United States Court of Appeals

For the Eighth Circuit

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No. 18-1591

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Enterprise Financial Group, Inc.,

lllllllllllllllllllllPlaintiff - Appellant,

v.

Richard Podhorn; GR3 Construction, LLC; Capital Constructors Development,

LLC; SLC Group, LLC; CLS Group, LLC; LCS Group, LLC; Cornerstone

Investors, LLC; CapDev, LLC; Wilmer Farms, LLC; Highland Management

Group, LLC; Maundeigh-Blu, LP; Maundeigh-Blu Management Company, Inc.;

Richard J. Podhorn Revocable Trust U/T/A Dated May 18, 2006; Locomotive

Investments, LP; HSWB, LLC; HS157, LLC; PFWB, LLC; WB1, LLC; 6ND,

LLC; 6NWB, LLC; Missouri Equity Solutions, LLC; MO Housing &

Re-Development, LLC; Contract Holdings, Inc.; Simpson Living Trust;

Automotive Professional Resources, LLC; JCL Realty, LLC; James Capital

Investments, LP; 4S Development, LLC; Wentzville Cinema Company, LLC,

lllllllllllllllllllllDefendants - Appellees.

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Appeal from United States District Court

for the Eastern District of Missouri - St. Louis

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Submitted: January 15, 2019

Filed: July 16, 2019

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Before SMITH, Chief Judge, COLLOTON and ERICKSON, Circuit Judges.

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COLLOTON, Circuit Judge.

Enterprise Financial Group, Inc. sued Richard Podhorn, GR3 Construction,

LLC, and several affiliated entities, advancing a claim under the Missouri Uniform

FraudulentTransferAct. The district court dismissed the complaint without prejudice

on the ground that there was no case or controversy because Enterprise lacked Article

III standing. We conclude, however, that Enterprise has alleged facts sufficient to

demonstrate the elements of standing. We therefore reverse and remand for further

proceedings.

According to the amended complaint, Enterprise sells consumer protection

productssuch as vehicle service contracts. Podhorn and GR3Construction were partowners of North American Vehicle Insurance Services LLC, also known as NAVISS,

an entity that sold Enterprise’s vehicle service contracts. NAVISS agreed to pay a

share of refunds for early cancellation of the vehicle service contracts, but failed to

meet this obligation. The complaint alleges that NAVISS’s owners transferred

NAVISS’s funds to themselves and various affiliated entities, rendering NAVISS

insolvent. As a result, Enterprise was forced to pay NAVISS’s share of refunds

totaling more than $6 million. NAVISS also agreed to use two advances from

Enterprise, in the amounts of $250,000 and $400,000, exclusively for marketing and

advertising expenses. But NAVISS allegedly transferred at least $350,000 fromthese

advances to its owners and affiliated entities, and the funds were thus not used for

their intended purpose.

Enterprise sued NAVISS and its owners in Texas court, seeking damages,

injunctive relief, and a declaration that Enterprise has a security interest in NAVISS’s

assets. While that suit was pending, Enterprise brought this action against Podhorn,

GR3 Construction, and other entities that received transfersfrom NAVISS, asserting

a claimunder the Missouri UniformFraudulent Transfer Act. The Act providesrelief

for “creditors” who are victims of fraudulent transfers. See Mo. Rev. Stat.

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§§ 428.024, .029, .039, .044. A “creditor” is an individual or entity that has a “right

to payment” from a debtor, “whether or not the right is reduced to judgment,

liquidated, unliquidated,fixed, contingent,matured, unmatured, disputed, undisputed,

legal, equitable, secured, or unsecured.” Id. § 428.009(3)-(6), (9). A debtor that

retains no interest in the transferred assets is not a necessary party to the fraudulenttransfer action, see Springfield Gen. Osteopathic Hosp. v. West, 789 S.W.2d 197, 201

(Mo. Ct. App. 1990), and the Act provides remedies directly against transferees. See

Mo. Rev. Stat. §§ 428.039, .044.

Several defendants moved to dismiss this action for lack of an Article III case

or controversy. The district court granted the motion, concluding that Enterprise

lacks Article III standing. The court reasoned that Enterprise’s alleged injuries are

“hypothetical and conjectural,” because the Texas court has not rendered a judgment

on whether NAVISS breached any agreements or owes Enterprise anymoney. Asthe

defendants mounted a facial attack on the plaintiff’s standing, we review the district

court’s dismissal of the action de novo, accepting the material allegations in the

amended complaint as true, and drawing all permissible inferences in Enterprise’s

favor. In re SuperValu, Inc., 870 F.3d 763, 768 (8th Cir. 2017).

Article III limits the judicial power to resolving “Cases” or “Controversies,”

and the standing doctrine is “rooted in the traditional understanding of a case or

controversy.” Spokeo,Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). The “irreducible

constitutional minimum” of standing consists of three elements. Id. “The plaintiff

must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged

conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial

decision.” Id. The district court concluded that Enterprise faltered at the first

element.

We conclude that the absence of a judgment in the Texas litigation does not

mean that Enterprise lacks Article III standing. To demonstrate injury in fact at the

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pleading stage, Enterprise must demonstrate that its alleged injury is actual or

imminent, as well as concrete and particularized. See id. at 1547-48. According to

the amended complaint, NAVISS agreed to pay its share of refunds for early

cancellation of vehicle service contracts and to use money advances for specified

purposes, but failed to meet these obligations. As a result, Enterprise suffered losses

in excess of $6 million. An alleged economic harm “is a concrete, non-speculative

injury,” Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1029 (8th Cir. 2014), and

the harm here is personal to Enterprise. The amended complaint thus alleges an

injury that is actual, concrete, and particularized.

Standing under Article III to bring a claim in federal court is distinct from the

merits of a claim under the Missouri Uniform Fraudulent Transfer Act. Whether

Enterprise must first secure a judgment against NAVISS in Texas before recovering

against the defendants under the Act is a question that bears on the merits of the

claim. As we understand Missouri law, a plaintiff proceeding under the Act might

be required to show at least a pending or threatened lawsuit against an alleged debtor

in order to have a “claim” under the Act. See Curtis v. James, 459 S.W.3d 471, 475-

76 (Mo. Ct. App. 2015). But whether or not Enterprise can satisfy the elements of a

claim under the Act, it has alleged a present injury in fact that issufficient to establish

Article III standing.

The defendants argue that Enterprise cannot demonstrate the second element

of standing—i.e., that its alleged injury is fairly traceable to the conduct of the

defendants. They assert that Enterprise’s alleged injury resulted from the

“independent action” of a third party, NAVISS, that is not before the court. See

Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (internal quotation omitted). 

NAVISS’s conduct as the transferor, however, was not the sole cause of Enterprise’s

alleged injury. A fraudulent transfer requires both a transferor and a transferee. The

defendants’ alleged receipt and retention of the transferred assets kept these assets

fromEnterprise and rendered NAVISS insolvent,therebycontributing toEnterprise’s

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economic harm. Enterprise’s alleged injury is thus “fairly traceable” to the

defendants’ alleged participation in the transfers as transferees.

The defendants do not challenge the final element of standing, and Enterprise

has adequately demonstrated that its injury “is likely to be redressed by a favorable

judicial decision.” See Spokeo, 136 S. Ct. at 1547. The Act provides remedies

against transferees, and these remedies would compensate Enterprise to the extent of

its claim against NAVISS if the claim has merit. See Mo. Rev. Stat. §§ 428.039.2,

.044.2.

For these reasons, the order of dismissal is reversed, and the case is remanded

for further proceedings. We leave the alternative argument of appellee Simpson

Living Trust—that Enterprise lacks “statutory standing”—to the district court in the

first instance.

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