Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Allied Property and Casualty Insurance Co. v. Fulgham

United States District Court, W.D. Arkansas, Harrison Division

April 28, 2017

ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY PLAINTIFF
v.
JACKSON FULGHAM D/B/A COMMERCE STREET PARTNERS, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

         Now before the Court are Plaintiff Allied Property and Casualty Insurance Company's ("Allied") Motion for Summary Judgment (Doc. 76), Statement of Facts (Doc. 77), and Brief in Support (Doc. 78), all of which were filed on March 8, 2017. On April 3, 2017, Defendant Jackson Fulgham filed a Response to the Motion (Doc. 92) and then filed an Amended or Supplementary Response (Doc. 93). Thereafter, Allied filed a Reply to the first Response (Doc. 95) and a Brief in Support (Doc. 96), and then filed a Reply to the Amended or Supplementary Response (Doc. 97). The Motion is now ripe for disposition, and for the reasons explained herein, is GRANTED as to certain Counts of the Amended Complaint.

         This Order will also substantively address three motions filed by Mr. Fulgham, all of which concern his allegation that the attorneys currently representing Allied in this case should be disqualified due to a conflict of interest. The pertinent motions are: (1) Defendant's Motion Seeking to Provide Evidence of Conflict and Request for Removal of Kutak Rock Law Firm in This Matter (Doc. 80); (2) Defendant's Amended Motion Seeking to Provide Evidence of Conflict and Request for Removal of Kutak Rock Law Firm in This Matter (Doc. 82); and (3) Defendant's Motion Seeking Revocation of Pro Hac Vice Privileges of Melanie K. Okon, Lauren Leider, and the Estes Okon Thorne Carr PLLC and Taber Estes Law Firms (Doc. 94). Allied filed Responses to all three Motions. See Docs. 89, 90, 91, 100, 101. The Court has given Mr. Fulgham's allegations of attorney misconduct their due consideration, and for the reasons explained in this Order, the Motions (Docs. 80, 82, 94) are DENIED.

         I. BACKGROUND

         Mr. Fulgham originally filed suit against Allied in the District Court of Dallas County, Texas, on July 11, 2011. The subject of the lawsuit was an insurance coverage dispute. Allied filed a counterclaim against Mr. Fulgham, and in the end, Allied prevailed, and Mr. Fulgham lost. His case was dismissed on summary judgment, and only Allied's counterclaim went to trial. The state court approved the jury's verdict, and judgment was entered in favorof Allied on September 30, 2013, in the amount of $899, 160.00, along with pre-judgment interest of $44, 958.00, costs of $12, 887.80, and post-judgment interest at a rate of 5% per annum (the "Texas judgment").[1] Shortly before the trial of Allied's counterclaim, Mr. Fulgham in his individual capacity purchased two tracts of real property located in Arkansas on June 6, 2013. See Docs. 25-1, 25-2 (warranty deeds for real property). These tracts of real property are specifically described in the Amended Complaint in this case and will hereafter be referred to as the "Arkansas Property." See Doc. 25, pp. 5-6. The warranty deeds for the two tracts of Arkansas Property were filed of record in the Office of the Circuit Clerk and Ex-Officio Recorder of Carroll County, Arkansas, on June 7, 2013. See id.

         When Allied sought to collect on its Texas judgment, it became aware of Mr. Fulgham's ownership in the Arkansas Property. It also eventually became clear to Allied that a number of parties in addition to Mr. Fulgham might claim an interest in the Arkansas Property, by virtue of the fact that he had tried to assign both mortgage and leasehold interests to various parties, namely, All American Truck & Equipment Sales, LLC; L.W. and Melinda Richards; USA Truck and Equipment Sales, LLC; Michael Canada; TFT Family Trust; and Four States Truck Sales, Inc.-all of whom were named as Defendants in this action. The Amended Complaint asserts that Mr. Fulgham, in an attempt to shield the Arkansas Property from collection, fraudulently transferred his interest in the Property to these other Defendants, either while the Texas case was still pending or after final judgment was entered against him, and Mr. Fulgham did not receive a reasonably equivalent value in exchange for these transfers of interest. The Amended Complaint also asserts a claim for foreclosure of lien, noting that Allied registered its Texas judgment in Carroll County, Arkansas on August 8, 2014, thereby attaching a lien to the Arkansas Property that is the subject of this suit. The Amended Complaint further sets forth a claim for civil conspiracy against Defendants Fulgham, Canada, All American Truck & Equipment Sales, LLC, and USA Truck and Equipment Sales, LLC; but the Motion for Summary Judgment does not discuss this civil conspiracy claim, and the Court does not believe that the Motion seeks judgment as to this claim.

         Since the Amended Complaint was filed, a number of Defendants have either defaulted, disclaimed interest in the Arkansas Property, been dismissed, or made an agreement with Allied as to their legal interests in the Property. Beginning with Mr. Fulgham, who represents himself pro se, the Court observes that he has participated in his own defense and has filed an Answer to the Amended Complaint and a Response in Opposition to the Motion for Summary Judgment. He attempted to file an answer on behalf of Defendant TFT Family Trust, but that answer was stricken, and TFT Family Trust is now in default. See text-only Order of March 28, 2017, striking TFT Family Trust's Answer. Defendants All American Truck & Equipment Sales, LLC and USA Truck and Equipment Sales, LLC are in default. See Doc. 40. Defendants L.W. and Melinda Richards are also in default, but subject to Allied's stipulation that they hold a valid mortgage interest in the tracts of real property described in the Amended Complaint, and that their mortgage is superior to Allied's claim and first in line to be paid out of any proceeds collected in this matter. See text-only Order of August 8, 2016 (memorializing stipulation as to the Richards' mortgage interest). Defendant Michael Canada appeared in this case, pro se, but stipulated during the Court's Case Management Hearing that neither he, nor any other entity managed, operated, or otherwise controlled by him, had any interest in the tracts of real property described in the Amended Complaint. See text-only Order of August 8, 2016 (memorializing Mr. Canada's stipulation). Finally, Defendant Four States Truck Sales, Inc. was voluntarily dismissed without prejudice by Allied on July 1, 2016. See Doc. 46.

         Now that the dust has settled, it is undisputed that the only Defendant claiming an interest in the Arkansas Property-besides the Richards, who negotiated a settlement with Allied concerning the priority of their mortgage interest-is Mr. Fulgham. Turning to the Motion for Summary Judgment, Allied requests that an in rem judgment enter against the Arkansas Property in Allied's favor, and that if the judgment is not paid by a date certain, that Allied be declared to have a lien on the Arkansas Property, subject only to the Richards' superior interest, by virtue of their valid mortgage. It is difficult to discern which Counts of the Amended Complaint are the subject of the summary judgment motion, but in any event, it is clear that the relief sought by Allied is the sale of the Arkansas Property and the right to claim the proceeds of that sale in payment of the outstanding Texas judgment.

         Mr. Fulgham's Responses to the Motion for Summary Judgment (Docs. 92, 93) are viewed by the Court mainly as an attempt to relitigate the underlying Texas case, and to that extent, the Responses are largely unhelpful in deciding the Motion at hand. The relevant portions of the Responses that attempt to refute Allied's claims of fraudulent transfer are as follows. First, Mr. Fulgham admits that he purchased the Arkansas Property in June of 2013, just before the trial of the Texas case began, but he claims that he did not make the purchase on his own behalf, but did so "acting as trustee for his heirs and assigns... with funds belonging to [his] children, " and "not with [Mr. Fulgam's] funds." (Doc. 92, p. 7). He provides no evidence to support this claim. He only points to the language of the warranty deeds, which states that "valuable consideration" for the two tracts of land was "paid by Jackson Fulgham, a single person"; and that the tracts were sold and conveyed "unto Jackson Fulgham, a single person, hereafter called GRANTEE, and unto his heirs and assigns forever. . . ." (Docs. 25-1, 25-2).

         Immediately after quoting this language from the warranty deeds, Mr. Fulgham interprets it to mean that he, "acting as Trustee for the purpose of purchasing rural residential real estate for his children with funds of his children, closed the transaction on the Arkansas 31 acre property." (Doc. 93, p. 20). He provides no evidence to establish, as a matter of fact, that the TFT Family Trust even exists as a legal entity. See Doc. 84-2, p. 3 (responding to Allied's request for production of "a copy of the TFT Family Trust Agreement as well as all amendments thereto and certifications thereof by claiming that the documents were "presently missing and unavailable" and would not be produced). He provides no evidence to support his claim that the TFT Family Trust purchased the Arkansas Property, or that the funds used to purchase the property came from anyone other than himself. He also fails to explain the contradiction between his claim that the TFT Family Trust purchased the Arkansas Property outright, yet on June 18, 2013, Mr. Fulgham executed a Memorandum of Land and Building Lease as to the Arkansas Property in favor of the TFT Family Trust, "for the lifetime of Jackson Fulgham and the lifetime of his now living heirs plus 21 years." See Doc. 25-5.

         As to the transfer of interest Mr. Fulgham made to former Defendant Four States Truck Sales, Inc., he explains that the owners of that company made an agreement with him to use the Arkansas Property "at least partially for the benefit of helping disabled U.S. Veterans, especially those who had lost limbs in the Gulf Wars." (Doc. 92, p. 9). He admits, however, that there was "no finalization of a 'formal deal' so to speak, with Four States and there was not any obligation or expectation at any time placed on Four States." Id. at 9-10. He then argues that "there was no fraudulent mortgage [with respect to Four States Truck Sales, Inc.], as there was no obligation meant or intended that Four States nor Jeff McCourt, nor his son Jeffrey, nor his father Fred be obligated in any way at that time or in the future." Id. at 11. Regardless of Mr. Fulgham's assertions, the record contains a mortgage document filed by Mr. Fulgham with the Circuit Clerk of Carroll County, Arkansas, on August 27, 2013, that purports to grant a security interest in the Arkansas Property to Four States Truck Sales, Inc. See Doc. 25-4. Mr. Fulgham fails to explain in his briefing why he executed a Memorandum of Lease Agreement and Commercial Lease for the Arkansas Property in favor of USA Truck and Equipment Sales and Four States Truck Sales, Inc., and then filed it with the Circuit Clerk of Carroll County, Arkansas, on September 26, 2013. See Doc. 25-6.

         Finally, as a general defense to Allied's claims, Mr. Fulgham avers:

There was never any intent to commit fraud on the part of Fulgham. The facts are that there was no Fraud committed by Fulgham. There were alleged acts of Fraud committed by Nationwide, their attorneys and by certain employees. Fulgham motives were to securely set up his children with a property that they could enjoy, along with their children for a lifetime. Fulgham was simply trying to complete a project, secure the children's interest, and prepare a development plan for the children with their funds, so there was nothing of intent, in any way, that what I was doing could or would be considered wrongful or would be considered as being done to deceive anyone. There was simply no intent, and no circumstances that would require scrutiny of one's intent. On the other hand, Fulgham did consult attorneys and with his knowledge that what could go wrong, would go wrong, even under normal circumstances, he purposed to do everything he could to insure a long lasting use and benefit for the children with the purchased property.

(Doc. 93, p. 22).

         II. LEGAL STANDARD

         The standard of review for summary judgment is well established. Under Federal Rule of Civil Procedure 56(a), "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The Court must review the facts in the light most favorable to the opposing party and give that party the benefit of any inferences that logically can be drawn from those facts. Canada v. Union Bee. Co., 135 F.3d 1211, 1212-13 (8th Cir. 1997). The moving party bears the burden of proving the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Matsushita Bee, Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Natl Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602 (8th Cir. 1999). Once the moving party has met its burden, the non-moving party must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting Fed.R.Civ.P. 56(c)).

         In order for there to be a genuine issue of material fact, the non-moving party must produce evidence "such that a reasonable jury could return a verdict for the nonmoving party." Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66 (8thCir. 1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). "The nonmoving party must do more than rely on allegations or denials in the pleadings, and the court should grant summary judgment if any essential element of the prima facie case is not supported by specific facts sufficient to raise a genuine issue for trial." Register v. Honeywell Fed. Mfg. & Techs., LLC, 397 F.3d 1130, 1136 (8th Cir. 2005) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).

         III. DISCUSSION

         A. Motion for ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.