Clary-Ghosh v. Ghosh

• Docket Number: 22A-PL-1411
• Decision Date: 18 September 2023
• Parties: Meleeka Clary-Ghosh, et al., Appellants-Defendants, v. Michael Ghosh, Appellee-Plaintiff.
• Court: Indiana Appellate Court

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Meleeka Clary-Ghosh, et al., Appellants-Defendants, v. Michael Ghosh, Appellee-Plaintiff.

No. 22A-PL-1411

Court of Appeals of Indiana

September 18, 2023

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.

Appeal from the Hamilton Superior Court The Honorable Jonathan M Brown, Judge Trial Court Cause No. 29D02-1707-PL-6437

ATTORNEY FOR APPELLANT Adam Lenkowsky Roberts Litigation Group Indianapolis, Indiana

Appellants Pro Se Andrew L. Clary, Jr. Philippines Luke L Tooley, Jr. Dorchester, Massachusetts

APPELLEE PRO SE Michael Ghosh The Ghosh Law Office, LLC Carmel, Indiana

MEMORANDUM DECISION

RILEY, JUDGE.

STATEMENT OF THE CASE

[¶1] In this consolidated appeal, Appellants-Defendants, Meleeka Clary-Ghosh^[1](Meleeka), MCM Fashions, LLC (MCM), Andrew Clary, Jr. (Andrew), and Luke Tooley, Jr. (Tooley) (collectively, the Defendants),^[2] appeal the trial court's judgment in favor of Appellee-Plaintiff, Michael Ghosh (Ghosh), on his claims pursuant to the Indiana Uniform Fraudulent Transfer Act (UFTA).

[¶2] We affirm in part and reverse in part.

ISSUES

[¶3] The Defendants present this court with at least twenty-one separate claims, which we consolidate and restate as the following eight claims:

(1) Whether the trial court improperly denied Meleeka's and MCM's joint motion to dismiss for failure to state a claim;

(2) Whether the trial court's judgment as to Meleeka is clearly erroneous;

(3) Whether the trial court abused its discretion when it awarded punitive damages against Meleeka and MCM; (4) Whether the trial court abused its discretion when it ordered Meleeka and MCM to pay Ghosh's attorney's fees;

(5) Whether genuine issues of material fact existed precluding summary judgment in favor of MCM; (6) Whether the trial court's judgment as to MCM is clearly erroneous;

(7) Whether Andrew and Tooley are procedurally defaulted from raising certain claims following this court's affirmance of the default judgments entered against them; and

(8) Whether Tooley's claim that he was entitled to a change of venue in related receivership proceedings is moot.

FACTS AND PROCEDURAL HISTORY

[¶4] Pursuant to our standard of review, we recite the facts most favorable to the trial court's judgment. Meleeka and Ghosh were formerly married. Andrew is Meleeka's brother and Tooley is the father of Meleeka's two adult children who were born before she married Ghosh. This is the fourth appeal stemming from Ghosh's efforts to collect judgments he obtained against Meleeka in their divorce proceedings, which began on August 13, 2009, when Ghosh filed a petition for dissolution. The divorce proceedings were protracted and resulted in the entry of multiple judgments in Ghosh's favor against Meleeka, only five of which are relevant for our purposes. Those five judgments (the Judgments) totaled $36,600.91 and were entered as follows: (1) October 3, 2011, in the amount of $2,235.84; (2) October 3, 2011, in the amount $1,484.73; (3) October 3, 2011, in the amount of $1,880.34; (4) October 26, 2016, in the amount of $17,000.00 and (5) February 27, 2018, in the amount of $14,000.00. The Judgments accrued post-judgment interest of eight percent per year.

[¶5] On November 15, 2011, while the divorce proceedings were ongoing, Meleeka incorporated MCM with the Indiana Secretary of State. MCM was in the business of retail sales of women's clothing. In its incorporation filings, Meleeka was listed as MCM's registered agent, and Meleeka's personal residence was listed as MCM's principal office address. On August 14, 2013, articles of amendment were filed with the Indiana Secretary of State providing that Andrew and Tooley were members of MCM. On March 15, 2018, MCM was dissolved. From its inception on November 15, 2011, until its dissolution on March 15, 2018, MCM filed no state or federal tax returns and observed few corporate formalities. During MCM's existence, there were no amendments to its operating agreement or any other resolutions or documentation which provided Meleeka the authority to engage in business on behalf of MCM.

[¶6] During the corporate life of MCM and while the divorce proceedings were ongoing, Meleeka effectuated a series of transfers of vehicles to MCM. On July 11, 2013, she transferred a 2000 Mercedes Benz CLK 430 to MCM for $1.00 and a 2006 Suzuki AN400K3 motorcycle to MCM for $1.00. Also on July 11, 2013, Meleeka transferred a 2001 Mercedes Benz S500 to MCM for $1.00; this vehicle was subsequently traded in on May 2, 2015, in MCM's name for a 2007 BMW 750i. On July 23, 2013, Meleeka transferred a 2002 Chevrolet Venture to MCM for $1.00. Meleeka signed on behalf of MCM as the purchaser for all these transfers. On November 6, 2014, Meleeka signed as the agent of MCM for the acquisition of a 2000 Dodge Durango and signed as MCM's agent when the Durango was traded in on April 27, 2015, for a 2005 Lexus GX 470.

[¶7] Ghosh pursued proceedings supplemental against Meleeka in the divorce case but was unsuccessful in satisfying the Judgments he then held against her. On July 11, 2017, Ghosh filed his Verified Complaint to Set Aside Fraudulent Transfers and Piercing the Corporate Veil/Alter Ego (the Complaint) that is the basis of the instant appeal. Ghosh named Meleeka and MCM as defendants and alleged that, in violation of the UFTA, Meleeka had fraudulently transferred the aforementioned vehicles to MCM, without receiving a reasonably equivalent value in exchange and that she had done so with the actual intent to prevent Ghosh from enforcing the Judgments and to make herself insolvent or appear to be insolvent. Ghosh also claimed that Meleeka had titled other vehicles in MCM's name. Ghosh further alleged that MCM was the alter ego of Meleeka and requested that MCM's corporate veil be pierced. Ghosh sought an order voiding the transfer of the vehicles to MCM and subjecting the vehicles to seizure to satisfy the Judgments, an injunction prohibiting Meleeka and MCM from further disposing of the vehicles, discovery of the assets of Meleeka and MCM, the appointment of a receiver for the vehicles and other assets owned by Meleeka and MCM, costs and reasonable fees, and any other appropriate relief.

[¶8] On February 23, 2018, Ghosh propounded discovery requests to MCM. On March 8, 2018, the Tooley Revocable Trust (Tooley Trust) was created. On March 15, 2018, the same day that MCM was dissolved, Tooley transferred the 2000 Mercedes Benz CLK 430, the 2006 Suzuki AN400K3 motorcycle, the 2002 Chevrolet Venture, the 2007 BMW 750i, and the 2005 Lexus GX 470 to the Tooley Trust. To effectuate these transfers, Meleeka signed affidavits for certificates of title on behalf of MCM as agent or trustee, and she signed the certificates of gross retail and/or use tax exemptions on behalf of the Tooley Trust as its agent. The transfer of these five vehicles to the Tooley Trust was made for no consideration. MCM did not disclose these transfers to Ghosh in response to his written discovery requests; rather, MCM informed Ghosh the vehicles had been transferred to Tooley.

[¶9] On May 31, 2018, MCM filed a motion for summary judgment with an accompanying memorandum of law and designation of evidence. MCM argued that there were no genuine issues of material fact that its corporate veil could not be pierced because Meleeka was not an owner or member of MCM, Ghosh already held personal judgments against Meleeka, and Ghosh had never transacted business with MCM. On June 26, 2018, the trial court stayed the summary judgment proceedings pending further discovery.

[¶10] On July 8, 2018, Tooley incorporated TCD using an email address associated with MCM as its service of process and business address. TCD was apparently the corporate vehicle for the production of a movie written, directed, and starring Meleeka.

[¶11] On August 16, 2018, Meleeka and MCM filed a joint motion to dismiss, which they substituted for an amended motion on August 21, 2018. Meleeka and MCM argued, in relevant part, that because Ghosh sought to enforce the Judgments, his instant cause of action could only be brought as an Indiana Trial Rule 69 proceeding supplemental to the divorce proceedings, not as a new, unrelated lawsuit. On August 21, 2018, the trial court held a hearing on the amended motion to dismiss and issued its order concluding that Ghosh had asserted a "new and distinct cause of action against the Defendants" such that pursuing his claims against the Defendants in a proceeding supplemental in the divorce proceedings might not be appropriate. (Joint App. Vol. II, p. 54). The trial court ruled that Ghosh had stated a claim upon which relief could be granted and denied Meleeka's and MCM's joint amended motion to dismiss.

[¶12] On August 27, 2018, after receiving third-party discovery Ghosh moved for leave to amend the Complaint to add Andrew, Tooley, and TCD as defendants. Ghosh re-asserted the Complaint's allegations and additionally alleged in his Amended Complaint that Andrew and Tooley were corporate members of MCM who were personally liable for the Judgments. Ghosh further alleged that, as a result of the Defendants' combined conduct, he had sustained "additional financial losses, including the costs, expenses, and attorney's fees associated with the Defendants' violations of the [UFTA.]" (Joint App. Vol. III, p. 118). Ghosh sought $84,567.13 in compensatory damages, requested that he be awarded punitive damages, costs, reasonable attorney's fees, any appropriate injunctive relief, and any other appropriate relief. Meleeka and MCM opposed the amendment, but on January 3, 2019, the trial...