In re Bell & Beckwith
| Decision Date | 15 February 1990 |
| Docket Number | Bankruptcy No. 85-0024. |
| Citation | 112 BR 871 |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
| Parties | In re BELL & BECKWITH, Debtor. Patrick A. McGRAW, Trustee, Plaintiff, v. Roscoe R. BETZ, Jr., et al., Defendants. |
Fuller & Henry, Toledo, Ohio, for plaintiff.
Stephen P. Harbeck, Washington, D.C., for SIPC.
Edward F. Zoltanski, Russell R. Miller, Toledo, Ohio, for Roscoe R. Betz, Jr.
Susan M. Pioch, Toledo, Ohio, for Robert R. Coon, II.
Randy L. Reeves, Lima, Ohio, for Louis Haubner, Jr.
Charles V. Contrada and Dennis F. Keller, Holland, Ohio, for Donald C. Henninger.
Philip R. Joelson, Toledo, Ohio, for J. Robert & Marilyn Jesionowski.
David M. Schnorf, Toledo, Ohio, for Thomas L. McGhee.
David W. Wicklund, and Deborah L. Kovac, Toledo, Ohio, for John E. Thompson and George M. Todd.
Frank J.P. McManus, Toledo, Ohio, for Edward P. Wolfram, Jr.
David P. Rupp, Jr., Swanton, Ohio, for Beverly Betz.
This cause comes before the Court after Hearing on Plaintiff's Motion to Alter or Amend Judgments Entered on January 19, 1990. At the Hearing, Attorneys for J. Robert Jesionowski, John E. Thompson, and George M. Todd appeared and presented Objections to the Motion of the Plaintiff Trustee. Written arguments in support of the Motion were filed by the Trustee and the Securities Investor Protection Corporation. No request for leave to file post-Hearing Briefs was made by the Defendants who appeared. The Court has reviewed the arguments of counsel, as well as the entire record in this case. Based on that review, and for the following reasons, the Court finds that the Plaintiff's Motion to Alter or Amend Judgments Entered on January 19, 1990 should be granted.
The facts relevant to the determination of this issue are not in dispute. The Court issued Two (2) Memorandum Opinions and Orders on January 19, 1990. In the first decision, the Court struck the Seventh Defense of John E. Thompson, and granted Summary Judgment in favor of the Trustee on his Counterclaim. 112 B.R. 858. The Opinion held that Mr. Thompson could not avoid liability for the Bell & Beckwith deficiency by attempting to rescind the partnership agreement. In the second decision, the Court granted the Plaintiff's Motion for Summary Judgment on the first count of the Complaint, holding that Edward P. Wolfram, Jr., Robert R. Coon, II, J. Robert Jesionowski, Donald C. Henninger, Thomas L. McGhee, John E. Thompson, and George M. Todd were liable for the partnership debts and granting judgment against them, jointly and severally, for Twenty-nine Million Dollars ($29,000,000.00). 112 B.R. 863. Both decisions of the Court deal with only the first count of the Trustee's Complaint, and fully resolve the issues raised in that count against the above Defendants.
The Trustee's Complaint in Adversary Case 85-0024 contains Thirteen (13) counts. The Complaint contains the following allegations and parties:
1) The first count deals with the liability of the general partners, and the former general partners, for the debts of the partnership under Ohio partnership law and 11 U.S.C. § 723(a). Summary Judgment was entered against all of the general partners except Roscoe R. Betz, who had a pending settlement agreement filed with the Court.
2) The second count alleges that the general partners, and former general partners, are liable for Wolfram's breach of trust under Ohio partnership law.
3) The third count seeks to avoid transfers made to general partners while the brokerage was insolvent in the year prior to Bell & Beckwith's bankruptcy. The Trustee's theory of recovery is based upon § 548(b).
4) The fourth count asserts that the transfers in the third count were also fraudulent conveyances under § 548(a)(2) of the Bankruptcy Code, and Ohio fraudulent conveyance statutes.
5) The fifth count claims that certain transfers from Bell & Beckwith to the general partners were preferences under § 547(b).
6) The sixth count is similar to the fourth count, except it involves transfers to the former general partners.
7) The seventh count parallels the fifth count, but seeks to recover transfers made to the former general partners.
8) The eighth count is a state law fraud action for the return of certain transfers which were allegedly made by J. Robert Jesionowski to Marilyn Jesionowski. The Trustee also asks for Ten Thousand Dollars ($10,000.00) in punitive damages, and an accounting.
9) The ninth count involves a promissory note which evidences a loan from Zula Wolfram to Roscoe Betz. The assignment of all Zula Wolfram's property to the Trustee included this demand note, which was originally for Sixty Thousand Dollars ($60,000.00).
10) The tenth count deals with a loan made by Edward P. Wolfram, Jr. to Roscoe Betz for Two Hundred Thousand Dollars ($200,000.00). Mr. Wolfram also assigned all of his property, including the promissory note, to the Trustee.
11) The eleventh count alleges that transfers made by Roscoe Betz to Beverly Betz were in violation of this Court's injunction issued under § 723(b). Orders for a "separation agreement", "property settlement" and "alimony only" were entered in the Fulton County Court of Common Pleas on September 15, 1983, based upon an agreement between the Betz's. The Trustee requests that the transfers be held null and void, and that the property be made part of Roscoe Betz's Chapter 11 estate.
12) The twelfth count involves a loan from Edward P. Wolfram, Jr. to Donald C. Henninger. The loan was for Thirty Thousand Dollars ($30,000.00) and the Trustee alleges that there remains a balance due of Eleven Thousand Dollars ($11,000.00).
13) The thirteenth count seeks to have the general partners amend their tax returns to take a "net operating loss" carry back for federal, state, and local tax purposes, and pay any refunds over to the Trustee.
The record reflects that all of the former general partners, except Louis Haubner, Jr., have been dismissed from this action. All matters involving Roscoe R. Betz, Jr. and Beverly Betz have been resolved in the Order entered by this Court on February 14, 1990 approving the proposed settlement with the Trustee. At the Hearing, counsel for the Trustee stated that with the possible exception of the tax return issue, the remaining counts against the general partners would not be pursued if the judgment based on § 723(a) was upheld on appeal. Essentially, the size of the judgment against the general partners, in relation to their assets, makes most of the remaining counts superfluous. At this time, the only count which the Trustee has indicated he does intend to pursue is count Eight (8), which alleges that certain fraudulent transfers were made from J. Robert Jesionowski to Marilyn J. Jesionowski.
Initially, the Court notes that even if the January 19, 1990 decisions were found to be interlocutory, the District Court could hear an appeal under 28 U.S.C. § 158(a). See, In re Durability, Inc., 893 F.2d 264 (10th Cir.1990); In re Cottrell, 876 F.2d 540 (6th Cir.1989).
In his Motion, the Trustee seeks to have the Court alter or amend the Judgments issued on January 19, 1990 pursuant to Federal Rule of Civil Procedure 54(b), which states:
(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
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