JUDGMENT CREDITORS' MOTION FOR A JUDGMENT AGAINST ECONOMY CURRENCY EXCHANGE, LTD. FOR TRANSFERRING ASSETS TO THE JUDGMENT DEBTORS IN VIOLATION OF A THIRD-PARTY CITATION TO DISCOVER ASSETS

MANISH S. SHAH, District Judge.

Judgment Creditors FOX VALLEY LABORERS' HEALTH AND WELFARE FUND, THE FOX VALLEY LABORERS' PENSION FUND, and PAT SHALES, Administrator of the Funds (collectively, "the Funds"), through their attorneys, Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, pursuant to Federal Rules of Civil Procedure 64 and 69, 735 ILCS 5/2-1402, and Illinois Supreme Court Rule 277, respectfully move this Court for relief in aid of the execution of this Court's judgment of August 17, 2017 against Judgment Debtors HUGH HENRY CONSTRUCTION INC., an Illinois corporation, TRACEY BIESTERFELDT, individually, and MICHAEL GALLAGHER, individually (collectively, "the Debtors"). The evidence establishes that after the Funds served Economy Currency Exchange, Ltd. ("Economy") with a citation prohibiting Economy from allowing any transfer of assets it was holding for the Debtors, Economy accepted checks payable to the Debtors and then transferred assets to the Debtors in the form of cashing those checks, in a total amount of $28,010.86. Therefore, the Funds request that this Court find Economy in contempt for failing to abide by the Third Party Citation to Discover Assets served upon it on February 8 (all dates 2018 unless otherwise noted) and enter a contempt judgment against Economy for the $28,010.86 transferred in violation of the citation.

In support of this motion, Plaintiffs state as follows:

1. On August 17, 2017, the Court entered an Agreed Judgment against Judgment Debtors Hugh Henry Construction Inc. ("Hugh Henry"), Tracey Biesterfeldt, and Michael Gallagher, in the amount of $419,221.93 (Agreed Judgment [Docket No. 66]), of which the principal balance of $153,494.97 remains unsatisfied.

2. On February 8, the District Court Clerk issued a Third Party Citation to Discover Assets against Economy (the "Citation"), regarding any amounts held belonging to Judgment Debtors. (A copy of the Third Party Citation to Discover Assets is attached hereto as Exhibit A.) Pursuant to 735 ILCS 5/2-1401(f) the Citation stated that Economy was "PROHIBITED from making or allowing any transfer or other disposition of, or interfering with, any property not exempt from the enforcement of a judgment therefrom, a deduction order or garnishment, belonging to the judgment debtor or to which it may be entitled or which may thereafter be acquired by or become due to him or it, and from paying over or otherwise disposing of any moneys not so exempt which are due or to become due to the judgment debtor, until the further order of the court or the termination of the proceeding, whichever occurs first."

3. On February 8, the Funds served the Citation on Economy by certified mail, return receipt requested. In an accompanying letter, counsel for the Funds specifically warned Economy about cashing checks for the Debtors in light of the Citation's prohibition on transfers to the debtors, advising them that the Citation:

(A copy of the letter is attached as Exhibit B. A copy of the signed return receipt is attached as Exhibit C.) Pursuant to 735 ILCS 5/2-1402, the citation was mailed to Judgment Debtors within three business days of the service upon Economy.

4. The Citation called for a deposition of a representative of Economy on February 27. But Economy never made a personal appearance. Instead of personally appearing, Economy emailed documents to the Funds' counsel on February 26 (a copy of the email is attached as Exhibit D).

5. It recently came to the Funds' attention that Economy continued to cash checks for the Debtors, despite the warning to Economy in the Funds' counsel's letter of February 8 (Ex. B). Specifically, Economy cashed the following checks for the Debtors, with a total value of $28,010.86:

The Funds became aware of the checks from TK on November 16 when TK provided copies as attachments to an email of that date (a copy of the email is attached as Exhibit H). The Funds became aware of the checks from Paris Ceramics on November 27 when Paris Ceramics provided copies as attachments to an email of that date (a copy of the email is attached as Exhibit I).

6. This disbursement of $28,010.86 was prohibited by the citation which stated that Economy was "PROHIBITED from making or allowing any transfer or other disposition of, or interfering with, any property not exempt from the enforcement of a judgment therefrom, a deduction order or garnishment, belonging to the judgment debtor or to which it may be entitled or which may thereafter be acquired by or become due to him or it, and from paying over or otherwise disposing of any moneys not so exempt which are due or to become due to the judgment debtor, until the further order of the court or the termination of the proceeding, whichever occurs first" (Ex. A; emphasis added). Thus, the Citation's hold applied not just to money Economy may have been holding when the Citation was served, but also applied to any assets of the Debtors that came into Economy's possession, such as these three checks. Cacok v. Covington, 111 F.3d 52, 53 (7th Cir. 1997).

7. Even if Economy provided cash to the Debtors in exchange for the checks, that was a violation of the Citation. When a debtor's asset is given to a third party that is subject to a third-party citation to discover assets, the third party must immediately freeze the asset pending court determination; the third party does not have discretion to determine on its own the proper disposition of that asset. West Bend Mut. Ins. Co. v. Belmont State Corp., 2010 U.S. Dist. LEXIS 136267 *29-34 (N.D.Ill. 2010) (St. Eve, J.). Thus, Economy was obligated by the Citation to freeze the checks upon receiving them. By converting the Debtors' checks into cash and transferring that cash to the Debtors, Economy violated the citation. Id.

8. The remedy for a third-party's violation of a third-party citation to discover assets is for the Court to "enter judgment against him or her in the amount of the unpaid portion of the judgment and costs allowable under this Section, or in the amount of the value of the property transferred, whichever is lesser." 735 ILCS 5/2-1402(f)(1).

9. Because Economy never made a personal appearance on the Citation, the Citation remains in effect through the present. Ill. Sup. Ct. R 277(f). Alternatively, if the six-month Citation period has expired as of the date the Funds discovered these checks, it was doubtless in effect during the May through July period when Economy cashed the Debtors' three checks, because the Citation was issued by the Court's clerk on February 8 (Ex. A at 4). The Court has authority to extend a citation in order to allow an appropriate motion to be ruled on, absent any concerns about indefinite liens or harassment. West Bend Mut. Ins. Co., 2010 U.S. Dist. LEXIS 136267 *13-15. Extensions should be granted liberally, and an extension is appropriate here because the Funds only recently learned that Economy violated the Citation's prohibition and this motion seeks only to address only those violations. Id.

10. The Funds respectfully request that a judgment be entered against Economy personally for $28,010.86 which reflects the amount of assets that Economy caused to be transferred out of the account after being served with the Citation.

WHEREFORE, the Funds request that this Court enter judgment against Economy Currency Exchange, Ltd., in the amount of $28,010.86.

EXHIBIT A

THIRD-PARTY CITATION TO DISCOVER ASSETS

THIS COURT HAS ISSUED A THIRD-PARTY CITATION AGAINST ECONOMY CURRENY EXCHANGE. This Citation directs a representative of ECONOMY CURRENY EXCHANGE to appear before Josiah A. Groff, attorney for the Plaintiffs/Judgment-Creditors, at 8 South Michigan Avenue, Suite 1900, Chicago, Illinois 60603 on February 27, 2018 at 12:30 p.m. to be examined under oath concerning the indebtedness owed to the Plaintiffs. IF YOU FAIL TO APPEAR AS DIRECTED IN THIS NOTICE, YOU MAY BE ARRESTED AND BROUGHT BEFORE THE COURT TO ANSWER TO A CHARGE OF CONTEMPT OF COURT, WHICH MAY BE PUNISHABLE BY IMPRISONMENT IN THE COUNTY JAIL.

The Citation was issued on the basis of a judgment order entered on August 17, 2017 by Judge Manish S. Shah against Hugh Henry Construction Inc., Tracey Biesterfeldt, and Michael Gallagher (collectively, "Judgment-Debtors"), jointly and severally, in the total amount of $419,221.93. To date, Plaintiffs have received $114,800.10 towards the judgment, leaving a principal balance of $304,421.83 unsatisfied. On or after the court date stated above, the court may compel the application of any discovered income or assets toward payment on the judgment.

You are commanded to produce at the examination:

All books, records and documents reflecting the assets and financial status of the Judgment-Debtors for the period of November 1, 2016 through the present, including, but not limited to, the following:

YOU ARE PROHIBITED from making or allowing any transfer or other disposition of, Or interfering with, any property not exempt from execution or garnishment belonging to the Judgment-Debtors, which they may be entitled to or which may be acquired by or become due to them and from paying over or otherwise disposing of any money not so exempt, that is due or becomes due to the Judgment-Debtors until further order of court or termination of the proceedings. You are not required to withhold the payment of any money beyond double the amount of the balance due on the judgment.

The amount of income or assets that may be applied toward the judgment is limited by Federal and Illinois law. THE JUDGMENT-DEBTORS HAVE THE RIGHT TO ASSERT STATUTORY EXEMPTIONS AGAINST CERTAIN INCOME OR ASSETS OF A JUDGMENT-DEBTORS WHICH MAY NOT BE USED TO SATISFY THE JUDGMENT IN THE AMOUNT STATED ABOVE:

1) Under Illinois or Federal law, the exemptions of personal property owned by a debtor include a debtor's equity interest, not to exceed $4,000.00 in value, in any personal property as chosen by the debtor; Social Security and SSI benefits; public assistance benefits; unemployment compensation benefits; workers compensation benefits; veteran's benefits; circuit breaker property tax relief benefits; the debtor's equity interest not to exceed $2,400.00 in value, in any one motor vehicle, and the debtor's equity interest, not to exceed $1,500.00 in value, in any implements professional books, or tools of the trade of the debtor;

2) Under Illinois law, every person is entitled to estate in homestead, when it is owned and occupied as a residence, to the extent in value of $15,000.00, which homestead is exempt from judgment;

3) Under Illinois law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 15% of gross weekly wages or (ii) the amount by which disposable earnings for a week exceed the total 45 times the federal minimum hourly wage.

4) Under Federal law, the amount of wages that may be applied toward a judgment is limited to the lesser of (i) 25% of disposable earnings for a week or (ii) the amount by which disposable earnings for a week exceeds 30 times the federal minimum hourly wage.

5) Pension and retirement benefits and refunds may be claimed as exempt under Illinois law.

The Judgment Debtors may have other possible exemptions under the law.

THE JUDGMENT-DEBTORS HAVE THE RIGHT AT THE CITATION HEARING TO DECLARE EXEMPT CERTAIN INCOME OR ASSETS OR BOTH. The Judgment-Debtors also have the right to seek a declaration at an earlier date by notifying the clerk in writing at the Office of the Clerk of the United States District Court for the Northern District of Illinois, Eastern Division, 219 South Dearborn Street, 20th Floor, Chicago, Illinois. When so notified, the Clerk of the Court will obtain a prompt hearing date from the court and will provide the necessary forms that must be prepared by the Judgment-Debtors or the attorney for the Judgment-Debtors and sent to the Judgment-Creditors and Judgment-Creditors' attorney regarding time and location of the hearing. This notice may be sent by regular first class mail.

CERTIFICATION OF ATTORNEY

The foregoing Citation was issued on the basis of a judgment order entered on August 17, 2017 by Judge Manish S. Shah against Hugh Henry Construction, Inc., Tracey Biesterfeldt, and Michael Gallagher, jointly and severally, in the total amount of $419,221.93. To date, Plaintiffs have received $114,800.10 towards the judgment, leaving a principal balance of $304,421.83 unsatisfied.

I, the undersigned, certify to the Court, under penalties as provided by law pursuant to 735 ILCS 5/1-109, that all information stated herein is true.

CERTIFICATE OF SERVICE

I, Josiah A. Groff, an attorney, hereby certify that I will cause to be served the attached Third-Party Citation to Discover Assets on the party listed below via prepaid certified mail, return receipt requested, on February 8, 2018:

CERTIFICATE OF MAILING CITATION

I, Josiah A. Groff, an attorney, hereby certify that within three business days of the Third-Party Citation to Discover Assets upon a person or party other than the debtor, I will cause to be served the Third-Party Citation to Discover Assets on the debtors listed below via regular first-class mail:

EXHIBIT B

EXHIBIT C

EXHIBIT D

EXHIBIT E

EXHIBIT F

EXHIBIT G

EXHIBIT H

EXHIBIT I

ORDER ON JUDGMENT CREDITORS' MOTION FOR A JUDGMENT AGAINST ECONOMY CURRENCY EXCHANGE, LTD. FOR TRANSFERRING ASSETS TO THE JUDGMENT DEBTORS IN VIOLATION OF A THIRD-PARTY CITATION TO DISCOVER ASSETS

This matter coming before the Court on Judgment Creditors' Motion for a Judgment Against Economy Currency Exchange, Ltd. for Transferring Assets to the Judgment Debtors in Violation of a Third-Party Citation to Discover Assets, the Court having reviewed the motion along with the supporting materials, hereby FINDS, ORDERS, and ADJUDGES as follows:

1. The motion is granted. Judgment is entered in favor of the Judgment Creditors Fox Valley Laborers' Health and Welfare Fund, the Fox Valley Laborers' Pension Fund, and Pat Shales (together, "Funds") and against Third-Party Citation Respondent Economy Currency Exchange, Ltd., in the amount of $28,010.86.

2. This Judgment against Economy Currency Exchange, Ltd. is joint and several with the Agreed Judgment in this case of August 17, 2017 in favor of the Funds and against Judgment Debtors Hugh Henry Construction Inc., Tracey Biesterfeldt, and Michael Gallagher.

SO ORDERED: