Tango Transport, LLC et al v. Navistar International Corporation et al
Filing
254
MEMORANDUM OPINION AND ORDER. It is ORDERED 37 Defendants' Motion for Partial Summary Judgment is hereby DENIED. Signed by District Judge Amos L. Mazzant, III on 2/13/2019. (rpc, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
CHRISTOPHER MOSER as Plan Trustee of §
the Trust Under the Amended Joint Plan of §
Liquidation of Tango Transport, LLC, et al.,
§
§
§
v.
§
§
NAVISTAR INTERNATIONAL
§
CORPORATION, et al.
§
Civil Action No. 4:17-CV-00598
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendants Navistar International Corporation, Navistar Inc.,
Navistar Leasing Company, Navistar Financial Corporation, Navistar Leasing Services
Corporation, and ITA Truck Sales & Services, LLC’s Motion for Partial Summary Judgment
(Dkt. #37). Having considered the motion and the relevant pleadings, the Court finds the motion
should be denied.
BACKGROUND
In October 2014, Tango Transport, LLC; Tango Logistx, LLC; Gorman Group, Inc.; Tango
Truck Services, LLC; Tango Enterprises, Inc.; and GMGO, LLC (collectively, “Tango”) sued
Defendants in Louisiana state court (Dkt. #37 at p. 3; Dkt. #37-1). Defendants filed Exceptions to
Tango’s state-court claims (Dkt. #37 at p. 3). However, before the state court heard Defendants’
Exceptions, the parties executed a Receipt, Release, and Settlement of all Claims and Indemnity
Agreement (“Settlement Agreement”) (Dkt. #37 at p. 3; Dkt. #39). Pursuant to the Settlement
Agreement, Tango filed a Motion to Dismiss Suit with Prejudice (Dkt. #37-3; Dkt. #39 at p. 7;
Dkt. #40 at p. 3). In a one-sentence order, the state court granted Tango’s motion and dismissed
the case with prejudice on September 22, 2015 (“Dismissal Order”) (Dkt. #37-4).
On April 6, 2016, Tango filed a Chapter 11 Voluntary Petition for Bankruptcy. In re Tango
Transport, LLC, 16-40642 (Bankr. E.D. Tex.). On November 18, 2016, Christopher Moser
(“Trustee”), as Plan Trustee of the Trust Under the Amended Joint Plan of Liquidation of Tango,
filed this adversary proceeding. Tango Transport, LLC v. Navistar Int’l Corp. (In re Tango
Transport, LLC), 16-04109 (Bankr. E.D. Tex.). On December 19, 2017, this Court, adopting the
Report and Recommendation of the United States Bankruptcy Judge, withdrew the reference of
the adversary proceeding to the Bankruptcy Court (Dkt. #3).
In this proceeding, the Trustee seeks to avoid the Settlement Agreement under 11
U.S.C. §§ 544(b)(1), 548, and 550. See Tango Transport, LLC, 16-04109, (Dkt. #34). On April
11, 2018, Defendants filed their Motion for Partial Summary Judgment (Dkt. #37). On April 30,
2018, the Trustee filed a response to the motion (Dkt. #40). On May 7, 2018, Defendants filed a
reply in support of the motion (Dkt. #41).
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported claims
or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). Summary judgment is proper
under Rule 56(a) of the Federal Rules of Civil Procedure “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). A dispute about a material fact is genuine when “the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby Inc.,
477 U.S. 242, 248 (1986). Substantive law identifies which facts are material. Id. The trial court
“must resolve all reasonable doubts in favor of the party opposing the motion for summary
judgment.” Casey Enters., Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981).
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The party seeking summary judgment bears the initial burden of informing the court of its
motion and identifying “depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of
material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the burden
of proof on a claim or defense for which it is moving for summary judgment, it must come forward
with evidence that establishes “beyond peradventure all of the essential elements of the claim or
defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant
bears the burden of proof, the movant may discharge the burden by showing that there is an absence
of evidence to support the nonmovant’s case. Celotex, 477 U.S. at 325; Byers v. Dall. Morning
News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the movant has carried its burden, the
nonmovant must “respond to the motion for summary judgment by setting forth particular facts
indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at
248–49). A nonmovant must present affirmative evidence to defeat a properly supported motion
for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn
allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this
burden. Rather, the Court requires “significant probative evidence” from the nonmovant to dismiss
a request for summary judgment. In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 440
(5th Cir. 1982) (quoting Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 114 (5th Cir. 1978)). The
Court must consider all of the evidence but “refrain from making any credibility determinations or
weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.
2007).
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ANALYSIS
Defendants move for summary judgment on the Trustee’s 11 U.S.C. §§ 544 and 548 claims
(Dkt. #37). Specifically, Defendants contend the Fifth Circuit’s holding in Besing mandates
summary judgment on the Trustee’s claims as a matter of law (Dkt. #37) (referencing Besing v.
Hawthorne (In re Besing), 981 F.2d 1488 (5th Cir. 1993)).
To succeed on a constructive fraudulent transfer claim under § 548, the Trustee must show
that the debtors “received less than a reasonably equivalent value in exchange for such transfer or
obligation.” 11 U.S.C. § 548(a)(1)(B). In Besing, the Fifth Circuit considered whether a Texas
state court’s judgment constituted a transfer for reasonably equivalent value as a matter of law.
See 981 F.2d at 1496.
I.
Besing
Before bankruptcy, the debtors in Besing sued Hawthorne in Texas state court seeking
specific performance of an alleged settlement agreement or damages for breach of the agreement.
Id. at 1490. Hawthorne filed a counterclaim seeking a declaratory judgment and sought the
recovery of several business debts. Id. As a result of a discovery abuse, the state court entered a
sanction order striking the debtors’ pleadings and dismissing with prejudice their claims for
affirmative recovery. Id. Shortly thereafter, the state court entered a final judgment in favor of
Hawthorne. Id.
Subsequently, the debtors filed petitions for relief under Chapter 11. Id. at 1490–91. In an
adversary proceeding, the debtors attempted to avoid the state-court judgment under § 548 arguing
the judgment constituted a transfer of their claims for which they received no value. Id. at 1491.
After a short trial, the bankruptcy court concluded that the state-court judgment did not constitute
a transfer within the meaning of § 548. Id. The district court affirmed the bankruptcy court’s
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decision, and the debtors appealed to the Fifth Circuit. Id. The Fifth Circuit concluded that the
bankruptcy court erred in concluding that the state-court judgment had not effected a “transfer” of
the debtors’ claims within the meaning of § 548. Id. at 1494. However, the Fifth Circuit affirmed
the bankruptcy court’s decision on other grounds. Id. at 1494–96. The Fifth Circuit held, as a
matter of law, that the Texas state court’s striking of the debtors’ claims constituted a transfer for
“reasonably equivalent value.” Id. at 1496. Therefore, because the debtors could not establish
that they received less than the reasonably equivalent value from the “transfer” of their claims, the
bankruptcy court properly dismissed the debtors’ § 548 avoidance claims. Id.
Two considerations underpin the holding in Besing. First, under Texas law, the dismissal
of the debtors’ claims by the state court was an adjudication on the merits of the debtors’ claims.
Id. (citations omitted). The Court declined the debtors’ invitation to “look behind” the state-court
judgment and found instead, “[t]he judgment conclusively established that the Debtors’ claims
against Hawthorne had no merit.” Id. (citation omitted).1 Second, the Court grounded its decision
in the Full Faith and Credit Act, 28 U.S.C. § 1738, stating “‘The Bankruptcy Code was not
intended to give litigants a second chance to challenge a state court judgment . . . .’” Id. (quoting
G & R Mfg. Co., Inc., v. Gunia (In re G & R Mfg. Co., Inc.), 91 B.R. 991, 994 (Bankr. M.D. Fla.
1988)).
The Fifth Circuit also limited the extent of its holding in Besing.
The Court first
emphasized the decision addressed “only the disposition of state law claims by a state tribunal”
and did not limit “the well-established rule that other transfers of property may be subject to
avoidance under the provisions of the Bankruptcy Code.” Id. Second, the holding did not address
1. The debtors argued the claims were not adjudicated on the merits because the dismissal resulted from a sanction
order. Besing, 981 F.2d at 1496 n.15. The Court disagreed quoting Texas law, “‘a party’s hindrance of the discovery
process justified a presumption that its claims or defenses lack merit.’” Id. (quoting TransAmerican Nat. Gas Corp.
v. Powell, 811 S.W.2d 913, 918 (Tex. 1991)).
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the issue of claims lost or forfeited by a debtor asserting an actual, as opposed to constructive,
fraudulent transfer under § 548(a)(1). Id.
II.
Motion for Partial Summary Judgment
Defendants argue the Dismissal Order operates like the Texas sanction order and judgment
in Besing (Dkt. #37; Dkt. #41). Defendants contend that as a matter of law, the Court must enter
partial summary judgment because the Dismissal Order was an adjudication on the merits of the
Trustee’s state-law claims (Dkt. #37 at p. 5). Therefore, Defendants claim the Trustee cannot
prove that the debtors received less than reasonably equivalent value for their claims under § 548
(Dkt. #37 at p. 5). The Court disagrees as Besing is distinguishable from this case.
The Transfer
Section 548(a) enables a Trustee to avoid a transfer if certain factors are met. The transfer
the Trustee seeks to avoid in this case is the Settlement Agreement, not the Dismissal Order. See
Tango Transport, LLC, 16-04109 (Dkt. #34). The opposite occurred in Besing, where the debtors
sought to avoid the state court’s sanction order and subsequent judgment. 981 F.2d at 1490.
Defendants contend the Trustee cannot seek to avoid the Settlement Agreement without
avoiding the Dismissal Order:
The Trustee argues that the relief he now seeks is solely limited to
unwinding the Settlement Agreement. In so doing, the Trustee asks
this Court to ignore the Dismissal Order and its binding legal effect.
First, the Settlement Agreement and the Dismissal Order are
intertwined. Second, if only the Settlement Agreement was set
aside, the Dismissal Order would prevent prosecution of the State
Court Claims anew. And if the Trustee were to alternatively receive
the value of the State Court Claims under Bankruptcy Code § 550,
such claims would be worthless because those claims were
previously and finally adjudicated. The only way the State Court
Claims or the value thereof could be worth anything to the Trustee
is if this Court were to overturn the Louisiana state court’s final
order of dismissal with prejudice, which would equate to using
Bankruptcy Code § 548 to circumvent state law.
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(Dkt. #41 at p. 2).
Defendants wrongfully attempt to immunize the Settlement Agreement from attack as a
fraudulent transfer through the subsequent, uncontested Dismissal Order.
The Court finds
persuasive the reasoning in Wolf. Osherow v. Wolf (In re Wolf), 15-31477-HCM, 2016 WL
4940198, at *1 (Bankr. W.D. Tex. Sept. 15, 2016), aff’d, 697 F. App’x. 317 (5th Cir. 2017). In
Wolf, Abie transferred real property to Rema. Id. at *38. A later divorce decree awarded at least
some of the previously transferred real property to Rema. Id. In a subsequent adversary
proceeding, the trustee sought to avoid and recover the transfers of the real property under
§§ 548(a)(1)(A), 548(a)(1)(B), and 550. Id. at *2. Rema argued the award of the properties by
the state court in the divorce decree was entitled to preclusive effect, and could not be collaterally
attacked by the Trustee as a fraudulent transfer. Id. at *38. The court, citing Erlewine—a Fifth
Circuit opinion considering Besing in the context of a divorce decree—separated the transfer of
the properties from the divorce decree:
[I]n Erlewine, the bankruptcy trustee was directly challenging the
award of the debtor’s property in a divorce decree as the fraudulent
“transfer” to be avoided. The debtor in Erlewine did not make a
transfer of property to the former spouse before the award and
division of property in the divorce decree. Here, Abie voluntarily
transferred the Subject Properties to Rema by deeds before the
Divorce Decree was entered and before the Divorce Proceeding was
even filed by Rema. The Subject Properties were transferred by
Abie to Rema through deeds signed by Abie and recorded in
February and March 2014—before the Divorce Decree was entered
in September 2014 and even before the Divorce Proceeding was
filed by Rema in May 2014. In the present case, the Trustee is
challenging the “transfer” of the Subject Properties made by the
deeds signed by Abie to Rema; the Trustee is not directly attacking
the subsequent award by the state court in the Divorce Decree as the
fraudulent “transfer.”
It would be an untenable (and unfounded) legal principle that would
permit a debtor (like Abie) to voluntarily transfer away his property
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by deed to his spouse, and then somehow later “immunize” those
transfers from attack as fraudulent transfers through a subsequent
uncontested Divorce Decree. This cannot be what the Fifth Circuit
intended (and is far beyond what was even addressed) in the
Erlewine decision.
Id. at *40 (footnotes omitted) (citing Ingalls v. Erlewine (In re Erlewine), 349 F.3d 205, 211 (5th
Cir. 2003)).
Like Wolf, the Trustee here seeks to avoid a private transaction—the Settlement
Agreement—which led to a judicial action—the Dismissal Order. Therefore, the Trustee is not
directly attacking the Dismissal Order as a fraudulent transfer. Accordingly, if the Settlement
Agreement is a result of a constructively fraudulent transfer, as debtors allege, the Court would
find it untenable to permit Defendants to immunize the fraudulent transfer through the
subsequently uncontested Dismissal Order. A review of other distinguishing factors of Besing,
demonstrates that Wolf’s analysis correctly interpreted the Fifth Circuit’s intentions.
Adjudicated on the Merits
Defendants’ primary argument is that the Dismissal Order was an adjudication on the
merits, like the sanction order and judgment in Besing, and therefore demonstrates that the debtors
received reasonably equivalent value for their claims as a matter of law (Dkt. #37 at p. 5).
Defendants cite Louisiana law stating, “a judgment of dismissal with prejudice shall have the effect
of a final judgment of absolute dismissal after trial.” (Dkt. #37 at p. 7) (quoting La. Code Civ.
Proc. Ann. art. 1673). The Court finds Besing distinguishable because the “adjudication on the
merits” in Besing and other similar cases is fundamentally different from the Dismissal Order here.
In this case, the state court did not consider the merits of the debtors’ claims before
dismissing the debtors’ claims pursuant to an uncontested motion. Tango’s financial condition
deteriorated during the litigation of the Louisiana suit (Dkt. #40 at p. 2). During this time, Tango’s
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executives ceded control of Tango to Chief Restructuring Officer Dan Dooley. (Dkt. #40 at p. 2).
Dooley caused Tango to enter the Settlement Agreement with Defendants on August 21, 2015
(Dkt. #40 at p. 2). The Settlement Agreement required Tango to dismiss the Louisiana suit
(Dkt. #39 at p. 7). Consequently, Tango filed its motion to dismiss on September 17, 2015
(Dkt. #37-3). Defendants did not contest the motion to dismiss, and the state court dismissed the
suit on September 22, 2015 (Dkt. #37-4). The Dismissal Order is one sentence in length and
includes no analysis (Dkt. #37-4). Further, there is no evidence that the state court knew of or
reviewed the Settlement Agreement, nor did the Settlement Agreement require the state court’s
approval. Therefore, the Dismissal Order is more similar to a consent judgment then the judgments
found in Besing and similar cases where courts considered the merits of the debtor’s case before
dismissal. See 18A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure
§ 4443 (3d. ed. 2018) (footnotes omitted) (“The [consent] judgment results not from adjudication
but from a basically contractual agreement of the parties. It can be entered only if the parties have
in fact agreed to entry, it is to be enforced in accord with the intent of the parties, and it can be
vacated according to basically contractual principles of fraud, ignorance, mistake, mutual breach,
or special protection of favored parties.”).
The opposite occurred in Besing, where the state court struck the debtors’ pleading as a
result of a discovery abuse. 981 F.2d at 1490. The court’s consideration of the case and ultimate
sanction created a presumption that the debtors’ claims lacked merit. Id. at 1496 n.15. In other
words, the dismissal occurred after the state court carefully considered the violation and sanctioned
the debtors. This type of consideration of the case and pleadings is not apparent in the Dismissal
Order at issue.
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In Erlewine, Erlewine filed for a divorce in Texas state court. 349 F.3d at 207. After
several days of trial, the divorce court entered a final decree of divorce. Id. In a subsequent
adversary proceeding, the trustee sought to avoid the divorce decree under § 548. Id. at 208.
Affirming the bankruptcy court’s finding that the debtor received reasonably equivalent value as
a matter of law, the Court noted:
We are not sure that Besing sweeps so broadly as always to prevent
a Trustee from challenging a divorce decree under § 548(a)(1)(B).
But in this case the only thing that the Trustee can say by way of
challenge to the property settlement provided by the divorce decree
is that the state court divided the community assets unevenly.
Whatever concerns might arise in other cases, the divorce before
us—which was fully litigated, without any suggestion of collusion,
sandbagging, or indeed any irregularity—should not be unwound
by the federal courts merely because of its unequal division of
marital property. Accordingly, we conclude that the bankruptcy
court did not err in finding that the Debtor received reasonably
equivalent value as a matter of law.
Id. at 212–13 (emphasis added) (footnotes omitted).2 In the instant case, the debtors’ claims were
not fully litigated and the debtors allege an irregularity—the Settlement Agreement is a
constructively fraudulent transfer. Accordingly, the Court believes this case presents one of the
situations contemplated by the Fifth Circuit where Besing does not sweep-away the debtors’ § 548
claims. Overall, in both Besing and Erlewine, the Fifth Circuit addressed cases where the state
courts considered, or even tried, the parties’ state-court claims. This is not the situation here, where
the state court did not consider the merits of the parties’ claims before dismissal.
This case is more similar to Mt. McKinley. Mt. McKinley Ins. Co. v. Lac D’Amiante Du
Quebec LTEE (In re ASARCO LLC), 513 B.R. 499 (S.D. Tex. 2012). In Mt. McKinley, Mt.
McKinley settled its dispute. Id. Pursuant to the settlement, the state court then entered an agreed
2. The Fifth Circuit recognized that some bankruptcy courts have set aside property settlements under § 548.
Erlewine, 349 F.3d at 212 n.8 (citing Citibank, N.A. v. Williams (In re Williams), 159 B.R. 648 (Bankr. D. R.I. 1993);
Germain v. Kaczorowski (In re Kaczorowski), 87 B.R. 1 (Bankr. D. Conn.1988)).
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stipulated order of dismissal. Id. at 502. In a subsequent adversary proceeding, ASARCO sought
to set aside the settlement agreement. Id. Mt. McKinley moved to dismiss the adversary
proceeding citing Besing and Erlewine. Id. at 503. The bankruptcy court denied Mt. McKinley’s
motion to dismiss and Mt. McKinley sought an interlocutory review from the district court of the
ruling. Id. The court denied Mt. McKinley’s motion for interlocutory appeal finding that neither
Besing nor Erlewine applied. Id. at 509–10. The district court distinguished the two cases:
Erlewine was resolved on cross-motions for summary judgment,
after which the court affirmed the bankruptcy court’s finding that
the Trustee/Debtor had received reasonably equivalent value
pursuant to the divorce decree at issue, thus negating the claim of
fraudulent transfer. Besing . . . was affirmed by the Fifth Circuit on
the basis that the state trial court had decided that the Debtors’
claims had no merit. Since the claims had no merits, the transfer
was as a matter of law one for reasonably equivalent value, again
negating any claim for fraudulent transfer. This Court does not have
enough of a record to either grant a summary judgment or to rule as
a matter of law that reasonably equivalent value was transferred.
Indeed at oral argument, counsel for Mt. McKinley told the Court
that the settlement agreement—the very document that would
exhibit the quid pro quo and perhaps therefore the existence of
reasonably equivalent value—was not relevant to the appeal.
....
The very petition here, however, suggests that the settlement in
question involved some irregularity. Thus, this Court cannot, on the
slim record before it, summarily dispose of the claims.
Id. at 509 (citations omitted). The same situation is before the Court in this case. The Trustee
alleges irregularity in the Settlement Agreement and, therefore, the Court does not believe Besing
mandates summary judgment.
Voluntary/Involuntary Dismissal
Additionally, the Court believes there is a fundamental difference between an involuntary,
judicial transfer of a debtor’s claims and a voluntary, non-judicial transfer of a debtor’s claims. In
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Besing and Erlewine, the parties involuntarily transferred their claims due to a judicial action. See
Besing, 981 F.2d at 1496; Erlewine, 349 F.3d at 207. In Wolf and Mt. McKinley, the parties
voluntarily transferred their claims through a private action. See Wolf, 2016 WL 4940198, at *38;
Mt. McKinley, 513 B.R. at 502. In Wolf, the court noted this distinction:
[T]he divorce action in Erlewine and the Divorce Proceeding
between Abie and Rema are at opposite ends of the spectrum. In
Erlewine, the divorce and award were hotly contested by the debtor
and non-debtor spouse and actively litigated in a state court trial that
lasted several days. At the conclusion of the trial, the state court
entered a divorce decree which granted ownership of more than 50%
of the marital property to the non-debtor spouse. The state court in
Erlewine specifically justified its disproportionate division of
property in the divorce on several grounds, including that the debtorspouse had used a significant amount of community funds on drug
treatment and unnecessary prescription drugs and had taken
unreasonable positions in the divorce action that drove up the
expense of the divorce. The debtor in Erlewine had not
“volunteered” to take fewer assets in the divorce, according to the
Fifth Circuit.
Nothing even close to this happened in the Divorce Proceeding filed
by Rema against Abie. The Divorce Proceeding and attendant
Divorce Decree were completely uncontested by Abie. Abie waived
notice of the Divorce Proceeding, agreed that the Divorce
Proceeding could be taken up by the state court without further
notice to Abie, and waived the making of a record. The Divorce
Decree states that Rema and her counsel appeared at a hearing on
September 8, 2014. Abie did not appear at the hearing. The Divorce
Decree has boilerplate language about a “just and equitable
division” of properties, with no specific findings by the state court
to justify the grossly unequal division of property between Abie and
Rema. The Divorce Decree and the docket in the Divorce
Proceeding indicate that the Divorce Decree was an “Agreed
Judgment”, and only Rema signed the Divorce Decree. Abie
effectively “volunteered” to take fewer assets and let Rema take
whatever property she wanted.
2016 WL 4940198, at *40 (citations omitted).
This distinction is crucial. The federalism concerns noted in Besing are implicated if a
debtor may avoid an involuntary, judicial transfer under § 508. Essentially, a debtor seeking to
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avoid an involuntary, judicial transfer—such as a sanction order or divorce decree entered after a
trial on the merits—alleges that the state court is the fraudulent actor. Consequently, these types
of actions should not be allowed. See Besing, 981 F.2d at 1496.
However, these federalism concerns are not implicated when a debtor seeks to avoid a
voluntary, private transfer of the debtor’s claims, which later leads to an unopposed dismissal by
a state court. In such a case, the debtor alleges a party is the fraudulent actor, and the fraud is
merely continued when the state court grants the subsequent, unopposed motion for dismissal.
CONCLUSION
Besing stands for the important principle that federal courts must respect the disposition of
state-law claims by state courts. See 981 F.2d at 1496. Defendants argue that allowing the Trustee
to proceed on its claims violates the principle stated in Besing.
The Court disagrees because the “transfer” at issue occurred because of the Settlement
Agreement, not the Dismissal Order. Further, the constructive fraud alleged by the Trustee
occurred when the parties signed the Settlement Agreement, not when the state court granted the
. uncontested motion.
It is therefore ORDERED Defendants’ Motion for Partial Summary Judgment is hereby
DENIED (Dkt. #37).
IT IS SO ORDERED.
SIGNED this 13th day of February, 2019.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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