Efforts to collect on judgment against Congo

Federal District Court Opinions

LNC INVEST. INC. v. DEMOCRATIC REP. OF CONGO, (Del. 1999) 69 F. Supp.2d 607 LNC INVESTMENTS, INC., Plaintiff, v. DEMOCRATIC REPUBLIC OF CONGO (formerly, The Republic of Zaire) and The National Bank of Congo (formerly, the Bank of Zaire), Defendants. No. 97-135 MMS. United States District Court, D. Delaware. Argued July 29, 1999. Dated August 18, 1999. West Page 608

Kevin G. Abrams, Frederick L. Cottrell, II, and Jeffrey L. Moyer, of Richards, Layton & Finger, Wilmington, DE, of counsel Michael Straus, of Bainbridge & Straus, L.P., Birmingham, AL, for LNC Investments, Inc.

Michael F. Bonkowski, and Scott J. Jensen, of Saul, Ewing, Remick & Saul LLP, Wilmington, DE, of counsel Douglas G. Boven, Garet D. O’Keefe, and Helen N.E. Posnansky, of Crosby, Heafey, Roach & May, Oakland, CA, for Chevron Overseas Petroleum Inc.

OPINION

SCHWARTZ, Senior District Judge.

This matter arises from the efforts of LNC Investments,
Inc. (“LNC”) to collect on a default judgment in the
approximate amount of $3.5 million (“judgment”) against the
Democratic Republic of Congo (“DRC”) and the National Bank
of Congo (collectively the “Judgment Debtors”) in the
Southern District of New York. LNC seeks discovery of
Chevron Overseas Petroleum Inc. (“COPI”) and attachment of
monies owed to the Judgment Debtors by COPI. Before the
Court are LNC’s Motion to Show Cause why COPI should not be
held in contempt of Court for removing monies owed to the
Judgment Debtors from the District of Delaware and to
return those assets to this District and COPI’s renewal of
its 1998 Motion to Quash the Restraining Notice with
Information Subpoena.[fn1] For reasons which follow, LNC’s
motion will be denied and COPI’s motion to quash granted.

I. PROCEDURAL HISTORY

The present dispute arises out of a long and complicated
procedural history.

A. Background

1. The Actors in this Matter

LNC Investments, Inc. is a Delaware company and an
indirect, wholly-owned subsidiary of Leucadia National
Corporation, a publicly traded company. The Judgment
Debtors, once known as the Republic of Zaire and the Bank
of Zaire are now known as the Democratic Republic of Congo
and the Bank of Congo since the nation changed its name
after a civil war.[fn2] Chevron Overseas Petroleum Inc. is
a Delaware corporation. COPI is domiciled in San Ramon,
California, where it maintains its principal place of
business. COPI, through a series of mergers and
name-changes, was a successor to Zaire Gulf Oil Company, a
signatory to a petroleum concession agreement with DRC.

2. The New York Litigation

LNC brought this action in the Southern District of New
York against the Judgment Debtors for breach of contract
arising out of a refinancing credit agreement. On January
8, 1997, that Court entered a default judgment against the
Judgment Debtors in the amount of $3,917,497.11. On March
4, 1997, a Writ of Execution West Page 609 pursuant to
Fed.R.Civ.P. 69(a) and 28 U.S.C. § 1610(c) was
entered in that action in favor of LNC and against the
Judgment Debtors, and LNC commenced execution proceedings
in the Southern District of New York. However, LNC was not
able to satisfy the judgment through proceedings in that
district.

B. Delaware Litigation

1. Prior Disputes

After learning COPI was a successor to Zaire Gulf Oil
Company, a signatory to a petroleum concession (the
“Concession Agreement”) under which payments were
apparently periodically due to be paid the Judgment
debtors, LNC sought discovery of COPI.

On December 22, 1997, LNC served a subpoena (“First
Subpoena”) issuing from this Court with a request for
documents. On December 26, 1997, LNC filed the New York
Judgment with this Court, and on December 29, 1998, LNC
filed a Writ of Execution, Docket Item (“D.I.”) 3, pursuant
to Rule 69(a) of the Federal Rules of Civil Procedure and
28 U.S.C. § 1610(c). The Writ of Execution against
the Judgment Debtors issued January 9, 1998, under
signature and seal of the Clerk of this Court. D.I. 3.

LNC filed a “Restraining Notice to Garnishee with
Information Subpoena” (“Restraining Notice”) with the Clerk
of the Court on January 26, 1998.[fn3] D.I. 5. According to
the Docket Entry dated January 29, 1999, the Clerk then
provided a certified copy of the Restraining Notice along
with the form used for service by the U.S. Marshal to the
U.S. Marshal’s office. On January 30, 1998, the U.S.
Marshal served a “Restraining Notice” (“Restraining
Notice”) upon COPI’s registered agent for service of
process in Delaware. D.I. 7.

The Restraining Notice consists of a two pages of paper,
titled “Restraining Notice to Garnishee with Information
Subpoena,” and signed by local counsel for LNC, which,
among other things, commands COPI to take notice it is not
to dispose of any debt owed to the Judgment Debtors and
commands COPI “to answer the with in questions in writing,
under oath, and return the original of the questions
together with our answers” to the local counsel whose
signature appeared below. D.I. 5, at 2. Attached to this
document is the form for subpoena in a civil case used by
this Court, directing COPI to produce documents as
referenced in an “Attachment A.” D.I. 5. Attachment A
follows, with definitions and categories of documents to be
produced. D.I. 5.

LNC initially asserted that the Writ of Execution (D.I.
3), which bears the signature of a Deputy Clerk of this
Court and the seal of this Court, was also served with the
Restraining Notice on January 30, 1998. However, COPI
submitted affidavits of the “Service Process Coordinator”
for COPI’s registered agent for service of process in
Delaware, D.I. 70, COPI’s Vice President for Negotiations
and Legal, D.I. 71, and a Legal Process Analyst for COPI,
D.I. 74, denying the Writ of Execution was served on COPI
at that time. At oral argument, LNC conceded it could not
prove the Writ of Execution was served on COPI with the
Restraining Notice on January 30, 1998.

COPI disputed its obligation to produce documents pursuant
to either the First Subpoena or the Restraining Notice. On
March 12, 1998, LNC filed its first Motion to Compel
Discovery in Aid of Execution. COPI filed a Counter-Motion
for a Protective Order to quash or modify subpoena, quash
restraining notice with information subpoena, and bar
discovery in Delaware.

The Court held oral argument on the motions November 19,
1998. At the November 19 hearing, LNC agreed to issue a new
subpoena, drawing its request for documents more narrowly
and setting a five-year time limit on document requests.
The parties also agreed in principle to a Stipulation and
Protective Order pursuant to Rule 26(c) of the Federal
Rules of Civil West Page 610 Procedure regarding
confidential information, signed by the Court December 12,
1998. D.I. 35. The Court entered an order: 1) denying as
moot LNC’s Motion to Compel and COPI’s Motions to Quash the
first subpoena, for a Protective Order, and for an Order
barring discovery in Delaware; and 2) denying as premature
COPI’s Motion to Quash the Restraining Notice with
Information Subpoena, on December 28, 1998. D.I. 38.

2. The Instant Dispute

LNC issued and served a subpoena (“New Subpoena”) on
December 24, 1999, pursuant to the Court’s guidance at the
November 19 hearing. COPI objected to the subpoena but did
produce some documents.[fn4] LNC also requested the Clerk’s
office issue a new Writ of Execution, D.I. 44, and a Writ
of Attachment, D.I. 43. The United States Marshal served
the Writs of Execution and Attachment on COPI’s registered
agent for service of process in Delaware on February 25,
1999, with COPI responding on March 17, 1999.

The documents which COPI has produced pursuant to the New
Subpoena included documents revealing for the first time
that COPI had assigned its rights, interests and
obligations under the Concession Agreement to a Liberian
corporation called Chevron International Limited on April
6, 1998. D.I. 63, Exh. C. On the same day, Chevron
International Limited assigned those same rights, interests
and obligations to Chevron Oil Congo (D.R.C.) Limited, a
Bermudian corporation.[fn5] Id. With those transfers, which
took place over six months before the November 19, 1998
hearing, COPI allegedly divested itself of the obligations
owed to the Judgment Debtors in the District of Delaware.

Upon learning of the assignments of obligations and/or
future obligations owed to the Judgment Debtors, LNC filed
a Motion to Show Cause, urging COPI be held in contempt of
Court for moving obligations and/or future obligations owed
to the Judgment Debtors out of the District of Delaware in
contravention of the Restraining Notice served January 30,
1998. LNC further requested the Court order the property of
the Judgment Debtors, which COPI had allegedly held prior
to April 6, 1998, be returned to the District of Delaware.
COPI responded by renewing its Counter-Motion to Quash the
Restraining Notice with Information Subpoena which the
Court had denied as premature in its order of December 28,
1998.

II. DISCUSSION

LNC contends the April 6, 1998, transfers constitute a
violation of the Restraining Notice served on January 30,
1998. On this basis, LNC urges CONPI should be required to
show cause why it should not be held in contempt and
further required to show why the obligations of the
Judgment Debtors transferred out of the District by the
April 6 transfers should not be ordered returned to the
District of Delaware. COPI contends that because the
Restraining Notice was not a valid court order or effective
attachment of obligations owed by COPI to the Judgment
Debtors, the Restraining Notice provides no basis for a
holding of contempt or for the return of the obligations to
the District. It follows the merits of the motions turn on
the effectiveness and validity of the January 30, 1998
Restraining Notice.

A. The Law Governing Post-Judgment Proceedings

Rule 69 of the Federal Rules of Civil Procedure governs
execution on judgments of United States District Courts.
That Rule states in pertinent part:

Process to enforce a judgment for the payment of money
shall be a writ of execution, unless the court directs
West Page 611 otherwise. The procedure on execution, in
proceedings supplementary to and in aid of a judgment, and
in proceedings on and in aid of a judgment, and in
proceedings on and in aid of execution shall be in
accordance with the practice and procedure of the state in
which the district court is held, existing at the time the
remedy is sought, except that any statute of the United
States governs to the extent that it is applicable.

Fed.R.Civ.P. 69(a). Pursuant to Rule 69(a), a judgment
creditor must pursue enforcement of its judgment through a
writ of execution, which LNC had done in its pursuit of its
judgment in Delaware. However, proceedings supplementary to
and in aid of a judgment, including collection of the
property of the judgment debtors held by third parties, is
to be conducted by state law absent a controlling federal
statute. Fed.R.Civ.P. 69(a); Schreiber v. Kellogg, 50 F.3d
264, 267 (3d Cir. 1995); Arnold v. Blast Intermediate Unit
17, 843 F.2d 122, 125 (3d Cir. 1988).

“Substantial compliance with state procedure may be
sufficient.” Arnold, 843 F.2d at 125. The Supreme Court has
explained some substitutions may be necessary: for example,
the U.S. Marshal rather than a sheriff may execute the
judgment, or proceedings may be held in a federal
courthouse rather than the prescribed state courthouse.
Yazoo & M.V.R. Co. v. Clarksdale, 257 U.S. 10, 24-25, 42
S.Ct. 27, 66 L.Ed. 104 (1921). However, no precedent
suggests this flexibility allows a court to wholly abandon
state procedural requirements. In Thomas, Head and Greisen
Employees Trust v. Buster, 95 F.3d 1449, 1452 (9th Cir.
1996), after recognizing Rule 69(a) is “not `meant to put
the judge into a procedural straitjacket . . .,’ Resolution
Trust Corp. v. Ruggiero, 994 F.2d 1221, 1226 (7th Cir.
1993),” the appellate court went on to approve the
execution procedures followed by the parties and district
court because “we think `[t]he procedure followed here . .
. accord[ed] with the spirit of the Rules and . . . [was] a
sufficiently close adherence to state procedures.’ See
Chambers v. Blickle Ford Sales, Inc., 313 F.2d 252, 256 (2d
Cir. 1963).” Thomas, Head, 95 F.3d at 1452. Indeed, the
Court in Thomas, Head determined the execution procedure
used in the execution proceedings in the U.S. District
Court for the District of Alaska was appropriate only after
considering two decisions of the Alaska Supreme Court
authorizing proceedings not expressly authorized by the
Alaska rule governing execution of judgments. Id. at 1453.
Thus, while some flexibility, such as the use of U.S.
Marshals in substitution for sheriffs, is necessary to make
Rule 69(a)’s reference to state law practicable, state law
governs the level of procedural compliance.

The governing Delaware law includes Title 10, Chapter 35
of the Delaware Code, Title 10, section 5031 of the
Delaware Code, the Rules of the Superior Court and judicial
precedent construing those rules. Title 10, section 5031 of
the Delaware Code provides:

The plaintiff in any judgment in a court of record, or
any person for him lawfully authorized, may cause an
attachment, as well as any other execution, to be issued
thereon, containing an order for the summoning of
garnishees, to be proceeded upon and returned as in cases
of foreign attachment.

By its reference to cases of foreign judgment, §
5031 incorporates Chapter 35 of Title 10 of the Delaware
Code. Under those provisions, “[g]oods, chattels, rights
credits, moneys, effects, lands and tenements” may be
attached. 10 Del.C. § 3508. This includes debts owed
the judgment debtors by the garnishee. McNeilly v. Furman,
95 A.2d 267, 271 (Del. 1953).

Both parties agree that under Delaware law, the
appropriate form for attachment is a writ of attachment
fieri facias (“fi.fa.”). Wilmington Trust Co. v. Barron,
470 A.2d 257, 262 (Del. 1983). The Delaware Supreme Court
has explained the nature and effect of a writ of attachment
fi.fa.: West Page 612

[W]hen the property attached is not to be physically
seized but is in the possession or control of another, or
if the thing to be attached is not such property as is
susceptible of seizure, such as rights and credits, the
sheriff must summon the person who has the goods,
chattels, rights, credits, money or effects of the
defendant in his possession, who is termed the garnishee,
to appear at the court to which the writ is returnable,
and declare what property of the defendant he has in his
hands.

Id.

The Superior Court is empowered to make all necessary
rules for, inter alia, “the form of process, the manner of
issuance and return thereof, modes of proof, manner of
seizure of property . . ., and all other matters relating
to attachment proceedings. . . .” 10 Del.C. § 3512.
The Superior Court Rules, along with the statute, govern
the process for attaching property by writ of attachment
fi.fa. Rule 4 explains the process for issuance of writs.
Rule 4(a) requires an attorney to complete a praecipe and
form of the writ with space for the signature of the
Prothonotary under the seal of the Court.
Del.Super.Ct.Civ.R. 4(a). Rule 4(c) contains both the
general and specific contents for a writ of attachment
fi.fa. Among other requirements, a writ must, “bear the
date of its issuance, be signed by the Prothonotary or one
of the Deputy Prothonotaries, be under the seal of the
Court, contain the name of the Court and the names of the
parties, . . . and the time within which these Rules
require the defendant to appear and defend. . . .”
Del.Super.Ct.Civ.R. 4(c). Furthermore,

[t]he writ of attachment shall be directed to the person
serving the writ and command that person to attach the
defendant by all the defendant’s real and personal
property in the county to which the writ is issued and to
summon defendant’s garnishees to appear within 20 days
after service of the writ to answer or plead and shall
notify them that, on failure to do so, they may be
compelled by attachment.

Del.Super.Ct.Civ.R. 4(c)(2).

Superior Court Rule 5(aa)(2) provides further rules
governing the summoning of a garnishee through writs of
attachment. That rule provides in relevant part:

Any garnishee duly summoned (either on mesne writ of
attachment or execution process) shall serve upon
plaintiff a verified answer within 20 days after service
of process, which shall specify what goods, chattels,
rights, credits, money or effects of a defendant, if any,
the garnishee has in its possession or custody. . . .
Before the sheriff shall serve any writ of attachment, the
sheriff shall receive from the plaintiff the sum of $20
for each party to be summoned as garnishee . . . and said
sum shall be delivered to each garnishee when the summons
is served; . . . no garnishee will be required to answer
without first having received the garnishee fee as
aforesaid.

Del.Sup.Ct.Civ.R. 5(aa)(2). In Delaware Trust v. Carolina
Freight Carriers Corp., 1986 WL 2831 (Del.Super. March 5,
1986), the Superior Court explained the effect of failure
to tender the $20 fee:

Although the garnishee is not required to answer without
first having received the garnishee fee, it does not
follow that the garnishee may refuse the tender of the fee
in order to avoid its obligation to answer. Nor is it the
case, as the defendant argues, that the plaintiff must
file a general writ in place of the attachment fi.fa. . .
.

Id. at *3. Contrary to COPI’s assertions, failure to tender
the garnishment fee does not invalidate the writ, but
merely relieves the garnishee of the obligation to answer
it. It follows COPI’s challenge to the effectiveness and
validity of the Restraining Notice based on the failure to
tender the $20 garnishee fee must be rejected.

The Superior Court has provided a form for the writ of
attachment fi.fa. (“Form 45”).[fn6] Form 45 commands the
sheriff to West Page 613 attach the goods of the judgment
debtor in the possession of the garnishee. It further
commands the garnishee to inform the plaintiffs attorney of
“all money, goods, credits and effects, stocks, bonds,
personal property, and/or real estate belonging to the
defendant” currently in its possession and notifies the
garnishee that it is required to retain those items until
released from the order. Form 45 lists a return date of 20
days and informs the garnishee that failure to respond
within 20 days after service may result in default
judgment. Finally, the form includes a space to indicate
the amounts owed by defendant and a space for the signature
of the Prothonotary, per his deputy.

“The Forms attached to the Rules will be considered to
satisfy the requirements for practice and procedure,” Gordy
v. Preform Building Components, Inc., 310 A.2d 893, 897
(Del.Super. 1973) (citing Mackey v. O’Neal, 47 Del. 483, 93
A.2d 526 (1952)), but the Delaware Supreme Court has also
explained that “the Rules prevail over the forms.” Pauley
Petroleum, Inc. v. Continental Oil Company, 235 A.2d 284,
292 (Del. 1967). Where a writ adheres to the Rules, it need
not necessarily adhere to the Form. Cf. id. (stating Form
does not dictate interpretation given to the Rules).

With the Delaware law governing garnishment and attachment
of property of judgment debtors in the possession of others
in mind, the Court turns to an examination of the
Restraining Notice to determine whether LNC has adequately
satisfied the requirements of that law.

B. The Restraining Notice served January 30, 1998

As LNC conceded at oral argument, it did not base the
January 30, 1998, “Restraining Notice” served on Form 45,
but rather used a form from parallel New York litigation to
execute on a New York judgment based on a New York statute.
See N.Y.C.P.L.R. § 5222.[fn7] Nevertheless, LNC
asserts the Restraining Notice was adequate under Delaware
law to effect attachment on COPI.

COPI conceded at oral argument that substantively, the
Restraining Notice was the same as Form 45, with one
exception. While Rules 4(c)(2) and 5(aa)(2) of the Superior
Court Civil Rules as well as Superior Court Form 45 provide
for a 20 day return date by which the garnishee must answer
the writ, the Restraining Notice states, “NOW THEREFORE, WE
COMMAND YOU (as defined above), to answer the within
questions in writing, under oath, and return the original
of the questions together with your answers to the
undersigned within seven (7) days of service upon you.”
D.I. 5, at 2. In addition, COPI urges the Court that the
writ is neither valid nor effective because of a formal
procedural defect: the Restraining Notice issued over the
signature of local counsel for LNC, and not the signature of
the Clerk of the Court. The issue then becomes whether
designation of the seven days as opposed to 20 days for the
garnishee to answer the Restraining Notice and/or failure
to have a Court officer sign the Restraining Notice over
the seal of the Court departs from Delaware law, so as to
render the Restraining Notice ineffective and invalid.[fn8]

The Court turns first to the Restraining Notice’s
seven-day return period. Rules 4(c)(2) and 5(aa)(2) both
make clear the period for answer is twenty days. Del.
Sup.Ct.Civ.R. 4(c)(2) and 5(aa)(2). LNC’s only response to
the disparity is that West Page 614

COPI and LNC had previously agreed that COPI could have
additional time to provide that information which had been
requested weeks earlier through discovery in aid of
execution. (D.I. 11 [(the First Subpoena)]) Regardless,
COPI provided no information whatsoever in response to
either LNC’s prior discovery or the Attachment. . . .

D.I. 75, at 7-8 n. 10. Whatever earlier assurances or
extensions as to time LNC had provided to COPI regarding
the First Subpoena, the subsequent “Restraining Notice”
purported to order COPI to provide an answer within seven
days — almost two weeks less time than that
contemplated by the Delaware Superior Court Civil Rules.
Thus, COPI was ordered to do something which LNC had no
power under the laws of Delaware to order it to do.

LNC’s implies in briefing that COPI knew what it was
required to do under the statute. The short answer is that
the issue is not what COPI knew, but rather whether LNC
sufficiently complied with Delaware law. The Rules state in
plain and ordinary language that a garnishee has 20 days to
respond. That is a minimal and easily relayed piece of
information which should have been conveyed accurately by
LNC to COPI. A proper return date is an essential portion
of any document purporting to be a writ of attachment
fi.fa. under Delaware law.

Turning to the issue of the signature of the Court, LNC
makes several arguments. First, it argues that the
certification by the clerk’s office indicated on the Docket
Sheet entry for January 29, 1998 (“Exit to [U.S. Marshal],
One cert. copy of DI 5 w/USM 285 form”) serves as the
signature of the clerk of the Court. Indeed, the copy of
D.I. 5 submitted by COPI in its Appendix does contain such
a certification. D.I. 66, at Tabs 4-6. On the last page of
“Attachment A,”[fn9] what appears to be an ink-stamped
statement with a signature appears:

CERTIFIED:

AS A TRUE COPY:

ATTEST:

PETER T. DALLEO, CLERK

BY /s/ Brian K Blackwell

Deputy Clerk

D.I. 66, at Tab 6, B-18.

This signature cannot satisfy the requirement of the
Delaware Superior Court that the writ be signed by the
Prothonotary with the seal of the Court.
Del.Super.Ct.Civ.R. 4(e). First, the Restraining Notice
itself does not bear the signature. Indeed, the signature
appears on “Attachment A”. Nowhere in the Restraining
Notice is Attachment A referenced. While the form of
subpoena served as part of the Restraining Notice
references Attachment A, no clear link exists between the
Restraining Notice and subpoena, since the Restraining
Notice commands COPI to provide sworn, written answers to
questions while the subpoena and Attachment A clearly
contemplate production of documents.

Second, even if LNC could persuasively argue that the
certification appears on the Restraining Notice, the
certification does not purport to be a signature by the
Court directing what should be done pursuant to the writ.
Rather, the certification, by its own terms, is a
representation that the document is a “true copy” of the
document. Indeed, it is telling that the original of D.I.
5, kept by the Clerk’s office does not bear such a
signature. By comparison, both Writs of Execution in this
matter, D.I. 3 and D.I. 44, contain an original signature
for the Clerk of the Court by one of his Deputies on the
Clerk’s originals. Indeed, the Clerk’s originals of those
two documents also bear the raised seal of the United
States District Court for the District of Delaware,
something absent from the original of the Restraining
Notice. It follows the mere “true copy” certification of
the last page of D.I. 5 may not be West Page 615 treated
as a signature in satisfaction of the writ of attachment
fi.fa. required by Rule 4(c) of the Delaware Superior Court
Civil Rules. Moreover, there is no indication that the seal
of this Court was placed on the document.

LNC also argues the existence of the Writ of Execution,
signed by a Deputy clerk for the Clerk and bearing the seal
of the Court, which authorizes LNC to execute upon the
property of the Judgment Debtors suffices to indicate that
the Restraining Notice was issued under the signature and
seal of the Court. However, the Restraining Notice makes
absolutely no mention of the existence of such a writ
authorizing LNC to take such action. LNC’s contention at
oral argument that local counsel for COPI could have
investigated whether a Writ of Execution had issued is
beside the point. The burden is upon LNC to employ and
confirm correct execution process, not COPI to conduct an
investigation into what was not served. The execution
process should be self-explanatory on its face. A garnishee
should not have to contact the clerk of the Court, to
retrieve the docket sheet, to know the Writ of Execution
was a document which might authorize LNC to execute in the
District or to request the Clerk to show him or her that
document to confirm that LNC was so authorized. LNC will
not be permitted to set in motion an execution process
without regard for the requirements of Delaware state law.
To hold otherwise would render meaningless the requirement
of Rule 69(a) that judgment creditors follow state law in
proceedings to execute on the judgment. Fed.R.Civ.P. 69(a).

The Delaware Superior Court Rules explicitly require the
signature and seal of the Prothonotary (substituted by the
Clerk of the Court in this particular instance) so that the
writ issues from the Court. Without such a signature or
seal, the document is not an order of the Court but an
order of an attorney. While some states may allow such an
order to issue over the signature of an attorney, Delaware
has not chosen to do so. However formalistic LNC complains
such a requirement is, that requirement ensures that a
garnishee understands in no uncertain terms that a Court,
with all its powers of enforcement, is commanding it to
take particular actions. Without the signature and seal of
the Court, it is impossible to say a Court has commanded a
garnishee to take the action directed by the papers served.
Therefore, without the signature and seal of the Court, the
Restraining Notice was not an order of the Court and can be
neither valid nor effective as a writ of attachment fi.fa.

Because of the flaws in the Restraining Notice — the
flawed return date and the absence of the signature and
seal of the Court — it was neither an effective
attachment or a valid order. Therefore, the Court will
quash the Restraining Notice, and deny LNC’s motion to
order return of the Judgment Debtor’s property to the
District of Delaware. Because the Restraining Notice was
not an order of the Court, much less a valid one, actions
in contravention of the Restraining Notice cannot subject
COPI to being held in contempt of Court. See Roe v.
Operation Rescue, 54 F.3d 133, 137 (3d Cir. 1995)
(existence of a valid court order is an element of
contempt). The Court will deny LNC’s motion for an order to
show cause why COPI should not be held in contempt of the
Restraining Notice.

III. CONCLUSION

This Court will not allow parties to disregard clear-cut,
easy-to-follow rules established by the Delaware Superior
Court where those rules have a clear purpose. The Delaware
Superior Court Civil Rules clearly set out the timing and
signature and seal requirements to be followed. Failure to
follow either one would compel this Court to reach the
conclusion that the Restraining Notice is invalid and
ineffective. LNC could have easily complied with the clear
mandates of Delaware law. It chose instead to tweak a New
York state form of execution process without regard for the
requirements of Delaware law. LNC’s motions will be denied
and COPI’s West Page 616 motion to quash the Restraining
Notice will be granted.

APPENDIX A

RESTRAINING NOTICE TO GARNISHEE WITH INFORMATION SUBPOENA

TO: Chevron Overseas Petroleum, Inc. c/o its registered
agent The Prentice-Hall Corporation System, Inc. 1013
Centre Road Wilmington, DE 19805

WHEREAS, in an action in the United States District Court,
Southern District of New York, between LNC Investments,
Inc., as plaintiff, and The Democratic Republic of Congo
(formerly the Republic of Zaire) and The National Bank of
Congo (formerly the Bank of Zaire), as defendants, who are
all the parties named in the action, a judgment (the
“Judgment”) was entered on January 9, 1997, in favor of LNC
Investments, Inc., judgment creditor, and against The
Democratic Republic of Congo (formerly the Republic of
Zaire) and The National Bank of Congo (formerly the Bank of
Zaire), judgment debtors, in the amount of THREE MILLION
NINE HUNDRED SEVENTEEN THOUSAND FOUR 11/100 HUNDRED
NINETY-SEVEN AND DOLLARS ($3,917,497.11). Of the Judgment
amount, together with interest thereon from January 9,
1997, THREE MILLION TWO HUNDRED TWENTY-ONE THOUSAND NINE
HUNDRED SEVENTY AND 45/100 DOLLARS ($3,221,970.45) remains
due and to date unpaid to plaintiff.

WHEREAS, on December 26, 1997 the Judgment was entered in
this Court for purposes of execution;

WHEREAS, it appears that you (including, without
limitation, any of your parent(s), subsidiary(ies),
branches, agencies, instrumentalities and/or affiliated
entities) owe a debt to the judgment debtors or are in
possession or in custody of property in which the judgment
debtors have an interest, including but not limited to any
account payable pursuant to any joint venture or other
arrangement for the exploration and production of petroleum
products.

TAKE NOTICE that pursuant to Federal Rule of Civil
Procedure 69 and Title 10 Delaware Code Chapter 35 and
Subchapter VIII, you (as defined above) are hereby
forbidden to make or suffer any sale, assignment, or
transfer of, or any interference with, any such property or
payover or otherwise dispose of any such debt except to the
United States Marshal and as therein provided.

TAKE FURTHER NOTICE that this notice also covers all
property in which the judgment debtors have an interest
hereafter coming into your possession or custody, and all
debts hereafter coming due from you (as defined above) to
the judgment debtors.

NOW, THEREFORE, WE COMMAND YOU (as defined above), to
answer the within questions in writing, under oath, and
return the original of the questions together with your
answers to the undersigned within seven (7) days of service
upon you. False swearing or failure to comply with this
subpoena is punishable as a contempt of court.

TAKE FURTHER NOTICE that disobedience of this Restraining
Notice is punishable as a contempt of court.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on January 26, 1998, I caused to be
delivered by Certified Mail, postage pre-paid, return
receipt requested, two true and correct copies of the
foregoing Restraining Notice to Garnishee With Information
Subpoena to the following:

CT Corporation

1633 Broadway

New York, N.Y. 10019 West Page 617

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NON-TRANSFERRABLE.] West Page 618

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ATTACHMENT A

DEFINITIONS

“DOCUMENTS” means writings and recordings, as defined in
Federal Rules of Evidence § 1001, and includes but is
not limited to royalty statements, correspondence,
memoranda, notes, messages, letters, telegrams, teletypes,
facsimiles, bulletins, notes or summaries of meetings,
notes of oral communications, notes of interoffice and
intraoffice telephone calls, diaries, chronological data,
minutes, books, reports, studies, appraisals, summaries,
West Page 619 pamphlets, printed matter, charts, accounting
records, ledgers, journals, invoices, worksheets, receipts,
returns, computer printouts, prospectuses, financial
statements or reports (including bank, brokerage, mutual
fund, and other investment account statements), shipping
records, deposit tickets, checks, advices, credit
memoranda, debit memoranda, checkbook stubs, schedules,
affidavits, pleadings, agreements, releases, contracts,
canceled checks, transcripts and graphic or aural records
of any kind.

“ZAIRE” means any of the following: the National Bank of
Congo, Banque Nationale du Congo, the Bank of Zaire, Banque
du Zaire, the Democratic Republic of Congo, Republique
Demoncratique du Congo, Republic of Zaire or Zaire.

“YOUR POSSESSION, CUSTODY OR CONTROL” means the
possession, custody, or control of any of the following:
(i) Chevron Corporation; (ii) subsidiaries, joint ventures,
partnerships and other entities in which Chevron
Corporation directly or indirectly has an ownership
interest and which explore for or produce oil or gas from
fields located in ZAIRE; (iii) subsidiaries, joint
ventures, partnerships and other entities included in
Chevron Corporation’s most recent consolidated financial
statements; (iv) Gulf Oil Zaire S.A.R.L.; and (v) Zaire
Gulf Oil Company.

“CHEVRON ENTITY” means any of the following: (i) Chevron
Corporation; (ii) subsidiaries, joint ventures, partnerships
and other entities in which Chevron Corporation directly
or indirectly has an ownership interest and which explore
for or produce oil or gas from fields located in ZAIRE;
(iii) subsidiaries, joint ventures, partnerships and other
entities included in Chevron Corporation’s most recent
consolidated financial statements; (iv) Gulf Oil Zaire
S.A.R.L.; and (v) Zaire Gulf Oil Company.

CATEGORIES

Category One: Chevron Corporation’s Form 10-K for the
fiscal year ended December 31, 1996 at page 5 states: “The
petroleum activities of the company are widely distributed
geographically, with major operations in the United States,
Canada, Australia, United Kingdom, Congo, Angola, Nigeria,
Papau, New Guinea, Indonesia, China and Zaire.” This
category requests the most recent DOCUMENTS in YOUR
POSSESSION, CUSTODY OR CONTROL which reflect the following
for each CHEVRON ENTITY which has petroleum activities in
Zaire: (i) the legal name of the entity; (ii) the state of
the United States of America of incorporation or the
country, other than the United States of America, of
incorporation; (iii) the name(s), address(es) and phone
number(s) of the agent(s) for service of process; (iv) the
name(s), work address(es), and work phone number(s) of its
officers; (v) the states of the United States of America in
which the entity is qualified to do business; and (vi) the
percentage of the entity directly and indirectly owned by
Chevron Corporation.

Category Two: Any DOCUMENTS less than five years old in
YOUR POSSESSION, CUSTODY OR CONTROL reflecting, relating,
mentioning or referring in any way to royalty or concession
payments for the exploration or production of oil or gas
from fields located in ZAIRE.

Category Three: Any DOCUMENTS in YOUR POSSESSION, CUSTODY
OR CONTROL reflecting, relating, mentioning or referring in
any way to contracts or other agreements entered into with
ZAIRE.

Category Four: Any DOCUMENTS less than five years old,
including but not limited to accounting records, in YOUR
POSSESSION, CUSTODY OR CONTROL reflecting, relating,
mentioning or referring to the full or partial satisfaction
of accounts, debts or obligations owed to or from ZAIRE.

Category Five: Any DOCUMENTS less than five years old in
YOUR POSSESSION, CUSTODY OR CONTROL West Page 620
reflecting, relating, mentioning or referring to transfers
of funds to or from ZAIRE.

Category Six: Chevron Corporation’s Form 10-K for the
fiscal year ended December 31, 1996 at page 5 states: “The
petroleum activities of the company are widely distributed
geographically, with major operations in the United States,
Canada, Australia, United Kingdom, Congo, Angola, Nigeria,
Papau, New Guinea, Indonesia, China and Zaire.” This
category requests for each of the past five years,
organization charts showing Chevron Corporation’s direct
and indirect ownership interests in the CHEVRON ENTITIES
which have petroleum activities in Zaire.

Category Seven: For the past five years, any tax, excise
or duty returns filed with ZAIRE and related work papers
and schedules in YOUR POSSESSION, CUSTODY OR CONTROL.

Category Eight: For the past five years, any DOCUMENTS
which mention or refer in any way to ZAIRE which were
provided to the auditors of Chevron Corporation by any of
the following: (i) Chevron Corporation; (ii) subsidiaries,
joint ventures, partnerships and other entities in which
Chevron Corporation directly or indirectly has an ownership
interest and which explore for or produce oil or gas from
fields located in ZAIRE; (iii) subsidiaries, joint
ventures, partnerships and other entities included in
Chevron Corporation’s most recent consolidated financial
statements; (iv) Gulf Oil Zaire S.A.R.L.; (v) Zaire Gulf
Oil Company; and (vi) ZAIRE. West Page 621

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[fn1] The parties originally asked the Court to decide
LNC’s Motion to Compel Discovery in Aid of Execution, dated
March 3, 1999, and COPI’s Counter-Motion for a Protective
Order. At oral argument and ensuing discussions, the
parties were able to resolve all of their differences but
one. That one difference was resolved during a telephonic
hearing held on August 17, 1999. Those motions will be
dismissed as moot, along with COPI’s motion for costs and
attorney’s fees. LNC’s motion for costs and attorney’s fees
will be held in abeyance.

[fn2] The DRC and the National Bank of Congo were formally
added to the judgment by amendment dated February 18, 1999.

[fn3] A copy of the Restraining Notice, D.I. 5, is attached
as Appendix A.

[fn4] This dispute eventually led to LNC’s Motion to Compel
of March 3, 1999, which, as already rehearsed, the parties
settled amicably at the hearing held July 29, 1999.

[fn5] Throughout, these transfers will be referred to as
the “April 6 transfers.”

[fn6] A copy of Form 45 is attached as Appendix B.

[fn7] That statute allows service of a restraining notice of
a judgment debtor or the obligor of a judgment debtor over
the signature of the attorney for the judgment creditor.
N.Y.C.P.L.R. § 5222(a).

[fn8] COPI does not suggest the substitution of the U.S.
Marshal for the sheriff, and the substitution of the Clerk
for the Prothonotary are objectionable. Indeed, as already
rehearsed, the Supreme Court has indicated that such
substitutions are both necessary and acceptable for the
execution of judgments in the federal system. See Yazoo,
257 U.S. at 24-25, 42 S.Ct. 27.

[fn9] Attachment A contains the “questions” the Restraining
Notice and attached subpoena purport to require COPI to
answer.