Joseph F. Hughes & Co. v. United Plumbing & Heating Court Opinion

    JOSEPH F. HUGHES ft CO, v ’rr*TYrFY,T) t«ta
Cite us oC/0 F.2d 020 ( UX>S)

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JOSEPH F. HUGHES & COMPANY, Inc., 
Plaintiff-Appellee, 

v.
UNITED PLUMBING & HEATING, INC., 

Def endan t-Appellan t.
No. 18260.

United States Court of Appeals 
Sixth Circuit.

March 18, 1968.

Proceeding by judgment debtor to 
vacate order in aid of execution requir­
ing the District Director of Internal 
Revenue to hold any money to be refund­
ed to judgment debtor. The United 
States District Court for the Southern 
District of Ohio, Western Division, Carl 
A. Weinman, J., denied motion to vacate, 
and the judgment debtor appealed. The 
Court of Appeals held that order denying 
motion to vacate was sufficiently final 
for purposes of appeal, where hold order 
was being contested by judgment debtor, 
tax refunds due judgment debtor had 
been garnished pursuant to such order, 
and all that remained to be done was for 
court to collect refunds and pay them to 
judgment creditor.

Motion denied.

1. Appeal and Error C=781(7)
Where hold order, issued in aid of 

execution and requiring District Direc­
tor of Internal Revenue to hold any mon­
ey to be refunded to judgment debtor, 
was to remain in effect until further 
order by district court, and no order had 
been entered vacating hold order, and 
checks paid into court by Internal Rev­
enue Service were paid pursuant to order 
subsequent to hold order, compliance 
with subsequent order did not render 
moot controversy concerning legality of 
outstanding hold order.

2. Courts 0=405(12.16)
Order of district court denying mo­

tion to vacate order in aid of execution 
requiring District Director of Internal
Revenue to hold any money to be refund­
ed to judgment debtor was sufficiently

final for purposes of appeal, where hold 
order was being contested by judgment 
debtor, tax refunds due judgment debtor 
had been garnished pursuant to such or­
der, and all that remained to be done was 
for court to collect refunds and pay them 
to judgment creditor.

3. Courts e=405(12.1)
Piecemeal review, against which 

rule of finality is aimed, is not as deci­
sive a consideration after judgment as 
before judgment.

Thomas B. Talbot, John T. Ducker, 
Talbot, Jennings & Ducker, Dayton, 
Ohio, for appellant.

Richard L. Steinberger, Pickrel, 
Schaeffer & Ebeling, Dayton, Ohio, for 
appellee.

Before CELEBREZZE, McCREE and 
COMBS, Circuit Judges.

PER CURIAM.
Appellee obtained a judgment against 

the Appellant in the United States 
District Court for the District of 
Columbia and caused a certified copy 
of the judgment to be registered with 
the United States District Court for 
the Southern District of Ohio. On 
the basis of the registered judgment 
the District Court for the South­
ern District of Ohio issued an or­
der in aid of execution requiring the 
District Director of the Internal Revenue 
Service at Cincinnati, Ohio, to “ * * * 
hold any and all monies it may determine 
should be refunded to the [Appellant].”

Upon receiving notice of the “ hold” 
order, the Appellant moved the Court to 
vacate the order “ * *  *  for the rea­
son that said order violates the well- 
established legal concept of sovereign im­
munity.” The Internal Revenue Service, 
however, recognized the “ hold” order and 
pursuant to a subsequent order o f the 
Court deposited into Court two refund 
checks due to the Appellant. The Dis­
trict Court denied the motion to vacate, 
and the Appellant perfected an appeal. 
The Appellee has now filed a motion with

l

- 4



630 390 FEDERAL REPORTER, 2d SERIES

this Court to dismiss the appeal on any 
one of three grounds: (1) that the case 
is moot since the Internal Revenue Serv­
ice has paid the refund checks into 
Court, (2) that the judgment of the Dis­
trict Court is not final, and (3) that the 
Appellant has no standing to raise the 
defense of sovereign immunity. We 
deny the motion so far as it is based upon 
the mootness and lack of finality of the 
District Court’s order; the question of 
standing is passed to be briefed and ar­
gued on appeal.

[1] The “ hold” order in question is
to remain in effect “ until further order 
[by the District Court] * * No
order has been entered vacating the 
“ hold” order; and the cheeks paid into 
Court by the Internal Revenue Service 
were paid pursuant to an order subse­
quent to the “ hold” order. Compliance 
with the subsequent order does not ren­
der moot this controversy concerning the 
legality of the still outstanding “ hold” 
order.

[2] We also find that the order of 
the District Court denying the motion 
to vacate is sufficiently final for appeal. 
In Sabadash v. Schavo, 128 F.2d 923 (6th 
Cir. 1942), this Court held that an or­
der denying a petition to recall and per­
petually stay execution upon a judgment 
was not appealable. The petition in that 
case was based on the claim that the 
judgment had been discharged by virtue 
of the petitioner’s subsequent discharge 
in bankruptcy. No property of the peti­
tioner had been levied upon; so in es­
sence the petitioner was seeking an ad­
visory opinion. Here specific property, 
tax refunds due or to be due to the 
judgment debtor, has been garnisheed; 
and the judgment debtor is contesting 
the Court’s power to levy upon the spe­
cific property in question. In a like 
circumstance this Court has entertained 
an appeal from a denial of a motion to 
vacate a levy and sale. Whiteleather v. 
United States, 264 F.2d 861 (6th Cir. 
1959).

[3J rcover, since the C7,, 7 , . . , ,  •,

case the United States Supreme Court 
has noted'tKarthrTccitrireinent of final- 
liv' sEo'dia BFM W TTaifactical rather 
than a technical construction. Gillespie 
w  United States Steel Corp., 379 U.S.

“ 148, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964) 
affirming 321 F.2d 518 (6th Cir. 1963). 
Piecemeal review, against which the rule

judgment. g. Plymouth Mutual
Life Ins. Co. v. Illinois Mid-Continent 
Life Ins. Co., 378 F.2d 389 (3rd Cir. 
1967); McDonnell v. Birrell, 321 F.2d 
946 (2d Cir. 1963). In the instant case 
all that remains to be d'OTte' is for the 
District Court to collect any refunds due 
the judgment debtor and pay them over 
t<r^fi(f’judgment cred ito r^ ji would be 
difficult to conceive of a time when this

the judgment debtor must wait and sue 
for  return of his property wrongfully 
-garnisheed. Such a requirement would 
seem to promote the piecemeal litigation 
that the rule of finality was designed to 
avtrtth---- -------

©JfTEe question of standing to raise 
the defense of sovereign immunity, we 
have found a surprising lack of author­
ity on the capacity of a judgment debtor 
to contest a proceeding in aid of execu­
tion, and an even more surprising lack of 
authority on the nature of the defense 
of sovereign immunity and its affect up­
on the jurisdiction of a federal District 
Court. Compare Williams v. United 
States, 289 U.S. 553, 571-577, 53 S.Ct. 
751, 77 L.Ed. 1372 (1933); with United 
States v. Sherwood, 312 U.S. 584, 61 
S.Ct. 767, 85 L.Ed. 1058 (1941). It 
would be inappropriate, therefore, to dis 
pose of the close question of standing or, 
a motion to dismiss. A determination of 
that question and a final determination 
on the motion to dismiss will be passed 
to the argument on appeal. Counsel an 
requested to further brief the question 
of standing for the convenience of the 
Court.