USCA1 Opinion

United States Court of Appeals

For the First Circuit
____________________

No. 95-1270
AETNA CASUALTY & SURETY CO.

Plaintiff, Appellee,
v.

JACK MARKARIAN,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, U.S. District Judge]

___________________
____________________

Before

Stahl and Lynch, Circuit Judges,

______________
and O'Toole, District Judge.*
______________
____________________

Kenneth R. Berman, with whom Rhonda B. Parker and Sherin & Lod
__________________
________________
____________
LLP were on brief, for appellant.
___

David S. Douglas, with

_________________

whom Howard S. Veisz,

________________

Kornstein, Veisz & Wexler LLP,

______________________________

and Glenda Ganem

____________

Welch & Ganem LLP were on brief, for appellee.

_________________

____________________

June 4, 1997

Gregg Kanter
____________

and McGovern, H
____________

____________________

____________________

*Of the District of Massachusetts, sitting by designation.

LYNCH, Circuit Judge.

Jack Markarian, against whom

LYNCH, Circuit Judge.

_____________

appellee

Aetna

judgment,

against

Casualty

appeals from

him.

equitable

The

bail,

Massachusetts in

and

the

Surety Company

entry of

writ, which

was issued

ex

February 1995.

is

writ of

essentially a

parte

It

has

in the

civil

ne exeat
_________

form

of

District

of

prohibits Markarian, an

American citizen who is employed and lives with his family in

Massachusetts, from leaving the state or removing

assets from

the state without

any of his

the court's permission.

The

writ required Markarian to surrender his passport to a United

States Marshal, and

violation of its terms is

punishable by

detention in a federal facility.

Markarian

raises

federal

statutory

and

constitutional objections

vacate the writ

although

they

are not

not available as a

action like this.

judgment

neglect or

frivolous.

It

tool in an

issues,

ne exeat,
________

P. 4.3(c),

in furtherance of

the performance of

refusal to perform

U.S.C.

writ of

which would be

1651, does

requirement for issuance of the writ.

not

"a

an act, the

punishable by

Mass. R. Civ. P. 4.3(c).

I.

We

ordinary civil collection

may only issue

or order requiring

Act, 28

The

P. 69 and Mass. R. Civ.

the court as a contempt."

Writs

of the writ.

without reaching the constitutional

governed by Fed. R. Civ.

is

to the issuance

negate this

The All

state

The facts of the underlying civil action brought by

Aetna

against

present appeal.

of

a fraudulent

Markarian along

Markarian are

Suffice it to

of

little

claim scheme,

relatives and the

controlled were the perpetrators of the scheme.

brought

suit in

federal

the

say that Aetna was the victim

autobody insurance

with some

importance to

district

court in

and that

companies they

A e t n a

Massachusetts,

asserting claims under civil RICO,

and the

jury

Massachusetts common law,

Massachusetts deceptive trade practices

found in

complaint, and

Aetna's favor

in November

on most of

the defendants

were also

found individually

the judgment in December

1994.

in the

jointly

Markarian and some

over $1.5 million under Mass. Gen. Laws Ch. 93A.

affirmed

court entered

his 22 co-defendants

and severally liable for over $6 million.

of

the claims

1993 the district

judgment holding Markarian and

statute.

liable for

This court

Aetna Cas. & Sur.

__________________

Co. v. P & B Autobody, 43 F.3d 1546 (1st Cir. 1994).

___
______________

Judgment

seize

assets.

proceeding

in

It

in federal

hand, Aetna

commenced

court under

sought

to identify

supplementary

Fed. R.

Civ. P.

and

process

69 and

Mass. Gen. Laws Ch.

224,

14 seeking an

order transferring

ownership of Markarian's non-exempt assets.

an

ex parte

supported it

application

with an

for

the

writ

Aetna also filed

of

affidavit stating that

-33

ne exeat
_________

and

Markarian and

his co-defendants were secreting assets to render them immune

to supplementary process.

The district court

February 1995, finding

had been moving

issued the writ of

that Markarian and

ne exeat in
________

his co-defendants

assets out of the jurisdiction as part of an

effort to prevent enforcement of the judgment and

was

a strong likelihood that

The

district court also

likelihood

that

the

that there

they would continue

found that

there was

co-defendants

would

to do so.

an immediate

depart

the

jurisdiction or the United States.

In March 1995, Markarian appealed from the writ and

filed

a suggestion

of

bankruptcy.

The bankruptcy

filing

resulted in

an automatic

proceedings,

see 11
___

stay of the

U.S.C.

supplementary process

362(a), and

later in

March,

Markarian moved this court to stay the appeal from the writ.1

This court issued an order holding the appeal in abeyance and

directing counsel to report back after the

bankruptcy court.

Markarian then

before the bankruptcy court,

decision from the

moved to vacate

the writ

which denied the motion without

prejudice in November 1995 and referred Markarian back to the

district

court.

See
___

In re Jack Markarian, No.

______________________

95-40961

(Bankr. D. Mass. Nov. 20, 1995).

____________________

1.

The writ does not appear to fall within

Automatic

Stay

provision of

the

the terms of the

Bankruptcy

Code, see
___

11

U.S.C.

362, and thus the writ and the appeal from the writ

were not stayed automatically by the bankruptcy filing.

-44

The district court in March 1996 denied Markarian's

motion

to

vacate

jurisdiction

over

the

the

writ,

matter.

clarification of this ruling.

in

July 1996,

stating

the bankruptcy

that

Markarian

it

lacked

moved

for

While that motion was pending,

court ruled

that Markarian's

debts to Aetna were not dischargeable because they

of fraud.

See In re Jack Markarian, No. 95-40961 (Bankr.

___ ____________________

Mass. Jul. 31, 1996).

the

issue

close

However, the bankruptcy court

enough

dischargeability and

Bankruptcy

October

arose out

to

certify the

Appellate Panel,

1996, the

stay

district

the

order

case to the

where it

court,

is

deemed

of

non-

First Circuit

now pending.

ruling

D.

on

In

Markarian's

motion for clarification of the refusal to vacate the writ of

ne exeat, denied
________

or findings.

the motion "on the

merits" without opinion

This appeal followed.

II.

Aetna

jurisdiction,

argues

saying

that

the

writ

there

is

is

no

no

more

appellate

than

an

interlocutory

order to

supplementary

process

completed.2

preserve assets

proceedings

We disagree.

the

order

issuing

against

At issue is

process order but a writ of

and

until

ne exeat:
________

the

writ

its separate

Markarian

are

not a supplementary

Aetna's motion papers

make

no

reference

to

____________________

2.

The supplementary process proceedings cannot resume until

the conclusion of the

bankruptcy proceedings unless the stay

is lifted.

-55

supplementary process, and the

expire with

the

proceedings.

which

this

1292(a).

Cir. 1971).

of the

termination of

The

writ

court has

See
___

writ, by its terms,

the

supplementary

is effectively

jurisdiction

does not

process

an injunction

pursuant

to 28

over

U.S.C.

United States v. Shaheen, 445 F.2d 6, 7 (7th

_____________
_______

We also note Markarian's argument

writ was an error of law,

be an appealable collateral order.

that issuance

and thus the writ may well

See id. at 7 n.2.

___ ___

III.

Where a money judgment

has been entered in federal

court, enforcement

of the

judgment is governed

by Fed.

R.

Civ. P. 69, which provides that the procedures to be used are

those of the state

in which the district court

there is an applicable federal statute.

sits, unless

Aetna availed itself

of state process, seeking a writ of ne exeat.

________

Massachusetts

procedure

permits

issuance of

the

writ only in support of an order punishable by the court as a

contempt.

not

See Mass. R. Civ.

___

such an order.3

issued

process,

in aid

or for

of

"[T]he writ

legal, as

the purpose

____________________

P. 4.3(c).

A money judgment is

of ne exeat has never been

________

distinguished from

of obtaining

equitable,

security from

3.

The Massachusetts supplementary process statute, however,

provides that violation of

be punishable as a contempt.

a supplementary process order may

See Mass. Gen. Laws
___

Ch. 224,

16.

We do not reach the question of whether the writ may be

used

after a supplementary process order has been issued and

there has been a violation.

That is not the case here.

-66

defendant in

1102,

at action of

law."

Moore v.
_____

1103 (Mass. 1890) (per curiam).

Valda, 23
_____

N.E.

"[W]hen a party fails

to

satisfy a

remedy

court-imposed

is a writ of

money judgment

execution, not a

the appropriate

finding of contempt."

Combs v. Ryan's Coal Co., 785 F.2d 970, 980 (11th Cir. 1996);
_____
_______________

see also
________

Shuffler v. Heritage Bank, 720 F.2d

________
______________

(9th Cir. 1983).

was error.

Cir.

See
___

1978)

It follows that

the issuance of the

Gabovitch v. Lundy, 584

_________
_____

(failure

to

comply

1141, 1147-48

F.2d 559, 560

with

state

writ

(1st

procedure

invalidated writ of execution).

These

are not

exeat is an ancient writ.

_____

debtors

mere formalisms.

The writ

It hearkens back to the days when

were imprisoned for failure to pay their debts.

writ is itself a form

of ne
__

of civil arrest.

Caselaw on

The

the writ

has narrowed

its use to situations

debt rather than

Exeat
_____

4,

at

resulting from equitable

debts recoverable at law.

396

(1966).

The

See 65 C.J.S. Ne
___
__

Massachusetts

rule

is

similarly circumscribed.

Indeed, the Reporter's

Notes to the

Massachusetts

rule providing for the writ of ne exeat express concern about

________

the constitutionality

is.

The

Massachusetts

operates in

the writ

of the writ, even

circumscribed as it

courts, recognizing

restraint of personal liberties,

"is to

be

granted with

-7-

caution"

that the

writ

have held that

and "is

to

be

continued

in force with caution."

Cohen v. Cohen, 64 N.E.2d

_____
_____

689, 693 (Mass. 1946).

Aetna's

ground on

which to

motion for

rest.

a writ

Rule

ground independently, because it

enforce a judgment for

of ne exeat finds
_________

69 does

not provide

that

directs that "[p]rocess

the payment of money shall be

no

to

a writ

of

execution,

unless

the

procedure on execution .

practice

and procedure

court is

held . . .

construed.

other

than

writ

established principles

Federal

Practice

also Hilao v.
____ _____

of the

state in which

The "otherwise"

See Combs,
___ _____

785

of a

of

F.2d

____________________

The

at

the district

clause is narrowly

980.

It

civil money judgment

execution,

[so] warrant."

69.02, at 69-5

Estate of Marcos, 95
________________

1996).4

otherwise.

. . shall be in accordance with the

."

authorize enforcement

court directs

except

does

not

by methods

where

"well

13 J.

Moore, Moore's

to -7 (3d

ed. 1997); see

___

F.3d 848, 854

(9th Cir.

4.

One such

situation is where an

action for contempt has

been instituted for

failure to pay an

statute in order to

enforce the public policies

the

statutory scheme.

Paper Co., 336

_________
there has

U.S. 187,

furtherance

193-95 (1949).

the ability to

of enforcing

7402(a).

state which
process

McComb v.
______

tax

embodied in
Jacksonville
____________

Another is

been a congressional determination

government with

U.S.C.

See, e.g.,
_________

obligation imposed by

where

to provide the

seek a writ

of ne exeat in
_________

obligations.

See, e.g.,
_________

26

A third is where the judgment is against a

refuses to appropriate funds

provided

by

state

law.

through the normal

See, e.g.,
__________

Spain
_____

v.

Mountanos, 690 F.2d 742,

_________

744-45 (9th Cir. 1982); Gary W. v.

________

Louisiana, 622 F.2d 804,

_________

806 (5th Cir. 1980).

In contrast,

award and the difficulties in

enforcing the

the size of the

judgment

due

to

the

location

-88

of

the

assets

and

the

This court has

and

first

held that "the legislative

judicial application of

sentence of

the Rule

Rule 69(a) make

expresses a

history

clear that the

limitation on

the

means of enforcement of money judgments and does not create a

general power to issue writs of execution in disregard of the

state

law incorporated by the rest of the Rule."

584 F.2d at 560-61.

here.

Gabovitch,
_________

The state remedy is the exclusive

route

See id. at 561.

___ ___

Aetna also points to the All Writs Act, 28 U.S.C.

1651,

but does not develop

well taken.

The

courts]

issue

to

statutory

ad

hoc writs

authorize [federal

whenever

appears

compliance

inconvenient

or

Pennsylvania Bureau of Correction

__________________________________

States Marshals Serv.,

_____________________

here, there

The point is not

All Writs Act "does not

procedures

appropriate."

its argument.

is

474 U.S.

a statutory

34, 43 (1985).

procedure

which

with

less

v. United
______

Where,

as

"specifically

addresses the particular issue at hand, it is that authority,

and

not

the

All Writs

Indeed, there is every

Act,

that

is

controlling."

reason not to reach

to find the

Id.
___

All

Writs Act applicable where "the courts have consistently read

Rule 69(a) as limiting all federal process on money judgments

____________________

uncooperativeness of the judgment debtor are not the types of

extraordinary
general rule
writs

circumstances which warrant departure from the

that money judgments

of execution

power of the courts.

rather than

are enforced by
by

resort to

means of

the contempt

See Hilao, 95 F.3d at 855.

___ _____

-99

to

the

type

of

process

available

under

state

law."

Gabovitch, 584 F.2d at 561.

_________

This opinion

to

pay his

Aetna's

does not condone

judgment debt,

frustration.

It

nor does

simply

Markarian's failure

it fail

holds

to appreciate

that

the

predicate for issuance of the extraordinary writ of

legal

ne exeat
________

is lacking and so issuance of the writ was error.

The

order granting

writ is vacated.
_______

No costs.

the writ

is reversed
________

and the

-1010