                               In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 15-2469
SYED RIZVI and PRIME BUILDERS & DEVELOPMENT, INC.,
                                      Plaintiffs-Appellants,

                                 v.

ALLSTATE CORPORATION, also known as
ALLSTATE INDEMNITY COMPANY,
                                                 Defendant-Appellee.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
            No. 13 C 6924 — Thomas M. Durkin, Judge.
                     ____________________

     ARGUED APRIL 14, 2016 — DECIDED AUGUST 12, 2016
                     ____________________

   Before POSNER, KANNE, and HAMILTON, Circuit Judges.
    HAMILTON, Circuit Judge. We hold in this appeal that a sep-
arate basis for federal subject matter jurisdiction is necessary
when, in a federal supplemental proceeding, a judgment
creditor seeks to maintain an action under 735 Ill. Comp. Stat.
§ 5/2-1402(c)(6) against a third party on the ground that the
third party is indebted to the judgment debtor. Such an action
2                                                   No. 15-2469

is sufficiently independent of the underlying case as to re-
quire its own basis for subject matter jurisdiction. There was
no separate basis for jurisdiction in this case, so we affirm the
judgment of the district court dismissing the supplemental
proceeding for lack of subject matter jurisdiction.
    Plaintiffs Syed Rizvi and his company, Prime Builders &
Development, Inc., performed repair work for Mirza Alikhan,
whose house had been damaged in a fire. When the work was
completed in 2009, Alikhan paid Rizvi only part of what he
owed. Rizvi sued suit for breach of contract in federal district
court, invoking the court’s diversity jurisdiction under 28
U.S.C. § 1332. (Rizvi and Prime Builders are Illinois citizens.
Alikhan is a citizen of Texas.) When Alikhan failed to appear
to defend the suit, plaintiffs obtained a default judgment.
    Plaintiffs then served a citation to discover assets on All-
state Corporation pursuant to an Illinois statute that governs
supplementary proceedings to assist in collecting on a judg-
ment. See 735 Ill. Comp. Stat. § 5/2-1402; see also Fed. R. Civ.
P. 69(a) (adopting state law for procedures to execute judg-
ments and obtain relevant discovery). The statute permits the
creditor to prosecute supplementary proceedings “for the
purposes of examining the judgment debtor or any other per-
son to discover assets or income of the debtor not exempt
from the enforcement of the judgment….” § 5/2-1402(a). The
district court ordered Allstate to respond to the citation and
determined it would take no further action in the case absent
a motion from the parties.
   Allstate responded that Alikhan had no accounts of any
sort with Allstate. Allstate also said: (1) Alikhan had no claims
pending with Allstate; (2) Alikhan’s most recent claim had
No. 15-2469                                                      3

been opened and closed in 2008; and (3) Allstate did not owe
any insurance payments to Alikhan.
   Plaintiffs then asked the district court to order Allstate to
remit “outstanding insurance proceeds of $110,926.58” and to
impose sanctions against Allstate pursuant to Federal Rule of
Civil Procedure 11(b)(4). Plaintiffs attacked Allstate’s re-
sponse as “baseless” and offering “absolutely no evidence
that Allstate is not holding [Alikhan’s] insurance proceeds.”
According to plaintiffs, Allstate had participated in negotiat-
ing the repair contract. Their evidence was that Allstate In-
demnity Company was listed as the insurance company on
the contractor estimate. Plaintiffs also contended that Allstate
had made a partial payment to Alikhan and Prime Builders in
2008. Through this conduct, plaintiffs argued, Allstate had es-
sentially admitted a valid insurance policy was in effect at the
time of the fire but had refused without justification to pay
the rest of the proceeds for the repairs on Alikhan’s property.
     The district court held a status hearing and sensibly raised
the question of subject matter jurisdiction. Diversity of citi-
zenship had existed between the plaintiffs and Alikhan, but
Allstate, like plaintiffs Rizvi and Prime Builders, is a citizen of
Illinois. Following the hearing, the court denied the turnover
motion. The court noted that plaintiffs had served Allstate
with the citation to discover assets, and Allstate had re-
sponded that it had no assets belonging to Alikhan, complet-
ing the process described in 735 Ill. Comp. Stat. § 5/2-1402(a).
The court then considered whether the remainder of the stat-
ute authorized a turnover order.
   Once a judgment debtor’s assets have been discovered un-
der § 5/2-1402(a), the statute focuses primarily on actions a
4                                                    No. 15-2469

creditor can take against the judgment debtor itself. Two pro-
visions, though, can apply to parties other than the judgment
debtor. One grants the court the power to compel “any person
cited, other than the judgment debtor, to deliver up any assets
so discovered … when those assets are held under such cir-
cumstances that in an action by the judgment debtor he or she
could recover them in specie or obtain a judgment for the pro-
ceeds or value thereof as for conversion or embezzlement.”
§ 5/2-1402(c)(3). The district court rejected this provision as a
basis for the turnover order because no assets belonging to
Alikhan had been “so discovered” through the citation.
    The other provision allows the court to authorize the judg-
ment creditor “to maintain an action against any person or
corporation that, it appears upon proof satisfactory to the
court, is indebted to the judgment debtor, for the recovery of
the debt….” § 5/2-1402(c)(6). This provision provides the
plaintiffs with a mechanism to attempt to recover any insur-
ance proceeds that Allstate allegedly owed Alikhan. It per-
mits them to step into Alikhan’s shoes to assert any rights he
might have under the insurance policy as a means to satisfy
the default judgment. The district court, however, relied on
our opinion in Travelers Property Casualty v. Good, 689 F.3d 714
(7th Cir. 2012), to hold that plaintiffs’ effort to recover insur-
ance proceeds directly from Allstate was so independent from
the original contract action against Alikhan that it required an
independent basis for subject matter jurisdiction. Without di-
versity of citizenship, there was no basis for jurisdiction. The
district court dismissed plaintiffs’ claim against Allstate for
lack of subject matter jurisdiction.
No. 15-2469                                                       5

    Plaintiffs appealed but inexplicably failed to address the
district court’s ruling on subject matter jurisdiction or the ef-
fect of Travelers, the foundation of the dismissal. Instead, they
devoted their brief to a new argument, that Allstate’s response
to the original citation to discover assets does not qualify as
an “affidavit” under Illinois Supreme Court Rule 191(a). Even
if the plaintiffs were correct, the point would still be irrele-
vant. Allstate was ordered to respond to the citation, and it
did. It was not ordered to respond with an affidavit that com-
plied with Rule 191(a), nor does the statute require one. All-
state answered in a document prepared by an Allstate agent
and declared under penalty of perjury pursuant to 28 U.S.C.
§ 1746 that it was not holding any assets belonging to Alikhan.
Given this evidence, the district court was correct that there
was no basis for a turnover order under § 5/2-1402(c)(3). See
Lange v. Misch, 598 N.E.2d 412, 415 (Ill. App. 1992) (statute
does not authorize “the entry of a judgment at a supplemen-
tary proceeding against a third party who does not possess
assets of the judgment debtor”).
    Plaintiffs’ real argument seems to be that Allstate is ly-
ing—that, contrary to its declaration in the record, Allstate is
holding Alikhan’s assets in the form of unpaid insurance pro-
ceeds. Well, perhaps. We take no position on that question.
For the district court and for us, the critical jurisdictional point
is that resolving that dispute takes the case out of the sphere
of § 5/2-1402(c)(3), which applies when the third party is hold-
ing the debtor’s assets (in a bank account, for example), and
into the realm of § 5/2-1402(c)(6), which applies when the
third party may be indebted to the debtor and allows the judg-
ment creditor to maintain a separate action on that basis.
6                                                  No. 15-2469

    As we explained in Travelers, such a dispute under § 5/2-
1402(c)(6) presents a separate action that requires its own ba-
sis for federal jurisdiction. Travelers involved an underlying
state court class action alleging violations of the Fair and Ac-
curate Credit Transactions Act of 2003, 15 U.S.C. § 1681c(g).
The case had been settled by the original parties. As part of
the settlement, the original defendant assigned the plaintiffs
its claims against and rights to payment under an insurance
policy issued by Travelers. 689 F.3d at 716. Class representa-
tive Good filed a citation to discover assets against Travelers
in the state court pursuant to § 5/2-1402. Travelers then filed
an action in federal district court seeking a declaratory judg-
ment that its policies did not cover the class members’ statu-
tory claims. 689 F.3d at 717.
    We held that the district court lacked subject matter juris-
diction over Travelers’s declaratory judgment suit because the
claims of the individual defendants could not be aggregated
to satisfy the amount-in-controversy requirement of 28 U.S.C.
§ 1332. Id. at 723. In coming to this conclusion, we held that
there was no evidence that the original defendant had as-
signed its insurance proceeds to the class in order to defeat
federal jurisdiction—primarily because we concluded that
Travelers could have removed the citation proceeding to fed-
eral court as its own separate action. Id.
   We explained that the removal statute, 28 U.S.C. § 1441,
permits removal of independent suits, though not ancillary or
supplementary proceedings. 689 F.3d at 724, citing Federal
Sav. & Loan Ins. Corp. v. Quinn, 419 F.2d 1014, 1018 (7th Cir.
1969), and Barrow v. Hunton, 99 U.S. 80, 83 (1878). There is no
bright-line formula for separating supplemental and inde-
pendent proceedings for removal purposes, but we said that
No. 15-2469                                                      7

a proceeding is independent, and thus potentially removable,
where it presents “genuine disputes with new parties and
raise[s] new issues of fact and law.” Travelers, 689 F.3d at 725
(citations omitted). We found that “the citation proceeding
against Travelers was separate from the underlying suit” and
“could have been removed if the requirements of diversity ju-
risdiction were satisfied.” Id. “[A]s the dispute over insurance
coverage crystallized in the state court, the citation proceed-
ing became an ‘action … for the recovery of the debt.’” Id.,
quoting § 5/2-1402(c)(6). The district court correctly recog-
nized here that this case, like Travelers, involves a citation pro-
ceeding that has become separate from the underlying suit
and needs its own basis for jurisdiction.
    In oral argument, plaintiffs argued that Travelers is irrele-
vant because the insurance company in Travelers contested
coverage and Allstate has not done so here. As evidence,
plaintiffs point out that Allstate does not deny that it made a
partial payment on the repairs. The critical point in Travelers
was not the specifics of the insurer’s defense. What mattered
was that the decision to contest coverage established a new
dispute governed by law distinct from the underlying con-
sumer class action and based on different facts. See Travelers,
689 F.3d at 724–26. Likewise, in this case Allstate has taken the
position that it does not owe Alikhan any money and is not
holding any proceeds from his claim. It has produced a state-
ment under penalty of perjury to that effect. Any further pro-
ceedings—for example, to contest coverage, to dispute
whether additional payment is owed, or to litigate exclusions
or policy limits—will require litigation that relies on different
facts and law than the underlying breach of contract claim
against Alikhan. Under Travelers, this is a separate dispute
that requires its own basis for federal jurisdiction. There is
8                                                     No. 15-2469

none, so the district court correctly dismissed plaintiffs’ § 5/2-
1402(c)(6) claim for lack of subject matter jurisdiction. Plain-
tiffs may seek relief from Allstate in an Illinois state court, but
not in a federal court.
    The judgment of the district court is AFFIRMED.
