Court Opinion

ID: 4402871
Source: CourtListenerOpinion
Date Created: 2019-06-03 18:00:17.836284+00
Date Added: 2024-06-11T14:52:29.319432
License: Public Domain

Case: 18-10051         Document: 00514979819   Page: 1   Date Filed: 06/03/2019

         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT     United States Court of Appeals
                                                     Fifth Circuit

                                                                             FILED
                                                                           June 3, 2019
                                     No. 18-10051
                                                                          Lyle W. Cayce
                                                                               Clerk
In the Matter of: LIFE PARTNERS HOLDINGS, INCORPORATED

                  Debtor.
---------------------

ALAN M. JACOBS, As Trustee for Life Partners Creditors' Trust; LIFE
PARTNERS CREDITORS' TRUST,

               Appellants,

v.

ROOT HOSPITALITY SOLUTIONS, L.L.C.; JOHN CROOKS; K'S
MARKETING, INCORPORATED; MICHAEL MISHLER; REBECCA
TEEL,TENA WILSON, A ROGER O. WHITLEY GROUP, INCORPORATED,
A SILVER LINING, L.L.C., A.D. VALLETT ; COMPANY, L.L.C., ADAM
BURCH, ADAMS LIFE BROKERAGE, L.L.C., ALETHEA BUSBY, AML
PARTNERS, L.L.C., ANDREW WALVOORD, ANDY HINES, ANDY L.
MCJOHNSTON, ANNUI CORP SERVICES, INCORPORATED, ANTHONY
ALLEN, BAAPLIFE1-2013, L.L.C., BAAPLIFE2-2014, L.L.C., BRAZOS LIFE
SETTLEMENT FUND, BRIAN H. O'NEILL, CAPERTON ENTERPRISES,
INCORPORATED, CHARLES PETERS, CINDY BULLOCH, COASTAL
EQUITIES, INCORPORATED, CRAIG WEAR FINANCIAL GROUP, L.L.C.,
CRIMSON FUND-1, L.L.C., DAVID NORCOM, DOUGLAS WALL, DUB
HUCKABEE, FUTURE PLANNING, INCORPORATED, G. STEVEN
WILLIAMS, GAIN PLAN FINANCIAL, L.L.C., GARY BROSSEIT, GBENGA
ASEDEKO, GO FINANCIAL SERVICES, INCORPORATED, HEALTH
INSURE MANAGEMENT, INCORPORATED, HOMER H. STOUT,
INTERNET ACES CORPORATION, JACK M. PAUSMAN, JOE MARTINEZ,
JOHN C. COVEY SR., JOHN D. JONES, JOHN HARPER, KEN MARKO,
KEVIN JONES, LINDA HARPER, WINDFALL DEVELOPMENT,
INCORPORATED, WILLIAM V. MOZEK JR., MARK J. SMITH,
MATHESON SERVICES, L.L.C., MATTHEW PASHBY, MDH INTERESTS,
L.L.C., MICHAEL DAVIS, MICHAEL EASTHAM, MONTCLAIR
PROPERTIES, INCORPORATED, PERSONAL FINANCIAL ADVISORS,
     Case: 18-10051       Document: 00514979819   Page: 2   Date Filed: 06/03/2019

                                   No. 18-10051
INCORPORATED, PHANTOM CONSULTING, L.L.C., TOM GRACE,
TIMOTHY JOYCE, TIM MCGUIRE, TODD SHEVLIN, TIMOTHY
TURBEVILLE, ULTIMATE WEALTHCARE, INCORPORATED, SHARON
ADAMS, ROGER LANE, R. E. BRANCH, M.D.

            Appellees.
________________________________________________________________________

In the Matter of: LPI FINANCIAL SERVICES, INCORPORATED

                Debtor.
---------------------

ALAN M. JACOBS, As Trustee for Life Partners Creditors' Trust; LIFE
PARTNERS CREDITORS' TRUST,

             Appellants,

v.

BAGBY INVESTMENTS, L.P.

          Appellee.
________________________________________________________________________

In the Matter of: LPI FINANCIAL SERVICES, INCORPORATED

              Debtor.
---------------------

ALAN M. JACOBS, As Trustee for Life Partners Creditors' Trust; LIFE
PARTNERS CREDITORS' TRUST,

            Appellants,

v.

STACEY MUNDERLOH

         Appellee.
________________________________________________________________________

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     Case: 18-10051      Document: 00514979819         Page: 3    Date Filed: 06/03/2019

                                      No. 18-10051

In the Matter of: LPI FINANCIAL SERVICES, INCORPORATED

             Debtor.
---------------------

ALAN M. JACOBS, As Trustee for Life Partners Creditors' Trust; LIFE
PARTNERS CREDITORS' TRUST,

           Appellants,

v.

TOBER ASSOCIATES, INCORPORATED

           Appellee.

                    Appeal from the United States District Court
                         for the Northern District of Texas
                               USDC No. 4:16-CV-300
                               USDC No. 4:17-CV-109
                               USDC No. 4:17-CV-110
                               USDC No. 4:17-CV-111

Before ELROD, HIGGINSON, and ENGELHARDT, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:*
       This case is one of five related adversary proceedings arising out of the
Chapter 11 bankruptcies of Life Partners Holdings, Inc.; Life Partners, Inc.
(LPI); and LPI Financial Services (collectively, the “LP Entities”), in which the
Life Partners Creditors’ Trust asserts claims against various groups of LP

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.

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     Case: 18-10051       Document: 00514979819          Page: 4     Date Filed: 06/03/2019

                                       No. 18-10051
Entities Licensees. We described the factual background and much of the
relevant procedural history in our recent opinion in Life Partners Creditors’
Trust v. Cowley, No. 17-11477 (5th Cir. May 31, 2019). We note one procedural
difference that is material to the disposition of Count 11 in Creditors’ Trust’s
pleadings: unlike in Cowley, Creditors’ Trust sought leave to amend Count 11
in a written motion before the district court’s judgment of dismissal. Thus, the
Federal Rule of Civil Procedure 59(e) standard does not apply to that claim,
and the proposed amended complaint demonstrates that repleading would not
have been futile. The district court therefore abused its discretion in declining
to grant leave to amend Count 11. See Brown v. Taylor, 911 F.3d 235, 247 (5th
Cir. 2018) (district court abused its discretion in denying leave to amend where
plaintiff offered a proposed amendment that would not be futile and had not
repeatedly failed to cure deficiencies).
       Beyond the above distinction, the arguments before the court in this case
are substantially the same as those in Cowley, and the live pleadings are
parallel in all important respects. Accordingly, we AFFIRM the district court’s
judgment of dismissal as to Counts 5, 8, and 12. However, we REVERSE the
dismissal of Counts 1–4, 1 6, 9, 10, and 11 and REMAND them for further
proceedings consistent with this opinion.

       1 As in Cowley, we affirm the district court’s dismissal of Count 2 only as to transfers
from Life Partners Holdings that occurred before January 20, 2011, and transfers from LPI
and LPI Financial Services that occurred before May 19, 2011. We also affirm the district
court’s dismissal of Counts 3 and 4 only as to transfers made by Life Partners Holdings before
January 20, 2013, and transfers made by LPI and LPI Financial Services before May 19,
2013.

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