United States District Court, E.D. Pennsylvania
J. PAPPERT, J.
Court previously granted summary judgment in favor of Louis
Dreyfus Commodities Suisse, SA and against Financial Software
Systems, Inc (“FSS”). After the Court entered
judgment, Dreyfus sought to execute the judgment and
conducted post-judgment discovery. Dreyfus now seeks
supplemental relief in aid of execution under Federal Rule of
Civil Procedure 69. It requests the production of stocks and
other securities Financial Software Systems owns in
third-party, foreign companies. FFS contends that those
securities have always been held outside of Pennsylvania, and
Dreyfus has not alleged otherwise. Because the state-law
procedures incorporated by Federal Rule of Civil Procedure 69
do not permit the requested relief, the Court denies the
motion, without prejudice.
and FSS entered into a software license and maintenance
agreement in 1996. See (Summ. J. Mem., at 1, ECF No.
39). Following a dispute under the agreement, Dreyfus sued
FSS in an English Court, which entered a default judgment
after FSS failed to appear. (Id.) Dreyfus sought to
enforce that judgment by serving process on FSS in
Pennsylvania. (Id.) Both parties moved for summary
judgment. (ECF Nos. 25 & 30.) FSS argued that Dreyfus did
not properly serve FFS with the English claim form because
Dreyfus used a process server instead of a sheriff as
required by Pennsylvania law. (Summ. J. Mem., at 2; Pl.'s
Stmt., ¶ 15, ECF No. 25-3.) Dreyfus, meanwhile,
contended that FSS had agreed by contract to submit to the
jurisdiction of English courts and thus could not claim that
the English courts lacked personal jurisdiction over it.
(Id.) The Court therefore had to determine whether
the English courts had personal jurisdiction over FSS, which
would have allowed Dreyfus to have its judgment recognized
and enforced under Pennsylvania law. (Id.)
Court ruled for Dreyfus, holding that the default judgment
was enforceable because FFS unambiguously consented to the
personal jurisdiction of English Courts in its agreement with
Dreyfus, and there was no dispute that FFS had actual notice
of and opportunity to defend itself in the English action.
(Id. at 9.) The Court therefore granted
Dreyfus's motion on October 9, 2015, (ECF No. 40), and
entered judgment on December 9, 2015, (ECF No. 45).
filed a notice of appeal on December 22, 2015, (ECF No. 46),
and Dreyfus requested a writ of execution against FSS's
property on December 24, (ECF No. 48). Dreyfus then served
interrogatories on FSS and third parties in aid of executing
the judgment. See (ECF Nos. 49-50, 54-56).
On January 24, 2017, Dreyfus filed a motion for supplementary
relief in aid of execution. (ECF No. 59.) It seeks to compel
FSS to turn over to the United States Marshall any stocks,
bonds and securities it may hold in Spot Systems, Inc.,
Financial Software Systems, Pte, Ltd, and Hyperabad Spectrum
Finsoftware Services Private Limited. To the extent FFS cannot
produce those securities, Dreyfus seeks to compel the company
to issue original or replacement shares of stock, bonds or
securities in those companies. FFS filed its response on
February 7, 2017. (ECF No. 60.)
Rule of Civil Procedure 69 governs the execution process in
federal court, including discovery in aid of
execution. Randall Mfg., LLC v. Pier Components,
LLC, No. 14-0346, 2017 WL 1519498, at *2 (M.D. Pa. Apr.
27, 2017). Rule 69 states: “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.” Fed.R.Civ.P.
69(a)(1). The Court must therefore consider the relevant
Pennsylvania law in determining whether to grant
Rule of Civil Procedure 3118 governs relief in aid of
execution. lwhich a judgment has been entered may, before or
after the issuance of a writ of execution, enter an order
against a party or person” by, among other things,
enjoining the transfer, removal or disposition of any
security. Pa. R. Civ. P. 3118(a)(2).
parts of Rule 3118 appear sweeping, the rule is meant only to
preserve the status quo. Hearst/ABC-Viacom Ent. Servs. v.
Goodway Marketing, Inc., 815 F.Supp. 145, 147 (E.D. Pa.
1992). Dreyfus emphasizes that the rule permits the Court to
grant “other such relief as may be deemed necessary and
appropriate.” See (Pl.'s Mem., at 3
(quoting Pa. R. Civ. P. 3118(a)(6)). And the rule requires
only summary proceedings to grant such relief. Greater
Valley Terminal Corp. v. Goodman, 202 A.2d 89 (Pa.
1964). That broad authority, however, may only be used to
maintain the status quo. Id. Thus where a judgment
creditor seeks to compel a judgment debtor to deliver
securities into Pennsylvania “without proof that [the
securities were] removed from the court's jurisdiction
with the intent to prevent execution, ” Rule 3118 is
“of no avail.” Chadwin v. Krouse, 386
A.2d 33, 36 (Pa. Super. Ct. 1978).
relief Dreyfus seeks is beyond the scope of Rule 3118. FFS
contends that the securities at issue have “at all
relevant times . . . been located outside of
Pennsylvania.” (Def.'s Resp., at 1, ECF No. 60.)
And Dreyfus does not allege that the securities in question
were ever possessed in Pennsylvania. In light of that, the
Court will not utilize the summary proceedings of Rule 3118
to bring those securities into the Commonwealth. See
Chadwin, 386 A.2d at 36. Compare, e.g.,
Savitsky v. Mazzella, 93 F. App'x 439, 440 (3d
Cir. 2004) (upholding grant of motion under Rule 3118 where
judgment creditor “alleged [the judgment debtor] was
the sole owner of all shares of stock in Colonial Investment
Company, a Pennsylvania corporation, and that the stock was
originally possessed by [the judgment creditor], or on his
behalf, in Pennsylvania”), with Chadwin, 386
A.2d at 36 (overturning lower court's decision to grant a
motion under Rule 3118 where the ruling would “compel[
] a judgment debtor to bring property into the state when
there is no evidence that it has ever had a Pennsylvania
situs”). The same may be said of Dreyfus's