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Transfirst Group Inc. v. Magliarditi

United States District Court, D. Nevada

August 29, 2017

TRANSFIRST GROUP INC., et al., Plaintiffs,
v.
DOMINIC J. MAGLIARDITI, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR LEAVE TO WITHDRAW MONTHLY EXPENSES FROM THE FANE TRUST (ECF NO. 138)

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Defendant Francine Magliarditi moves to withdraw over $40, 000 per month to pay expenses. She also seeks a one-time distribution to pay over $109, 000 in attorney's fees for both her own counsel and for her husband Dominic's counsel. She filed a breakdown of her requests in an in camera submission to the court. The plaintiffs oppose, arguing there is no support for the requested distributions, and over $40, 000 per month is unreasonable on its face.

         I previously indicated in the preliminary injunction order that Francine could move to withdraw funds "for specific purposes upon a showing of good cause." ECF No. 109 at 17. I have discretion to modify the preliminary injunction to release funds to Francine to pay living expenses. See S.E.C. v. Dowdell, 175 F.Supp.2d 850, 854 (W.D. Va. 2001) (stating if courts have the power to freeze assets they logically have the "corollary authority" to release funds for living expenses) (quoting S.E.C. v. Diicland Gonzalez de Castilla, 170 F.Supp.2d 427, 429 (S.D.N.Y. 2001)). To determine whether to release funds, I weigh Francine's interest in having funds for "ordinary and necessary living expenses" against the plaintiffs' interest in preventing the dissipation of assets. See S.E.C. v. Dobbins, No. 3:04-CV-0605-H, 2004 WL 957715, at *3 (N7D7Tex. Apr. 14, 2004). In making this evaluation, I consider whether Francine has access to other sources of funds and whether the requested distributions are for luxury items rather than necessities. Duclaud Gonzalez de Castilla, 170 F.Supp.2d at 430. I address below the various categories of requested distributions.

         A. Rents

         I allow a monthly distribution of $1, 000 per month to pay rent on the 9501 Canyon Mesa property in Las Vegas so that Francine has a place to live. However, Francine provides no reason why she requires $6, 400 per month for another home in California. Although she denies that home is a vacation home (ECF No. 144 at 6-7), she provides no explanation for why she needs it given that she resides in Las Vegas. Based on the lease Francine provided, the California home is a month-to-month rental, and thus she will not suffer severe financial hardship by cancelling it. See Francine Magliarditi's In Camera Submission of Monthly Budget Items for July 2017, Ex. A. I therefore deny the request for monthly rent for the California property.

         B. Utilities

         Because I have denied rent for the California property, I also deny the related utility expenses. As for the Nevada property, Francine requests $58 for her gas bill and $300 for her energy bill. I allow monthly distributions for these bills, but only for the exact amount of the bills. As the weather changes, Francine's gas bill may go up while her energy bill (which is $256, not $300) may go down. Consequently, I currently approve $58 to pay the gas bill and $256.39 to pay for the energy bill for the 9501 Canyon Mesa property. Future bills will need to be submitted for approval in the amount incurred only.

         C. Food

         Francine requests $3, 500 per month for food. That amount is unreasonable on its face. Per the U.S. Bureau of Labor Statistics for 2015 (the last available year), a family of 2.5 persons spent an average of $7, 023 per year on food. Francine offers no explanation why each month she needs half the amount that an average family spends on food for an entire year. She offers no evidentiary support for this request. I will allow a quarter of the annual average amount ($1, 755.75) for food for the the remainder of 2017.

         D. Miscellaneous

         Francine asks for $1, 000 per month for "miscellaneous" expenses. She provides no explanation as to what might fall into this category nor offers any evidence in support. This request is unreasonable on its face. I therefore deny it.

         E. Automobiles

         Francine requests $633.08 per month for lease of a Mercedes Benz. She also requests $91.41 to pay for insurance on the Mercedes Benz. She seeks to pay insurance on three other vehicles, although she provides no explanation for who owns the vehicles or why she is paying the insurance. Finally, she requests $400 per month in gas.

         I allow the $633.08 per month for the lease of the Mercedes Benz. Per the lease contract Francine provided, she may suffer a substantial penalty if the lease is terminated early. See In Camera Submission, Ex. H. Additionally, I grant $91.41 to pay the insurance on the Mercedes Benz. Id., Ex. I at 2 (6-month premium of $548.51).

         I deny the request to pay insurance on the other vehicles. There is no explanation for why insurance for a Mazda, a Toyota, and a Saturn are necessary living expenses for Francine.

         Finally, I allow $175 per month for gas. Per the U.S. Bureau of Labor Statistics for 2015 (the last available year), the average family spent $2, 090 per year for gas and motor oil. Francine has not presented evidence that her driving needs exceed that of an average family.

         F. Health Insurance

         I grant the request to pay for health insurance for Francine, her husband Dominic, and their adult child Alexandra. However, the evidence provided does not show what period the premium amount of $1, 132.55 covers. Upon proof that this amount is the monthly premium, it will be approved for a monthly distribution. If this is a semi-annual payment, I will approve a lump sum distribution.

         G. ...


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