Do you know what “proceedings supplemental” are? If you are in the business of collecting judgments in Indiana, and from time to time virtually all secured lenders are, then the June 27, 2007 opinion by the Indiana Supreme Court in Rose v. Mercantile National Bank, 2007 Ind. LEXIS 471 provides a great primer on the subject.

Facts of Rose. Plaintiffs sued an S-Corp, and the trial court entered judgment against S-Corp for $159,581. During the litigation, the owners of S-Corp sold the company in an asset sale to Corporation I for $475,000. Corporation I then transferred its rights and obligations under the asset-purchase agreement to Corporation II, a wholly-owned subsidiary of Corporation I. After the sale, the owners of S-Corp deposited the sale proceeds into S-Corp’s bank account and, within three days, issued checks to themselves for the entire sale price. The closing occurred approximately one month after the trial court entered judgment for Plaintiffs.

About a year later, presumably because the judgment had not been paid, Plaintiffs moved for proceedings supplemental and brought fraudulent transfer claims against S-Corp, Corporation I, Corporation II, and S-Corp’s owners. Plaintiffs asserted that assets had been transferred out of S-Corp to avoid paying the judgment. During the proceedings supplemental, Plaintiffs sought to amend the complaint to add additional claims and to recover new damages. The result was a new judgment for Plaintiffs for $542,435.49 plus attorney’s fees of $162,730. The Indiana Supreme Court affirmed the trial court’s finding that the two owners of S-Corp fraudulently transferred assets, but the Court set aside the new claims for new damages.

Proceedings supplemental generally. Proceedings supplemental are designed to help judgment creditors enforce judgments – for discovering assets and to set aside fraudulent conveyances. Proceedings supplemental are merely the continuation of an original action. Ind. Trial Rule 69(E) generally governs proceedings supplemental, and the motion is made in the court where judgment was rendered. Discovery is permitted, and a hearing must be conducted, after which certain property is to be applied toward the judgment. Id. at 4-5.

Fraudulent transfer. Judgment creditors often use proceedings supplemental to bring fraudulent transfer actions, the purpose of which is to remove “obstacles which prevent the enforcement of the judgment . . . through the levy of execution.” The essence of a fraudulent transfer action is not to attack the transfer or to recover damages. Instead, the action “is to subject property to execution as though it were still in the name of the grantor.” Id at 6-7.

New claims. Unlike Plaintiffs’ fraudulent transfer claims, Plaintiffs also sought new damages from the S-Corp owners by adding a new cause of action under Indiana’s Crime Victims’ Compensation Act, which allows for treble damages and attorney’s fees. The Court said this was a no-no: “Allowing a new claim to be tacked on at this stage would be just as unfitting as opening up any other litigation to add new claims after judgment. Such an approach to collections would lay the groundwork for perpetual motion-a far cry from the timely and efficient system of conflict resolution the nation’s judiciary strives to provide. Proceedings supplemental are appropriate only for actions to enforce and collect existing judgments, not to establish new ones.”

Id. at 7. So, a new claim for new damages, and thus the imposition of a new judgment, should be filed in a new lawsuit. On the other hand, “any action to assist in collection of an original judgment [like a proceeding supplement] must be filed under the same cause number as the original action.” Id.

In addition to addressing the generalities of proceedings supplemental, the Indiana Supreme Court provides clarity for lenders concerning fraudulent transfer actions, which can be appropriately prosecuted in proceedings supplemental or, in other words, in a continuation of the same case and in the same trial court that rendered the judgment. Any new claims or, in other words, actions for separate and distinct damages, however, must be the subject of another lawsuit.

Welcome to the Indianapolis Schools   by Patricia Hawke
If you’re considering a move to Indiana and are planning to send your children to Indianapolis Schools, this is the article for you. With numerous magnet programs, a clear instructional framework, and 5 district initiatives to improve learning, Indianapolis Schools are highly organized and are the place to learn.

Mission:

The mission of Indianapolis Schools is to increase student achievement for all within a safe environment resulting in graduates who are knowledgeable, responsible, productive, employable citizens.

Vision:

By the year 2010 the Indianapolis Schools will be widely recognized as a model urban school system that is guided by high expectations and standards of excellence. Indianapolis Schools can offer your child a unique experience where their learning is of utmost importance to all faculty and staff.

In the 2006-2007 school year, the student population consisted of 36,957 who attended 80 different Indianapolis Schools. 50 of which are K-6 elementary schools, 9 Middle Schools (7-8), and 5 high schools, serving grades 9-12. There are also 4 alternative schools. Indianapolis Schools have a graduation rate of 50%, and the district-wide attendance rate is 93.5%.

Indianapolis Schools employ 3,003 teachers, 2,435 support staff, and 238 administrators.

Indianapolis Schools are the only schools in central Indiana that offers magnet programs in the areas of: Business and Finance Environmental Studies Foreign Language Immersion Health Professions Humanities Inquiry-Based Learning International Baccalaureate International Studies Life Science and Wellness Math, Science & Engineering Medical Multiple Intelligences Montessori Performing and Visual Arts Science and Technology of Agriculture & its Resources Teacher Preparation Telecommunications

Indianapolis Schools have adopted an “Instructional Framework”. This framework, which incorporates the “Best Teaching Strategies”, has four priorities: 1. Preparing the learning environment 2. Connecting with the learner 3. Engaging the learner 4. Assessing the learning

The leaders of the Indianapolis Schools have instituted 5 “District Initiatives to Improve Learning”:

Small Schools – In contrast to traditional high schools, Small Schools offer a more intimate learning environment than large high schools. This model is better able to address the needs of students, staff and parents. Each small Indianapolis School has an enrollment of no more than 400 students. The purpose of Small Schools is to improve students’ academic, performance, to reduce the dropout rate, and to connect to students in a more personal way.

Literacy Improvement – Indianapolis Schools are involved in a multi-year partnership with the National Urban Alliance to increase reading achievement in all schools by providing on-site professional development training for teachers and principals. This training will help faculty improve the quality of instruction.

Technology – Indianapolis Schools are leaders of large school districts across the nation in access to technology. The district has implemented IPS Online, a web portal that engages students in accessing online resources and homework assignments remotely. Parents also can log in to check grades, attendance, discipline, homework assignments, school newsletters and other pertinent info.