Society of Lloyd's v. Bennett , 204 F. App'x 728 ( 2006 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
July 25, 2006
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
TH E SO CIETY OF LLO YD’S,
Plaintiff-Appellee,
v. Nos. 05-4208 & 05-4239
(D.C. No. 2:02-CV-204-TC)
W ALLA CE R. BENNETT, (D. Utah)
Defendant-Appellant,
and
GRA NT R. CA LD W ELL; CA LV IN P.
GA DD IS; DA VID L. GILLETTE;
STEPHEN M . HARM SEN; KELLY C.
HA RM SEN; JAM ES R. KR USE;
EDWA RD W . M UIR; KENT B.
PETER SEN ,
Defendants.
OR D ER AND JUDGM ENT *
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
Before BROR B Y and EBEL, Circuit Judges, and KANE, ** District Judge.
Defendant Wallace R. Bennett appeals from two orders of the district court
rejecting his efforts to void a garnishee judgment. Exercising our jurisdiction
under 28 U.S.C. § 1291, we affirm. 1
Relevant Background
On M arch 18, 2003, plaintiff The Society of Lloyd’s (Lloyd’s) obtained a
judgment against Bennett based on an award of summary judgment that was
subsequently affirmed by this court. See Soc’y of Lloyd’s v. Reinhart, 402 F.3d
982 (10th Cir.), cert. denied, 126 S. Ct. 366 (2005). Seeking to collect on the
judgment, on June 28, 2004, Lloyd’s served a writ of garnishment on M organ
Stanley, an investment bank where Bennett held a brokerage account.
Accompanying the writ were interrogatories to be answered and filed by M organ
Stanley. The writ advised M organ Stanley that if it did not receive a court order
regarding the writ within sixty days of filing its interrogatory responses, the writ
would expire and could be ignored. Based on the timing of M organ Stanley’s
responses, the writ was to expire on September 7, 2004.
**
The Honorable John L. Kane, Senior District Judge, United States District
Court for the District of Colorado, sitting by designation.
1
Pursuant to the parties’ request, we have consolidated cases 05-4208 and
05-4239, as the latter is merely a carbon-copy of the former filed to cure a
jurisdictional defect.
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On July 14, 2004, Bennett filed objections to the writ of garnishment and
requested a hearing. The hearing was held on August 6, 2004, before a magistrate
judge to whom the case had been referred under 28 U.S.C. § 636(b)(1)(A). The
minute entry from the hearing reflects that the magistrate judge heard arguments
concerning Bennett’s objections to the writ of garnishment, one of which was that
the writ would unduly interfere with his wife’s interest in the account. At some
point during the hearing, the court recessed to allow the parties to schedule
discovery regarding M rs. Bennett’s interest. W hen the court reconvened the
parties had reached a stipulation. The following is a quote from the minute entry:
Counsel stipulated to the following: M r. Barton to subpoena M organ
Stanley today and expect production of documents by 8/20/04;
M r. Bennett to produce all account information requested by
M r. Barton by 8/20/04; extend the garnishment pending further
order of the Court; set the matter for status conference prior to
setting the case for evidentiary hearing.
Aplt. App. at 48 (emphasis added).
On August 23, 2004, the magistrate judge issued an Order Regarding
Pending Garnishment reflecting his findings from the August 6 hearing. The
magistrate judge overruled all of Bennett’s objections to the writ except for the
objection based on M rs. Bennett’s interest in the account. As to that objection,
the magistrate judge found that discovery into the matter was warranted and that
the parties had stipulated as to the nature and timing of that discovery. “W ith
respect to the status of the Account, the M agistrate Judge [found] that each of the
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parties stipulated and agreed, on the record, that the Account remain frozen until
the current dispute regarding the respective interests of M r. and M rs. Bennett
[was] resolved.” Id. at 148. He therefore found, pursuant to the local civil rules,
that “good cause exist[ed] to stay the release of the W rit of Garnishment.” Id.On October 7, 2004, after discovery into M rs. Bennett’s interest was
complete, the magistrate judge ordered counsel for Lloyd’s to prepare a proposed
order and garnishee judgment. It is at this point in the appellate record that
Bennett’s objection to the magistrate judge’s authority first appears. On October
15, 2004, he filed “Specific Objections to a M agistrate Judge Effecting a Final
Irrevocable Disposition” (Id. at 150), alerting the district judge that the magistrate
judge was prepared to sign the garnishee judgment. Bennett argued that the
magistrate judge lacked authority to sign the garnishee judgment and that he had
already exceeded his authority in staying the release of the writ of garnishment.
Lloyd’s conceded that a garnishee judgment is a final and appealable order,
which, absent the parties’ consent, cannot be signed by a magistrate judge under
28 U.S.C. § 636. Lloyd’s also conceded that the parties had not given their
consent to the magistrate judge’s exercise of such power.
Accordingly, on October 21, 2004, the court revoked its earlier order of
reference and issued a second order of reference, this time under 28 U.S.C.
§ 636(b)(1)(B), which sets forth the procedure for a magistrate judge to hear and
make recommendations concerning certain dispositive matters. On October 25,
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2004, the magistrate judge issued a report pursuant to that section recommending
that a garnishee judgment be entered against M organ Stanley for one-half the net
value of Bennett’s brokerage account. Bennett filed a timely objection to the
report and recommendation under § 636(b)(1)(C). He then filed for bankruptcy
and the case was held in abeyance.
In response to a request from the bankruptcy court, the district court issued
an order on April 22, 2005, holding that the magistrate judge had not exceeded his
authority under the first order of reference by staying the release of the writ of
garnishment. On M ay 6, 2005, Bennett filed a motion for reconsideration with
respect to the April 22, 2005, order. Before deciding that motion, however, the
court entered a garnishee judgment based on the report and recommendation of
the magistrate judge. On M ay 24, 2005, Bennett filed a motion to reconsider the
garnishee judgment. On July 7, 2005, the court denied Bennett’s motion for
reconsideration with respect to its April 22, 2005, order, reaffirming its decision
that the m agistrate judge had authority to extend the writ of garnishment. On
August 26, 2005, it denied Bennett’s motion to reconsider the garnishee
judgment. This appeal followed.
Discussion
Based on the time of filing, the district court considered Bennett’s first
motion for reconsideration under Rule 60(b) and his second motion under Rule
59(e) of the Federal Rules of Civil Procedure. We therefore review the court’s
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decision for abuse of discretion. See Adams v. Reliance Standard Life Ins. Co.,
225 F.3d 1179, 1186 n.5 (10th Cir. 2000) (Rule 59(e)); Allender v. Raytheon
Aircraft Co., 439 F.3d 1236, 1242 (10th Cir. 2006) (Rule 60(b)). “Under that
standard, a motion for reconsideration should be granted only to correct manifest
errors of law or to present newly discovered evidence.” Adams, 225 F.3d at 1186
n.5 (quotation omitted). W e review questions of law de novo. Strong v. Laubach,
443 F.3d 1297, 1298 (10th Cir. 2006).
Bennett’s appeal challenges the district court’s finding that the magistrate
judge acted within his authority in staying the release of the writ of garnishment
and ordering the M organ Stanley account to remain frozen. He argues that
§ 636(b)(1)(A), which he maintains was the only source of the magistrate judge’s
authority, pertains only to non-dispositive, non-injunctive pretrial matters, and
that the magistrate judge’s order extending the writ was a post-judgment grant of
injunctive relief clearly beyond its scope. Therefore, the writ actually expired on
September 7, 2004, and all orders flowing from the writ after that date, including
the garnishee judgment, are invalid.
Lloyd’s counters that § 636(b)(1)(A ) should not be read literally to
preclude any matter not occurring before trial. It argues that the term “pretrial
matter” as used in § 636(b)(1)(A) was meant to refer to any non-dispositive
matter, whether occurring before, during, or after trial. Lloyd’s contends that the
challenged order was neither injunctive nor dispositive and was therefore within
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the bounds of § 636(b)(1)(A). Alternatively, it argues that authority for the
magistrate judge’s order can be found in the “additional duties” language of
§ 636(b)(3). Furthermore, Lloyd’s argues that the magistrate judge had authority
to extend the writ under § 636(c)(1), because the parties agreed to the extension
on the record.
Both parties raise interesting and complex arguments concerning the scope
of a magistrate judge’s authority to issue post-judgment orders under the Federal
M agistrates Act. W e need not reach the merits of the arguments, however,
because we can affirm the district court judgment based on the parties’
on-the-record stipulation to extend the writ of garnishment.
“In this circuit, the rulings of a trial court in accordance with stipulations
that are clear and unambiguous will not be considered erroneous on appeal.”
M ills v. State Farm M ut. Auto. Ins. Co., 827 F.2d 1418, 1422 (10th Cir. 1987)
(quotation omitted). At the August 6, 2004, hearing Bennett clearly and
unambiguously agreed to an extension of the writ pending discovery into
M rs. Bennett’s interest in the account. 2 He now argues that the stipulation was
never intended to broaden the magistrate judge’s authority. This argument,
2
Contrary to Lloyd’s assertion, the parties did not grant the type of consent
contem plated in § 636(c)(1), which would have authorized the magistrate to
conduct any and all proceedings, including the entry of a final garnishee
judgment. See Colo. Bldg. & Constr. Trades Council v. B.B. Andersen Constr.
Co., 879 F.2d 809, 810 (10th Cir. 1989).
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however, is a red herring because regardless of whether Bennett consented to the
magistrate judge’s general authority, he clearly consented to the very act now
complained of. We have long been “reluctant to relieve parties from the benefits,
or detriments, of their stipulations.” L.P.S. ex rel. Kutz v. Lamm, 708 F.2d 537,
539-40 (10th Cir. 1983). Therefore, we conclude that the parties’ stipulation
regarding the extension of the writ of garnishment waived any objections to the
matter, and the district court did not abuse its discretion in denying Bennett’s
motions for reconsideration.
The judgment of the district court is AFFIRMED.
Entered for the Court
David M . Ebel
Circuit Judge
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