Eastern Property Development LLC et al v. Gill

Filing 74

ORDER granting 68 Motion for Partial Summary Judgment. Ordered by Judge Clay D. Land on 04/24/2012. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
EASTERN PROPERTY DEVELOPMENT
LLC and SOUTH EAST ENTERPRISE
GROUP LLC,

*
*

Plaintiffs,

*
CASE NO. 4:11-CV-62 (CDL)

vs.

*

LOREN C. GILL,

*

Defendant.

*
O R D E R

Defendant

Loren

Gill

(“Loren

Gill”)

filed

a

counterclaim

against Plaintiffs Eastern Property Development LLC and South East
Enterprise Group LLC (“Plaintiffs”), asserting that Plaintiffs are
exercising

unauthorized

control

over

Leasing”), a company owned by him.

Elm

Leasing,

LLC

(“Elm

Presently pending before the

Court is Loren Gill’s Motion for Partial Summary Judgment with
respect to the ownership of Elm Leasing (ECF No. 68).

For the

reasons set forth below, the Court finds that no genuine fact
dispute exists regarding the ownership of Elm Leasing and that the
undisputed material facts establish that Loren Gill is the sole
member

of

ownership.

Elm

Leasing

with

all

rights

associated

Therefore, Loren Gill’s motion is granted.

with

such

SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P.

56(a).

Fed. R. Civ.

In determining whether a genuine dispute of material

fact exists to defeat a motion for summary judgment, the evidence
is

viewed

summary

in

the

judgment,

light

drawing

opposing party=s favor.
242,

255

(1986).

most

A

favorable

all

to

justifiable

the

party

opposing

inferences

in

the

Anderson v. Liberty Lobby, Inc., 477 U.S.
fact

is

material

necessary to the outcome of the suit.

if

it

is

relevant

Id. at 248.

or

A factual

dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.

Id.

FACTUAL BACKGROUND
Unless otherwise noted, the following facts are undisputed.
Elm Leasing is a Mississippi limited liability company.

Raymond

Thorn formed the company in September 2003 at the instruction of
Loren Gill’s brother, John Gill.

Pls.’ Resp. to Def.’s Mot. for

Partial Summ. J. Ex. A, Thorn Dep. 10:6-23, ECF No. 70-3.

At that

same time, Loren Gill executed an Operating Agreement that listed
him as the manager and sole member of Elm Leasing.1
1

Def.’s Mot.

It is undisputed that at some point, Loren Gill was unable to find the
original operating agreement for Elm Leasing, and he prepared a
“replacement” document.
Loren Gill located the original Operating
Agreement, and he also located a copy of the original Operating
Agreement, which he had given to a Columbus, Georgia attorney in 2005 in

2

for Summ. J. Attach. 3, Earley Aff. Ex. B, Operating Agreement 12
¶ 7.1, 28-29, ECF No. 68-3 at 34, 50-51.

The Operating Agreement

states that Elm Leasing’s profits and losses “shall be allocated
among

the

Members

Commitment.”

in

proportion

to

their

respective

Id. at 11 ¶ 6.1, ECF No. 68-3 at 33.

Capital

The Operating

Agreement further states that Loren Gill made an initial capital
contribution of $5,000.00; Loren Gill is the only person listed as
a member and is the only person who made a capital contribution.
Id.

at

29,

ECF

No.

68-3

at

51.

Operating Agreement as a witness.

Dan

Van

Gasken

signed

the

Id. at 28, ECF NO. 68-3 at 50;

Def.’s Br. in Supp. of Mot. for Summ. J. Ex. D, Van Gasken Dep.
31:13-18, ECF No. 68-1 at 45 (acknowledging that signatures on
Operating Agreement are Van Gasken’s and Loren Gill’s).
Loren Gill later signed an “Application for Certificate of
Authority for Foreign Limited Liability Company” as Elm Leasing’s
manager,

and

that

Secretary of State.

application

was

submitted

to

the

Georgia

Def.’s Mot. for Summ. J. Attach. 4, Loren

Gill Aff. Ex. D, Application for Certificate of Authority for
Foreign

Limited

Liability

Company,

ECF

No.

68-4

at

60.

The

Georgia Secretary of State issued Elm Leasing a certificate of
authority to transact business, and the certificate lists Loren

connection with a real estate transaction on behalf of Elm Leasing.
Plaintiffs have not pointed to any evidence challenging the authenticity
of the Operating Agreement Loren Gill relies upon in support of the
present motion.

3

Gill

as

the

manager.

Loren

Gill

Aff.

Ex.

E,

Certificate

of

Authority to Transact Business, ECF No. 68-4 at 62.
In April of 2005, John Gill purchased real property located
in Columbus, Georgia from the Ervin and Susanne Bard Family Trust
(“Bard Family Trust”).

Earley Aff. ¶¶ 4-5.

John Gill assigned

his rights in the property to Elm Leasing, and Elm Leasing assumed
John Gill’s obligations.

Id. ¶ 5.

The Bards agreed to finance

part of the purchase price, and Elm Leasing executed a promissory
note and security deed in favor of the Bard Family Trust; Loren
Gill signed the security deed on behalf of Elm Leasing.

Id. ¶ 6;

see generally Earley Aff. Ex. A, Security Deed, ECF No. 68-3 at 517.

During

the

closing

of

the

transaction,

the

Bard

Family

Trust’s attorney, Karen Earley, requested certain documents from
Elm Leasing to determine the ownership of Elm Leasing and who was
authorized to act on its behalf.

Earley Aff. ¶ 7.

Ms. Earley

obtained the following: a “Certificate” from Loren Gill stating
that

he

is

certificate

the
of

sole

member

formation

for

of

Elm

Elm

Leasing,

Leasing,

a

a

copy

of

the

copy

of

the

Elm

Leasing Operating Agreement listing Loren Gill as the manager and
sole member, and a written consent of Loren Gill on behalf of Elm
Leasing

authorizing

the

assumption

of

the

obligations

by

Elm

Leasing related to the property purchased from the Bard Family
Trust and listing Loren Gill as the sole member of Elm Leasing.
Id. ¶¶ 7-9; Earley Aff. Ex. B, ECF No. 68-3 at 18-55.

4

Raymond

Thorn acknowledged that Loren Gill was the sole member of Elm
leasing.

Thorn Dep. 48:7-19.

Notwithstanding

the

written

documentary

evidence

to

the

contrary, Plaintiffs contend that Elm Leasing was actually owned
by John Gill and that Elm Leasing and its property were intended
to be placed in one of John Gill’s many trusts under Plaintiffs’
management,

with

beneficiary.2
speculation,

the

Gill

Family

Plaintiffs’
however,

are

Cornerstone

not

supported

as

the

understandings,

contentions,

and

by

Trust

factual

evidence.

Plaintiffs have produced no documents showing that John Gill owns
Elm Leasing; Plaintiffs have produced no documents showing that
Loren Gill is not the sole member of Elm Leasing; and Plaintiffs
have

produced

no

documents

showing

that

Elm

Leasing

or

the

property owned by Elm Leasing was placed in one of John Gill’s
many

trusts.

neither

of

Hartshorn,

Van

Gasken

Plaintiffs’
had

any

Dep.

32:23-34:23

managers,

Dan

documents

regarding

Van
the

(acknowledging
Gasken

and

ownership

that
Kevin

of

Elm

Leasing and that Van Gasken did not know if Elm Leasing had ever
been placed in a trust).
The Court does not suggest that “documentary evidence” is the
only type of evidence that may be considered on summary judgment,
2

Plaintiffs also pointed to testimony of Wallace Whitten, who stated
that he understood that Michael Gill, not Loren Gill, owns Elm Leasing
and that Elm Leasing was never placed in a trust. Pls.’ Resp. to Def.’s
Mot. for Summ. J. Ex. B, Whitten Dep. 55:22-56:7.
Plaintiffs did not
point to any documents showing that Michael Gill is a member of Elm
Leasing.

5

but

Plaintiffs have

evidence

that

also failed to point to other testimonial

creates

a

genuine

factual

dispute.

Plaintiffs

direct the Court to testimony that Plaintiffs and Raymond Thorn
managed Elm Leasing under the direction of John Gill, without
input from Loren Gill, and that all proceeds to and payments from
Elm Properties were processed through John Gill’s company bank
accounts.

Thorn Dep. 25:22-28:21; accord Pls.’ Resp. to Def.’s

Mot. for Summ. J. Ex. E, Loren Gill Dep. 95:17-97:17, ECF No. 7010; Pls.’ Resp. to Def.’s Mot. for Summ. J. Ex. C, Blossfield
Decl. ¶¶ 13-14, ECF No. 70-5.

But Thorn acknowledged that Loren

Gill’s name was on Elm Leasing’s bank account because Loren Gill
was a member of the company.
pointed

to

Leasing

for

statements.

Loren
Loren

Gill’s
Gill

Thorn Dep. 27:9-15.

testimony
and

that

provided

Loren Gill Dep. 97:2-17.3

John
Loren

Plaintiffs also

Gill

managed

Gill

with

Elm

annual

Such evidence, however,

does not conflict with the undisputed documentary evidence showing
Loren Gill as the sole member of Elm Leasing.

As explained below,

none of this testimony creates a genuine factual dispute as to
whether Loren Gill owns Elm Leasing.

3

Plaintiffs also pointed the Court to evidence supporting their claims
against Loren Gill related to Loren Gill’s attempt to assume control over
Plaintiffs’ operations. Plaintiffs did not, however, clearly articulate
how this evidence is related to Loren Gill’s Elm Leasing counterclaim,
and the Court finds that it is irrelevant to the pending motion.

6

DISCUSSION
Elm
Loren

Leasing

Gill

is

a

Mississippi

contends,

Mississippi

law

and

governs

liability company.

limited

Plaintiffs

formation

do

of

liability
not

a

company.

dispute,

Mississippi

that

limited

See Miss. Code Ann. § 79-29-119(a) (stating

that law of Mississippi governs the “internal affairs of a limited
liability

company”

created

under

Mississippi

law).

Under

Mississippi law, an operating agreement must be agreed to by all
of

the

limited

agreement

liability

governs

the

company’s

“affairs

of

members,
a

[and] the conduct of its business.”
123(1)(a);

accord

Miss.

liability

company

is

Mississippi

law

defines

Code
bound

Ann.
by

“member”

and

limited

the

operating

liability

company

Miss. Code Ann. § 79-29§

79-29-105(t)

its

operating

as

“a

person

(“A

limited

agreement.”).
who

has

been

admitted to a limited liability company” and may be a person who
has a financial interest, a governance interest, or both.

Miss.

Code Ann. § 79-29-105(q).
Mississippi law does not prescribe a method by which a person
becomes a member at the formation of a limited liability company,
but in the Operating Agreement, Loren Gill is designated as the
manager, and he is also listed as the sole member with a capital
contribution.
ECF

No.

68-3

Earley Aff. Ex. B, Operating Agreement 12 ¶ 7.1,
at

34

(stating

that

Loren

Gill

is

the

“initial

manager”); id. at 29, ECF No. 68-3 at 51 (listing Loren Gill as

7

the

sole

member

contribution).

and

stating

that

he

made

a

$5,000.00

capital

Furthermore, the Operating Agreement states that

Elm Leasing’s profits and losses “shall be allocated among the
Members

in

proportion

to

their

respective

Id. at 11 ¶ 6.1, ECF No. 68-3 at 33.
Agreement,

it

is

clear

that

Loren

Capital

Commitment.”

Based on the Operating

Gill

has

both

a

financial

interest and a governance interest in Elm Leasing.
Plaintiffs
designates
Leasing.

acknowledge

Loren

Gill

as

that

the

the

manager

Operating

and

sole

Agreement

member

of

Elm

Plaintiffs, however, contend that the written Operating

Agreement should be ignored because as a practical matter John
Gill acted as owner of Elm Leasing.

The Court finds that the

written Operating Agreement and related documents unambiguously
provide that Loren Gill is the sole member and manager of Elm
Leasing.

Moreover,

involvement
criminal

in

Elm

even

with

John

Properties

prosecution,

inconsistent

if

the

his
other

Gill

before

did

he

have

some

disappeared

involvement

is

uncontroverted

not

to

flee

necessarily

evidence

Gill was the sole member and manager of Elm Leasing.

active

that

Loren

Plaintiffs’

conclusory allegations that Loren Gill is untrustworthy and that
his documentary evidence is “of questionable authenticity” is not
the

type

genuine

of

factual

factual

“evidence”

dispute.

that

While

is

required

“circumstantial

to

create

evidence

a

and

reasonable inferences drawn therefrom create a genuine issue of

8

material fact for trial . . . [an] inference based on speculation
and

conjecture

judgment.

is

not

reasonable”

and

cannot

defeat

summary

City of Riviera Beach v. That Certain Unnamed Gray, Two

Story Vessel Approximately Fifty-Seven Feet In Length, 649 F.3d
1259, 1272 (11th Cir. 2011) (internal quotation marks omitted).
Plaintiffs simply have failed to produce any evidence that the
Operating

Agreement

and

related

documents

are

not

authentic.

Moreover, though Plaintiffs sought and were granted discovery so
they could locate documents regarding Elm Leasing to support their
claims

that

John

Gill

or

one

of

the

trusts

own

Elm

Leasing,

Plaintiffs have not produced any evidence that Elm Leasing is in
fact owned by John Gill or one of the trusts he established.

For

all of these reasons, the Court must conclude that based on the
present record no genuine dispute exists as to the ownership of
Elm Properties, and the undisputed evidence establishes that it is
owned by Loren Gill.

Given the undisputed documentary evidence

that Loren Gill is the sole member of Elm Leasing with all rights
associated with ownership of Elm Leasing, Loren Gill is entitled
to summary judgment on this issue.
CONCLUSION
As discussed above, the undisputed evidence establishes that
Loren Gill is the owner of Elm Leasing, LLC.
grants

Loren

Gill’s

Motion

for

Judgment

with

respect to the ownership of Elm Leasing, LLC (ECF No. 68).

The

9

Partial

Therefore, the Court

Summary

remaining issues for trial include (1) what property and/or funds
presently managed by Plaintiffs belongs to Elm Leasing, and (2)
whether Loren Gill is entitled to damages and, if so, what amount.

IT IS SO ORDERED, this 24th day of April, 2012.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

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