Porter Capital Corporation v. Sunset Logistics Inc et al

Filing 66

MEMORANDUM OPINION. Signed by Judge R David Proctor on 01/03/2025. (CLD)

FILED
2025 Jan-03 PM 01:50
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION

PORTER CAPITAL CORPORATION,
Plaintiff,
v.
SUNSET LOGISTICS, INC., et al.,
Defendants.

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Case No.: 2:24-cv-00484-RDP

MEMORANDUM OPINION
This case is before the court on the Second Motion to Dismiss filed by Defendants
Capstone Fuel Services, Inc.; Sunset Tank Express, Inc.; and Tammy Sue Glidewell, in her
capacity as Executor of the Estate of John Glidewell (“Defendants”) (Doc. # 45) and the Motion
to Strike Jury Demand filed by Plaintiff Porter Capital Corporation (“Porter Capital”). (Doc. # 58).
The Motions have been fully briefed.1 (Docs. # 45, 49; 58, 61, 62). After careful consideration, the
court concludes that Defendants’ Second Motion to Dismiss (Doc. # 45) is due to be denied,2 and
Porter Capital’s Motion to Strike Jury Demand (Doc. # 58) is due to be denied.

Regarding the Second Motion to Dismiss (Doc. # 45), movants, Defendants, have not filed a Reply.
According to Exhibit B of the court’s Initial Order (Doc. # 39), the movant’s reply brief shall be filed no later than
five (5) calendar days after the date on which the opponent’s responsive brief is filed. (Id. at 24). Because the
responsive brief was filed on August 22, 2024, the deadline for a reply brief has passed. Defendants did not file a
reply; therefore, the court proceeds as if the Motion (Doc. # 45) has been fully briefed.
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The court recognizes that this case is stayed as to the following Defendants who have filed for bankruptcy
protection: Sunset Express, Inc.; Sunset Logistics, Inc.; Mobile Fleet Marketing, Inc; Glidewell Leasing Company,
LP; Sun-Teach Leasing of Texas, LP. (Doc. # 65). However, because there are remaining Defendants who have not
filed for bankruptcy protection, the court may rule on this Motion to Dismiss as to them. And when the previously
listed entities’ bankruptcy cases are resolved, this opinion and contemporaneously filed order will also apply to them.

I.

Background
On April 17, 2024, Porter Capital Corporation (“Porter Capital”) filed its initial complaint

against Defendants Sunset Logistics, Inc.; Mobile Fleet Marketing, Inc.; Alpine Aggregate
Transport, Inc.; Sunset Express, Inc.; Capstone Fuel Services, Inc.; Sunset Tank Express, Inc.;
Glidewell Leasing Company, Limited Partnership; Sun-Tech Leasing of Texas, LP; the Estate of
John Glidewell; David Malay; and Track Line, LLC, asserting claims of breach of contract, breach
of guarantees, and possession/detinue. (Doc. # 1).
On July 31, 2024, Porter Capital filed its First Amended Complaint against all of the
previously mentioned Defendants with the exception of the Estate of John Glidewell. (See Doc. #
43 at 1-3 (listing Defendants)). Porter Capital substituted the Estate of John Glidewell with
Defendant Tammy Sue Glidewell, who is the executor of the Estate of John Glidewell. (Id. ¶ 10).
The First Amended Complaint asserts the same claims as the initial complaint: breach of contract,
breach of guarantees, and possession/detinue. (Id. ¶¶ 27-38).
In its complaint, Porter Capital alleges that on or about March 4, 2021, it entered into a
Recourse Receivables Purchase & Security Agreement (the “Factoring Agreement”) with Seller
Companies.3 (Id. ¶ 16). According to Porter Capital, the Factoring Agreement provides a
framework through which the Seller Companies could obtain immediate working capital through
the sale of certain accounts receivables (defined as “Accounts” under the Factoring Agreement) to
Porter Capital, the “Purchaser.” (Id. ¶ 17). Porter Capital alleges that because the Factoring
Agreement is a “recourse” rather than a “non-recourse” agreement, the Seller Companies remained

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Porter Capital does not specifically define who the Seller Companies are in either its initial Complaint or
First Amended Complaint. (See Docs. # 1, 43). However, Plaintiff attached what it alleges is the Factoring Agreement,
which defines the “Seller” as Sunset Logistics, Inc.; Mobile Fleet Marketing, Inc.; Alpine Aggregate Transport, Inc.;
Sunset Express, Inc.; Capstone Fuel Services, Inc.; Sunset Tank Express, Inc.; Glidewell Leasing Company, Limited
Partnership; and Sun-Tech Leasing of Texas, LP. (See Doc. # 43-1 at 2 (defining the “Seller”)). Therefore, pursuant
to the attached Factoring Agreement, the court finds that the listed entities are the Seller Companies.

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liable for any amount advanced in connection with the purchase of an Account under the Factoring
Agreement when the Account is not paid under its terms. (Id.).
Porter Capital contends that once it purchased an Account, it became the sole owner of the
Account, thereby retaining all rights to payment. (Id. ¶ 18). According to Porter Capital, the Seller
Companies then became obligated to immediately deposit all funds received in connection with
such Purchased Account into a controlled account as designated under the Factoring Agreement.
(Id.). And as alleged, Porter Capital retained the right to collect such amounts owed on all
Purchased Accounts directly from the applicable account debtor in the event of default. (Id.).
Porter Capital also alleges that when it purchased an Account, it would advance to the
Seller Companies an amount equal to up to 95% of the Account’s face amount and the remaining
amount that was not advanced was held by Porter Capital and applied to Seller’s “Reserve
Account,” which, according to the Factoring Agreement, is a ledger maintained by Porter Capital
throughout the duration of the relationship. (Id. ¶ 19). Porter Capital alleges that pursuant to the
Factoring Agreement, (1) Seller agreed to pay to Porter Capital a fixed interest component and
additional term fees that fluctuated depending on the payment term of each Account and the
minimum average monthly volume, and (2) in the event of default, these term fees increased. (Id.
¶ 20).
According to Porter Capital, in March 2021, it purchased Accounts from the Seller
Companies with a face amount of $3,055,953.03 and advanced to them the total sum of
$2,460,061.08. (Id. ¶ 21). Porter Capital also alleges that on or around June 16, 2022, it executed
an amendment to the Factoring Agreement with the Seller Companies, whereby Porter Capital
purchased additional Accounts and increased the amount advanced to the Seller Companies. (Id.
¶ 22). Porter Capital contends that the amendment incorporates the terms of the Factoring

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Agreement and states that the Agreement’s terms remain in full force and effect. (Id.). According
to Porter Capital, John Glidewell executed the amendment4 as both President of the Seller
Companies and the individual guarantor of the Seller Companies’ obligations. (Id.).
Porter Capital further alleges that in January 2024, the Seller Companies stopped
submitting Accounts for purchase. (Id. ¶ 23). Porter Capital claims that around this time it learned
that that its Purchased Accounts were subject to garnishment proceedings (id. ¶ 24) and that its
two most significant Purchased Accounts were subject to dispute and unlikely to be paid. (Id. ¶
25). According to Porter Capital, on February 20, 2024, it notified the Seller Companies that
multiple events of default had occurred as a result of the garnishment proceedings and the Seller
Companies’ failure to timely pay their obligations under the Factoring Agreement. (Id. ¶ 27).
Porter Capital alleges that at that time the total outstanding balance was $5,003,651.58. (Id.).
Additionally, Porter Capital alleges that around that time, it accelerated all obligations due under
the Factoring Agreement and set a deadline of February 26, 2024 for the Seller Companies to pay
the full outstanding balance. (See id. (citing Doc. # 43-2, the letter sent to Seller Companies
regarding the acceleration and deadline)).
Porter Capital contends that the Seller Companies have not made any payments related to
the obligations owed under the Factoring Agreement and, as of April 3, 2024, the outstanding
balance was $5,009,556.51 (plus accruing costs and expenses). (Id. ¶ 28).
According to Porter Capital, the Factoring Agreement is secured by the personal guarantees
of John Glidewell (“Glidewell”), David Malay (“Malay”), and Track Line, LLC. (Id. ¶ 29). Porter
Capital further alleges that John Glidewell was the original owner of the Seller Companies, but
after he passed away in May 2023, Malay and his company Track Line, LLC executed individual

Porter Capital provides in its complaint that “[t]he Factoring Agreement as amended is still referred to
herein as the ‘Factoring Agreement.’” (Id. ¶ 22).
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and entity guarantees on behalf of all Seller Companies besides Alpine Aggregate Transport, Inc.
(“Alpine”). (See id. ¶ 30 (citing Doc. # 43-3 (Malay and Track Line, LLC’s Guarantee
Agreement))). Also, according to Porter Capital’s Complaint, the Estate of John Glidewell (“the
Estate”) has assumed Glidewell’s obligations under his personal guarantee with respect to Alpine.
(Id. ¶ 31).
In its Complaint, Porter Capital notes that the Estate, Malay, and Track Line, LLC are
collectively referred to as the “Guarantors.” (Id.). Porter Capital alleges that the Guarantee
Agreements specifically provide that the Guarantors “absolutely, unconditionally, and irrevocably,
jointly and severally, guarantee to Purchaser the prompt payment and performance of the
Obligations . . . along with all other obligations of Seller . . . of every kind and character now or
hereafter owed to Purchaser.” (Id. ¶ 32). Porter Capital also alleges that the Factoring Agreement
is further secured by a first-priority security interest in favor of Porter Capital in the Seller
Companies’ Accounts and Inventory. (Id. ¶ 33). According to Porter Capital, it perfected its
security interest by filing a UCC financing statement with the Texas Secretary of State on March
8, 2021.5 (Id.)
II.

Standard of Review
The Federal Rules of Civil Procedure require that a complaint provide “a short and plain

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
However, the complaint must include enough facts “to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more
than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards,
nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked

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The financing statement is allegedly recorded as Instrument No. 210008857172. (Id.).

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assertion[s]” without supporting factual allegations. Id. at 555, 557. In deciding a Rule 12(b)(6)
motion to dismiss, courts view the allegations in the complaint in the light most favorable to the
non-moving party. Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).
To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible
on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “[t]he
plausibility standard is not akin to a ‘probability requirement,’” the “complaint must demonstrate
‘more than a sheer possibility that a defendant has acted unlawfully.’” Id. A plausible claim for
relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal
evidence” to support the claim. Twombly, 550 U.S. at 556.
In considering a motion to dismiss, a court should “1) eliminate any allegations in the
complaint that are merely legal conclusions; and 2) where there are well-pleaded factual
allegations, ‘assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.’” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 F. App’x 136, 138
(11th Cir. 2011) (quoting Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)).
That task is context specific and, to survive the motion, the allegations must permit the court based
on its “judicial experience and common sense . . . to infer more than the mere possibility of
misconduct.” Iqbal, 556 U.S. at 679. If the court determines that all the well-pleaded facts,
accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly,
550 U.S. at 570.

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III.

Analysis
Porter Capital asserts the following claims: breach of contract against the Seller Companies

(Count One); breach of guarantees against the Guarantors (Count Two); and possession/detinue
against the Seller Companies (Count Three). (Doc. # 43). Defendants argue that all of Porter
Capital’s claims should be dismissed because (1) the Tarrant County Probate Court has dominant
jurisdiction; (2) Porter Capital has failed to state a claim for breach of contract; and (3) Porter
Capital’s pleading fails to plead with particularity as to each defendant. (Doc. # 45-1). The court
addresses each of Defendants’ arguments, in turn.
A.

Dominant Jurisdiction

Defendants contend that the court should dismiss this matter because the Tarrant County
Probate Court of Texas has dominant jurisdiction as it has the first-filed case. (Id. at 4-6).
Defendants’ argument rests on the grounds that Porter Capital’s First Amended Complaint
substitutes Tammy Sue Glidewell in her capacity as the Executor of the Estate of John Glidewell.
(Cf. Docs. # 43 ¶¶ 2-12 (listing Defendants); 1 ¶¶ 2-12 (listing Defendants)). Because of this
substitution, Defendants argue that this matter has now become the second-filed case, falling
behind the probate proceeding involving the Estate of John Glidewell in the Tarrant County
Probate Court. (Doc. # 45-1 at 4-6). Defendants’ argument lacks legal and logical merit.
Defendants attempt to invoke the “first-filed rule,” which holds that “[w]here two actions
involving overlapping issues and parties are pending in two federal courts, there is a strong
presumption across the federal circuits that favors the forum of the first-filed suit.” Manuel v.
Convergys Corp., 430 F.3d 1132, 1135 (11th Cir. 2005). However, the first-filed rule is not
applicable here because two federal courts are not involved. Obviously, the case pending in the
Tarrant County Probate Court was filed in state court. Moreover, even if the other pending case

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were in federal court, the instant action was the first-filed case as it was filed on April 17, 2024
(see Doc. # 1), while the probate court petition was not amended to add Porter Capital as a party
until April 24, 2024. (See Tarrant County Probate Court, Case No. 2023-PRO1912-2). The fact
that Porter Capital has filed an amended complaint and substituted a party (who is a party in the
pending probate proceeding) does not change the filing date of the first-filed action. See Fed. R.
Civ. P. 15(c) (allowing an amended complaint to relate back to the date of the original complaint).
For these reasons, the court declines to dismiss Plaintiff’s complaint based on Defendants’
argument that the Tarrant County Probate Court has dominant jurisdiction.
B.

Failure to State a Claim for Breach of Contract

Defendants also contend that Porter Capital has failed to state a claim for breach of contract
against the Seller Companies and the Guarantors. (Doc. # 45-1 at 6-7). The court concludes that
this argument is meritless.
In its complaint, Porter Capital asserts two breach of contract claims: one against the Seller
Companies (Count One) (Doc. # 43 at 8-9 ¶¶ 27-31) and one against the Guarantors (Count Two).
(Id. at 9 ¶¶ 32-35). As to its claim against the Seller Companies, Porter Capital alleges that (1) it
entered into a written contract (the Factoring Agreement) with the Seller Companies, “under which
Porter Capital purchased certain Accounts from the Seller Companies, and in connection with such
purchases, advanced funds in excess of $4,300,000” (id. at 8 ¶ 28); (2) that “[t]he Seller Companies
agreed to ensure repayment of all amounts advanced by Porter Capital in connection with the
Purchased Accounts and to pay all fees and monetary obligations set forth under the Factoring
Agreement” (id. ¶ 29); (3) that the Seller Companies “have breached the terms of the Factoring
Agreement by failing to pay all Obligations due thereunder” (id. ¶ 30); and (4) that pursuant to the
Factoring Agreement, the Seller Companies owe Porter Capital $5,009,556.51. (Id. at 9 ¶ 31).

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Despite these specific allegations in the complaint, Defendants assert that Porter Capital
has failed to state a claim for breach of contract based on the Factoring Agreement because it did
not attach the amendment to the Factoring Agreement.6 (Doc. # 45-1 at 6-7). But “[n]o Federal
Rule of Civil Procedure requires a copy of the contract to be attached to a complaint alleging a
breach of contract claim.” Nurradin v. Tuskegee Univ., 2022 WL 808693, at *9 (M.D. Ala. Mar.
16, 2022); see also Grayson Inc. v. Glob. Payments Direct, Inc., 2013 WL 5719087, at *3 (N.D.
Ala. Oct. 18, 2013) (“No federal rule requires a party asserting breach of contract to attach the
contract.”). Federal Rule of Civil Procedure 8(a) only requires that a complaint provide “a short
and plain statement of the claim showing that the pleader is entitled to relief,” include “a demand
for the relief sought,” and contain “sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Iqbal, 566 U.S. at 678. Porter Capital has done so.
Under Alabama law,7 the elements of a breach of contract claim are “(1) a valid contract
binding the parties; (2) the plaintiffs’ performance under the contract; (3) the defendant’s
nonperformance; and (4) resulting damages.” Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105
(Ala. 2002). Here, Porter Capital’s complaint alleges that Porter Capital had a Factoring
Agreement with the Seller Companies; that the Seller Companies agreed to pay all fees and
monetary obligations pursuant to the Factoring Agreement; that Seller Companies breached the

In its complaint, Porter Capital alleges that “[o]n or around June 16, 2022” it executed an amendment to the
Factoring Agreement with the Seller Companies, “whereby Porter Capital purchased additional Accounts and
increased the amount advanced to the Seller Companies.” (Doc. # 43 ¶ 22). Porter Capital also alleges that the
amendment “incorporates the terms of the Factoring Agreement and states that the Agreement’s terms remain in full
force and effect.” (Id.).
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The court preliminarily finds that Alabama law governs Porter Capital’s breach of contract claims because
the Factoring Agreement provides under its Choice of Law provision that “This Agreement and all transactions
contemplated hereunder and/or evidenced hereby shall be governed by, construed under, and enforced in accordance
with the internal laws of the State of Alabama.” (Doc. # 43-1 at 8). Additionally, neither Porter Capital nor Defendants
dispute that Alabama law governs Porter Capital’s breach of contract claims.

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Factoring Agreement by failing to pay their obligations; and that Porter Capital is owed
approximately $5,009,556.51. (Doc. # 43 at 8-9 ¶¶ 27-31). Based upon these allegations, the court
concludes that Porter Capital has pled a plausible breach of contract claim against the Seller
Companies sufficient to survive Defendants’ motion to dismiss.
As to its claims against the Guarantors, Porter Capital alleges that “the Guarantors
delivered unlimited continuing guarantees for all obligations owed then and in the future by the
Seller Companies to the Porter Capital, including all attorney fees and interest owed by the Seller
Companies.” (Id. ¶ 33). And Porter Capital alleges that “[t]he Guarantors breached said Guarantee
Agreements by failing to pay the amounts due under said Factoring Agreement after default by the
Seller Companies” (id. ¶ 34) and, as such, Guarantors owe Porter Capital $5,009,556.51. (Id. ¶
35).
Defendants contend that Porter Capital has “failed to state a claim upon which relief may
be granted against [the Guarantors] by failing to plead the terms of each contract for the sale of
Accounts that occurred and which defendant made each Account sale.” (Doc. # 45-1 at 7). In
response, Porter Capital argues that Defendants misunderstand Porter Capital’s allegations as
“Porter Capital alleges that the Factoring Agreement (rather than individual sales contracts)
governs the parties’ obligations with respect to Purchased Accounts.” (Doc. # 49 at 6). Viewing
the allegations in the complaint in the light most favorable to the nonmovant, Porter Capital, the
court concludes that Porter Capital has sufficiently pled a plausible claim for breach of contract
against the Guarantors. Porter Capital has alleged that the Guarantors delivered guarantees for all
obligations owed by the Seller Companies to Porter Capital; that the Guarantors breached the
Guarantee Agreements by failing to pay the amounts due under the Factoring Agreement; and that

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the Guarantors owe Porter Capital $5,009,556.51. (Doc. # 43 at 9 ¶¶ 33-35). Thus, Porter Capital
has sufficiently alleged a breach of contract claim against the Guarantors.
C.

Failure to Plead with Particularity

Defendants also aver that Porter Capital “improperly asserts claims against all defendants,
lumping them together as the ‘Seller Companies’ without separating any specific action, omission,
consideration, performance, breach, or cause of action against any of the defendants individually.”
(Doc. # 45-1 at 7). The court finds that this argument also fails.
In support of its argument, Defendants cite to the Eleventh Circuit’s decision in Kyle K. v.
Chapman, 208 F.3d 940, 944 (11th Cir. 2000). (Doc. # 45-1 at 7). However, Kyle K. does not
support Defendants’ argument here. Rather, Kyle K. actually supports Porter Capital’s contention,
which is that collective allegations do not render a complaint deficient where the “complaint can
be fairly read to aver that all defendants are responsible for the alleged conduct.” Id. Here, Porter
Capital has alleged that the Seller Companies, which are collectively defined as the “Seller” in the
Factoring Agreement, jointly breached the Factoring Agreement by failing to pay the outstanding
balance and fees owed under the Factoring Agreement. Under these circumstances, the court
determines that Porter Capital may refer to the Seller Companies collectively. See Sprint Sols., Inc.
v. Fils-Amie, 44 F. Supp. 3d 1224, 1227 (S.D. Fla. 2014) (“[A] plaintiff may plead claims against
multiple defendants by referring to them collectively, for example by referring to a group of
defendants as ‘defendants.’ These collective allegations are construed as applying to each
defendant individually.”).

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D.

Motion to Strike Jury Demand

Porter Capital filed a Motion to Strike Jury Demand (Doc. # 58) after Defendants Malay
and Track Line, LLC filed their answer to the First Amended Complaint, wherein they included a
jury demand. (Doc. # 56). As stated in the court’s Order (Doc. # 65), this case is dismissed as to
several defendants pending their proceedings in the United States Bankruptcy Court for the
Northern District of Texas. Because of these pending proceedings, Porter Capital’s motion (Doc.
# 58) is due to be denied but the court notes that it may be raised at a later point in time if and
when this case proceeds to trial.
IV.

Conclusion
For the reasons explained above, Defendants’ Motion to Dismiss (Doc. # 45) and Porter

Capital’s Motion to Strike Jury Demand (Doc. # 58) are due to be denied. An order consistent
with this memorandum opinion will be entered contemporaneously.
DONE and ORDERED this January 3, 2025.

_________________________________
R. DAVID PROCTOR
CHIEF U.S. DISTRICT JUDGE

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