Victor Stanley, Inc. v. SCH Enterprises, LLC

          MEMORANDUM & ORDER

          Richard D. Bennett, United States District Judge

         The Court has before it Magistrate Judge Sullivan's Order of May 31, 2019 (ECF No. 878), Defendant's Objections to Magistrate Judge's Findings as to Sanctions Credits (ECF No. 885), and the materials submitted by the parties relating thereto. The Court finds that a hearing is unnecessary. For the reasons that follow, the Order is ADOPTED and die Defendants are entitled to a credit of $455, 026.62 against the Sanctions Award for the sale of the Salem, Oregon property, and the proceeds that Plaintiff, Victor Stanley, Inc., obtained from the state court garnishment proceeding in Michigan shall be credited against the underlying Judgment, but not against the Sanctions Award, as ordered.

         BACKGROUND

         Inasmuch as the parties are fully familiar with the pertinent background, it suffices to state that currently, the status of this litigation is that Plaintiff, Victor Stanley, Inc. ("VSI") is seeking to collect on its judgment and on sanctions that have been awarded.^[1] This effort has been ongoing since the first sanctions were awarded in November 2010, final judgment in favor of VSI in November 2011, and further sanctions awarded during the collections process. (See, e.g.. ECF Nos. 721, 747 (summarizing the various judgments and failures to comply by the Defendants^[2]).)

         Most recently, in May 2019, the case was referred to Magistrate Judge Sullivan to determine whether certain proceeds from a garnishment writ issued by a state court in Michigan should be credited against the underlying judgment or against the sanctions award. (ECF No. 875.) Magistrate Judge Sullivan held a hearing on May 31, 2019, and issued an Order forthwith, determining as follows:

1. Defendants are entitled to a credit of $455, 026.62 against the Sanctions Award for the sale of the Salem, Oregon property. This is the net amount of proceeds that Victor Stanley obtained from the sale of the property after deduction of the mortgage balance, selling expenses, carrying costs, and other reasonable and necessary expenses.

2. The proceeds that Victor Stanley obtained from the state court garnishment proceeding in Michigan shall be credited against the underlying Judgment, but not against the Sanctions Award.

(ECF Nos. 878, 883.) Defendant Pappas did not appear at the hearing.

         Defendants timely filed Objections on June 14, 2019. (ECF No. 885.) VSI filed a response (ECF No. 886) to Defendants' objections, and the matter is ripe for review. Defendants argue that the following determinations by Magistrate Judge Sullivan were improper: (1) the determination of the net amount of $455, 026.62 from the sale of the Salem, Oregon property; and (2) the |108, 000 Plaintiff collected from the state court garnishment proceeding in Michigan should be credited against Defendants' underlying judgment and not against the Defendants' payment obligation under the Sanctions Order. (ECF No. 885.)

         STANDARD OF REVIEW

         When reviewing a magistrate judge's findings, a district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). The Court reviews de novo any portions of the recommendations to which a specific objection is made, id, but may adopt, without explanation, any of the magistrate judge's recommendations to which no objections are filed. Solis v. Malkani, 638 "" F.3d 269, 274 (4th Cir. 2011) (citing Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983)). Where objections consist of general and conclusory objections that are not directed to a specific error, the court reviews for clear error. See Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982); Brown v. Comm'r of Soc. Sec, 969 F.Supp.2d 433, 437 (W.D. Va. 2013).

         DISCUSSION

         I. Oregon Property Value

         Defendants' first specific objection is to the determination of a net amount of $455, 026.62 from the sale of the Salem, Oregon property. Defendants contend that they should be credited the months of rental payments that Plaintiff would have received from the property but chose to forego, and that Defendants should not bear the burden of the "depressed sales result VSI caused in rendering the property virtually unsellable for over five ...