Trost v. Trost
| Decision Date | 28 September 2011 |
| Docket Number | Case No. 1:09-cv-580 |
| Parties | SHERRY TROST, Plaintiff, v. ZACHARY TROST, et al., Defendants. |
| Court | U.S. District Court — Western District of Michigan |
Hon. Hugh W. Brenneman, Jr.
This matter is now before the court on defendants' motion for summary judgment (docket no. 33).
Plaintiff Sherry Trost is the widow of Fred D. Trost ("Fred Trost"). This action seeks damages and injunctive relief arising from Fred Trost's business ventures, which included a long-running television show. Plaintiff filed this action in the federal court on June 24, 2009. See Compl. (docket no. 1). She filed an amended complaint on December 16, 2009, which named 32 defendants: Zachary Trost (Fred Trost's son); Zachary's wife, Kim Trost; "John and Jane Does I-X;" "ABC Partnerships I-X;" and XYZ Corporations I-X." See Amend. Compl. (docket no. 17).
Plaintiff set forth the following allegations in her amended complaint. Fred Trost started a television show in Michigan in 1982, entitled Michigan Outdoors (sometimes referred to as "the show"), which "was a dba of Michigan Sportsman Development Association." Amend.Compl. at ¶¶ 6-7.1 Plaintiff married Fred Trost in 1988. Id. at ¶ 8. In 1992, the "Michigan Sportsman Development Association became Practical Sportsman, Inc." Id. at ¶ 9. "Michigan Outdoors" and the "Practical Sportsman, Inc." accumulated significant debts, including a civil judgment. Id. at ¶ 10.2 Fred Trost was going to shut down the television show and the business because of the debt. Id. at ¶ 11.
Plaintiff and non-party JoAnn Cribley ("Cribley") "agreed to take ownership of the show and its assets and agreed to take on the show's debts in their names so that Fred Trost could continue to operate the show." Id. at ¶ 13. On May 1, 1996, Cribley filed a certificate of assumed name with the State of Michigan, "assuming, on behalf of ZNT Marketing, Inc., the name PracticalSportsman, Inc." Id. at ¶ 14.3 Plaintiff and Cribley became officers and owners of "Practical Sportsman, Inc." Id. at ¶ 15. In turn, Fred Trost promised to repay "any and all debts of the show" as soon as he received an expected inheritance from his parents. Id. at ¶¶ 12 and 16.
In 2002, a non-profit corporation known as the "Practical Sportsman Foundation" (the "Foundation") was established to continue the operation of the television show. Id. at ¶ 17. Plaintiff and Cribley were officers of the foundation, which both took on the debts of "the previous business entities" and incurred additional debt. Id. at ¶¶ 18-19. Fred D. Trost remained in charge of running "the business," including finances and bookkeeping, and again promised to repay the debts of the show as soon as he received the expected inheritance. Id. at ¶¶ 20-22.
The Foundation obtained an operating loan in the amount of $36,000.00, using the "rights to episodes of the show" as collateral. Id. at ¶ 23. The Foundation also incurred significant tax debts to the Internal Revenue Service (IRS) and the State of Michigan which, at the time plaintiff filed the amended complaint, were in the amounts of approximately $56,707.06 and $16,000.00, respectively. Id. at ¶¶ 24-25. Plaintiff alleged that she and Cribley are "ultimately liable" for the loan and tax debts as the "legal owners and financiers" of the Foundation. Id. at ¶ 26. Fred Trost became ill in May 2007 and died of natural causes in July 2007. Id. at ¶¶ 28-29. He did not leave a last will and testament, but had "repeatedly expressed his desire to put down in writing his promise to pay the debts of the business so [p]laintiff would not be liable." Id. at ¶ 29.
Fred Trost's son, defendant Zachary Trost, worked on the show. Id. at ¶¶ 31-32. Plaintiff alleged that Zachary Trost was "fully aware of the arrangement pursuant to which FredTrost promised to pay any and all debts of the business with his inheritance," and "that [p]laintiff had signed for the business in order to allow Fred Trost to carry on his legacy and dream." Id. at ¶¶ 33-34. Plaintiff owned all of the property related to the show, including "all original episodes and the rights thereto." Id. at ¶ 36 (emphasis omitted). However, Zachary Trost "wanted the personal property related to the legacy of the show and Fred Trost." Id. at ¶ 35 (emphasis omitted).
When Fred Trost died, plaintiff and Zachary Trost agreed that plaintiff would give him "all of the business assets, which she rightfully owned as owner of the business and personal property she owned related to the show, business and Fred Trost's legacy," in consideration for Zachary Trost "paying the business debts, including the tax debts and outstanding loans with the inheritance Fred Trost was to have received." Id. at ¶ 37 (emphasis omitted). Pursuant to this agreement and Zachary Trost's "representations," plaintiff allowed Zachary and his sister, Tara Trost, to take possession of "all of the assets, original episodes and memorabilia of the show that belonged to [p]laintiff." Id. at ¶ 39 (emphasis omitted). Zachary Trost ultimately received the inheritance that his father, Fred Trost, had expected throughout his lifetime. Id. at ¶ 40.
Zachary Trost has attempted to sell and market the show's assets and "[p]laintiff's property" and has retained possession of both the show's assets and "[p]laintiff's property." Id. at ¶¶ 41-42 (emphasis omitted). Despite plaintiff's "demand," Zachary Trost has not paid any of the "show/business debts" and has refused to return plaintiff's "property." Id. at ¶¶ 43-44.
Based on these allegations, plaintiff's amended complaint seeks seven "claims for relief": (I) Breach of Contract; (II) Breach of Implied Covenants; (III) Fraud - Intentional Misrepresentation; (IV) Rescission; (V) Common Law Conversion; (VI) Statutory Conversion -M.C.L. § 600.2919a; and (VII) Injunctive Relief. Plaintiff seeks damages in the amount of $108,797.06, punitive damages and attorneys' fees. In the alternative to monetary damages, plaintiff seeks to rescind the agreement between the parties and order "[d]efendant" to return to her "all property she transferred to him." Finally, plaintiff seeks an order prohibiting "[d]efendant" from disposing any of plaintiff's property until conclusion of this litigation.
In response to the motion for summary judgment, plaintiff submitted an affidavit which is at times inconsistent with the allegations set forth in the amended complaint. According to Sherry Trost, Fred Trost started a television show in 1982, entitled Michigan Outdoors. Sherry Trost Aff. at ¶ 2 (docket no. 42-1). Michigan Outdoors "was a dba of Fred Trost Enterprises, Inc." Id. at ¶ 3.4 Fred Trost Enterprises, Inc., incurred a significant debt, including a civil judgment commonly referred to as the "Buck Stop" judgment. Id. at ¶ 5. At a later date, Michigan Outdoors "was operated by the corporate entity Michigan Sportsman Development Association" and the name of the show was changed to Practical Sportsman. Sherry Trost Aff. at ¶ 6. In 1992, "Michigan Sportsman Development Association" became "Practical Sportsman, Inc." Id. at ¶ 7. "Practical Sportsman Inc. [sic] was later changed to a nonprofit corporation, Practical Sportsman Foundation." Id. at ¶ 8.
When the assets of Fred Trost Enterprises, Inc., were "seized" due to the "Buck Stop" judgment, the "tape library" for the shows owned by Fred Trost Enterprises, Inc. was sold at an auction and purchased by ZNT Marketing, Inc., a corporation "at least partially owned" bydefendant Zachary Trost. Id. at ¶ 9. The "tape library" was "signed over" to plaintiff when defendant Zachary Trost incurred substantial debt and "dissolved his business" which ran a museum. Id. at ¶ 10. In consideration for this transfer of the "tape library" to plaintiff, two entities, Michigan Sportsman Development Association and Practical Sportsman, Inc., "paid-off bills from [defendant Zachary Trost's] company." Id. at ¶ 10.
The debts from Fred Trost Enterprises, Inc. followed Fred Trost and "made it impossible for him to own or operate the show in his name or to own any assets of the show." Id. at ¶ 12. Under these circumstances, Fred Trost was going to have to "shut down the show and business" due to the debt. Id. at ¶ 13. At some point in time, plaintiff and Cribley became "officers and owners" of Practical Sportsman, Inc. Id. at ¶ 16.
In 2002, Practical Sportsman Foundation was set up in order to continue the operation of the show. Id. at ¶ 18. Plaintiff and Cribley "were officers" of the Foundation, which took on the debts of the "previous business entities" and incurred additional debt. Id. at ¶¶ 19-20. Fred Trost "promised to repay any and all debts of the show as soon as he received his inheritance" which Fred anticipated from his parents. Id. at ¶ 21. While affiant states that Fred Trost "remained in charge of running the business, including finances and bookkeeping," id. at ¶ 22, she does not explain the nature of "the business" engaged in by the Foundation.
Plaintiff took a second mortgage on her home so that the Foundation could obtain an operating loan in the amount of $36,000.00. Id. at ¶ 23.5 The Foundation incurred at least $56,797.06 in payroll tax liability to the IRS. Id. at ¶ 24. Plaintiff paid the IRS tax liability and thesecond mortgage with her personal funds. Id. at ¶ 25. The Foundation also incurred tax liability to the State of Michigan of approximately $16,000.00 and took out an additional operating loan of $9,000.00. Id. at ¶¶ 26-27. Plaintiff stated that she and Cribley were "the legal owners and financiers of Practical Sportsman Foundation" and ultimately liable for the loan and tax debts. Id. at ¶ 28.
Fred Trost became ill in May 2007 and passed away in July 2007 "prior to receiving his inheritance or paying any of the debts from the show." Id. at ¶¶ 29-30. Plaintiff stated that she "remained the lawful owner of all personal property related to the...
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