Church Joint Venture, a limited partnership v. Blasingame et al
Filing
217
ORDER denying 191 Motion to Strike and addressing 198 , 199 , 200 , and 201 parties' memoranda and responses regarding issues remaining for trial. Signed by Judge Samuel H. Mays, Jr on 03/09/2017. (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; 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 the parties’ pretrial memoranda and
responses.
Venture,
On
a
December
Limited
16,
2016,
Partnership
Plaintiff
(“Church
Church
JV”)
Memorandum Addressing Issues Remaining for Trial.
Joint
filed
its
(ECF No. 198
(“Church JV Mem.”).)
On January 6, 2017, Defendants Earl Benard
Blasingame
Margaret
Benard
(“EBB”);
“Ben”
Technologies,
Generation
Business
Blasingame,
Inc.
Skipping
Gooch
Jr.
(“Fiberzone”);
Trust
Investment
Blasingame
(“EBB
Blasingame
(“BFRGST”);
Trust
and
(“MGB”);
Jr.”);
Family
Earl
Fiberzone
Residence
Blasingame
Family
(“BFBIT”) –– collectively,
“Defendants”1
––
filed
their
Memorandum
in
Response
to
Plaintiff’s Memorandum Addressing Issues Remaining for Trial.
(ECF No. 201 (“Defs.’ Resp.”).)
On
December
16,
2016,
Defendants
filed
Concerning Remaining Claims to be Tried.
Mem.”).)
their
Memorandum
(ECF No. 199 (“Defs.’
On January 6, 2017, Church JV filed its Response to
Defendants’ Memorandum Concerning Remaining Claims to be Tried.
(ECF No. 200 (“Church JV Resp.”).)
Also before the Court is the November 22, 2016 Motion and
Memorandum of BFBIT and EBB Jr. to Strike [Certain Allegations]
of Amendment to Paragraph 7 of Complaint.
to Strike”).)
(ECF No. 191 (“Mot.
Church JV did not file a response to the Motion
to Strike, and the deadline for doing so has passed.
7.2(a)(2).
L.R.
The Church JV Memorandum and Church JV Response
contain pertinent material that the Court has considered.
(See
Church JV Mem. ¶¶ 4–8 & n.3; Church JV Resp. 5–10.)
For the following reasons, the Motion to Strike is DENIED.
Two issues remain for trial.
The first is whether (and to what
extent) MGB’s deposits –– between January 1, 2007, and July 31,
2008 –– of annuity and paycheck payments into a BFRGST bank
account are fraudulent transfers.
The second is whether (and to
what extent) Debtors’ transfer to BFBIT of the real property
1
References
collectively.
to
“Debtors”
are
2
to
Defendants
EBB
and
MGB
listed
in
a
quitclaim
fraudulent transfer.
or Fiberzone.
I.
deed
dated
January
14,
2005,
is
a
No claims remain for trial as to EBB Jr.
Both are dismissed from this action.
BACKGROUND
Section I of the Court’s Order dated November 17, 2016 ––
the
“November
matter.
2016
Order”
–– recounts
the
history
of
this
Church Joint Venture, a Ltd. P’ship v. Blasingame, No.
2:12-CV-02999, 2016 WL 6810873, at *2–5 (W.D. Tenn. Nov. 17,
2016).
This Background section addresses only the November 2016
Order and the proceedings that have followed it.
The
motions.
November
2016
Order
addressed,
inter
alia,
five
First, it addressed the Motion to Dismiss [First]
Amended Complaint Pursuant to Federal Rule of Civil Procedure
Rule 12(b)(6) filed by EBB Jr. and Katherine Blasingame Church
(“KBC”) on June 29, 2016.
(ECF No. 155 (“KBC/EBB Jr. Mot.”).)
The Court granted the motion.
The
Court
also
granted
(November 2016 Order at *10–11.)
Church
JV
leave
to
“amend
Amended Complaint to state that EBB Jr. is Debtors’ son.”
at *12; see id. at *12 n.6.)
the
(Id.
The Amended Complaint contained
“several allegations that suggest transfers to Debtors’ son.”
(Id. at *10; see Am. Compl. ¶¶ 81(a), 84(a), 91.)
The Court
concluded that an amendment stating that EBB Jr. is Debtors’ son
would permit claims based on those allegations to proceed.
at *10.)
3
(Id.
Second, the November 2016 Order addressed the Motion for
Summary
Judgment
as
to
Counts
II,
III,
IV,
and
Complaint filed by Fiberzone on June 29, 2016.
(“Fiberzone
Mot.”).)
The
Court
considered
V
of
the
(ECF No. 156
four
Fiberzone-
related fraudulent-transfer claims, one of which was that MGB
performed
a
fraudulent
transfer
by
incurring
obligations
to
credit-card companies for charges made on her credit card for
Fiberzone’s
benefit
(the
Claim”).2
“Credit-Card
The
Court
granted the Fiberzone Motion on all claims but the Credit-Card
Claim,
concluding
Fiberzone-related
trial.”
that
the
Credit-Card
fraudulent-transfer
Claim
claim
“is
the
only
remaining
for
(November 2016 Order at *16.)
Third, the November 2016 Order addressed Debtors’ Motion to
Dismiss First Amended Complaint Pursuant to Fed. R. Civ. P.
12(b)(6) and, in the Alternative, Motion for Summary Judgment,
filed on July 11, 2016.
Court
decided
that
(ECF No. 158 (“Debtors’ Mot.”).
“[t]he
Amended
Complaint
lacks
The
any
allegations specifying transfers to either Debtor (as opposed to
transfers from the Debtors).”
(November 2016 Order at *17.)
2
The
other
Fiberzone-related
fraudulent-transfer
claims
addressed in the November 2016 Order were that (1) EBB provided
consulting
services
to
Fiberzone
for
no
consideration;
(2) Fiberzone wrote various checks to EBB without identifying
the reasons for payments; and (3) payments from Blasingame
Farms, Inc. (“BFI”) to Fiberzone were linked to payments that
EBB received from the U.S. Department of Agriculture. (November
2016 Order at *14–16.)
4
The Court granted Debtors’ Motion that the Court dismiss any
claims based on fraudulent transfers to Debtors.
(Id.)
The
Court concluded that “[n]o claims of fraudulent conveyances to
Debtors survive for trial.”
Debtors’
because
Motion
they
(Debtors’
are
Mot.
(Id. at *18.)
also
asked
neither
3.)
The
that
necessary
Court
Debtors
nor
denied
be
dismissed
permitted
that
part
parties.
of
Debtors’
Motion, holding that Debtors are required parties under Rule
19(a)(1)(A)
or,
20(a)(2)(B).
alternatively,
permitted
parties
under
Rule
(November 2016 Order at *17–18.)
Fourth, the November 2016 Order addressed BFRGST’s July 11,
2016 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 Paragraph 24(a) of the Complaint.
(“BFRGST
Mot.”).)
The
Order
analyzed
(ECF No. 159
three
potential
fraudulent-transfer claims against BFRGST.
The first arose from
a
by
certificate
of
deposit
(CD)
purchased
granted the BFRGST Motion on that claim.
at *21.)
MGB.
The
(November 2016 Order
The second claim arose from MGB’s deposits of annuity
and paycheck payments into a BFRGST bank account.
denied the BFRGST Motion on that claim.
third
claim
Complaint.
Court
was
stated
Paragraph
in
25(a)
Paragraph
alleged
The Court
(Id. at *23.)
25(a)
that
of
MGB
the
had
The
Amended
collected
proceeds from the sale of property left to her by her mother and
5
then
transferred
¶ 25(a).)
those
proceeds
to
BFRGST.
(Am.
Compl.
The Court granted the BFRGST Motion on the Paragraph
25(a) claim.
(November 2016 Order at *25.)
Fifth, the November 2016 Order addressed BFBIT’s July 11,
2016 Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(1) and,
in the Alternative, for Summary Judgment as to Counts II, III,
IV, and V of the Complaint.
(ECF No. 160 (“BFBIT Mot.”).)
Court denied the BFBIT Motion.
The
(November 2016 Order at *27.)
At the time of the November 2016 Order, this matter was set
for trial on November 28, 2016.
(Scheduling Order 1, ECF No.
154.)
the
On
November
conference.
(Minute
18,
2016,
Entry,
ECF
No.
Court
187.)
held
a
Counsel
pretrial
for
the
parties sought a continuance of the trial to review the November
2016 Order.
(Id.)
The Court denied that request.
(Id.)
On November 21, 2016, Church JV filed its Partial Amendment
to
Original
Amend.”).)
Complaint.
(ECF
No.
189
(“Church
JV
Partial
The amended Paragraph 7 of the Amended Complaint
reads, in relevant part, as follows:
Defendant EARL BENARD “BEN” BLASINGAME, JR.
(“Ben” or “Ben Jr.”) is an adult resident
and
citizen
of
the
State
of
Tennessee . . . . Ben Jr. is the son of EBB
and MGB. . . .
As further alleged below,
EBB and MGB established a “clearing account”
in the name of Ben Jr. and using his Social
Security Number, into which they deposited
hundreds of thousands of dollars between the
time it was opened and the time EBB and MGB
filed bankruptcy on August 15, 2008.
Ben
6
Jr.
did
not
use
this
account.
The
ostensible purpose of the account was so
that Joyce Long could write checks for
various trusts controlled by EBB and MGB,
yet she wrote and signed checks for those
trusts on many occasions.
Ms. Long,
[Debtors’] long time bookkeeper, used the
“clearing account,” which was part of the
BIT (defined herein) to pay bills of and
loan money to EBB and MGB.
The “clearing
account” was concealed from EBB and MGB’s
creditors. Its use enabled EBB and MGB, who
had no personal or real property in their
name after December 1993, to maintain their
lifestyle while at the same time concealing,
hindering, delaying and defrauding their
creditors from gaining access to the funds
in the account.
(Id. at 1–2 (emphasis removed).)3
On November 22, 2016, EBB Jr. filed his Answer to Church
JV’s Partial Amendment.
(ECF No. 190.)
EBB Jr. admitted being
Debtors’ son, but denied the remaining substantive allegations
in Paragraph 7.
(Id. at 1–2.)
The same day, EBB Jr. and BFBIT
filed the Motion to Strike.
On November 23, 2016, the Court held a status conference.
(Minutes, ECF No. 192.)
Court
continued
the
After discussion with counsel, the
trial
“to
allow
for
clarification
of
3
In the Amended Complaint, Paragraph 7 read, in relevant part,
as follows:
Defendant
EARL
BENARD
“BEN”
BLASINGAME
(“Ben”) is an adult resident and citizen of
the State of Tennessee . . . .
(First Am. Original Compl. ¶ 7, ECF No. 81 (“Am. Compl.”).)
7
claims.”
(Id.)
The Court set a status conference on November
28, 2016, to reschedule the trial.
At the November 28 status conference, the Court set a new
trial date: March 20, 2017.
also
ordered
the
(Minutes, ECF No. 194.)
parties
to
file
memoranda
The Court
addressing
the
remaining issues for trial by December 16, 2016, and to file
responses by January 6, 2017.
On
December
Memorandum
and
16,
(Id.)
2016,
Defendants
Church
filed
JV
filed
Defendants’
the
Church
Memorandum.
JV
On
January 16, 2017, Church JV filed the Church JV Response and
Defendants filed Defendants’ Response.
II.
ANALYSIS
A.
Motion to Strike
The
Motion
to
Strike
asks
the
Court
to
“strike
those
portions of [Church JV’s] amendment to paragraph 7 which go
beyond
Plaintiff’s
[Debtors],”
and
to
allegation
“prohibit
that
[EBB
[Church
Jr.]
JV]
is
from
the
son
of
attempting
to
introduce evidence in support of such claims at trial.”
to Strike 3–4.)
to
Strike.
Strike.)
(Mot.
Defendants cite no rule to support their Motion
(Church
JV
Mem.
7
n.3;
see
generally
Mot.
to
Rule 12(f) provides that a court “may strike from a
pleading . . . any
redundant,
immaterial,
8
impertinent,
or
scandalous matter.”4
The Court construes the Motion to Strike to
be based on Rule 12(f).
Rule
motion
12(f)’s
to
language
is
serves
the
strike
permissive,
purpose
not
of
mandatory.
“‘avoid[ing]
A
the
expenditure of time and money that must arise from litigating
spurious issues by dispensing with’ them early in the case.”
Operating Eng’rs Local 324 Health Care Plan v. G&W Const. Co.,
783 F.3d 1045, 1050 (6th Cir. 2015) (quoting Kennedy v. City of
Cleveland, 797 F.2d 297, 305 (6th Cir. 1986)).
however,
is
“a
drastic
remedy
to
be
Such a motion,
resorted
to
only
when
required for the purposes of justice” and when “the pleading to
be
stricken
has
no
possible
relation
to
the
controversy.”
Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819,
822
(6th
Cir.
1953);
see
also
Parlak
v.
U.S.
Immigration
&
Customs Enf’t, No. 05-2003, 2006 WL 3634385, at *1 (6th Cir.
Apr. 27, 2006) (quoting Brown).
The Sixth Circuit has recently
stated that Rule 12(f) motions “are viewed with disfavor and are
not frequently granted.”
(citing cases).
pleadings
unless
Operating Eng’rs, 783 F.3d at 1050
Generally, “‘courts should not tamper with the
there
is
a
strong
reason
for
so
doing.’”
Williams v. E.I. du Pont de Nemours & Co., Inc., No. 2:15-CV02111-STA-DKV, 2016 WL 7192173, at *2 (W.D. Tenn. Dec. 12, 2016)
4
Unless otherwise noted, all citations to “Rule __” are to the
Federal Rules of Civil Procedure.
9
(quoting City of New York v. Fedex Ground Package Sys., Inc.,
314 F.R.D. 348, 354 (S.D.N.Y. 2016)).
The gravamen of Defendants’ argument is that Church JV’s
amendment
goes
beyond
November 2016 Order.
what
the
Court
contemplated
(Mot. to Strike ¶¶ 1–2.)
in
its
In addition to
the allegation that EBB Jr. is Debtors’ son, the new Paragraph 7
includes
allegations
about
a
clearing
account
that
appear
neither in the original Amended Complaint nor in Church JV’s
discovery responses.
(Id. ¶¶ 2–6.)
Defendants contend the
amendment is “prejudicial to the Defendants” and “expands the
claims asserted by [Church JV] . . . .”
(Id. ¶ 7.)
Church JV has not filed a response to the Motion to Strike.
The Church JV Memorandum, however, states that, “[t]o the extent
necessary . . . ,[5] Church JV adopts [the Church JV Memorandum]
as its response to the Motion to Strike.”
n.3.)
Church
JV
argues
that
its
(Church JV Mem. ¶ 8
Paragraph
7
amendment
“satisfies the Court directive in [the November 2016 Order],
tracks the allegations in the Amended Complaint, and complies
5
Church JV suggests that the Motion to Strike may be
inappropriate because “the time to file dispositive motions has
passed.”
(Church JV Mem. ¶ 8 n.3.)
Even if the Motion to
Strike were a dispositive motion –– which the Court will assume
without deciding –– the Court may consider it. Under Rule 12, a
court may strike material from pleadings “on its own,” without
any motion from a party. Fed. R. Civ. P. 12(f)(1). It follows
that a court can consider a motion to strike filed after a
dispositive-motion deadline.
10
with
the
Court’s
comments
Conference . . . .”
at
the
[November
18]
Pretrial
(Id. ¶ 6.)
Striking material from Paragraph 7 is unnecessary.
justice
do
not
require
granting
the
Motion
The
purposes
of
to
Strike.
The content added to Paragraph 7 arguably goes beyond
what the November 2016 Order permitted, but the material relates
to the controversy between the parties.
More importantly, the
new material does not prejudice Defendants.
As discussed below,
even assuming that the new material is properly part of the
Amended Complaint, no claims based on the clearing account will
proceed to trial.
B.
The Motion to Strike is DENIED.
Remaining Issues for Trial
In the Memoranda and Responses, the parties raise numerous
issues that remain for trial.
Church JV asserts that ten issues
remain:6
1.
“Whether and to what extent [EBB]
fraudulently transferred property to
Fiberzone?”
(Church JV Resp. 3; see
also Church JV Mem. 8.)
2.
“Whether and to what extent [MGB] used
a
credit
card
in
the
name
of
[Fiberzone] for her personal benefit,
which charges were paid for through the
‘clearing
account’
and
were
not
disclosed or known to her creditors and
were, therefore, fraudulent transfers?”
6
The numbering is the Court’s, not Church JV’s, and is based on
the Court’s review of the Church JV Memorandum and the Church JV
Response.
11
(Church JV Resp. 3; see also Church JV
Mem. 8.)
3.
“Whether and to what extent [MGB’s]
transfer of annuity and employment
checks into a bank account of the
[BFRGST]
(approximately
$38,000)
constituted a fraudulent transfer from
[MGB] to the [BFRGST]?”
(Church JV
Resp. 4; see also Church JV Mem. 8.)
4.
“Whether and to what extent Debtors
fraudulently transferred property to
the [BFRGST] directly or indirectly
through the vehicle and use of the
‘clearing account’?”
(Church JV Resp.
4; cf. Church JV Mem. 8 (“Whether and
to what extent Debtors fraudulently
transferred
property
to
the . . .
[BFRGST]?”).)
5.
“Whether and to what extent Debtors
fraudulently transferred property to
the [BFBIT]?” (Church JV Resp. 10; see
also Church JV Mem. 8.)
6.
“Whether
and
to
what
extent
the
transfer of certain real property by
Debtors by Quitclaim Deed dated January
14, 2005, to the [BFBIT] constituted a
fraudulent transfer from Debtors to the
[BFBIT]?”
(Church JV Resp. 10; see
also Church JV Mem. 8.)
7.
“Whether and to what extent [Debtors’]
transfer
of
personal
property,
including
cash,
to
the
[BFBIT],
directly or indirectly by and through
the use of the ‘clearing account,’
constituted a fraudulent transfer by
Debtors as to their creditors (which
includes, without limitation, checks
totaling over $240,000.00 payable to
[EBB] which he deposited in to [sic]
the
‘clearing
account’)?
These
transfers, as indicated in the Amended
Complaint and summary judgment evidence
amount to not less than $186,229.58
12
worth of checks drawn on the bank
account of the [BFBIT] and not less
than $60,028.00 worth of checks drawn
on the bank accounts of other trusts
and entities he controlled, which he
then
deposited
into
the
‘clearing
account.’ There may be other transfers
that will be revealed should the Court
order an accounting following trial.”
(Church JV Resp. 10–11; see also Church
JV Mem. 8 & n.4.)
8.
“Whether
and
to
what
extent
the
transfers from Debtors to the ‘clearing
account’ established by the Debtors and
which was opened in the name of their
son [EBB Jr.] and into which funds from
various trust and corporations [were]
commingled,
constituted . . .
fraudulent transfers by Debtors to
third persons and entities?”
(Church
JV Resp. 11; see also Church JV Mem.
8.)
9.
“Whether and to what extent Debtors
used
the
‘clearing
account’
as
a
vehicle to defraud creditors in that
the ‘clearing account’ contains money
transferred to it by Debtors, as well
as trusts and entities controlled by
Debtors, and from which Debtors would
accept transfers for [their] personal
financial benefit?”
(Church JV Resp.
11; see also Church JV Mem. 8–9.)
10.
“Whether and to what extent [EBB Jr.]
should be held liable to Church JV for
allowing
his
parents
to
use
the
‘clearing
account,’
which
was
originally set up in his name and using
his SSN, to be used as a vehicle to
defraud Debtors’ creditors?”
(Church
JV Resp. 11; see also Church JV Mem.
9.)
13
Defendants assert that five issues remain for trial:7
1.
Whether MGB “incurred obligations which
are voidable under fraudulent transfer
law by permitting [certain credit]
cards to be used to incur charges for
the benefit of Fiberzone”?
(Defs.’
Mem. 2; see also Defs.’ Resp. 7 & n.3.)
2.
Whether MGB’s “deposits of annuity and
paycheck payments into a [BFRGST] bank
account between January 1, 2007 and
July 31, 2008” constitute fraudulent
transfers?
(Defs.’ Mem. 2; see also
Defs.’ Resp. 6.)
3.
Whether
MGB’s
“transfer[]
[of]
an
undisclosed amount of money from her
investment account at UBS ‘in her own
name’ into a bank account owned by the
[BFBIT]”
constitutes
a
fraudulent
transfer?
(Defs.’ Mem. 2; see also
Defs.’ Resp. 2, 6.)
4.
Whether Debtors’ transfer to the BFBIT,
on January 14, 2005, of “quitclaimed
property that was inherited from Evelyn
Hipshire
Gooch”
constituted
a
fraudulent transfer?
(Defs.’ Mem. 3;
see also Defs.’ Resp. 2, 6.)
5.
Whether Church JV “is entitled to any
injunctive relief or accounting relief
by reason of its remaining [fraudulenttransfer] claims against the other
remaining Defendants”?
(Defs.’ Mem.
3.)
1.
Church JV Issue 1
Church JV Issue 1 is “[w]hether and to what extent [EBB]
fraudulently
transferred
property
to
Fiberzone?”
(Church
JV
7
The numbering is the Court’s, not Defendants’, and is based on
the Court’s review of Defendants’ Memorandum and Defendants’
Response.
14
Resp. 3; see also Church JV Mem. 8.)
Defendants argue this is
no longer a trial issue because (1) the only Amended Complaint
allegation
that
EBB
fraudulently
transferred
property
to
Fiberzone is that EBB provided Fiberzone uncompensated services,
and
(2)
the
November
2016
Order
ruled
that
providing
uncompensated services cannot be a fraudulent transfer.
(Defs.’
Resp. 7.)
The uncompensated-services claim does not remain for trial.
(November 2016 Order at *14–15.)
To the extent Church JV Issue
1 refers to some other, unspecified EBB-to-Fiberzone transfer,
no such claim will proceed to trial.
The parties’ Memoranda and
Responses were to identify specific fraudulent-transfer claims
that remain for trial.
claim.8
Church JV Issue 1 states no precise
Church JV Issue 1 does not remain for trial.
2.
Church
Church JV Issue 2 and Defendants’ Issue 1
JV
asserts
than
a
remaining
trial
issue
is
“[w]hether and to what extent [MGB] used a credit card in the
name of [Fiberzone] for her personal benefit, which charges were
paid for through the ‘clearing account’ and were not disclosed
8
The Church JV Response suggests that the only Fiberzone-related
claim addressed in the November 2016 Order was the Credit-Card
Claim.
As discussed in Section I above, that misreads the
November 2016 Order and the Fiberzone-related briefing preceding
that order. (See, e.g., November 2016 Order at *12–16; Mem. ISO
Fiberzone Mot. 4–10, ECF No. 156-1.)
The briefing and the
November 2016 Order dealt with all of Church JV’s asserted
claims against Fiberzone.
15
or
known
to
transfers?”
her
creditors
and
were,
therefore,
fraudulent
(Church JV Resp. 3; see also Church JV Mem. 8.)
The relevant clearing account –– mentioned in numerous other
Church JV issue statements –– is a BancorpSouth account with the
number
xxxx2680
(the
“Clearing
Account”).
(See
Church
JV
Partial Amend. 1–2; Am. Compl. ¶ 81(a).)9
Church JV Issue 2 corresponds to Defendants’ Issue 1 ––
i.e., whether MGB “incurred obligations which are voidable under
fraudulent transfer law by permitting [certain credit] cards to
be used to incur charges for the benefit of Fiberzone”?
Mem. 2; see also Defs.’ Resp. 7.)
Credit-Card Claim discussed above.
(Defs.’
It also corresponds to the
(See Section I supra.)
The
parties agree that a claim remains for trial on certain creditcard payments related to Fiberzone.
They disagree about the
parameters of that claim.
Defendants argue that Church JV has changed its theory of
the Credit-Card Claim, and that its new theory is inconsistent
with the allegations in the Amended Complaint:
In its Memorandum, Plaintiff describes the
issue to be tried as whether MGB’s use of
the credit card in the name of [Fiberzone]
for her personal benefit which charges were
paid for through the clearing account were
fraudulent transfers. This characterization
is contrary to the allegations of the
9
Neither the Church JV Memorandum nor the Church JV Response
mentions any other potential clearing account.
(See generally
Church JV Mem.; Church JV Resp.)
16
Amended Complaint which alleges that MGB
obligated herself alone for repayment of
charges that may have been made or incurred
by [Fiberzone] on several credit cards.
To
the
extent
Plaintiff
is
intentionally
changing its theory to contend that MGB used
a credit card in the name of [Fiberzone],
rather than vice versa, such allegation
constitutes a new claim which is not pled in
the [Amended] Complaint and the Court should
not permit such claim to go to trial.
(Defs.’ Resp. 7 n.3.)
Defendants correctly construe the Credit-Card Claim as pled
in the Amended Complaint.
Paragraph 76 of the Amended Complaint
alleges: “Prior to August 2008 and continuing until at least
February 2009 and thereafter, MGB obligated herself alone for
repayment of any charges that may have been made or incurred by
[Fiberzone] on several credit cards . . . .”
(Am. Compl. ¶ 76.)
There is no reference to the Clearing Account.
(Id.)
That is
consistent with Defendants’ construction of the claim, not with
Church JV’s.
The Fiberzone-related summary-judgment briefing also shows
that Defendants’ construction of the claim is consistent with
the
Amended
Complaint.
In
the
statement
of
material
facts
submitted with the Fiberzone Motion, Fiberzone said that charges
for
Fiberzone’s
benefit
were
made
on
MGB’s
credit
card.
(Fiberzone’s Statement of Undisputed Facts in Supp. of Mot. for
Summ. J. as to Counts II Through V of the Compl. ¶¶ 7–10 (ECF
No. 157).)
Church JV did not dispute that statement.
17
(See
generally Mem. in Supp. of Pl.’s Resp. to Fiberzone’s Mot. for
Summ. J. as to Counts II, III, IV, and V of the Compl., ECF No.
164.)
The first time Church JV has suggested that MGB used a
Fiberzone
credit
card
is
in
the
Church
JV
Memorandum
and
Response.
The November 2016 Order did not permit Church JV to amend
its pleadings to add allegations that did not appear in the
Amended
Complaint.
(November
2016
Order
at
*11–12.)
The
Court’s reasons included the late stage of the proceedings and
the absence of justification for the failure to amend earlier.
For the same reasons, Church JV cannot try its new version of
the Credit-Card Claim.
Church JV Issue 2 does not remain for
trial.
The question remains whether Defendants’ construction of
the
Credit-Card
trial.
Claim
It does not.
–– Defendants’
Issue
1
–– remains
for
The parties’ versions of the Credit-Card
Claim differ significantly.
Church JV adopted its new version
rather than Defendants’ version (which is alleged in the Amended
Complaint).
In their Memorandum, Defendants state that “[Church
JV’s] counsel stated to the Court that [Church JV] does not
intend to pursue such claim against Fiberzone” –– “such claim”
referring to Defendants’ construction of the Credit-Card Claim.
(Defs.’ Mem. 2.)
Church JV argues that it intends to pursue the
Credit-Card Claim, but asserts only its own construction of that
18
claim.
(Church JV Resp. 1–3.)
Church JV does not suggest that,
in the alternative, it wishes to proceed to trial on Defendants’
construction of the claim.
(See generally id.)
Given that
history, Defendants’ Issue 1 does not remain for trial.
The only Fiberzone-related fraudulent transfers potentially
remaining for trial were Church JV Issue 1, Church JV Issue 2,
and Defendants’ Issue 1.
None of those remains for trial.
The
Amended Complaint requests injunctive relief, accountings, and
attorneys’
fees.
Those
fraudulent-conveyance
Fiberzone.
requests
claims.
depend
No
on
claims
the
success
remain
of
against
Fiberzone is dismissed from the action.
3.
Church JV Issue 3 and Defendants’ Issue 2
Church JV asserts that an issue remaining for trial is
“[w]hether and to what extent [MGB’s] transfer of annuity and
employment
checks
into
a
bank
account
of
the
[BFRGST]
(approximately $38,000) constituted a fraudulent transfer from
[MGB] to the [BFRGST]?”
Mem. 8.)
(Church JV Resp. 4; see also Church JV
The subject matter of this issue statement is the same
as that in Defendants’ Issue 2 –– i.e., whether MGB’s “deposits
of annuity and paycheck payments into a [BFRGST] bank account
between
January
transfers.
The
1,
2007
and
July
31,
2008”
were
fraudulent
(Defs.’ Mem. 2; see also Defs.’ Resp. 6.)
parties
agree
this
claim
remains
for
trial.
parties’ statements of the claim differ in two ways.
19
The
First,
Defendants suggest a date range including payments made between
January 1, 2007, and July 31, 2008.
range.
Church JV provides no date
Defendants’ range is appropriate.
The November 2016
Order explained:
The Amended Complaint notes deposits “[f]rom
January of 2007 through May 2008.”
The
Declaration of Joyce Long submitted by
BFRGST refers to deposits by MBG “from
January 1, 2007 through July 31, 2008.”
BFRGST’s challenge to this claim does not
depend on the relevant dates.
The Court
will construe the Amended Complaint as
alleging deposits from January 1, 2007,
through July 31, 2008.
(November
2016
Order
at
*11
n.12
(citations
omitted).)
Defendants have construed the date range to extend to July 31,
2008.
Church JV cannot object: the range alleged in the Amended
Complaint is shorter.
Second, Church JV’s issue statement asserts that the amount
of the transfers is approximately $38,000.
of any stipulation as to amount.
The Court is unaware
The amount must be determined
through proof presented at trial.10
10
As discussed in the November 2016 Order, the parties dispute
the extent to which MGB’s deposits into the BFRGST account were
used to purchase a certificate of deposit (CD). (November 2016
Order at *21.)
The dispute matters because the November 2016
Order
determined
that,
because
the
trustee
in
Debtors’
bankruptcy settled the claim that the CD purchase was a
fraudulent transfer, Church JV lacked standing to pursue that
claim.
(Id. at *19–21.)
To the extent the MGB deposits into
the BFRGST account were used to buy the CD, Church JV has no
claim on them.
20
The first trial issue is whether and to what extent MGB’s
deposits of annuity and paycheck payments into a BFRGST bank
account –– between
January
1,
2007
and
July
31,
2008 ––
constitute fraudulent transfers.
4.
Church JV Issue 4
Church JV asserts that an issue remaining for trial is
“[w]hether and to what extent Debtors fraudulently transferred
property
to
the
[BFRGST]
directly
or
indirectly
vehicle and use of the ‘clearing account’?”
through
the
(Church JV Resp.
4.11)
This issue will not proceed to trial.
As noted above, the
parties’ briefing was designed to narrow the trial issues, and
the parties were to indicate specific fraudulent-transfer claims
that remained for trial.
claim.
Church
JV
Amended
Complaint
points
Church JV Issue 4 states no precise
to
no
identifying
specific
transfers
allegations
from
the
in
the
Clearing
Account to BFRGST.
5.
Church JV Issue 5
Church JV asserts that an issue remaining for trial is
“[w]hether and to what extent Debtors fraudulently transferred
11
Church JV changed its wording of this issue between the filing
of the Church JV Memorandum and the filing of the Church JV
Response.
The Church JV Memorandum’s issue statement did not
mention the Clearing Account.
(See Church JV Mem. 8 (“Whether
and to what extent Debtors fraudulently transferred property to
the . . . [BFRGST]?”).)
21
property to the [BFBIT]?”
JV Mem. 8.)
trial.
(Church JV Resp. 10; see also Church
This broadly worded issue will not proceed to
Church
JV
Issue
5
fails
to
identify
any
specific
fraudulent-transfer claims remaining for trial.
6.
Church
“[w]hether
Church JV Issue 6 and Defendants’ Issue 4
JV
and
asserts
to
what
that
a
extent
remaining
the
transfer
trial
of
issue
certain
is
real
property by Debtors by Quitclaim Deed dated January 14, 2005, to
the [BFBIT] constituted a fraudulent transfer from Debtors to
the [BFBIT].”
Church
JV
Mem.
(Church JV Resp. 10 (emphasis removed); see also
8.)
The
subject
matter
here
is
similar
to
Defendants’ Issue 4, which asserts that a remaining trial issue
is whether Debtors’ transfer to BFBIT, on January 14, 2005, of
“quitclaimed property that was inherited from Evelyn Hipshire
Gooch” constituted a fraudulent transfer.
(Defs.’ Mem. 3; see
also Defs.’ Resp. 2, 6.)
The
only
significant
difference
between
the
issue
statements is their descriptions of the transferred property.
Neither
party
transferred.
notes
The
a
Court
dispute
assumes
22
about
(without
what
property
deciding)
that
was
the
clearer definition of the transferred property is provided by
the quitclaim deed.12
The second issue for trial is thus whether and to what
extent Debtors’ transfer to BFBIT of the real property listed in
the
quitclaim
deed
dated
January
14,
2005,
is
a
fraudulent transfer.
7.
Church JV Issue 7
Church JV asserts that an issue remaining for trial is
“[w]hether and to what extent [Debtors’] transfer of personal
property, including cash, to the [BFBIT], directly or indirectly
by and through the use of the [Clearing Account,] constituted a
fraudulent
transfer
by
Debtors
as
to
their
creditors
(which
includes, without limitation, checks totaling over $240,000.00
payable
to
[EBB]
Account])?”
which
he
deposited
in
to
the
[Clearing
(Church JV Resp. 10; see also Church JV Mem. 9.)
Church JV asserts that “[t]hese transfers, as indicated in the
Amended Complaint and summary judgment evidence[,] amount to not
less than $186,229.58 worth of checks drawn on the bank account
of the [BFBIT] and not less than $60,028.00 worth of checks
drawn
on
the
controlled,
account.’”
bank
which
accounts
he
then
of
other
trusts
deposited
into
and
entities
the
he
‘clearing
(Church JV Resp. 10; see also Church JV Mem. 8 n.4.)
12
The identity of the real property, or any dispute about the
identity of that property, should be addressed in the joint
proposed pretrial order.
23
Church JV asserts that “[t]here may be other transfers that will
be
revealed
trial.”
should
the
Court
order
an
accounting
following
(Church JV Resp. 10–11; see also Church JV Mem. 8 n.4.)
Defendants
argue
that
this
is
an
[Church JV’s] claims against [BFBIT].”
“attempt[]
to
expand
(Defs.’ Resp. 3.)
They
contend that these allegations do not appear in the Amended
Complaint and are inconsistent with allegations that do appear
in the Amended Complaint.
(Id.)
Defendants also argue that to
the extent Church JV asserts transfers of funds from outside
entities to Debtors –– as opposed to transfers from Debtors to
other
entities –– the
transfers
cannot
be
fraudulent.
(Id.
at 4.)
Church JV Issue 7 is not an issue for trial.
statement is vague and unhelpful.
The issue
It refers to transfers of
“personal property, including cash,” but provides no specifics.
It
refers
to
transfers
done
“directly
or
indirectly . . .
through the use of the [Clearing Account],” but provides no
details about the method of transfer.
proviso
suggests
numerous
The “without limitation”
transactions
–– other
than
the
transfer of checks payable to EBB –– but provides no detail.
The issue statement refers to transfers that might be found in a
posttrial accounting, but the purpose of the parties’ memoranda
is to determine the issues for trial itself.
would confuse the jury.
24
Church JV Issue 7
More specific is Church JV’s claim that Debtors transferred
to
BFBIT
“checks
totaling
over
$240,000.00
payable
which he deposited in to the [Clearing Account].’”
to
[EBB]
The Court
cannot find these allegations anywhere in the Amended Complaint,
even including the amended Paragraph 7.
Church JV seems to
suggest that “summary judgment evidence” supports its claims,
but Church JV’s summary-judgment evidence (even if it were what
Church
JV
asserts)
is
operative complaint.
no
substitute
for
allegations
in
the
Letting Church JV bring previously unpled
claims now would amount to permitting amendment, which would be
inappropriate at this juncture.
Church JV Issue 7 will not
proceed to trial.
8.
Church
Church JV Issues 8–10
JV’s
remaining
potential
trial
issues
overlap.
Church JV Issue 8 is “[w]hether and to what extent the transfers
from
Debtors
to
the
[Clearing
Account]
established
by
the
Debtors and which was opened in the name of their son [EBB Jr.]
and
into
which
funds
from
various
trust[s]
and
corporations
[were] commingled, constituted fraudulent transfers by Debtors
to third persons and entities?”
Church JV Mem. 8.)
extent
Debtors
used
(Church JV Resp. 11; see also
Church JV Issue 9 is “[w]hether and to what
the
[Clearing
Account]
as
a
vehicle
to
defraud creditors in that the [Clearing Account] contains money
transferred to it by Debtors, as well as trusts and entities
25
controlled
by
Debtors,
and
from
which
Debtors
would
transfers for [their] personal financial benefit?”
Resp. 11; see also Church JV Mem. 8–9.)
accept
(Church JV
Church JV Issue 10 is
“[w]hether and to what extent [EBB Jr.] should be held liable to
Church JV for his allowing his parents to use the [Clearing
Account] . . .
as
a
vehicle
to
defraud
Debtors’
creditors?”
(Church JV Resp. 11; see also Church JV Mem. 9.)
None of these issue statements isolates specific transfers.
Church JV apparently contemplates that the upcoming trial will
include a broad inquiry into the Clearing Account, as opposed to
a
review
of
specific
transfers.
That
is
not
what
the
Court contemplated.
Defendants raise as a threshold issue whether Church JV has
pled
any
fraudulent-transfer
Account with particularity?13
claims
concerning
the
(Defs.’ Mem. 3–8.)
Clearing
Defendants
note the statement in the November 2016 Order that under Rule
9(b),
parties
alleging
fraudulent-conveyance
claims
Tennessee law must plead them with particularity.
(citing November 2016 Order).)
under
(Id. at 4
Defendants suggest that, even
given the allegation that EBB Jr. is Debtors’ son, the Amended
13
The argument in Defendants’ Memorandum focuses on whether
Church JV has pled any claims against EBB Jr. with sufficient
particularity. (Defs.’ Mem. 3–8.) The gravamen of the Amended
Complaint’s allegations against EBB Jr. concern the Clearing
Account. (See generally Am. Compl.) Defendants’ particularity
argument addresses the Clearing Account allegations in the
Amended Complaint.
26
Complaint’s claims about the Clearing Account are insufficiently
particular.
(Id. at 5–6.)
They also argue that, because the
Court has dismissed fraudulent-conveyance claims against other
entities
due
to
lack
of
particularity,
consistency
dismissal of claims about the Clearing Account.
Church JV’s response is unclear.
demands
(Id. at 6–9.)
It appears to suggest
that the Court has already ruled in its favor on this issue.
Church JV refers to the statement in the November 2016 Order
that amending Paragraph 7 to include the allegation that EBB Jr.
is Debtors’ son “‘would not be futile because allegations in the
Amended Complaint about Debtors’ son are sufficient to state a
claim.’”
(Church
JV
Resp.
8
(quoting
November
2016
Order)
(emphasis removed).)
The thrust of Defendants’ argument is that the Court erred
in its November 2016 Order.
EBB Jr. raised the particularity
issue in the KBC/EBB Jr. Motion to Dismiss.
(See Mem. in Supp.
of KBC/EBB Jr. Mot to Dismiss 7–8, ECF No. 155-1.)
notes, the Court found that argument unpersuasive.
As Church JV
The Court
thus construes Defendants’ particularity argument as a motion
that the Court reconsider its particularity finding as to the
Clearing Account in the November 2016 Order.
A district court has the inherent power to reconsider or
modify an interlocutory order before entry of a final judgment.
See In re Metro. Gov’t of Nashville & Davidson Cty., Tenn., 606
27
F.3d 855, 861 (6th Cir. 2010) (citing Leelanau Wine Cellars,
Ltd. v. Black & Red, Inc., 118 F. App’x 942, 945–46 (6th Cir.
2004)); see also Fed. R. Civ. P. 54(b) (“[A]ny [interlocutory]
order or decision . . . may be revised at any time before the
entry of a judgment adjudicating all the claims and all the
parties’
rights
justification
and
for
liabilities.”).
reconsidering
“‘[C]ourts
interlocutory
will
orders
find
whe[re]
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.’”
Louisville/Jefferson Cty. Metro
Gov’t v. Hotels.com, L.P., 590 F.3d 381, 389 (6th Cir. 2009)
(second
alteration
in
original)
(quoting
Rodriguez
v.
Tenn.
Laborers Health & Welfare Fund, 89 F. App’x 949, 959 (6th Cir.
2004)); see also L.R. 7.3 (stating standards for motions to
revise interlocutory orders).
The Court understands Defendants to argue that the November
2016 Order failed to consider a dispositive legal argument ––
namely, that the Clearing Account allegations in the Amended
Complaint
were
not
sufficiently
fraudulent-conveyance claim.14
particular
to
state
a
The Court agrees.
14
Defendants also suggest that, even if the Court considers
newly amended Paragraph 7, the Clearing Account allegations are
insufficiently particular.
(Defs.’ Mem. 7–8.)
This argument
does not concern reconsideration, as amended Paragraph 7 did not
exist at the time of the November 2016 Order.
The Court will
28
Plaintiffs
must
particularity.
plead
fraudulent-conveyance
claims
with
See, e.g., Phillips v. Nationstar Mortg., LLC,
No. 3:13-CV-01414, 2016 WL 2866164, at *8–9 (M.D. Tenn. May 17,
2016); Heartland Payment Sys., Inc. v. Hickory Mist Luxury Cabin
Rentals, LLC, No. 3:11-CV-350, 2011 WL 6122371, at *4–6 (E.D.
Tenn. Dec. 8, 2011); Cricket Commc’ns, Inc. v. Eleiwa & Sons,
Inc., No. 2:08-CV-02541-P, 2009 WL 3784596, at *2–3 (W.D. Tenn.
Nov. 10, 2009).
District courts require plaintiffs to allege
“particularized facts with respect to the who, the what, the
when, the where, and the how regarding the alleged fraudulent
conduct.”
Phillips, 2016 WL 2866164, at *9; see also, e.g.,
Heartland Payment Sys., 2011 WL 6122371, at *5.
allegations
of
“the
conveyance . . . .”
time,
place,
and
This requires
amount
of
the
Eastwood v. United States, No. 2:06-CV-164,
2007 WL 2815560, at *3–4 (E.D. Tenn. Sept. 25, 2007); see also
Phillips,
2016
WL
2866164,
at
*9
(dismissing
fraudulent-
conveyance claim where “[t]here is no allegation regarding the
time or place in which the fraudulent presentations or transfers
were
made”);
Heartland
Payment
Sys.,
2011
WL
6122371,
at
*5 (same).
nevertheless consider the point about amended Paragraph 7 here
because it presents the same particularity issue.
29
The relevant Clearing Account allegations in the Amended
Complaint appear in amended Paragraph 7 and in Paragraphs 81(a),
84(a), and 91.
Those paragraphs allege the following:
“[EBB Jr.] is an adult resident and
citizen
of
the
State
of
Tennessee . . . . [EBB Jr.] is the son
of EBB and MGB. . . .
As further
alleged below, EBB and MGB established
a ‘clearing account’ in the name of
[EBB Jr.] and using his Social Security
Number,
into
which
they
deposited
hundreds
of
thousands
of
dollars
between the time it was opened and the
time EBB and MGB filed bankruptcy on
August 15, 2008. [EBB Jr.] did not use
this account.
The ostensible purpose
of the account was so that Joyce Long
could write checks for various trusts
controlled by EBB and MGB, yet she
wrote and signed checks for those
trusts on many occasions.
Ms. Long,
[Debtors’] long time bookkeeper, used
the ‘clearing account,’ which was part
of the [BFBIT] to pay bills of and loan
money to EBB and MGB.
The ‘clearing
account’ was concealed from EBB and
MGB’s creditors.
Its use enabled EBB
and MGB, who had no personal or real
property in their name after December
1993, to maintain their lifestyle while
at the same time concealing, hindering,
delaying and defrauding their creditors
from gaining access to the funds in the
account.”
(Church
JV
Partial
Amend. 1–2.)
“In their Schedule J filed in [Debtors’
bankruptcy],
Debtors
report
total
monthly
income
from
employment
of
$888.
The Debtors deny having other
income
from
any
other
source.
However, discovery has revealed that
Debtors have received and personally
spent
and
continue
to
spend
over
30
$24,850 per month (equating to over
$300,000 per year) for personal living
expenses.
For example and without
limitation during the year prior to
filing . . . [a] monthly average of
$5,877
was
deposited
into
[MGB’s]
household account . . . 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 #[xxxx2680]) into
which hundreds of thousands of dollars
from multiple sources are deposited each
year.
This
clearing
account
is
concealed from creditors in the son’s
name, [EBB 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.”
(Am.
Compl. ¶ 81(a) (citation omitted).)
“The
Debtors
now
admit
to
having
created
a
‘clearing
account’
(BancorpSouth
account
#[xxxx2680]),
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
31
then disbursed to or for the benefit
of the Debtors.
Plaintiff assert[s]
that all funds deposited into this
‘commingling account,’ accessible by
the single signature of either of the
Debtors, became Debtors’ property as a
matter
of
law
and
remained
such
thereafter.
The
Debtors
exercised
their single signatory authority on
this
‘commingling
account’
at
BancorpSouth, and during the twelve (12)
month period prior to their filing,
deposited $270,210 into the account and
withdrew $279,879
from the account.
The deposits came from various sources
including the three (3) Trusts and five
(5)
Corporations
with
significant
amounts coming from unidentified ‘cash
deposits.’ The Debtors have yet failed
to produce copies of the deposits,
copies of items deposited or the check
registry.
A significant number of
checks (some $189,000) were written in
‘even amounts’ back and forth between
the Trusts, the Corporations and to the
Debtors
and/or
for
their
benefit.”
(Id. ¶ 84(a).)
“As
further
evidence
of
Debtors’
conscious scheme to utilize the Trusts
and Corporations to defraud creditors
is
the
account
at
BancorpSouth
([#xxxx2680])
––
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. . . .
[W]hen one of the
entities needs money, funds flow into
and out of the Clearing Account and in
many instances simply directly from/to
the
individuals,
Trusts
and
32
Corporations themselves.
Collectively,
for years the Trusts and Corporations
have been consciously and intentionally
ignor[ing]
corporate
and
trust
formalities,
choosing
instead
to
utilize them for the single purpose of
thwarting and defrauding creditors.”
(Id. ¶ 91.)
These paragraphs undoubtedly assert extensive and repeated
improper
conduct
question
is
related
whether
to
these
the
Clearing
allegations
transfer claims with particularity.
Account.
state
any
They do not.
The
key
fraudulentThere is no
specific conveyance related to the Clearing Account for which
these paragraphs provide the time and amount of the transfer.
The only allegations about the timing of Debtors’ transfers
to the Clearing Account are in amended Paragraph 7 and Paragraph
84(a).
Amended Paragraph 7 alleges that Debtors made various
deposits into the Clearing Account “between the time it was
opened and the time EBB and MGB filed bankruptcy on August 15,
2008.”
(Church JV Partial Amend. 1.)
Paragraph 84(a) alleges
various deposits into the Clearing Account “during the twelve
(12) month period prior to [Debtors’ bankruptcy] filing.”
Compl. ¶ 84(a).)
(Am.
There is no Clearing Account transaction for
which Church JV specifies a particular date.
The
only
allegations
about
the
amounts
of
Debtors’
transfers to the Clearing Account are in amended Paragraph 7 and
Paragraphs
81(a)
and
84.
Paragraph
33
7
alleges
that
Debtors
transferred “hundreds of thousands of dollars” into the Clearing
Account.
(Church JV Partial Amend. 1.)
Paragraph 81(a) alleges
that “hundreds of thousands of dollars” are deposited into the
Clearing Account “each year,” although this refers to transfers
from
“multiple
Debtors.
sources”
and
does
(Am. Compl. ¶ 81(a).)
not
isolate
transfers
from
Paragraph 84(a) alleges that
between August 15, 2007, and August 15, 2008, Debtors deposited
$270,210 into the Clearing Account.
Clearing
Account
transaction
for
(Id. ¶ 84(a).)
which
Church
There is no
JV
provides
a
specific amount.
On
this
Complaint’s
Church
JV’s
particular
record,
Clearing
amendment
to
state
the
Court
Account
of
finds
that
the
allegations –– even
Paragraph
any
7 –– are
following
insufficiently
fraudulent-conveyance
Defendants’ motion for reconsideration is GRANTED.
Amended
claims.
No remaining
issue for trial remains about the Clearing Account.
Church JV
Issues 8 and 9 do not remain for trial.
Because the only Amended Complaint claims against EBB Jr.
concern the Clearing Account, the fraudulent-conveyance claims
as to EBB Jr. are dismissed.
The Amended Complaint’s requests
for injunctive relief, accountings, and attorneys’ fees depend
on the success of fraudulent-conveyance claims.
requests can succeed against EBB Jr.
dismissed as to EBB Jr.
None of those
The Amended Complaint is
There is no issue remaining for trial
34
as to EBB Jr.’s liability to Church JV.
Church JV Issue 10 no
longer remains for trial.
9.
Defendants’ Issue 3
Defendants
state
that
one
potential
issue
remaining
for
trial is whether MGB’s “transfer[] [of] an undisclosed amount of
money from her investment account at UBS ‘in her own name’ into
a bank account owned by the [BFBIT]” constitutes a fraudulent
transfer.
(Defs.’
Mem.
2;
see
also
Defs.’
Resp.
2,
6.)
Defendants state that, as to this claim, “[Church JV’s] counsel
advised
the
court
claim . . . .”
that
(Defs.’
[Church
JV]
was
Mem.
see
also
3;
not
pursuing
Defs.’
such
Resp.
6.)
Church JV does not list this claim as remaining for trial in its
Memorandum
or
its
Response,
and
it
does
not
challenge
Defendants’ statement that Church JV advised that it would not
pursue this claim.
Resp.)
(See generally Church JV Mem.; Church JV
This issue no longer remains for trial.
10.
Defendants’ Issue 5
Defendants
whether
Church
accounting
transfer]
state
JV
relief
claims
that
“is
by
an
issue
entitled
reason
against
to
of
the
remaining
any
injunctive
any
fraudulent
remaining
Defendants.”
after
transfers
35
or
other
will
whether
relief
[fraudulent-
issue
address
is
remaining
That is not a trial issue.
Court
trial
its
(Defs.’ Mem. 3.)
the
for
the
occurred.
It is a remedies
factfinder
decides
At
status
the
conference on November 18, 2016, the parties agreed that the
remedies sought in Counts III and IV of the Amended Complaint
were not issues for the jury.
(Hr’g Tr. 13, ECF No. 197.)
There is no reason to alter that conclusion.
III. CONCLUSION
For the reasons discussed above, the Motion to Strike is
DENIED.
will
The upcoming trial will concern two issues.
address
whether
and
to
what
extent
MGB’s
First, it
deposits
of
annuity and paycheck payments into a BFRGST bank account ––
between
January
1,
fraudulent transfers.
2007,
and
July
31,
2008
–– constitute
Second, it will address whether and to
what extent Debtors’ transfer to BFBIT of the real property
listed
in
the
quitclaim
deed
dated
January
14,
2005,
fraudulent transfer.
So ordered this 9th day of March, 2017.
/s/ Samuel H. Mays, Jr._
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
36
is
a
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