Vector Aerospace Engine Services-Atlantic, Inc. v. Mason (In re Claudia Faye Mason Fdba Mason & Mason Consultants, Inc.)
| Decision Date | 01 May 2017 |
| Docket Number | Adv. No. 16-05002,Cause No. 15-50754 |
| Court | U.S. Bankruptcy Court — Western District of North Carolina |
| Parties | In re: Claudia Faye Mason Fdba Mason & Mason Consultants, Inc., Debtor. Vector Aerospace Engine Services-Atlantic, Inc., a Canadian Corporation, Plaintiff, v. Claudia Faye Mason, Defendant. |
This matter came on for hearing on January 6, 2017 in Statesville, North Carolina on the Amended Motion for Summary Judgment of Plaintiff Vector Aerospace Engine Services-Atlantic, Inc. ("Vector") against the Defendant Claudia Faye Mason ("Mason"). Present at the hearing were Jameson P. Wells on behalf of Vector and Mason on behalf of herself. The Court took the matter under advisement and continued the hearing to February 1, 2017 in Charlotte, North Carolina, where it announced its ruling.
The Court has reviewed the pleadings, the exhibits thereto, the affidavits and declarations, including the affidavit of Mason and the declarations submitted by Vector, and other matters of record in this adversary proceeding. Based on its consideration of the same, as well as the arguments made by Wells and Mason at the hearing, the Court has determined that there are no issues of material fact and that Vector's Amended Motion for Summary Judgment should be, and the same hereby is, GRANTED. The granting of Vector's Amended Motion for Summary Judgment disposes of all issues in this adversary proceeding.
Prior to the transactions that gave rise to this case, Vector employed the services of Mason from time to time to collect delinquent accounts. Mason conducted business in her personal capacity as "Mason & Mason Consultants, Inc.," "Mason & Mason Consultants," and "Mason & Mason." In 2012, Vector hired Mason to collect sums owed to Vector by American Care Air, Inc. ("American Care"). Mason arranged for Vector to retain the Law Offices of Philip Landsman, a California law firm, ("Landsman Firm") and specifically attorney Philip Landsman ("Attorney Landsman") to assist with the American Care account. While Mason did not sign Vector's retention agreement with the Landsman Firm, she largely communicated with the Landsman Firm on Vector's behalf. In fact, the retention agreement designated Mason as Vector's authorized representative.
Vector agreed in the retention agreement that the Landsman Firm would receive 25% of all gross amounts collected as compensation. Although there was no formal written agreement regarding Mason's compensation, the parties agreed that any amounts tendered on behalf of American Care would first be sent to Attorney Landsman, who would deduct his fee and send the net amount to Mason, who would then deduct her fee and send the remainder to Vector. Inlight of the Landsman Firm's retention, Mason agreed that her usual fee of 25% would be reduced to 15%.
In July 2012, the Landsman Firm filed a lawsuit against American Care on behalf of Vector. In early 2013, Attorney Landsman negotiated a settlement of that lawsuit where American Care agreed to pay $1,500.00 per month for six months, with escalating payments from there, totaling approximately $80,000.00. American Care initially made six $1,500.00 payments to the Landsman Firm via check. Attorney Landsman handled these payments by depositing the funds into the Landsman Firm's trust account, deducting its contractual 25%, preparing a letter and check for the net amount, and sending the same to Mason. The Landsman Firm sent six checks in the amount of $1,125.00 to Mason with accompanying letters from June to October of 2013.
On or after June 4, 2013, Mason received the first payment from the Landsman Firm and deposited the check for $1,125.00 into her bank account. Mason then obtained a cashier's check for $956.25 after deducting a 15% commission from the $1,125.00 received from the Landsman Firm and sent the cashier's check to Vector on or about June 11, 2013. Mason handled the next four monthly payments in the same way, sending a total of five payments to Vector from June to October 2013. These payments were also accompanied by letters signed by Mason that described a $1,500.00 payment being tendered by American Care, a $375.00 deduction for the Landsman Firm's fee (25% of the $1,500.00 received by the Landsman Firm), a $168.75 deduction for Mason's fee (15% of the $1,125.00 received by Mason),1 and a $956.25 net remittance to Vector.
While the first five payments received by Mason were tendered to Vector without controversy, the same cannot be said of subsequent payments. Mason received the sixth payment of $1,125.00 from the Landsman Firm on or around October 30, 2013, and Mason deposited the check into her bank account. However, Mason did not remit the sixth payment to Vector as she had done with the previous five payments, and she did not notify Vector of her receipt of this payment.
Meanwhile, Attorney Landsman negotiated an accord and satisfaction in the fall of 2013 whereby American Care made one final payment to complete its obligation to Vector. American Care paid $71,480.00 to the Landsman Firm via wire transfer, and the Landsman Firm handled this final payment as it had the other payments, deducting its 25% fee and remitting the net amount to Mason. On or after December 21, 2013, Attorney Landsman sent a check in the amount of $53,610.00 to Mason along with a letter that advised the $71,480.00 from American Care was a payment in full, the case was closed, and Attorney Landsman would be taking no further action against American Care.
Mason deposited the $53,610.00 into her bank account, and, as was the case with the sixth payment of $1,125.00, Mason did not remit to Vector its share of the $53,610.00 or inform Vector of the receipt of the funds. As of January 2014, Mason had deposited $54,735.00 into her bank account without Vector's knowledge between her receipt of the sixth payment of $1,125.00 and the seventh payment of $53,610.00.
On January 10, 2014, Vector employee Roxanne Delaney ("Delaney") e-mailed Mason to inquire about the status of the American Care account. In her message, Delaney noted thatVector had not received a payment since November of 2013 and that it appeared American Care was in default of the settlement agreement. After waiting four days, Mason responded to Delaney's e-mail on January 14, 2014. Mason and Delaney then corresponded through e-mail several times between January 14 and 15 of 2014. Over the course of this correspondence, Mason would consistently provide statements that misrepresented her receipt of funds payable to Vector.2
Instead of disclosing the receipt of the sixth and seventh payments, Mason stated in a January 14, 2014 e-mail that American Care was "going out of business" but "there [were] a couple payments forthcoming." Mason also asserted in the same e-mail that "[Attorney Landsman] [was] well aware of this and [was] scrambling to do all within legal limitations to secure monies owed" and that she would know more by the following Friday. Mason concluded her e-mail by saying: "Please keep your fingers crossed and hope my office can manage something in your favor." Later on January 14, 2014, Delaney e-mailed Mason again about a new Vector customer, a company referred to as "Reva." Delaney reported to Mason that Reva had brought Vector an engine that Vector had previously serviced for American Care. Vector believed that Reva and American Care were somehow related, so Vector was in the process of contacting Reva regarding the unpaid American Care account. Mason responded to Delaney again on January 14, 2014 and indicated that she would call Attorney Landsman.
Despite what was indicated in Mason's January 14, 2014 correspondence with Delaney, Attorney Landsman had already advised Mason in his December 2013 letter that no further payments would be coming from American Care and that a final payment had been made.Indeed, Mason had deposited the sixth payment of $1,125.00 and the seventh payment of $53,610.00 into her bank account.
Although she had already received the sixth and seventh payment from Attorney Landsman, Mason e-mailed Delaney on January 15, 2014, claiming that she had just received payment directly from American Care. Mason's e-mail also understated the amounts she had actually received, as her e-mail provided: "Good news also; yesterday afternoon, my office received 1500$ [sic] payment for Sept 2013 up until Jan 2014=total 7500.00 . . . ." Unaware that Mason had received the sixth payment and seventh payment, Delaney considered that perhaps the Landsman Firm and Attorney Landsman were withholding the funds. Delaney e-mailed Mason again on January 15, 2014 to indicate that she had been provided with proof that over $71,000.00 had been paid on behalf of American Care. Mason responded on January 15, 2014, maintaining that Attorney Landsman had informed her that the $71,480.00 check would not clear and that he was wiring the funds to her. Mason claimed that Attorney Landsman did not tell Mason or Vector about the payment because he did not want to "get hopes up until it was good funds." Mason also stated that "[t]his is all they can pay...and are closing or have closed their doors." However, as already noted, the $71,480.00 was wired to Attorney Landsman, so no check needed to clear. More importantly, at the time of Mason's correspondence on January 15, 2014, Attorney Landsman had mailed checks to Mason for the sixth and seventh payments, and Mason had deposited these checks into her bank account.
Still unaware of Mason's receipt of the sixth and seventh payments, Delaney continued to suspect that Attorney Landsman was withholding the funds, as Delaney stated in another e-mail on January 15, 2014 that she was "still unsure of why he waited to advise and do feel uneasy about it taking a month." Mason, however, did not...
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