United States of America for the Use of Lister Harrell, Saraland, LLLP, and Paradise Farms, Inc. v. Boudreaux et al

Filing 13

ORDER Affirming the Opinion and Order of March 30, 2019. The Clerk of Court is directed to close this case. Signed by Judge Dudley H. Bowen on 10/4/2019. (pts)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
DUBLIN DIVISION

IN RE:

SARALAND, LLLP,

Bankruptcy No. 12-30113

*
5

Debtor.

UNITED STATES OF AMERICA

Chapter 7 Proceeding

*

*

for the use of LISTER HARRELL,*
SARALAND, LLLP, and PARADISE
FARMS, INC.,

*
*

Appellants,

CIVIL ACTION NO.

CV 319-030

Adversary Proceeding

vs.

No. 18-03002
TODD BOUDREAUX and LIBERTY

MUTUAL INSURANCE CO.,

Appellees.

ORDER

Appellants Lister Harrell, Saraland, LLLP, and Paradise Farms,

Inc., appeal the Opinion and Order of the United States Bankruptcy
Court of March 30, 2019, granting the Appellees' motions to dismiss.
(See generally Opinion and Order, Case No. 18-03002 (Bankr. S.D.

Ga. Mar. 30, 2019), Bankr. Doc. 54.)

This Court has jurisdiction

under 28 U.S.C. § 158(a)(1) because the Opinion and Order was a

final order dismissing the Appellants' adversary proceeding.
The adversary proceeding relates to a Chapter 7 case filed by
Debtor Saraland, LLLP in the United States Bankruptcy Court for the
Southern District of Georgia.

Saraland is a limited liability

partnership, consisting

of Lister

Harrell

with

a

99%

ownership

interest and Paradise Farms, Inc. with a 1% ownership interest in
the partnership.
Farms.

Harrell is also the sole shareholder of Paradise

{Compl., Bankr. Doc. 1, If 6-7.)

On

March

29, 2012,

behalf of Saraland.

Harrell filed

(Id.

SI

10.)

appointed as Chapter 11 Trustee.

a Chapter

Appellee
(Id.)

Todd

11

petition on

Boudreaux

was

Appellee Liberty Mutual

Insurance Company issued a blanket bond covering Boudreaux as the
Chapter 11 Trustee and later as Chapter 7 Trustee.

(Id. SI 11.)

The bankruptcy cases of Saraland, Paradise Farms, and Harrell

have been pending for more than seven years with many disputes and
appeals.

This proceeding began with the filing of an adversary

complaint on April 4, 2018.

The complaint alleges the following

facts:

Harrell and

On April 10,

2013,

his attorney met with

Boudreaux to discuss bankruptcy matters including full payment of
all creditors and dismissal of the bankruptcy petition.

12.)

(Id. SI

On April 17, 2013, Boudreaux informed Harrell that it would

take $6,000,000 to pay all creditors and requested that Harrell
meet at Boudreaux's office on April 22, 2013 with a plan to pay off
the creditors.

(Id. SI 14.)

On April 22, 2013, Harrell gave Boudreaux a commitment from
H.G. Youmans of Youmans Wood and Timber, who planned to harvest and

purchase timber on property owned by Saraland, the proceeds of which

would be used to pay off all creditors.

(Id. SI 15.)

Notwithstanding

Harrell's representation, Boudreaux took no action to determine the

viability of the Youmans commitment.

Instead, according to the

complaint, Boudreaux ''aided by Dodge County District Attorney Tim
Vaughn, unlawfully and illegally seized property from Harrell's
home in Dodge County, Georgia.

Also, on May 31, 2013, Boudreaux

filed an interim report with the United States Bankruptcy Court, in
which

[]

Boudreaux

wrongfully

accused

Harrell

of

misappropriation of property and other wrongful acts."

crimes,

(Id. SI 16.)

Further, Harrell was arrested and remained incarcerated from May to

October 2013 as a result of the actions of District Attorney Vaughn.

(Id. f 19.)
Harrell's

The complaint continues that Boudreaux was aware of

incarceration

and

improperly

comingled funds for personal gain.

sold

his

property

and

(Id. SISI 17, 19.)

Based upon these general allegations, the complaint sets forth
six causes of action: breach of fiduciary duty, comingling funds,

conversion, fraud, accounting, and breach of bond.

In particular,

the fraud count alleges that Boudreaux committed fraud when he gave
assurances

to

Harrell

on

April 22,

2013 that

he

would

contact

Youmans about the harvesting commitment, knowing then that he never

intended to contact Youmans but instead planned to use the office
of Trustee for his own gain.

(Id. SI 32.)

On

May

29,

2018,

Appellees

Boudreaux

and

Liberty

Mutual,

defendants in the adversary proceeding, filed separate motions to

dismiss all counts of the complaint on the following grounds:
judicata,

collateral

Boudreaux's

immunity

limitations,

procedure.

and

estoppel,
from

failure

failure
lack

suit,
to

to

standing,

follow

of

state

Federal

Tort

a

res

claim,

statute
Claims

of
Act

The Bankruptcy Court held a hearing and received post-

hearing briefs from both sides.

In its Opinion and Order of March

30, 2019, the Bankruptcy Court dismissed all counts upon finding
that

res

absolute

judicata,
immunity

Bankruptcy
addressed

Court
the

collateral
bar

Appellants'

recounted

same

estoppel,

the

allegations

claims.

numerous
of

lack
In

of

standing,

and

particular,

the

occasions

fraud,

that it

misappropriation,

had
or

misfeasance against Boudreaux throughout the Saraland bankruptcy

proceeding as well as other related proceedings.

For instance, in

recounting the Orders dismissing two other adversary proceedings,
Bankr.

Case

Nos.

14-03013

and

14-03015,

the

Bankruptcy

Court

explained that Appellants had claimed that Boudreaux raised false
accusations against Harrell leading to his arrest, illegally seized
property, and failed to properly respond to the Yeomans ^^commitment
letter."

(Op.

and

Dismissal

Orders

Order, at

were

final

31.)

Upon

adjudications

determining
on

the

that the

merits,

the

Bankruptcy Court concluded that the Dismissal Orders operated as

res judicata as to Harrell and Saraland's claims in the instant

complaint.

(Id. at 32-34.)

As another example, the Bankruptcy

Court found that its resolution of Harrell's 2014 motion to rescind
the

contract

of

sale

from

Saraland

to

Carter

Clements

is

res

judicata as to Harrell, Saraland, and Paradise Farms with respect
to "the claims in Plaintiffs' Complaint which have been brought."
(Id. at 36-40.)

These are but two examples of the Bankruptcy

Court's thorough review of numerous proceedings under the doctrine

of res judicata.

The Bankruptcy Court concluded its discussion of

res judicata with the following observation:

"[T]hese motions and

orders show a small sample of the numerous pleadings filed in the

three bankruptcy cases by Mr. Harrell, raising these same issues on
behalf of himself and Saraland and Paradise Farms. . . . Mr. Harrell

appeared on numerous occasions and made these same arguments. . .
. This case illustrates the need and purpose behind the doctrine of
res judicata."

(Id. at 46-48.)

Next, the Bankruptcy Court went on to find that "the issues
Plaintiffs raise in the current Complaint were actually raised and
actually litigated by the same parties or their privities, the
issues were a critical and necessary part of the prior action and
the Plaintiffs had a full and fair opportunity to litigate the
issues with the Court considering and denying the matters on the
merits.

. .

.

For

these

reasons,

the

Court

finds

the

current

Complaint barred by the doctrine of collateral estoppel."

(Id. at

49-50 (emphasis added).)

Then,

after

addressing

the

other

grounds

asserted

by

the

defense motions, the Bankruptcy Court clearly granted dismissal
based upon res judicata and collateral estoppel (as well as failure

to state a claim, immunity and standing) and dismissed the entire
adversary proceeding.

On appeal to this Court, Appellants assert only two errors:

(1) that the Bankruptcy Court failed to rule on the fraud claim and
therefore, the fraud claim remains viable; and (2) that the fraud

claim against Boudreaux individually is not barred by the statute

of limitations.

Upon review of the Opinion and Order, the parties'

briefs, and the relevant law, this Court utterly fails to comprehend

Appellants' assertion that the Bankruptcy Court did not address the
fraud claim.

The fraud claim rests upon factual assertions and

claims that the Bankruptcy Court found were already litigated in

prior proceedings.

In fact, in discussing Harrell's 2014 motion to

rescind in the Opinion and Order, the Bankruptcy Court specifically
notes

that

the

motion

to

rescind

^'details

the

same

allegations/claims in the current Complaint, regarding the Yeomans
offer, . . . claims of false statements by Boudreaux, . . . and

Boudreaux's purported lack of accounting and communications and
other wrongdoings."

(Id. at 10.)

These are the very allegations

that underpin the fraud claim in this case.

And, the Bankruptcy

Court determined that its resolution of the motion to rescind has

a preclusive effect on the current complaint, that is, all claims
in the complaint.

To be clear. Appellants do not appeal the Bankruptcy Court's
determination that res judicata, collateral estoppel, or any other
ground warrants dismissal of the complaint.

Appellants simply

assert that some how the Bankruptcy Court's findings and conclusions
do not reach the fraud claim.

The Bankruptcy Court's very thorough

and well-reasoned Opinion and Order belies this assertion.
Upon

the

foregoing,

and

finding

that

the

Bankruptcy

Court

determined that res judicata and collateral estoppel bars every
claim in the complaint including the fraud claim, the Court hereby

AFFIRMS the Opinion and Order of March 30, 2019.
need

to

address

Appellants'

statute of limitations.

The

assertion

of

Thus, there is no

error

respecting

the

Clerk of Court is directed to CLOSE

this case.

ORDER ENTERED at Augusta, Georgia, this

day of October,

2019.

UNITED STA

DISTRICT

JUDGE