Pucci v. Hill (In re Hill)

• Decision Date: 22 March 2022
• Docket Number: ADVERSARY PROCEEDING 20-1031,20-10925-PMB
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia
• Parties: In re: CHAUNCEY DAMON HILL, Debtor. v. CHAUNCEY DAMON HILL, H&H DEMOLITION & HAULING, INC., EAGLE DEMOLITION & ENVIRONMENTAL, INC., and VETIA HOLLAND, Defendants. JOHN W. PUCCI, SR. d/b/a Chestnut Run Excavating & Tree Service, Plaintiff,

In re: CHAUNCEY DAMON HILL, Debtor.

JOHN W. PUCCI, SR. d/b/a Chestnut Run Excavating & Tree Service, Plaintiff, v. CHAUNCEY DAMON HILL, H&H DEMOLITION & HAULING, INC., EAGLE DEMOLITION & ENVIRONMENTAL, INC., and VETIA HOLLAND, Defendants.

No. 20-10925-PMB

ADVERSARY PROCEEDING No. 20-1031

United States Bankruptcy Court, N.D. Georgia, Newnan Division

March 22, 2022

CHAPTER 7

ORDER (I) GRANTING DEFENDANT VETIA HOLLAND'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT AS TO DEFENDANTS VETIA HOLLAND AND EAGLE DEMOLITION &amp ENVIRONMENTAL, INC. AND (II) DENYING AS MOOT DEFENDANT VETIA HOLLAND AND DEFENDANT EAGLE DEMOLITION & ENVIRONMENTAL INC.'S MOTION FOR EXTENSION OF TIME TO RESPOND TO PLAINTIFF'S FIRST INTERROGATORIES AND FIRST REQUEST FOR PRODUCTION OF DOCUMENTS

Paul Baisier, U.S. Bankruptcy Court Judge

The following matters are before the Court:

(1) Defendant Vetia Holland's Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition & Environmental, Inc. (Docket No 20), ^[1] and Defendant Vetia Holland's Brief in Support of Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition & Environmental, Inc., filed on March 2, 2021 (Docket No. 21)(collectively, the "Original Motion to Dismiss");

(2) Defendant Vetia Holland's Amended Motion to Dismiss Plaintiff's Complaint (Docket No. 38), and Defendant Vetia Holland's Brief in Support of Amended Motion to Dismiss Plaintiff's Complaint, filed on October 15, 2021 (Docket No. 39)(collectively, the "Amended Motion to Dismiss"; with the Original Motion to Dismiss, the "Motion to Dismiss");

(3) Plaintiff's Response in Opposition to Defendant Vetia Holland's Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition & Environmental, Inc. (Docket No. 23), and Plaintiff's Brief in Opposition to Defendant Vetia Holland's Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition &amp Environmental, Inc., filed on March 16, 2021 (Docket No 24)(collectively, the "Plaintiff's Original Response") (4) Plaintiff's Supplemental Response in Opposition to Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc.'s Amended Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and (sic.) Demolition & Environmental, Inc. (Docket No. 40), and Plaintiff's Supplemental Brief in Opposition to Defendant Vetia Holland's Amended Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition & Environmental, Inc., filed on October 29, 2021 (Docket No. 41)(collectively, the "Plaintiff's Amended Response"; with Plaintiff's Original Response, the "Plaintiff's Response");

(5) Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc., Motion for Extension of Time to Respond to Plaintiff's First Interrogatories and First Request for Production of Documents (Docket No. 18), and Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc., Brief in Support of Motion for Extension of Time to Respond to Plaintiff's First Interrogatories and First Request for Production of Documents, filed on March 2, 2021 (Docket No. 19)(collectively, the "Motion to Extend Time"); and

(6) Plaintiff's Response in Opposition to Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc.'s Motion for Extension of Time to Respond to Plaintiff's First Interrogatories and First Request for Production of Documents (Docket No. 25), and Plaintiff's Biref (sic.) in Support of His Response in Opposition to Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc.'s Motion for Extension of Time to Respond to Plaintiff's First Interrogatories and First Request for Production of Documents filed on March 16, 2021 (Docket No. 26)(collectively, the "Plaintiff's Response to Motion to Extend Time").

I. Procedural Posture

John W. Pucci, Sr. d/b/a Chestnut Run Excavating & Tree Service (the "Plaintiff" or "Chestnut Run") initiated this Adversary Proceeding (the "Adversary Proceeding") through the filing of an eight-count complaint titled John W. Pucci, Sr.'s Complaint Objecting to Discharge of Debts and Adversary Proceeding for Damages and for Equitable Relief on September 15, 2020 (Docket No. 1)(the "Complaint") against Chauncey Damon Hill (the "Debtor"), H&H Demolition & Hauling, Inc. ("H&H Demolition"), Vetia Holland ("Holland"), and Eagle Demolition & Environmental, Inc. ("Eagle Demolition")(together, the "Defendants").^[2] The eight (8) counts of the Complaint are as follows:

Count I: Objection to Discharge of Chauncey Hill Debt and Resurgence Demolition Debt (¶¶ 77-94);

Count II: Declaratory Judgment and Equitable Relief Concerning Ownership of the Equipment (¶¶ 95-116);^[3]

Count III: Turnover of the Equipment to the Estate (¶¶ 117-20);

Count IV: Declaratory Judgment and Equitable Relief Concerning Ownership of the Co-Defendant Eagle Demolition (¶¶ 121-44);

Count V: Preliminary Injunctive Relief Concerning the Equipment and Assets of Eagle Demolition (¶¶ 145-57);

Count VI: Piercing the Corporate Veil Against the Co-Defendant Vetia Holland (¶¶ 158-73); Count VII: Avoidance of Voidable Transfers to Co-Defendant Vetia Holland (¶¶ 174-200); and

Count VIII: Attorneys' Fees and Expenses of Litigation (¶¶ 201-03).

See Complaint.

Following a telephonic status conference held on April 19, 2021, the Court held an evidentiary hearing on Count I of the Complaint on June 14, 2021 (the "Evidentiary Hearing") on the issue of dischargeability of the indebtedness owed by the Debtor to the Plaintiff (the "Indebtedness").^[4] See Order and Notice Scheduling Evidentiary Hearing on Count I Of Plaintiff's Complaint, entered on May 5, 2021 (Docket No. 28). The Plaintiff argued that the Indebtedness should be excepted from discharge under 11 U.S.C. § 523(a)(2)(A).^[5] By Order Granting Judgment to the Debtor on Count I of the Plaintiff's Complaint entered on September 20, 2021 (Docket No. 33)(the "Count I Order"), the Court determined that the Indebtedness was not excepted from discharge on the grounds alleged by the Plaintiff and that it was dischargeable. Following the Count I Order, on September 21, 2021, the Court entered an Order Allowing Parties Time to Supplement Filing on (1) Defendant Vetia Holland's Motion to Dismiss Plaintiff's Complaint as to Defendants Vetia Holland and Eagle Demolition & Environmental, Inc. and (2) Defendant Vetia Holland and Defendant Eagle Demolition & Environmental, Inc., Motion for Extension of Time to Respond to Plaintiff's First Interrogatories and First Request for Production of Documents (Docket No. 34), allowing Holland and Eagle Demolition until October 15, 2021 to amend or supplement the Original Motion to Dismiss and the Motion to Extend Time in light of the Court's ruling in the Count I Order, and allowing the Plaintiff until October 29, 2021 to file amended or supplemental responses.^[6]

II. Alleged Facts

The Indebtedness arose in connection with a demolition job involving the removal of telephone poles, pilings and other debris at Little Beach Island in the E.B. Forsythe National Wildlife Refuge in New Jersey in the fall of 2011 (the "Project"). Resurgence had entered into an agreement with the United States Fish and Wildlife Service as the primary contractor on the job. Chestnut Run entered into an agreement with Resurgence to perform this work as a subcontractor as reflected in a contract proposal from Resurgence to Chestnut Run dated October 24, 2011 (the "Contract"). Although Chestnut Run completed work on the Project as agreed, it was never paid by Resurgence or the Debtor under the Contract.

In addition to alleging in Count I of the Complaint that the Indebtedness is non-dischargeable, the Plaintiff attempts in the remaining seven (7) counts to connect the Debtor's liability to other individuals and entities who allegedly helped the Debtor hide assets and funds that the Plaintiff alleges should have been made available to the Plaintiff. In the Complaint, the Plaintiff seeks a determination of the extent of assets that he asserts belong to the bankruptcy estate and turnover of those assets to the chapter 7 trustee in this case (the "Trustee").^[7] First, the Plaintiff asserts that the Equipment, which Plaintiff states is legally titled in the name of H&H Demolition, is equitably property of the Debtor and should be turned over to the Trustee for the benefit of the Debtor's bankruptcy estate. See Complaint, ¶¶ 116, 120. Second, the Plaintiff alleges that Resurgence and Eagle Demolition are alter egos and thus Eagle Demolition is equitably liable for the Indebtedness owed by the Debtor. See Id. ¶ 127. Next, the Plaintiff contends that Holland should also be held equitably and personally liable for the debts of Eagle Demolition because of her alleged depletion of its assets which should have been property of the Debtor's bankruptcy estate because it is allegedly an alter ego of Resurgence. See Id. ¶¶ 167-70. In addition to piercing the corporate veil to hold Holland liable, the Plaintiff alleges that assets of the Debtor were fraudulently transferred to Holland and such transfers should be avoided pursuant to Georgia's Uniform Voidable Transactions Act. See Id. ¶¶ 180-87. These allegations are described in more detail below.

a. Counts II and III

In Count II of the Complaint, the Plaintiff seeks a declaratory judgment that the Equipment is equitably property of the estate. According to the Plaintiff, the Equipment was and still is legally titled in the name of H&H Demolition. However, the Plaintiff alleges that after H&H Demolition administratively dissolved on August 21, 2011, the Debtor continued to utilize the Equipment in his operation of...