Kelley v. Stevanovich

In action by Trustee who prevailed against third-party entity via $578,366,822 default judgment and initiated post-judgment supplemental proceedings against defendant-Director of said entity, where Trustee alleged that it was entitled to sue defendant directly for embezzlement debt he owed to entity, and where defendant had embezzled $1,948,670.79 from entity to fund defendant’s expensive wine purchases for defendant’s personal use, Dist. Ct. did not err in applying seven-year statute of limitations for supplementary proceedings instead of five-year limitation period for embezzlement claims. Moreover, Dist. Ct. did not err in granting Trustee’s motion for turnover order without conducting evidentiary hearing, where: (1) defendant, in response to Trustee’s turnover motion, failed to present evidence creating issue of fact that would necessitate hearing; (2) defendant’s affidavit was insufficient to refute Trustee’s showing that defendant used entity’s funds to buy wine for his own use; and (3) defendant never asked for evidentiary hearing. Also, Dist. Ct. could properly use preponderance of evidence standard, as opposed to clear and convincing standard, to establish defendant’s embezzlement of entity’s funds. Ct. rejected defendant’s claim that evidence did not support Dist. Ct.’s finding that he had embezzled funds from entity.