OMS Collections, LTD v. Henry Tien , 634 F. App'x 750 ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-14237
Non-Argument Calendar
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D.C. Docket No. 1:13-cv-22978-ASG
OMS COLLECTIONS, LTD.,
a Cayman Islands Company,
Plaintiff-Appellee,
versus
HENRY TIEN,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 16, 2015)
Before MARTIN, JILL PRYOR and ANDERSON, Circuit Judges.
PER CURIAM:
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Henry Tien, proceeding pro se, appeals the district court’s final entry of
judgment against him and in favor of OMS Collections, Ltd. (“OMS”) in OMS’s
Florida common law action to renew judgment, brought under diversity
jurisdiction, 28 U.S.C. § 1332. OMS filed the present action with the goal of
renewing a partial final judgment, entered in a prior action, that imposed sanctions
against Mr. Tien in favor of American University of the Caribbean, N.V. (“AUC
N.V.”), American University of the Caribbean School of Medicine (“AUCSOM”),
and American University of the Caribbean (“AUC”) (collectively, the “AUC
entities”). On appeal, Mr. Tien advances the following arguments: (1) OMS does
not have a valid interest in the underlying judgment; (2) the district court’s
judgment suffered from procedural defects; (3) the district court, by using the
“show cause” procedure, denied him the opportunity to engage in discovery and to
litigate a variety of issues; and (4) the district court improperly denied him the
opportunity to file responsive pleadings. After careful review of the parties’ briefs
and the record, we affirm the district court’s judgment.
I.
The genesis of this case was an interpleader action Wachovia Bank filed in
2004 to resolve conflicting claims to $90 million held in five bank accounts.
Wachovia Bank N.A. v. Tien, 598 F. App’x 613, 614 (11th Cir. 2014). The parties
to the interpleader action included Mr. Tien and the AUC entities. Id. at 614-15.
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The district court in that case awarded approximately $3.4 million in sanctions to
the AUC entities against Mr. Tien after finding that he owned none of the funds at
issue and that he had engaged in bad faith conduct during the litigation. Id. at 615.
In affirming the imposition of sanctions against Mr. Tien, we observed:
[Mr. Tien] falsified corporate documents, took advantage of his
family's trust, and opened secret accounts in a fictitious name, as
part of a scheme to embezzle more than $61 million from
AUCSOM's and his father's accounts. He knew from the outset the
true ownership of the funds, but he asserted his frivolous claim of
joint ownership nevertheless, and he pursued it for four years. He
was uncooperative throughout discovery, an action in replevin was
required to remove hundreds of boxes of corporate documents
from his home, he produced the documents in a state of disarray
that necessitated extensive document review, and he improperly
retained possession of certain corporate assets that he transferred to
his own name and used to pay his own legal and personal
expenses. . . .
The district court's specific findings demonstrate that [Mr.
Tien] knowingly or recklessly raised and pursued frivolous claims,
and his conduct caused repeated delays and disruptions to the
litigation. Under the circumstances, the district court reasonably
concluded that [Mr. Tien] had acted in bad faith, and its imposition
of sanctions was not an abuse of its discretion.
Wachovia Bank v. Tien, 406 F. App’x 378, 383 (11th Cir. 2010) (citation omitted).
The AUC entities had a difficult time collecting their $3.4 million judgment
despite the fact that Mr. Tien apparently owned significant assets. These assets
consisted largely of ownership interests in a number of different companies
including AUC, Medical Education Information Office, Inc. (“MEIO”), and
American University of the Caribbean (Montserrat) (“AUC Montserrat”). Seeking
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to satisfy the judgment, the AUC entities filed a motion to compel Mr. Tien to
produce a share certificate for his ownership interest in AUC so that the AUC
entities could levy execution on the shares. The district court granted the motion.
The AUC entities obtained a writ of execution and seized the share
certificate. They then filed a motion to direct the United States Marshal to sell the
shares. Mr. Tien responded to the motion in a number of ways. He requested that
the court sell his 37.5% interest in MEIO instead of his shares in AUC. He
demanded that the court appoint a forensic accountant to appraise the values of
MEIO and AUC, at the AUC entities’ expense. He also attempted to designate
$100 worth of MEIO stock, $4,700 of AUC stock, and $200 of AUC Montserrat
stock as exempt personal property. Finally, he requested an evidentiary hearing
regarding the value of MEIO and AUC. The district court granted the AUC
entities’ motion to direct the United States Marshall to sell Mr. Tien’s shares of
AUC. The AUC entities ultimately purchased Mr. Tien’s shares of AUC for $1
million at the execution sale. They filed a partial satisfaction of judgment showing
that $1 million of their judgment against Mr. Tien had been satisfied.
After purchasing Mr. Tien’s shares, the AUC entities assigned their
remaining interests in the judgment to OMS for $10 “and other good and valuable
consideration.” OMS then filed the instant complaint to renew judgment against
Mr. Tien, seeking the balance of the judgment owed to the AUC entities totaling
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$2,461,855.65. Prior to assigning their interests in the judgment, the AUC entities
changed their names. AUC became American Associated Group, Ltd. (“AAG
Ltd.”), AUC N.V. became American Associated Group, N.V., and AUCSOM
became American Associated Group, Inc. (“AAG Inc.”) (collectively, the “AAG
entities”).
The district court sua sponte ordered Mr. Tien to show cause, within 30 days
of the date he was served with the complaint, why the court should not grant OMS
the relief it requested. The court then referred the show cause order to a magistrate
judge. Mr. Tien filed a motion requesting an extension of time to respond to the
show cause order because he was preparing an appellate brief for this Court on the
sanctions order in the prior case. In the motion, Mr. Tien also requested that the
district court suspend the deadline for him to respond to the complaint until the
show cause order had been decided. The magistrate judge summarily denied the
motion.
The district court ultimately issued an order granting OMS’s action to renew
judgment and entered final judgment. Mr. Tien filed a notice of appeal from the
order to show cause, the order denying his motion for extension of time to respond,
the order granting OMS’s request to renew judgment, and the entry of final
judgment against him.
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Mr. Tien advances a plethora of arguments on appeal. First, he argues that
OMS did not have a valid interest in the underlying judgment. Second, he
maintains that the forced sale of his ownership stake in AUC suffered from
procedural defects. These arguments mirror those he made in response to the AAG
entities’ motion to direct the U.S. Marshal to sell Mr. Tien’s interest in AUC.
Third, he contends the district court improperly entered judgment against him
using the show cause procedure. He asserts that, as a result, he was denied the
opportunity to raise a number of different issues concerning whether the
assignment from the AAG entities to OMS was valid and whether he had
previously satisfied the outstanding judgment by selling his AUC shares. Fourth,
he argues that the district court erred by denying his request for an extension of
time to file responsive pleadings until after the order to show cause had been
resolved. After describing the law generally applicable to actions to renew
judgment, we address each of these arguments in turn.
II.
A complaint to renew judgment (also called an action upon judgment) is a
Florida common law cause of action. Corzo Trucking Corp. v. West, 61 So. 3d
1285, 1288 (Fla. Dist. Ct. App. 2011). An action to renew judgment arises out of
a judgment received in a prior, separate action. Under Florida law, “[e]very
judgment gives rise to a common law cause of action to enforce it, called an action
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on a judgment. A judgment, whether domestic or foreign, constitutes a cause of
action upon which a new and independent action may be based.” Desert Palace,
Inc. v. Wiley, 145 So. 3d 946, 947 (Fla. Dist. Ct. App. 2014) (citations omitted).
“[T]he main purpose of an action on a judgment . . . was to obtain a new and
independent judgment which would facilitate the ultimate goal of securing
satisfaction of the original cause of action.” Corzo Trucking, 61 So. 3d at 1288(internal quotation marks omitted). Thus, “[i]f the statute of limitation period has
almost run on the judgment . . . the judgment creditor can start the limitation period
anew by bringing an action upon the judgment.” Adams v. Adams, 691 So. 2d 10,
11 (Fla. Dist. Ct. App. 1997) (quoting Koerber v. Middlesex College, 383 A.2d
1054, 1057 (Vt. 1978)).
Notably, a Florida action to renew judgment is not an opportunity to
relitigate the merits of the original cause of action. Corzo Trucking, 61 So. 3d at
1288. “In defending an action on a judgment, a defendant cannot avail himself of
defenses which he might have interposed in the original action.” Id. (internal
quotation marks omitted). This is consistent with the United States Supreme
Court’s interpretation of similar causes of action. See Milwaukee Cty. v. M.E.
White Co., 296 U.S. 268, 275 (1935) (“A cause of action on a judgment is different
from that upon which the judgment was entered. In a suit upon a money judgment
for a civil cause of action, the validity of the claim upon which it was founded is
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not open to inquiry, whatever its genesis.”). “However, a defendant may interpose
defenses which have arisen since the rendition of the judgment, such as payment,
release, accord and satisfaction, or the [s]tatute of [l]imitations.” Corzo Trucking,
61 So. 3d at 1288 (internal quotation marks omitted); see also Milwaukee Cty, 296
U.S. at 275 (“Recovery [on a cause of action on a judgment] can be resisted only
on the grounds that the court which rendered it was without jurisdiction, or that it
has ceased to be obligatory because of payment or other discharge, or that it is a
cause of action for which the state of the forum has not provided a court . . . .”)
(citations omitted).
We review the district court’s grant of a request to renew a judgment de
novo, viewing the record and drawing all factual inferences in the light most
favorable to the non-moving party. See D’Angelo v. ConAgra Foods, Inc., 422
F.3d 1220, 1225 (11th Cir. 2005) (applying standard of review for summary
judgment). 1
III.
A.
Mr. Tien’s contention that OMS has no valid interest in the underlying
judgment raises standing concerns, so we address it first. Standing is a threshold
1
Our precedent sets forth no clear standard for review of a district court’s grant of an
action to renew judgment where the court applied the procedural mechanism of a show cause
order. The parties state, without citation to case law, that the de novo standard applies. Because
the court’s order appears analogous to a grant of summary judgment, however, we apply the de
novo standard applicable to summary judgment.
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jurisdictional question we must address before considering the merits of a dispute.
Elend v. Basham, 471 F.3d 1199, 1204 (11th Cir. 2006).
We review de novo whether standing exists. 2 Bischoff v. Osceola Cty., Fla.,
222 F.3d 874, 885 (11th Cir. 2000). Although Mr. Tien raised the issue of
standing before the district court, he does not explicitly do so on appeal.
Nevertheless, federal courts have an independent obligation to examine standing
sua sponte, and the question of standing is not subject to waiver. Id. at 877-78.
Standing requires the plaintiff to establish three elements: (1) injury-in-fact;
(2) causation; and (3) redressability, that is, it must be likely, as opposed to mere
speculation, that the injury will be redressed by a favorable decision. Id. at 1206.
“The plaintiff bears the burden of establishing each of these elements.” Id. The
Supreme Court has explained the evidence necessary to prove standing at the
various stages of litigation as follows:
At the pleading stage, general factual allegations of injury resulting
from the defendant’s conduct may suffice, for on a motion to
dismiss we presum[e] that general allegations embrace those
specific facts that are necessary to support the claim. In response
to a summary judgment motion, however, the plaintiff can no
longer rest on such mere allegations, but must set forth by affidavit
or other evidence specific facts, which for purposes of the
2
The district court’s order granting OMS’s request to renew judgment does not expressly
discuss standing. The absence of any explicit findings by the district court on standing does not
preclude our review of the issue, however. See Church of Scientology of Cal. v. Cazares, 638
F.2d 1272, 1281 (5th Cir. Mar. 1981). We can uphold the district court’s judgment in the
absence of any “specific findings” on standing as long as “it is apparent on appeal that no
genuine issue of fact exists under the proper legal analysis.” Id.9
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summary judgment motion will be taken to be true. And at the
final stage, those facts (if controverted) must be supported
adequately by the evidence adduced at trial.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (citations and internal
quotation marks omitted).
Mr. Tien advances two arguments for why OMS lacks a valid interest in the
underlying judgment (and thus has not suffered an injury-in-fact). He first argues
that no evidence in the record supports that the AAG entities are in fact the former
AUC entities. Thus, he contends (liberally construed) that OMS failed to
demonstrate a validly assigned interest in the underlying judgment. In fact,
though, evidence in the record shows that the AUC entities simply changed their
names to those of the AAG entities. The deeds of assignment transferring the
AAG entities’ interests in the judgment plainly state that each AAG entity was
formerly known as a particular AUC entity. Mr. Tien presented no evidence to the
contrary. We therefore reject this argument.
Mr. Tien’s second argument is that AUCSCOM (now AAG Inc.) was not a
party to the interpleader case and therefore was not entitled to collect, renew, or
assign its interest in the judgment. This argument, too, flies in the face of the
record. In its amended entry of partial final judgment in the underlying action, the
district court entered judgment against Mr. Tien and in favor of three companies,
one of which was AUSCOM, in the amount of $3.4 million. Mr. Tien provides no
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evidence or even explanation to support his assertion that AAG Inc. was not a
party to the interpleader action. We thus reject this argument as well.
B.
Mr. Tien argues that the forced sale of his ownership interest in AUC
suffered from several procedural defects. He maintains that (1) he should have
been allowed to exempt certain property from forced sale, (2) the district court
should have ordered an appraisal of the value of his shares of AUC, and (3) the
court should have conducted an evidentiary hearing to address the propriety of the
exemptions and the value of AUC and MEIO.
As an initial matter, Mr. Tien did not raise these procedural objections to the
forced sale of his AUC shares before the district court. Therefore, the objections
are waived, and we do not consider them. Access Now, Inc. v. Sw. Airlines Co.,
385 F.3d 1324, 1331 (11th Cir. 2004). Moreover, Mr. Tien cannot raise these
arguments in defense of an action to renew judgment. He should have—and
indeed, did—raise them in defense of the underlying action. As discussed above,
a complaint to renew judgment does not give him a second bite at the apple.
Because these arguments should have been “interposed in the original action,” they
are unsuitable for consideration in an action to renew judgment. Corzo Trucking,
61 So. 3d at 1288.
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C.
Mr. Tien next argues that the district court erred in using the show cause
procedure to enter judgment against him and that the truncated process prevented
him from litigating a number of issues. But, a district court can enter judgment sua
sponte as long as the parties are given adequate notice that they must present all
their evidence. Imaging Bus. Machins, LLC. v. BancTec, Inc., 459 F.3d 1186,
1191 (11th Cir. 2006) (discussing summary judgment); Massey v. Cong. Life Ins.
Co., 116 F.3d 1414, 1417 (11th Cir. 1997) (“District courts unquestionably possess
the power to trigger summary judgment on their own initiative.”). Mr. Tien
provides little to no explanation how or why the district court erred in using the
show cause procedure.
To the extent that Mr. Tien is arguing he received inadequate notice, his
argument falls short. The order adequately informed him that he needed to present
all of his evidence by instructing Mr. Tien broadly to show cause “why the relief
requested in the Complaint should not be granted.” Additionally, the district court
gave Mr. Tien sufficient time to respond to the order and to present his evidence.
The court gave him 30 days from service of the complaint to respond to the show
cause order. Then, after having been referred the case, the magistrate judge
extended the deadline for Mr. Tien to respond to the show cause order until
December 2, 2013, almost three months after the district court issued the order.
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Although Mr. Tien may have wished for more time in which to prepare a response
to the court’s order, he failed to identify anything that he needed extra time to
provide. We see no indication that he lacked notice of what was required of him or
received insufficient time provide it.
But even accepting Mr. Tien’s assertions that the somewhat abbreviated
nature of the show cause procedure deprived him of the opportunity to raise certain
defenses to OMS’s complaint, we find no reversible error in the district court’s
judgment because these defenses likely would not have changed the outcome. See
Artistic Entm't, Inc. v. City of Warner Robins, 331 F.3d 1196, 1202 (11th Cir.
2003). In his brief, Mr. Tien identifies a number of defenses he would have
litigated more thoroughly if given the opportunity. First, he would have
challenged the validity of the assignment of the underlying judgment from the
AAG entities to OMS on the basis that (a) there was insufficient consideration for
the assignment; (b) most of the deeds were not signed by both the assignee and
assignor; and (c) Ernest Dover, director of AAG Ltd., was not authorized to sign
the deed of assignment on AAG Ltd.’s behalf. Second, he would have
demonstrated that the entire judgment had already been satisfied by the sale of his
shares of AUC. None of these arguments has merit.
We can easily dispose of Mr. Tien’s first argument. He is not entitled to
argue invalidity of the assignment of interest from the AAG entities to OMS
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because he was not a party to the assignment. See Harvey v. Deutsche Bank Nat’l.
Trust Co., 69 So. 3d 300, 304 (Fla. Dist. Ct. App. 2011); McCampbell v. Aloma
Nat’l. Bank of Winter Park, 185 So. 2d 756, 758 (Fla. Dist. Ct. App. 1966). His
second argument fares no better. He cannot demonstrate that he has satisfied the
underlying judgment. His shares in AUC were sold at public auction for $1
million, leaving an unpaid balance of $2,405,651. To the extent Mr. Tien is
arguing that the procedure by which his shares were valued and sold was
improper, he was required to raise those concerns in the underlying action; his
argument thus presents no valid defense to an action on judgment for the reasons
described in the previous section. See Corzo Trucking, 61 So. 3d at 1288.
D.
Finally, Mr. Tien argues that the district court erred by denying his request
for an extension of time to file responsive pleadings until after the order to show
cause had been decided. He maintains that he had insufficient time to research and
prepare his pleadings because he had to respond to the order to show cause while
simultaneously preparing briefs for this Court.
We review a district court’s denial of a motion for an extension of time for
an abuse of discretion. Young v. City of Palm Bay, 358 F.3d 859, 863 (11th Cir.
2004). Under that standard, “[t]he district court has a range of options,” and we
will affirm unless we find that the district court committed “a clear error in
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judgment.” Id. Mr. Tien identifies no clear error of judgment in the district court’s
denial of his request. Moreover, Mr. Tien has not shown what additional defenses
he would have raised in responsive pleadings if the district court had granted his
motion for an extension of time. An action on a judgment is a relatively simple
cause of action, with few available defenses. See Corzo Trucking, 61 So. 3d at
1288; Milwaukee Cty, 296 U.S. at 275. Consequently, the district court did not
abuse its discretion by refusing to grant Mr. Tien more time.
AFFIRMED.
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