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Perez v. Bruister

United States District Court, S.D. Mississippi, Northern Division

January 4, 2017

THOMAS E. PEREZ, Secretary of the United States Department of Labor PLAINTIFF
v.
HERBERT C. BRUISTER, et al. DEFENDANTS JOEL D. RADER and VINCENT SEALY PLAINTIFFS
v.
HERBERT C. BRUISTER, et al. DEFENDANTS

          ORDER

          DANIEL P. JORDAN III UNITED STATES DISTRICT JUDGE

         This ERISA case is again before the Court, post-judgment, on several motions: Plaintiff Vincent Sealy's Motion to Enforce Stay Order and for Other Relief [854]; Defendants' Motion for Further Relief from the Temporary Restraining Order, as Modified by the Preliminary Injunction [864]; and Sealy's Motion to Release Funds [875]. For the reasons that follow, the motion to enforce is granted, and the motion to release funds and the motion for further relief are denied without prejudice.

         I. Background

         As before, see Order [848], this Order is written primarily for the benefit of the parties and the record and assumes familiarity with the general facts of the underlying case and more specific facts related to the present motions. In general terms, following the October 16, 2014 entry of a multi-million dollar judgment in favor of Plaintiffs Vincent Sealy and the Secretary of the Department of Labor, on January 14, 2015, Plaintiffs filed a joint ex parte motion for a temporary restraining order, which the Court granted on January 16, 2015. The TRO froze “[a]ll assets and property of any kind owned or controlled by Defendant[s] Herbert Bruister (“Bruister”) [and Bruister Family LLC], except to the extent necessary to preserve the viaticals.” Order [668] at 5. The Order further stated that “[n]othing herein should be construed as limiting any Defendant from providing for his or her or his or her family's normal activities of daily living.” Id. at 7.

         The TRO was converted to a preliminary injunction by agreed order on January 23, 2015. That order extended the provisions of the TRO through April 30, 2015. Order [682] at 1. Following an evidentiary hearing held on July 14, 2015, the TRO was extended indefinitely “until further order from the Court.” July 15, 2015 Text Order.

         Also following the July 14, 2015 evidentiary hearing, pursuant to an Agreed Order entered under seal on July 15, 2015, the parties agreed that a portfolio of life-insurance policies in which Bruister and/or BFLLC had an interest-the so-called viaticals-would be sold and that “[t]he first $900, 000” in proceeds from the sale-plus some additional money, including $153, 000 for viaticals that matured prior to the entry of the order and proceeds that would be obtained after the payment of certain fees to Premium Funding-“shall be paid into the registry of the Court” with certain exceptions. Order [758] at 7, 9. The Order provided that “Plaintiffs and Bruister, BFLLC, BAI, and Linda Bruister reserve all rights with respect to the application of the proceeds paid into the registry of the Court pursuant to this Order.” Id. at 14.

         In the meantime, a number of additional motions related to Plaintiffs' collection efforts and Defendants' assets followed. Relevant here, on March 20, 2015, Defendants filed a motion to stay enforcement of the judgment pending appeal and to lift the freeze on other assets. In that motion, they identified specific assets they would agree to offer as substitute security. The Court granted the motion “to the extent execution is stayed but denied [it] to the extent it [sought] an order lifting the freeze.” Order [848] at 12. The Court gave Bruister 14 days (from February 5, 2016) to provide the assets as security, after which “an order will be entered staying the proceedings under Rule 62(d).” Id. at 7. The Court further noted, consistent with Defendants' motion, that “if Plaintiffs ultimately prevail [on appeal], the security that has been offered would immediately fall into their hands.” Id.

         On May 3, 2016, the Fifth Circuit affirmed (as modified) the Court's judgment. Since then, it appears that no amount of the judgment has been satisfied, and the parties have filed the present motions. All matters raised have been fully briefed, and the Court is prepared to rule.

         II. Sealy's Motion to Enforce

         In his May 12, 2016 motion to enforce, Sealy complains that Bruister did not comply with the Court's Order [848] requiring him to provide security within 14 days. As such, he asks that the Court order Bruister to do a number of specific things to rectify his non-compliance. By the time Sealy replied, some of the original requests were moot, so the outstanding requests are that the Court order Bruister to: (1) transfer title to three vehicles to BAESOP LLC;[1] (2) provide information, including medical records, pertinent to conducting a valuation of Bruister's life-insurance policy or policies; and (3) “[s]atisfy the Judgments and the Fee Award no later than May 20, 2016.” Mot. [854] at 4. The Court will address each request in turn after first addressing Bruister's argument that the Order is unenforceable.

         A. Enforceability of the Order

         Bruister argues that the stay order was conditioned upon Bruister timely posting the required security, and that, as a result of his failure to do so, a stay was never in place and he cannot now be held responsible for his failure to comply with the Court's order. Defs.' Resp. [860] at 9. He says that, when he failed to post the collateral security, Plaintiffs' remedy “was to continue their post-judgment collection activities under Federal Rule 69.” Id. at 10.

         Sealy responds that the Court effectively granted the relief Bruister sought-a stay-and conditioned that stay on Bruister offering the enumerated security. Sealy points to the mandatory nature of the language used in the Court's order, that Bruister “will be required to offer substitute security.” Order [848] at 5. Indeed, the concluding paragraph of the Order expressly granted the stay Bruister sought. Sealy argues that “[i]t would be manifestly unjust to allow Mr. Bruister to benefit from this dilatory conduct by getting the benefit of the stay he sought and received without providing the security he offered.” Pl.'s Reply [865] at 5.

         Neither party cites any law on this point, but the Court agrees with Sealy that to permit Bruister to benefit from his failure to comply with the Court's Order, which was entered at Defendants' behest to stay collection efforts pending appeal, would be patently unfair. The Court possesses “inherent power to enforce compliance with [its] lawful orders.” Shillitani v. United States, 384 U.S. 364, 371 (1966). Defendants received the benefit of the relief they sought ...


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