Opinion
Civil Action No. 3:04-CV-2376-K.
January 13, 2005
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Pursuant to the District Court's Order of Reference, filed December 27, 2004, Defendant's Original Answer to Application for Writ of Garnishment, Claim for Exemptions, Motion for Appointment of Receiver, and Request for Hearing, filed December 17, 2004, was referred to this Court for hearing, if necessary, and report and recommendation. Also before the Court is the Plaintiff's Reply to Defendant's Original Answer to Application for Writ of Garnishment, Claim for Exemptions, Motion for Appointment of Receiver, and Request for Hearing, filed January 4, 2005. On January 13, 2005, this Court conducted a hearing on the motion for the appointment of a receiver. The Court recommends that Brosseau's motion for the appointment of a receiver be DENIED.
The Court also conducted a hearing on Brosseau's claim for exemptions. The parties have been ordered to submit additional briefing on that matter by January 18, 2005. The Court will then issue a separate recommendation on the claim for exemptions.
I.
On October 31, 1997, a judgment was entered against Defendant William Brosseau ("Brosseau") in criminal cause No. 3:96-CR-315-1 in the Northern District of Texas. In that judgment, Brosseau was ordered to pay restitution in the amount of $8,036,251 pursuant to the Mandatory Victim Restitution Act of 1996, 18 U.S.C. § 3663.Brosseau subsequently initiated a lawsuit, currently pending in the 191st Judicial District Court of Dallas County, against Garnishees Kelly Resources, Ltd., Len Tallo Management, and Pheasant #1 Prospect. By that suit, Brosseau seeks both a monetary recovery as well as the recovery of a working interest in oil and gas wells.
On November 4, 2004, the United States Attorney for the Northern District of Texas filed an application for a writ of garnishment, under the Federal Debt Collection Procedures Act ("FDCPA"), against the proceeds of any judgment or settlement reached in favor of Brosseau in the state court litigation. The District Court ordered that the writ of garnishment issue on November 30, 2004.
The Garnishees filed an answer on December 9, 2004, disputing Brosseau's claims against them in the state court action. The Garnishees did not deny that any recovery by Brosseau against them would be subject to the writ of garnishment.
Brosseau's answer, filed on December 17, 2004, asserted a claim for exemptions and requested a hearing. In conjunction with his answer, he also filed a motion for the appointment of a receiver in the state court litigation, asserting that the appointment of a receiver would protect the Government's interest in a settlement.
II.
Brosseau contends that the Court should appoint a receiver in the state court litigation to clearly establish his authority to settle the case. At the hearing, he claimed that the Garnishees discontinued settlement negotiations with him after receiving a letter from the Government asserting a right to all the proceeds of any settlement or judgment. Brosseau stated that in his bankruptcy action in Laredo, Texas, the bankruptcy trustee had acted as the receiver in a civil matter and helped to achieve a larger recovery, which ultimately benefitted the victims of the instant offense. However, Brosseau could cite no statutory authority or case law in support of his request that the Court appoint a receiver in the instant matter. He also stated that an order from the Court clearly establishing his authority to settle the case would eliminate the need to appoint a receiver.The Government contends that no receiver is needed because the Government's interests are adequately protected under the FDCPA. At the hearing, the Government's attorney stated that the Government does not dispute Brosseau's authority to settle the case independently, but merely has asserted a right to the proceeds of any settlement or judgment.
Given that the Government does not dispute Brosseau's authority to settle the state court litigation independent of the Government's involvement, and that its interests are adequately protected by the FDCPA, no receiver is necessary. Moreover, no authority would support the appointment of a receiver. Under the FDCPA, the Court may only appoint a receiver at the Government's request, not at the request of a judgment debtor. See 28 U.S.C. § 3103(a).
Accordingly, this Court recommends that Brosseau's motion to appoint a receiver be DENIED.
SO ORDERED.