United States District Court, W.D. Missouri, St. Joseph Division
ROSEANN A. KETCHMARK, UNITED STATES DISTRICT COURT JUDGE
closed case is before the Court on Plaintiff Active Way
International Limited's (“Active Way”)'s
Motion for Creditor's Bill (doc. 6) and Application and
Motion for Immediate Appointment of Limited Receiver (doc.
8). For the following reasons, Plaintiff's motions are
DENIED without prejudice.
is a citizen of a foreign country (doc. 1 ¶ 3);
Plaintiff is incorporated in and has its principal place of
business in Hong Kong. (Id. at ¶ 1.) Defendant
is a citizen of the United States (id. at ¶ 3);
Defendant is incorporated in Delaware and has its principal
place of business in Missouri. (Id. at ¶ 2.)
Plaintiff previously sued Defendant in a Hong Kong court for
breach of a loan agreement (Id. at ¶ 5;
see doc. 1-3) and on October 19, 2016, obtained a
judgment awarding Plaintiff $1, 085, 327.88, with additional
interest and costs (the “Judgment”) (doc. 1-1).
Defendant did not appear or otherwise defend in the Hong Kong
commenced this action on November 28, 2016, by filing its
Verified Petition to Register Foreign Country Judgment (the
“Complaint”). (Doc. 1.) Plaintiff brings this
action pursuant to the Court's diversity jurisdiction
requesting that the Judgment be made a final judgment of this
Court and that Plaintiff be allowed to enforce the Judgment
in the same manner as any other judgment of this Court.
(Id. at 2-4.) After Plaintiff was unable to serve
the Complaint on Defendant at the addresses for its
registered agent and its principal place of business (doc.
4), Defendant was served on December 9, 2016, via the
Missouri Secretary of State's Office (doc. 5). Defendant
failed to file a timely answer and failed to file any
objection within thirty days of service. Thereafter, the
Judgment became a final judgment of this Court in January
2017 in accordance with Missouri's Uniform Foreign
Country Money-Judgments Recognition Act, Mo. Rev. Stat.
§ 511.778. Upon the Judgment, a Writ of
Execution was issued to the address of the defunct registered
agent, and returned nulla bona (or unsatisfied).
(Doc. 16.) The return noted that “[t]he address
[provided] is an empty, guard shack type building. The only
door was secure and it looked as though it had not been used
in years.” (Id.)
February 23, 2017, Plaintiff filed the instant motions
seeking equitable relief, and in particular, the appointment
of a receiver to receive certain intangible property along
with an order compelling Defendant to assign the property to
said receiver. (Docs. 6, 8.) Plaintiff specifically seeks an
order directing Defendant to assign certain intangible
property to a limited receiver pursuant to the Missouri
Commercial Receiver Act, Mo. Rev. Stat. § 515.510.
Plaintiff defines the assets over which it seeks the
appointment of a receiver by reference to a Contribution
Agreement entered into on May 4, 2015, between Defendant and
Orng EV Solutions, Inc. n/k/a Nohm Inc. (“Orng”).
(Doc. 7 at 2-8.) As part of the Contribution Agreement,
Defendant contributed a variety of intellectual properties to
Orng, which was formed to manufacture and sell electric
vehicles. Plaintiff describes Defendant's particular
assets it seeks to reach in the following general categories:
(1) Defendant's rights under the Contribution Agreement,
(2) Defendant's claims under the Contribution Agreement,
including any claims which were, or could have been asserted
in an earlier action Defendant brought against FDG Electric
Vehicles Limited (“FDG”),  Orng, and Plaintiff,
previously pending in a Delaware state court (“Delaware
lawsuit”), and (3) Defendant's intellectual
property listed in the Contribution Agreement. Plaintiff
requests that these intangible assets be subjected to
satisfaction of the Judgment.
Court scheduled the instant motions for a hearing on April
10, 2017, and also issued its Order Regarding Agenda for
April 10, 2017 Hearing (doc. 17) requesting that argument on
the motions specifically address several concerns the Court
had regarding the filings. The morning of the hearing, Joon
Kim, Peter Christiansen, and Potomac Asset Management Company
(“Proposed Intervenors”), filed a motion to
intervene purporting to be other creditors of Defendant.
(Docs. 19 and 20.) At the same time, Defendant filed a motion
for leave to file a response to Plaintiff's motion for
limited receiver out of time (doc. 22) together with its
response brief to that effect (doc. 21). The Court granted
Defendant leave to file its late response brief. (Docket
Entry 24.) Counsel for Plaintiff, Defendant, and the Proposed
Intervenors appeared and presented argument at the hearing.
At the hearing's conclusion, the Court permitted Proposed
Intervenors and Defendant to file post-hearing briefing
addressing the concerns listed in the Court's Agenda
(doc. 17) to which Plaintiff was permitted to file a reply.
(Docs. 29, 30, 33.)
Rule of Civil Procedure 69 provides that “[a] money
judgment is enforced by a writ of execution, unless the court
directs otherwise.” Rule 69 goes on to state that
“[t]he procedure on execution-and in proceedings
supplementary to and in aid of judgment or execution-must
accord with the procedure of the state where the court is
located, but a federal statute governs to the extent it
applies.” Specific to receivership appointments,
Federal Rule of Civil Procedure 66 provides that
“[t]hese rules govern an action in which the
appointment of a receiver is sought[.]” See
3-26 Moore's Manual--Federal Practice and Procedure
§ 26.101 (2017) (a federal rule is considered a
governing statute for the purpose of determining which law
controls in execution of a judgment in federal court pursuant
to federal rule 69). The Eighth Circuit has held that
“[t]he appointment of a receiver in a diversity case is
a procedural matter governed by federal law and federal
equitable principles.” Aviation Supply Corp. v.
R.S.B.I. Aerospace, Inc., 999 F.2d 314, 316 (8th Cir.
1993) (citing Fed.R.Civ.P. 66 and Advisory Committee's
Note and 12 C. Wright & A. Miller, Federal Practice
and Procedure § 2983) (other citations omitted);
PNC Bank, Nat'l Assoc. v. Raintree Village Shopping
Center, LLC, Case No. 4:13-cv-00940-HFS (W.D. Mo. Jan.
3, 2014) (doc. 26) (applying Aviation Supply factors
and denying a motion to appoint receiver to sell real estate
where creditor conducted no discovery, and offered no
specific examples or theory of requisite misconduct such as
fraud or diversion of assets); see Canada Life Assur. Co.
v. LaPeter, 563 F.3d 837, 842-3 (9th Cir. 2009) (federal
law governs the appointment of a receiver by a district court
in a diversity case); Nat'l P'ship Inv. Corp. v.
Nat'l Hous. Dev. Corp., 153 F.3d 1289, 1291-92 (11
Cir. 1998) (same); Sterling Sav. Bnk. v. Citadel Develop.
Co., Inc., 656 F.Supp.2d 1248, 1253, 1258 (D. Or. 2009)
(because appointment of a receiver is not a substantive
right, a federal court acting in diversity must comply with
Rule 66 even if state receivership law would produce a
the April hearing, Plaintiff's Counsel represented that
although he believed Plaintiff would be able to establish the
Aviation Supply factors, Plaintiff does not have to
comply with those factors because it seeks a remedy separate
than a federal equitable receiver. (Doc. 28 at 11-12.)
Rather, Plaintiff is specifically asking for a limited
receiver as provided in the new Missouri Commercial
Receivership Act. Despite Plaintiff's reliance on case
authority from outside of this circuit, Aviation
Supply instructs this Court to apply Rule 66 in
determining whether to appoint a receiver in this case
regardless of whether a state statute would produce a
different result and Plaintiff has presented no argument or
case authority to support that this case is somehow
distinguishable. See e.g., U.S. Bank v. CB
Settle Inn Ltd. P'ship, 827 F.Supp.2d 993 (S.D. Iowa
2011) (appointing receiver to manage real property and
distinguishing Aviation Supply where parties'
contract explicitly provided for the appointment of receiver
to Aviation Supply, “[a] receiver is an
extraordinary equitable remedy that is only justified in
extreme situations.” 999 F.2d at 316. The factors to be
considered in determining if a receiver is warranted include:
(1) a valid claim by the party seeking the appointment;
(2) the probability that fraudulent conduct has occurred or
will occur to ...