American Home Assurance Company v. Weaver Aggregate Transport, Inc. et al

Filing 415

ORDER granting 397 Weaver's motion to implead Beacon Tri-State Staffing, Inc., and directing Weaver to file a supplemental complaint asserting claims against both BIS and Beacon Tri-State Staffing, Inc. within 14 days; ruling deferred [377 ] motion for Claude Harden to withdraw as attorney; denying without prejudice 380 Weaver's motion for sanctions; denying without prejudice 394 BIS's motion for summary judgment; denying as moot 396 Weaver's motion to compel; and granting in part 405 Weaver's amended motion to compel a response to the subpoena. See Order for details. Signed by Magistrate Judge Philip R. Lammens on 2/12/2018. (AR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION
AMERICAN HOME ASSURANCE
COMPANY, a New York corporation
Plaintiff,
v.

Case No: 5:10-cv-329-Oc-32PRL

WEAVER AGGREGATE TRANSPORT,
INC., BEACON INDUSTRIAL
STAFFING, INC., THE FARMERS AND
MECHANICS BANK and BIS GROUP
HOLDINGS, INC.

ORDER
There are a number of motions pending in this case related to Weaver Aggregate Transport,
Inc.’s (“Weaver”) efforts to collect judgments it obtained in the underlying case against Beacon
Industrial Staffing, Inc. (“Beacon”). The Court held a hearing on January 30, 2018, to discuss all
pending matters and to determine the best way to move this case forward.
I.

Background
In February 2014, Weaver obtained a final judgment against Beacon for $145,000.00.

(Doc. 237). In February 2015, Weaver obtained an additional judgment against Beacon for
$231,507.02 in attorney’s fees, costs, and pre and post-judgment interest. (Docs. 328, 329). These
two judgments, both of which are unsatisfied, are the basis for Weaver’s current collection efforts.
In July 2015, Beacon was administratively dissolved (although argument is made that it
ceased operations as early as 2008). Weaver subsequently shifted its collection efforts to related
third party entities. In November 2015, Weaver filed a motion to institute proceedings

supplementary and to implead BIS Group Holdings, Inc. (“BIS”), claiming that Beacon
fraudulently transferred its assets to BIS and that BIS is the mere alter ego of Beacon. (Doc. 343).
The Court granted the motion and BIS was implead. (Doc. 348). Now, Weaver seeks to implead
another third party, Beacon Tri-State Staffing, Inc., on the same theory that it is the mere alter ego
of Beacon and BIS. (Doc. 397). Weaver explains that it will also seek to hold this new party “liable
for the unsatisfied judgments it holds against Beacon on the grounds that Beacon Tri-State
Staffing, Inc., is a mere pass-through corporation from BIS and is therefore the alter ego of Beacon
and/or that Beacon, through BIS, fraudulently transferred Beacon’s assets to Beacon Tri-State
Staffing.” (Doc. 397 at ¶6).
Also pending are discovery motions related to Weaver’s largely unsuccessful efforts to
obtain discovery from (and about) Beacon. To that end, Weaver has filed a motion for spoliation
of evidence, seeking to sanction BIS (as the alter ego of Beacon) for failing to maintain Beacon’s
records. (Doc. 380). Weaver has also attempted to obtain Beacon’s records from attorney Claude
M. Harden, III, who represented Beacon in the underlying action. Weaver subpoenaed Attorney
Harden’s law firm requesting his entire file, and Attorney Harden has asserted privilege as to more
than 300 documents. Weaver has moved to compel production of the allegedly privileged
documents. (Docs. 396, 405). Attorney Harden has also filed a motion to withdraw from further
representation of Beacon in this action because it has been dissolved. (Doc. 377). In addition to
these discovery disputes, BIS filed a motion for summary judgment arguing that Weaver has failed
to create any genuine issues of material fact as to the alleged fraudulent transfer of assets from
Beacon to BIS or on the theory that BIS is an alter ego of Beacon. (Doc. 394).

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II.

Discussion

Without a complaint, Weaver’s claims of alter ego and fraudulent transfer seem to have
blended together. While not intending to change the law of the case, where it was determined no
complaint was required under the prior version of Fla. Stat. § 56.29, the posture of the case has
somewhat changed.
First, Weaver now wishes to implead another entity. And second, it has become more
apparent that under this alter ego theory, Weaver seeks to impute liability for the underlying
judgments directly on the impleaded parties, as distinguished from liability merely for the value
of transferred assets. See e.g., Doc. 397 at ¶6 (explaining that it seeks to hold Beacon Tri State
Staffing, Inc. “liable for the unsatisfied judgments it holds against Beacon on the grounds that
Beacon Tri-State Staffing, Inc. is a mere pass-through corporation from BIS and is therefore the
alter ego of Beacon and/or that Beacon, through BIS, fraudulently transferred Beacon’s assets to
Beacon Tri-State Staffing.”). The relief Weaver seeks is different than the more discrete relief
sought under the Court’s ancillary jurisdiction in National Maritime Services, Inc. v. Straub, 776
F.3d 783 (11th Cir. 2015) (finding ancillary jurisdiction where judgment creditor sought to disgorge
fraudulently transferred asset from implead third-party). That is, there is a difference between
proceeding under Florida Statutes § 56.29 and Chapter 726 to undo a fraudulent transfer of assets
and, what seems to be the primary relief sought here, seeking a judgment of liability against the
implead parties for existing federal judgments. Compare National Maritime Services, Inc. v.
Straub, 776 F.3d 783 (11th Cir. 2015), and Branch Banking and Trust Co. v. Hamilton Greens,
LLC et al, 2016 WL 3251165 (S.D. Fla. June 14, 2016), and Reiseck v. Universal Communications
of Miami, Inc., 141 F.Supp.3d 1295 (S.D. Fla. August 18, 2015), with Peacock v. Thomas, 516

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U.S. 349 (1996), and Jackson-Platts, v. General Electric Capital Corp., 727 F.3d 1127 (11th Cir.
2013).
While there is overlap in establishing a fraudulent transfer of assets and establishing an
alter ego claim, whether the Court has subject matter jurisdiction to consider each claim has not
been fully established. Nor, frankly, has personal jurisdiction—a separate inquiry, but also one
with overlapping factors. On this issue of personal jurisdiction, the Court did not weigh whether
BIS rebutted the allegations of alter ego because, as it noted, BIS focused on the lack of a tort in
Florida under the long-arm statute. (Doc. 360 at 6). And now, BIS points to evidence that could be
used to refute the alter ego claim—i.e., assets were not transferred from Beacon, BIS (unlike
Beacon) did not hold itself out as a PEO, and the ownership structure of BIS (5%, 5%, 90%) is
different than Beacon (50%, 50%).
Weaver’s new effort to implead another corporation—Beacon Tri-State Staffing, Inc.—
(with a similar name and Salvatore Manzo’s involvement), will likely result in another series of
motions about personal jurisdiction, perhaps subject matter jurisdiction, and ultimately motions to
dismiss and for summary judgment. The Court endeavors to avoid inconsistent results and
duplicative effort, and thus, will manage the case as to both implead parties at the same time.
The standard for impleading another third-party into the already open proceedings
supplementary is not high. Consistent with the requirements of Fla. Stat. § 56.29(2), Weaver’s
counsel filed an affidavit identifying property not exempt from execution in the possession of
Beacon Tri-State Staffing, Inc. (Doc. 397, Exhibit C). While BIS disputes the evidentiary basis for
the claim against Beacon Tri-State Staffing, Inc. (Doc. 406), “[a] judgment debtor is not required
to make a prima facie showing that the third party holds assets subject to a judgment prior to

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impleading that party.” Bodywell Nutrition, LLC v. Fortress Systems, LLC 846 F.Supp.2d 1317 at
1325 (S.D. Fla. 2012).
III.

Conclusion

Accordingly, Weaver’s motion to implead Beacon Tri-State Staffing, Inc. (Doc. 397) is
GRANTED. As a complaint is required now statutorily for claims against Beacon Tri-State
Staffing, Inc. brought under Chapter 726, and because no objection to adding BIS to the complaint
was made at the hearing, Weaver shall file a supplemental complaint setting forth all claims against
both BIS and Beacon Tri-State Staffing, Inc. within fourteen (14) days of this Order and serve the
supplemental complaint as provided by the rules of civil procedure. See Fla. Stat. §56.29(9).
With respect to the other pending motions, BIS’s motion for summary judgment (Doc. 394)
and Weaver’s motion for sanctions for spoliation of evidence (Doc. 380), they are DENIED
without prejudice to renewal after the supplemental complaint has been filed since both motions
turn on the claims being asserted.
As for discovery, Weaver’s amended motion to compel a response to the subpoena (Doc.
405)1 is due to be GRANTED in part. While Weaver seeks to compel production of Attorney
Harden’s entire file, the scope of documents relevant to the supplemental proceedings is much
narrower and limited to documents relating to Beacon’s assets, corporate structure, dissolution and
any dealings with BIS or Beacon Tri-State Staffing, Inc. Accordingly, within ten (10) days of this
Order, Attorney Harden shall either produce to Weaver all such documents, or if he continues to
assert privilege as to any of those documents, he shall provide Weaver an amended privilege log
specifically identifying each such document. The Court will defer ruling on Attorney Harden’s
motion to withdraw (Doc. 377) until he has complied with this Order.

1

Weaver’s initial motion to compel a response to the subpoena (Doc. 396) is terminated as moot.
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DONE and ORDERED in Ocala, Florida on February 12, 2018.

Copies furnished to:
Counsel of Record
Unrepresented Parties

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