Stamey Cattle Company, LLP v. Wright et al

Filing 138

ORDER granting in part and denying in part Pete Wright's 100 Motion for Summary Judgment; granting in part and denying in part WFD's 101 Motion for Summary Judgment; granting WPW's 103 Motion for Summary Judgment, and granting in part and denying in part Plaintiff's 104 Motion for Partial Summary Judgment. Additionally, Pete Wright and WFD's Other 102 Motion for Summary Judgment is withdrawn as moot. Signed by Judge Lisa G. Wood on 2/19/2019. (csr)

3ifn

?linttetii States: 3its(trtct Court

for t|ie ^otttliertt Btsstrtrt of 4leorgta
^apcrooo BtOtotott
STAMEY CATTLE CO., LLP,

Plaintiff,
No. 5:17-cv-147

And

SUNSHINE HEIFERS, LLC,

Intervening Plaintiff,
V.

WILLIAM P. WRIGHT, JR.; WILLIAM

P. WRIGHT, JR., D/B/A THE
WRIGHT FAMILY DAIRY FARMS, LLC;
THE WRIGHT FAMILY DAIRY, LLC,

D/B/A, THE WRIGHT FAMILY DAIRY
FAMRS, LLC; W.P. WRIGHT FAMILY,

LLC, D/B/A, THE WRIGHT FAMILY
DAIRY FARMS, LLC; LOWER APPLING
COUNTY HOLSTEINS, LLC; FIRST
BANK SHARES OF THE SOUTHEAST,

INC., D/B/A FIRST NATIONAL BANK
SOUTH, GLENDA WRIGHT, ASBURY
FARMS, LLC, LEVI WRIGHT, AND
STAMEY CATTLE COMPANY, LLP,'
Defendants.

ORDER

Before

the

Court

are

the

following

motions:

Defendants

William P. Wright, Jr., and William P. Wright, Jr., d/b/a The
Wright

Family

Dairy

Farms,

LLC

(collectively ""Pete

Wright")'s

Motion for Summary Judgment, dkt. no. 100, Defendant The Wright

A0 72A

(Rev. 8/82)

Family

Dairy,

LLC,

d/b/a

The

Wright

Family

Dairy

Farms,

LLC

(''WFD")'s Motion for Summary Judgment, dkt. no. 101, Defendant

W.P. Wright Family, LLC, d/b/a The Wright Family Dairy Farms, LLC
(^^WPW")'s Motion for Summary Judgment, dkt. no. 103, and Plaintiff
Stamey

Cattle

Company,

LLP

(""Plaintiff") s
'

Summary Judgment, dkt. no. 104.^
briefed and are ripe for review.

Motion

for

Partial

These motions have been fully
For the reasons set forth below.

Plaintiff's Motion, dkt. no. 104, is GRANTED with respect to Count

One and Crossclaim Count VIII and DENIED as MOOT with respect to
Counts

Two

and

Three;

Defendants

Pete

Wright,

WFD,

and

WPW's

Motions, dkt. nos. 100, 101, 103, are GRANTED with respect to
Counts Seven and Eight and Crossclaims Counts II and IV; Defendants

Pete Wright and WFD's Motions, dkt. nos. 100, 101, are DENIED with
respect to Counts One, Four, Six, Ten, Eleven, and Twelve and
Crossclaim Counts I, III, V, VI, and VIII, and their Motions are

DENIED as MOOT as to Counts Two and Three; Defendant WPW's Motion,
dkt. no. 103, is GRANTED with respect to all counts.
and

Nine

and

Crossclaim

Count

VII^

are

Counts Five

DISMISSED

as

MOOT.

1 Defendants argue in their motions that The Wright Family Dairy Farms, LLC,
does not exist. Even if this is the case. Plaintiff points out, as explained
below, that Pete Wright was involved with multiple entities with similar names,
and more importantly. Plaintiff lists Pete Wright, WFD, and WPW in the Complaint
and Crossclaims. In other words, the name designation is not sufficient grounds
for granting summary judgment against Plaintiff.
Thus, for the purposes of
this Order, the Court will disregard the "d/b/a The Wright Family Dairy Farms,
LLC" designation and instead focus on the individual parties of Pete Wright,
WFD, and WPW.

2 The Crossclaim count for constructive trust is incorrectly labeled "Count
VIII" in

Plaintiff's Crossclaim.

been listed as "Count VII".

Dkt. No. 65 at 78.

The count should

have

As such, the Court will refer to the crossclaim

Defendants' Motion in dkt. no. 102 is MOOT and WITHDRAWN.3

Default

Judgment against Defendant Lower Appling County Holsteins C'LACH")
is GRANTED.

BACKGROUND

This case involves a purchase of cattle between two family
businesses and a forty-year history of doing business together
gone awry.

Specifically, this case involves the purchase of cattle

by Pete Wright or one of his business entities from Plaintiff,

Stamey Cattle Company, LLP.

Plaintiff is a North Carolina based

company in the business of raising and selling registered and grade
cattle, primarily dairy cattle, domestically and abroad.
117 5 1.^
Stamey.

Dkt. No.

Plaintiff has two partners—David Stamey and Robert ''Bob"
Dkt. No. 118-1 SI 2.^

for constructive trust as Count VII and the crossclaim for successor liability
as Count VIII in this Order.

3 During the Motions Hearing on November 19, 2018, counsel for Defendants
informed the Court that one of its motions for summary judgment was moot due to
the settlement with Sunshine Heifers. After checking his records, counsel for
Defendants informed the Court that the motion was Dkt. No. 103, and counsel for
Plaintiff stated that Plaintiff had no objection to that motion being marked as
moot.

The Court ordered from the bench that Dkt. No. 103 be marked as moot and

withdrawn.

were

However, the motion that counsel for the Defendants and the Court

referring

to—a

motion

involving

Sunshine

Heifers's

claims

against

Defendants—was actually Dkt. No. 102. Dkt. No. 103 should not have been marked
as moot and withdrawn. Therefore, pursuant to Federal Rule of Civil Procedure
60(a), the Court corrects this mistake and orders that Dkt. No. 102 be marked
as moot and withdrawn.

Furthermore, Dkt. No. 103 is at issue before the Court

and is resolved in accordance with this Order.

^ Throughout
Statement of
3 Throughout
Statement of

this Order, the Court cites only those statements in Plaintiff's
Undisputed Material Facts that Defendants explicitly admit.
this Order, the Court cites only those statements in Defendants'
Undisputed Material Facts that Plaintiff explicitly admits.

A. The Parties

Defendants in this case include Pete Wright, his family
members, and various business entities that he or his family are
involved with in some capacity.

Pete Wright is a dairy farmer who

lives in Georgia with his wife, Glenda Wright, and his sons,
Raymond and Levi Wright.

Id. SI 6.

Pete and Glenda are the sole

members of the Wright Family Dairy, LLC, C'WFD") with Pete being
the principal owner and managing member.

SI 3.

Id. SI 9; Dkt. No. 117

WFD formerly ran a dairy operation.

Dkt. No. 118-1 SI 10.

Pete and Glenda Wright also owned W.P. Wright Family, LLC C'WPW"),
which at least at one point functioned as a landholding company.

Id. SI 12.

Raymond Wright is the sole member of Lower Appling

County Holsteins, LLC {''LACH"), and Pete Wright, as an employee of
LACH, was in charge of all of LACK's finances.^
SISI 31-32.
of WFD.

Dkt. No. 117

LACH was created in order to lease the dairy operation
Id. SI 24.

Pete Wright's residence, WPW's registered

office and the dairy operations and offices of WFD and LACH were
located at the same address: 18 Holstein Lane, Baxley, Georgia

31513 ("Dairy Property").

Dkt. No. 1 SI 4; Dkt. No. 7 SI 4; Dkt.

No. 117 SI 46; Dkt. No. 104-3 at 2, 72, 77.

Pete Wright, WFD,

® Plaintiff's Cross Claims include claims against Lower Appling County, LLC

("LAC"), but Plaintiff states that "no such entity . . . is registered with the

Secretary of State of Georgia" and therefore "[t]o the extent that [LAC] does
exist, it will be considered synonymous with [LACH]." Dkt. No. 65 f 153. Based
on the Court's review of the record, no party disputes that LACH and LAC are
the same entities.

Thus, based on this statement, the Court will consider LAC

to be the same entity as LACH for the purposes of this Order.

WPW, and LACH are the only Defendants at issue before the Court in

the Parties' Motions.

However, other Defendants relevant to the

facts in this Order include Hurricane Creek Dairy, LLC-a dairy
owned by Levi Wright as the sole member—and Asbury Farm, LLC-an
entity that Pete Wright testified was created to hide money and
avoid creditors.

Dkt. No. 117

55-58; Dkt. No. 104-2 at 55.

At

the time of this Order, the property on which WFD and LACH's dairy
operated

has

dissolved.

been foreclosed,

and

WFD,

WPW,

and

LACH

are

now

Dkt. No. 117 f 64; Dkt. No. 104-2 at 1, 14, 18-20, 55.

B. Pete Wright's Involvement with WFD and LACH

Pete and Raymond Wright formed LACH around August 1, 2016.
Dkt. No. 118 SI 14.

LACH leased the dairy and equipment on the

Dairy Property owned by WFD from WFD.

Dkt. No. 117 SI 24.

At the

time that LACH was formed, Pete Wright and WFD had substantial

debts, including debts to First National Bank South (^^FNB South"),
Sunshine Heifers, LLC ('^Sunshine Heifers"), the IRS, and other
creditors.

Id. SI 25.

Raymond Wright testified that this lease

arrangement between LACH and WFD would allow LACH to operate the
dairy and collect proceeds from the dairy's milk production while
allowing WFD to avoid its creditors.

Dkt. No. 104-5 at 7.

WFD

and LACH were located on the same property—the Dairy Property—and

employed many of the same employees, such as Harvey Prater, Pete
Wright's office manager.

Dkt. 119-4 at 7.

Moreover, Pete, while continuing as the managing member of
WFD,

simultaneously

finances.

worked

for

Dkt. No. 104-2 at 40.

LACH

managing

of

LACK's

While Raymond was the sole member

of LACH, he did not handle ''the office stuff."

7.

all

Dkt. No. 104-5 at

As Pete testified, he was "in control of the money" for the

entire existence of LACH.

Dkt. No. 104-2 at 40.

While in control

of LACH's finances, Pete Wright transferred significant amounts of
money from LACH's bank account to WFD, from LACH's bank account to

his personal account, and from WFD's bank account to his personal
account.

at 40-49.

See, e.g., Dkt. No. 117

34-35, 37-40; Dkt. No. 104-2

Some of this money was transferred from LACH to pay off

WFD's and Pete Wright's debts.
104-5 at 8.

Dkt. No. 104-2 at 41; Dkt. No.

Some of this money was used to pay for Pete Wright's

personal expenses such as a speeding ticket and repairs for his
personal truck. Dkt. No. 104-2 at 41, 45. These transfers between
accounts were substantial-Glenda Wright testified that in 2016
transfers from the businesses to her and Pete's personal accounts

exceeded $200,000.

Dkt. No. 104-6 at 10.

Glenda Wright testified

that "[t]ransfers were made, yes, from all accounts simply because

we had to pay everything either by cash, cashier's check.
would take our checks at that point." Dkt. No. 104-6 at 9.

Nobody
Despite

being LACH's sole member, Raymond was not aware of these transfers
or why Pete was making them. Dkt. No. 140-5 at 10 ("I don't really
know what he was paying with any of that money.").

C. The Purchase of Cattle from Plaintiff

During the time that WFD was leasing dairy operations to LACH
in February 2017, Pete Wright, by or through WFD and LACH, traveled
to North Carolina to select cattle to purchase from Plaintiff.
Dkt. No. 117 SISl 11-12.

Pete Wright's businesses had been buying

cattle from Plaintiff for 40 years and had purchased approximately
$40 million in cattle from Plaintiff.

Id. SISI 7-8.

Typically, in

their past dealings, Pete Wright would travel to Plaintiff's farm
in North Carolina and select specific cattle to purchase, and those

cattle would be shipped to Pete Wright's operations in Georgia.
Id. 5SI 9-10.

On this occasion, in February 2017, Pete Wright

selected cattle for purchase, and Plaintiff evidenced the sale of
the cattle in invoices prepared by Plaintiff.
SISl 25-26.

address,

Dkt. No. 118-1

The invoices included who the cattle were sold to,

a

phone

number

of

the

seller,

the

date,

cattle

identification, the itemized price per cattle, and a total invoice

price.

Id. SI 27.

A table provided by Defendants summarizes the

invoices for cattle purchased by WFD and LACH from Plaintiff in
2017:

Load

Sold To

Date

Invoice No.

Invoice Amount

"Load 1"

WFD

2/8/17

2017-501

$16,775.00

"Load 2"

LACH

2/21/17

2017-503

$70,000.00

"Load 3"

LACH

2/23/17

2017-504

$74,000.00

"Load 4"

LACH

3/2/17

2017-505

$72,000.00

"Load 5"

LACH

3/7/17

2017-506-

$57,900.00

"Load 6"

LACH

3/25/17

2017-510

$28,000.00

"Load 7"

WFD

6/5/17

2017-514

$96,800.00

Dkt. No. 118-1 f 29."^

Plaintiff shipped the cattle to WFD and LACH

on these dates with health papers and identification tags in the
ears of the cattle.

Dkt. No. 117 SI 17.^

Payments for the cattle

were to be made through milk check assignments from WFD and LACH's
dairy operations.

Id. SI 14; Dkt. No. 7 SI 23.

D. Termination of the Lease and WFD's Takeover of LACH

In

early

May

of

2017,

Pete

and

Raymond

Wright

had

a

disagreement concerning the management of LACH. Dkt. No. 117 SI 47.

Pete Wright testified that they ''had a dispute about the milk check
before I ran him off."

Id. SI 48.

This dispute escalated into a

lawsuit between WFD and LACH, which

ultimately ended

with WFD

terminating the lease with LACH on May 11, 2017, retaining control
over all dairy operations, property, and equipment, and absorbing
LACH's assets—including LACH's cattle.
Dkt. No. 104-5 at 8.

Dkt. No. 104-2 at 3, 18;

Pete Wright testified that when WFD took

over LACH's cattle, it took "all of the cows over," including those

Although Plaintiff disputes this table of invoices, the dispute is only over
whether

the

cattle

were

ultimately

sold

information in the table is incorrect.

to

third

parties,

not

that

the

Dkt. No. 118-1 at 29.

8 Pete Wright testified that he removed the Stamey identification tags from the
cows' ears after they were delivered to him, which made identifying which cows
were purchased from Plaintiff versus other cows, like those leased from Sunshine
Heifers, difficult.

See Dkt. No. 104-2 at 25, 28.

However, some of the cattle

still had some form of metal clip and an "RFID" tag in their ears, which could
provide some form of identification. Id.
8

sold by Plaintiff to LACK that Pete selected in February.

Dkt.

No. 104-2 at 18.

After the termination of the lease and WFD's taking over of
LACK'S cattle, Plaintiff made the final delivery of cattle. Load
7, on June 5, 2017.

Dkt. No. 117 SI 19.

Defendants admit that at

the time of this delivery, WFD and LACK were insolvent and that

Plaintiff had not been fully paid for the prior loads of cattle
purchased.

Id. SI 19.

Prior to this point, LACK had been paying

a milk assignment check to Plaintiff to pay for the cattle.
No. 104-4 at 2.

Dkt.

However, after the termination of the lease, WFD

initiated a monthly recurring milk check assignment to Plaintiff

of $35,823.00 to replace the initial milk check assignment from
LACK.

Id. at 3; Dkt. No. 104-2 at 19.

The assignment stated that

'Ms]uch payments to the assignee are to continue until I provide
written notice of termination to the Association. Consent of the

assignee is not required to terminate this assignment."
104-4 at 3.

Dkt. No.

In accordance with this provision, WFD cancelled its

milk check assignment to Plaintiff on July 12, 2017, id. at 4,
because WFD did not have enough money to pay Plaintiff and chose

to pay other creditors with what money was left from its milking
operations, dkt. no. 104-2 at 32.

When Plaintiff found out about

the cancelation of the milk check assignment, it made overtures to

Pete

Wright

to

finalize

payment

for

the

satisfaction

of

the

outstanding debt on the cattle purchased from Plaintiff.

Dkt. No.

117 1 53.

E. Pete Wright Sells Off the Cattle

On or about July 18, 2017, Pete and Levi Wright organized a
sale and purchase of cattle with Gutman Brothers, Ltd. (^^Gutman").
Dkt. No. 118-1

57-58.

In this transaction, WFD sold cattle to

Gutman for $500,000.

Id. SI 58.

in

included

this

transaction

At least some of the cattle sold

cattle

sold

to

WFD

and

LACH

by

Plaintiff, and money was still owed to Plaintiff for those cattle

at that point.

Dkt. No. 104-2 at 35.

Pete had his bank, FNB

South, place the money from the Gutman sale in escrow to be used

by Levi to purchase new cattle from Gutman for Levi's dairy.
Hurricane

Creek.

Id.

at

35-36.

Pete

discussed

the

transactions with Levi and FNB South before it occurred.
35.

Gutman

Id. at

Pete did not tell Plaintiff about the Gutman sale in advance.

Id. at 36.

On or about August 23, 2017, WFD sold cattle to New Holland
Stable Sales (^'New Holland").

2 at 34.

Dkt. No. 118-1 f 63; Dkt. No. 104-

Pete Wright testified that some of the cattle sold to

New Holland could have included cattle sold to WFD and LACH from

Plaintiff.

Dkt. No. 104-2 at 34.

Moreover, Pete testified that

he set up the company Asbury Farm, and he directed New Holland to
send money from the sale to Asbury Farm.

Id.

He testified that

he did this to try to keep the money from that sale out of creditors
10

hands and ''hide it."

Id. at 34, 55.

When asked why he created

Asbury Farm and if it was done to move assets from WFD to Asbury
Farm, to liquidate those assets and sell cattle and receive the
proceeds

from

Amendment.

those

assets

Id. at 17.

and

cattle,

Pete

invoked

the

Fifth

Pete Wright's plan of having the money

from the New Holland sale sent to Asbury Farm ultimately did not
occur after someone at New Holland noticed brands or tags on the
cattle.

Id. at 34.

Around this same time, WFD also sold cattle,

including eleven Holstein bulls purchased from Plaintiff, to Dixie
Livestock.

Id. at 27.

Sometime around September 2017, Pete Wright called Robert and
David Stamey and told them "to come get" their cattle, and Pete
testified that at the time,, he believed he owed Plaintiff about

$200,000 for the cattle.

Id. at 38.

Pete testified that "I told

[Robert and David Stamey] to come get enough cows that was left to
cover the rest of their money."

Id.

Robert Stamey testified that

Pete called him and said "Bob, I can't pay for those Jerseys.

need to come get them."

Dkt. No. 110-1 at 111.

You

Pete maintained

in his deposition that the Stameys decided not to come retrieve
their cattle, dkt. no. 104-2 at 39, but Robert Stamey testified
that he and David traveled to the Dairy Property in early September
2017 only to learn that Pete had already sold the Jersey cattle
that they came to retrieve, dkt. no. 110-1 at 101.

Robert also

testified that when they asked Pete how many of their cows were
11

left there, Pete responded, ""I don't know."

Id.

Pete Wright

testified that he asked Robert and David to work with him while he

tried to sell his dairy to a buyer to pay the balance of the cattle
to Plaintiff, but that sale never occurred.

Dkt. No. 104-2 37-

38.

F. The Final Cattle Sale and Plaintiff's Invoices

On October 6, 2017, Plaintiff, and other creditors of Pete

Wright,

WFD,

and

LACH,

which

included

FNB

South

and

Sunshine

Heifers, met together to organize a final sale to liquidate the
remaining cattle in Pete Wright and WFD's possession.
118-1 SISl 66-67; Dkt. No. 117 SISI 62-63.

Dkt. No.

The proceeds of the sale

resulted in $188,681.86, and that amount was held in trust.

Dkt.

No. 118-1 SI 68.

Also, on October 6, 2017, the Stameys met with Pete Wright to

sign five invoices—for loads 1, 4, 5, 6, and 7—and two statements
of account for the balances owed by WFD and LACH.
documents included

the

statement ^'Title

Id. SI 33.

will transfer

payment is received" next to the signature line.

Id.

when

These
full

Pete Wright

signed them on October 6, 2017, with the signature ^^W.P. Wright,
Jr."

Id. SISI 33-34, 38.

However, invoices for ""Load 2" and ""Load

3," which also included the statement "'Title will transfer when

full payment is received," were signed upon delivery in February
of 2017.

Dkt. No. 110-1 at 43-45.

But, Pete Wright testified

that the signature on those two invoices—"Pete Wright"—was not his
12

signature; he stated that he signs his name "'W.P. Wright, Jr."
Dkt. No. 104-2 at 19-20; Dkt. No. 119-4 at 9.

As of October 6,

2017, the statements of account signed by Pete Wright showed that
WFD owed a balance to Plaintiff of $44,960.97 and LACH owed a

balance of $182,798.29 for the cattle purchased from Plaintiff.
Dkt. No. 116-1 Ex. H, I.
6. Procedural History

On November 3, 2017, Plaintiff sued Pete Wright, WFD, LACH,
WPW, and FNB South over its sale of cattle to Pete Wright, WFD,
and LACH and for the bank's involvement in Pete Wright's subsequent

sales of the cattle.

Specifically, Plaintiff brought claims for

breach of contract (Count One), promissory estoppel (Count Two),

unjust enrichment (Count Three), fraud and fraud in the inducement

(Count

Four),

implied

trust

(Count

Five),

enforcement

and

foreclosure of a purchase-money lien (Count Six), civil conversion
(Count Seven), civil conspiracy (Count Eight), and

judgment (Count Nine).

Dkt. No. 1 at 11-20.

declaratory

Plaintiff also

requests prejudgment interest (Count Ten), attorneys' fees and
litigation
Twelve).

costs

(Count

Eleven),

and

punitive

damages

(Count

Id. at 20-21.

After Plaintiff filed its initial Complaint, Sunshine Heifers

filed suit as an intervening plaintiff on March 6, 2018, against

WFD, LACH, Pete Wright, Glenda Wright, Asbury Farms, Levi Wright,
FNB

South,

Hurricane

Creek,

Raymond
13

Wright,

and

Stamey

Cattle

Company.

Dkt. No. 27.

against Sunshine
defendants.

In response. Plaintiff filed counter claims

Heifers and added crossclaims against several

Id.

at

64-80.

Specifically,

Plaintiff

added

crossclaims of fraud (Count I), civil conversion, livestock theft

and theft by deception (Count II), tortious interference with a
security interest (Count III), civil conspiracy to commit civil

conversion, livestock theft and theft by deception (Count IV),

civil conspiracy to commit tortious interference with a security
interest (Count V), fraudulent transfers (Count VI), constructive

trust (Count VII),^ and successor liability (Count VIII).
67-80.

Id. at

Some of these crossclaims were against new Defendants not

included in the original Complaint including Raymond Write, Glenda

Wright, Asbury Farms, Levi Wright, Hurricane Creek, and Lower
Appling County, LLC.

Id. at 74-80.

On July 16, 2018, Sunshine Heifers, FNB South, and Plaintiff
informed the Court that they had reached a settlement resolving

all claims against each other.

Dkt. No. 95.

On September 24,

2018, the Court approved the dismissal with prejudice as to claims
between and among Plaintiff, Sunshine Heifers, and FNB South.
No. 123.

that

it

Dkt.

On November 15, 2018, Sunshine Heifers informed the Court

had

entered

into

a

settlement

with

the

remaining

Defendants, which resolved its remaining claims, and the following

5 See supra note 2
14

day, the Court approved the dismissal with prejudice of Sunshine
Heifers's remaining claims.

Dkt. Nos. 129-130.

As a result of

these settlements. Sunshine Heifers is no longer a party to the
case, all claims against FNB South in the original Complaint and
the Crossclaims have been resolved (Counts Three, Five, Six, Seven,

Eight,

Nine,

Ten,

and

Eleven

in

the

original

Complaint

and

Crossclaim Counts III, IV, V, and VII), Counts Five and Nine in

the

original

Complaint

and

Crossclaim

Count

VII

(incorrectly

listed as Count VIII) are moot, and Pete Wright and WFD's Motion
for Summary Judgment against Sunshine Heifers claims, dkt. no.
102, is moot.

Additionally, Plaintiff filed a motion for default judgment

against LACH for failure to appear and respond in this case on
August 30, 2018.

Dkt. No. 98.

The clerk signed the proposed order

for default judgment against LACH, but it noted the order as an
entry of default on the Court's docket.

Dkt. No. 99.

Under

Federal Rule of Civil Procedure 55, a party may seek an entry of

default

and,

subsequently,

a

default

judgment against

another

party who has failed to plead or otherwise defend a lawsuit.
55(a).

It is a two-step process.

Rule

''First, the party seeking a

default judgment must file [an application] for entry of default
with

the

clerk

of

a

district

court

by

demonstrating

that the

opposing party has failed to answer or otherwise respond to the
complaint, and, second, once the clerk has entered a default, the
15

moving party may then seek entry of a default judgment against the
defaulting party."

CV-01547-HGD,

2011

Gladden v. Homewood Florist, Inc.^ No. 2:09-

WL

13286008,

at

*1

(N.D.

Ala.

July

6,

2011)(alteration in original)(citations omitted); see also Bank of
Am., N.A. V. Harris, No. 1:17-CV-1201-CAP-JSA, 2017 WL 8186606, at
*3 (N.D. Ga. Nov. 30, 2017), report and recommendation adopted.
No. 1:17-CV-1201-CAP, 2017 WL 8186601 (N.D. Ga.

''two-step

procedure

for

Dec. 20, 2017)

(describing

the

obtaining

a

default

judgment").

Here, Plaintiff did not follow the proper procedure

by prematurely filing a motion for default judgment before filing

a motion for default and the clerk incorrectly filed a default

judgment before entering default.

However, because LACH has never

appeared in this case and because the amount owed by LACH to
Plaintiff is a sum certain-$182,798.29—the Court enters DEFAULT

JUDGMENT against LACH in that sum certain amount.
Therefore,

currently

at

issue

before

the

Court

are

Pete

Wright's Motion for Summary Judgment, dkt. no. 100, WFD's Motion
for Summary Judgment, dkt. no. 101, and WPW's Motion for Summary
Judgment, dkt. no. 103.

These motions request summary judgment on

all counts of the Complaint and the crossclaims.

Plaintiff's Cross

Motion for Partial Summary Judgment is also before the Court.
No. 104.

Dkt.

Plaintiff requests summary judgment on Count One for

breach of contract. Count Two for promissory estoppel, and Count
Three for unjust enrichment and Crossclaim Count VIII for successor
16

liability.

Id.

Plaintiff's Motion is only directed at Defendants

Pete Wright and WFD.

Id.

Therefore, this Order will only resolve

the parties and claims at issue before it in "these four motions.
Claims against other Defendants not at issue in these motions are
not before the Court, and those claims continue in this case.
LEGAL STANDARD

Summary judgment is required where """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."
56(a).
the

Fed. R. Civ. P.

A fact is ""material" if it ""might affect the outcome of

suit

under

FindWhat.com,

the

658

governing

F.3d

1282,

law."
1307

FindWhat
(11th

Cir.

Inv'r

Grp.

2011)

(quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

v.

A

dispute is ""genuine" if the ""evidence is such that a reasonable
jury could return a verdict for the nonmoving party."

Id.

In

making this determination, the court is to view all of the evidence

in the light most favorable to the nonmoving party and draw all
reasonable inferences in that party's favor.

Johnson v. Booker T.

Washington Broad. Serv., Inc., 234 F.3d 501, 507 (11th Cir. 2000).

The moving party bears the initial burden of demonstrating
the absence of a genuine issue of material fact.
Catrett, 477 U.S. 317, 323 (1986).

Celotex Corp. v.

The movant must show the court

that there is an absence of evidence to support the nonmoving
party's case.

Id. at 325.

If the moving party discharges this
17

burden,

the

burden

shifts

to

the

nonmovant

to

go

beyond

the

pleadings and present affirmative evidence to show that a genuine
issue of fact does exist.

Anderson, 477 U.S. at 257.

The nonmovant may satisfy this burden in two ways.

First,

the nonmovant ''may show that the record in fact contains supporting
evidence, sufficient to withstand a directed verdict motion, which

was 'overlooked or ignored' by the moving party, who has thus
failed

to

evidence."

meet

the

initial

burden

of

showing

an

absence

of

Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th

Cir. 1993) (quoting Celotex Corp., 477 U.S. at 332 (Brennan, J.,

dissenting)).

Second,

the

nonmovant "may

additional evidence sufficient to

come

forward

withstand a directed

verdict

motion at trial based on the alleged evidentiary deficiency."

at 1117.

with

with

Id.

Where the nonmovant attempts to carry this burden instead

nothing

more

"than

a

repetition

of

his

conclusional

allegations, summary judgment for the [movant is] not only proper
but required."

Morris v. Ross, 663 F.2d 1032, 1033-34 (11th Cir.

1981) (citing Fed. R. Civ. P. 56(e)).
DISCUSSION

I.

Contract Related Claims and Liability
A. Breach of Contract

Plaintiff and Defendants have filed cross motions for summary

judgment on Plaintiff's claim of breach of contract against WFD.
Plaintiff argues that the record supports all of the elements of
18

a

breach

of

contract
the

claim

and

contract

asserts that

that

it

had

the

with

amount
WFD

owed

is

to

not

in

Plaintiff

under

dispute.

Defendants argue that Plaintiff's claim fails because

Plaintiff has been paid in full for the contract between WFD and
Plaintiff
Sunshine

out

of

Heifers,

the
and

$75,000

settlement

FNB South.

between

Moreover,

Plaintiff,

Defendants

contend

that to the extent Plaintiff disputes that it has been paid in
full, a material dispute of fact exists as to how the proceeds
from the $75,000 settlement are to be applied.

In Georgia, the elements of a breach of contract claim are
^'(1) a valid contract; (2) material breach of its terms; and (3)

damages arising therefrom."

Brooks v. Branch Banking & Tr. Co.,

107 F. Supp. 3d 1290, 1295 (N.D. Ga. 2015) (citation omitted).
^'To constitute a valid contract, there must be parties able to

contract, a consideration moving to the contract, the assent of
the parties to the terms of the contract, and a subject matter
upon which the contract can operate."

O.C.G.A. § 13-3-1 (2018).

First, Pete Wright, acting by or through WFD as the owner and
managing

member,

was the

buyer, and

Plaintiff

was the seller.

Second, the consideration in this case was an exchange of cattle
sent

dairy

in

loads

from

property

in

Plaintiff s

Georgia

farm

in

in

North

exchange

for

Carolina

payment

to

by

WFD's

WFD.

Specifically for WFD, it is undisputed based on invoices in the
record that WFD purchased two loads of cattle from Plaintiff on or
19

around February 2, 2017, for $16,775.00 and on June 5, 2017, for
$96,800.00.

This money—along with the balance owed by LACK—was to

be to be paid out of milk check assignments from an account with
Maryland and Virginia Milk Producers Cooperative, Inc.

This milk

check assignment originated with LACH but was changed to WFD after
WFD took over LACH's milking operations once the lease with LACH

was terminated.

Other money was paid directly from Pete Wright to

Plaintiff {for LACH's debts), see dkt. no. 104-10 at 2 (showing a
payment of $17,000 on August 22, 2017), and a payment of $68,000
was paid to Plaintiff on WFD's behalf from the Gutman sale, dkt.
no. 104-2 at 22, 37.

cattle

from

Moreover, WFD accepted the deliveries of

Plaintiff,

and

Plaintiff

accepted

WFD's

payments.

These payments and the acceptance of the cattle deliveries, along
with other documentary evidence of the invoices and statements of
accounts,

demonstrate

the

Parties'

assent to the

terms

of the

contract—delivery in exchange for payment via milk assignment—and
the subject matter of that contract—the purchase of cattle.

Thus,

the Court finds that Plaintiff and WFD had a valid contract.

Plaintiffs argue that WFD breached this contract by not paying

fully for the cattle.

Defendant does not dispute this assertion,

but instead, argues that any payment obligation owed by WFD to

Plaintiff has been fulfilled.

First, it is undisputed that WFD's

Neither of these payments changed the undisputed balance owed by WFD of
$44,950.97 or by LACH of $182,798.29, which were calculated after these payments
were made to Plaintiff.

20

statements of account shows that WFD owed $44,950.97 to Plaintiff

for the cattle in September of 2017.
WFD

has

not

paid

Plaintiff

this

The record demonstrates that
remaining

amount.

However,

Defendants argue that this payment obligation has been satisfied

by a $75,000 payment to Plaintiff out of the settlement with
Sunshine

Heifers

and

FNB

South.

Defendants

believe

that

this

$75,000 payment should be credited to WFD's debt because WFD sold

its remaining cattle on October 6, 2017, in the Final Cattle Sale,
and they allege that the $75,000 settlement money was distributed
from the proceeds of that cattle sale.

However, despite the fact that Plaintiff admits the $75,000
came from the trust account that contained the funds from the Final

Cattle Sale, dkt. no. 118-1 SI 69, Defendants have not pointed to

any evidence in the record to establish that the $75,000 settlement
payment fulfills WFD's contractual debt to Plaintiff.

The trust

account holding that money included funds owed to Sunshine Heifers
and FNB South.

Plaintiff, FNB South, and Sunshine Heifers disputed

how much each of the three parties were entitled to from the trust
account.

Additionally, Plaintiff had claims against FNB South and

counterclaims against Sunshine Heifers that included tort claims.
Thus, to

meet their

burden

Defendants

would

have

to show

that

despite these facts, evidence in the record shows that the $75,000
in

the

settlement

payment

came

from

funds

that

WFD

owed

Plaintiff, not funds owed to FNB South or Sunshine Heifers.
21

to

From

the standpoint of the moving party in their Motion for Summary

Judgment,

without

pointing

to

any

evidence

in

the

record.

Defendants fail to show the absence of a genuine issue of material
fact that the $75,000 settlement covers WFD's debts to Plaintiff
under the breach of contract claim.

non-moving

From the standpoint of the

party responding to Plaintiff's Motion for Summary

Judgment, Defendants fail to point to evidence in the record that

creates a genuine issue of material fact as to Plaintiff being
paid in full under the contract.

Thus, the Court finds that

Plaintiff

WFD

and

WFD

had

a

contract,

breached

that

contract

through non-payment, and Plaintiff has suffered damages in the
remaining balance of $44,950.97 as evidenced by the statement of
account.

Therefore, with respect to Count One against WFD, Plaintiff's
Motion, dkt. no. 104, is GRANTED and Defendant WFD's Motion, dkt.
no. 101, is DENIED.

Because Plaintiff has an adequate remedy at

law under Count 1 for breach of contract, the Parties' Motions

with respect to Count 2 for promissory estoppel and Count 3 for
unjust enrichment are hereby DENIED as MOOT.
B. Successor Liability
Next, the Court must consider whether Plaintiff can also hold

WFD liable for LACK's liability for its debt to Plaintiff for its
breach of contract.

In its Motion for Summary Judgment, Plaintiff

argues that WFD should be held liable for the debts of LACH under
22

a theory of successor liability as pled in Count VIII of the Cross
Claim.

Specifically, Plaintiff argues that WFD is a successor in

interest to LACK because it either agreed to assume the liabilities
of LACH or because it functioned as a mere continuation of LACH.

Default Judgment has now been entered against LACH in the amount
of $182,798.29 in this case.

explicitly

agreed

to

assume

Defendants argue that WFD never

LACK's

liabilities

and

any

such

agreement must have been in writing under the Statue of Frauds.
Moreover, Defendants argue WFD cannot be a mere continuation of

LACH because WFD never purchased LACH or any of its assets and
because the two companies were in a landlord-tenant relationship
which is inapplicable to the doctrine of successor liability.

Under Georgia law,

[o]rdinarily, a successor entity does not

assume the liabilities of its predecessor unless Ml) there is an

agreement to assume liabilities; (2) the transaction is, in fact,
a merger; (3) the transaction is a fraudulent attempt to avoid
liabilities; or (4) the [successor] is a mere continuation of the

predecessor corporation."

Dan J. Sheehan Co. v. Fairlawn on Jones

Condo.

S.E.2d

Ass^n,

Inc.,

780

35,

38

(Ga.

(citations omitted) (alteration in original).

Ct.

App.

2015)

Plaintiff argues

that WFD is a successor in liability to LACH under either the first
or fourth exception.

Turning to the first exception, where there is an agreement
to assume liabilities. Plaintiff has failed to show an agreement
23

between

WFD

liabilities.

and

LACH

under

which

WFD

would

assume

LACH's

Under the Georgia Statute of Frauds, O.C.G.A. § 13-

5-30(2) (2018), ^'a promise to answer for the debt, default, or

miscarriage of another" must be in writing.
this

agreement is evidenced

by the

Plaintiff argues that

agreement concerning

WFD's

termination of its lease with LACH, but nothing in the lease or

testimony about the termination of that lease reveals an agreement

for WFD to assume LACK'S liability.
Dkt. No. 104-3 at 71.

See Dkt. No. 104-2 at 18;

Next, Plaintiff argues that the agreement

is evidenced by the milk-check assignment to the Plaintiff by WFD.
While the milk check assignment could be considered a ''writing"

for purposes of the Statute of Frauds, it is not sufficient, on
its own, to show an agreement to assume liability.

First, the

assignment could be terminated by WFD at any time-and was in fact
terminated—which suggests that this document does not demonstrate
an

all-encompassing agreement to assume liability.

Moreover,

despite Pete Wright's testimony that the milk-check assignment was
to pay for LACK'S debt to Plaintiff,

WFD also owed money to

Plaintiff at this point, so it is not clear that this milk check

assignment was an agreement to pay LACK's debts instead of merely
an attempt to pay WFD's debt.

Ultimately, while the fact that WFD

may have made the milk check assignment to pay off part of LACK'S
debt to Plaintiff, the Court cannot say that this document on its

24

own is an agreement to assume the liabilities of LACH as a matter
of law.

As to the fourth exception, it refers to ''the common law

doctrine of corporate continuity [, which] applies where ... there
is a substantial identity of ownership and a complete identity of
the objects, assets, shareholders, and directors."

Dan J. Sheehan

Co., 780 S.E.2d at 38 {alteration in original); see T.V.D.B. Sari
V. Kapla USA, LP, No. 4;12-CV-230, 2013 WL 6623186, at *9 (S.D.

Ga. Dec. 16, 2013) (quoting Copeland & Assocs., Inc. v. Tag Poly
Bags, Inc., 267 S.E.2d 862, 863 (Ga. Ct. App. 1980)) ("An entity
'is

but

a

continuance

of the

old'

entity

'by

reason

of

such

identity of name, objects, assets, and stockholders.'" (citation

omitted)). "The identity need not be complete; only 'some identity
of ownership' is necessary to apply the successor-in-interest

theory."

T.V.D.B., 2013 WL 6623186, at *9.

continuity doctrine is one of equity."

"The corporate

Dan J. Sheehan Co., 780

S.E.2d at 38.

This Court finds the reasoning of the court in T.V.D.B. Sari
V. Kapla USA, LP to be persuasive and instructive on the facts of
this case.

2013 WL 6623186, at *9-*10.

found

one

that

successor

in

company,

interest

to

CITIBLOCS,
another

LLC

In T.V. D.B., the court

("CITIBLOCS"),

separate

company,

was

KAPLA

a

USA,

LP("KAPLA"),. based primarily on that fact that one individual,

Chayette, was "at the heart of both ventures." Id. at *9. Chayette
25

was the founding member of KAPLA, which

was formed first, and

eventually became a member of CITIBLOCS.

Despite the fact that

CITIBLOCS was its own independent company that did not merge with,

purchase, or take over KAPLA, the court found a variety of factors
that made the former a continuance of the latter: both companies

made the same type of children's blocks toys, Chayette held herself

out as a member of CITIBLOCS—despite not yet being one—and used

KAPLA's name on a credit application for CITIBLOCS, the entities
used the same bank accounts, some of the same employees worked for

both companies (some even doing so simultaneously), the companies
used the same mailing address, the founding member of CITIBLOCS
sold KAPLA's inventory and received payment from CITIBLOCS for
those sales, and KAPLA transferred at least $30,000 to CITIBLOCS

to fund its start-up.

Id. at *1, *9-10.

Based on these facts,

the court held that ''[n]early all signs point to CITIBLOCS as being
a continuation of and successor in interest to KAPLA."

Id. at *9.

For many of the same reasons that the court found successor

liability in T.V.D.B., WFD is also a continuation and successor in
interest to LACH in this case.

Like Chayette in T.V. D.B., Pete

Wright was ^^at the heart of" both WFD and LACH.

Although he was

not a member of LACH, he was in charge of all of LACH's finances

(even to the point that Raymond Wright, the sole member of LACH,
was unaware of the financial decisions and transfers Pete Wright

was making), and Pete Wright appears to have held himself out as
26

a member of LACK to Plaintiff, when he went on behalf of LACH to

purchase cattle from Plaintiff, and the bank, who both thought
they were always dealing with Pete Wright whether through WFD or
LACH, see dkt. no. 104-8 at 7; 104-9 at 6-8.^^

Pete Wright also

transferred money from LACH to WFD, and he took money from LACH
and transferred it directly to himself, like the money transfer in
T.V.D.B.

Moreover,

possession

of

the

WDF

same

and

LACH

had

the

milking-operation

same

assets

address,

on

the

had

same

property, utilized some of the same employees (who worked for both

companies simultaneously), and Pete Wright paid off WFD's debts
with income from LACH's operations—this in addition to WFD paying

the milk assignment to Plaintiff on behalf of LACH's debt.
the

settlement

between

LACH

and

WFD,

WFD

retained

all

After
of the

equipment used by LACH and took over all of LACH's cattle to
continue the milking operation.

Finally, testimony in the record

shows that LACH was set up to provide revenue to WFD from milking

operations while protecting assets and money from WFD's numerous
creditors and liens.

The Court finds that based on these facts,

a substantial identity of ownership exists between WFD and LACH

with '"the similarity of the names being the only incompleteness."

Moreover, the fact that Pete Wright was not a member of LACH is not dispositive
because the issue is whether the two entities, not the members of those entities,
are successor in interest.
As an example, the court in T.V.D.B. found facts

supporting successor liability involving Chayette's actions before she became
a member of CITIBLOCS.

2013 WL 6623186 at *9.
27

T.V.D.B., 2013 WL 6623186, at *10.

As such, Plaintiff can hold

WFD liable for LACH's liability under the contract with Plaintiff.

Defendant argues that WFD cannot be a mere continuation of
LACH because they had a landlord-tenant relationship and because
there was no ''purchase" under the rule.

First, the Court does not

hold that WFD is a successor in interest of LACH based on their

landlord-tenant

relationship.

Rather, the

Court's

holding is

based on the numerous facts demonstrating a common identity of

ownership between the two entities, with Pete Wright's involvement
in both as the most compelling factor.

Second, while the language

of the rule for the mere continuation exception

uses the term

"purchase" in regard to corporations, a purchase is not required
to apply the equitable doctrine of corporate continuity.

See

T.V.D.B., 2013 WL 6623186, at *9-10 (finding continuity for an LLC

and an LP despite the lack of a purchase); see also Dan J. Sheehan
Co. V. Fairlawn on Jones Condo. Ass'n, Inc., 780 S.E.2d 35, 38

(Ga. Ct. App. 2015) (finding continuity between two associations
despite the lack of a purchase).

Additionally, in T.V.D.B., the

Court rejected the defendants' argument that there was no successor

liability because there was an absence of a transfer of stock
between

the

two

companies.

2013

WL

6623186,

at

*9.

Thus,

Defendant has failed to show a genuine dispute of material fact as

to why successor liability does not apply in this case to WFD.

As

a result. Plaintiff can hold WFD liable for its own breach of
28

contract as

well as

the $182,798.29 default judgment

against LACK in this case for its debts to Plaintiff.

entered

Plaintiff's

Motion for Partial Summary Judgment with respect to Cross Claim
Count VIII for claims against WFD and LACK is hereby GRANTED.12
C. Piercing the Corporate Veil
The Court must also determine whether Plaintiff can hold Pete

Wright personally liable for the debts of WFD—which also includes
the debts of LACH under a theory of successor liability—under a

theory of piercing the corporate veil.

The Court will first

determine whether Plaintiff raised the theory of veil-piercing in

the pleadings.

Second, finding that the theory was raised, the

Court will determine the merits of the veil-piercing argument.
i. Did Plaintiff Raise Veil-Piercing in the
Complaint?

In this case. Plaintiff attempts to hold Pete Wright liable
for the debts of WFD-which as a result of successor liability
discussed above includes the debts of LACH—under a theory of

piercing the corporate veil.

In response. Defendants argue that

Plaintiff never raised the doctrine of veil-piercing in either the

Complaint or the Cross Claims but was instead improperly raised
for the first time in Plaintiff's Motion for Summary Judgment.

12 Plaintiff's Motion for Partial Summary Judgment is only directed at Defendants

WFD and LACH with respect to Crossclaim Count VIII.
Moreover, Defendants'
Motions for Summary Judgment are filed on behalf of Pete Wright, WFD, and WPW.
For WPW's liability, see infra Section V. As for the remaining Defendants under
Crossclaim Count VIII beyond WFD and LACH, claims against those Defendants
remain undisturbed by this Order.
29

Defendants correctly note that a Complaint must be amended in
accordance with Federal Rule of Civil Procedure Rule 15 and motions

for

summary

judgment

or

responses

vehicles to raise new claims.

thereto

are

inappropriate

See, e.g., American Federation of

State, County and Mun. Employees Council 79 v. Scott, 717 F.3d

851, 863 (11th Cir. 2013) (""A plaintiff may not amend her complaint
through

argument

in

a

brief

opposing

summary

judgment

or

one

advocating summary judgment.") (citation and internal quotation
marks omitted); GeorqiaCarry.Qrg, Inc. v. Georgia, 687 F.3d 1244,

1258 n.27 (11th Cir. 2012) (''It is well-settled in this circuit

that a plaintiff may not amend the complaint through argument at
the

summary

judgment

phase

of

proceedings.").

However,

"[t]echnically 'piercing the corporate veil' is not a claim but a

means by which [a plaintiff] might hold" individual defendants
liable for a corporate entity's misconduct.

GEBAM, Inc. v. Inv.

Realty Series I, LLC, 15 F. Supp. 3d 1311, 1313 (N.D. Ga. 2013);
see also RehabCare Grp. E., Inc. v. SAK Mqmt. Servs., LLC, No. 09

C 4523, 2010 WL 3307084, at *5 (N.D. 111. Aug. 18, 2010) ("The

alter ego theory is not a claim but a procedural mechanism for
allowing liability on a substantive claim.").

Citing other courts

in this Circuit, this Court has previously explained that "a veil-

piercing claim or theory of liability must be presented in the
plaintiff's pleading in some form or fashion."

Pinova, Inc. v.

Quality Mill Serv., Inc., No. CV 213-144, 2015 WL 5178946, at *230

3 (S.D. Ga. Sept. 3, 2015) {emphasis added) (quoting Northstar
Marine, Inc. v. Huffman, No. CIV.A. 13-0037-WS-C, 2014 WL 4854843,
at *9 (S.D. Ala. Sept. 29, 2014)).

Given the liberal standard of notice pleading, the Court finds
that, despite not using the term ''piercing the veil," Plaintiff
did

raise

Crossclaims

the

theory

such

that

of

liability

Defendants

in

were

on

the

Complaint

notice

that

and

the

Plaintiff

would attempt to hold Pete Wright liable as the alter ego of WFD.
See Gonzalez v. Asset Acceptance, LLC, 308 F. App'x 429, 430 (11th

Cir. 2009) ("The purpose of Fed. R. Civ. P. 8(a)(2) is to provide
the defendant with fair notice of what claim is being alleged, and

the grounds upon which it rests.").

First, as a general matter,

the Complaint and the Crossclaims detail Pete Wright's involvement
in the facts of this case (namely his involvement with various
business entities surrounding his milking operations and with the

specific sale of cattle at issue in this case), and Plaintiff sues
Pete Wright as doing business as WFD and includes him under the
label of "The Wright Defendants."

This Court has previously held

that this fact alone—being lumped in a group of "Defendants" with

corporate entities—is not enough to raise the theory of veilpiercing.

Pinova, 2015 WL 5178946, at *3 ("Simply stating that

'Defendants' sold Pinova the chains and that 'Defendants' knew how
Pinova intended to use the chains does not allege that Quality

Industries was abusing the corporate form by using Quality Mill as
31

an alter-ego or sham corporation.").

alleged

in

Crossclaim

Count

VIII

But, here. Plaintiff also

that

''these

corporations

[referring to WFD and others] have at various times functioned as
alter-ego of one another or of Pete Wright."

Dkt. No. 65 SI 320.

Therefore, Defendants were on notice that Plaintiff alleged Pete
Wright was the alter ego of WFD.

This fact combined with the facts

alleged in the pleadings such as Pete Wright's involvement with
WFD

and

that

he

entered

into

a

transaction

with

Plaintiff

to

provide cattle for WFD—an LLC of which he was the managing memberwere sufficient to raise the

doctrine of veil-piercing to put

Defendants on notice of that theory.

ii. Do the Facts Support Piercing the Corporate Veil
Against Pete Wright?

After establishing that Plaintiff did raise the theory of

piercing the corporate veil, the Court now turns to the merits of
that

theory.^''

"Under

Georgia

corporate

law,

individual

shareholders and officers of a corporation are 'shielded by the

corporate veil,' in the absence of fraud or abuse of the corporate
form."

Dearth v. Collins, 441 F.Sd 931, 934-35 (11th Cir. 2006)

13 Moreover, Plaintiff also asserted that Pete Wright was not protected by the

corporate form for alleged torts he committed involving WFD, which, while
involving a separate theory of liability, shows Plaintiff noting Pete Wright's
relationship to the corporate form of his business entities in the pleadings.
Dkt. No. 1 f 118; Dkt. No. 65 If 247, 257.

This fact furthers the view that

the pleadings put Defendants on notice of a possible piercing the corporate
veil theory of liability.

14 Defendants only presented argument on the issue of whether Plaintiff properly
raised the veil-piercing doctrine; they did not present any argument on the
merits of Plaintiff's veil-piercing theory.
32

(quoting Moore v. Barge, 436 S.E.2d 746, 749 (Ga. Ct. App. 1993)).
However, this ''corporate veil" can be pierced under the "alter ego
doctrine"

if

requirements:

a

plaintiff

(1)

that

can

the

establish

the

stockholders'

doctrines

disregard

three

of

the

corporate entity made it a mere instrumentality for the transaction
of their own affairs; (2) that there is such unity of interest and

ownership that the separate personalities of the corporation and
the owners no longer exist; and (3) to adhere to the doctrine of
corporate entity would promote injustice or protect fraud."

Id.

(quoting McLean v. Cont'l Winqate Co., 442 S.E.2d 276, 279 (Ga.
Ct. App. 1994).

While "[t]he doctrines of limited liability and

of piercing the corporate veil are often discussed in terms of
corporations," they

also "apply

to

LLCs."

Functional

Prod.

Trading, S.A. v. JITC, LLC, No. 1:12-CV-0355-WSD, 2014 WL 3749213,

at *6 (N.D. Ga. July 29, 2014) (citing O.C.G.A. § 14-11-303(a)).

"To justify piercing the corporate veil, 'the plaintiff must
show [that] the owner abused the corporate form by disregarding

the separateness of legal entities by commingling [funds] on an
interchangeable or joint basis or confusing the otherwise separate
properties, records, or control.'"

Id. (quoting Rasheed v. Klopp

Enters., Inc., 622 S.E.2d 442, 446 n.4 (Ga. Ct. App. 2005)).

justify

piercing

the

corporate

veil

under

Georgia

To

law,

"[g]enerally, there must be evidence that the corporate owner used
corporate funds for personal expenses; or that the owner bled or
33

siphoned

the

assets

of

the

debtor

corporation

to

another

corporation that the owner controls; or that the owner passed the
owner and the owner's corporations off to third parties as single
entity.

2012

WL

Manhattan Constr. Co. v. Phillips, No. 1:09-CV-1917-WSD,

13001890,

at

*11

(N.D.

Ga.

Apr.

9,

2012)(citations

omitted), aff'd sub nom. Manhattan Const. Co. v. Place Properties

LP, 559 F. App'x 856 (11th Cir. 2014).

Finally, although the

determination of veil-piercing is ''typically one to be resolved at

trial" given

its "fact-intensive" nature, "a

court

may

summary judgment if a jury would have but one result."

grant

Smith v.

Georgia Energy USA, LLC, No. CV 208-020, 2014 WL 5643919, at *4
(S.D. Ga. Nov. 4, 2014).

Based on the undisputed facts of this case, the Court finds

that a jury would have but one result-finding that Plaintiff could

pierce the corporate veil of WFD to hold Pete Wright liable for
WFD's debts to Plaintiff.

Here, the key factors for piercing the

corporate veil under Georgia law are all present.

Plaintiff has

demonstrated from the record that this case is one of the rare

cases where a member of an LLC is not entitled to protection from
the corporate veil.

First, the evidence demonstrates that Pete Wright disregarded
the

corporate

entity

instrumentality for

his

of

own

WFD

such

affairs.

that

WFD

As for

was

WFD's

a

mere

business

generally, while it is possible that WFD might have been initially
34

set up and run as a legitimate corporate entity, the evidence shows
that as WFD's debts piled up, Pete Wright set up other entities

like LACH to continue receiving milking revenue while avoiding
paying WFD's creditors.

Raymond Wright testified that LACH was

set up to continue the dairy operations on the dairy farm owned by
WFD and to send revenue to WFD while protecting that revenue from
WFD's creditors.

Additionally, Pete Wright set up an entity called

Asbury Farm, and he admitted that after selling cattle from WFD
{after acquiring them from LACH) to New Holland, he directed New
Holland to send those funds to Asbury Farm to avoid WFD's creditors

and ^'hide" the money.

Dkt. No. 104-2 at 55.

More broadly, when

asked under oath whether he created Asbury Farm to in an effort to

move assets to Asbury Farm out of WFD and to liquidate those assets

to receive proceeds, Pete Wright asserted the Fifth Amendment right

against

self-incrimination.

These

actions

involving

other

15 The Court makes an adverse inference against Pete Wright for his assertion
of the Fifth Amendment in response to the deposition questions about WFD's

assets and Asbury Farm for the purposes of this veil-piercing inquiry.

The

Eleventh Circuit has held that "the Fifth Amendment does not forbid adverse

inferences against parties to civil actions when they refuse to testify in
response to probative evidence offered against them." United States v. Premises
Located at Route 13, 946 F.2d 749, 756 (11th Cir. 1991), as amended (Nov. 5,

1991) (citations omitted).

Although an exception to this rule applies where "a

person, who is a defendant in both a civil and a criminal case, is forced to
choose between waiving his privilege against self-incrimination or losing the
civil case on summary judgment," that exception does not apply here for two
reasons: the Court is not aware of any pending criminal case against Pete Wright
and this adverse inference alone is not dispositive on the issue of veil-

piercing or summary judgment overall.

Thus, the Court can properly make an

adverse inference at this juncture. See United States v. Marder, 208 F. Supp.
3d 1296, 1305 (S.D. Fla. 2016) (making an adverse inference against a defendant

for asserting the Fifth Amendment privilege in response to deposition questions
in deciding a summary judgment motion).
35

business entities to protect WFD's money and other assets from
creditors

are

an example of

WFD

and

Pete

Wright

abusing the

corporate form to avoid WFD's monetary obligations for his own
financial gain.

See Baillie Lumber Co. v. Thompson, 612 S.E.2d

296, 299 (Ga. 2005) (^'The concept of piercing the corporate veil
is applied in Georgia to remedy injustices which arise where a

party has over extended his privilege in the use of a corporate

entity in order to . . . evade contractual or tort responsibility."
(emphasis added)).

Additionally, other facts show how Pete Wright abused the
corporate form of WFD.

Pete Wright was the managing member of WFD

and was in charge of the finances for LACH.

In those capacities,

he made multiple money transfers between LACH, WFD, and himself.
In one example, there was a transfer of $2,200 from LACH to WFD,

and on that same day, someone^® wrote a check of $2,200 from WFD's
account to a paint and body shop for repairs on Pete Wright's

personal vehicle.

Dkt. No. 104-2 at 41.

Harvey Prater also

wrote a check from WFD to pay for Pete's speeding ticket fine.

The check was signed by W.P. Wright, but Pete Wright testified it was written
by his office manager Harvey Prater.

1"' Although it is true that the lease agreement between LACH and WFD included a
provision that LACH would provide Pete Wright a pick-up truck and maintenance
costs, the point of this fact and this paragraph is that Pete Wright, in his
position as managing member of WFD and head of finances for LACH, abused the
corporate form by transferring money in various ways between WFD, LACH, and his
own personal bank accounts. Indeed, even if the transfer here was for the truck
provided for in the lease, the money was still transferred from LACH's account
to WFD's account before a check was written for the truck repair—demonstrating

an example of comingling funds.

Moreover, the record is not clear as to whether

the truck referred to in the lease is the truck that Pete Wright had repaired.
36

Dkt. No. 104-2 at 45.

In another example, there was a transfer of

$2,150 from LACK to WFD, and on the same day, WFD wrote a check to
Dixie Farms.

Dkt. No. 104-2 at 41.

Pete Wright testified that

this was an example of him using LACH to pay off WFD's debts.
Moreover, Pete and Glenda Wright would transfer money from LACH to
WFD, then transfer to their personal accounts, and then pull out
cash or write cashier's checks to make various payments, including
to their creditors.

These multiple transfers between WFD, LACH,

and Pete Wright's personal accounts made bookkeeping the records

^Very

difficult,"

dkt.

no.

104-6

at

10,

such

that

in

his

deposition, Pete Wright could not identify for what purposes large
transfers to WFD or from WFD to himself were being made.

e.g., Dkt. No. 104-2 at 40-4.

See,

Glenda Wright admitted that during

2016, she and Pete wired roughly $200,000 to their personal bank
account from WFD and LACH and then would wire money from that

personal account to creditors.
Pete

Wright used

WFD's

All in all, these facts show that

business account to

pay

his personal

expenses and that he mixed that account with his personal account
and LACH's account in paying WFD's creditors such that he was

comingling WFD's business funds with his own personal funds. These
facts show a total disregard of the corporate entity of WFD.
Second, the facts of this case show a unity of interest and

ownership between Pete Wright and WFD that essentially eliminate
the separate personalities of the two entities.
37

In addition to

the comingling of WFD's bank accounts with his personal accounts,
Pete Wright also owned all of the dairy property and assets, and

he held himself out to others as a single entity with WFD.

Pete

Wright's residence, WFD's principal office and farming operation,
and LACH's principal office and farming operation were all located
at the same address—the Dairy Property.

While the fact that Pete

Wright lives and operates a business on the same property is not

enough on its own to pierce the veil, this fact shows the milking

operation assets were always on Pete Wright's land.

When Pete

Wright would interact with third parties regarding the milking
operation on his land, even if he was doing so as WFD or LACH,

third parties testified that they believed they were doing business
with Pete Wright personally.

Robert Stamey testified that he

understood Pete Wright to be the purchaser of his cows, and he
went so far as to say that ''if Pete Wright hadn't been the buyer,
not one of these [cows] would have been put on a truck headed to

Georgia."

Dkt. No. 104-9 at 7.

Furthermore, a representative

from the bank, FNB South, affirmed during deposition testimony
that from the bank's perspective, regardless of what corporate

entity it was, they considered themselves to be dealing with Pete
Wright.

Dkt. No. 104-8 at 7.

These facts show that based on Pete

Wright's conduct, the line between WFD and himself had been blurred
to the point that they could be considered one and the same.

38

Third, and finally, allowing Pete Wright to avail himself of

the detection of the corporate form would promote an injustice in
this case.

As of

now,

WFD

has been

dissolved

and

has

ceased

business operations, and the dairy property has been foreclosed.
Additionally, WFD was at one-time subject to a tax lien and various
other debts, and to the court's knowledge based on the record,
those debts still exist.

Thus, if the Court, despite Pete Wright's

disregard of the corporate form, were to allow him to maintain the

protection of the corporate veil. Plaintiff would likely have no
means of recovery since WFD and LACH are now dissolved and have
been insolvent since at least the time of the final delivery of

cattle.

See Dkt. No. 117 f 19 (admitting that WFD and LACH were

insolvent at the time of the June 5, 2017 delivery); see also Rapp

V. Escante, Inc., 695 S.E.2d 744, 746 (Ga. Ct. App. 2010) (^'^A

debtor who generally is not paying his debts as they become due is

presumed to be insolvent."). Thus, in order to promote a just and
equitable outcome, in light of the facts discussed above, the Court
holds that Plaintiff may pierce the corporate veil of WFD and hold
Pete Wright personally liable for the LLC's contractual debts.

18 Plaintiff also asks the Court to pierce the veil against Pete Wright and

LACH. However, it is undisputed that Raymond Wright was the sole member of
LACH, and the record is unclear as to whether Pete Wright could be considered

a manager of LACH subject to potential liability for LACH's debts under a veilpiercing theory. Pete Wright managed all the finances of LACH in some sort of
supervisory capacity, but Raymond Wright did not provide a clear answer when
asked whether Pete Wright was a "manager" of LACH. Thus, at the very least
this is a factual issue. However, in light of the Court's findings that WFD is
a successor in interest to LACH and that Plaintiff can pierce the veil against

Pete Wright for WFD's contractual liabilities, Pete Wright would also be liable
39

Therefore, Plaintiff's Motion with respect to Count One against
Pete Wright is GRANTED, and Pete Wright's Motion with respect to
Count One is DENIED.

Pete Wright's Motion as to Counts Two and

Three is DENIED as MOOT.

II.

Security Interest and Related Claims

Plaintiff asserts that it had a security interest of some
kind

in

the

cattle

sold

crossclaims in this case.

to

Defendants

that

Plaintiff

several

counts

and

See Counts Six and Seven and Crossclaim

Counts Two, Three, Four, Five, and Six.

argue

in

was

merely

an

In response. Defendants'

unsecured

creditor

that

possessed no such security interest in the cattle.
The attachment and enforceability of security interests is

governed by Article 9 of the U.C.C., which is adopted under Georgia
law in O.C.G.A. § 11-9-203, et. seq.

Art. 9 provides that ^'[t]hree

conditions must be met before a security interest is enforceable

against anyone."

In re Pierce, 581 B.R. 912, 917 (Bankr. S.D. Ga.

2018) (citing O.C.G.A. § 11-9-203(b)). ''First, unless the secured

party possesses the collateral, there must be a written security
agreement signed by the debtor and containing a description of the
collateral.
the

debtor.

collateral.'"

Second, the secured party must have given value to
And

third,

the

debtor

must

have

'rights

in

the

Id. (quoting O.C.G.A. 11-9-203(b)); see also Grier

for WFD's successor liability of LACH.

In other words, the issue of veil-

piercing for Pete Wright as to LACH is likely moot at this point.
40

V. Skinner^s Furniture Store of Newnan, Inc., 349 S.E.2d 826, 828

{Ga. Ct. App. 1986) (^'A signed security agreement is an absolute

requisite

to

the

enforceability

of

the

security

interest."

(citations omitted) (internal quotation marks omitted)).
In this case, it is undisputed that Plaintiff did not have

possession of the cattle that it claims a security interest in;
thus. Plaintiff would have to show evidence of a security agreement

signed by Defendants.

A security agreement is ^'an agreement that

creates or provides for a security interest." O.C.G.A. § 11-9102(a)(72) (2018).

signature

by the

accordance

with

This agreement must be authenticated with a

party against
the

Statute

whom it is to be enforced in

of

Frauds.

See

id.

§

11-9-

102(a)(7)(defining ''authenticate"); In re Flaqer, Jr., No. 0750293-JDW, 2007 WL 1701812, at *2-3 (Bankr. M.D. Ga. June 8, 2007)

(Thus,

the

need

for

authentication

imposes

"an

evidentiary

requirement in the nature of a Statute of Frauds." (quoting U.C.C.
§ 9-203, cmt. 3)).

"A security agreement need not be in any

particular form so long as it consists of a writing signed by the
debtor

that

reasonably

describes

the

collateral

and

includes

language evidencing an intent to create a security interest."
re

Flaqer,

Jr.,

2007

WL

1701812,

at

*2

(citations

In

omitted)

(internal quotation marks omitted).

To support its argument that it had a security interest in
the cattle. Plaintiff points to O.C.G.A. § 11-2-401 (2018), which
41

states in part: "MaJny retention or reservation by the seller of

the title (property) in goods shipped or delivered to the buyer is
limited in effect to a reservation of a security interest."

Thus,

although title passes to the buyer upon delivery of goods, a seller
can still retain a security interest in the goods if it reserved
title in
Pippin^
Ga.

those

goods.

See

O.C.G.A. § 11-2-401(1)-(2); In

re

Dots Patent Litig., 249 F. Supp. 2d 1346, 1377-78 (N.D.

2003), aff^d

sub

nom.

Pippin^

Dots,

Inc.

v.

Frosty

Bites

Distribution, LLC, 369 F.3d 1197 (11th Cir. 2004)(explaining that
under

Article

II

of

the

U.C.C., ''reservation

of

title

after

delivery amounts only to a security interest, and for all other
purposes, title passed to [the buyer] at the time of delivery by
[the seller]").
statements

of

In this case. Plaintiff points to invoices and

accounts

for

the

seven

loads

Defendants that contain the statement "Title

of

cattle

sold

will transfer

to

when

full payment is received" next to a signature line at the bottom
of the pages.

Defendant admits that Plaintiff sold the cattle to

Defendant on credit, see dkt. no. 118-1 1 32f and while the title

reservation language would not allow Plaintiff to retain title

after delivery of the cattle, it would be sufficient to retain a
security interest in the cattle.
However, two issues arise with these invoices.

First, five

of the invoices with the reservation language were not signed until
October 6, 2017,

which

was well after the cow sales to Gutman
42

Brothers and others that are basis of Plaintiff s security interest
claims.

In other words, if these five invoices were sufficient to

create a security interest, that interest would not have attached

until they were signed on October 6, 2017.

But, two other invoices

exist in this case—specifically the invoices for cattle loads 2
and 3 that were delivered in February 2017.

The second issue is

that these two invoices, containing the reservation language, were

signed

upon

delivery

in

February

2017,

which

security interest in those two loads of cattle.

would

create

a

However, a dispute

of material fact exists as to whether those invoices were properly

authenticated writings because Defendants claim that the signature
on

those

two

invoices

is

not

Pete

Wright's.

The

other

five

invoices are signed ^'W.P. Wright, Jr." while the two February

invoices are signed ^^Pete Wright."

Pete Wright testified that the

only invoices he signed were the five signed on October 6, 2017,
and that the signatures on the invoices for loads 2 and 3 were not
his signature.

Dkt. No. 104-2 at 19-20.

Glenda Wright also

testified that the signatures on the invoices for loads 2 and 3
were not Pete Wright's signature, Dkt. No. 104-6 at 5, and Harvey
Prater testified that he had never seen Pete Wright sign his name

^'Pete Wright" and that he usually signed it ''W.P. Wright," Dkt.
No. 119-4.

However, Robert Stamey, who had been doing business with Pete

Wright for approximately 40 years, testified that he believed the
43

signatures on the invoices for loads 2 and 3 to be those of Pete

Wright, despite looking different than the signatures on the other
five invoices.

He stated that he had "a lot" of other ""invoices"

from previous years where Pete Wright signed his name ""Pete Wright"
as opposed to ""W.P. Wright Jr."

Dkt. No. 110-1 at 38-39, 41-42.

Additionally, Pete Wright stated during his deposition testimony
that on at least one occasion, he believed Harvey Prater, Pete

Wright's office manager, signed Pete Wright's name to a check-

demonstrating at least one example of Pete Wright's signature being
signed by someone else on his behalf.

Dkt. No. 104-2 at 40.

Moreover, at least twice in the record, Pete Wright's signature

differs from both of the signatures on the load invoices.

See

Dkt. No. 104-3 at 32 (signing the Certificate of Verification for

the

Response

to

Plaintiff's

First

Request

for

Production

of

Documents ""William P. Wright Jr."); Dkt. No. 116-1 Ex. W (signing
the lease for WFD and LACH as ""William P. Wright").

Viewing these facts in the light most favorable to Plaintiff,
the Court finds that a genuine dispute of material fact exists as
to whether Plaintiff had a security interest in the cattle that it
sold to

Defendants.

A material dispute of fact exists as to

whether Pete Wright, or someone authorized by him, signed the
invoices for loads 2 and 3 in February 2017.

Thus, the Court

cannot determine whether Plaintiff had a security interest in the
cattle based on those two invoices because it cannot determine if

44

they were

properly authenticated.

If they were not properly

authenticated, then Plaintiff would have no security interest, if

any, until October 6, 2017, when the other invoices were signed.
If they were properly authenticated, then Plaintiff would have a

security interest in the cattle^^ as a result of the reservation
language signed in the February invoices.
must be left to the jury.^o

However, this issue

Thus, with respect to claims against

WFD and Pete Wright under Count Six and Crossclaim Counts III and
V,2i Defendants' Motions are DENIED.
However, because the Court finds that even under a theory of
a reservation of title Plaintiff did not retain any ownership or

title to the cattle. Plaintiff's claim under Count Seven for civil
conversion and Cross Claim Count II for civil conversion, livestock

A jury would also have to determine which cattle Plaintiff had a security
interest in. It is unclear from the record whether, at this point, it could be
determined which cows were from loads 2 and 3 compared to the cows from the
other loads for two reasons. First, the record shows that Pete Wright removed

one type of identification tags from the cows, and second, the cows have now
been sold elsewhere. For the purposes of this Order, the Court will refer to
a security interest in "the cattle," knowing that jury would have to determine
which exact "cattle" that might be.

20 Despite this genuine dispute of material fact as to whether Plaintiff
possessed a security interest in the cattle, the Court does find that even if
a jury finds that Plaintiff has a security interest, the record contains no
evidence that would allow a reasonable jury to find that such security interest

was perfected. In other words, if Plaintiff had a security interest, it would
be an unperfected security interest because Plaintiff did not file a UCC-1
filing statement or pursue any other method of perfecting any alleged security
agreement under Art. 9 of the U.C.C.
21 Crossclaim Count V is for civil conspiracy for tortious interference with a
security interest. Defendants' only argument for summary judgment on this count
is that Plaintiff had no security interest and had been paid in full. Because
the Court has determined that Plaintiff was not paid in full through the $75,000
settlement and because it finds that a genuine dispute of material fact exists
as to the issue of Plaintiff's alleged security interest. Defendants have failed
to meet their burden for Crossclaim Count V warranting a denial of their summary
judgment motions on that count.
45

theft, and theft by deception fail as a matter of law.

"To make

out a prima facie case, in an action for damages for conversion of
personal property, the plaintiff must show title to the property,
possession by the defendant, demand for possession, and refusal to
surrender the property, or an actual conversion prior to the filing
of the suit."

Taylor v. Powertel, Inc., 551 S.E.2d 765, 769 {Ga.

Ct. App. 2001) {emphasis added) (citations omitted).

"A person

commits the offense of livestock theft when he unlawfully takes

or, being in lawful possession thereof, unlawfully appropriates
any livestock of another with the intention of depriving the owner
of such livestock."

O.C.G.A. § 16-8-20 (2018) (emphasis added).

"A person commits the offense of theft by deception when he obtains
property

by

any

deceitful

means

or

artful

practice

intention of depriving the owner of the property."

with

the

O.C.G.A. § 16-

8-3 (2018) (emphasis added).

Although a jury could find that Plaintiff had a security
interest in the cattle based off of the reservation language in
the

two

February

2017

invoices,

Plaintiff to also retain title.

default

rule

is

that

title

that

language

does

not

allow

Under O.C.G.A. § 11-2-401, the

passes

upon

delivery.

Therefore,

despite the possibility of a security interest, 'Mi]n no event
. . . may a seller retain title after the delivery of the goods,
despite an explicit reservation of title."

In re Jones, No. 12-

14608, 2013 WL 1092099, at *4 (Bankr. E.D. Tenn. Jan. 17, 2013)
46

(discussing O.C.G.A. § 11-2-401).

Plaintiff argues that the fact

that Pete Wright told Plaintiff to come get the cattle when he
realized that he would not be able to pay for them is evidence
that

Plaintiff

However,

maintained

ownership

or

title

while this fact may be evidence

of

the

cattle.

of a creditor-debtor

relationship or possibly a security interest, it does not change
the fact that Plaintiff sold and delivered cattle to Defendants at

which

point

title

transferred

to

Defendants.

Thus,

because

Plaintiff did not retain any title to the cattle in this case,
even with the reservation language. Plaintiff cannot show title or
ownership to the cattle and his conversion and theft claims must
fail.

Defendants'

Motions

with

respect

to

Count

Seven

and

Crossclaim Count II are GRANTED.

Finally, because the underlying individual claims for civil
conversion, livestock theft, and theft by deception fail due to
Plaintiff's lack of title or ownership in the cattle. Plaintiff's
claim

under

Crossclaim

Count

IV

for

Civil

Conspiracy:

Civil

Conversion, Livestock Theft, and Theft by Deception must also fail.
Defendant's Motions with respect Crossclaim Count IV are GRANTED.
III. Fraud Claims

A. Fraud and Fraud in the Inducement

Plaintiff also brings claims against Defendants for fraud and

fraud in the inducement, arguing that Defendants entered into a
contract with Plaintiff to purchase cattle with the intent to not
47

pay for those cattle.

Defendants respond by arguing that a promise

to pay in the future and a failure to pay does not amount to fraud.
''The tort of fraud [including fraudulent inducement]22 has
five elements: a false representation by a defendant, scienter,

intention to induce the plaintiff to act or refrain from acting,

justifiable

reliance

by

plaintiff,

and

damage

to

plaintiff."

Stafford v. Gareleck, 769 S.E.2d 169, 173 (Ga. Ct. App. 2015)

(alteration in original) (citation omitted). "Generally, fraud in
Georgia is not actionable if it arises from a failure to fulfill
promises to perform acts in the future."

Tr. v. 0^ Connor, No.

1:10-CV-1438-AT, 2012 WL 12836517, at *8 (N.D. Ga. Sept. 28, 2012).

This fact is especially "true of a promise to pay money" because
"[o]therwise

any

breach

of

contract

would

amount

to

fraud."

Georgia Real Estate Common v. James, 262 S.E.2d 531, 533 (Ga. Ct.

App. 1979). However, Georgia recognizes an exception for "promises
made with a present intention not to perform or where the promisor
knows that the future event will not take place."

Tr., 2012 WL

12836517, at *8 (quoting Georgia Real Estate Common, 262 S.E.2d at
533).

The Eleventh Circuit has explained that "[bjecause fraud in

itself is by nature subtle and often difficult to prove, the

22 "Fraud in the inducement consists of one party's misrepresenting a material
fact concerning the subject matter of the underlying transaction and the other

party's relying on the misrepresentation to his, her, or its detriment in
executing a document or taking a course of action."

Solymar Investments, Ltd.

V. Banco Santander S.A., 672 F.3d 981, 994 (11th Cir. 2012) (citations omitted).
48

Georgia

courts

have

held

that

slight

circumstances

may

be

sufficient to prove its existence." Wilson v. S & L Acquisition
Co., 940 F.2d 1429, 1440 (11th Cir. 1991). ''Fraud is by definition

subtle 'and can be accomplished in an infinite number of ways.'"
Tr., 2012 WL 12836517, at *8 (quoting Federal Ins. Co. v. Westside
Supply Co., 590 S.E.2d 224, 229 (Ga. Ct. App. 2003)).

"As a

result, fraud is 'seldom ever susceptible of direct proof, [and]
recourse to circumstantial evidence usually is required.'"

Id.

(quoting Lloyd v. Kramer, 503 S.E.2d 632, 634 (Ga. Ct. App. 1998)).

Therefore, the general rule in Georgia is that "[ejxcept in plain

and indisputable cases, scienter in actions based on fraud is an
issue of fact for jury determination."

Id. (quoting Farmers State

Bank v. Huguenin, 469 S.E.2d 34, 37 (Ga. Ct. App. 1996)); see also
GIW Indus., Inc. v. JerPeq Contracting, Inc., 530 F. Supp. 2d 1323,

1335 (S.D. Ga. 2008) ("Perhaps most importantly, it is peculiarly

the province of the jury to pass on the circumstances showing
fraud.").

Although

Plaintiff's

fraud

claim

involves

a

failure

to

perform a promise to pay in the future. Plaintiff also alleges and

points to some

supporting evidence of Defendants making that

promise to pay either with the intent to not perform or knowing
that it will be unable to pay in the future.

Although Plaintiff

does not point to any direct evidence of Pete Wright's intent, it
does

highlight

circumstantial

evidence
49

showing

Pete

Wright's

dishonest or misleading intent.

Harvey Prater testified that in

February 2017, when Pete Wright went to North Carolina to order
the cattle from Plaintiff, Pete Wright's dairy had substantial
financial problems and that WFD and LACH already had bills that
they could

not

pay.

Dkt.

No.

119-4

at

10.

On

top

of this

testimony. Plaintiff points to the facts that WFD had multiple
liens and judgments against them at this time—which is why LACH
was formed in the first place—and that Pete Wright canceled the

milk check assignment to Plaintiff, removed the identification

tags from the cattle, and entered negotiations to sell some of the
cattle

within

Plaintiff.

six

Based

weeks
on

of

these

accepting
facts.

the

final

delivery

Plaintiff argues

from

Defendants

purchased the cattle merely to generate cash flow and had no intent
to fully pay for the cattle at the time that they entered the
contract.

This circumstantial evidence, however slight, is enough to

raise a genuine dispute of material fact as to whether Defendants
made false representations to Plaintiff and to Pete Wright's intent
or scienter.

Under

Georgia law, this case

is

not plain

and

indisputable, and thus. Plaintiff's fraud claims must be decided
by a jury.
in

the

Therefore, with respect to Plaintiff's fraud and fraud

inducement

claims

in

Count

50

Four

of

the

Complaint

and

Crossclaim

Count

I against WFD and

Pete

Wright,^3 Defendants'

Motions are DENIED.

B. Fraudulent Transfers

Plaintiff

also

claims

that

Defendants

fraudulently

transferred cattle to other buyers while Plaintiff had a security
interest in those
Plaintiff

and

cattle.

Defendants

Defendant
did

not

responds by arguing
have

a

that

creditor-debtor

relationship.
The elements of a fraudulent transfer claim are described in

O.C.G.A. § 18-2-75(a) (2018), which states:

A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor whose claim arose before the

transfer was made or the obligation was incurred if the
debtor

made

the

transfer

or

incurred

the

obligation

without receiving a reasonably equivalent value in
exchange for the transfer or obligation and the debtor
was insolvent at that time or the debtor became insolvent

as a result of the transfer or obligation.

Georgia courts have explained that ''[a] debtor who generally is
not

paying

insolvent."

his

debts

as

they

become

due

is

presumed

to

be

Rapp, 695 S.E.2d at 746.

Here, Plaintiff's claim for fraudulent transfer survives a

motion for summary judgment because a genuine dispute of material
fact exists as to whether a creditor-debtor relationship existed

23 Pete Wright's Motion is denied to this claim because the evidence shows that
he was the managing member of WFD and held himself out as a representative of
WFD and LACH when purchasing cattle from Plaintiff in North Carolina. Thus, if
a jury finds evidence supporting a fraud claim, that claim can apply to Pete

Wright individually for any of his own potential misrepresentations on behalf
of his companies.
51

between Plaintiff and Defendants, because Defendants transferred

cattle to other entities without paying Plaintiff proceeds from

those transfers, and because WFD and LACH were insolvent at the
time of those transfers.

First, as discussed above, a genuine

dispute of material fact exists as to whether Plaintiff had a
security interest in the cattle sold to Defendant based on the

reservation language in the invoices for the two February 2017
deliveries.

This dispute would also apply to whether Plaintiff

was a creditor of Defendant whose claim arose before any transfers

were made in this case.

Second, Plaintiff has presented evidence

that WFD took over all of the cattle from LACH, that WFD sold some

of those cattle to Gutman Brothers, that Pete Wright transferred

the proceeds of that sale to Levi Wright to buy new cattle from
Gutman Brothers, that WFD sold cattle to New Holland, and that

Pete Wright attempted to have New Holland send the proceeds from
that sale to an account for Asbury Farm to ^^hide it" and keep the

money ""out of creditors hands," dkt. no. 104-2 34, 55.

Third,

Plaintiff has presented evidence that Defendants are insolvent as

they were not paying, and by their own admission, could not pay
their debts.

Pete Wright actually admitted to creating LACH and

Asbury Farm to avoid WFD's debts.

Moreover, Defendants admit that

WFD and LACH were insolvent at least as early as the final delivery
of cattle on June 5, 2017.

52

Therefore,

summary

judgment

fraudulent transfer is improper.

on

Plaintiff's

claim

of

Defendants' Motions with respect

to claims against Pete Wright^^ and WFD under Crossclaim Count VI
are DENIED.

IV.

Civil Conspiracy Claim

Plaintiff also brings a stand-alone claim of civil conspiracy

against Defendants based on the underlying torts of fraud, fraud
in the inducement, and civil conversion.

This claim in Count Eight

of the Complaint is only against Pete Wright, WFD, LACH, and WPW.^s
The

Court

has

granted

summary

judgment

for

Defendants

on

Plaintiff s civil conversion claim, leaving only the fraud claims
as the bases for the conspiracy claim.

Defendants argue that there

is no evidence that Pete Wright, WFD, or WPW conspired with anyone

to commit a tort against Plaintiff.^6
^^To recover damages for a civil conspiracy claim, a plaintiff
must show that two or more persons, acting in concert, engaged in
conduct that constitutes a tort."

Mustaqeem-Graydon v. SunTrust

Bank, 573 S.E.2d 455, 461 (Ga. Ct. App. 2002)(emphasis added).

2^ Pete Wright's Motion is denied on this count because the record shows that
he was the managing member of WFD and the individual coordinating these
allegedly-fraudulent transfers with other entities. Thus, Defendant has failed
to show an absence of a genuine dispute of material fact as to Pete Wright's

liability for fraudulent transfer under Crossclaim Count VI.
25 The count also includes FNB South, but all claims against FNB South have been
resolved in this case.

2® Defendants also incorrectly assert that there is no cause of action for civil
conspiracy.
The case cited by Defendants for this proposition explains that
there is no cause of action for civil conspiracy standing alone; rather, the
claim must be grounded in some underlying tort. See Mclntee v. Deramus, 722
S.E.2d 377, 379 (Ga. Ct. App. 2012).
53

''The essential element of the alleged conspiracy is proof of a

common design establishing that two or more persons in any manner,

either positively or tacitly, arrive at a mutual understanding as
to how they will accomplish an unlawful design."

Mclntee v.

Deramus, 722 S.E.2d 377, 379 (Ga. Ct. App. 2012) (emphases added)
(citation omitted) (internal quotation marks omitted).

Here, Defendants met their burden to show an absence of a

dispute of material fact by stating that there is no evidence in
the record of a conspiracy.

The burden then shifts to Plaintiff

to point to specific facts in the record demonstrating that a

genuine dispute of fact does exist as to whether a conspiracy
existed.

To

do

this.

Plaintiff

stated

that

the

Defendants

conspired to derive benefits from the Plaintiff's cattle without
pointing to any specific evidence.
underlying
evidence

tort

in the

can

be

established.

Assuming arquendo that an
Plaintiff

record of an agreement,

fails

to

show

understanding, common

design, or action in concert between Pete Wright, WFD, WPW, or
LACK

to

meet

the

essential

element

of

a

conspiracy

claim.

Therefore, because Plaintiff has not met its burden on this claim.
Defendants' Motions with respect to Count Eight of the Complaint
are GRANTED.

V.

Claims Againsi: WFW

In every count of the Complaint and in Count VIII of the
Crossclaim,

Plaintiff

asserts

claims
54

against

WPW.

Defendants

argue that WPW—a landholding company, not a dairy farm—should not
be liable for any of these claims because there is no evidence
connecting it to the alleged actions in this case.

Defendants are

correct.

Plaintiff s main arguments for why WPW should be liable in
this case are as follows: Pete Wright disregarded the corporate

form with other entities so that should implicate WPW, Pete Wright

transferred money between other entities and some of that money is
unaccounted for and might have gone to WPW, WPW's registered office
was at Pete Wright's personal residence as well as the offices for
WFD and LACK, Pete Wright paid the property tax bills for Levi
Wright's dairy. Hurricane Creek, which was located on property
owned by WPW in Pierce County, and Hurricane Creek was making
payments on WPW's bank note prior to the land being foreclosed on.
These facts fail to show that WPW should be liable for any of the

claims involving Defendants' purchase of cattle from Plaintiff.
The most direct evidence of WPW's involvement in this case has to

do with the facts involving Hurricane Creek, but while these facts

might be relevant to Hurricane Creek's liability, they are too
attenuated to attach liability to WPW in this case.

Looking specifically to the various counts against WPW, WPW
was not a

party to any contract for the sale of cattle

Plaintiff under Count One.

with

Moreover, Plaintiff has not shown that

WPW made any promise to Plaintiff for a promissory estoppel claim
55

or that WPW was unjustly enriched under Counts Two and Three.2'' As
to Count Four for fraud and fraud in the inducement. Plaintiff has

failed to show that WPW or Pete Wright on behalf of WPW made any

misrepresentations to

Plaintiff.

Additionally,

Plaintiff

has

failed to show that WPW did anything to interfere with any alleged

security interest that Plaintiff may have had in the cattle sold
to

Defendants

under

Count

Six.

Plaintiff

failed

to

establish

ownership for the civil conversion claim under Count Seven, so it
also fails with regard to WPW, and Count Eight for civil conspiracy
has the same result with respect to WPW since Plaintiff could not

show any agreement or meeting of the minds.
Finally,

Plaintiff

hinges

multiple

arguments

for

WPW's

liability on the possibility that it could be a successor in
interest

to

the

debts

continuation theory.

of

the

other

entities

under

the

mere

Plaintiff argues that Pete Wright was the

managing member of WPW and WFD, the names of the entities are
similar, they shared a principal office address, and at some point,
were both leasing land to dairy farms.

However, WPW's relationship

with WFD is distinguishable and does not warrant a finding of
successor liability.

Unlike WFD and LACK'S relationship, WPW was

not operating a dairy farm, entering into contracts for cattle,
taking over dairy operations, taking over milk assignments, or

2"' The assertion that some of the unaccounted-for funds from WFD and LACH could

have gone to WPW is insufficient.
56

transferring thousands of dollars to WFD.

Plaintiff has not shown

facts demonstrating that WPW is a mere continuation of WFD, or
vice-versa, in the same way that WFD is a successor in interest of

LACH.

Most

importantly.

Plaintiff

cannot

point

to

a

single

transfer of money between WPW and WFD or that WPW was at any point

operating a dairy farm.
Crossclaim

Count

VIII

For these reasons. Plaintiff's claim under
also

fails.

Therefore,

WPW's

Motion

is

GRANTED as to all counts against it.
VI.

Damages Issues

A. Prejudgment Interest

Plaintiff has included a claim for prejudgment interest under

Count Ten of the Complaint.

Defendants argue for summary judgment

on this count because Plaintiff is not entitled to any judgment,

and thus. Plaintiff would not have any judgment upon which to

collect prejudgment interest.

As this Court has found a judgment

against WFD and Pete Wright for breach of contract and denied
Defendants

Motions

Defendants'

argument

with

on

respect

this

to

count

other

is

pending

without

merit.

claims.

Thus,

Defendants' Motions with respect to Count Ten are DENIED.

B. A-btorneys' Fees and Li-bigation Cosbs

Under Count Eleven of the Complaint, Plaintiff also requests
attorneys'

fees

and litigation

costs

under

O.C.G.A. § 13-6-11

(2018), which provides for recovery where ""the defendant has acted
in bad faith, has been stubbornly litigious, or has caused the
57

plaintiff unnecessary trouble and expense."

Defendants argue they

are entitled to summary judgment on this claim for attorneys' fees.

^'For the purposes of the statute, ^bad faith' means ^bad faith

during the transaction out of which the lawsuit arose.'"

Sommers

V. Hall, No. CV 408-257, 2010 WL 1963381, at *4 (S.D. Ga. May 13,

2010) (quoting Capital Health Mgmt. Group, Inc. v. Hartley, 689
S.E.2d 107, 116 (Ga. Ct. App. 2009)).

Here, Plaintiff has pointed

to evidence in the record that Pete Wright created entities like

LACH and Asbury Farms to avoid his debts to creditors and hide
money and that he may have committed fraud by entering into the
contract with Plaintiff while not intending to fully pay for the

cattle.

A jury could find evidence related to these facts amounts

to bad faith and warrants granting attorneys' fees.

questions

as

to

whether

a

party

generally for the jury to decide."

has

acted

in

bad

''Moreover,

faith

are

Id. (citing Merlino v. City of

Atlanta, 657 S.E.2d 859, 863 (2008)). Accordingly,

Defendants'

Motions with respect to Count Eleven of the Complaint are DENIED.
C. Punitive Damages

Plaintiff also requests punitive damages against Defendant
under Count Twelve of the Complaint.

Defendant argues that it is

entitled to summary judgment on this issue because Plaintiff has
not established any tort claims against the Defendants.

First,

the Court has held that genuine issues of fact require a jury to
determine Plaintiff's fraud claims,
58

which are actions in tort.

Second, Georgia courts have held that the Georgia code provision

providing for punitive damages, O.C.G.A. § 51-12-5.1 (2018),
its plain language . . . provides that a determination of punitive
damages must be made by the trier of fact."
802 S.E.2d 835, 843 (Ga. Ct. App. 2017).

Caldwell v. Church,

As a result, ^Mt]he issue

of punitive damages is ordinarily for the jury."
in original) (citation omitted).

Id. (alteration

Therefore, Defendants' Motions

with respect to Count Twelve of the Complaint are DENIED.
CONCLUSION

For these

reasons.

Plaintiff's

Motion for

Partial Summary

Judgment, dkt. no. 104, is GRANTED IN PART AND DENIED IN PART;

Pete Wright's Motion for Summary Judgment, dkt. no. 100, is GRANTED
IN PART AND DENIED IN PART; WFD's Motion for Summary Judgment,
dkt. no. 101, is GRANTED IN PART AND DENIED IN PART; WPW's Motion

for Summary Judgment, dkt. no. 103, is GRANTED.

Additionally,

Pete Wright and WFD's other Motion for Summary Judgment, dkt. no.
102, is WITHDRAWN as MOOT.

With regard to the specific claims in each motion at issue
before the Court, Plaintiff's Motion, dkt. no. 104, is GRANTED

with respect to Count One and Crossclaim Count VIII and DENIED as

MOOT with respect to Counts Two and Three; Defendants Pete Wright,
WFD, and WPW's Motions, dkt. nos. 100, 101, 103, are GRANTED with

respect to Counts Seven and Eight and Crossclaim Counts II and IV;
Defendants Pete Wright and WFD's Motions, dkt. nos. 100, 101, are
59

DENIED with respect to Counts One, Four, Six, Ten, Eleven, and
Twelve and Crossclaim Counts I, III, V, VI, and VIII, and their
Motions are DENIED as MOOT as to Counts Two and Three; Defendant

WPWs Motion, dkt. no. 103, is GRANTED with respect to all counts.
Counts

Five

and

Nine

and

Crossclaim

Count

VII

are DISMISSED

as

MOOT.

Defendants' Motion in dkt. no. 102 is MOOT and WITHDRAWN.

Default Judgment against Defendant Lower Appling County Holsteins
(^'LACH") is GRANTED.

The Clerk is DIRECTED to terminate the following parties from

the case: (1) W.P. Wright Family, LLC, D/B/A, The Wright Family
Dairy Farms, LLC; (2) Lower Appling County Holsteins, LLC; and (3)
Lower Appling County, LLC.

The following claims and parties REMAIN PENDING in this case:
Count Four against Pete Wright and WFD; Count Six against Pete
Wright and WFD; Count Ten against Pete Wright and WFD; Count Eleven

against Pete Wright and WFD; Count Twelve Against Pete Wright and
WFD; Cross Claim Count I against Pete Wright and WFD; Cross Claim
Count III against Pete Wright and WFD; Cross Claim Count V against
Pete Wright, WFD, Raymond Wright, Glenda Wright, Asbury Farms,
Hurricane

Creek

Dairy,

and

Levi

Wright;

Cross

Claim

Count

VI

against WFD, Pete Wright, Asbury Farms, Hurricane Creek Dairy,
Raymond Wright, Glenda Wright, and Levi Wright; and Cross Claim
Count

VIII

(Successor

Liability)

Hurricane Creek Dairy.
60

against

Asbury

Farms

and

so ORDERED, this 19th day of February, 2019.

HON.«^LISA GODBEl WOOD, JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN

61
A0 72A

(Rev. 8/82)

DISTRICT OF GEORGIA