FRT 2011-1 Trust v. Ehealthscreen, LLC

• Decision Date: 19 April 2016
• Docket Number: CV 213-107
• Parties: FRT 2011-1 TRUST, Plaintiff, v. eHEALTHSCREEN, LLC; MACK W. BRYSON; and JANE O. BRYSON, Defendants.
• Court: U.S. District Court — Southern District of Georgia

FRT 2011-1 TRUST, Plaintiff, v. eHEALTHSCREEN, LLC; MACK W. BRYSON; and JANE O. BRYSON, Defendants.

CV 213-107

United States District Court for the Southern District of Georgia Brunswick Division

April 19, 2016

ORDER

This matter comes before the Court on several fully briefed dispositive motions: Defendant eHealthscreen, LLC's ("eHealthscreen") Motion for Summary Judgment Against Plaintiff FRT 2011-1 Trust ("Plaintiff") (dkt. no. 57); Plaintiff's Motion for Partial Summary Judgment Against eHealthscreen (dkt. no. 65); eHealthscreen's Motion for Summary Judgment on Crossclaims and for Partial Summary Judgment on Counterclaims to Crossclaims (dkt. no. 55); and Defendants Mack W. Bryson ("Mack Bryson") and Jane 0. Bryson's (collectively, the "Brysons") Motion for Partial Summary Judgment on Crossclaims and Counterclaims (dkt. no. 59).

For the reasons that follow, eHealthscreen's Motion for Summary Judgment Against Plaintiff (dkt. no. 57) is GRANTED, and Plaintiff's cross-Motion for Partial Summary Judgment against this Defendant (dkt. no. 65) is DENIED. Additionally, eHealthscreen's Motion seeking summary judgment on the Brysons' crossclaims and partial summary judgment on its counterclaims (dkt. no. 55) is GRANTED. The Brysons' Motion for Partial Summary Judgment on Crossclaims and Counterclaims (dkt. no. 59) is thus DENIED.¹

BACKGROUND²

Plaintiff is a Delaware statutory trust that claims to have a security interest in the Brysons' real property (the "Property") and seeks to foreclose upon the same. See eHealthscreen's SMF 2, ¶¶ 43-44; Pl.'s SMF, ¶¶ 61-62. TheBrysons own and currently reside on the Property, which is located in Waverly, Georgia. Brysons' SMF, ¶¶ 1-2. eHealthscreen is a Florida limited liability company that also purports to be a secured creditor of the Brysons and has attempted to exercise its alleged rights in the subject Property. eHealthscreen's SMF 1, ¶¶ 17-18, 30; Brysons' SMF, ¶ 3; Pl.'s SMF, ¶ 6.

I. Mack Bryson's Equity Partnership in HealthScreen Disease Management, LLC ("HSDM")

In May 2005, HSDM was formed and acquired Mack Bryson's company, Currahee Health Benefits Solutions, Inc. Dkt. No. 71, Ex. A (Affidavit of Mack Bryson, hereinafter "Mack Bryson Aff."), ¶ 2. Mack Bryson became an equity partner with a twenty percent share in HSDM and also agreed to serve as its Chief Executive Officer. eHealthscreen's SMF 1, ¶ 1; Brysons' SMF, ¶ 4. Aside from Mack Bryson, the equity members of HSDM included Anthony Campbell ("Campbell"), J. Melvin Deese ("Deese"), William McArthur ("McArthur"), and Charles Hendrix ("Hendrix"). Brysons' SMF, ¶ 3; Pl.'s SMF, ¶ 7.

A letter dated May 6, 2005, sets forth the agreed-upon terms of Mack Bryson's relationship with HSDM. eHealthscreen's SMF 1, ¶ 2. The letter states, in relevant part:

2. You will draw an advance of distributions in the form of a salary in the amount of $25,000 per month. You will not receive any further distributions until each of the other equitymembers of the [c]ompany have received distributions in an amount equal to the amount of distributions you have drawn. An adjustment for reasonable salary compensation will be credited in the calculations at such time of distribution.

. . . .

11. The [c]ompany will pay the premiums on your Massachusetts Mutual Life insurance policy in the amount of $2,305 per month for twelve months from the date hereof.

12. The [c]ompany will transfer the title of the [c]ompany[-]owned Chevrolet Silverado to you once the bank loan secured by the vehicle is paid in full.

13. The [c]ompany will employ David Stephens at a salary of $2500 per month for a period of time up to 18 months.

The amounts paid by the [c]ompany pursuant to items numbered 11, 12, 13 above will be accrued on the [c]ompany's books as an account receivable due from you to the [c]ompany to be deducted from your future equity member distributions.

Dkt. No. 55, Ex. A.

Upon Mack Bryson becoming an equity member, HSDM began making the $25,000 monthly payment to him as an "advance of distributions in the form of a salary," as well as the other payments on his behalf as stipulated in paragraphs eleven, twelve, and thirteen. eHealthscreen's SMF 1, ¶¶ 6-7. HSDM took tax deductions for these payments, and state and federal taxes were withheld from Mack Bryson's monthly paychecks. Mack Bryson Aff., ¶ 8.

II. HSDM and eHealthscreen

The four equity members of HSDM other than Mack Bryson—namely, Campbell, Deese, McArthur, and Hendrix—formed and became partners of eHealthscreen in September 2006. Brysons' SMF, ¶ 4; Pl.'s SMF, ¶ 8; Mack Bryson Aff., ¶¶ 6, 12. Mack Bryson was not a member of eHealthscreen. Brysons' SMF, ¶ 4; Pl.'s SMF, ¶ 8; Mack Bryson Aff., ¶ 6. HSDM and eHealthscreen were organized and operated as entirely separate and distinct legal entities. Brysons' SMF, ¶ 11. eHealthscreen nevertheless maintains that it and HSDM operated as a joint venture, because it existed only to provide services to HSDM. Dkt. No. 75-1, ¶ 11.

Hendrix served as President of eHealthscreen and oversaw most of its day-to-day operations. Pl.'s SMF, ¶ 10. Campbell was Vice Chairman of eHealthscreen and, as a licensed attorney, also handled at least some of the company's legal and other matters. Id. at ¶ 9. For example, according to McArthur, Campbell was the only member who wrote documents or letters on behalf of eHealthscreen. Id. at ¶ 56. As to some matters, the other members needed to review and agree with Campbell's work prior to him taking action; however, under certain circumstances, the other members allowed Campbell to act on behalf of eHealthscreen without their express, written authority. Id. at ¶¶ 9, 48.

III. The Property and the Secured Promissory Note in Favor of eHealthscreen

In July and September 2006, the Brysons refinanced the Property with First Chatham Bank ("FCB") and, in doing so, executed two deeds to secure debt granting liens on the Property to FCB. eHealthscreen's SMF 2, ¶¶ 2-3; Pl.'s SMF, ¶¶ 3-4.

In November 2006, two members of HSDM informed Mack Bryson that he needed to execute a secured promissory note agreeing to pay eHealthscreen certain sums of money or else his relationship with HSDM would be severed. eHealthscreen's SMF 1, ¶¶ 10, 15-16. According to the HSDM members, they did so because HSDM had been making steady "advance[s] of distributions in the form of a salary" to Mack Bryson and other payments on his behalf as contemplated in the May 6, 2005, letter, while "no distributions were ever made to the members of HSDM." Id. at ¶¶ 3, 6-9. Thus, the HSDM members required that Mack Bryson promise to pay eHealthscreen these amounts, as well as any future amounts, because HSDM ultimately had not made any equity member distributions from which these amounts could be deducted. Id. at ¶¶ 10-12.

The Promissory Note, dated November 27, 2006, states, in pertinent part, as follows:

FOR VALUE RECEIVED, Mack W. Bryson, an individual resident of 2310 Horsestamp Church Road, Waverly, Georgia 31565 ("Borrower") promises to pay, on the Maturity Date (defined below), to the order ofeHealthscreen, LLC, a Georgia limited liability company ("Lender"), at such place as the Lender may designate in writing, the principal sum of Five Hundred Fifty[-]Seven Thousand Five Hundred Eighty[-]One Dollars ($557,581.00) (the "Initial Principal Amount"), which sum was outstanding as of November 27, 2006[,] plus such further sums as may have been or may hereafter be advanced by Lender to Borrower as listed or to be listed on the Schedule of Loans and Payments attached hereto, together with interest on such principal sums. This Promissory Note is referred to herein as the "Note." As used herein, "Maturity Date" shall be the thirtieth (30th) day succeeding receipt by the Borrower of a written demand by Lender for payment hereunder.

Interest shall accrue on the principal sums advanced under this Note from the date each advance of principal was made as recorded on the Schedule of Loans and Payments attached hereof until paid at the annual rate of interest of eight percent (8%). Unless otherwise stated herein, all interest shall be due and payable on the Maturity Date. All interest accruing hereunder as to any advance of principal shall be computed on the basis of actual days elapsed, over a year of 365 days, from the effective date for the Initial Principal Amount as to such amount and from the date of each respective advance for all subsequent loans.

The Initial Principal Amount is intended to reflect, as the initial entry on the Schedule of Loans and Payments, the sums advanced by Lender to Borrower on or prior to the effective date hereof. As further loans or advances have been made or are made by Lender to Borrower, if any, such loans and advances shall be recorded on this Note on the Schedule of Loans and Advances. As payments are made of the sums due under this Note, an entry of same shall be recorded on the Schedule of Loans and Advances. Borrower shall maintain a duplicate copy of the Schedule of Loans and Advances, and periodically Lender and Borrower will verify and reconcile the entries on such Schedule.

. . . .Should it become necessary to collect this Note through an attorney, by legal proceedings, or otherwise, the undersigned[,] including endorsers, promise(s) to pay all costs of collection, including reasonable attorneys' fees.

This Note shall be secured by a Security Deed on the [P]roperty located in the [C]ounty of Camden, [S]tate of Georgia described on Exhibit "A" attached hereto and made apart hereof. Lender shall have, in addition to its remedies under this Note, all the remedies of a holder of a security deed under the laws of the State of Georgia.

Dkt. No. 54-2, pp. 1-2. The attached Security Deed conveys an interest in the Brysons' Property to eHealthscreen as security for Mack Bryson's payment on the Promissory Note. Id. at pp. 6, 8.

Mack Bryson signed the Promissory Note, and he and his wife signed the Security Deed, in favor of eHealthscreen. eHealthscreen's SMF 1, ¶¶...