In a victory for Levin Ginsburg’s client Nano Gas Technologies, Inc., the United States Court of Appeals for the Seventh Circuit reversed the district court’s interpretation of an arbitration award, holding that the defendant could not “wait until he dies” to pay a portion of a damage award. In Nano Gas Technologies, Inc. v. Roe, Case Nos. 21-1809; 1822 (7th Cir., Apr. 25, 2022) the Seventh Circuit ruled that the district court had misinterpreted an arbitration award in concluding that the defendant could satisfy a $500,000 judgment “in such manner as Roe chooses.” In refusing to allow Nano Gas to immediately enforce the underlying arbitration award, the district court interpreted the arbitrator’s “in such manner as [defendant] chooses” language as allowing the defendant to choose when to satisfy the arbitration award, if ever, including by whatever assets he had left at the time of his death. Nano Gas appealed from the district court’s judgment.
Agreeing with Nano Gas, the Appellate Court concluded that, although Mr. Roe “invited ambiguity” through an alternative reading of “in such manner as Roe chooses,” his reading was unreasonable. The Appellate Court recognized that Roe could not “refuse to turn over his only identifiable asset, choose hypothetical forms of payment that may never come to fruition, or require Nano Gas to wait until he dies.” The court agreed with Nano Gas that both the language of the arbitrator’s opinion and common sense resolved this issue. Finally, recognizing that although in certain cases district courts may send a case back to the arbitrator to clarify an award, the Seventh Circuit rejected that procedure in this case because the award’s language compelled only one conclusion.
The panel reversed the district court’s findings regarding Roe’s discretion to satisfy the $500,000 award and remanded to allow Nano Gas to resume enforcing the entire judgment without delay. Levin Ginsburg Shareholder and Chair of Litigation Department, Howard L. Teplinsky, authored the appellate briefs and argued the case on appeal.
It was a hard fought battle. You successfully sued a party in a commercial dispute who wronged you and a judge or jury awarded you seven-figure sum. Because the Defendant didn’t immediately take out its checkbook, however, you now face the task of collecting the judgment. Oftentimes, litigation doesn’t end when the judge bangs the gavel and you walk out of the courtroom with a judgment – a piece of paper saying that you’re entitled to money. You can’t bring the judgment to a car dealership and buy a car with it and the judgment itself won’t pay your mortgage. So what do you do to turn the judgment into actual dollars?
The Illinois Legislature and Illinois Supreme Court have carefully crafted laws and rules that allow you, as the successful plaintiff, to discover the judgment debtor’s assets in an attempt to collect your judgment. The process usually begins by serving the defendant with Citation to Discover Assets. The Citation to Discover Assets is first served on the defendant, usually either a person or a business, and, much like a summons or a subpoena, commands the defendant to appear at a specified time and place, usually a courtroom, to answer, under oath, questions about its assets. Typically, a Document Rider is attached to the Citation to Discover Assets requiring the judgment debtor to produce documents, such as bank records, titles to property, and the like, that will enable your attorney to locate assets. Importantly, service of the Citation to Discover Assets also acts as a form of lien or injunction on the defendant’s assets, generally preventing the defendant from disposing of assets while the post-judgment proceedings are pending.
As the victor, you are not only permitted to serve a Citation to Discover Assets on the defendant, you are also entitled to serve one on anyone who holds the defendants assets or who owes the defendant money, such as a customer, employer, bank, relative, investment company or anyone holding assets belonging to the defendant. These Third Party Citations require the third-party to provide sworn written answers to your questions within a certain period of time and, if it fails to do so, the judgment can also be entered against that third-party.
After you’ve been able to discover the existence of assets, you then ask the court to enter an order requiring the party holding the assets to turn them over to you. It takes a court order to get a bank to turnover a defendant’s cash. If you’re asking the court to order the turnover of tangible things, as opposed to cash, typically the order will require the assets to be turned over to the sheriff so the sheriff can sell them and turn them into cash.
There are many effective ways to satisfy a judgment, many are complex and require the assistance of an attorney familiar with the procedures. While most litigators know how to obtain a judgment, far fewer know how to effectively collect the judgment, leaving you holding little more than a very expensive piece of paper.
For more information on post-judgment proceedings, please contact:
Howard Teplinsky at email@example.com or 312-368-0100