Flabeg Solar U.S. Corp. v. David Busby, Am. Int'l Dev., LLC (In re Flabeg Solar U.S. Corp.)
Flabeg Solar U.S. Corp. v. David Busby, Am. Int'l Dev., LLC (In re Flabeg Solar U.S. Corp.)
Opinion of the Court
The above-captioned adversary proceeding was commenced by Flabeg Solar US Corporation ("Debtor") on July 30, 2015. Within Debtor's Amended Adversary Complaint ("Amended Complaint," Doc. No. 49), Debtor alleges that David Busby and American International Development, LLC ("Defendants") took possession of Debtor's property without payment.
Standard
When faced with a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), the court must determine if the complaint contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " See Ashcroft v. Iqbal ,
Typically, if matters outside of the pleadings are considered by the Court, a motion to dismiss must be treated as a motion for summary judgment pursuant to Fed.R.Civ.P. 12(d) ; however, there are exceptions to the general rule:
First, a court is permitted to consider documents "integral to or explicitly relied upon in the complaint" in ruling on a motion to dismiss. "Plaintiffs cannot prevent a court from looking at the texts of the documents on which [their] claim is based by failing to attach or explicitly cite them." Second, the court may rely on "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Third, the court may rely on public records (if undisputed) such as criminal case dispositions, letter decisions of government agencies and published reports of administrative bodies. The rationale behind these exceptions is that the plaintiff is already on notice of the documents in these situations, and as such is not prejudiced by their consideration on a motion to dismiss.
See Lewis v. Allegheny Ludlum Corp. , No. 11-1619,
In addition, Defendants contend that Debtor lacks standing to bring this action requiring dismissal. As standing is a jurisdictional matter, the motion is properly brought pursuant to Fed.R.Civ.P. 12(b)(1). See Ballentine v. United States ,
Factual Background
Prior to the filing of the bankruptcy case, Debtor manufactured two coat primary mirror assemblies used for commercial solar power generation. See Amended Complaint, at ¶ 6. As of the commencement of the case, Debtor had 14,881 of these mirrors (the "Mirrors") in stock and ready for shipment at its business facilities, which Debtor leased from The Buncher Company ("Buncher"). Id. at ¶¶ 6-7.
As agreed upon by Debtor, Buncher, UniCredit Luxembourg, S.A. (Debtor's primary secured creditor), and approved by the Court, the Debtor was to vacate the business premises by January 15, 2014 (the "vacation date") and remove its personalty from the premises by that date as well. See id. at ¶ 8; Stipulated and Agreed Order entered November 7, 2013 (the "Vacation Order"), Case No. 13-21415, Doc. No. 222.
b. All of the Debtor's personal property, equipment, and inventory shall be removed from the Property no later than 12:00 p.m. (EST) on January 15, 2014. The Debtor shall remove all personal property, equipment, and inventory from the Property at its own cost;
c. The Debtor shall deliver the Property to Buncher no later than 5:00 p.m. (EST) on January 15, 2014. The Debtor shall be responsible for all repairs to the Property as a result of or caused by the removal of the personal property, equipment, and inventory and the Debtor shall deliver the Property to Buncher in broom clean condition;
d. In the event the Debtor fails to deliver the Property to Buncher by 5:00 p.m. (EST) on January 15, 2014, Buncher shall be entitled to exercise its self-help remedies and/or seek immediate injunctive relief without first filing a state court complaint[.]
As the vacation date approached, certain property remained at the business premises, including property purchased by third parties at the auction as well as items belonging to Debtor. Amended Complaint, at ¶¶ 12, 14. Buncher cooperated with the third-party purchasers, including Defendants, and Debtor by allowing additional time beyond the vacation date to remove items. Id. at ¶ 12-14.
Leading up to the vacation date and through the vacation date, Debtor was involved in discussions with Defendants regarding the purchase of the Mirrors by the Defendants. See id. at ¶ 9. Defendants had purchased some of Debtor's equipment at the auction conducted at the business premises and expressed an interest in purchasing the Mirrors as well. Id. at ¶ 10. Despite these ongoing discussions and Buncher's cooperation with Debtor for the orderly removal of property beyond the vacation date, Defendants took the Mirrors after the vacation date without notification or payment to Debtor. Id. at ¶¶ 15-16. Rather than purchasing the Mirrors from Debtor, Defendants approached Buncher directly and sought to obtain the Mirrors along with the items Defendants had purchased at the auction. Id. at ¶ 16. As Debtor detrimentally relied on discussions it had with Defendants to purchase the Mirrors, Debtor lost the opportunity to pursue a sale to another party or arrange for orderly removal of the Mirrors. Id. at ¶¶ 20-22. Accordingly, Debtor seeks to recover $125,000.40 on the basis of unjust enrichment and turnover.
Analysis
To state a claim for unjust enrichment, a plaintiff must plead facts in support of the following elements: "benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value." Seitz v. 6130 West, LLC (In re Joey's Steakhouse, LLC ),
Thus, Debtor's success in this adversary proceeding is dependent upon whether the Mirrors remained property of the estate following the vacation date when Defendants obtained possession. In order *114to demonstrate an entitlement to recovery, Debtor contends that the Mirrors remained property of the bankruptcy estate at the time Defendants took the Mirrors without payment. To the contrary, Defendants contend that the Mirrors were not property of the Debtor's estate at the time of the transfer to Defendants and thus Debtor is unable to state a claim for unjust enrichment or turnover. See Defendants' Brief in Support (Doc. No. 55-1), at 1. Despite Debtor pleading that "[t]he Mirrors remained property of the Debtor's Estate at the time the Defendants took same without payment to the Debtor[,]" (see Amended Complaint, at ¶ 17), as set forth above, the Court may consider the Vacation Order in resolving this Motion to Dismiss. Here, the issue is resolved by the terms of the Vacation Order; however, a brief recitation of the procedural history leading up to the entry of the Vacation Order is helpful in understanding the unique circumstances in this case.
Following an evidentiary hearing, the Court granted Buncher relief from stay with respect to the leased premises on October 2, 2013. See Memorandum Opinion and Order, Case No. 13-21415, Doc. Nos. 174 and 175. The decision was followed by the filing of three motions by the Debtor: (1) Motion to Reopen and Supplement Record , (2) Motion for Reconsideration of Order of Court Dated October 2, 2013 , and (3) Motion for Continuation of Stay Pending Ruling on Reconsideration and Request for an Expedited Hearing in Regard to Same . See Case No. 13-21415, Doc. Nos. 187-189. Notably, in requesting a continuation of the stay, Debtor stated its concern that Buncher would "utilize self-help landlord remedies" potentially resulting in the ruination of Debtor's equipment and inventory located at the business premises. See Case No. 13-21415, Doc. No. 189, at ¶ 8. Ultimately, the motions, and particularly Debtor's concerns regarding its equipment and inventory, were resolved by the filing of a proposed stipulated and agreed order. See Case No. 13-21415, Doc. No. 218. The proposed order was approved by the Court and served on the mailing matrix (Case No. 13-21415, Doc. No. 228) with an opportunity for objection and hearing. As no objections were filed, that Order, the Vacation Order, became final.
A court's interpretation of its order is given great deference. See Wells Fargo Bank N.A. v. Ashley Business Park LLC ,
The fact that Buncher may have been cooperating with Debtor beyond the vacation date does not amend the applicable terms of the Vacation Order nor did the successive hearings on Buncher's Request for Emergency Status Conference ("Emergency Motion," Case No. 13-21415, Doc. No. 300) seeking to enforce the terms of the Vacation Order.
Conclusion
Based on the foregoing, Debtor failed to plead facts, and in fact cannot plead facts based upon the record of this case and the terms of the Vacation Order, establishing that Defendants were unjustly enriched at the expense of the estate or that the estate is entitled to turnover of the Mirrors or their value. Accordingly, the Motion to Dismiss must be granted. An Order will be entered consistent with this Memorandum Opinion.
Pursuant to
The Motion to Dismiss was filed by Defendants' former counsel. Prior to Defendants' deadline to file a reply brief, Defendants' counsel withdrew. See Doc. Nos. 79 and 82. The Court provided an extension of time to file a reply brief. See Doc. No. 120. Rather than filing a brief, Defendant Busby filed a pro se Motion to Dismiss Adversary Complaint (Doc. No. 123). The pro se motion is rendered moot for the reasons set forth herein.
Debtor cites to the terms of the Vacation Order within its Amended Complaint. See Amended Complaint, at ¶¶ 8, 11. Further, as the Vacation Order is a matter of record in the Debtor's bankruptcy case, Debtor is clearly on notice of its existence and is not prejudiced by its consideration.
Even if the extent of Buncher's authorization was relevant to this analysis, Debtor fails to plead that Buncher did not authorize Defendants' actions. Debtor appears to concede that Buncher had authority to remove property from the premises following the vacation date. While Debtor alleges generally that Buncher cooperated with Debtor beyond the applicable deadline, Debtor further alleges that Defendants approached Buncher directly to obtain the Mirrors leaving open the question of whether Buncher provided such authorization. Without more, Debtor seems to insinuate that such authorization would be inconsistent with Buncher's ongoing cooperation with Debtor. Notably, Buncher is not a party to this action and Debtor has not otherwise sought relief against Buncher with respect to the Mirrors.
Further, accepting as true that Buncher cooperated with Debtor regarding the removal of property after the vacation date does not equate to an allegation that Buncher agreed to extend the time for Debtor to remove all of its remaining property nor does it mean that Buncher agreed to pass up an opportunity to rid itself of some remaining property when provided with an opportunity to do so and without incurring any cost.
Reference
- Full Case Name
- IN RE: FLABEG SOLAR US CORPORATION, Debtor. Flabeg Solar US Corporation v. David Busby, American International Development, LLC
- Status
- Published