The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge
Plaintiff, Marjorie Fudali, ("Fudali"), secured a judgment against Pivotal Corporation ("Pivotal") in 2008. Fudali v. Pivotal Corp., 623 F. Supp. 2d 11 (D.D.C. 2008). She has spent the two and a half years since that time trying to collect it.*fn1 She has now added a third party-CDC Software, Inc. ("CDC")-and on September 2, 2010, filed Plaintiff's Supplemental Proceeding to Recover Fraudulent Conveyances by Defendant/Judgment Debtor Pivotal Corporation to CDC Software, Inc. [Doc. #222].*fn2 Additionally, she seeks the appointment of a receiver "to independently gather the assets of Defendant Pivotal Corporation." Plaintiff's Motion to Appoint a Receiver Over the Assets of Defendant Pivotal Corporation and Incorporated Statement of Points and Authorities in Support Thereof [Doc. #241] at 9.
Fudali states that CDC (to which she refers as "CDCSINC") is a Georgia corporation which has its principal business in Atlanta, Georgia. #222, ¶ 4.*fn3 She alleges that, soon after the judgment was entered in this case, "all control of the operations and finances of Defendant Pivotal Corporation was transferred to CDCSINC." Id. ¶ 7. She also alleges that "the corporate officers of Defendant Pivotal were also management of CDCSINC and were controlled by corporate officers and management of CDCSINC." Id.
According to Fudali, within weeks of the judgment entered in this case, "Pivotal went from an operation with millions of dollars running through its bank accounts and multiple employees, to a shift of its bank accounts, all employees and other financial operations to CDC Software, Inc." Plaintiff's Reply to Defendant's Opposition to Motion to Appoint a Receiver [Doc. #258] at 3.
Fudali contends that these transactions were made with the intent to deceive:
Pivotal and its related companies are engaging in an elaborate asset protection scheme to avoid Plaintiff Fudali's Judgment and likely other creditors. Since shortly after the Judgment was awarded, Defendant has been a mere shell of company that does not control its own operations, including the legal defense in the case. Pivotal's bank accounts were closed and shifted over to CDCSIN as was the payroll of Pivotal's employees. See 10/15/2010 Deposition of Bryan Sell as corporate designee of CDCSINC and CDC Corporation (Exhibit 2) at 30; Morela Dep. at 82-83. All monies earned by Pivotal and other related entities are sourced to CDCSINC bank accounts and commingled for disbursement controlled by CDCSINC. Sell Dep. (Ex. 2) at 31-34. # 258 at 3 (footnote omitted).
In her supplemental proceeding, Fudali identifies eight transfers of funds made by Pivotal in late 2008 and early 2009 to accounts controlled by CDC. #222 at ¶ 9. She alleges that these transfers were made with the intent to defraud her, a judgment creditor. Id. ¶¶ 10-12. She asks that the court order that the transfers made by Pivotal to CDC be avoided and disgorged to satisfy her claims, and that judgment be entered against the defendants for the amounts transferred. Id. at 5.
For its part, Pivotal insists that Fudali cannot show that the structure and operation of Pivotal has changed at all since the time of her employment. Opposition to Motion to Appoint Receiver [Doc. #252] at 1. Pivotal explains that it has only ever had one customer, a parent corporation also called Pivotal Corporation, which is based in British Columbia ("Pivotal BC"). Id. Indeed, the very contract at issue in this case was a contract between a customer, Syngenta, and an Irish company, Pivotal Technologies Corporation Limited. Id. at 3. Pivotal explains that "plaintiff, as an employee of Pivotal US, provided services under the Services Agreement with Pivotal Canada [i.e., Pivotal BC], to secure a contract for another Pivotal entity, as part of Pivotal US's performance of the Services Agreement." Id. Pivotal insists that the only assets it has are intangibles, and that its "debts" are nothing more than intercompany balances between Pivotal and other affiliated entities. Id. at 5-7. According to Pivotal, nothing has changed, no "assets" have been moved, and there is no warrant whatsoever for the appointment of a receiver.
CDC, as the new third-party defendant, has moved to dismiss plaintiff's supplemental proceeding, on the grounds that the Court lacks jurisdiction both over its subject matter and over the person of CDC. See Third-Party Defendant CDC Software, Inc.'s Motion to Dismiss Supplemental Proceeding [Doc. #235] at 1.
I conclude that the Court has jurisdiction over the subject matter, but the contention that the Court lacks jurisdiction over the person of the third-party defendant-and, in turn, as to whether the Court should appoint a receiver-raises genuine issues of fact as to what has occurred since judgment was rendered, which I believe can only be resolved after an evidentiary hearing.
A. Subject Matter Jurisdiction and a Cognizable Claim
Pivotal first argues that the Court lacks jurisdiction over the subject matter of any claim against CDC, because the nature of such a claim is greater than the "proceedings supplementary to and in aid of judgment or execution" that are described in Rule 69(a)(1) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 69(a)(1). But, Rule 69 neither grants nor deprives a federal court of jurisdiction over the subject matter of a claim for relief. It simply states that the procedure on execution of a judgment, and in proceedings supplementary to and in aid of judgment or execution of the judgment, must be in accord with the procedure of the state where the court is located, unless a federal statute applies. Id.
Pivotal ignores that the District of Columbia adopted the Uniform Fraudulent Transfer Act in 1996, which creates a cause of action for a creditor to set aside a fraudulent conveyance. See Unif. Fraudulent Transfer Act § 7 (1984); D.C. Code § 28-3107. Furthermore, "[i]f a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds." D.C. Code § 28-3107(b). Thus, Fudali, no matter how she may phrase it, states a claim upon which relief can be granted on the basis of that statute.
Moreover, there is no question that Fudali, now apparently a citizen of California, is diverse in citizenship from Pivotal and CDC, neither of whom is incorporated in California nor has its principal place of business there, nor is there any question that the claim she asserts exceeds $75,000 in value. See 28 U.S.C. § 1332. It must be recalled that the issue of whether a district court can assert ancillary jurisdiction over a claim for relief arises only when the court does not otherwise have jurisdiction over the claim. Accordingly, she is asserting a claim for relief over which this Court unquestionably has subject matter jurisdiction based on diversity of citizenship. See generally 28 U.S.C. § 1332.
B. Personal Jurisdiction Over CDC Software, Inc.
Less clear is whether the Court has personal jurisdiction over CDC such that plaintiff can maintain her supplemental proceeding. I will approach this question through two potential sources of personal jurisdiction. In the first, this Court's ability to assert jurisdiction over the person of a foreign corporation is found in the District of Columbia "long-arm" statute, to which I will turn in a moment. Independent of that source of authority is the Court's power to exercise jurisdiction over the person of a foreign corporation when it is the "alter ego" of a domestic corporation. If this theory applies, then it will not matter whether any of the bases of the long arm statute apply to the foreign corporation.
In order for this Court to exercise personal jurisdiction over a non-resident defendant, the Court must first determine whether such jurisdiction is authorized by the District of Columbia's long-arm statute, and then whether the exercise of such jurisdiction satisfies due process requirements. In re Fort Totten Metrorail Cases, ___ ...