Arthur Muegler v. Thomas Berndsen ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 98-1266
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Lilly M. Kell, As personal *
representative of the estate of Rita *
Glover, *
*
Plaintiff, *
*
v. *
*
First Colony Life Insurance Company; *
Mark Ostenfeld, Personal *
representative of Estate of William *
Glover; Mark L. Ostenfeld, Guardian * Appeals from the United States
Ad Litem Stephanie Glover, * District Court for the
* Eastern District of Missouri.
Defendants, *
* [UNPUBLISHED]
Arthur G. Muegler, *
*
Movant-Appellant, *
*
Thomas Berndsen, *
*
David J. Bening; Alfred W. Harre, *
*
Appellees. *
*
----------------------- *
*
Mark L. Ostenfeld, Public *
Administrator and Personal *
Representative of the Estate of *
deceased William Glover, *
*
Plaintiff, *
*
Lilly M. Kell, as the personal *
representative of the estate of Rita *
Glover, *
*
Plaintiffs, *
*
v. *
*
Mark L. Ostenfeld, Guardian Ad *
Litem Stephanie Glover, *
*
Defendant, *
*
Arthur G. Muegler, *
*
Movant-Appellant, *
*
Thomas Berndsen. *
__________
No. 98-1772
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Lilly M. Kell, As personal *
representative of the estate of Rita *
Glover, *
*
Plaintiff, *
*
v. *
*
John Hancock Financial Services, *
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Inc.; Stephanie Glover, also known as *
Lilly M. Kell; Mark L. Ostenfeld, *
*
Defendants, *
*
Arthur G. Muegler, *
*
Movant-Appellant, *
*
Thomas Berndsen, *
*
David J. Bening; Alfred W. Harre, *
*
Appellees. *
__________
No. 98-2262
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Alfred W. Harre; Bernice E. Harre; *
David Bening, *
*
Plaintiffs-Appellees, *
*
v. *
*
Arthur G. Muegler, *
*
Defendant, *
*
Rita D. Glover, *
*
Movant, *
*
Donald V. Nangle, *
*
Movant-Appellant, *
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*
The Monticello Group, Inc.; State *
Farm Fire & Casualty Company, *
*
Movants, *
*
------------------- *
*
The Monticello Group, Inc. *
*
Plaintiff, *
*
v. *
*
State Farm Fire & Casualty Company, *
*
Defendant, *
*
David Bening, *
*
Movant-Appellee, *
*
Alfred W. Harre, *
*
Movant, *
*
Donald V. Nangle, *
*
Movant-Appellant, *
*
Arthur G. Muegler, *
*
Movant. *
__________
No. 98-2266
__________
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Alfred W. Harre; Bernice E. Harre; *
David Bening, *
*
Plaintiffs-Appellees, *
*
v. *
*
Arthur G. Muegler, *
*
Defendant-Appellant, *
*
Rita D. Glover; Donald V. Nangle; *
The Monticello Group, Inc.; State *
Farm Fire & Casualty Company, *
*
Movants, *
*
-------------------- *
*
The Monticello Group, Inc. *
*
Plaintiff, *
*
v. *
*
State Farm Fire & Casualty Company, *
*
Defendant, *
*
David Bening, *
*
Movant-Appellee, *
*
Alfred W. Harre; Donald V. Nangle, *
*
Movants, *
*
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Arthur G. Muegler, *
*
Movant-Appellant. *
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Submitted: November 24, 1998
Filed: November 30, 1998
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Before BOWMAN, Chief Judge, HANSEN, and MURPHY, Circuit Judges.
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PER CURIAM.
In these consolidated appeals, Arthur G. Muegler and Donald V. Nangle
challenge orders of the District Court1 (1) granting the motions of David J. Bening and
Alfred W. Harre for a creditor’s bill and equitable garnishment on Muegler’s portion
of contingency fees owed to Muegler and Nangle for legal work performed in the
underlying cases; (2) denying Muegler’s claimed statutory exemption pursuant to 15
U.S.C. § 1673(a) (1994) and Mo. Rev. Stat. § 525.030(2)(a), (c) (1994); and (3)
ordering payout to Bening and Harre. We affirm.
Muegler and Nangle argue the District Court lacked subject matter jurisdiction
over these motions. We disagree. In the absence of a controlling federal statute, a
district court “has the same authority to aid judgment creditors in supplementary
proceedings as that which is provided to state courts under local law.” H.H. Robertson
Co. v. V.S. DiCarlo Gen. Contractors, Inc., 994 F.2d 476, 477 (8th Cir.) (quoting
1
The orders were entered by the Honorable Charles A. Shaw, United States
District Judge for the Eastern District of Missouri, and by the Honorable Catherine D.
Perry, United States District Judge for the Eastern District of Missouri.
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United States ex rel. Goldman v. Meredith, 596 F.2d 1353, 1357 (8th Cir.), cert.
denied, 444 U.S. 838 (1979)), cert. denied, 510 U.S. 1019 (1993). To the extent
Muegler and Nangle claim that they were not given proper notice and that the elements
necessary to impose a creditor’s bill were not established, we disagree. All interested
parties received notice of the motion for a creditor&s bill in the subject property, and
they were given ample opportunity to respond to the allegations in the motion and to
present evidence on whether the creditor&s bill should be granted. There were valid
judgments against Muegler, and he had repeatedly failed to produce requested
information concerning the location and amount of his assets. The judgment creditors
had been unable to collect their judgments. There was substantial evidence to support
the finding that Muegler was entitled to receive fees for his representation, and that a
creditor’s bill should be granted on those funds to satisfy the outstanding judgment
against him. See id. at 478 (affirming grant of creditor’s bill).
Assuming that Muegler was eligible to claim the exemption afforded by 15
U.S.C. § 1673(a) and Mo. Rev. Stat. § 525.030(2), we conclude the District Court was
correct in denying it to Muegler. The District Court did not clearly err in finding that
the fees in question were earned over multi-year periods, not simply the two-week
periods preceding the hearings on Muegler’s exemption claims. Because Muegler did
not present evidence of his aggregate earnings for the entire applicable periods, the
District Court had no basis for concluding that any of the funds in question were
exempt from garnishment. See MDU Resources Group v. W.R. Grace & Co., 14 F.3d
1274, 1281 (8th Cir.) (“[W]hen evidence is in the control of one party and not
produced to the other, the factfinder may infer that the evidence would establish what
the other party proposes.”), cert. denied, 513 U.S. 824 (1994); see also 15 U.S.C. §
1673(a) (“aggregate disposable earnings”); Mo. Rev. Stat. § 525.030(2) (“aggregate
earnings”).
We also conclude the District Court did not err in disregarding an attorney
compensation agreement Muegler and Nangle purportedly entered into with respect to
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one of the lawsuits. The District Court did not clearly err in finding that the agreement
was an attempt to obscure the attorneys’ actual fee-splitting arrangement. See Sheng
v. Starkey Lab., Inc., 117 F.3d 1081, 1083 (8th Cir. 1997) (existence of valid contract
is finding of fact reviewed under clearly erroneous standard).
Accordingly, we affirm the judgment of the District Court.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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