In re B.L. Jennings, Inc.
| Decision Date | 12 June 2007 |
| Docket Number | Bankruptcy No. 03-4928-3F1.,Adversary No. 03-345.,Adversary No. 03-473.,Bankruptcy No. 03-4937-3F1,,Adversary No. 03-203.,Adversary No. 04-107. |
| Citation | 373 B.R. 742 |
| Parties | In re B.L. JENNINGS, INC., et al., Debtors. RKB Investments, et al., Plaintiffs, v. Brandon James Maxfield, et al., Defendants. Janice K. Jennings, Plaintiff, v. Brandon James Maxfield, et al., Defendants. Brandon James Maxfield, Plaintiff, v. Bryco Arms, et al., Defendants. Brandon James Maxfield, Plaintiff, v. Bryco Arms, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
This proceeding came before the Court for a trial on January 24, 2006, January 25, 2006, January 26, 2006, January 31, 2006, and February 1, 2006. In view of the voluminous exhibits (approximately 3,000) and the record before the Court, the. Court elected to take the matter under advisement and directed the parties to file post-trial memoranda. Upon the evidence and the arguments of the parties, the Court makes the following Findings of Fact and Conclusions of Law.
Brandon James Maxfield ("Maxfield") is an individual who was injured when a handgun designed by Bruce Jennings, manufactured by Bryco Arms, Inc. ("Bryco"), a firearms manufacturer, and distributed by B.L. Jennings, Inc. ("B.L.Jennings"), a firearms distributor, accidentally discharged and injured him. Maxfield obtained a judgment against Bruce Jennings, Bryco, and B.L. Jennings. Linda Bullard is the mother of William O. Bullard, III, who was allegedly killed by a Bryco handgun. Bullard's claim has not been determined as to either liability or damages. Gary and Deborah Kramer are the parents of Jacob Kramer who was allegedly injured by a Bryco handgun. Kramer's claim has likewise not been determined as to liability or damages. The Court classified these three sets of parties as plaintiffs for ease of reference although they are technically defendants in two of the adversary proceedings. In addition to Maxfield, Bullard, and Kramer, there are approximately eleven other parties who were named as defendants in the two declaratory actions filed by the debtors. These parties all alleged damages from firearms manufactured by Bryco and distributed by B.L. Jennings. All of these parties have either been defaulted or otherwise elected not to participate in the trial.
Bruce Jennings was the sole shareholder of B.L. Jennings. Although he was not technically an officer of Bryco, Bruce Jennings was involved in its day-to-day operations, In re Jennings, 332 B.R. 465, 466 (Bankr.M.D.Fla.2005), and' served as a "consultant" to the company since its inception. (Tr. at 935:10-13; 596:16-597:1.) Bryco sold its handguns mainly to B.L. Jennings. (Id.)
Janice Jennings was Bruce Jennings' second wife. Bruce Jennings and Janice Jennings were married in March 1975 and divorced in December 1984. (Maxfield's Exs. 697, 699.) Bruce Jennings' divorce from Janice Jennings incorporated a detailed Marital Settlement Agreement. (Tr. at 99:8-14.) Bruce Jennings and Janice Jennings had two children of the marriage, Kimberly Jennings and Bradley Jennings. (Maxfield's Ex. 697.) Bruce Jennings also has a daughter from a previous marriage, Rhonda Jennings. (Tr. at 98:23-25.) Bryan Miller was Bruce Jennings' stepson (Tr. at 55:8-9), who passed away on April 24, 1987.1 (Tr. at 57:13-15.)
In May 1981, Bruce Jennings and Janice Jennings established the Rhonda D. Jennings California Trust and the Kimberly K. Jennings California Trust, and in February 1983, Bruce Jennings and Janice Jennings established the Bradley A. Jennings California Trust (collectively the "California Trusts"). (Debtors' Exs. 782-784.) Bruce Jennings and Janice Jennings were co-trustees of the California Trusts. (Id.) The respective beneficiaries of the California Trusts were Rhonda Jennings, Kimberly Jennings, and Bradley Jennings. The California Trusts, by their terms, call for the distribution of the trust res to the beneficiary upon his or her twenty-fifth birthday. (Debtors' Exs. 782-784.) In June 1992, the Rhonda D. Jennings California Trust matured and was distributed to Rhonda Jennings pursuant to the terms of the trust instrument. (Tr. at 474:12-24.)
The California Trusts filed separate tax returns from their inception up to and including their filing for bankruptcy. (Debtors' Exs. 16-51, 68-101, 103-121.) The California Trusts kept separate books and records from the other defendants in these adversary proceedings. (Debtors' Exs. 1-121.)
In 1987, Bruce Jennings and Janice Jennings, as co-trustees of the California Trusts, created RKB Investments ("RKB"), a California General Partnership, the three general partners of which were the California Trusts. (Debtors' Ex. 224.) RKB's purpose was to develop real estate in California. Bruce Jennings managed RKB's real estate portfolio. (Tr. at 162:7 — 13). Janice Jennings' duties with RKB were to manage its checkbooks and business records. (Tr. at 862.) Janice Jennings also signed RKB's tax returns. (Tr at 978:3-4.) The Statement of Partnership for RKB, which was recorded in the public records, designated Janice Jennings as the agent of the partnership authorized to sign any documents necessary to transact partnership business. (Debtors' Ex. 265.) Although Bruce Jennings and Janice Jennings testified that they "managed" RKB together as "co-trustees" (Tr. at 862:4-11; 977:25-978:1), the Court finds that Bruce Jennings managed RKB and that Janice Jennings' management of RKB was limited to Bruce Jennings' instruction. RKB has always maintained separate bank accounts from all of the other debtors in these proceedings. (Debtors' Exs. 225-263, 274.)
The following discussion centers on evidence which was presented to the Court in the form of a chart. That chart has been duplicated as follows, with unnecessary evidence having been deleted. The chart references financial transactions which occurred between Bruce Jennings, RKB and the California Trusts beginning in 1987 and ending in 2004.2
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