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Vision Marketing Resources, Inc. v. McMillin Groups, LLC

United States District Court, D. Kansas

July 14, 2015

McMILLIN GROUPS, LLC, et al., Defendants,
WELLS FARGO BANK, et al., Garnishees.


KATHRYN H. VRATIL, District Judge.

Vision Marketing Resources, Inc. brought suit against McMillin Groups, LLC and James L. McMillin, alleging breach of contract and fraudulent misrepresentation. Defendants defaulted, and plaintiff commenced garnishment proceedings to collect the resulting judgment. Plaintiff now seeks the entire judgment from Wells Fargo Bank, the garnishee, because it failed to timely answer one of two garnishment orders. See Motion For Judgment Against Garnishee (Doc. #36) filed December 2, 2014. This matter comes before the Court on the Report And Recommendation (Doc. #48) which Magistrate Judge Teresa J. James filed March 4, 2015, and Plaintiff's Objections To Magistrate's Report And Recommendations (Doc. #54) filed March 16, 2015. For the reasons set forth below, the Court overrules plaintiff's objections and denies plaintiff's motion for judgment for substantially the reasons stated in the Report And Recommendation (Doc. #48).

I. Factual And Procedural Background

On July 21, 2010, plaintiff filed a motion for default judgment against defendants. See Plaintiff's Motion For Default Judgment With Memorandum In Support (Doc. #9). The Court sustained the motion in part and on August 31, 2010, directed the clerk to enter default against defendants under Fed.R.Civ.P. 55(a). See Memorandum And Order (Doc. #10) at 3. On January 31, 2011, the Court sustained plaintiff's motion for default judgment, and directed the clerk to enter judgment against defendants in the sum of $101, 500.00 in compensatory damages and $101, 500.00 in punitive damages, plus interest and costs. See Order (Doc. #15); Judgment In A Civil Case (Doc. #16).

A. Service Of Writs, Responses And Motion For Default

On November 11, 2014, plaintiff filed applications for writs of garnishment to Wells Fargo on the accounts of "McMillan Group, LLC (a/k/a/Bluewater Trading, Inc.)" (hereinafter "Bluewater") and "McMillan Group, LLC (a/k/a Buffalo Nickel Trading, LLC)" (hereinafter "Buffalo Nickel"). See Plaintiff's Application For Writ Of Garnishment (Doc. #27), at 1; Plaintiff's Application For Writ Of Garnishment (Doc. #28), at 1. On November 12, 2014, the Clerk issued the writs and orders and filed service packets, which consisted of the papers which plaintiff had provided pursuant to D. Kan. Rule 4.1.[1] See Writ Of Garnishment (Doc. #29); Writ Of Garnishment (Doc. #30).

Plaintiff took responsibility for service and filed identical returns of service for both writs on November 17, 2014. Both returns of service indicated service as follows:

4) Return Receipt Delivery. By mailing on the 15th day of November, 2014, a copy of the garnishment order along with two copies of the answer form to the following persons at the following address:
Illegible on returned green card

Return Of Service (Doc. #32); Return Of Service (Doc. #33). The returns indicated the date of mailing. The date of delivery is the operative date of service, however, and the returns are ambiguous in that regard: the "date" line could indicate the date of delivery, the date of the return, or some other date altogether.[2] Plaintiff did not attach green cards or any other evidence of the date of delivery as required by K.S.A. § 60-303(c)(4).

On December 1, 2014, the Clerk filed the Wells Fargo response to the Buffalo Nickel writ. The response was in the form of a letter dated November 18, 2014 which referenced the case number and stated that it held $285.00. The letter included a copy of the Buffalo Nickel Trading writ, but it did not include any paperwork related to the Bluewater writ.

The next day, December 2, 2014, plaintiff filed a two-page Motion For Judgment Against Garnishee (Doc. #36), seeking to collect the entire judgment (approximately $203, 000 plus interest) because Wells Fargo failed to timely answer the Bluewater writ. Plaintiff represented that it had served Wells Fargo the writ of garnishment "on November 17, 2014 by certified mail." Motion For Judgment Against Garnishee (Doc. #36), at 1 ¶ 2 (first paragraph 2). In support of this statement, plaintiff cited its return of service, which as noted above, stated that plaintiff mailed the writ on November 15, 2014, but did not expressly indicate the date of delivery. Id . Plaintiff did not include any other evidence of the date of delivery. Wells Fargo, which was and remains unrepresented by counsel, did not respond to plaintiff's motion for judgment. On December 11, 2014, however, the Clerk of Court filed a letter from Wells Fargo dated December 10, 2014. The letter enclosed the Bluewater writ, the order of garnishment and instructions to garnishee, and stated that Wells Fargo held $1, 365.97.

On January 7, 2015, Wells Fargo filed an Amended Answer Of Garnishee (Doc. #42), which amended the responses to both writs.

B. Report And Recommendations

On January 12, 2015, the Court referred plaintiff's motion for judgment to Judge James for a report and recommendation. On March 4, 2015, she recommended that the Court overrule plaintiff's motion for the following reasons.[3]

Based upon its review of the docket, the Court finds that the Bank did mail letters to the Clerk of the Court attempting to answer the Orders of Garnishment. The first letter, dated November 18, 201[4], was stamped received and filed by the Clerk on December 1, 2014. Thus, the Court finds that letter was timely, as it was submitted within 14 days after the order of garnishment was served on November 17, 2014. While this letter does not comply with K.S.A. 60-736(a) because it is not "substantially in compliance with" the Kansas Judicial Counsel's form Answer of Garnishee and fails to include the statement required from financial institutions by K.S.A. 60-733, the Bank later filed an Amended Answer (ECF No. 42) on January 7, 2015 that does comply with the statutes.

Report And Recommendation (Doc. #48) at 7-8. Judge James further found that "it would be unreasonable and unjust to award the requested judgment of over $200, 000 against the Bank under the circumstances in this case." Id. at 8. She noted that the record contained no evidence that Wells Fargo had intentionally disregarded its duty to timely answer the writs. Id. at 8. Judge James further found that "in light of the minor differences between the two Writs... (addresses and Bluewater versus Buffalo Nickel a/k/a), it is understandable that ...

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