United States District Court, D. Maryland, Southern Division
W. GRIMM UNITED STATES DISTRICT JUDGE.
than two decades after the United States District Court for
the Eastern District of Virginia entered a judgment
(“Judgment”) against Nabil J. Asterbadi, he seeks
a permanent injunction to prohibit its enforcement, or
alternatively an accounting to determine the current amount
of the Judgment, as well as discovery to determine whether
the Judgment was assigned to Plaintiff Wells Fargo Equipment
Finance, Inc. (“Wells Fargo”) and, if so, how
much is due under the Judgment. ECF No. 58. Wells Fargo
opposes Dr. Asterbadi's motion and the discovery he
seeks. Dr. Asterbadi has not shown that he has
suffered injury, and therefore he is not entitled to a
permanent injunction. Additionally, this Court and the Fourth
Circuit already determined that the Judgment was assigned to
Wells Fargo. Yet, considering Dr. Asterbadi's request for
an accounting and, in the interest of justice, construing Dr.
Asterbadi's motion as a Rule 60(b)(5) motion for relief
from a judgment that has been, at least in part, satisfied, I
will grant the motion insofar as Dr. Asterbadi seeks
discovery to determine the amount currently due on the
Judgment before Wells Fargo executes on it.
United States District Court for the Eastern District of
Virginia entered a judgment (“Judgment”) in favor
of CIT Group/Equipment Finance Inc. (“CIT”) and
against Nabil J. Dr. Asterbadi (the resident agent for and a
stockholder of Zachair Ltd.) on October 4, 1993. See
Wells Fargo Equip. Fin., Inc. v. Asterbadi
(“Wells Fargo I”), No. PWG-15-1371, 2015
WL 5521797, at *1 & n.1 (D. Md. Sept. 16, 2015). CIT,
formerly the plaintiff in this action, filed a Certification
of Judgment for Registration in Another District, ECF No. 1,
in this Court on August 27, 2003. CIT also moved for a
permanent injunction (i) to prevent Defendant Asterbadi from
transferring his corporate stock certificates in Zachair Ltd.
and (ii) to require Dr. Asterbadi to turn over these
certificates to CIT in partial satisfaction of the Judgment.
CIT's Mot., ECF No. 3. Dr. Asterbadi consented to the
portion of the motion enjoining him from transferring the
certificates but contested the portion of the motion
requiring him to turn over the certificates to CIT.
Def.'s Opp'n to CIT's Mot., ECF No. 4. The Court
did not resolve the motion at that time.
year later, on November 23 and December 3, 2004, CIT filed
two Notices of Partial Satisfaction of the Judgment. The
first noted a credit of $1, 699, 327.96 from “sale of
collateral” in 1993; a voluntary $259, 740.20 reduction of
attorneys' fees; and $81, 500 in “credits against
accrued interest, ” leaving a “principal due of
$586, 682.01 and attorneys' fees due of $88,
002.30.” ECF No. 6. The second noted the same amounts
due, in addition to “accrued but unpaid interest of $1,
175, 009.98 as of December 3, 2004, for a total due as of
December 3, 2004, of $1, 849, 694.20, ” with interest
continuing to accrue “at the rate of $289.32 per
day.” ECF No. 8.
there things stood (in this Court) for more than a decade.
Then, on April 7, 2015, Counsel for CIT filed a notice with
this Court that CIT had assigned its interest in the Judgment
to Plaintiff Wells Fargo Equipment Finance, Inc.
(“Wells Fargo”) and that Counsel would be
representing Wells Fargo in this case. Notice of Assignment
of Judgment, ECF No. 9. Wells Fargo then attempted to collect
on the Judgment, and Dr. Asterbadi sought a protective order,
asking the Court to “prohibit the taking of a post
judgment deposition of Zachair, Ltd., by Wells Fargo
Equipment Finance, Inc.” and to “declar[e] the
judgment of the United States District Court for the Eastern
District of Virginia . . . unenforceable and [to] permanently
enjoin enforcement of the judgment in Maryland.”
See Def.'s Mot. for Protective Order 1, ECF No.
11. On August 26, 2015, Wells Fargo filed a Request and
Notice for Renewal of Judgment, ECF No. 25, asking “the
Clerk [to] note the Court's records to reflect that the
Judgment is renewed as of the date this Request was
Court's Previous Orders
September 16, 2015 Memorandum Opinion and Order, ECF No. 26,
I found that “CIT . . . assigned its interest in the
1993 Judgment to Plaintiff Wells Fargo”; the assignment
was filed in this Court, albeit by Dr. Asterbadi, not by the
judgment creditor; Wells Fargo, now Plaintiff in this action,
has standing to enforce the Judgment; and the Judgment is
enforceable because the time during which it can be enforced
started to run on the date the Judgment was certified in this
Court, i.e., August 27, 2003. Wells Fargo I, 2015 WL
5521797, at *1-2 (citing Assignment Agr.). Yet I also found
that Plaintiff had failed to meet the burden necessary to
grant its decade-old motion for permanent injunctive relief
on the contested portion of the motion. Id. As a
result, I granted in part and denied in part Plaintiff's
Motion for Permanent Injunction, without ruling on
Defendant's Motion for Protective Order. Id. at
Asterbadi appealed, and I denied his Motion for Protective
Order without prejudice pending the appeal. ECF Nos. 27, 30.
I approved the parties' Stipulation and Consent Order for
Preservation of Assets, Interim Stay of Discovery and
Execution on Judgment, Tolling of Limitations and for Other
Relief, ECF No. 43, which restrained Dr. Asterbadi from
“selling, removing, dissipating, alienating,
transferring, assigning, pledging[, ] encumbering, [or]
granting any interest [in] or similarly dealing with any [of
his] Assets” or asking or helping anyone else to do so.
ECF No. 44. It also stayed discovery in aid of execution and
execution upon the Judgment, and it stayed any limitations
periods “that may be applicable to claims setting aside
or avoiding voidable transactions or transfers by Defendants
for Purposes of Plaintiff's collection on the underlying
judgment.” Id. I also issued a Memorandum
Opinion and Order on May 26, 2016, granting Dr.
Asterbadi's motion to stay and extending the stipulated
agreement to protect Wells Fargo's interests until the
Fourth Circuit ruled on the appeal. ECF No. 47.
Fourth Circuit's Ruling
Fourth Circuit affirmed the September 16, 2015 Memorandum
Opinion and Order regarding standing. Wells Fargo Equip.
Fin., Inc. v. Asterbadi (“Wells Fargo
II”), 841 F.3d 237, 239-40 (4th Cir. 2016) (on
docket as ECF No. 49). Noting that Md. Rule 2-624 (applicable
under Fed.R.Civ.P. 69(a)(1)) “provides that the
assignee of a judgment may enforce the judgment in its
own name when it files ‘the assignment .
. . in the court where the judgment was entered, '”
the Fourth Circuit concluded that Wells Fargo had standing to
enforce the Judgment in this Court, despite having filed only
a notice of assignment rather than the actual assignment,
because “Asterbadi filed the actual assignment, . . .
so that the district court had before it both the
notice of assignment and the assignment
itself.” Id. at 243 (quoting Md. Rule 2-624)
(emphasis in Wells Fargo II). It also agreed with me
that the registration was not, as Dr. Asterbadi argued,
“merely a ‘ministerial act.'”
Id. at 245. In reaching its conclusion, it construed
28 U.S.C.§ 1963, governing registration of judgments in
to elevate a registered money judgment such that it functions
in every way as a new judgment. It follows that with the
registered judgment functioning as a new judgment, the
limitations period for enforcement runs from the date of
registration. This is the conclusion that every court of
appeals that has construed § 1963 has reached.
Id. at 245-46. The Fourth Circuit observed that,
under Maryland law, “a money judgment expires 12 years
from the date of entry or from the date of renewal, if it is
renewed before its expiration.” Id. at 243
(citing Md. Rule 2-625). Thus, given that CIT registered it
on August 27, 2003 and “Wells Fargo renewed the
judgment for another 12 years on August 26, 2015, the
registered judgment remains enforceable in Maryland to August
26, 2027.” Id. at 245. The Fourth Circuit
[T]he registration of the Virginia district court judgment in
the District of Maryland at a time when the judgment was not
time-barred by Virginia law functions as a new judgment in
the District of Maryland, and Maryland's 12-year
limitations period for enforcement on the judgment begins
running from the date of registration.
Id. at 246. Thus, its holding was limited to the
time bar issue. See Id. But, significantly, in
reaching its holding, the Fourth Circuit observed that
“[e]ffective June 29, 2007, CIT sold and assigned its
judgment against Asterbadi to Wells Fargo as part of an asset
purchase agreement.” Id. at 240-41.
of the Judgment, and Post-Judgment Discovery
Asterbadi filed a pre-motion conference request letter, ECF
No. 53, and I held a conference call on December 15, 2016. I
permitted Dr. Asterbadi to file a motion regarding the
enforceability of the Judgment and other issues raised in his
letter. ECF No. 57. Dr. Asterbadi filed a Motion to
Permanently Enjoin Enforcement of Judgment or in the
Alternative for Accounting to Determine Unpaid Balance on the
Federal Judgment and Accrued Interest (“Perm. Inj.
Mot.”). ECF No. 58. The Permanent Injunction Motion now
is ripe. ECF Nos. 61, 63.
the December 15, 2016 call, I also lifted the stay on
discovery. I did not lift the Consent Order as it pertained
to preservation of assets, prohibiting Dr. Asterbadi from
“selling, removing, dissipating, alienating, assigning,
pledging[, ] encumbering, granting any interest or similarly
dealing with any assets of the Defendant” or asking or
helping anyone else to do so. Jan. 21, 2016 Consent Order,
ECF No. 44. I directed the parties to file a proposed
discovery plan and schedule by January 16, 2017 and to read
Rule 26(g) and certify to me that they have done so by
January 16, 2017. They have done neither.
Dr. Asterbadi filed a letter stating that the parties do not
agree on the scope of discovery, ECF No. 65 (and Wells Fargo
filed a response, ECF No. 69, and Dr. Asterbadi filed a
reply, ECF No. 70, both in violation of the Case Management
Order ¶ B(3), ECF No. 17). Dr. Asterbadi argues in his
letter that enforcement of the Judgment should be barred
because CIT and Wells Fargo took no action for a decade, and
he wants discovery to find out why. Dr. Asterbadi also seeks
discovery to determine what CIT assigned to Wells Fargo, and
specifically whether it intended to assign the Judgment to
Wells Fargo. Additionally, he wants to determine what
payments CIT received toward the Judgment and how it treated
the payments it received. And, he raises the question of
whether the amount due is governed by the Judgment or the
Forbearance Agreement that the parties later signed.
Fargo responded to say that it questions whether Dr.
Asterbadi is entitled to any post-judgment discovery beyond
what Wells Fargo already agreed to produce. Wells Fargo notes
that the discovery rules provide for the judgment creditor,
not the judgment debtor, to engage in post-judgment
discovery. Wells Fargo contends that Dr. Asterbadi is
indirectly challenging the order already entered against him
(and affirmed by the Fourth Circuit) and no discovery is
necessary, relevant, or allowed.
discovery disputes raise the same issues addressed in the
Permanent Injunction Motion briefing. Therefore, I will
resolve the Permanent Injunction Motion and then define the
scope of discovery in this case.
obtain a permanent injunction, “a plaintiff must show
(1) irreparable injury, (2) remedies at law are inadequate to
compensate for that injury, (3) the balance of hardships
between the plaintiff and defendant warrants a remedy, and
(4) an injunction would not disserve the public
interest.” Raub v. Campbell, 785 F.3d 876, 885
(4th Cir. 2015) (quoting Monsanto Co. v. Geerston Seed
Farms, 561 U.S. 139, 156-57 (2010)). “An
injunction is a matter of equitable discretion; it does not
follow from success on the merits as a matter of
course.” Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 32 (2008). Curiously, neither party
addresses the standard in their briefs.
as it is, indeed, injunctive relief that Dr. Asterbadi seeks,
he cannot, as the judgment debtor (not the plaintiff), show
irreparable injury at this juncture. The Judgment is based on
the judgment creditor's injury. And, while Dr.
Asterbadi argues that Wells Fargo is not entitled to his
assets, he has failed to provide sufficient evidence in
support of this argument.Indeed, he seeks discovery to obtain
that evidence, should it exist. Certainly, Wells Fargo could
locate Dr. Asterbadi's assets, execute on the Judgment,
obtain more than Dr. Asterbadi contends it is entitled to,
and entangle what (according to Dr. Asterbadi) is rightfully
Dr. Asterbadi's in a Gordian knot. But, even if that were
likely-which I cannot determine on the record before me-,
this is not a motion for a preliminary injunction,
where Dr. Asterbadi only would need to show a likelihood of
success on the merits. See Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008). And, that possible
injury is not injury that Dr. Asterbadi “has
suffered.” See eBay Inc. v. MercExchange,
L.L.C., 547 U.S. 388, 391 (2006) (“A plaintiff
[seeking a permanent injunction] must demonstrate: (1) that
it has suffered an irreparable injury . . . .”
(emphasis added)); see Dominion Transmission, Inc. v.
Town of Myersville Town Council, 982 F.Supp.2d 570, 580
(D. Md. 2013) (same). Thus, Dr. Asterbadi is not entitled to
a permanent injunction. See eBay, 547 U.S. at 391.
Dr. Asterbadi also seeks an accounting, and it appears that
what he wants to do is challenge both Wells Fargo's
ability to enforce the Judgment against him and the scope of
the unpaid balance of that Judgment, if enforceable by Wells
Fargo. In the interest of justice, I will construe his motion
as one for relief from the Judgment under Fed.R.Civ.P.
60(b)(5) or (6). See Fed. R. Civ. P. 1. Rule 60(b)
provides that, “within a reasonable time, ” a
judgment debtor may file a motion asking for relief from a
judgment on the grounds that “the judgment has been
satisfied, ” or for “any other reason that
justifies relief.” Fed.R.Civ.P. 60(b)(5)-(6).
CIT Assigned the Judgment to Wells Fargo
Asterbadi continues to insist that Wells Fargo cannot enforce
the Judgment because “the assignment and assumption
agreement [between CIT and Wells Fargo] was ineffective to
assign the federal judgment against Asterbadi.”
Def.'s Perm. Inj. Mot. 14. If this were the case, it
would be a “reason that justifies relief” from
the Judgment under Fed.R.Civ.P. 60(b)(6). Wells Fargo
counters that the law of the case, the mandate rule, and the
Rooker-Feldman doctrine bar consideration of this
issue. Pl.'s Opp'n 3, 14.
Fargo argues that Rooker-Feldman bars this
Court's consideration of whether the Judgment was
properly assigned to Wells Fargo. Pl.'s Opp'n 14. But
Rooker-Feldman, a jurisdictional doctrine, see
Friedman's, Inc. v. Dunlap, 290 F.3d 191, 196 (4th
Cir. 2002), is inapplicable. The Rooker-Feldman
doctrine “holds that ‘lower federal courts are
precluded from exercising appellate jurisdiction over final
state-court judgments.'” Thana v. Bd. of
License Comm'rs for Charles Cnty., Md., 827 F.3d
314, 319 (4th Cir. 2016) (quoting Lance v. Dennis,
546 U.S. 459, 463 (2006) (per curiam)). Thus, by invoking the
doctrine, Wells Fargo essentially is asking this Court to
find that it does not have jurisdiction over the very suit
that Wells Fargo brought. See Id. The doctrine
“assesses only whether the process for appealing a
state court judgment to the Supreme Court under 28 U.S.C.
§ 1257(a) has been sidetracked by an action filed in a
district court specifically to review that state
court judgment.” Id. at 320. It is
“confined to . . . cases brought by state-court
losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings
commenced and inviting district court review and
rejection of those judgments.” Id. (quoting
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544
U.S. 280, 284 (2005)) (emphasis in Thana). To
emphasize the narrow scope of the doctrine, “the
Supreme Court has noted repeatedly that, since the decisions
in Rooker and Feldman, it has
never applied the doctrine to deprive a district
court of subject matter jurisdiction, ” and,
“since Exxon, [the Fourth Circuit has] never,
in a published opinion, held that a district court lacked
subject matter jurisdiction under the Rooker-Feldman
the judgment creditor, which prevailed under the
“state-court judgment rendered before the district
court proceedings commenced, ” brought this
litigation, not Dr. Asterbadi, the “state-court
loser” at the time CIT filed this case. Id.
Moreover, the Rooker-Feldman doctrine does not apply
because of the procedural posture of the state court
litigation, in which the Maryland Court of Special Appeals
recently reversed the orders of the state trial courts and
remanded the cases in an unreported opinion, Asterbadi v.
Wells Fargo (“Asterbadi”), Nos.
1590 and 2174, slip op. at 1 (Md. Ct. Spec. App. Feb. 21,
2017). See Thana, 827 F.3d 314 at 321. Dr.
Asterbadi is not asking this Court “to exercise
appellate jurisdiction over a final judgment from ‘the
highest court of a State in which a decision could be
had'”; he did not file this suit or remove
it to this Court. Id. (quoting 28 U.S.C. §
1257(a) (emphasis added)). And, given that the state court
litigation is still “on track for potential review by
the U.S. Supreme Court, ” and this suit would not
“bypass the Supreme Court's appellate jurisdiction
under 28 U.S.C. § 1257(a) over any relevant state court
judgment, ” the suit in this Court does not implicate
the purpose behind ...