United States District Court, S.D. Indiana, New Albany Division
ENTRY ON PLAINTIFF'S OBJECTIONS TO
MAGISTRATE'S REPORT AND RECOMMENDATION ON MOTION TO
MODIFY CHARGING ORDER (FILING NO. 126)
WALTON PRATT, JUDGE
matter is before the Court on Plaintiff Caudill Seed &
Warehouse Co.'s (“Caudill Seed”) Objections
to the Magistrate's Report and Recommendation on its
Motion to Modify Charging Order (Filing No. 126).
(Filing No. 127.) On July 17, 2017, the Magistrate
Judge entered a Report and Recommendation, (Filing No.
126), recommending that the district court deny Caudill
Seed's Motion to Modify Charging Order (Filing No.
116), and Garnishee-Defendant Mark Matthew Rose's
(“Matt Rose”) Motion for Evidentiary Hearing
(Filing No. 122). Caudill Seed filed a timely
objection to the Report and Recommendation asserting that the
Magistrate Judge erred in failing to include “100% of
the Roses' economic interest in the Contract for Sale of
Real Estate for 32 acres located at 13812 Nabb-New Washington
Road, Clark County, Indiana” (the “Contract
Property”). Caudill Seed argues the charging order in
this action should be modified as it is entitled to a lien on
both Mark Rose's and Matt Rose's economic interest in
the Contract Property. For the following reasons, the Court
OVERRULES Caudill Seed's Objections and
ADOPTS the Magistrate Judge's Report and
April 17, 2017, this Court adopted a Report and
Recommendation which granted Caudill Seed a charging order
against Mark Rose's economic interest in the Contract
Property. (Filing No. 107.) Caudill Seed now seeks
modification of the charging order, specifically requesting a
lien against both Mark Rose's and his son, Matt
Rose's interest in the Contract Property.
motion was referred to the Magistrate Judge. (Filing No.
118.) The Magistrate Judge issued the following succinct
and legally sound recommendation:
According to the purchase agreement for this property, Mark
and Matt will hold title to the property as tenants in
common, “each owning a one half undivided
interest.” [Filing No. 77-1, at ECF p. 1.] The
prior charging order provided for Caudill Seed to obtain a
lien against Mark's one half interest in the property to
satisfy the judgment against Mark. [Filing No. 107,
adoptingFiling No. 103.] The instant motion asks the
Court to expand Caudill Seed's entitlement to the
property to include Matt's economic interest. However,
Caudill Seed does not provide a legal basis to support its
position. Rather, Caudill Seed points to checks signed by
Mark. This does not affect the Court's prior order.
As previously explained, Mark and Matt will jointly own the
property and may utilize the doctrine of contribution with
each other to equalize the burden of Caudill Seed's lien
based on the portion of their contribution. Caudill Seed
fails to point to any law that allows it to place a lien on
Matt's one half interest. Evidence of mortgage liens and
property value does not affect the outcome here. Therefore,
Caudill Seed's motion to amend the charging order
[Filing No. 116] and Matt's motion for an
evidentiary hearing [Filing No. 122] should be
Filing No. 126 at 1-2 (emphasis in original).
Seed now appeals the Magistrate Judge's decision.
(Filing No. 127.)
district court may assign dispositive motions to a magistrate
judge, in which case the magistrate judge may submit to the
district judge only a report and recommended disposition,
including any proposed findings of fact.” Schur v.
L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 760 (7th
Cir. 2009) (citing 28 U.S.C. § 636(b)(1)(B);
Fed.R.Civ.P. 72(b)). “The magistrate judge's
recommendation on a dispositive matter is not a final order,
and the district judge makes the ultimate decision to adopt,
reject, or modify it.” Schur, 577 F.3d at 760
(citing 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3)).
After a magistrate judge makes a report and recommendation,
either party may object within fourteen days. 28 U.S.C.
§ 636(b)(1); Fed.R.Civ.P. 72(b)(2). “A judge of
the court shall make a de novo determination of
those portions of the report or specified proposed findings
or recommendations to which objection is made” with
respect to dispositive motions. 28 U.S.C. § 636(b)(1).
Further, a judge “may accept, reject, or modify, in
whole or in part, the findings or recommendations made by the
magistrate judge.” Id.
Seed objects to the Magistrate Judges Report and
Recommendation and requests that the Court award it 100% of
both Mark Rose's and Matt Rose's economic
interest in the Contract Property. Caudill Seed argues that
it is legally entitled to an attachment on the property
pursuant to the Indiana Uniform Fraudulent Transfer Act
(“IUFTA”) and because Matt Rose is Mark
Rose's alter ego.
IUTFA is codified in Indiana Code §32-18-2-17(b). This
provision states: “If a creditor has obtained a
judgment on a claim against the debtor, the creditor, if the
court orders, may levy execution on the asset transferred or
its proceeds.” This statute thus authorizes an
attachment. In response, Matt Rose argues that Caudill Seed
is not seeking the proper statutorily proscribed relief.
Under the IUFTA “a judgment creditor may have relief
either in: (1) Avoidance of the transfer... or (2) An
attachment or other provisional remedy against the asset
transferred or other property of the transferee in accordance
with … IC 34-25-2-1 or any other applicable statute
providing for attachment…. See Ind. Code
§ 32-18-2-17(a)(2).” (Filing No. 128 at
2.) In the Order on Motion to Avoid Fraudulent
Conveyances, (Filing No. 60), this Court granted
Caudill Seed's Motion for avoidance of the real ...