United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon Defendant Oldcastle
Precast, Inc.'s Motion for Summary Judgment (Motion for
Summary Judgment), filed on May 8, 2017. (Doc. 148). Rune
Kraft, a nonparty, filed a response on May 18, 2017, which
the Court subsequently struck. (Docs. 153 and 167). Defendant
Oldcastle Precast, Inc. (Oldcastle) filed a reply on May 23,
2017. (Doc. 155). Having considered the Motion for Summary
Judgment and the uncontested circumstances of this case, the
Court grants the Motion for Summary Judgment.
Background and Uncontested Facts
The Royalty Agreement
February 1999, American Building Supply, Inc. agreed to pay
royalty payments, both monthly and annually, to Kraft
Americas, L.P. (Kraft LP) for aggregate mined in New Mexico.
(Doc. 1) at ¶ 4); (Doc. 4-1). In May 2015, CalMat Co.
(CalMat) succeeded to the interests of American Building
Supply, Inc. (Doc. 1) at ¶ 2; (Doc. 9) at 1. CalMat,
therefore, is obligated under the 1999 agreement to pay
royalty payments. CalMat contends that it, indeed, paid the
royalty payments to “Kraft Americas.” (Doc. 9) at
¶ 2 in MC No.15-33 WJ.
2011, Inland Concrete Enterprises, Inc. Employee Stock
Ownership Plan (Inland Concrete) obtained a default judgment
in the United States District Court for the Central District
of California against Kraft LP and Rune Kraft in the amount
of $3, 808, 483.00, plus interest of 0.18% per annum. (Doc.
1) in MC No. 15-33 WJ; (Doc. 1) at ¶¶ 5 and 10.
collect on the default judgment, Inland Concrete filed in
this Court, in July 2015, a Certification of Judgment for
Registration in Another District, which was assigned to
United States District Court Judge William Johnson. (Doc. 1)
in MC No.15-33 WJ. Inland Concrete then assigned its interest
in the default judgment to Oldcastle. (Doc. 1) at ¶ 1.
August 2015, Judge Johnson granted Oldcastle's
Application for Writ of Garnishment and issued a Writ of
Garnishment naming CalMat as garnishee and Kraft LP as the
judgment debtor. (Docs. 3 and 4) in MC No.15-33 WJ. CalMat
then answered the Writ of Garnishment and informed Kraft LP
and Kraft Americas Holding, Inc. (KAHI) of the garnishment.
(Doc. 6) in MC No.15-33 WJ; (Doc. 9) at 9-10, 52.
was subsequently notified that Kraft LP had in March 1999,
days after entering into the royalty agreement with American
Building Supply, Inc., assigned its interest in the royalty
agreement to KAHI, thereby allegedly making KAHI the sole
beneficiary of the royalty agreement. (Docs. 1-3 and 1-4).
Consequently, KAHI, which is not a judgment debtor with
respect to the default judgment, claims that CalMat cannot
garnish the royalty payments now owed to it. Oldcastle,
however, argues that Kraft LP's assignment of the royalty
agreement interest to KAHI is invalid and fraudulent, and
that KAHI and Kraft LP are, in fact, a single entity owned
and managed by Rune Kraft. Hence, Oldcastle concludes that
the royalty agreement proceeds are subject to garnishment by
virtue of Kraft LP, as a judgment debtor, still being the
sole beneficiary of the royalty agreement.
does not dispute that it owes the royalty payments. (Doc. 1)
at ¶ 22. CalMat also takes no position on which party is
entitled to the royalty payments. Id. CalMat,
therefore, claims that it is a disinterested stakeholder who
is at risk of suffering multiple liabilities from an
erroneous distribution of the royalty proceeds. Id.
at ¶¶ 22 and 23. Consequently, CalMat filed this
interpleader action on January 12, 2016, naming as Defendants
Oldcastle, Kraft LP, Rune Kraft, KAHI, and John Does 1-5.
Judge Johnson subsequently stayed the garnishment action
pending the outcome of this interpleader action. (Doc. 23) in
MC No.15-33 WJ.
October 5, 2016, the Court ordered that the royalty agreement
proceeds be interpled. (Doc. 55). At the same time, the Court
granted, in part, Rune Kraft's motion to dismiss and
dismissed Rune Kraft as a defendant in this action, because
Rune Kraft did not himself have a claim to the royalty
agreement or royalty payments. (Doc. 56).
March 2017, the Court held that Rune Kraft “has no
basis for further participation in this case, ” since
he is no longer a defendant and does not purport to be a
plaintiff. (Doc. 126) at 3. The Court also entered an adverse
judgment against Kraft LP because it failed to obtain counsel
as required by the Local Rules. Id. at 5.
April 12, 2017, the Court, likewise, entered an adverse
judgment against KAHI for not retaining counsel as required
by the Local Rules. (Doc. 132). Two days later, Rune Kraft
filed a motion requesting that he be re-joined as a defendant
because KAHI transferred its interest in the royalty payments
to him on April 4, 2017. (Doc. 135).
8, 2017, the Court denied Rune Kraft's motion to be
re-joined as a defendant. (Doc. 146). Also, on May 8, 2017,