be in favor of full discovery of any matters arguably related to the [creditor's] efforts to trace [the debtor's] assets and otherwise to enforce the judgment.” Id.

         Under M.C.L. § 600.6116(1), a court may, as part of an order for a creditor's examination, restrain the judgment debtor from transferring nonexempt property:[1]

“An order for examination of a judgment debtor may contain a provision restraining the judgment debtor from making or suffering any transfer or other disposition of, or interference with any of his property, then held or thereafter acquired by or becoming due to him not exempt by law from application to the satisfaction of the judgment, until further direction in the premises, and such other provisions as the court may deem proper.”

         III. DISCUSSION

         I have granted a similar motion that Plaintiff Comerica filed in E.D. Mich. Docket No. 17-11019. That case has since been designated a companion case, and both it and the present case are now assigned to Judge Steeh. Defendants in this case raise similar ...


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