Meyer v. Bayles et al

Filing 41

MEMORANDUM ORDER granting 40 Motion to Dismiss, denying 36 Motion for Summary Judgment. IT IS ORDERED that Meyers' Memorandum in Support of Motion to Dismiss Defendants' Motion for Summary Judgment 40 , construed by the Court as a R ule 56(d) motion, is GRANTED. IT IS FURTHER ORDERED that Caldwell's Motion for Summary Judge 36 is DENIED without prejudice at this time, subject to her right to re-urge the motion at the close of discovery. IT IS FURTHER ORDERED that Bayles ' Motion for Summary Judgment 36 is DENIED without prejudice at this time as improperly filed in light of the automatic stay provision of 11 U.S.C. 362. No motions pertaining to Bayles will be considered during the pendency of the stay. IT IS FURTHER ORDERED that a Scheduling Order issue, setting all deadlines for Myer's claims against Defendants other than Bayles, including discovery deadlines. Signed by Chief Judge Robert G James on 10/29/12. (crt,DickersonSld, D)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
ROSE MEYER

CIVIL ACTION NO. 12-0043

VERSUS

JUDGE ROBERT G. JAMES

FRED M. BAYLES, ET AL.

MAG. JUDGE KAREN L. HAYES

MEMORANDUM ORDER
This action derives from an earlier action filed by Plaintiff Rose Meyer (“Meyer”) against
The Arbor and Terrace Senior Center of Ruston, LLC, (“The Arbor”), Civil Action No. 08-0268.
In that action, Meyer obtained a default judgment against The Arbor on September 2, 2010, [Doc.
No. 36, p. 1]; however, The Arbor was insolvent and Meyer was unable to collect on her
judgment.
Defendants Fred Bayles (“Bayles”) and Joanne Caldwell (“Caldwell”) were formerly
married and were both associated with The Arbor. [Doc. No. 36-3, p. 1.] Caldwell was the sole
officer of The Arbor, while Bayles was its registered agent. [Doc. No. 1, p. 2.] Bayles and
Caldwell are also associated with Defendant Arbor Terrace of Louisiana, Inc. (“Arbor Terrace”).
Bayles is an officer of Arbor Terrace, and Caldwell is an employee. [Doc. No. 36-3, p. 2.]
Meyer instituted this new action on January 12, 2012, alleging Bayles and Caldwell are
liable for the judgment in her favor in the previous action. [Doc. No. 1.] She alleges that Bayles
and Caldwell created Arbor Terrace as a shell company to avoid paying the legitimate debt of The
Arbor. [Doc. No. 1, p. 2.]

On September 10, 2012, Magistrate Judge Hayes granted Bayles’ Motion to Stay the
action. [Doc. No. 30.] Bayles instituted Chapter 13 bankruptcy proceedings on August 3, 2012
[Doc. No. 25-2], and any proceedings involving Bayles are subject to the automatic stay provision
of 11 U.S.C. § 362. [Doc. No. 30, p. 1.] Magistrate Judge Hayes expressly noted that the stay
applies only to Bayles and does not affect the remaining Defendants. [Doc. No. 30, p. 2.]
In spite of the stay, on October 1, 2012, Bayles and Caldwell filed a threadbare Motion for
Summary Judgment, in which they apparently argue that the Court should not pierce the corporate
veil and hold them personally liable for debts incurred by The Arbor. [Doc. No. 36.]
Instead of filing an opposition to the Motion for Summary Judgment, Meyer filed a
“Memorandum in Support of Motion to Dismiss Defendants’ Motion for Summary Judgment,”
[Doc. No. 40] which is procedurally improper. However, in her filing, Meyer correctly notes that
a nonmoving party may respond to a motion for summary judgment by filing a motion under
Federal Rule of Civil Procedure 56(d). [Doc. No. 40, p. 2.] Thus, the Court, sua sponte, construes
Meyer’s filing as a motion under Rule 56(d).
Rule 56(d) provides that, if a nonmovant shows that “it cannot present facts essential to
justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to
obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.”
FED . R. CIV . P. 56(d). Rule 56(d) was designed to “safeguard non-moving parties from summary
judgment motions that they cannot adequately oppose.” Culwell v. City of Fort Worth, 468 F.3d
868, 871 (5th Cir. 2006). For that reason, Rule 56(d) discovery motions are “broadly favored and
should be liberally granted.” Id. However, a request to stay summary judgment under Rule 56(d)
must “set forth a plausible basis for believing that specified facts, susceptible of collection within
a reasonable time frame, probably exist and indicate how the emergent facts, if adduced, will
2

influence the outcome of the pending summary judgment motion.” Raby v. Livingston, 600 F.3d
552, 561 (5th Cir. 2010) (quotations omitted).
The essence of Meyer’s argument is that Bayles, Caldwell, The Arbor, and Arbor Terrace
disregarded corporate formalities to such an extent that The Arbor and Arbor Terrace “ceased to
be distinguishable from themselves and their alter egos, [requiring] the veil of protection to be
pierced to make each of them individually responsible for the debts of The Arbor . . . .” [Doc. No.
1, p. 4.] In support of the Motion for Summary Judgment, Caldwell submitted a self-serving
affidavit stating, “Neither I nor my husband received any money when the property was sold to the
non-profit corporation. There has never been any co-mingling of personal and business funds or
assets, and the formalities of a limited liability company were observed by [The Arbor] . . . .”
[Doc. No. 36-3, p. 2.]
However, Meyer’s declaration states that discovery is needed to determine: (a) the
financial status of the corporate entities, including the valuation of assets and liabilities; (b) the
actual knowledge, intent, and state of mind of the managers and shareholders of the corporate
entities; (c) whether the transfer of assets was for adequate value; (d) compliance of notice of
disclosure of the transfers for purpose of prescription; (e) compliance with disclosures of transfers
for purpose of prescription; and (f) compliance with notice for discharge in bankruptcy. [Doc. No.
40-4.] Meyer’s counsel attests that she has had no opportunity to conduct discovery. [Doc. No. 402.] Indeed, no Scheduling Order has yet been issued by this Court, and, thus, no discovery
deadline has been set.
The Court finds that Meyer has set forth a plausible basis for concluding that discovery in
this matter may influence the outcome of Bayles’ and Caldwell’s Motion for Summary Judgment.

3

Because discovery motions under Rule 56(d) are “broadly favored and should be liberally
granted,”
IT IS ORDERED that Meyer’s Memorandum in Support of Motion to Dismiss
Defendants’ Motion for Summary Judgment [Doc. No. 40], construed by the Court as a Rule
56(d) motion, is GRANTED.
IT IS FURTHER ORDERED that Caldwell’s Motion for Summary Judgment [Doc. No.
36] is DENIED without prejudice at this time, subject to her right to re-urge the motion at the
close of discovery.
IT IS FURTHER ORDERED that Bayles’ Motion for Summary Judgment [Doc. No. 36]
is DENIED without prejudice at this time as improperly filed in light of the automatic stay
provision of 11 U.S.C. § 362. No motions pertaining to Bayles will be considered during the
pendency of the stay.
IT IS FURTHER ORDERED that a Scheduling Order issue, setting all deadlines for
Myer’s claims against Defendants other than Bayles, including discovery deadlines.
MONROE, LOUISIANA, this 26th day of October, 2012.

4