Opinion
CV-20-71
11-05-2020
TPL Financial Services, IXC, Plaintiff, v. AJL-Doggett, Inc., Christopher R. Brcau, Bald Kagle, Inc., Just Taxes, LLC, Virginia Fowler-Rawls, W.IT. Green & Sons, Inc., Apex Electric, LLC, Trombley Redi-Mix, Inc, Simard Constructions, Inc., Michael, J. White, and JBBC, Inc. Defendants.
ORDER AND MOTIONS TO DISMISS COUNTS VIT - IX
VALERIE STANFILL JUSTICE
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 Ragle Lake, Maine. Because A.L. Doggctt 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 any tiling 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 14M.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, Second, Plaintiff has alleged with great deal of specificity 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 cite Bean v. Cuinmlngs, 2008 ME 18 for the proposition that a statutory perjury claim is like a claim of fraud and requires a higher pleading standard with circumstances pled with particularity. That case was not interpreting Rule 9(b) but rather the civil perjury statute itself, which explicitly requires that the claim identify the specific testimony alleged to be false at the initial filing of the claim. Moreover, the statute states its pleading and proof requirements must be strictly construed. 14 M.R.S. § 870. There are no such requirements in the Maine Uniform Fraudulent Transfer Act.
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 Baid 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),