Church Joint Venture v. Blasingame

• Decision Date: 17 November 2016
• Docket Number: No. 2:12-cv-02999,2:12-cv-02999
• Parties: 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.
• Court: U.S. District Court — Western District of Tennessee

CHURCH JOINT VENTURE, A LIMITED PARTNERSHIP, Plaintiff, v. EARL BENARD BLASINGAME;MARGARET GOOCH BLASINGAME;KATHERINE BLASINGAME CHURCH;EARL BENARD "BEN" BLASINGAME,JR.; BLASINGAME FAMILY BUSINESSINVESTMENT TRUST; BLASINGAMEFAMILY RESIDENCE GENERATIONSKIPPING TRUST; and FIBERZONE TECHNOLOGIES, INC.; Defendants.

No. 2:12-cv-02999

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

November 17, 2016

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 Pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). (ECF No. 155 ("KBC/EBB Jr. Mot.").)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. (ECF No. 156 ("Fiberzone Mot.").) On July 27, 2016, Church JV filed a response to the Fiberzone Motion. (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 Gooch Blasingame ("MGB")—collectively, "Debtors"—filed a Motion to Dismiss 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.").)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.").) BFRGST filed a reply on August 22, 2016. (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,for Summary Judgment as to Counts II, III, IV, and V of the Complaint. (ECF No. 160 ("BFBIT Mot.").) Church JV filed a response on August 8, 2016. (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. (ECF No. 174 ("Mot. for Status Conference").) 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. The KBC/EBB Jr. Motion is GRANTED, but Church JV may make one limited amendment to the Amended Complaint addressing EBB Jr. The Fiberzone Motion, the EBB/MGB Motion, and the BFRGST Motion are GRANTED in part and DENIED in part. The BFBIT Motion is DENIED.

I. BACKGROUND

On November 16, 2012, Church JV filed its Original Complaint. (ECF No. 1 ("Original Compl.").) The 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 to hinder, delay and defraud Church JV." (Id. ¶ 84.) 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." (Id. ¶ 83; see also id. ¶ 81.) Second, Church JV asked the Court to "set aside and avoid" 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"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 subsequent transfers of property, real or personal, by them, as well as any other entity which they control or [in which they] have a controlling interest." (Id. ¶ 95.) 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 JV filed a response on March 4, 2013. (Pl.'s Resp. to Defs.' Mot. to Dismiss, ECF No. 24.) 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 fileda 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 Amended Original Complaint. (ECF No. 81 ("Am. Compl.").) This is the presently operative complaint. The Amended Complaint adds details about allegedly problematic transfers. (See generally id.) 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 Dismiss, Combined with Request for Leave to File if Necessary, ECF No. 92.)

On September 27, 2013, the Court entered an Order addressing, inter alia, the First Motion to Dismiss. (ECF No. 98.) The order denied that part of the First Motion to Dismiss based on Rule 12(b)(1).⁴ (Id. at 3-4.) It granted leave to filethe 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. (Defs.' Mot. to Dismiss Firt [sic] Am. Compl. Pursuant to 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.) Church JV filed a Court-permitted surreply on January 3, 2014, and Defendants filed a Court-permitted sur-surreply on January 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...