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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 Ex Parte Motion for Orders Prohibiting Transfer of Assets and Compelling Creditor's Examinations [Doc. #166], 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 March 23, 2018, the Court entered a stipulated amended judgment against the Defendants as follows [Dkt. #47]:

(a) Defendants James Esshaki, Bernadette Esshaki, the James Esshaki Living Trust dated April 25, 1991, and Essco, Inc., jointly and severally, for the sum of $4, 624, 655.44 in principal, plus accrued interest in the amount of $382, 364.41 as of February 15, 2018, plus $13, 727.98 in late fees, plus costs and attorney fees, with interest continuing to accrue.
(b) Defendants James Esshaki, the James Esshaki Living Trust dated April 25, 1991, Essco, Inc., and Essco International Restaurants, LLC, jointly and severally, for the sum of $933, 942.24 in principal, plus accrued interest in the amount of $77, 217.76 as of February 15, 2918, plus $2, 367.24 in late fees, plus costs and attorney fees, with interest continuing to accrue.
(c) Defendants James Esshaki and the James Esshaki Living Trust dated April 25, 1991, jointly and severally, for the sum of $433, 334.87 in principal, plus accrued interest in the amount of $35, 827.85 as of February 15, 2918, plus $1, 102.56 in late fees, plus costs and attorney fees, with interest continuing to accrue.
(d) Defendants James Esshaki, the James Esshaki Living Trust dated April 25, 1991, and Essco Development-Southgate, LLC, jointly and severally, for the sum of $316, 640.36 in principal, plus accrued interest in the amount of $26, 179.62 as of February 15, 2018, plus $939.93 in late fees, plus costs and attorney fees, with interest continuing to accrue.

         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's Motion [Dkt. #166, Pg. ID 1138].

         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 ...


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