Berish Berger v. Richard Zeghibe

666 F. App'x 119
CourtCourt of Appeals for the Third Circuit
DecidedOctober 17, 2016
Docket15-3984 & 16-1871
StatusUnpublished
Cited by3 cases

This text of 666 F. App'x 119 (Berish Berger v. Richard Zeghibe) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berish Berger v. Richard Zeghibe, 666 F. App'x 119 (3d Cir. 2016).

Opinion

OPINION *

SHWARTZ, Circuit Judge.

Jatinder Chawla (“Jatinder”) 1 appeals the District Court’s order granting a preliminary injunction to Berish Berger, Kil-bride Investments Limited, Busystore Limited in Liquidation, Towerstates Limited, Bergfeld Co. Limited, and Ardenlink Limited (“Judgment Creditors”), enjoining Philadelphia Chancellor, LP (“Philadelphia Chancellor”) from making any payments to her and directing that the payments be placed in escrow. Jatinder claims that the District Court lacked jurisdiction over her *121 and abused its discretion by granting the preliminary injunction. We disagree and will affirm.

I

Five years ago, a federal jury in the Eastern District of Pennsylvania awarded Judgment Creditors and others a $33 million judgment against Jatinder’s husband, Ravinder Chawla (“Ravinder”), and others for fraud related to two real estate projects. 2 Collection has been unsuccessful because, on paper, Ravinder appears to have few assets, 3 even though he plays a leadership role in his family’s real estate development business. Although he is not directly compensated for his services, the family business pays for his luxury cars, private school education for his children, home repairs, meals, insurance, attorneys’ fees, and some daily expenses.

Jatinder has an ownership interest in a number of companies that make up the family’s real estate business, including Gol-dencents, Inc., from which she receives a $20,000 monthly stipend. Jatinder also has an ownership interest in an entity called Philadelphia Chancellor, which made a $200,000 distribution to her in 2014. Philadelphia Chancellor has a contract to sell a property (the “Chancellor Street Property”) for $25 million, which could result in the Chawla family receiving between $8 million and $10 million.

In light of the impending sale of the Chancellor Street Property, Judgment Creditors filed a motion seeking a declaration that all of Jatinder’s interests are the assets of Ravinder. They also sought an injunction prohibiting Ravinder and Jatin-der from disguising, concealing, transferring, assigning, and/or otherwise disposing of Ravinder’s assets held in Jatinder’s name. In the alternative, Judgment Creditors asked that all distributions be placed in escrow. Following an evidentiary hearing, the District Court entered an order preliminarily enjoining Philadelphia Chancellor from making any payments to Jatin-der, and directing that any payments be placed in escrow until there is a decision regarding whether Ravinder has a partnership interest in Jatinder’s assets. Jatin-der appeals.

II 4

Jatinder argues that the District Court: (1) lacked subject matter jurisdiction to enter the preliminary injunction; (2) lacked jurisdiction under Fed. R. Civ. P. 69 to issue an injunction against a nonparty; and (3) abused its discretion by issuing the preliminary injunction. We will address each argument in turn. 5

*122 A

A district court that enters a judgment has subject matter jurisdiction over actions related to its enforcement. IFC Interconsult, AG v. Safeguard Int’l Partners, LLC., 438 F.3d 298, 309-10 (3d Cir. 2006) (“[A] federal court may exercise ancillary jurisdiction (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to ... vindicate its authority, and effectuate its decrees.” (quoting Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 379-80, 114 5.Ct. 1673, 128 L.Ed.2d 391 (1994))). 6 The injunction sought here—to prevent Jatin-der from receiving, transferring, or disposing of assets in a manner that would prevent Judgment Creditors from collecting on their judgment—is precisely the type of post-judgment action that falls within a district court’s supplemental jurisdiction. Thus, the District Court had subject matter jurisdiction over this motion.

B

Having determined that the District Court had subject matter jurisdiction, we next examine whether it had the power to issue an. order resolving the motion against a nonparty. Judgment Creditors’ post-judgment motion is governed by Rule 69, which sets forth the following guidelines for proceedings in aid of executing a judgment:

A money judgment is enforced by a writ of execution, unless the court directs otherwise. The 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, but a federal statute governs to the extent it applies.

Accordingly, under Rule 69, the District Court was bound to follow the procedures set forth by Pennsylvania state law and any applicable federal statute in deciding whether it had the authority to enter an injunction impacting Jatinder. The operative statutes in this case were PaR.C.P. No. 3118 and 28 U.S.C. § 1651 (the “All Writs Act”). 7 Rule 3118 permits summary proceedings in aid of executing a judgment *123 to maintain the status quo as to property that is owned by the judgment debtor or in which he has an interest. Greater Valley Terminal Corp. v. Goodman, 415 Pa. 1, 202 A.2d 89, 92, 94 (1964). The All Writs Act has been interpreted to empower a federal court “to issue such commands ... as may be necessary or appropriate to effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained.” United States v. N.Y. Tel. Co., 434 U.S. 159, 172, 98 S.Ct. 364, 54 L.Ed.2d 376 (1977). This power “extends, under appropriate circumstances, to persons who, though not parties to the original action or engaged in wrongdoing, are in a position to frustrate the implementation of a court order or the proper administration of justice, and encompasses even those who have not taken any affirmative action to hinder justice.” Id. at 174, 98 S.Ct. 364; see also Catalytic, Inc. v. Monmouth & Ocean Cty. Bldg. Trades Council, 829 F.2d 430, 434 (3d Cir. 1987) (holding that the All Writs Act empowers federal courts to enjoin nonparties to enforce orders in civil cases). 8

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Bluebook (online)
666 F. App'x 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berish-berger-v-richard-zeghibe-ca3-2016.