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Parties Involved:
Earl Benard Blasingame
Appellee Cross-Appellant
Margaret Gooch Blasingame
Appellee Cross-Appellant
Blasingame Family Business Investment Trust
Appellee Cross-Appellant
Church Joint Venture, L.P.
Appellant Cross-Appellee

Document Text:

NOT RECOMMENDED FOR PUBLICATION

File Name: 20a0339n.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Case Nos. 19-5592/5593/5646/5649

CHURCH JOINT VENTURE, L.P.,

Plaintiff-Appellant/Cross-Appellee,

)

)

)

v. )

)

EARL BENARD BLASINGAME; MARGARET 

GOOCH BLASINGAME; BLASINGAME 

FAMILY RESIDENCE GENERATION 

SKIPPING TRUST,

Defendants-Appellees/Cross-Appellants.

)

)

)

)

)

)

ON APPEAL FROM THE 

UNITED STATES 

DISTRICT COURT FOR 

THE WESTERN DISTRICT 

OF TENNESSEE

OPINION

BEFORE STRANCH, BUSH, and LARSEN, Circuit Judges.

JOHN K. BUSH, Circuit Judge. This appeal is the latest installment in the decade-long

saga of the Blasingame family bankruptcy, which has involved two proceedings in the bankruptcy 

courts, two proceedings in the district court, an appeal to the Bankruptcy Appellate Panel, and two 

appeals to the Sixth Circuit. The Blasingames filed for bankruptcy in 2008. Church Joint Venture, 

a creditor in the original bankruptcy action, purchased all of the non-discharge related claims from 

the Blasingames’ bankruptcy estate. Over the past decade, Church filed four lawsuits in 

bankruptcy court and the district court alleging, in one way or another, that various trusts of which 

the Blasingames are the beneficiaries may be reached by creditors, despite the spendthrift 

provisions in those trusts. In this action, Church filed suit in the U.S. District Court for the Western 

District of Tennessee, alleging that two of the trusts were self-settled, and thus reachable in 

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bankruptcy. The district court dismissed Church’s complaint on res judicata grounds, or 

alternatively, because Church engaged in impermissible claim splitting. The Blasingames moved 

for Rule 11 sanctions to be imposed on Church for its barrage of lawsuits. The district court denied 

that motion. For the reasons stated below, we AFFIRM the district court in full. 

I.

This appeal arises from the fourth installment of Church Joint Venture’s attempt to reach

the Blasingames’ assets in bankruptcy. Earl Benard Blasingame and Margaret Gooch Blasingame 

struck it big in the 1980s. They lived in a 5,700 square-foot mansion on a sprawling 28-acre estate 

with an in-ground pool, tennis courts, storage facilities, and barns. Times got hard for the 

Blasingames in the early 1990s, and they defaulted on loans secured by their personal residence 

and an approximately 205-acre tract of land adjacent to their residence, along with other real and 

personal property. With foreclosure looming, Earl’s mother, Mavoureen Blasingame, stepped in 

to help avoid foreclosure when she established one of the trusts at issue in this litigation: the 

Blasingame Family Residence Generation Skipping Trust (“BRT”), with Earl and Margaret 

serving as trustees and Earl, Margaret, and their children serving as beneficiaries. Later, 

Mavoureen formed the other trust at issue here, the Blasingame Family Business Investment Trust 

(“BIT”), again with Earl and Margaret as trustees and their children as beneficiaries.1 

In 2008, Earl and Margaret filed for Chapter 7 Bankruptcy in the U.S. Bankruptcy Court 

for the Western District of Tennessee. Because of the length and complexity of this dispute, some 

background of the prior four proceedings is helpful to understand the present appeal. 

1 Although the facts suggesting that Mavoureen Blasingame settled the BIT and BRT are not in the record below, we 

may take judicial notice of factual circumstances from a previous case involving the same parties. See Shuttlesworth 

v. City of Birmingham, 394 U.S. 147, 157 (1969) (taking judicial notice of the record in prior, related litigation between 

the same parties for the purposes of identifying relevant circumstances). These background facts were stated in 

Church Joint Venture, L.P. v. Blasingame, 947 F.3d 925 (6th Cir. 2020). 

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The 2009 Bankruptcy Proceeding (“BIT/BRT I”)

In 2009, the Bankruptcy Trustee and Church filed an adversary proceeding in the U.S. 

Bankruptcy Court for the Western District of Tennessee, which sought declaratory and injunctive 

relief against the BIT, the BRT, and the Blasingames. The complaint sought to deny the 

Blasingames their discharge in bankruptcy, to declare that certain entities, including the BRT, were 

the alter egos or reverse alter egos of the Blasingames, and that the Blasingames were the de facto 

owners of those entities, and to set aside and void fraudulent transfers by the Blasingames. In 

2011, the Chapter 7 Trustee filed a motion to approve the sale of all the bankruptcy estate’s claims 

and causes of action to Church. The bankruptcy court entered a Sale Order which gave Church 

the right to pursue claims on the trustee’s behalf.

The 2012 District Court Proceeding (“BIT/BRT II”)

In 2012, following the Sale Order, Church filed a complaint in the U.S. District Court for 

the Western District of Tennessee, alleging among other things, that the trusts had been used as 

instrumentalities of the Blasingames and as such the trusts’ assets should be treated as the 

Blasingames’ assets (thereby reachable by creditors). Church’s first amended complaint alleged 

that “the Debtors . . . deposited their salaries, their substantial inheritances and personal assets into 

the shelter of the Trusts so as to render them ‘self-settled’ in whole or in part for the specific 

purpose of evading creditors.” R. 15-6 (Case No. 12-CV-02999, R. 81 at PageID 1675). The 

district court dismissed the declaratory judgment claims but allowed two fraudulent transfer claims 

to go to trial. Church Joint Venture v. Blasingame, No. 12-2999, 2016 WL 3248044 (W.D. Tenn., 

Jan. 13, 2016). 

In 2017, five years after filing its initial complaint in BIT/BRT II, and after the bankruptcy 

court dismissed the complaint for declaratory judgment in BIT/BRT III, see infra, Church filed a 

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motion for leave to amend its complaint in BIT/BRT II to add a claim that the trusts were selfsettled and were thus reachable by creditors in bankruptcy. The district court denied Church’s 

motion for leave to file a second amended complaint, holding that Church’s argument “that it 

recently recognized its right to bring the self-settled trust claim is an inadequate reason for delay.” 

R. 15-10 (No. 12-02999, R. 244 at PageID 6768). The district court further noted that Church’s 

original complaint in BIT/BRT II alleged that the trusts were self-settled, and the proposed second 

amended complaint alleged the same, which established that Church believed that the Blasingames 

were using self-settled trusts to shield their assets from creditors. Id. The district court found that 

Mavoureen was the settlor of those trusts. 

Church then appealed the dismissal and the denial of its motion for leave to amend. Church 

Joint Venture, L.P. v. Blasingame, 947 F.3d 925 (6th Cir. 2020) (“Blasingame II”). In that appeal

we affirmed the dismissal of Church’s claims of reverse alter ego and reverse veil piercing as 

unavailable under Tennessee trust law. Id. at 932. We further held that the district court did not 

abuse its discretion in denying Church leave to amend its complaint. Id. at 934. 

The 2017 Bankruptcy Court Proceeding (“BIT/BRT III”)

In 2017, Church filed an adversary proceeding in bankruptcy court seeking a declaratory 

judgment that the assets of the trusts were property of the bankruptcy estate. The bankruptcy court 

dismissed Church’s complaint, and the Bankruptcy Appellate Panel affirmed. We then, in turn,

affirmed the BAP. In re Blasingame, 920 F.3d 384 (6th Cir. 2019) (“Blasingame I”). We held 

that the Sale Order from BIT/BRT I included the “right to sue under any legal theory based on the 

same factual allegations in the first complaint—namely, factual allegations that the Blasingames 

and their trusts were one and the same.” Id. at 393. Therefore, because Church tried to bring those 

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same factual allegations again, dressed up in a different legal theory, it lacked derivative standing 

to bring a claim for declaratory relief in the bankruptcy court. Id. at 395. 

The Current Proceeding (“BIT/BRT IV”)

After the district court denied Church’s motion for leave to amend its complaint in 

BIT/BRT II, and while BIT/BRT II and BIT/BRT III were pending appeal in this court, Church 

filed the present case seeking a declaratory judgment that the BIT and the BRT were self-settled 

and thus reachable by creditors in bankruptcy. The district court dismissed Church’s complaint as 

precluded by res judicata. The district court noted that Church’s assertion—that the BIT/BRT IV 

complaint was the first time that it had raised affirmative claims for relief that the trusts were selfsettled—“is not supported by the decisions of [the district court in BIT/BRT II or the Bankruptcy 

Court, B.A.P., and the Sixth Circuit in BIT/BRT III].” R. 25 at PageID 1970. The court concluded: 

“Because judgment has been entered in the 2012 Lawsuit [BIT/BRT II], any new claim predicated 

on legal theories which could have been used to support the 2012 complaint’s claim for declaratory 

judgment are precluded by both the prohibition against claim splitting and the doctrine of res 

judicata.” Id. at PageID 1971. The district court also denied the Blasingames’ motion for sanctions 

under Rule 11, or in the alternative, 28 U.S.C. § 1927. It reasoned that, “due to the complexity of 

the issues and length of the prior litigation, [Church] could reasonably have believed that the 

present lawsuit was warranted. Id. at PageID 1972. Church and the Blasingames filed timely 

cross-appeals. 

II.

Where a district court dismisses a subsequent suit as duplicative, or barred by claim 

splitting, we review the district court’s inherent discretionary authority to manage its own docket 

for an abuse of discretion. Smith v. S.E.C., 129 F.3d 356, 361 (6th Cir. 1997). We review a district 

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court’s decision whether to sanction a party for abuse of discretion also. Williamson v. Recovery 

Ltd. P’ship, 826 F.3d 297, 301 (6th Cir. 2016). 

A.

Plaintiffs “must join all claims arising from the same set of facts in a single proceeding and 

cannot split them across multiple fora.” Ellis v. Gallatin Steel Co., 390 F.3d 461, 479 (6th Cir. 

2004); see Waad v. Farmers Ins. Exch., 762 F. App’x 256, 263 (6th Cir. 2019) (Moore, J., 

concurring)) (“The rule against claim-splitting requires a plaintiff to assert all of its causes of action 

arising from a common set of facts in one lawsuit.” (quoting Katz v. Gerardi, 655 F.3d 1212, 1217 

(10th Cir. 2011))). “Essentially, claim splitting is the same as res judicata, but with a presumption 

of a final judgment instead of an actual final judgment.” Id. at 260. The prohibition against claim 

splitting requires the plaintiff to present all material relevant to a claim in the first action and 

permits the district court to dismiss a second action grounded in that same set of facts. See 

Restatement (Second) of Judgments § 25 (1982). “[P]laintiffs engage in claim-splitting at the peril 

of having one case barred by the decision in the other.” Twaddle v. Diem, 200 F. App’x 435, 439 

(6th Cir. 2006). 

Church’s claim for declaratory relief here is barred under the prohibition against claim 

splitting. When this complaint for declaratory judgment was filed, Church had two other lawsuits 

pending that sought declaratory relief that the Blasingames’ trusts were reachable by their creditors 

in bankruptcy. Those lawsuits were both based in the same facts at issue here. Both lawsuits 

claimed, in one way or another, that the BIT and the BRT were self-settled trusts. They alleged 

that the Blasingames used the trust to shield their own assets from bankruptcy. That Church has 

dressed up those facts under what is ostensibly a different legal theory is of no consequence. See 

Blasingame I, 920 F.3d at 391; Ellis, 390 F.3d at 479 (noting that plaintiffs must join all claims 

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arising from the same set of facts in a single proceeding). Therefore, the district court was within 

its discretion to dismiss the action because Church engaged in impermissible claim splitting. See 

Wilkins v. Jakeway, 183 F.3d 528, 535 (6th Cir. 1999) (“[B]y bringing two different suits which 

present two different theories of the case arising from the same factual situation, counsel engaged 

in the precise behavior that res judicata [in the form defined here as claim splitting] seeks to 

discourage.”). And, as we put it in Blasingame I, “Permitting [Church] to re-assert factual 

allegations . . . would lead to the exact problems res judicata prevents: ‘the expense and vexation’ 

of multiple lawsuits, wasted ‘judicial resources,’ and the ‘possibility of inconsistent decisions.’” 

920 F.3d at 391–92 (quoting Taylor v. Sturgell, 553 U.S. 880, 892 (2008)). 

Therefore, because Church brought multiple suits based on the same set of facts across 

several fora, it engaged in impermissible claim splitting. The district court was within its discretion 

to dismiss this case. 

B.

The Blasingames maintain that the district court erred in denying their motion for sanctions 

under Rule 11 or 28 U.S.C. § 1927. They claim that, in light of the prior rulings in BIT/BRT II 

and BIT/BRT III, it was not reasonable for Church to file this lawsuit asserting the same claims. 

The district court held that, given the complexity of the issues and the length of the prior litigation, 

Church could have reasonably believed that this lawsuit was warranted. We find no abuse of 

discretion in the district court’s ruling.

Under Rule 11, a court may sanction a party that makes court filings for an improper 

purpose or based on frivolous arguments. Fed. R. Civ. P. 11. The test for imposition of Rule 11 

sanctions is “whether the individual’s conduct was reasonable under the circumstances.” Union 

Planters Bank v. L & J Dev. Co., 115 F.3d 378, 384 (6th Cir. 1997) (quoting Lemaster v. United 

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States, 891 F.2d 115, 118 (6th Cir. 1989)). Sanctions under § 1927 are warranted when “[a]ny

attorney . . . so multiplies the proceedings in any case unreasonably and vexatiously,” 28 U.S.C. 

§ 1927, and objectively “falls short of the obligations owed by a member of the bar to the court 

and which, as a result, causes additional expense to the opposing party.” Red Carpet Studios Div. 

of Source Advantage, Ltd. v. Sater, 465 F.3d 642, 646 (6th Cir. 2006) (quotation omitted). “The 

lawyer need not have subjective bad faith but must act with something more than negligence or 

incompetence.” Carter v. Hickory Healthcare Inc., 905 F.3d 963, 968 (6th Cir. 2018) (internal 

quotation marks omitted). 

The Blasingames maintain that it was improper for the district court to deny their motion 

for sanctions based on the “complexity of issues and length of the prior litigation.” Second Br. at 

31. Although it is true that Church filed strikingly similar complaints in the district court in 

BIT/BRT II and the bankruptcy court in BIT/BRT III, there is nothing in the record to indicate that 

the district court abused its discretion in declining to impose sanctions on Church. Given that res 

judicata rules surrounding declaratory judgments are complex, that there is no law in this circuit 

regarding whether denial of a motion for leave to amend a complaint constitutes a final judgment 

on the merits, and that Blasingame I noted that “[that ruling] d[id] not preclude Church from 

continuing to pursue [the BIT] outside of bankruptcy court,” 920 F.3d at 395, it can hardly be said 

that the district court abused its discretion in not sanctioning Church. 

III.

For the reasons stated above, we AFFIRM the district court’s decisions to dismiss this 

lawsuit and to deny the motion to impose sanctions on Church. 

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