# U n i t e d S t a t e s C o u r t o f A pp e a l s For the Eig hth Circu it

_ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _
No . 1 8 -1 5 91

_ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _
En t erp ri s e Fi n an ci al Gro u p , In c.,

l l ll l ll l l l l l l l ll l ll l l Pl a i n t i

f f - Ap p el l a n t ,

v

.

Ri ch ard Po dh o rn ; GR3 Co ns t ru ct i on , LLC; Cap i t al Co n st ru ct ors Dev el o p m en t , LLC; SLC Gro u p , LLC; CLS Gro u p , LLC; LCS Gro u p, LLC; Co rn ers t o n e In v es t o rs , LLC; Cap Dev , LLC; W i l m er Farm s , LLC; Hi g h l an d M an ag em en t Gro u p , LLC; M au n d ei gh -Bl u , LP; M au n d ei g h -Bl u M an ag em en t Co m p an y , In c.; Ri ch ard J . Po d h o rn Rev o cab l e Tru s t U/ T/ A Dat ed M ay 1 8 , 2 0 0 6 ; Lo co m o t i v e In ves tm en t s , LP; HSW B, LLC; HS1 5 7 , LLC; PFW B, LLC; W B1 , LLC; 6 ND, LLC; 6 NW B, LLC; M i s s o u ri Eq u i t y So l u t i o n s , LLC; M O Ho u s i n g & Re-Dev el op m en t , LLC; Co nt ract Ho l d i n gs , In c.; Si m p s o n Li vi n g Tru s t ; Au to m o t i v e Pro fes s i o n al Res o u rces , LLC; J CL Real t y , LLC; J am es Cap i t al In v es t m en t s , LP; 4 S Dev el o p m en t , LLC; W en t zv i l l e Ci n em a Co m p an y , LLC,

ll l l l l l l l l l ll l l l l l l l l Def

en da n t s - Ap p el l ees

.

_ __ _ _ __ _ __ _ _ Ap p eal fro m

Un i t ed St at es Di s t ri ct Co u rt fo r t he Eas t ern Di s t ri ct o f M i s s o u ri - St . Lo u i s

_ __ _ _ __ _ __ _ _
Su b m i t t ed : J an u ary

1 5
, 2 0 1 9 Fi l ed : J ul y 1 6 , 2 0 1 9

_ __ _ _ __ _ __ _ _ Befo re SM ITH, Ch i ef J u d g e, COLLOTON an d ERICKSON, Ci rcu i t J u d g es

.

_ __ _ _ __ _ __ _ _COLLOTON, Ci rcu i t J u d g e.

En t erp ri s e Fi n an ci al Gro u p , In c. su ed Ri ch ard Po d h orn , GR3 Co n s t ru ct i o n, LLC, an d s ev eral affi l i at ed en t i t i es , ad van ci n g a cl ai m u n d er t h e M i s s ou ri Un i fo rm Frau d u l en t Tran sf

e r A c t. T he distr ict co u rt d i s m i s s ed th e co m p l ai n t wi th o u t p reju d i ce

o n t he g ro u n d t h at t h ere was n o cas e o r co n tro v ers y becau s e En t erp ri s e l ack ed Art i cl e III s tan di n g. W e co n cl ud e, h o wev er, t h at En t erp ri s e h as al l eg ed fac t s s u ffi ci en t to d em o n s t rat e th e el em en t s o f s t an d in g

. W e th erefo re rev ers e an d rem an d fo r fu rt h er
p ro ceed in g s

.

Acco rd i ng t o t h e am en d ed co m p l ai n t , En t erp ri s e s el l s co n s u m er p ro t ec t i o n
p ro d uct s s u ch as v eh i cl e serv i ce co n t ract s

. Po d h o rn an d GR3 Co n s t ru ct i o n were p art

o wn ers o f No rt h Am eri can Veh icl e In s u ran ce Serv i ces LLC, al s o k n own as NAVISS,

an en t i t y t h at s o ld En t erp ri s e’ s v eh i cl e s erv ic e c o n t ract s. N A VISS ag reed t o p ay a

s h are o f refu n d s fo r earl y can cel l at i o n o f t h e v eh i cl e s erv i ce co n tract s , b u t fai l ed to

m eet t h is o b l i g at io n

. Th e c o m p l ai n t al l eg es t h at NAVISS’ s o w n ers tran s ferred
NAVISS’ s fu nd s t o t h em sel ves an d v ari ou s affi l i at ed en ti t ies
, ren der i n g N AVISS i n s o l v en t

. As a res u l t , E n t er p r i s e w as fo rced t o pay NAVISS’ s s h are o f refu nd s
t o t al i n g m ore t h an $ 6 m il l i o n

. NAVISS a l s o ag reed t o u s e t wo ad v an ces fro m En t erp ri s e, i n th e am o u n t s o f $ 25 0 ,0 0 0 an d $ 4 0 0
, 0 0 0
, ex cl u s i v el y fo r m ark et i n g an d ad v ert i s in g ex pen s es

. Bu t N A V I S S al l eg ed l y t ran s ferred at l eas t $ 3 5 0 ,0 0 0 fro m t h es e ad v an ces t o i t s o w n ers an d af f i l i a t e d en ti t ies
, an d t h e fu n d s were t h u s n ot u s ed fo r
t h ei r i n t en d ed p urp os e.

En t erp ri s e s u ed NAVISS a n d i t s o wn ers i n Tex as co u rt , s eek i n g d am ag es , i n ju n ct i v e rel i ef, an d a decl arat i o n t h at En t erp ri se h as a secu ri t y i n t eres t i n NAVISS’ s

as s et s. W h i l e t h at s u i t was p en di n g , En t erp ri s e b ro u g h t t h i s act i o n ag ai n s t Po d h o rn , GR3 Co ns tru ct i o n , an d o t her en t i t i es t h at recei v ed t ran s fers fro m NAVISS, as s ert i n g

a cl ai m u nd er t h e M i s s ou ri Un i fo rm Frau d u l en t Tran s fer Act

. T h e A ct pro v i d es rel i ef fo r “ cred i t o rs ” wh o are v i ct i m s o f fr a u d u l en t t ran s fers

. S ee Mo

. Rev

. St at

.

-2

-§ § 4 2 8 .0 2 4
, .0 2 9
, .0 3 9, .0 4 4

. A “ cred i t o r” i s an in di v id u al o r en t i t y t h at h as a “ ri g ht

t o p ay m en t ” fro m a d eb t o r, “ wh et h er o r n o t t h e ri g h t i s red u ced t o ju d g m en t , l i qu i dat ed
, u nl iq uida

te d, f i xe d, c ontinge nt, m a tur e d
, unm a tur e d, dispute d, undi s p u t ed
, l eg al
, eq ui t ab l e, s ecu red
, o r u n s ecu red .” Id

. § 4 2 8

. 0 09 (3 )

- ( 6 ), (9 ). A d eb t o r t h at
ret ai n s n o in t eres t i n t h e t ran s ferred as s et s i s n o t a n eces sary p art y t o t h e frau d u l en t

t ran s fer act i o n, s ee S

p r i n g fi el d Gen

. Os t eo

p a t h i c Ho sp

. v. W

es t , 7 89 S.W .2 d 1 9 7
, 2 0 1 (M o

. Ct

. Ap p

. 1 99 0 ), an d t h e Act p ro v i d es rem ed ies d i rect l y ag ai n s t tran s ferees

. See
M o . Rev . St at . § § 4 28 .0 39 , .0 4 4

.

Sev eral defen d an ts m o v ed t o d i s m i s s t h i s act i on fo r l ack o f an A rt i cl e III cas e

o r co n t ro v ers y

. Th e di st ri ct co u rt g ran t ed t h e m o t i o n , co n cl u d in g t h a t E n t erp ri s e l ack s Art i c l e III s t an di n g

. Th e co u rt reas o n ed t h at En t erp ri s e’ s al l eg ed i n j u ri es are

“ h y p o t h et i cal an d co n

j ect ural ,” b ecau s e t h e Tex as co u rt h as n o t ren d ered a ju d g m en t

o n wh et h er NAVISS b reach ed an y ag reem en t s o r o wes En terp ri s e an y m o n ey

. As t h e d efen d an t s m o un t ed a faci al at tack o n t h e pl ai n ti ff’ s s t an d i n g , we rev i ew t h e d i s t ri ct

co u rt ’ s d i s m i s s al o f t h e a c t i o n d e n o vo , accep t i n g t he m at eri al al l eg at i o n s i n t h e

am en d ed co m

p lai nt as t ru e, an d d rawi n g al l p erm i s si b l e i n feren ces i n E n t erp ri s e ’ s fav o r. In r e S

u p er Va l u, In c. , 8 70 F.3 d 7 6 3 , 7 6 8 (8 t h Ci r. 2 0 17 ).

Art i cl e III l i m i t s t h e j u d ici al p o wer t o res o l v i ng “ Cas es ” o r “ Co nt ro v ers i es ,”

an d t h e s t an di ng d o ct ri ne i s “ ro o t ed i n t h e t rad i t i on al u n d e r s t a n d i n g of a cas e o r

co n tro v ers y .” S

po keo

, In c. v. Ro b i n s , 1 3 6 S. Ct

. 1 5 4 0, 1 54 7 (2 0 1 6). Th e “ i rred u ci b l e

co n st i t u t io n al m i n i m

um ” o f st an d i n g co ns i s ts o f t h ree el em en ts

. Id

. “ Th e p l ai n t i ff

m u st h av e (1 ) s u ffered an i nju ry i n fact
, (2 ) t h at i s fai rl y t raceab l e t o t h e ch al l en g ed

co n du ct o f t h e d efen d an t , an d (3 ) t h at i s l i k el y t o b e red res s ed b y a fav orab l e ju d i ci al d eci s i o n .” Id

. Th e d i s t ri ct co u rt co n cl u d ed t hat En t erp ri s e fal t ered at t h e fi rs t el em en t

.

W e co n cl u de t hat t h e ab s e n ce of a j u d gm en t in t h e T ex as l i t i g at i o n d o es n ot

m ean t h at En terp ri s e l ack s Art i cl e III s t an di n g. To d em o n s t rat e i n j u ry i n fact at t h e

-3

-p l ead i n g s t ag e, En t erp ri s e m u s t d em o n s t rat e t hat i t s al l eg ed i n ju ry i s act u al o r i m m i n en t, as wel l as co n cret e an d p art i cu l ari zed

. S ee i d

. at 15 4 7 -4 8

. Acco rd i n g t o
t h e am en d ed co m

p l ai nt , N AVISS ag reed t o p ay i ts s h are o f refu n d s fo r earl y

can cel l at i o n o f v eh i cl e s erv i ce co n t ract s an d t o u s e m o n ey ad v an ces fo r s p eci fi ed

p u rp os es , b u t fai l ed t o m eet t hes e o b li g at io n s

. As a res u l t , En t erp ri s e s u ffered l o s s es i n ex ces s o f $ 6 m i l l i o n . An al l eg ed eco n o m i c h arm “ i s a co n cret e, n on -s p ecu l at i v e i n ju ry ,” W a l la ce v. Co n

Ag r a Fo o d

s , In c. , 7 4 7 F.3 d 1 02 5
, 1 0 2 9 (8 th Ci r. 2 01 4 ), an d

t h e h arm h ere i s p ers o n al t o En t erp ri s e. Th e am en d ed co m p l a i n t t h u s al l eg es an i n ju ry t h at i s act u al
, co n cret e, an d p art i cu l ari zed

.

St an di ng u n d er A rt i cl e III t o b ri n g a cl ai m i n fed eral co u rt i s d is ti n ct fro m t h e

m eri t s o f a cl ai m u n der t h e M i s s o u ri Un i fo rm Frau du l en t Tran s fer Act

. Wh et h er En t erp ri s e m

u s t fi rs t s ecu re a ju d g m en t ag ai ns t N AVISS i n T ex as b efo re reco v eri n g
ag ai n s t t h e d e f

en d an t s u n d er t h e Act is a qu es t i o n t h at b ears o n t h e m eri t s o f t h e cl ai m

. As we un d ers t an d M i s so u ri l aw, a p l ai n t i ff p ro ceed i ng u n d er t h e Act m i g ht b e req u i red t o s h o w at l eas t a p en d i n g o r t h reat en ed l aws u i t ag ai n s t an al l eg ed d eb t o r i n o rd er t o h av e a “ cl ai m ” u n d er t h e Act

. S ee Cu r t i s v. Ja m es , 4 5 9 S.W .3 d 4 7 1
, 4 7 5

- 7 6 (M o

. Ct

. Ap p

. 2 0 1 5 ). Bu t wh et her o r no t En t erp ri se can sat i s fy t h e el em en t s o f a cl ai m u nd er t h e A ct , it h as al l eg ed a p res en t i n ju ry i n fact t h at i s s u ffi ci en t t o es t ab l i s h
Art i cl e III s t an d i n g

.

Th e d efen d an t s arg u e t h at En t erp ri s e can n ot d em o n s trat e t h e s eco n d el em en t

o f s t an d i n g

— i .e. , t h at it s al l eg ed i nju ry i s fai rl y t raceab l e t o t h e co n du ct o f t h e d efen d an t s

. Th ey as s ert t h at En t erp ri se’ s al l eg ed i n ju ry res u l ted f

r o m t h e

“ i n dep en d en t act io n” of a t h i rd p art y , NAVISS, th at i s n o t befo re t h e c o u r t

. See
Lu j a n v. D e f s

. o f Wi l d l i f e , 5 0 4 U.S. 5 55
, 5 6 0 (1 9 9 2 ) (i nt ern al q u o t at i o n o m i t t ed ).
NAVISS’ s co n d u ct as t h e t ran s fero r, ho wev er, was n o t th e s o l e cau s e of En t erp ri s e’ s al l eg ed i n ju ry

. A frau d u l en t t ran s fer req ui res b o t h a t ran s fero r an d a t ran s feree. Th e d efen d an t s ’ al l eg ed recei p t an d ret en t i o n o f t h e t ran s ferred as s e t s k ep t t h es e as s et s fro m En terp ri s e an d ren d ered N AVISS i ns o lv ent, the r e by c ont ri b ut i n g t o En t erp ri s e’ s

-4

-e c o n o m i c h arm

. En t erp ri s e’ s al l eg ed in ju ry i s t h us “ fai rl y t raceab l e” t o t h e d efen d an t s ’ al l eg ed p art i ci p at i o n i n t h e t ran s fers as t ran s ferees

.

Th e d efen d an t s d o n o t ch al l en g e t h e fi n al el em en t o f s tan d i n g , an d En t erp ri s e h as ad eq u at el y

d em o n s t rat ed t h at i t s i n

ju ry “ i s l i kel y t o b e red res s ed b y a fav o rab l e ju d i ci al deci s i o n .” S

ee S p okeo
, 1 3 6 S

. C t

. at 1 5 47

. Th e Act pro v i d es rem ed i es
ag ai n s t t ran s ferees
, an d t h es e rem ed i es w o u l d co m p en s at e En t erp ri s e t o t h e ex t en t o f i t s cl ai m ag ai n s t NAVISS i f t h e cl ai m h as m eri t

. S e e M o

. R e v

. St at

. § § 4 2 8 .0 3 9 .2
, .0 4 4.2

.

Fo r t h es e reas o n s , t h e o rd er o f d i s m i s s al i s rev ers ed
, an d t h e cas e i s rem an d ed fo r fu rt h er p ro ceed i n g s

. W e le a v e t h e al t ern at i v e arg u m en t o f ap p el l ee Si m p so n Li v i n g T ru s t

— t h at En t erp ri se l ack s “ s t at u t o ry s t an di n g”— t o t h e d i s t ri ct co u rt i n t h e fi rs t i n s t an ce.

__ _ _ _ _ __ _ _ __ _ _ __ _ __ _ _ _ _ _ __ _ _ _ _

-5

-