Enterprise Financial Group, Inc. v. Podhorn et al

Filing 99

OPINION MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the Motion for Contempt, [Doc. No.83] is DENIED. 83 Signed by District Judge Henry Edward Autrey on 12/12/18. (CLA)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ENTERPRISE FINANCIAL GROUP, )
)
Plaintiff,
)
)
v.
)
)
RICHARD PODHORN, et al.,
)
)
Defendants.
)

No. 4:16CV1619 HEA

OPINION, MEMORANDUM AND ORDER
This matter is before the Court on the Motion for Contempt filed by
Defendant CapDev, LLC, [Doc. No. 83]. Plaintiff opposes the motion. For the
reasons set forth below, the motion will be denied.
Facts and Background
Plaintiff filed its Amended Complaint seeking damages for alleged
fraudulent transfers on May 24, 2017. CapDev is among the named defendants.
The Amended Complaint asserts one count of fraudulent transfers under Mo. Rev.
Stat. § 428.028 against all defendants.
CapDev owned Lot 2B of the Wentzville Bluffs subdivision, in Wentzville,
Missouri, near the intersection of Interstate 70 and Missouri Highway Z. On
August 30, 2017, Plaintiff used the Amended Complaint as a basis for filing a

Notice of Lis Pendens on Lot 2 of Wentzville Bluffs (“August 2017 Notice”).
CapDev only owned Lot 2B on August 30, 2017.
CapDev sought construction financing to improve Lot 2B in December
2017. In anticipation of the financing, the August 2017 Notice was discovered.
The issuance of the policy of title insurance was conditioned on removal of the
August 2017 Notice. The loan was set to close on December 19, 2017.
On December 19, 2017, CapDev filed a Verified Emergency Motion to
Cancel Lis Pendens on Lot 2. This Court held a hearing on December 20, 2017
and granted the Motion later that afternoon. Plaintiff was ordered to cancel the
August 2017 Notice by the close of business on December 21, 2017. This Court
concluded that the Amended Complaint did not support a Notice of Lis Pendens
because “as presently stated, the civil action is not ‘based on any equitable right,
claim or lien, affecting or designed to affect real estate,’” as is required by
Missouri law to support the filing of a Notice of Lis Pendens. Plaintiff appealed
this ruling, and the appeal is still pending. The Eighth Circuit did not stay the
December 20 Order. Plaintiff cancelled the August 2017 Notice.
With the August 2017 Notice cancelled, CapDev closed on its constructionfinancing loans. As part of the financing, CapDev deeded Lot 2B to its wholly
owned subsidiary, WB2, LLC (“WB2”). WB2 then closed on a deed of trust to
secure the financing, dated and recorded on December 28, 2017.
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Notwithstanding the Eighth Circuit’s refusal to stay the December 20 Order,
Plaintiff filed another Notice of Lis Pendens dated March 6, 2018, and recorded on
March 16, 2018 (“March 2018 Notice”). The basis for the March 2018 Notice is a
pending lawsuit in Dallas County, Texas, cause number DC-15-00923 (“Texas
Litigation”), as support. CapDev is not a party to the Texas Litigation.
As part of the Texas lawsuit, documents were produced which indicated that
the Defendants in the Texas Lawsuit, indirect owners of Lot 2 through CapDev,
were alienating or otherwise disposing of assets. To prevent this, Plaintiff sought
and obtained from the Court of Dallas County, Texas (the “Texas Court”) a
Temporary Restraining Order.
The Texas Court granted the TRO preventing, inter alia, Defendants
Clayton Logomasini and Jason Chrisco and all those acting in concert with them
from: (a) releasing or assisting in the release of the lis pendens on the Real Estate
through signature or otherwise or providing consent to release of same;
(b) directly or indirectly, orally, in writing, or by way of execution or signing of
any document, assignment, or agreement in any capacity: authorizing, consenting,
voting in favor of, or otherwise exercising their authority as may be requested or
required to transfer, encumber, mortgage, convey, sell, assign, hypothecate, or
alienate the Real Estate or any ownership The TRO was signed by the Texas Court
on February 16, 2018, prior to the filing of the March Notice. The TRO defined
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“Real Estate” to include Lot 2. The TRO was extended to May 25, 2018 by
agreement of the defendants to the Texas Lawsuit on which date the Court entered
the Agreed Amended Temporary Injunction which granted the same relief.
The TRO and the Agreed TI were premised, in part, on two facts material to
CapDev’s Supplemental Motion. Texas Lawsuit Defendant Clayton Logomasini
formerly owned Lot 2, and in fact transferred it to CapDev. According to the First
Amended Operating Agreement of CapDev, LLC, Texas Defendants Clayton
Logomasini and Jason Chrisco indirectly owned interests in CapDev.
Thereafter, Plaintiff filed the notices of lis pendens against the property.
CapDev, among others, has filed an action in the Circuit Court of St. Charles
County, Missouri for Slander of Title, Abuse of Process, and Tortious Interference
against Plaintiff and John Pappanastos. In that action, CapDev and the other
plaintiffs filed a Combined Motion and Memorandum in Support of Their
Emergency Motion to Set Aside Notices of Lis Pendens (Plaintiffs’ “Emergency
Motion”) and Defendants’ Motion for Abatement or Stay. In the Emergency
Motion, Plaintiffs WB2, LLC, 6NWB, LLC, and Wilmer Farms, LLC move this
Court to lift six Notices of Lis Pendens (the “Notices”) affecting three parcels of
real estate located in St. Charles County, Missouri. The St. Charles County Court
granted the Motion and ordered the lis pendens removed, finding
that the Texas Case does not provide support for the filing of a notice of Lis
Pendens on property in the State of Missouri, owned by entities who are not
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parties in that litigation. The Court finds that the Notices of Lis Pendens,
filed on the basis of the Missouri Federal case, and filed after the dismissal
of the case by Judge Autry, [sic] are not based upon any pending litigation to
establish a claim of right or “affect” the property. The Court believes these
positions are supported by 21 W., Inc. v. Meadowgreen Trails, Inc., 913
S.W.2d 858, 878 (Mo. App. E.D. 1995) and First Nat. Bank of St. Louis v.
Ricon, Inc., 311 S.W.3d 857, 865 (Mo. App. E.D. 2010).
The lis pendens have been cancelled. Defendants therefore seek only
payment of attorneys’ fees incurred regarding the Motion for Contempt seeking the
cancellation of the second lis pendens notice.
Discussion
Courts have the inherent power to punish contempt. Schoenfeld v. Kleiber,
No. 07–4020–CV–C–NKL, 2007 WL 3256234, at *2 (W.D.Mo. Nov.2, 2007).
Courts may use this contempt power to compel a defendant to comply with a court
order, to compensate the complainant for losses sustained, or to do both. Chicago
Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 505 (8th Cir.2000). Assessing
fines and attorneys' fees is part of the civil contempt power. Schoenfeld, 2007 WL
3256234, at *2. The party seeking civil contempt bears the burden of proving, by
clear and convincing evidence, that the alleged contemnors violated a court order,
and that the violation was not based on a good faith and reasonable interpretation
of the protective order. Chicago Truck Drivers, 207 F.3d at 505; On Command
Video, 976 F.Supp. at 922; see also Imageware, Inc. v. U.S. W. Commc'ns., 219
F.3d 793, 797 (8th Cir.2000) (“No one should be held in contempt for violating an
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ambiguous order....”). There is no requirement to show the violation was willful.
Schoenfeld, 2007 WL 3256234, at *2; Hunter Eng'g Co. v. Hennessy Indus., Inc.,
No. 4:08 CV 465 DDN, 2010 WL 1186454, at *5 (E.D. Mo. Mar. 29, 2010).
Technically speaking, there was actual contempt through a violation of this
Court’s Order. The original lis pendens was cancelled in accordance with the
Order. Defendants argue, however, that the filing of the second lis pendens was in
reality a violation.
Although Defendants claim that “Attorney Bart Higgins’ affidavit reads like
a brief stating legal arguments, not an affidavit stating facts,” Defendants produce
nothing to controvert the averments in the affidavit, the affidavit necessarily
contains Mr. Higgins’ legal analysis for the filing of the lis pendens. Contained in
the affidavit are the details of obtaining the Texas TRO and Temporary Injunction,
and the grounds upon which Plaintiffs relied for the filing of the March lis
pendens. There is no clear and convincing evidence anywhere in the record that
the March filing was an effort to thwart the Court’s Order. Plaintiffs have
presented sufficient evidence to demonstrate that they had a good faith belief that
the actions they took were reasonable and proper at the time.
Conclusion
Although the filing of the lis pendens based on the Texas lawsuit was
ultimately determined by the St. Charles Court to be improper, the act of filing it
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was not a violation of this Court’s Order requiring the cancellation of the original
lis pendens. Furthermore, Defendants have not presented clear and convincing
evidence that Plaintiffs intended to thwart the Court’s determination.
Accordingly,
IT IS HEREBY ORDERED that the Motion for Contempt, [Doc. No.83] is
DENIED.
Dated this 12th day of December, 2018.

___________________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE

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