Church Joint Venture, a limited partnership v. Blasingame et al

Filing 185

ORDER granting 155 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 156 Motion for Summary Judgment; granting in part and denying in part 158 Motion to Dismiss; granting in part and denying in part 159 Motion to Dismiss for Lack of Jurisdiction; granting in part and denying in part 159 Motion for Summary Judgment; denying 160 Motion to Dismiss for Lack of Jurisdiction; denying 160 Motion for Summary Judgment; denying 174 Motion for Hearing. Signed by Judge Samuel H. Mays, Jr on 11/17/16. (Mays, Samuel)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

CHURCH JOINT VENTURE, A LIMITED )
PARTNERSHIP,
)
)
Plaintiff,
)
)
v.
)
)
EARL BENARD BLASINGAME;
)
MARGARET GOOCH BLASINGAME;
)
KATHERINE BLASINGAME CHURCH;
)
EARL BENARD “BEN” BLASINGAME,
)
JR.; BLASINGAME FAMILY BUSINESS )
INVESTMENT TRUST; BLASINGAME
)
FAMILY RESIDENCE GENERATION
)
SKIPPING TRUST; and FIBERZONE
)
TECHNOLOGIES, INC.;
)
)
Defendants.
)
)

No. 2:12-cv-02999

ORDER
Before the Court are six motions.1

First, on June 29, 2016,

Defendants Katherine Blasingame Church (“KBC”) and Earl Benard
“Ben” Blasingame, Jr. (“EBB Jr.”) filed a Motion to Dismiss Firt
[sic]

Amended

Complaint

Procedure Rule 12(b)(6).
1

Pursuant

to

Federal

Rule

of

Civil

(ECF No. 155 (“KBC/EBB Jr. Mot.”).)

Collectively, five of the motions are dispositive motions by
the remaining Defendants. Significant parts of the briefing are
duplicative. Going forward, including for any pretrial filings,
Defendants must file their papers jointly. (For a given filing,
if a Defendant does not adopt arguments that others offer, the
Defendant should note that in a footnote.)
If Plaintiff
responds to a filing, it must file one collected response.

On July 27, 2016, Plaintiff Church Joint Venture, A Limited
Partnership (“Church JV”) filed a response to the KBC/EBB Jr.
Motion.

(Pl.’s Resp. to Defs. KBC and EBB Jr.’s Mot. to Dismiss

First Am. Compl. Pursuant to Fed. R. Civ. P. 12(b)(6), ECF No.
161 (“Church JV Resp. to KBC/EBB Jr. Mot.”).)

On August 10,

2016, KBC and EBB Jr. filed a reply in support of the KBC/EBB
Jr. Motion.

(Defs. KBC and EBB Jr.’s Reply to Pl.’s Resp. to

Defs.’ Mot. to Dismiss First Am. Compl. Pursuant to Fed. R. Civ.
P. 12(b)(6), ECF No. 168 (“KBC/EBB Jr. Reply”).)
Second, on June 29, 2016, Defendant Fiberzone Technologies,
Inc. (“Fiberzone”) filed a Motion for Summary Judgment as to
Counts II, III, IV, and V of the Complaint.
(“Fiberzone

Mot.”).)

On

July

27,

response to the Fiberzone Motion.

2016,

Church

(ECF No. 156
JV

filed

a

(Mem. in Supp. of Pl.’s Resp.

to Def. Fiberzone’s Mot. for Summ. J. as to Counts II, III, IV,
and V of the Compl., ECF No. 164 (“Church JV Resp. to Fiberzone
Mot.”).)

On August 10, 2016, Fiberzone filed a reply in support

of the Fiberzone Motion.

(Def. Fiberzone’s Reply to Pl.’s Resp.

to Defs.’ Mot. for Summ. J., ECF No. 169 (“Fiberzone Reply”).)
Third, on July 11, 2016, Defendants Earl Benard Blasingame
(“EBB”)

and

Margaret

“Debtors”—filed

a

Gooch

Motion

to

Blasingame
Dismiss

(“MGB”)—collectively,

First

Amended

Complaint

Pursuant to Fed. R. Civ. P. 12(b)(6) and, in the Alternative,
Motion for Summary Judgment.

(ECF No. 158 (“EBB/MGB Mot.”).)

2

Church JV filed a response to the EBB/MGB Motion on August 8,
2016.

(Pl.’s Resp. to Defs. EBB and MGB’s Mot. to Dismiss First

Am. Compl. Pursuant to Fed. R. Civ. P. 12(b)(6) and, in the
Alternative, Mot. for Summ. J., ECF No. 166 (“Church JV Resp. to
EBB/MGB Mot.”).)

On August 22, 2016, Debtors filed a reply in

support of the EBB/MGB Motion.

(Defs. EBB and MGB’s Reply to

Pl.’s Resp. to Defs.’ Mot. to Dismiss First Am. Compl. Pursuant
to Fed. R. Civ. P. 12(b)(6), ECF No. 172 (“EBB/MGB Reply”).)
Fourth,

on

July

11,

2016,

Defendant

Blasingame

Family

Residence Generation Skipping Trust (“BFRGST”) filed a Motion
for Summary Judgment as to Counts II, III, IV, and V of the
Complaint and for Partial Dismissal Pursuant to Rule 12(b)(1) as
to ¶ 24(a) of the Complaint.

(ECF No. 159 (“BFRGST Mot.”).)

On

August 8, 2016, Church JV filed a response to the BFRGST Motion.
(Pl.’s Resp. to Def. BFRGST’s Mot. for Summ. J. as to Counts II,
III, IV, and V of the Compl. and for Partial Dismissal Pursuant
to Rule 12(b)(1) as to ¶ 24(a) of the Compl., ECF No. 165
(“Church JV Resp. to BFRGST Mot.”).)
August 22, 2016.

BFRGST filed a reply on

(Def. BFRGST’s Reply to Pl.’s Resp. to Def.’s

Mot. to Dismiss Pursuant to Fed. R. Civ. R. 12(b)(6) and, in the
Alternative, Mot. for Summ. J., ECF No. 170 (“BFRGST Reply”).)
Fifth,

on

July

11,

2016,

Defendant

Blasingame

Family

Business Investment Trust (“BFBIT”) filed a Motion to Dismiss
Pursuant to Fed. R. Civ. P. 12(b)(1) and, in the Alternative,

3

for Summary Judgment as to Counts II, III, IV, and V of the
Complaint.

(ECF No. 160 (“BFBIT Mot.”).)

response on August 8, 2016.

Church JV filed a

(Resp. to Def. BFBIT’s Mot. to

Dismiss Pursuant to Fed. R. Civ. P. Rule 12(b)(6) [sic] and, in
the Alternative, Mot. for Summ. J. as to Counts II, III, IV, and
V of the Compl., ECF No. 167 (“Church JV Resp. to BFBIT Mot.”).)
On August 22, 2016, BFBIT filed a reply in support of the BFBIT
Motion.

(Def. BFBIT’s Reply to Pl.’s Resp. to Def. BFBIT’s Mot.

to Dismiss Pursuant to Fed. R. Civ. P. Rule 12(b)(6) [sic] and,
in

the

Alternative,

Mot.

for

Summ.

J.,

ECF

No.

171

(“BFBIT

Reply”).)
Sixth, on October 12, 2016, Church JV filed a Motion for
Status Conference and/or Hearing on Pending Motions.
174 (“Mot. for Status Conference”).)

(ECF No.

Defendants filed a joint

response to the Motion for Status Conference on October 13,
2016.

(Defs.’ Resp. to Pl.’s Mot. for Status Conference and/or

Hr’g on Pending Mots., ECF No. 176 (“Defs.’ Resp. to Mot. for
Status Conference”).)
The Motion for Status Conference is DENIED.
Jr.

The KBC/EBB

Motion

one

amendment

is

to

GRANTED,

the

but

Amended

Church

JV

Complaint

may

make

addressing

EBB

limited

Jr.

The

Fiberzone Motion, the EBB/MGB Motion, and the BFRGST Motion are
GRANTED in part and DENIED in part.

4

The BFBIT Motion is DENIED.

I.
On

BACKGROUND
November

Complaint.

16,

(ECF

No.

2012,
1

Church

(“Original

JV

filed

its
The

Compl.”).)

Original
Original

Complaint’s gravamen was that Debtors took numerous actions to
shield

assets

from

creditors

in

Debtors’

bankruptcy.

(See

generally id.)
The Original Complaint

asserted five causes of action.

2

First, Church JV sought a declaration that various Defendant
entities “have effectively lost their independent status . . .
and have been and are now being used as devices and artifices
exclusively
¶ 84.)

to

hinder,

delay

and

defraud

Church

JV.”

(Id.

Church JV further asserted that those entities’ assets

“should be considered the assets of Debtors and made available
to satisfy the claims of Debtors’ creditors.”
also id. ¶ 81.)
and avoid”

(Id. ¶ 83; see

Second, Church JV asked the Court to “set aside

certain

“transfers of assets and property by and

between” Debtors and these various entities.

(Id. ¶¶ 87–88.) 3

Third, Church JV sought an injunction restricting Debtors and
“entities in which they are closely aligned and involved” from
2

The Court will generally use “causes of action” to refer to the
various theories of liability and/or relief in Church JV’s
complaints (e.g., fraudulent conveyance).
The Court will
generally use “claims” to refer to specific sets of allegations
that may make a Defendant or Defendants liable pursuant to a
given cause of action (e.g., a specific set of allegations
purportedly constituting a fraudulent conveyance).
3

The Court will refer to claims rooted in this second cause of
action as “fraudulent-conveyance claims.”
5

“making any further transfers of assets.”

(Id. ¶ 91.)

Fourth,

Church JV sought a court order “direct[ing] Defendants, as well
as

any

other

entities

in

which

they

have

control

or

a

controlling interest, to provide to Church JV . . . a full and
proper accounting of all assets held by them throughout their
existence

and

all

personal,

by

subsequent

them,

as

well

transfers
as

any

of

other

property,
entity

real

which

control or [in which they] have a controlling interest.”
95.)

or

they

(Id. ¶

Fifth, Church JV sought recovery of its “reasonable and

necessary attorneys’ fees incurred in prosecuting this action,”
“pre-judgment and post-judgment interest,” and “recovery of all
costs of court.”

(Id. ¶¶ 97–98.)

On February 1, 2013, Defendants filed a motion to dismiss
the Original Complaint.

(Defs.’ Mot. to Dismiss Pursuant to

Fed. R. Civ. P. Rule 12(b)(1) and (6) and, in the Alternative,
Mot. for Partial J. on the Pleadings, ECF No. 16 (“First Mot. to
Dismiss”).)

Church

(Pl.’s

to

Resp.

JV

Defs.’

filed

a

response

on

Mot.

to

Dismiss,

ECF

March

4,

No.

24.)

2013.
On

April 1, 2013, Defendants filed a reply in support of their
motion.

(Defs.’ Reply to Pl.’s Resp. to Defs.’ Mot. to Dismiss

Pursuant to Fed. R. Civ. P. Rules 12(b)(1) and (6) and, in the
Alternative, Mot. for Partial J. on the Pleadings, ECF No. 30.)
On April 19, 2013, with the Court’s permission, Church JV filed

6

a surreply.

(Pl.’s Surreply to Defs.’ Reply to Pl.’s Resp. to

Defs.’ Mot. to Dismiss, ECF No. 41.)
On

June

14,

2013,

Church

JV

filed

its

First

Original Complaint.

(ECF No. 81 (“Am. Compl.”).)

presently

complaint.

operative

The

Amended

This is the

Complaint

details about allegedly problematic transfers.
id.)

Amended

adds

(See generally

It retains the Original Complaint’s five causes of action.

(Compare Original Compl. ¶¶ 80–98 with Am. Compl. ¶¶ 93–111.)
It also removes one Defendant and adds Aqua Dynamic Systems,
Inc. as a new Defendant.

(See, e.g., Am. Compl. ¶ 15.)

On June 19, 2013, Church JV filed a motion for leave to
file the Amended Complaint.

(Pl.’s Mot. for Leave to File First

Am. Compl., for Voluntary Dismissal of Action Against One Def.,
and or [sic] Leave to Join Additional Party-Def., ECF No. 83.)
On August 29, 2013, Church JV filed an additional response to
the First Motion to Dismiss.

(Pl.’s Supp. Resp. to Defs.’ Mot.

to

Request

Dismiss,

Combined

with

for

Leave

to

File

if

Necessary, ECF No. 92.)
On

September

27,

2013,

the

Court

entered

addressing, inter alia, the First Motion to Dismiss.
98.)

an

Order

(ECF No.

The order denied that part of the First Motion to Dismiss

based on Rule 12(b)(1).4

(Id. at 3-4.)

4

It granted leave to file

Unless otherwise noted, references to “Rule __” are to the
Federal Rules of Civil Procedure.
7

the Amended Complaint.

(Id. at 5.)

It also denied as moot that

part of the First Motion to Dismiss based on Rule 12(b)(6),
“without prejudice to Defendants’ right to file a renewed motion
addressing the amended complaint.”

(Id.)

On October 11, 2013, Defendants filed a motion to dismiss
the Amended Complaint.
Compl.

Pursuant

to

(Defs.’ Mot. to Dismiss Firt [sic] Am.

Fed.

R.

Civ.

P.

12(b)(6)

and,

in

the

Alternative, Mot. for Summ. J., ECF No. 100 (“Second Mot. to
Dismiss”).)

Church JV filed a response on November 22, 2013.

(Pl.’s Resp. to Defs.’ Mot. to Dismiss First Am. Compl. Pursuant
to Fed. R. Civ. P. 12(b)(6) and, in the Alternative, Mot. for
Summ. J., ECF No. 104.)

On December 13, 2013, Defendants filed

a reply in support of the Second Motion to Dismiss.

(Defs.’

Reply to Pl.’s Resp. to Defs.’ Mot. to Dismiss First Am. Compl.
Pursuant to Fed. R. Civ. P. Rules [sic] 12(b)(6) and, in the
Alternative, Mot. for Summ. J., ECF No. 105.)
Court-permitted
filed

a

surreply

Court-permitted

on

January

3,

sur-surreply

Church JV filed a

2014,
on

and

January

Defendants
17,

2014.

(Pl.’s Sur-Reply to Defs.’ Reply to Pl.’s Resp. to Defs.’ Mot.
to Dismiss and, in the Alternative, Mot. for Summ. J., ECF No.
108; Defs.’ Sur-Sur Reply to Pl.’s Sur Reply to Defs.’ Reply to
Pl.’s Resp. to Defs.’ Mot. to Dismiss and, in the Alternative,
Mot. for Summ. J., ECF No. 110.)

8

On January 20, 2014, the parties filed an Agreed Motion to
Refer Action to Mediation.
to

“direct

that

[this

(ECF No. 111.)
proceeding’s]

They asked the Court

issues,

actions,

and

claims . . . proceed to mediation together with” related matters
already referred to mediation by the United States Bankruptcy
Court for the Western District of Tennessee.
Court granted this motion on January 23, 2014.

(Id. ¶ 3.)

The

(Order Granting

Mot. to Refer Action to Mediation, ECF No. 112.)

On April 24,

2014, the parties notified the Court that, notwithstanding a
three-day mediation, they “[had] not been able to resolve the
claims

arising

in

this

proceeding.”

(Jt.

Not.

Concerning

Mediation 1, ECF No. 115.)
In a telephone status conference on July 25, 2014, Church
JV indicated that it was “still in trial” on matters associated
with Debtors’ bankruptcy.
day,

the

Court

present matter.

entered

(Mins., ECF No. 125.)
an

order

staying

Later that

proceedings

in

the

(Order Staying Proceedings, ECF No. 126.)

On

April 7, 2015, after briefing by the parties, the Court entered
an Order Reopening Case.

(ECF No. 134.)

On January 4, 2016, the Court entered an order addressing
the Second Motion to Dismiss.

(Order, ECF No. 144.)

The order

stated that a limited partnership’s citizenship is “‘determined
by the citizenship of all of its partners’ at the time of the
complaint,” but that Church JV “[had] not provided information

9

as to the citizenship of any of its partners.”

(Id. at 3

(quoting Maiden v. N. Am. Stainless, L.P., 125 F. App’x 1, 3–4
(6th

Cir.

evidence

2004).)

The

sufficient

Court

to

ordered

establish

Church
its

JV

“to

submit

citizenship

for

jurisdictional purposes not later than January 14, 2016.”

(Id.)

Church JV provided the needed information on January 7, 2016.
(Notice of Compliance with Ct. Order, ECF No. 145 (“Not. of
Compliance”).)
On

January

13,

2016,

the

Court

entered

addressing the Second Motion to Dismiss.
(“January 13, 2016 Order”).)
2016

Order

action.

addressed

the

second

order

(Order, ECF No. 146

Section IV.A of the January 13,

Amended

(Id. at 18–22.)

a

Complaint’s

first

cause

of

The Court found that “[t]here is no

authority under Tennessee law for reverse piercing the corporate
veil outside the parent-subsidiary context.”

(Id. at 20–21.)

As a result, “the alter-ego claims against Defendant Trusts and
Corporations are DISMISSED.”

(Id. at 22.)

Section IV.B of the January 13, 2016 Order addressed the
Amended Complaint’s second cause of action.

(Id. at 22–28.)

The order divided the analysis between “transfers of property
between

Debtors

“transfers

and

solely

Defendant

among

Trusts

Defendant

(Id. at 23.)

10

and

Trusts

Corporations”
and

and

Corporations.”

Addressing transfers solely among the Defendant Trusts and
Corporations, the Court concluded that “Church is not a creditor
of any of [the] Trusts and Corporations,” and that “[i]t has not
successfully
The

Court

asserted

alter-ego

that,

failed

Complaint

held

to

fraudulent-conveyance

as

to
a

permitted

Trusts

and

transfers

Corporations,

for

the

which

relief.

(Id.)
Amended

Tennessee

(Id.

at

23–24.)

(Id. at 24.)

between
the

them.”

transfers,

claim

The Court dismissed those claims.
Addressing

against

those

state
law

claims

Debtors

Court

and

the

distinguished

Defendant

the

various

Defendant Trusts and Corporations.

(Id. at 24–28.)

“As to

transactions

[the

Trust],

between

Debtors

and

Blasingame

[Blasingame Farms, Inc.], [GF Corporation], and [Aqua Dynamic
Systems, Inc.],” the Court determined that the Amended Complaint
does

“not

establish

provide[]
‘a

claim

the
to

minimal

relief’

under

‘that is plausible on its face.’”
Corp.

v.

Twombly,

550

U.S.

factual

support

Tennessee

Flozone

transfers

544,

Services,

Inc.

between

avoidance

to
law

(Id. at 24 (quoting Bell Atl.
570

(2007)).)

dismissed those fraudulent-conveyance claims.
Addressing

required

Debtors

(“Flozone”),

and

The

Court

(Id.)
and

BFRGST,

Fiberzone,

the

BFBIT,
Court

held that the Amended Complaint did “allege[] with sufficient
particularity a series of fraudulent transfers.”
(citing

Am.

Compl.

5–7,

8–11,

11

18–22).)

(Id. at 25–26

The

Court

also

considered those transfers under a summary-judgment standard.
(Id. at 26–28.)
BFRGST,

BFBIT,

The Court determined that, as to transfers to
and

Fiberzone,

Church

JV

had

sufficient evidence to survive summary judgment.
Flozone

transfers,

the

Court

determined

that

put

forward

(Id.)
Church

As to
JV

had

“failed to adduce concrete evidence on which a reasonable juror
could return a verdict in its favor.”

(Id. at 26.)

The Court

granted summary judgment in Defendants’ favor on the fraudulentconveyance claims against Flozone, but denied summary judgment
on the fraudulent-conveyance claims against BFRGST, BFBIT, and
Fiberzone.
Section

IV.B.4

addressed

the

fourth, and fifth causes of action.

Amended

Complaint’s

(Id. at 29–30.)

third,

The Court

concluded that those causes of action “depend on the success of”
Church JV’s first and second causes of action.
The Court thus denied Defendants’ motion
action.

on

(Id. at 29.)

those causes of

(Id. at 30.)

On January 27, 2016, the remaining Defendants filed answers
to the Amended Complaint.
and

Fiberzone

(“Primary

to

Answer”);

First
Answer

(Answer of EBB, MGB, BFBIT, BFRGST,
Am.
of

Original

Compl.,

ECF

EBB

and

to

Jr.

KBC

No.

149

First

Am.

Original Compl., ECF No. 150 (“KBC/EBB Jr. Answer”).)
On February 10, 2016, the Court entered a Scheduling Order.
(ECF No. 154.)

That Order set a discovery deadline of June 10,

12

2016, and a dispositive-motion deadline of July 11, 2016.
at 1.)

(Id.

It also scheduled a pretrial conference for 9:30 a.m. on

November 18, 2016, and a trial date (for a three-day trial) on
November 28, 2016.

(Id.)

2016,

briefed

the

parties

Order addresses.

Between June 29, 2016, and August 22,
the

five

dispositive

motions

this

(See Introduction above.)

On October 12, 2016, Church JV filed its Motion for Status
Conference.

It

asks

the

Court

to

“set

an

expedited

status

conference and/or hearing on [the] pending motions to dismiss
and/or for summary judgment.”

(Id. ¶ 6.)

If the Court sets a

hearing, Church JV also asks that the “trial of the action be
postponed until at least 30 days after the Court rules on the
pending motions . . . to enable the parties to prepare for trial
on remaining issues.”

(Id.)

Defendants filed a response to the

motion on October 13, 2016.

Defendants agree that the Court

should “set an expedited pretrial status conference as to the
pending motions.”
¶ 4.)

(Defs.’ Resp. to Mot. for Status Conference

Defendants suggest

motions is unnecessary.
II.

§ 1332.

(Id. ¶ 5.)

JURISDICTION AND CHOICE OF LAW
A.

This

that oral argument on the pending

Jurisdiction

Court

has

diversity

jurisdiction

Church JV is a limited partnership.

under

28

U.S.C.

(Am. Compl. ¶ 2.)

“For purposes of determining diversity jurisdiction, a limited

13

partnership is deemed to be a citizen of every state where its
general and limited partners reside.”

Hooper v. Wolfe, 396 F.3d

744,

removed)

748

(6th

Cir.

2005)

(emphasis

(citing

cases).

Church JV has one general partner, an Ohio corporation with its
principal

place

of

business

in

Newton

limited partner, an Ohio resident.

Falls,

Ohio,

and

one

(Notice of Compliance 1.)

For purposes of determining diversity jurisdiction, Church JV is
a citizen of Ohio.
EBB, MGB, KBC, and EBB Jr. are citizens of Tennessee.

(Am.

Compl. ¶¶ 4–7; Primary Answer ¶¶ 4–5; KBC/EBB Jr. Answer ¶¶ 6–
7.)

Fiberzone is a corporation, but the Tennessee Secretary of

State has no record of its existence.
Answer ¶ 12.)
Tennessee.
A

(Am. Compl. ¶ 12; Primary

Fiberzone’s principal place of business is in

(Am. Compl. ¶ 12; Primary Answer ¶ 12.)

trust’s

citizenship.

citizenship

is

determined

by

its

trustees’

Homfeld II, LLC v. Comair Holdings, Inc., 53 F.

App’x 731, 732 (6th Cir. 2002) (citing Navarro Sav. Ass’n v.
Lee,

446

U.S.

458,

464

(1980)).

EBB

and

MGB,

Tennessee, are co-trustees of BFBIT and BFRGST.

citizens

of

(Am. Compl. ¶¶

8–9; Primary Answer ¶¶ 8–9.)
Given the parties’ various states of residence, there is
complete diversity.
Church
$75,000

alleges

against

all

Cf. 28 U.S.C. § 1332(a)(1).
that

the

amount

Defendants.

14

(See

in

controversy

generally

Am.

exceeds
Compl.)

“[T]he sum claimed by the plaintiff controls if the claim is
apparently made in good faith.”

St. Paul Mercury Indem. Co. v.

Red Cab Co., 303 U.S. 283, 288 (1938); see also Mass. Cas. Ins.
Co.

v.

Harmon,

88

F.3d

415,

416

(6th

Cir.

1996).

The

requirements of diversity jurisdiction are satisfied.
B.

Choice of Law

In diversity actions, state substantive law governs.

See,

e.g., Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
diversity

actions,

a

federal

court

applies

provisions of the state in which it sits.
Stentor

Elec.

Mileti,

133

Mfg.
F.3d

Co.,
433,

313
437

U.S.

487,

(6th

Cir.

the

In

choice-of-law

Id.; Klaxon Co. v.
496

(1941);

1998)

(“It

Cole
is

v.

well-

established that federal courts sitting in diversity must apply
the choice-of-law rules of the forum state.”) (citing cases).
When

“all

parties

have

acquiesced—without

comment”—to

the

application of a particular state’s law, the Court will not
“delve too deeply” into choice-of-law analysis.

GBJ Corp. v. E.

Ohio Paving Co., 139 F.3d 1080, 1085 (6th Cir. 1998); see also
In re Korean Air Lines Disaster of Sept. 1, 1983, 932 F.2d 1475,
1495

(D.C.

need

Cir.

not

1991)

address

(“Unlike

choice

of

jurisdictional
law

questions

issues,
sua

courts

sponte.”).

Following the January 13, 2016 Order, the bulk of Church JV’s
remaining

claims

Defendants.

assert

attempts

to

avoid

transfers

made

Church JV invokes Tennessee avoidance law.

15

by

(See,

e.g.,

Am.

Compl.

¶

101.)

Defendants

do

application of Tennessee avoidance law.

not

challenge

the

The Court will apply

Tennessee substantive law.
III. STANDARD OF REVIEW
Defendants’ motions seek dismissal and/or summary judgment.
Rule 12(b)(6) permits dismissal of a lawsuit for “failure
to state a claim upon which relief can be granted.”

Under Rule

8(a)(2), the complaint must include “a short and plain statement
of the claim showing that the pleader is entitled to relief.”
Rule 12(b)(6) requires the court to “treat all of the wellpleaded allegations of the complaint as true and construe all of
the allegations in the light most favorable to the non-moving
party.”

Coley

v.

Pennakem,

LLC,

No.

09-2780-STA,

2010

WL

2197821, at *1 (W.D. Tenn. May 28, 2010).
“While a complaint attacked by a Rule 12(b)(6) motion to
dismiss

does

plaintiff’s

not

need

obligation

‘entitle[ment]

to

detailed

to

factual

provide
requires

relief’

the
more

allegations,

‘grounds’
than

a

of

his

labels

and

conclusions, and a formulaic recitation of the elements of a
cause

of

action

will

not

do.”

(internal citations omitted).

Twombly,

550

U.S.

at

555

“‘To avoid dismissal under Rule

12(b)(6), a complaint must contain either direct or inferential
allegations with respect to all the material elements of the
claim.’”

Wright v. Memphis Police Ass’n, Inc., No. 14-2913-STA-

16

dkv, 2015 WL 3407358, at *4 (W.D. Tenn. May 26, 2015) (quoting
Wittstock v. Mark A. Van Sile, Inc., 330 F.3d 899, 902 (6th Cir.
2003)).
In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme
Court

stated

motions.

a

two-prong

test

for

analyzing

Rule

12(b)(6)

First, the reviewing court should consider whether

allegations are merely “legal conclusions” and, if so, disregard
them when ruling on the motion.
should

evaluate

the

remaining

Id. at 678.
well-pled

Second, the court

facts

and

determine

whether they give rise to a “plausible claim for relief.”
at

679.

“The

plausibility

standard

is

not

akin

Id.
to

a

‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
(quoting Twombly, 550 U.S. at 556).

Id. at 678

“Where a complaint pleads

facts that are ‘merely consistent with’ a defendant’s liability,
it ‘stops short of the line between possibility and plausibility
of entitlement to relief.’”
557).

“Threadbare

action,

supported

suffice.”

recitals
by

Id. (quoting Twombly, 550 U.S. at
of

mere

the

elements

conclusory

of

a

statements,

cause

of

do

not

Id. (citing Twombly, 550 U.S. at 555).

Under Rule 9(b), “[i]n alleging fraud or mistake, a party
must

state

with

fraud or mistake.”

particularity

the

circumstances

constituting

“Courts in the Sixth Circuit read this rule

liberally, requiring a plaintiff to, at a minimum, ‘allege the

17

time, place, and content of the alleged misrepresentation on
which he or she relied; the fraudulent scheme; the fraudulent
intent of the defendants; and the injury resulting from the
fraud.’”

Moore v. It’s All Good Auto Sales, Inc., 907 F. Supp.

2d

922

915,

(W.D.

Tenn.

2012)

(quoting

Advocacy

Org.

for

Patients and Providers v. Auto Club Ass’n, 176 F.3d 315, 322
(6th Cir. 1999)).
Rule

56(a)

provides

that

a

party

moving

for

summary

judgment must “identify[] each claim or defense—or the part of
each claim or defense—on which summary judgment is sought” and
“show[] that there is no genuine dispute of material fact and
the movant is entitled to judgment as a matter of law.”

The

court must view the record in the light most favorable to the
nonmoving party.

Loyd v. St. Joseph Mercy Oakland, 766 F.3d

580, 588 (6th Cir. 2014).
To overcome a properly supported summary-judgment motion,
the nonmoving party must set forth specific facts showing that
there is a “genuine” dispute for trial.

Fed. R. Civ. P. 56(c).

A “genuine” dispute exists when the nonmoving party presents
“significant

probative

evidence”

could return a verdict for [it].”

“on

which

a

reasonable

jury

E.E.O.C. v. Ford Motor Co.,

782 F.3d 753, 760 (6th Cir. 2015) (quoting Chappell v. City of
Cleveland, 585 F.3d 901, 913 (6th Cir. 2009)).

The court does

not have the duty to search the record for such evidence.

18

See,

e.g., Meachem v. Memphis Light, Gas & Water Div., 119 F. Supp.
3d 807, 813 (W.D. Tenn. 2015) (citing Fed. R. Civ. P. 56(c)(3);
InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir.
1989)).
that

The nonmoving party “‘must do more than simply show

there

facts.’”
Elec.

is

some

metaphysical

doubt

as

to

the

material

Ford Motor Co., 782 F.3d at 770 (quoting Matsushita

Indus.

Co.

v.

Zenith

Radio

Corp.,

475

U.S.

574,

586

(1986)).
Courts

must

use

summary

judgment

carefully,

but

when

appropriate, it is “an integral part of the Federal Rules as a
whole,

which

inexpensive
disfavored

are

designed

determination
procedural

to
of

secure
every

shortcut.”

the

just,

action[,]
F.D.I.C.

speedy,

rather
v.

Jeff

and

than

a

Miller

Stables, 573 F.3d 289, 294 (6th Cir. 2009) (internal quotation
marks and citations omitted).
IV.

ANALYSIS
A.

Motion for Status Conference

The motion for a hearing on the pending dispositive motions
is

DENIED.

The

Court

has

resolved

the

dispositive

motions

without oral argument.
The motion for an expedited status conference is DENIED.
This Order resolves all of Defendants’ dispositive motions.

Any

remaining matters can be resolved at the pretrial conference on

19

November 18, 2016.

(Notice of Setting, ECF No. 153 (“Notice of

Setting”).)
B.

KBC/EBB Jr. Motion

The KBC/EBB Jr. Motion contends that, “[a]lthough [KBC and
EBB Jr.] sought dismissal of any claims asserted against them in
the [Second] Motion to Dismiss, the Court’s order of January 13,
2016 did not specifically address the motion as it relates to
KBC or EBB, Jr.”

(KBC/EBB Jr. Mot. ¶ 4.)

KBC and EBB Jr. argue

that, under the Twombly/Iqbal dismissal standards, the Amended
Complaint’s allegations against them are insufficient.

(Mem. in

Supp. of Defs. KBC and EBB Jr.’s Mot. to Dismiss First Am.
Compl. Pursuant to Fed. R. Civ. P. Rule 12(B)(6) at 7–8, ECF No.
155-1 (“Mem. ISO KBC/EBB Jr. Mot.”).)
Church

JV

responds

that

the

Second

Motion

to

Dismiss

“sought dismissal of all claims against [KBC and EBB Jr.] as
asserted in the Complaint.”
Defs.

KBC

and

EBB

Jr.’s

(Mem. in Supp. of Pl.’s Resp. to
Mot.

to

Dismiss

First

Am.

Compl.

Pursuant to Fed. R. Civ. P. Rule 12(b)(6) ¶ 8, ECF No. 162
(“Mem. ISO Church JV Resp. to KBC/EBB Jr. Mot. to Dismiss”).)
Church

JV

argues

that

the

Court

granted

KBC

component of the Second Motion to Dismiss,

and

EBB

Jr.’s

such that “[a]ll

claims asserted . . . against KBC and [EBB Jr.] were dismissed.”
(Id. ¶ 9.)

20

That

would

seem

to

end

the

matter.

Church

JV

argues,

however, that the Court should treat the KBC/EBB Jr. Motion as a
summary-judgment

motion.

(Id.

¶¶

14–16.)

Citing

its

own

discovery responses, Church JV contends that fact issues exist
such that the Court, treating that KBC/EBB Jr. Motion as one for
summary judgment, should deny it.

(Id. ¶¶ 18–28.)

alternative, Church JV argues that,

In the

if the Court grants the

KBC/EBB Jr. Motion, it should do without prejudice and grant
Church JV leave to amend the Amended Complaint.

(Id. ¶¶ 29–31.)

KBC and EBB Jr. reply that “the Court should not permit the
party opposing a Rule 12(b)(6) motion to unilaterally convert
the motion to a summary judgment motion.”
2.)

(KBC/EBB Jr. Reply

They also argue that any dismissal should be with prejudice

and that the Court should not grant Church JV leave to amend the
Amended Complaint.
The

first

(Id. at 5–6.)

threshold

issue

is

how

the

Second

Motion

to

Dismiss and the January 13, 2016 Order affect the KBC/EBB Jr.
Motion.

The Second Motion to Dismiss argued that the Court

should dismiss any fraudulent-conveyance claims against KBC or
EBB Jr.

(Second Mot. to Dismiss 45.)

The January 13, 2016

Order did not address that argument, but did consider arguments
about fraudulent-conveyance claims against other Defendants.
Church

JV’s

argument

that

the

January

13,

2016

Order

dismissed the fraudulent-conveyance claims against KBC and EBB

21

Jr. is not well taken.

Although the January 13, 2016 Order

dismissed fraudulent-conveyance claims against entities, it did
so specifically.
The

Order

did

(See, e.g., January 13, 2016 Order 23–24.)
not

discuss

the

fraudulent-conveyance

claims

against KBC and EBB Jr.
A

district

court

has

the

inherent

power

to

reconsider,

rescind, or modify an interlocutory order before entry of a
final judgment.

See, e.g., Leelanau Wine Cellars, Ltd. v. Black

& Red, Inc., 118 F. App’x 942, 946 (6th Cir. 2004).
54(b),

“any

[interlocutory]

order

or

Under Rule

decision . . .

may

be

revised at any time before the entry of a judgment adjudicating
all the claims and all the parties’ rights and liabilities.”
“Traditionally, courts will find justification for reconsidering
interlocutory orders when there is (1) an intervening change of
controlling law; (2) new evidence available; or (3) a need to
correct a clear error or prevent manifest injustice.”

Rodriguez

v. Tenn. Laborers Health & Welfare Fund, 89 F. App’x 949, 959
(6th Cir. 2004) (citing Reich v. Hall Holding Co., 990 F. Supp.
955, 965 (N.D. Ohio 1998)).
The Court clearly erred by failing to address whether the
Amended Complaint properly pleads fraudulent-conveyance claims
against KBC and/or EBB Jr.

Thus, the Court will consider the

arguments in the KBC/EBB Jr. Motion.

22

A

second

threshold

issue

is

whether

Church

JV’s

introduction of interrogatory responses in its response to the
KBC/EBB

Jr.

Motion

summary

should

judgment.

convert

Church

JV

that

quotes

motion
Rule

into

for

for

12(d)

one

the

proposition that, “‘[i]f, on a motion under 12(b)(6) . . . ,
matters outside the pleadings are presented to and not excluded
by the court, the motion must be treated as one for summary
judgment under Rule 56.’”

(Mem. ISO Church JV Resp. to KBC/EBB

Jr. Mot. ¶ 15 (quoting Fed. R. Civ. P. 12(d).)

Church JV then

quotes at length its responses to interrogatories served by KBC
and EBB Jr.

(See generally id. ¶¶ 20–27.)

Relying
converts

a

on

“matters

dismissal

outside

motion

into

the
a

pleadings”

ordinarily

summary-judgment

motion.

Fed. R. Civ. P. 12(d); Swanigan v. Nw. Airlines, Inc., 718 F.
Supp. 2d 917, 922 (W.D. Tenn. 2010) (converting Rule 12 motion
into Rule 56 motion, in part because party filed affidavit in
support).

This case presents a variant on the issue: should a

court convert a motion to dismiss into a summary-judgment motion
because

the

pleadings,

plaintiff

where

the

introduced
defendant

has

materials
not

outside

introduced

the
those

materials and asks the Court not to treat the motion as one for
summary judgment?
The

Court

has

found

Circuit precedent on point.

no

binding

Supreme

Court

or

Sixth

The better approach is not to treat

23

the motion as one for summary judgment.

See, e.g., Alexander

Assocs., Inc. v. FCMP, Inc., No. 10-12355, 2012 WL 1033464, at
*7 (E.D. Mich. Mar. 27, 2012) (quoting Collins v. Palczewski,
841 F. Supp. 333, 334 (D. Nev. 1993)).

This is particularly

true where, as here, the Court neglected to address KBC and EBB
Jr.’s

earlier

dismissal

arguments.

Because

the

Court

will

review the KBC/EBB Jr. Motion as one for dismissal, it will not
consider the materials outside the pleadings presented by Church
JV.

See, e.g., Trustees of Detroit Carpenters Fringe Benefit

Funds v. Patrie Constr. Co., 618 F. App’x 246, 255 (6th Cir.
2015).
The second cause of action in the Amended Complaint alleges
that

various

transfers

of

Debtors’

assets

“were

with

the

specific intent, direct or indirect, of delaying, hindering, or
defrauding Church JV and other creditors and, therefore, were
fraudulent

conveyances

and

devices

within

the

meaning

of

applicable Tennessee avoidance law . . . and subject to being
avoided for the benefit of Church JV . . . and should be set
aside and avoided by the Court.”

(Am. Compl. ¶ 101.)

Parties

with fraudulent-conveyance claims under Tennessee law must plead
them with particularity under Rule 9(b).

See, e.g., Eastwood v.

United States, No. 2:06-CV-164, 2007 WL 2815560, at *4 (E.D.
Tenn. Sept. 25, 2007).
As to KBC, the Amended Complaint alleges the following:

24

1)
2)

KBC “is purported to be
[Flozone] and owns 100% of
stock.” (Id. ¶ 55.)

3)

“Debtors claim that KBC delegated all business
and financial decisions of [Flozone] to her
father . . . .” (Id. ¶ 58.)

4)

KBC cannot “adequately account for or explain the
amount KBC paid for her stock in [Flozone] or how
she acquired that stock,” and “[n]o stock has
been issued.” (Id. ¶ 59.)

5)

KBC “is not materially or significantly involved
in the business of [Flozone],” “has not made any
independent business decisions for [Flozone],”
“does not run the business of [Flozone],” and has
“turned all of the financial and business
operations
of
[Flozone]
over
to
her
father . . . .” (Id. ¶¶ 60, 64–66.)

6)
The

KBC is Debtors’ daughter.

KBC is the owner of Fiberzone.

January

13,

2016

Order

(Am. Compl. ¶ 54.)

determined

the
its

President of
issued common

(Id. ¶ 73.)
that

Church

JV’s

“fraudulent transfer claim against Flozone . . . can be disposed
of on summary judgment.”

5

(January 13, 2016 Order 26. 5 )

The January 13, 2016 Order stated:
Church
alleges
that
“Debtors
loaned
[Flozone] not less than $225,000” without
adequate consideration.
Church has adduced
no evidence to support that allegation,
despite voluminous and lengthy discovery,
numerous
depositions,
and
multiple
opportunities for response.
Church has not
specifically alleged any other transfers of
assets from Debtors to Flozone.
Church has
failed to adduce concrete evidence on which
a reasonable juror could return a verdict in
its favor. As to the transfer from Debtors
to Flozone, Defendants’ Motion for Summary
25

The

Flozone-related allegations about KBC cannot be the basis for a
fraudulent-conveyance claim against KBC.
The

Amended

Complaint’s

only

remaining

KBC-related

allegations are that she is Debtors’ daughter and that she owns
Fiberzone.
“has

set

The January 13, 2016 Order stated that Church JV
forth

specific

evidence

showing

a

material

dispute

about the allegedly fraudulent transfers of . . . liabilities
from Fiberzone to Debtors.”

Id.

The Amended Complaint fails to

plead with particularity any fraudulent transfer between Debtors
and KBC.

It makes no such transfer allegations at all.

The

KBC/EBB Jr. Motion is GRANTED as to KBC.
The Amended Complaint alleges that EBB Jr. is “an adult
resident and citizen of the State of Tennessee . . . .”
Compl. ¶ 7.)
There

(Am.

No other allegations specifically refer to EBB Jr.
are,

however,

transfers to Debtors’ son.

several

allegations

that

suggest

For example, the Amended Complaint

alleges:
1)

“A monthly average of $5,877 was deposited into
[MGB’s]
household
account
(Community
South
account #11048972) and spent for personal living
expenses from various sources including transfers
from all the Trusts and Corporations and from a
commingled
‘clearing
account’
(BancorpSouth
account
#87822680)
into
which
hundreds
of
thousands of dollars from multiple sources are

Judgment
GRANTED.

on

Church’s

(January 13, 2016 Order 26.)
26

avoidance

claims

is

deposited each year.
This clearing account is
concealed from creditors in the son’s name, E. B.
Blasingame, Jr., although the son appears never
to have written or signed a check and over which
the Debtors exert full control and exercise
single signatory authority.” (Id. ¶ 81(a).)
2)

“The Debtors now admit to having created a
‘clearing account’ . . . established in the name
of their son, into which they regularly commingle
funds from every source—individual funds, Trust
funds and Corporate funds.
Initially, the
Debtors asserted that they established this
‘clearing account’ to permit their bookkeeper,
Joyce
Long,
to
write
checks
because
she
supposedly could not write checks on the Trust
accounts.
Subsequently, the Debtors now admit
that their bookkeeper was, in fact, signatory on
all the Trust accounts and continued to write
checks on all the Trust accounts, before and
after this ‘clearing account’ was established.
Thus, this BancorpSouth account operated as a
depository into which individual funds, Trust
funds
and
Corporate
income
were
regularly
‘commingled,’ safe from creditors under their
son’s name, and then disbursed to or for the
benefit of the Debtors.” (Id. ¶ 84(a).)

3)

“As further evidence of Debtors’ conscious scheme
to utilize the Trusts and Corporations to defraud
creditors is the account at BancorpSouth . . . —
the so-called ‘Clearing Account’—which was opened
in the name of Debtors’ son in order that its
contents be safe from levy.
Funds belonging to
each of the Trusts, each of the Corporations and
from one or more of the ten (10) separate bank
accounts in Debtors’ own names were and still are
deposited, transferred back and forth as needed
into the Clearing Account.” (Id. ¶ 91.)

Church
fraudulent
¶¶ 81,
intent

84,
for

JV

has

transfers
91.)
these

alleged
by

Church

with

Debtors
JV

has

transactions,

27

to

sufficient
their

alleged
alleging

particularity

son.
Debtors’
badges

(Am.

Compl.

fraudulent
of

fraud

including secrecy, interrelationships, and retained interests.
That is enough to comply with Rule 9(b)’s standard.

Church JV

has provided “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action.”

Twombly, 550

U.S. at 554–56.
The Amended Complaint, however, does not directly allege
that

EBB

Jr.

is

Debtors’

son.

As

noted

above,

this

Court

generally may not consider materials outside the pleadings in
deciding a Rule 12(b)(6) motion.
KBC and EBB Jr. are correct that the Amended Complaint’s
only

allegation

against

resident and citizen.

EBB

Jr.

is

that

he

is

a

Tennessee

Without more, that is insufficient to

state a fraudulent-conveyance claim.

The KBC/EBB Jr. Motion to

Dismiss is GRANTED as to EBB Jr.
Church JV argues that, if the Court grants the KBC/EBB Jr.
Motion, any dismissal should be without prejudice and the Court
should grant leave to amend the Amended Complaint “to add the
allegations” of fraud that Church JV discusses in its response
relying on material outside the pleadings.
Resp. to KBC/EBB Jr. Mot. ¶ 29.)

(Mem. ISO Church JV

KBC and EBB Jr. argue that

dismissal under Rule 12(b)(6) “is a judgment on the merits and
is therefore with prejudice.”

(KBC/EBB Jr. Reply 5.)

They also

argue that Church JV’s request to amend the Amended Complaint is
untimely given this case’s procedural history.

28

(Id. at 5–6.)

KBC and EBB Jr. are correct: dismissals under Rule 12(b)(6)
are judgments on the merits, and thus are with prejudice.

Pratt

v. Ventas, Inc., 365 F.3d 514, 522 (6th Cir. 2004) (quoting
Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 399 n.3
(1981)).

The KBC/EBB Jr. Motion is GRANTED with prejudice.

The

Court, however, has the inherent power to modify interlocutory
orders before entry of a final judgment.
Rule 15(a) governs Church JV’s request to amend the Amended
Complaint.

Rule

15(a)(2)

provides,

in

pertinent

part,

“[A]

party may amend its pleading only with the opposing party’s
written consent or the court’s leave.
give leave when justice so requires.”

The court should freely
“Although Federal Rule of

Civil Procedure 15(a)(2) provides that a court ‘should freely
give leave [to amend a complaint] when justice so requires,’ the
right

to

amend

is

Middleburg-Legacy
(citing cases).
to grant leave.

not

Place,

absolute
539

or

F.3d

automatic.”

545,

551

Tucker

(6th

Cir.

v.

2008)

The district court has discretion about whether
Id.

Courts may consider a number of factors,

including undue delay, bad faith, undue prejudice, futility of
amendment, or repeated failure to cure deficiencies by previous
amendments.

Foman v. Davis, 371 U.S. 178, 182 (1962).

“Allowing

an

amendment

after

discovery

is

closed

and

summary judgment motions are ‘fully briefed’ imposes significant
prejudice on defendants. . . .

Further, ‘[w]hen amendment is

29

sought at a late stage in the litigation, there is an increased
burden

to

show

justification

for

failing

to

move

earlier.’”

Siegner v. Twp. of Salem, No. 15-2063, 2016 WL 3426092, at *3
(6th Cir. June 22, 2016) (quoting Sixth Circuit cases); see also
Duggins v. Steak ’N Shake, Inc., 195 F.3d 828, 834 (6th Cir.
1999) (citing cases).
Based on these factors and for the following reasons, the
Court DENIES Church JV’s request to amend the Amended Complaint
with one exception.

First, Church JV requested leave to amend

well after the close of discovery, after the dispositive-motion
deadline,

and

with

trial

less

generally Notice of Setting.)

than

four

months

away.

(See

Permitting amendment now would

prejudice KBC and EBB Jr.
Second, as Seigner specifies, when a party seeks leave to
amend late in litigation, “there is an increased burden to show
justification for failing to move earlier.”
*3.

Church JV provides no justification for failing to move

earlier.
Mot.)

2016 WL 3246092, at

(See generally Mem. ISO Church JV Resp. to KBC/EBB Jr.

That is particularly problematic because Church JV was

aware in January 2014 of the information it now wants to add to
the Amended Complaint.

(See Mem. ISO Church JV Resp. to KBC/EBB

Jr. Mot. ¶ 18 (noting that Church JV served relevant discovery
responses on January 3, 2014).)

30

Third, some of the amendments Church JV suggests would be
futile.

For example, Church JV suggests that it might add, in a

Second Amended Complaint, allegations of transfers from Debtors
to (1) the Katherine Blasingame 1993 Generation Skipping Trust,
and (2) the Earl Benard Blasingame Jr. 1993 Generation Skipping
Trust.

(Id. ¶¶ 20(a), 21(a).)

Those transfers were not to KCB

or EBB Jr., but to distinct trusts.

Even if the Court allowed

Church JV to amend the complaint to add these new allegations,
the resulting pleading would not state a claim as to KBC or EBB
Jr.
The one amendment the Court will allow is minor: Church JV
may, if it chooses, amend the Amended Complaint to state that
EBB Jr. is Debtors’ son.

That amendment would not prejudice EBB

Jr. because, assuming that he is Debtors’ son, he has known
about the allegations against him at least since Church JV filed
the

Amended

Complaint.

The

amendment

would

not

be

futile

because allegations in the Amended Complaint about Debtors’ son
are sufficient to state a claim.6

6

If Church JV elects to amend the Amended Complaint, it should
file a short document (one or two pages) that provides the text
of an amended Paragraph 7.
The deadline for this filing is
three days from the date of this Order. If Church JV makes this
filing, EBB Jr. will have three days from the date of Church
JV’s filing to submit a short document (one or two pages)
answering, pursuant to Rule 8(b), the allegations in amended
Paragraph 7. The parties should not make substantive arguments
to the Court in these filings.
If EBB Jr. admits that he is
31

All fraudulent-conveyance claims against KBC and EBB Jr.
are DISMISSED.

The January 13, 2016 Order decided that the

Amended Complaint’s third, fourth, and fifth causes of action
“depend on the success” of causes of action that no longer apply
to KBC or EBB Jr. (January 13, 2016 Order at 29.)

It follows

that there are no remaining causes of action against KBC or EBB
Jr.

The KBC/EBB Jr. Motion is GRANTED.
C.

Fiberzone Motion

Fiberzone

argues

that

the

only

claims

against

it

that

survive the January 13, 2016 Order are the allegations (1) “that
[MGB]

incurred

obligations

to

her

credit

card

companies

for

charges made on her credit card for the benefit of [Fiberzone],
and (2) “that [EBB] provided consulting services [to Fiberzone]
for no consideration.”
to

Counts

II–V

of

Fiberzone Mot.”).)

the

(Mem. ISO Fiberzone Mot. for Summ. J. as
Compl.

5,

ECF

No.

156-1

(“Mem.

ISO

Addressing the credit-card claim, Fiberzone

argues that “the undisputed facts are that any charges incurred
by [Fiberzone] on credit cards belonging to [MGB] were paid for
by [Fiberzone], [Flozone] or reimbursed to [MGB].”

(Id. at 9.)

Fiberzone argues that “[t]here is no proof that [MGB] paid any
of

the

charges

incurred

by

[Fiberzone].”

(Id.

at

10.)

Addressing the consulting-services claim, Fiberzone argues that

Debtors’ son,
proceeding.

then

EBB

Jr.

will

32

remain

a

Defendant

in

this

“a debtor who provides uncompensated services does not transfer
‘property’ within the meaning of the UFTA.”

(Id. at 7 (citing

cases).)
Church
presented

to

JV

responds

the

Court

that

in

Fiberzone’s

the

Second

arguments

Motion

rejected in the January 13, 2016 Order.

to

Dismiss

were
and

(Church JV Resp. to

Fiberzone Mot. ¶¶ 13–15.)

Church JV also points to a November

2013

KBC

and

arguing

that

deposition

interrogatories,

of

to

Church

they

making summary judgment inappropriate.

JV’s

create

responses

factual

to

disputes

(Id. ¶¶ 16–19.)

Fiberzone replies that Church JV has failed to show any
genuine issues of disputed fact about the credit-card claim.
(Fiberzone Reply 1–2.)

Fiberzone also argues that Church JV has

failed to rebut Fiberzone’s legal argument on the consultingservices claim.

(Id. at 2–3.)

Fiberzone contends that Church

JV’s response impermissibly attempts to “expand the allegations
of the [Amended Complaint] to assert claims not set forth in the
[Amended Complaint].”
The

Fiberzone

(Id. at 4–5.)

Motion

raises

issues

about

three

transfer

claims: (1) the credit-card claim, (2) the consulting-services
claim, and (3) claims of transfers not raised in the Amended
Complaint.

33

1.

Credit-Card Claim

As to the credit-card claim, the dispositive question is
how the Second Motion to Dismiss and the January 13, 2016 Order
addressed that claim.
The Second Motion to Dismiss specifically argued that the
credit-card

allegations

were

insufficient

(Second Mot. to Dismiss 26.)

to

state

a

claim.

Church JV responded that “[t]he

allegations against [Fiberzone] are the same as those asserted
against

the

other

Defendant

Trusts

and

Entities

with

which

[Debtors] have been involved,” and that “[t]he Bankruptcy Court
found that the allegations against [Fiberzone] were plausible in
light

of

the

allegations

and

lack

of

refuting

evidence.”

(Church JV Resp. to Second Mot. to Dismiss ¶¶ 74–75 (citing
Order Denying Am. Mot. to Dismiss (Summ. J.) Filed by the Def.
Corps., Montedonico v. Blasingame (In re Blasingame), Adv. Proc.
09-00482 (W.D. Tenn. May 31, 2011)) (“Bankruptcy Court Order”).)
The

Bankruptcy

discuss

the

Court

Order,

credit-card

however,

claim.

(See

did

not

specifically

Bankruptcy

Court

Order

14–15.)
Defendants’

reply

in

support

of

the

Dismiss again addressed the credit-card claim.

Second

Motion

It argued that:

Plaintiff’s Amended Complaint, ¶ 76 does
[contain] an allegation that prior to 2008,
charges were made on credit cards owned by
[MGB] for the benefit of [Fiberzone].
No
allegation is made that [MGB], rather than

34

to

[Fiberzone], paid those charges.
As set
forth in the Affidavit of Joyce Long, all
such charges were paid for by [Fiberzone]
and not by [MGB] prior to the filing of the
Complaint.
Accordingly,
there
is
no
transfer or obligation to avoid.
(Defs.’ Reply ISO Second Mot. to Dismiss 33.)
JV’s

surreply

Defendants’

opposing

the

sur-surreply,

Second

discussed

Motion
the

Neither Church

to

Dismiss,

credit-card

nor
claim

further.
The January 13, 2016
Complaint’s
claim).
that

claims

did not

(which

dismiss the Amended

included

(January 13, 2016 Order 25–26.)

Church

material

Fiberzone

Order

JV

dispute

“has

set

about

forth
the

evidence

January

arguments

about

surrounding

the

13,
the

2016

Order

credit-card

Second

Motion

to

showing

fraudulent

of . . . liabilities from Fiberzone to Debtors.”
The

credit-card

The Order determined

specific

allegedly

the

did

transfers

(Id. at 26.)

address

allegations.
Dismiss

a

Fiberzone’s
The

raised

briefing

Fiberzone’s

arguments, and the Court decided in Church JV’s favor.

The

Court

for

will

construe

Fiberzone’s

present

motion

as

reconsideration or revision.
Under this District’s Local Rules,
A motion for revision must specifically
show: (1) a material difference in fact or
law from that which was presented to the
Court before entry of the interlocutory
order for which revision is sought, and that
in the exercise of reasonable diligence the

35

one

party applying for revision did not know
such fact or law at the time of the
interlocutory order; or (2) the occurrence
of new material facts or a change of law
occurring after the time of such order; or
(3) a manifest failure by the Court to
consider material facts or dispositive legal
arguments that were presented to the Court
before such interlocutory order.
L.R. 7.3(b).
Fiberzone argues that “the undisputed facts are that any
charges incurred by [Fiberzone] on credit cards belonging to
[MGB] were paid for by [Fiberzone], [Flozone], or reimbursed to
[MGB].”

(Mem. ISO Fiberzone Mot. 9.)

For purposes of Local

Rule 7.3(b), the gravamen of the argument appears to be that the
January 13, 2016 Order “manifest[ly] fail[ed] . . . to consider
material facts or dispositive legal arguments” raised in the
briefing
Fiberzone

of

the

raises

Second
are

Motion

not

to

Dismiss.

materially

The

different

considered in the Second Motion to Dismiss. 7

arguments

from

those

Reconsideration of

the January 13, 2016 Order and its disposition of the creditcard claim is not justified.

The Fiberzone Motion as to the

credit-card claim is DENIED.

7

Fiberzone submits a new declaration from MGB attesting, for
example, that she is unaware “of any instance where credit card
charges incurred by [Fiberzone] were ever paid for by me.”
(Decl. of MGB ¶ 1, ECF No. 156-3.)
The substance of that
declaration, however, duplicates the declaration of Joyce Long
submitted to the Court during briefing of the Second Motion to
Dismiss. (Compare id. with Aff. of Joyce Long ¶ 3, ECF No. 10510.)
36

2.
The

Second

allegations
including

Consulting-Services Claim
Motion

of

the

the

to

Dismiss

Amended

argued

generally

Complaint

consulting-services

claim,

against
failed

that

the

Fiberzone,
to

state

a

claim.

(Second Mot. to Dismiss 25–26.)

The Second Motion to

Dismiss

and

not

the

resulting

briefing

did

address

whether

uncompensated debtor-provided services were “property” for UFTA
purposes.
that the

(See generally id.)
January 13, 2016

To the extent Church JV argues

Order

addressed

and rejected

this

argument, Church JV is incorrect.
Fiberzone argues that, “for Plaintiff to prevail on a claim
based

on

uncompensated

consulting

services,

Plaintiff

must

demonstrate that such services constitute ‘property’ which can
be the subject of a fraudulent transfer . . . .”
Fiberzone Mot. 7.)

(Mem. ISO

Fiberzone argues that uncompensated services

are not “property” under the UFTA.

(Id. at 7–8.)

The parties cite no pertinent Tennessee law, and the Court
has found no Tennessee cases on point.

Other jurisdictions’ on-

point case law agrees with Fiberzone that uncompensated services
are

not

Ambroziak,

transferred
379

F.3d

“property.”
478,

483

(7th

See,

e.g.,

Cir.

2004)

Bressner

v.

(“[Appellant]

provides no legal support, and this court has found none, for
the conclusion that Illinois law (or any other jurisdiction)
regards the value of services provided as an asset subject to

37

transfer under the UFTA.”) (emphasis removed); Schlossberg v.
Fischer (In re Fischer), 411 B.R. 247, 265–66 (Bankr. D. Md.
2009)

(referring

to

as

“majority

view”

principle

that

“‘a

debtor, even though insolvent, has committed no fraud in law or
in fact by giving his labor away, for by doing so he has not
concealed,

withheld

or

disposed

of

anything

on

which

his

creditors have any claim in law or in equity’”) (quoting Studds
v. Fid. & Dep. Co. of Md., 267 F.2d 875, 876 (4th Cir. 1959)).
As a matter of law, the consulting-services claim does not
state a claim for which this Court can grant relief.

8

The

Fiberzone Motion as to the consulting-services claim is GRANTED.
3.
Church
least

two

Claims Not Raised in Amended Complaint

JV’s
sets

response
of

transfer claims.

facts

to

the

that

Fiberzone

ostensibly

Motion

support

raises

at

fraudulent-

First, Church JV refers to various “checks

written to EBB by [Fiberzone]” that “have not been identified as
to reason for payment.”
¶ 16.)

Second, Church JV asserts that various payments from

Blasingame
payments

(Church JV Resp. to Fiberzone Mot.

Farms,
that

Agriculture.

EBB

Inc.

(“BFI”)

received

(Id. ¶ 17.)

to

from

Fiberzone
the

U.S.

are

linked

to

Department

of

The Amended Complaint itself mentions

8

Fiberzone also argues that the allegations about the
consulting-services claim lack particularity.
(Mem. ISO
Fiberzone Mot. 6.) Because the claim fails as a matter of law
for the reasons given in the text, the Court need not address
that argument.
38

neither of these fraudulent-transfer claims.

(See generally Am.

Compl.)
As to Fiberzone checks to EBB, Fiberzone quotes the January
13, 2016 Order:
Although
Church
alleges
a
number
of
withdrawals
and
payouts
from
these
Defendants
to
Debtors,
Church
has
not
alleged that Debtors transferred their own
money or assets to these Defendants. . . .
Even assuming the worst intentions, Church
fails to explain how the Debtors’ allegedly
enriching themselves with money and assets
from these Defendants would “delay, hinder,
or defraud” Church as Debtors’ creditor.
(Fiberzone Reply 5 (quoting January 13, 2016 Order 24; ellipses
in Fiberzone Reply).)

This portion of the January 13, 2016

Order did not directly concern Fiberzone, but the Court agrees
that the same logic applies here.

Church JV is not a Fiberzone

creditor; “[i]t has not successfully asserted alter-ego claims
against [it].”
EBB creditor.

(January 13, 2016 Order 23.)

Church JV is an

The facts that Church JV presents, however, do

not explain how EBB’s receiving funds from Fiberzone “delay[s],
hinder[s] or defraud[s]” Church JV as an EBB creditor.
As to BFI payments to Fiberzone, any fraudulent-transfer
claim based on such payments fails for reasons stated in the
January 13, 2016 Order.
transfers

among

That order concluded that, “[a]s to

Defendant

Trusts

and

Corporations,”

which

include BFI and Fiberzone, Church JV “is not entitled to relief

39

under the ‘fraudulent conveyances and devices’ statutory scheme
set forth in Tenn. Code Ann § 66-3-101 et seq.”

(Id. at 23

(quoting Perkins v. Brunger, 303 S.W.3d 688, 693 (Tenn. Ct. App.
2009)).)

Church JV cannot bring a fraudulent-transfer claim

based on BFI payments to Fiberzone.
Church JV’s response asserts that EBB deposited payments
from the U.S. Department of Agriculture “into an account in the
name

of

(Church

BFI,”
JV

after

Resp.

to

which

BFI

made

payments

Fiberzone

Mot.

¶

to

Fiberzone.

17(d)–(j).)

As

Fiberzone, however, the payments were transfers from BFI.
the

January

13,

2016

Order

discusses,

transfers

among

to
As
the

various Defendant Trusts and Corporations cannot be the basis
for fraudulent-transfer claims here.9
Fiberzone’s Motion is GRANTED in part and DENIED in part.
The Motion as to the credit-card claim is DENIED.

That claim is

the only Fiberzone-related fraudulent-transfer claim remaining
for trial.
transfer

The Fiberzone Motion as to all other fraudulent-

claims

against

Fiberzone

is

GRANTED.

Because

a

fraudulent-transfer claim remains against Fiberzone, the Court
DENIES

the

Fiberzone

Motion

to

9

the

extent

it

seeks

summary

As to BFI, the January 13, 2016 Order dismissed the Amended
Complaint’s claims of transfers between Debtors and BFI, which
included allegations about the Department of Agriculture
payments.
(January 13, 2016 Order 24, 30; see also Am. Compl.
¶¶ 34, 46, 77.) Church JV does not argue that the Court should
reconsider that ruling.
(See generally Church JV Resp. to
Fiberzone Mot.)
40

judgment on the third, fourth, and fifth causes of action in the
Amended Complaint.
D.

EBB/MGB Motion

The EBB/MGB Motion contends that, “[a]lthough [Debtors]
sought dismissal of any claims asserted against them in the
[Second Motion to Dismiss], the [January 13, 2016 Order] did not
specifically address the motion as it relates to [Debtors].”
(EBB/MGB Mot. ¶ 4.)

Debtors argue that the Amended Complaint

lacks particularized allegations of property transfers to them
(as opposed to transfers from them).

(Mem. in Supp. of Defs.

EBB and MGB’s Mot. to Dismiss First Am. Compl. Pursuant to Fed.
R. Civ. P. 12(b)(6) and, in the Alternative, Mot. for Summ. J.
5, ECF No. 158-1 (“Mem. ISO EBB/MGB Mot.”).)

Debtors contend

that the Court should dismiss the fraudulent-conveyance cause of
action against them.

(Id. at 6–7.)

Debtors contend that, once the Court has dismissed the
Amended Complaint’s claims against them, Debtors “are neither
necessary nor proper parties to the dismissed Counts and the
remaining litigation.”
EBB/MGB Mot. 7–10.)

(EBB/MGB Mot. ¶ 6; see also Mem. ISO

Debtors also argue that, once the Court has

granted the dispositive motions filed by BFRGST, BFBIT, and
Fiberzone, “this [will] remove any remaining argument that
[Debtors] are ‘proper parties.’”

41

(EBB/MGB Mot. ¶ 7.)

Church JV responds that the EBB/MGB Motion is confusing and
that the Court should treat it as a summary-judgment motion.
(Mem. in Supp. of Pl.’s Resp. to Defs. EBB and MGB’s Mot. to
Dismiss First Am. Compl. Pursuant to Fed. R. Civ. P. 12(b)(6)
and, in the Alternative, Mot. for Summ. J. ¶¶ 12, 15–17, ECF No.
166-1 (“Mem. ISO Church JV Resp. to EBB/MGB Mot.”).)

Church JV

argues that its responses to Debtors’ discovery requests
“support denial of [Debtors’ Motion], because they create
disputes as to material issues regarding transfers by and
between [Debtors] and other Defendants . . . .”

(Id. ¶ 22.)

Church JV also argues that, because it alleges fraudulent
transfers from Debtors to other Defendants and from other
Defendants to Debtors, Debtors are “proper and necessary parties
to the Action.”

(Id. ¶¶ 25-26.)

Church JV contends that

Debtors’ “absence . . . from the proceedings will result in a
failure of Church JV to recover of, from and through them for
avoidable and fraudulent transfers made by them and to them,”
making Debtors “indispensable parties to the Action.”
¶ 26.)

(Id.

Church also states that, if the Court dismisses the

claims against Debtors, the dismissal should be without
prejudice and that the Court should grant Church JV leave to
amend the Amended Complaint.

(Id. ¶¶ 28–30.)

Debtors’ reply argues that Church JV’s response
impermissibly attempts to convert Debtors’ motion into one for

42

summary judgment by relying on matter outside the Amended
Complaint.

(EBB/MGB Reply 3–5.)

Debtors also argue that none

of the materials on which Church JV relies in its response
identifies fraudulent transfers to Debtors.

(Id. at 5.)

Resolving the EBB/MGB Motion requires the Court to consider
how the January 13, 2016 Order addressed Defendants’ present
arguments.

The Second Motion to Dismiss argued that “Church JV,

asserting the status of a judgment creditor of the [Debtor],
cannot avoid a transfer to [Debtors] by any other Defendant.”
(Second Mot. to Dismiss 44.)
address that argument.
22–28.)

The January 13, 2016 Order did not

(See generally January 13, 2016 Order

For the reasons discussed in Section IV.B above, the

Court will consider Debtors’ dismissal arguments and review the
EBB/MGB Motion as one for dismissal rather than summary
judgment.
As discussed above (see Section IV.B), Rule 9(b)’s
particularity requirement applies to Church JV’s fraudulenttransfer claims.

Debtors state that “no facts pled [in the

Amended Complaint] . . . state any voidable and fraudulent
transfer to the Debtors as opposed to transfers by them.”
ISO EBB/MGB Mot. 6.)

(Mem.

Church JV does not point to any

allegations in the Amended Complaint that detail transfers to
Debtors.

(Mem. ISO Church JV Resp. to EBB/MGB Mot. ¶¶ 18–23.)

Church JV argues instead that its responses to Defendants’

43

discovery requests “support denial” of the EGG/KGB Motion.
¶ 22.)

(Id.

Church JV provides no pincites; it simply refers the

Court to Exhibits 1 through 9 of Church JV’s response.
22–23.)

(Id. ¶¶

Those exhibits comprise approximately 600 pages of

material.

(See generally id. exs. 1–9.)

review this material.

The Court need not

Cf. United States v. Dunkel, 927 F.2d

955, 956 (7th Cir. 1991).
The Amended Complaint lacks any allegations specifying
transfers to either Debtor (as opposed to transfers from the
Debtors).

The EBB/KGB Motion’s request that the Court dismiss

any claims based on fraudulent transfers to Debtors is GRANTED.
For the reasons discussed in Section IV.B above, dismissal is
with prejudice.
For the same reasons the Court largely denied leave to
amend the Amended Complaint as to KBC and EBB Jr., leave to
amend the Amended Complaint as to Debtors is DENIED.

Church JV

has offered no specific pleading to repair the Amended
Complaint.

(Mem. ISO Church JV Resp. to EBB/MGB Mot. ¶ 28.)

As

with the KBC/EBB Jr. Motion, the discovery-response exhibits to
which Church JV points are years old.
1–9.)

(See generally id. exs.

Whatever the responses contain that could support claims

of fraudulent transfers to Debtors (as opposed to from them),
Church JV has had sufficient time to incorporate those facts
into its pleadings.

It may not amend the Amended Complaint now.

44

The remaining question arising from the KGB/EBB Motion is
whether Debtors are required or permitted parties in this
proceeding.

Rule 19(a)(1) governs “persons required to be

joined if feasible”:
(1)

Required Party. A person who is subject
to service of process and whose joinder
will not deprive the court of subjectmatter jurisdiction must be joined as a
party if:
(A)

in that person’s absence, the
court cannot accord complete
relief among existing parties; or

(B)

that person claims an interest
relating to the subject of the
action and is so situated that
disposing of the action in the
person’s absence may:
(i)

as a practical matter impair
or impede the person’s
ability to protect the
interest; or

(ii) leave an existing party
subject to a substantial risk
of incurring double,
multiple, or otherwise
inconsistent obligations
because of the interest.
Debtors are not required parties under Rule 19(a)(1)(B).
They do not “claim[] an interest relating to the subject of the
action”; indeed, they disclaim any such interest.
EBB/MGB Mot. 7–8.)

(See Mem. ISO

Debtors are necessary parties, if at all,

only under Rule 19(a)(1)(A).

45

Debtors argue that “the Court can accord complete relief
solely between the Plaintiff and . . . the alleged recipients of
fraudulent conveyances from the Debtors.”
id. at 9.)

(Id. at 7; see also

That is ostensibly because Church JV’s “action seeks

to recover the value that these Defendants received, without
fair consideration, as a result of the transfers.”

(Id. at 7.)

Church JV contends that Debtors are necessary parties—
indeed, that they are indispensable.
to EBB/MGB Mot. ¶ 26.)

(Mem. ISO Church JV Resp.

Church JV provides no argument, save a

sentence that “the absence of [Debtors] from the proceedings
will result in a failure of Church JV to recover of, from and
through them for avoidable and fraudulent transfers made by them
and to them.”
sponte.

(Id.)

The Court can consider joinder issues sua

See, e.g., Glancy v. Taubman Ctrs., Inc., 373 F.3d 656,

676 (6th Cir. 2004) (citing 4 James Wm. Moore et al., Moore’s
Federal Practice § 19.02[4][b][i], at 19–27 (3d ed. 2003)).
Debtors’ joinder argument is unconvincing.

Church JV seeks

to recover more than merely “the value that . . . Defendants
received . . . as a result of” fraudulent transfers.

As

discussed above, the Amended Complaint contains other causes of
action.

The third seeks injunctive relief to prevent “further

transfers of assets.”

(Am. Compl. ¶ 104.)

The fourth seeks an

accounting from “Defendants,” including Debtors.

(Id. ¶ 107.)

The fifth seeks recovery of attorneys’ fees and costs.

46

(Id.

¶¶ 109–11.)

The January 13, 2016 Order and this Order may limit

the scope of those causes of action, but they do not eliminate
them.

Even if the first and second causes of action no longer

directly apply to Debtors, the third, fourth, and fifth do.
The January 13, 2016 Order states that the success of the
third, fourth, and fifth causes of action in the Amended
Complaint generally depends on the success of the first and
second.

(January 13, 2016 Order 29–30.)

That general

proposition does not apply to Debtors themselves.

If Church JV

were to establish fraudulent transfers from Debtors to another
Defendant, Church JV could recover attorneys’ fees, in whole or
in part, from Debtors.

Liability for fraudulent transfers may

make injunctive relief against Debtors appropriate.
cite no case law to the contrary.10

Debtors

In Debtors’ absence, the

Court cannot accord complete relief among existing parties.
Debtors are required parties under Rule 19(a)(1)(A).
Even if Debtors were not necessary parties under Rule 19,
they would be permitted parties under Rule 20.

Under Rule

20(a)(2)(B), “[p]ersons . . . may be joined in one action as
10

Debtors cite numerous cases for the proposition that, “[w]hen
a transferor completely relinquishes an interest, it is not an
indispensable party in a fraudulent transfer action.” (Mem. ISO
EBB/MGB Mot. 7–8 (citing cases).) The issue here is not whether
Debtors are indispensable parties.
Under Rule 19(b), an
indispensable party is a required party whose absence from the
action
(because
it
cannot
feasibly
be
joined)
dictates
dismissal.
The issue here is whether Debtors are required or
permitted parties.
47

defendants if . . . any question of law or fact common to all
defendants will arise in the action.”

The fraudulent-transfer

claims here present questions common to all remaining
Defendants: for instance, whether evidence establishes that
Debtors’ intent in making various transfers to other Defendants
was to evade Debtors’ creditors.

Debtors are permitted parties

under Rule 20(a)(2)(B).
The Court GRANTS the EBB/MGB Motion as to its request to
dismiss any fraudulent-conveyance claims against Debtors.

No

claims of fraudulent conveyances to Debtors survive for trial.
The Court DENIES the EBB/MGB Motion as to its request that the
Court remove Debtors from this action because they are neither
necessary nor permitted parties.
E.

BFRGST Motion

BFRGST contends that the Court should grant it judgment as
a matter of law on the allegations in the Amended Complaint that
MGB purchased a certificate of deposit (CD).

(Mem. in Supp. of

Def. BFRGST’s Mot. for Summ. J. as to Counts II-V of the Compl.
and for Partial Summ. J. Pursuant to Rule 12(b)(1) as to ¶ 24(a)
of the Compl. 8, ECF No. 159-2 (“Mem. ISO BFRGST Mot.”).)
BFRGST contends that the trustee overseeing Debtors’ earlier
bankruptcy settled the CD claim, so that Church JV could not
have acquired the claim when it bought certain causes of action
from the trustee.

(Id.)

BFRGST argues that, because there is

48

no factual dispute, the Court should enter summary judgment in
BFRGST’s favor on Church JV’s allegations about certain “annuity
and paycheck payments.”

(Id. at 8–9.)

BFRGST also asserts that

the Court should dismiss any claims based on Paragraph 25(a) of
the Amended Complaint because the claim lacks particularity,
Church JV lacks standing to bring the claim, and the claim is
time-barred.

(Id. at 9–12.)11

Church JV responds that it has standing to bring the CD
claim because the trustee did not settle it.

(Mem. in Supp. of

Pl.’s Resp. to Def. BFRGST’s Mot. for Summ. J. as to Counts II,
III, IV and V of the Compl. and for Partial Dismissal Pursuant
to Rule 12(b)(1) as to ¶ 24(a) of the Compl. ¶¶ 26–30, ECF No.
165-1 (“Mem. ISO Church JV Resp. to BFRGST Mot.”).)

Addressing

the claim about annuity and paycheck payments, Church JV asserts
that the proof BFRGST offers is inappropriate summary-judgment
evidence.

(Id. ¶¶ 32–33.)

Addressing the Paragraph 25(a)

claim, Church JV argues that it has standing to bring the claim,
that when read in context Paragraph 25(a) is sufficiently
particular, and that the claim is not time-barred.

(Id. ¶¶ 35–

45.)

11

BFRGST initially referred to this claim as Paragraph 24(a) of
the Amended Complaint, but that was incorrect.
(Compare Mem.
ISO BFRGST Mot. 8–10 with Am. Compl. ¶¶ 24–25(a).)
BFRGST
corrected this point in its reply. (BFRGST Reply 4 n.3.)
49

BFRGST’s reply largely reiterates arguments made in the
BFRGST Motion.

It disputes Church JV’s account of how the

trustee handled the CD claim.

(BFRGST Reply 2–3.)

BFRGST also

contends that its evidence about the annuity and paycheck
payments is undisputed and merits summary judgment.
4.)

(Id. at 3–

As to the Paragraph 25(a) claim, BFRGST asserts that Church

JV cannot show that it bought the claim and that neither
relation-back nor equitable tolling can save the claim from
being time-barred.
1.

(Id. at 4–9.)
CD Claim

The gravamen of BFRGST’s CD-claim argument is that, because
Debtors’ bankruptcy trustee settled the claim, Church JV could
not have bought it from the trustee.

As it does elsewhere,

Church JV argues that the Second Motion to Dismiss raised this
argument and that the January 13, 2016 Order rejected it.
ISO Church JV Resp. to BFRGST Mot. ¶ 9.)
Dismiss did raise the argument.
14.)

(Mem.

The Second Motion to

(See Second Mot. to Dismiss

The January 13, 2016 Order did not specifically address

it.
BFRGST’s argument turns on whether prior bankruptcy
proceedings resolved the CD claim.

That turns on how to

interpret various motions and orders in the bankruptcy
proceedings.

In one adversary proceeding in the bankruptcy, the

trustee sued BFRGST, MGB, and Community South Bank.

50

(See

generally Compl. to Avoid Fraudulent Conveyance, for Injunction,
and for an Accounting, Montedonico v. Blasingame Family
Residence Generation Skipping Trust (In re Blasingame), Adv.
Proc. No. 09-228 (Bankr. W.D. Tenn. May 14, 2009), ECF No. 10035 (“Montedonico Complaint”).)

The Montedonico Complaint

concerned the CD at issue in the CD claim.
9.)

(See, e.g., id. ¶

The Complaint asked “[t]hat the [CD] be determined to be

property of [MGB].”

(Id. at 4.)

On May 30, 2010, the parties in the overarching bankruptcy
proceeding asked the Bankruptcy Court to approve a settlement.
(Mot. to Approve Compromise and Settlement Pursuant to Fed. R.
Bankr. 9019(a), In re Blasingame, Case No. 08-28289-L (Bankr.
W.D. Tenn. May 13, 2010), ECF No. 100-37 (“Bankruptcy Settlement
Motion”).)

The Bankruptcy Settlement Motion specifically

referred to the CD.

(Id. ¶¶ 7–8.)

The Bankruptcy Settlement Motion stated that, “[a]s a
result of negotiations between the Trustee and the Debtors, the
Debtors have agreed to pay the Trustee $95,000.00 for the
estate’s interest in the Property,” with “Property” defined to
include the CD.

(Id. ¶ 16; see also id. ¶¶ 1, 7.)

The Motion

stated also that the trustee “believes that the proposed
compromise and settlement is reasonable under all the
circumstances.”

(Id. ¶ 17.)

Those circumstances included that,

51

[w]ith regard to the [CD], [MGB] claims that
she was indebted to [BFRGST] for advances
made to her and that the payments of her
salary and annuity payments to [BFRGST] were
for the purpose of repaying those advances.
The settlement proposed herein will avoid
the necessity of trying the complaint filed
by the Trustee with the attendant exepense
[sic] and risk of an adverse decision from
the Court.
(Id. ¶ 17(A).)
On June 15, 2010, the Bankruptcy Court granted the
Bankruptcy Settlement Motion.

(Order Granting Mot. to Approve

Compromise and Settlement Pursuant to Fed. R. Bankr. P. 9019(a),
In re Blasingame, Case No. 08-28289-L (Bankr. W.D. Tenn. June
15, 2010), ECF No. 100-38 (“Bankruptcy Settlement Order”).)

The

order stated that, “[u]pon payment by the Debtors to the Trustee
of the sum of $95,000 pursuant to the terms of this order, the
Trustee shall sell to the Debtors any interest of the estate in
[certain] property . . . .”
the CD.

(Id. ¶ 1(C).)

(Id. ¶ 1.)

That property included

The order further provided that, “[t]o

pay the Settlement Amount of $95,000.00, the Debtors and
[BFRGST] shall instruct Community South Bank to liquidate the
[CD] and pay over the funds to [the trustee].”

(Id. ¶ 2.)

On July 13, 2010, the Bankruptcy Court entered an order
dismissing the Montedonico Complaint.

(Consent Order Dismissing

Compl., Montedonico v. Blasingame Family Residence Generation
Skipping Trust (In re Blasingame), Adv. Proc. No. 09-228 (Bankr.

52

W.D. Tenn. July 13, 2010), ECF No. 100-36.)

The Court stated

that the trustee “desires to dismiss the [adversary proceeding]
by consent of the parties,” and ordered the Montedonico
Complaint dismissed with prejudice.

(Id. at 1–2.)

More than a year after the Bankruptcy Settlement Order, the
Bankruptcy Court entered an order permitting the trustee to sell
various claims to Church JV.

(See Order Granting Mot. for Order

Authorizing Trustee to Sell Estate Claims and Causes of Action,
In re Blasingame, Case No. 08-28289-L (Bankr. W.D. Tenn. Oct.
18, 2011), ECF No. 159-4 (“Claim-Transfer Order”).)

Under the

Claim-Transfer Order, Church JV would pay the trustee $100,000
in exchange for “the transfer, conveyance and assignment of the
claims and cause of action of the Trustee which have been
asserted in . . . Adversary Action No. 09-00482.”

(Id. ¶ 2.)

That adversary proceeding was not the one commenced by the
Montedonico Complaint.

The claims Church JV purchased included

claims “to avoid and recover transfers by, between, to and among
the Defendants [including BFRGST], which should be set aside and
avoided under applicable non-bankruptcy law.”

(Id. ¶ 4(B).)

If the trustee had settled the CD claim, Church JV could
not buy it through the Claim-Transfer Order.

The Court must

decide, therefore, the effect of the Bankruptcy Settlement Order
on the CD claim.

53

Because the Bankruptcy Settlement Order is a court order,
its proper interpretation is a question of law.

See, e.g.,

Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 572 (6th
Cir. 2008) (citing Brady v. McAllister (In re Brady), 101 F.3d
1165, 1168 (6th Cir. 1996)).
BFRGST’s account of the Bankruptcy Settlement Order is
clear and plausible.

(Mem. ISO BFRGST Mot. 8.)

The trustee and

the Debtors settled the CD claim before the trustee sold claims
to Church JV.

The CD claim was not among the claims sold to

Church JV.
Church JV’s argument to the contrary is unclear.
Church JV Resp. to BFRGST Mot. ¶¶ 27–31.)

(See

Church JV appears to

suggest that the Bankruptcy Settlement Order did not actually
settle the CD claim.

That is implausible.

Under the Bankruptcy

Settlement Motion and the Bankruptcy Settlement Order, Debtors
and BFRGST liquidated the CD at issue and paid the funds to the
trustee for the purpose of buying the trustee’s interest in
certain property, including the CD.

Given the circumstances,

the Bankruptcy Settlement Order settled the CD claim.
A trustee may sell causes of action that belong to the
estate.

See, e.g., Cadle Co. v. Mims (In re Moore), 608 F.3d

253, 258 (5th Cir. 2010); In re Nicole Energy Servs., Inc., 385
B.R. 201, 229–30 (Bankr. S.D. Ohio 2008).
only assets that are the estate’s property.

54

A trustee can sell
See, e.g., In re

Osterwalder, 407 B.R. 291, 294 (Bankr. N.D. Ohio 2008) (citing
11 U.S.C. § 363(b)(1)); Richardson v. Huntington Nat’l Bk. (In
re CyberCo Holdings, Inc.), 382 B.R. 118, 143 (Bankr. W.D. Mich.
2008). The CD claim did not belong to the estate when the
trustee sold his claims to Church JV; the CD claim had already
been settled.

Church JV did not buy the CD claim, and it lacks

standing to assert it.
BFRGST’s Motion as to the CD claim is GRANTED.
2.

MGB-Deposits Claim

BFRGST and Church JV disagree about deposits of annuity and
paycheck payments that MGB made into a BFRGST bank account
between January 1, 2007, and July 31, 2008.
¶ 25(d).)12

(Am. Compl.

The Court will refer to this as the MGB-deposits

claim.
BFRGST contends that the MGB-deposits claim is for
$29,034.54.

Although the MGB deposits were “at least $38,000,”

BFRGST asserts that “all but $29,034.54 of the [MGB deposits]
were used by the [BFRGST] to purchase” the CD discussed above.
(Mem. ISO BFRGST Mot. 8.)

BFRGST relies here on statements in

12

The Amended Complaint notes deposits “[f]rom January of 2007
through May 2008.”
(Am. Compl. ¶ 25(d).)
The Declaration of
Joyce Long submitted by BFRGST refers to deposits by MBG “from
January 1, 2007 through July 31, 2008.”
(Declaration of Joyce
Long ¶ 5, ECF No. 159-6 (“Long Decl.”).) BFRGST’s challenge to
this claim does not depend on the relevant dates.
(See
generally BFRGST Mem. 8–9.) The Court will construe the Amended
Complaint as alleging deposits from January 1, 2007, through
July 31, 2008.
55

the Declaration of Joyce Long submitted to support the BFRGST
Motion.

(Id. at 8–9; Long Decl. ¶ 5.)

BFRGST contends that,

because the CD claim was resolved, the MGB-deposits claim
concerns only the additional $29,034.54.
BFRGST asserts that “the record is clear that [the MGB
deposits] were made in repayment of a debt owed by [MGB] to
[BFRGST].”

(Mem. ISO BFRGST Mot. 8–9.)

assertion is Long’s declaration.

The basis for that

(See Long Decl. ¶¶ 4–5.)

According to BFRGST, the MGB deposits were loan repayments for
which MGB received reasonably equivalent value because “her
indebtedness [to BFRGST was] reduced dollar for dollar.”
ISO BFRGST Mot. 9.)

(Mem.

BFRGST contends that the MGB deposits were

not a fraudulent transfer.

(Id.)13

Church JV responds that “material issues of fact exist as
to” the MGB deposits.

(Church JV Resp. to BFRGST Mot. ¶ 32.)

Church JV also argues that Long’s declaration is new and subject
to various objections.

(Id. ¶¶ 32(a), 33.)

The Court construes Church JV’s latter argument as a motion
to strike the declarations.

That motion must be considered

first because “a district court should dispose of motions that
13

Under Tenn. Code Ann. § 66-3-309, a transfer is not voidable
under § 66-3-305(a)(1) “against a person who took in good faith
and for a reasonably equivalent value or against any subsequent
transferee or obligee.” Under § 66-3-304, “[v]alue is given for
a
transfer . . .
if,
in
exchange
for
the
transfer
or
obligation, . . .
an
antecedent
debt
is
secured
or
satisfied . . . .”
56

affect the record on summary judgment before ruling on the
parties’ summary judgment motions.”

Brainard v. Am. Skandia

Life Assur. Corp., 432 F.3d 655, 667 (6th Cir. 2005) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n.5 (1986)).
Within the Long Declaration, the key statements about the
MGB-deposit claim are in Paragraphs 3 through 5.

They purport

to explain the true amount and purpose of the MGB deposits.
Under Rule 56(c)(4), “[a]n affidavit or declaration used to
support . . . a [Rule 56] motion must be made on personal
knowledge, set out facts that would be admissible in evidence,
and show that the affiant or declarant is competent to testify
on the matters stated.”
Church JV objects to the Long Declaration on several
grounds.

Two are dispositive.

Church JV argues that Long

“refers and testifies to bank and accounting records and
documents which are not attached and, therefore, her testimony
is unsupported by the record and lacking in foundation.”
(Church JV Resp. to BFRGST ¶ 32(a).)

Church JV also argues that

Long’s “testimony as to bank and accounting records is hearsay
without demonstrated exception.”

(Id.)

The Court construes the first objection as one under
Federal Rule of Evidence 1006.

Under that rule, “[t]he

proponent [of evidence] may use a summary . . . to prove the
content of voluminous writings, recordings, or

57

photographs . . . .

The proponent must make the originals or

duplicates available for examination or copying, or both, by
other parties at a reasonable time and place.”

In her

declaration, Long summarizes BFRGST records and draws
conclusions based on them, so that Federal Rule of Evidence 1006
is applicable.
“The Sixth Circuit imposes five requirements for the
admission of summary evidence: (1) the underlying documents are
so voluminous that they cannot be conveniently examined in
court; (2) the proponent of the summary must have made the
documents available for examination or copying at a reasonable
time and place; (3) the underlying documents must be admissible
in evidence; (4) the summary must be accurate and
nonprejudicial; and (5) the summary must be properly introduced
through the testimony of a witness who supervised its
preparation.”

Santander Consumer USA, Inc. v. Superior Pontiac

Buick GMC, Inc., No. 10-13181, 2012 WL 5363553, at *4 (E.D.
Mich. Oct. 30, 2012) (citing United States v. Moon, 513 F.3d
527, 545 (6th Cir. 2008)).
meet the Rule 1006 criteria.

Here, the Long Declaration does not
In particular, the Court cannot

tell from the materials provided whether Long’s summary is
“accurate and nonprejudicial.”
It is also unclear whether the underlying documents would
be admissible as evidence.

“Courts cannot consider inadmissible

58

hearsay in an affidavit when ruling on a summary judgment
motion.”

Giles v. Univ. of Toledo, 241 F.R.D. 466, 471 (N.D.

Ohio 2007) (citing N. Am. Specialty Ins. Co. v. Myers, 111 F.3d
1273, 1283 (6th Cir. 1997)).

Perhaps the materials on which

Long relies are records of regularly conducted activity.
Fed. R. Evid. 803(6).

Cf.

BFRGST does not lay a foundation for that

conclusion.
Because BFRGST has moved for summary judgment, BFRGST has
the burden to establish the admissibility of its supporting
evidence.

Because it fails to do so for the key conclusions of

the Long Declaration, the Court will not consider that
declaration.

Without the Long Declaration, BFRGST’s Motion

fails as to the MGB-deposit claim.14
BFRGST’s Motion as to the MGB-deposit claim is DENIED.
3.

Paragraph 25(a) Claim

BFRGST argues that the Court should dismiss Church JV’s
claim as to Paragraph 25(a) of the Amended Complaint.

Paragraph

25(a) alleges that “MGB took the proceeds from the sale of some
‘property left by [MGB’s] mother,’ and deposited it into

14

BFRGST argues in its reply that, “[b]ecause Plaintiff has
failed to offer any evidence to rebut the testimony that [MGB’s
deposits] were loan repayments . . . and that MGB did not intend
to hinder or defraud any creditors by repaying her debts to the
BRT, no genuine material fact exists as to that proof.” (BFRGST
Reply 3.) BFRGST first had the burden to show that there was no
material dispute about the MGB-deposit claim. It has failed to
do so.
59

[BFRGST].”

(Am. Compl. ¶ 25(a).)

BFRGST makes three arguments.

The argument that Church JV lacks standing to bring the
Paragraph 25(a) claim must be addressed first.
BFRGST argues that Church JV lacks standing to assert its
claim because the trustee himself did not raise it.
BFRGST Mot. 10.)

(Mem. ISO

That argument turns on the Claim-Transfer

Order, which provided that Church JV was acquiring “the claims
and cause [sic] of action of the Trustee which have been
asserted in . . . Adversary Action No. 09-00482,” “as noted more
fully . . . in paragraph 4.”

(Claim-Transfer Order ¶ 2.)

Paragraph 4 states that the trustee is transferring
all claims and/or causes of action asserted
by Trustee in the Adversary Action, except
those relating to Debtors’ discharge . . .
including but not limited to . . .
(A) [c]laims that . . . [Defendants,
including BFRGST] have been used for an
improper purpose and are, in fact, the alter
egos or reverse alter egos of the Debtors,
are shams to thwart, deceive, hinder and
delay their creditors and to conceal assets
from the claims of their creditors and/or
have been so used in their assets repeatedly
co-mingled with the assets of each of them
should be one of the same and made available
to their creditors; [and (B)] [p]ursuant to
11 U.S.C. §544(d), to avoid and recover
transfers by, between, to and among the
Defendants, which should be set aside and
avoided under applicable non-bankruptcy law.
(Id. ¶ 4.)
BFRGST argues that, because the Paragraph 25(a) allegation
does not appear in the complaint in Adversary Proceeding No. 09-

60

00482, any claim or cause of action based on Paragraph 25(a) was
not “asserted by Trustee in the Adversary Action.”

Thus, the

Claim-Transfer Order did not transfer any related fraudulentconveyance claim to Church JV.
BFRGST’s argument is not persuasive.

First, certain

allegations in the complaint do refer to the content of the
Paragraph 25(a) allegation.

(See Compl. to Recover Property of

the Bankruptcy Estate, For Declaratory and Injunctive Relief, to
Object to and Avoid Discharge, and to Object to Claimed
Exemptions ¶¶ 32–33, Montedonico v. Blasingame (In re
Blasingame), Adv. Proc. No. 09-00482 (Bankr. W.D. Tenn. Sept.
29, 2009), ECF No. 159-3 (“Compl. in 09-00482”).)

For example,

Paragraph 32 of the Complaint in 09-00482 noted MGB’s
inheritance “from her mother’s estate.”

(Id. ¶ 32.)

Paragraph

33 sought “a complete accounting” regarding the inheritance,
because “Debtors have attempted to transfer certain inherited
assets beyond the reach of creditors into the Trusts [including
BFRGST] without consideration.”

(Id. ¶ 33.)

Second, BFRGST misinterprets the Claim-Transfer Order.15
BFRGST contends that, if the Complaint in 09-00482 did not state
particular facts underlying a specific claim, the Claim-Transfer
Order did not transfer the claim to Church JV.
15

There is no

As noted above, the interpretation of a court order is a
question of law.
Winget, 537 F.3d at 572 (citing Brady, 101
F.3d at 1168).
61

evidence, however, that the Claim-Transfer Order incorporated
this restrictive view.
The structure of the Claim-Transfer Order is contrary to
BFRGST’s reading.

Were BFRGST correct, Paragraph 4 of the

Claim-Transfer Order would be unnecessary.

The Paragraph 2

reference to Adversary Proceeding No. 09-00482 would be
sufficient, and there would be no need to “note[] more fully” in
Paragraph 4 what the trustee was transferring.

Because of

Paragraph 4 and the references to MGB’s inheritance in the
Complaint in 09-00482, the Claim-Transfer Order did transfer the
Paragraph 25(a) claim from the trustee to Church JV.

Church JV

has standing to bring the claim.
BFRGST also contends that the Paragraph 25(a) claim lacks
particularity and is time-barred.

The particularity argument is

dispositive.
BFRGST argues that Paragraph 25(a) fails to identify “the
property transferred, the date of transfer or the value of the
property.”

(BFRGST Mem. ISO Mot. 9.)16

The question arises

about whether the January 13, 2016 Order has disposed of this
argument.

Although the Second Motion to Dismiss could have

16

It is not entirely clear whether BFRGST intends to make this
particularity argument. Based on the headings in the memorandum
in support of the BFRGST Motion, it is unclear whether Sections
III.F and III.G of that memorandum are two arguments that are
subparts of Section III.E, or whether Section III.E is a
distinct argument.
The Court will construe Section III.E as a
separate argument.
62

presented the argument, it did not.
to Dismiss 11–15.)

(See generally Second Mot.

The January 13, 2016 Order did not fail to

consider an argument made in the Second Motion to Dismiss
briefing.
The particularity argument is that Church JV “fail[ed] to
state a claim upon which relief can be granted.”
P. 12(b)(6).

Fed. R. Civ.

A motion raising that defense “must be made before

pleading if a responsive pleading is allowed.”

Id.

BFRGST

filed its answer on January 27, 2016, well before BFRGST filed
its present motion.

(See Answer of EBB, MGB, BFBIT, BFRGST, and

Fiberzone to First Am. Original Compl., ECF No. 149.)
Considered as an argument for dismissal, BFRGST’s particularity
argument is untimely.

See, e.g., Emerman v. Fin. Commodity

Investments, L.L.C., No. 1:13CV2546, 2015 WL 6742077, at *5 n.4
(N.D. Ohio Nov. 2, 2015).
Numerous courts in this Circuit confronted with postanswer
dismissal motions have construed them as motions for judgment on
the pleadings under Rule 12(c).

See, e.g., Daniel v. George,

No. 1:13-CV-00058, 2015 WL 3970787, at *1 (M.D. Tenn. June 29,
2015); Novak v. Prison Health Servs., Inc., No. 13-CV-11065,
2014 WL 988942, at *3 n.4 (E.D. Mich. Mar. 13, 2014).

The

standard for Rule 12(c) motions is essentially identical to that
for Rule 12(b)(6) motions.

See, e.g., Gavitt v. Born, No. 15-

2136, 2016 WL 4547258, at *10 (6th Cir. Sept. 1, 2016); JPMorgan

63

Chase Bank, N.A. v. Winget, 510 F.3d 577, 581–82 (6th Cir.
2007).
The Court may properly consider whether the Paragraph 25(a)
allegations lack particularity.

They do.

Paragraph 25(a)

simply states: “MGB took the proceeds from the sale of some
‘property left by my mother,’ and deposited it into the
[BFRGST].”

Nothing here isolates the timing or amount of any

specific transfer from MGB to BFRGST.

See, e.g., Hyundai

Translead, Inc. ex rel. Estate of Trailer Source, Inc. v.
Jackson Truck & Trailer Repair Inc., 419 B.R. 749, 759 (M.D.
Tenn. 2009) (discussing cases).

Paragraph 25(a) is a generic

assertion of a conveyance, with no detail.
insufficient.17

That is

The BFRGST Motion as to the Paragraph 25(a)

claim is GRANTED.18

17

Church JV contends that “Paragraph [25](a) cannot be read in
solo,” but should be read “in the context of other facts set
forth in the Amended Complaint.”
(Mem. ISO Church JV Resp. to
BFRGST Mot. ¶ 36.)
That may be true, but does not change the
fact that the Court should address whether the allegations in
Paragraph 25(a) themselves support a fraudulent-conveyance
claim. Church JV cites no case law to the contrary. Church JV
invites the Court to look through Church JV’s responses to
BFRGST’s discovery, contending that those responses show
“sufficient facts to support claims and causes of action against
[BFRGST]” and “to demonstrate the existence of disputes as to
material facts.”
(Id. ¶ 37.)
That is not the Court’s
responsibility. Cf. Dunkel, 927 F.2d at 956.
18

Because the particularity argument is dispositive, the Court
expresses no opinion on BFRGST’s alternative argument that the
Paragraph 25(a) claim is time-barred.
64

Church JV argues that any dismissals the Court grants
should be without prejudice.
BFRGST Mot. ¶¶ 49–50.)

(Mem. ISO Church JV Resp. to

Church JV also seeks leave to conduct

additional discovery and to amend the Amended Complaint.
¶¶ 47–48.)

(Id.

For the same reasons the Court has denied similar

Church JV requests, the Court denies these.

The dismissals are

with prejudice, and at this late date, the Court will not permit
added discovery or allow Church JV to amend the Amended
Complaint.
The BFRGST Motion as to the CD claim and the Paragraph
25(a) claim is GRANTED.
deposits claim is DENIED.

The BFRGST Motion as to the MGBBecause a fraudulent-conveyance claim

remains for trial as to BFRGST, the Court DENIES the BFRGST
Motion to the extent it requests dismissal of the Amended
Complaint’s third, fourth, and fifth causes of action against
BFRGST.
F.

BFBIT Motion

BFBIT argues that only five Amended Complaint paragraphs
pertain to it: Paragraphs 37, 40, 43, 47, and 48.

(Mem. in

Supp. of Def. BFBIT’s Mot. to Dismiss Pursuant to Fed. R. Civ.
P. Rule 12(b)(1) and, in the Alternative, for Summ. J. as to
Counts II–V of the Compl. 5, ECF No. 160-2 (“Mem. ISO BFBIT
Mot.”).)

After the January 13, 2016 Order, BFBIT asserts that

only Paragraphs 37, 40, and 43 address fraudulent-transfer

65

allegations against it.

(Id. at 6–7.)

BFBIT argues that it is

entitled to judgment as a matter of law on any claims based on
those paragraphs.

The gravamen of its argument is that Church

JV lacks standing to bring such claims and that, even if it has
standing, the claims are time-barred.

(Id. at 8–11.)

Church JV suggests that the January 13, 2016 Order has
implicitly addressed BFBIT’s arguments.

(Mem. in Supp. of Pl.’s

Resp. to Def. BFBIT’s Mot. to Dismiss Pursuant to Fed. R. Civ.
P. 12(b)(6) and, in the Alternative, Mot. for Summ. J. as to
Counts II, III, IV, and V of the Compl. ¶¶ 11–12, ECF No. 167-1
(“Mem. ISO Church JV Resp. to BFBIT Mot.”).)

Church JV also

asserts that the Court should treat the BFBIT Motion as one for
summary judgment.

(Id. ¶¶ 14–16.)

Addressing BFBIT’s standing

argument, Church JV suggests that the argument confuses claims
and causes of action, on the one hand, and facts underlying
claims or causes of action, on the other.

(Id. ¶¶ 18–21.)

Church JV argues that the relevant claims are not time-barred.
(Id. ¶¶ 22–28.)
BFBIT’s reply reiterates BFBIT’s argument that Church JV
lacks standing to bring claims based on Paragraphs 37, 40, and
43.

(BFBIT Reply 2–5.)

BFBIT then argues that the relevant

claims are time-barred and that the doctrines of relation-back
and equitable tolling are not available to Church JV.
5—8.)

66

(Id. at

Church JV does not challenge BFBIT’s argument that,
following the January 13, 2016 Order, the only Amended Complaint
paragraphs alleging fraudulent transfers to BFBIT are Paragraphs
37, 40, and 43.
37.

Those paragraphs allege the following:
EBB and MGB allege that the assets of
the [BFBIT] include, among other
things, 100% of BFI (which may be owned
individually by EBB and as to which
Debtor EBB is President); 205 acres
adjacent to the Debtors’ residence, GF
Corp. (as to which Debtor [MGB] is
President); two rental properties; 1300
acres of farm land, and various
investment accounts. EBB and MGB
quitclaimed real property that MGB
received through inheritance from her
mother to the [BFBIT].

. . .
40.

MGB deposited an undisclosed amount of
money from an investment account at UBS
in her “own name” into a bank account
owned by [BFBIT]. MGB and EBB then
benefited from her control and use of
[BFBIT]. This is in addition to any
money which may have been returned by
MGB/EBB as part of a settlement with
the chapter 7 trustee in their personal
bankruptcy case.

. . .
43.

. . . [O]n January 14, 2005, EBB and
MBB quitclaimed property that they
inherited from Evelyn Hipshire Gooch,
to the [BFBIT].

Church JV’s contentions require the Court to determine
whether the January 13, 2016 Order addressed the present
arguments.

The Second Motion to Dismiss argued that Church JV

67

lacked standing to bring a fraudulent-transfer claim based on
the Paragraph 43 allegations.

(Second Mot. to Dismiss 21.)

January 13, 2016 Order did not address that argument.
generally January 13, 2016 Order.)

The

(See

The Second Motion to Dismiss

did not raise the present standing argument as to Paragraphs 37
and 40.

(See generally Second Mot. to Dismiss.)

Because

standing is at issue, the Court must consider the argument.
See, e.g., Works ex rel. A.R.W. v. Comm’r of Soc. Sec., 886 F.
Supp. 2d 690, 696 (S.D. Ohio 2012) (noting a district court’s
“obligation to raise standing issues sua sponte”) (citing
Adarand Constructors, Inc. v. Mineta, 534 U.S. 103, 109 (2001)).
BFBIT’s standing argument fails for essentially the same
reasons BFRGST’s standing argument fails.
Section IV.E.3 above.)

(See generally

First, the Complaint in 09-00482 does

contain material about the allegations in Paragraphs 37, 40, and
43.

The allegations in Paragraphs 37 and 43 of the Amended

Complaint speak to MGB’s inheritance from her mother.

As noted

above, Paragraph 32 of the Complaint in 09-00482 invokes MGB’s
inheritance “from her mother’s estate,” and Paragraph 33 of the
Complaint in 09-00482 demands “a complete accounting” for MGB’s
inheritance, because “Debtors have attempted to transfer certain
inherited assets beyond the reach of creditors into the Trusts
[including BFBIT] without consideration.”

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The allegations in Paragraph 40 of the Amended Complaint
speak to a “bank account owned by [BFBIT].”

The Complaint in

09-00482 also has allegations about that account.

Specifically,

Paragraph 35 in the Complaint in 09-00482 asserts that, contrary
to statements made in Debtors’ bankruptcy filings, Debtors in
fact had “not less than twenty-one (21) accounts . . . upon
which Debtors have single signatory authority . . . .”

One

listed account is an account with an “alleged owner” of BFBIT at
UBS Financial Services, Inc., for which “M. Blasingame”
allegedly had signatory rights.

Compl. in 09-00482 ¶ 35.

The

trustee then alleged that “the Debtors have treated the accounts
as their own personal accounts by regularly and without business
purpose drawing funds for their own use and transferring and
commingling funds between unrelated entities as if each account
was their own personal account without regard to the corporate
existence or trust purpose.”

Id. ¶ 36.

Given the allegations in the Complaint in 09-00482, the
facts underlying Paragraph 37, 40, and 43 of the Amended
Complaint were sufficiently asserted in the Complaint in 0900482.

BFBIT’s interpretation of the Claim-Transfer Order is,

like BFRGST’s, unduly restrictive.

Church JV has standing to

assert fraudulent-transfer claims based on the allegations of
Paragraph 37, 40, and 43.

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This analysis also disposes of BFBIT’s statute-oflimitations argument.

BFBIT argues that, “[b]ecause the

transfers described in paragraphs 37, 40 and 43 of the First
Amended Complaint were not asserted in the [Complaint in 0900482], those claims were time barred by [11 U.S.C. § 546(a)].”
(Mem. ISO BFBIT Mot. 10.)

The key premise here is wrong: the

transfers were sufficiently asserted in the Complaint in 0900482.

Claims based on those transfers are not time-barred.19

The BFBIT Motion is DENIED.
V.

CONCLUSION

The Motion for Status Conference is DENIED as moot.
The KBC/EBB Jr. Motion is GRANTED.
and EBB Jr. are dismissed.

All claims against KBC

As discussed above (see note 6 and

accompanying text), if Church JV wishes, it may file a short
pleading amending Paragraph 7 of the Amended Complaint to allege
that EBB Jr. is Debtors’ son.
The Fiberzone Motion as to all fraudulent-transfer claims
is GRANTED except for the credit-card claim discussed in Section
IV.C.1 above.

The Motion as to that fraudulent-transfer claim

19

BFBIT notes the four-year statute of repose at section 66-3310 of the Tennessee Code. (Mem. ISO BFBIT Mot. 10–11.) BFBIT
asserts, however, that “[11 U.S.C. § 546(a)] is controlling,”
and Church JV takes no position on the issue. (Id. at 10; see
generally Church JV Mem. ISO BFBIT Resp.)
The Court need not
pursue the argument.
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and as to the third, fourth, and fifth causes of action in the
Amended Complaint is DENIED.
The EBB/MGB Motion requesting dismissal of any fraudulentconveyance claims against Debtors is GRANTED.

The EBB/MGB

Motion requesting that the Court remove Debtors from this action
is DENIED.
The BFRGST Motion is GRANTED in part and DENIED in part.
The Motion as to the CD claim and the Paragraph 25(a) claim is
GRANTED.

The Motion as to the MGB-deposits claim and as to the

third, fourth, and fifth causes of action in the Amended
Complaint is DENIED.
The BFBIT Motion is DENIED.
So ordered this 17th day of November, 2016.

/s/ Samuel H. Mays, Jr. _______
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

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