Harris v. Trs. of Conneaut Lake Park, Inc. (In re Trs. of Conneaut Lake Park, Inc.)
| Decision Date | 03 February 2017 |
| Docket Number | Adversary No. 16–1039–JAD,Bankruptcy No. 14–11277–JAD |
| Citation | 563 B.R. 784 |
| Parties | IN RE: TRUSTEES OF CONNEAUT LAKE PARK, INC., Debtor, Gary Harris, Individually and as Alter Ego for MM–E Holding Trust, Concore Holding Trust, Richman Holding Trust and 3470 Corp. d/b/a/ The Water Company, Plaintiff, v. Trustees of Conneaut Lake Park, Inc., Defendant. |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
Jeanne S. Lofgren, George T. Snyder, Stonecipher Law Firm, Pittsburgh, PA, for Defendant.
The primary issue before the Court is whether the Plaintiff's claims and causes of action against the defendant are time barred.1 For the reasons set forth below, the Court concludes that the Plaintiff's claims are stale and that this Adversary Proceeding should be dismissed.
This Adversary Proceeding is a property dispute that's been percolating since the mid to late 1990's.
The Defendant is the Trustees of Conneaut Lake Park, Inc. (referred to herein as the "Defendant " or "TCLP "). TCLP is the reorganized debtor who owns and/or operates an amusement park consisting of land, buildings, rides and other facilities located on or near the shore of Conneaut Lake in Crawford County, Pennsylvania.
The Plaintiff in this Adversary Proceeding is Mr. Gary Harris. Mr. Harris commenced this action in his own name and as the purported "alter ego" of various trusts or entities that he owns and/or controls. Those alleged trusts and/or entities are: MM–E Holding Trust, 16401 Holding Trust, Concore Holding Trust, Richman Holding Trust, Resort Holding Trust, and 3740 Corp. d/b/a The Water Company. Collectively, these entities are referred to herein as the "Harris Entities ." The "Harris Entities " and Mr. Harris are collectively referred to herein as the "Plaintiff ."
By this Adversary Proceeding, the Plaintiff seeks a judgment declaring it as "the owner of the water company and its systems and equipment at" Conneaut Lake Park. See Complaint at ¶ 19. As to the water company assets, the Plaintiff further seeks a judgment declaring it as the owner of the water company contracts and accounts. See Complaint at ¶ 20. The Plaintiff also seeks a judgment declaring it to be the "sole and exclusive owner of amusement park rides and games et al [sic] used or stored at" Conneaut Lake Park. See Complaint at ¶ 23.
The Plaintiff seeks to have all of the assets that are the subject of this Adversary Proceeding "returned and restored" to the Plaintiff. See Complaint at ¶¶ 20 and 24. In this regard, the Plaintiff seeks control of these assets by way of injunctive relief enjoining the Defendant from transferring or otherwise disposing the disputed assets. See Complaint at ¶¶ 21, 24 and 25.2
Mr. Harris, through various entities he owned or controlled, purchased Conneaut Lake Park in 1996. Thereafter, he purportedly caused the park assets to be assigned or conveyed to various entities.
This Adversary Proceeding is not the first litigation involving the disputed assets. In an equity action filed in 1998 in the Court of Common Pleas of Crawford County (the "Equity Action "), the validity of a settlement agreement concerning the disputed assets was ruled to be unenforceable by way of an Adjudication rendered in February 20, 2003 by President Judge Gordon R. Miller. A copy of the Adjudication is annexed at Exhibit "B" to the Defendant's Brief in Support of Motion to Dismiss Complaint or, in the Alternative, for a More Definite Statement , which is filed at ECF Doc. # 13.4
As found by President Judge Miller, the directors of TCLP believed that TCLP owned all of the assets at the park "lock, stock and barrel" and Mr. Harris and/or the Harris Entities (through a separate entity owned, controlled or managed by Mr. Harris called Asset Management) disputed this assertion. SeeAdjudication at ¶¶ 15 and 75.
In his Adjudication , President Judge Miller defined the "Park" as the "land, buildings, rides and other facilities and asset[s]" at Conneaut Lake Park Seeid. at p. 3. President Judge Miller also found that "Mr. Harris expressly represented that the Park was being transferred to TCLP ‘lock, stock and barrel.’ " SeeAdjudication at p. 24. Ultimately, the Court of Common Pleas of Crawford County did not adjudicate the ownership issue as to the disputed rides when it rendered the settlement agreement unenforceable. SeeAdjudication at n. 6, p. 39.
Nonetheless, the record reflects that while the Equity Action was pending, Asset Management filed a replevin action against TCLP and others on July 13, 1999 at Case No. AD 1999–746 in the Court of Common Pleas of Crawford County.
The complaint in replevin was amended on April 11, 2001 (the "Replevin Complaint "). See ECF Doc. # 34 at Exhibit "1". Paragraph 2 of the Replevin Complaint avers that Asset Management "manages the affairs and has the express authority to act on behalf" of certain of the Harris Entities. Paragraph 3 of the Replevin Complaint avers that certain of the Harris Entities claimed ownership of the amusement rides at Conneaut Lake Park and demanded their replevy.
On July 10, 2002, President Judge Miller issued an order granting summary judgment in favor of TCLP and dismissed the Replevin Action on the basis that Asset Management lacked the authority to pursue the action on behalf of the averred Harris Entities. See ECF Doc. # 34 at Exhibit 7. The Court of Common Pleas also refused Asset Management's motion for reconsideration (which had requested permission of certain of the Harris Entities to intervene and to file an amended complaint in replevin). This determination of the trial court was affirmed by the Superior Court of Pennsylvania on August 22, 2003. Pursuant to its opinion the Superior Court of Pennsylvania wrote:
We find no abuse of discretion in the court's refusal to allow Asset Management to name new plaintiffs to an action originally filed in July 13, 1999. The motion for reconsideration was filed well beyond the expiration of the two-year statute of limitations for actions in replevin, and was also filed the day before trial was set to commence... Thus, amendment to name the four trusts as plaintiffs would clearly have been improper.
See ECF Doc. # 34 at Exhibit 7.
3740 Corp. is also no stranger to the litigation referenced above. In the Equity Action, 3740 Corp. opposed the custodian of TCLP's efforts to sell the sewer system at Conneaut Lake Park. 3740 Corp. sought to intervene in the Equity Action to block the sale. By Memorandum Order dated January 28, 2003, Judge Anthony J. Vardaro denied 3740 Corp.'s application to intervene in the Equity Action. See ECF Doc. # 31 at Exhibit "C".
In those proceedings Mr. Harris personally requested to intervene because the custodian of TCLP sought to sell other personal property in which Mr. Harris claimed an interest. Mr. Harris' request was denied as being untimely. In reaching its decision, the Court of Common Pleas noted that if Mr. Harris claimed ownership of personal property at Conneaut Lake Park "he could have filed a replevin action long ago to recover that property or if he believes the property was stolen or somehow no longer on the Conneaut Lake Property, he certainly could have filed a legal action to recover from those he felt to be responsible." SeeMemorandum Order at p. 11–12. Thereafter, in 2005, Mr. Harris filed within the Equity Action a Motion to Release Personal Property , which the Court of Common Pleas denied by way of an order dated March 18, 2005. See Exhibit "E" to the Supplement/Addendum to Motion to Dismiss filed at ECF Doc. # 37. The denial was based upon res judicata and lack of standing.
The matter presently before the Court is the Motion to Dismiss Complaint or, in the Alternative, for a More Definite Statement (the "Motion to Dismiss ") filed by the Defendant. By the Motion to Dismiss, the Defendant asserts a myriad of defenses sounding in want of jurisdiction or res judicata.
Given that the foundation of these defenses rested on the prior judgments made in the state court system, the Court directed the parties to supplement the record in this case by filing copies of the state court judgments and related documents. The Court also afforded the parties the opportunity to file supplemental briefs. See e.g.Order Signed on 11/14/2016 Directing Parties To Jointly Produce Prior Court Orders Regarding Issues Presented In This Adversary Proceeding filed at ECF Doc. # 27; and Order Signed on 1/17/2017 Permitting Plaintiff To File Responsive Pleading To Defendant's Supplement In Support of Motion to Dismiss And Brief In Support Of Supplement To Motion to Dismiss no later than February 1, 2017 filed at ECF Doc. # 44.
In response to this Court's directives, the parties filed various documents with the Court. Of note, the Defendant filed a Brief in Support of Supplement to Motion to Dismiss , in which TCLP asserts that the Plaintiff's claims are barred by the applicable statutes of limitation and should be dismissed with prejudice pursuant to Fed.R.Civ.P. 12(b)(6) and Fed.R.Bankr.P. 7012. SeeBrief in Support of Supplement to Motion to Dismiss at pp. 4–6. The Plaintiff also filed a Supplemental Brief at ECF Doc. # 48 disputing the Defendant's statute of limitations defense.5 This Memorandum Opinion addresses the merits of this defense and the Plaintiff's opposition thereto.
Fed.R.Civ.P. 12(b)(6) provides that complaints may be dismissed for "failure to state a claim on which relief can be granted."
In deciding such a motion, the Court "may consider material which is properly submitted as part of the complaint...without converting the motion to dismiss into a motion for summary judgment." Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). If the documents are not physically attached to the complaint, they may be considered if the documents' authenticity is not...
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