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Caudill Seed & Warehouse Co., Inc. v. Rose

United States District Court, S.D. Indiana, New Albany Division

March 27, 2018

CAUDILL SEED & WAREHOUSE CO., INC., Plaintiff,
v.
MARK D. ROSE, Defendant.

          ENTRY ON PLAINTIFF'S OBJECTIONS TO MAGISTRATE'S REPORT AND RECOMMENDATION ON MOTION TO MODIFY CHARGING ORDER (FILING NO. 126)

          TANYA WALTON PRATT, JUDGE

         This 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 Recommendation.

         I. BACKGROUND

         On 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.

         The 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 denied.

Filing No. 126 at 1-2 (emphasis in original).

         Caudill Seed now appeals the Magistrate Judge's decision. (Filing No. 127.)

         II. LEGAL STANDARD

         “A 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.

         III. DISCUSSION

         Caudill 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.

         The 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 ...


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