TPL Fin. Servs. v. A.L. Doggett, Inc.

TPL Financial Services, LLC, Plaintiff, v. A.L. Doggett, Inc., Christopher R. Breau,Bald Eagle, Inc., Just Taxes, LLC, Virginia Fowler-Rawls,W.H. Green & Sons, Inc., Apex Electric, LLC, Trombley Redi-Mix, Inc.,Simard Constructions, Inc., Michael J. White, and JBBC, Inc. Defendants.

SUPERIOR COURT DOCKET NO. CV-20-71

Superior Court of Maine

November 5, 2020

STATE OF MAINE

ANDROSCOGGIN, ss

Order on Motions to Dismiss Counts VII - IX

In June 2019, A.L. Doggett, Inc. contracted with Bald Eagle, Inc. to undertake tank installation and related work at Bald Eagle's service station in Eagle Lake, Maine. Because A.L. Doggett required financing in order to do the Bald Eagle project, it entered into a financing agreement with Plaintiff in July 2019. Plaintiff thereafter advanced money for the project which has not been paid back to it.

A.L. Doggett commenced work and eventually billed Bald Eagle for $136,073.08 which remains unpaid. W.H. Green & Sons, Inc.; Apex Electric, LLC; Trombley Redi-Mix, Inc.; Simard Construction, Inc.; Michael J. White; and JBBC, Inc. are all subcontractors of A.L. Doggett. In May 2020, Bald Eagle obtained financing from FAME. When they closed, Bald Eagle paid $31,221.19 to the various subcontractors and did not pay anything to Plaintiff, allegedly contrary to the terms of the Customer Notification and Consent it had signed. This suit followed.

Counts VII through IX of the Complaint seek damages pursuant to the Maine Uniform Fraudulent Transfer Act against Bald Eagle and the six subcontractor defendants. Defendants Bald Eagle, Inc., Simard Constructions, Inc., JBBC, Inc., Trombley Redi-Mix, Inc., and W.H. Green & Sons, Inc. have moved to dismiss Counts VII through IX The motions are brought pursuant to M.R. Civ. P. 12(b)(6) for failure to state a claim and failure to allege the claims with sufficient particularity pursuant to M.R. Civ. P. 9(b).

Specifically, Counts VII incorporates all prior allegations and alleges the transfers are avoidable pursuant to 14 M.R.S. § 3575(1)(A), as follows:

101. On or about May 20, 2020, Bald Eagle, with actual intent to hinder, delay or defraud TPL, which was a creditor of TPL at the time of the Transfers ... , made transfers of funds to Subcontractor Defendant [totally $31,221.19].

102. As a result of the Transfers, TPL, as creditor of Bald Eagle, has suffered damages.

103. Subcontractor Defendants were the initial transferees of the Transfers or the entities for whose benefit the Transfers were made or an immediate or mediate transferee of the initial transferee.

104. The transfers are avoidable pursuant to 14 M.R.S. § 3575(1)(A), TPL may recover from Bald Eagle and/or Subcontractor Defendants the Transfers or the value of the Transfers.

Count VIII additionally alleges the transfers are avoidable pursuant to 14 M.R.S. § 3575(1)(B) as follows:

106. Before and after the Transfers, Bald Eagle was engaged or was about to engage in a business or a transaction for which its remaining assets were unreasonably small in relation to the business or transaction.

107. Bald Eagle did not receive a reasonably equivalent value in exchange for the Transfers.

108. Before and after the Transfers, Bald Eagle intended to incur, or believed or reasonably should have believed that it would incur, debts beyond its ability to pay as the debts became due,'

Finally, Count IX alleges the transfers are avoidable pursuant to 14 M.R.S. § 3576(1) as follows:

114. Bald Eagle made the Transfers to Subcontractor Defendants without receiving a reasonably equivalent value in exchange for the Transfers and Bald Eagle was insolvent at the time of the Transfers and/or Bald Eagle became insolvent as a result of the Transfers.

115. As of May 20, 2020, unsecured creditors of Bald Eagle, including TPL, had claims against it in an amount of no less than $148,000.

These Counts incorporate the language of the Maine Uniform Fraudulent Transfer Act and state the elements of claims under the referenced subsections.

In reviewing the legal sufficiency of the complaint on a motion to dismiss under M.R. Civ. P. 12(b)(6), the material allegations of the complaint are taken as true and court examines the complaint "in the light most favorable to the plaintiff to determine whether [the complaint] sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory." Anctil v. Cassese, 2020 ME 59, ¶ 10, 232 A.3d 245, 250, quoting Ramsey v. Baxter Title Co., 2012 ME 113, ¶ 6, 54 A.3d 710 . The claim will not be dismissed unless it is clear that the plaintiff is not entitled to relief under any facts it might prove. Id.

Defendants first argue that M.R. Civ. P. 9(b) requires that the circumstances constituting fraud in each of these Counts must be stated with particularity, and they are not. The court disagrees. First, these are statutory claims and not common-law claims of fraud. It should be sufficient to allege the statutory elements.¹ Second, Plaintiff has alleged with great deal ofspecificity all the events in the case. It remains to be seen whether there was in fact any fraudulent transfer, but the allegations are there.

Defendants also argue Count VII fails to state a claim because it is not sufficient to allege "actual intent to hinder, delay or defraud"; rather, Plaintiff must allege the specific facts to support that allegation. The court disagrees that any more specificity is required.

Finally, Defendants argue that Plaintiff has failed to allege any facts to show that Bald Eagle paid the Subcontractors "without receiving a reasonably equivalent value in exchange," and indeed that Plaintiff specifically alleged elsewhere in the Complaint that A.L. Doggett in fact did not pay the Subcontractors in full. While the court certainly questions whether Plaintiff can prove that Bald Eagle did not receive a reasonably equivalent value in exchange for the payments, Plaintiff is permitted to plead in the alternative and inconsistently, and it has done so here.

For these reasons, the motions to dismiss Counts VII, VIII and IX are denied. This Order may be incorporated on the docket of the case by reference pursuant to Me. R. Civ. P. 79(a).

Dated: 11/5/2020

/s/_________

Valerie Stanfill

Justice, Maine Superior Court

TPL Financial Services, LLC, Plaintiff,

v.

A.L. Doggett, Inc., Christopher R. Breau, Bald Eagle, Inc., et al., Defendants.

Attachment Order

This matter comes before the court on Plaintiff's motion for prejudgment attachment against Defendants A.L. Doggett, Inc., Christopher R. Breau and Bald Eagle, Inc. Attachment is sought under Counts 1, 2, 3 and 6 of the Complaint. Attachment is not sought against the remaining defendants or pursuant to the remaining counts². The court has considered Plaintiff's motion and all supporting documentation as well as Defendant Bald Eagle's opposition³ and Plaintiff's reply thereto. No opposition has been filed by any other party.

Pursuant to M.R. Civ. P. 4A,

No property may be attached unless such attachment for a specified amount is approved by order of the court. . . . upon a finding by the court that it is more likely than not that the plaintiff will recover judgment, including interest and costs, in an amount equal to or greater than the aggregate sum of the attachment and any liability insurance, bond, or other security, and any property or credits attached by other writ of attachment or by trustee process shown by the defendant to be available to satisfy the judgment.

The standard for attachment on trustee process is the same. M.R. Civ. P. 4B(c). Of particular note in this case,

[W]hether a party will receive an attachment depends on the party's proof, by a preponderance of the evidence, of both the likelihood of success in the underlying suit and the likelihood of recovering in that amount or greater. Boisvert v. Boisvert, 672 A.2d 96, 98 n.3 (Me. 1996).

Estate of Summers v. Nisbet, 2016 ME 88, ¶6. Thus, it is not enough for Plaintiff to establish that it is likely to succeed against some defendant; Plaintiff must establish a claim against each defendant against whom it seeks to recover, and must establish a basis for the amount sought from that party. See also Bowman v. Dussault, 425 A.2d 1325, 1329 (Me. 1981). In this case, both A.L. Doggett and Breau failed to answer and defaults were entered. Those defaults establish that Plaintiff is likely to succeed against them. The defaults do not establish, however, the amount to which Plaintiff may be entitled. Thus, the court considers the claims against each defendant separately.

Factual Background

The undisputed facts show that in June 2019, A.L. Doggett entered into an agreement with Bald Eagle to undertake tank installation and related work at Bald Eagle's service station in Eagle Lake, Maine. Because A.L. Doggett required financing in order to do the Bald Eagle project, it entered into a financing agreement with Plaintiff in July 2019. Breau is a principal in A.L. Doggett, and executed a personal guarantee of A.L. Doggett's obligations under the financing agreement with Plaintiff. Plaintiff thereafter advanced a total of $107,000 to A.L. Doggett in October 2019 under the agreement which has not been paid back to it.

In October 2019, Bald Eagle executed a "Customer Notification and Consent" with A.L. Doggett, under which it agreed as follows:

Pursuant to our [A.L. Doggett's] agreement with TPL all right, title, and interest in our rights to payment under the Contract have been assigned to TPL, Your payment to TPL in full is the only valid discharge of your payment obligations under said Contract.

......

This Customer Notification and Consent ("Consent") addresses only the assignment of payment rights to TPL. All performance obligations under the CONTRACT remain our obligation exclusively.

The referenced "Contract" was the Bald Eagle project. At that point, Bald Eagle had already paid $59,951.92 for the project which had an original contract price of $179,855.76, with approximately...