Opinion
No. C8-00-1076.
Filed March 13, 2001.
Appeal from the District Court, Ramsey County, File No. C8003678.
Daniel W. Fram, Jeffrey J. Cohen, (for respondent)
Karl A. Oliver, (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
This case involves a creditor's remedies dispute in which a company, which shares a common address and owner and a similar name with appellant, is the assignee of a judgment against a person who allegedly uses respondent as his alter ego. After the assignee levied on properties of respondent without judicial involvement, respondent filed a complaint and a motion for replevin in district court. The complaint named appellant rather than the assignee. The district court granted respondent replevin. On appeal, respondent contends the district court order is not appealable and requests attorney fees. Appellant contends the district court erred by not dismissing the complaint for failure to name the correct party and by misinterpreting the law regarding fraudulent transfers and creditor's remedies. We affirm the district court on all issues.
FACTS
On January 9, 1996, Leroy Daniels shot Fred Arnett. Arnett sued Daniels and obtained a judgment, which currently exceeds one million dollars. Arnett had difficulty collecting on the judgment and assigned his interest in the judgment to C L Asset Group, Ltd. Fiduciary Trust Company (Trust Company) in 1999. Trust Company conducted an investigation, and discovered that respondent Jazzville, Inc., which does business in a building adjacent to a business owned by Daniels, lists Daniel's mother as the sole shareholder in its incorporation papers. Without judicial involvement, Trust Company decided for itself that respondent was Daniels's "alter ego." Trust Company then caused the sheriff of Ramsey County to levy on the business property of respondent, American Amusement, Inc., and 500 North Robert Street Limited Partnership. The latter two businesses provided cigarette and game machines and a security camera, respectively, to respondent.
Respondent first filed a summons and complaint requesting return of the property and damages for lost profits. It served the complaint on Carl Green and named appellant C L Asset Group, Ltd. rather than Trust Company. They are two separate entities, but both are owned by Carl Green and use the same business address.
Next, respondent made a motion pursuant to Minn. Stat. § 565.21 (2000) for replevin. The district court granted the motion. It ordered appellant to return all the property and required respondent to post a bond. Appellant filed a notice of appeal on June 22, 2000. On July 5, 2000, respondent filed a motion to amend the case title to correct the misnomer. The district court struck the motion because the appeal from the grant of replevin had been perfected.
DECISION I. Appealability of the District Court Order
Respondent contends the district court's order is not appealable pursuant to Minn.R.Civ.App.P. 103.03(c), which allows an appeal "from an order vacating or sustaining an attachment." But, Minn.R.Civ.App.P. 103.03(b) allows an appeal "from an order which grants, refuses, dissolves or refuses to dissolve, an injunction." The district court's order granting replevin ordered a change of possession of the property and characterized the pending matter as a "motion for a temporary injunction." See Edina Educ. Ass'n v. Board of Educ., 562 N.W.2d 306, 311 (Minn.App. 1997) (concluding order phrased as injunction was appealable, rather than nonappealable pretrial evidentiary ruling), review denied (Minn. June 11, 1997). Based on these facts, we conclude the order is appealable.
II. Identity of the Parties
Appellant contends the district court erred by denying its motion to dismiss the case for ineffective service caused by respondent's failure to name the correct party in the complaint. We disagree. The construction of court rules and the determination of whether service of process is proper are questions of law subject to de novo review. Stoebe v. Merastar Ins. Co., 554 N.W.2d 733, 735 (Minn. 1996) (examining rule of civil procedure under de novo standard); McBride v. Bitner, 310 N.W.2d 558, 561-63 (Minn. 1981) (examining whether service of process was proper under de novo standard).
In this case, Trust Company had actual notice of the lawsuit, and would not be prejudiced by an amended summons and complaint. As the supreme court has said:
A mistake in the name of a party which is amendable in the lower court will be disregarded by this court as not affecting the substantial rights of the parties where it appears that no one was misled or prejudiced by the defect.
Gustafson v. Johnson, 235 Minn. 358, 362, 51 N.W.2d 108, 111 (Minn. 1952) (citations omitted). The complaint was personally served on Carl Green, who owns and operates both Trust Company and appellant from the same address. The persons and arguments involved in this case would not change if Trust Company is named rather than appellant. Respondent can simply amend the complaint, as it attempted to do after the notice of appeal was filed, to add Fiduciary Trust Company to the name on the complaint. Neither Trust Company nor appellant would experience prejudice, a fact that appellant conceded at oral argument. Therefore, we conclude the district court properly denied appellant's motion to dismiss.
III. Propriety of the Levies
Appellant contends that the district court erred in ruling that the levies were improper. Appellant believes that common law and caselaw give creditors the right to levy on properties believed to be the subject of fraudulent transfers prior to judicial involvement. We disagree. The law is clear. A fraudulent transfer may thwart a creditor's ability to collect on a judgment, but a creditor may not levy on property without judicial involvement.
If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.
Minn. Stat. § 513.47(b) (2000) (emphasis added).
This statute has been in effect for over a decade. The cases appellant cites in support of his argument were decided prior to enactment of this statute in 1987. The underlying facts of this case, involving a victim who is paralyzed after a shooting and unable to collect on a judgment, illustrate why creditors need to be able to expose fraudulent transfers by debtors. But, the legislature has defined the process that creditors must follow to obtain relief, and that process was not followed in this case. Because there was no judicial determination of an "alter ego" or fraudulent transfer, the district court correctly ruled the levies were improper.
IV. Attorney Fees
Respondent requests attorney fees on appeal. It has not followed the procedural requirements of Minn.R.Civ.App.P. 139.06. Thus, its request for fees on appeal is not properly before us.