United States District Court, N.D. Alabama, Northeastern Division
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE
case is before the Court on the parties' cross-motions
for summary judgment. (Docs. 124, 127). Plaintiff Huntsville
Golf Development, Inc. (“HGD”) sued the Estate of
Robert Brindley, Sr. (through its executors, Ronald Brindley
and Richard White); Whitney Bank; and Jeffrey Brindley,
heir of Robert Brindley, Sr. This lawsuit is an outgrowth of
dealings that took place more than twenty years ago between
HGD, solely owned by Nelson Chatelain, and the Brindley
Construction Company, Inc. (“BCCI”), solely owned
by Robert Brindley, Sr. at the time.
1992, Nelson Chatelain and Charlene Chatelain filed for
personal bankruptcy. While the bankruptcy proceedings were
underway, Mr. Chatelain's company, HGD, won an
arbitration award against BCCI. The final order of the
bankruptcy court provided that if HGD recovered its judgment
against BCCI, then the Chatelains' creditors, including
Whitney, could pursue the funds that HGD received by
reopening the bankruptcy proceedings. For nearly nineteen
years, HGD's efforts to collect the judgment against BCCI
were unsuccessful. Finally in 2011, a federal district court
pierced the corporate veil so that HGD could proceed against
the Estate of Robert Brindley, Sr. to recover the BCCI
judgment. HGD and the Brindley Estate settled the matter
while the district court decision was on appeal. Whitney then
reopened the bankruptcy proceedings and recovered a
significant portion of the settlement proceeds that the
Brindley Estate had paid to HGD.
bases its current suit on the circumstances of the settlement
between HGD and the Brindley Estate and Whitney's
reopening of the Chatelains' bankruptcy proceedings.
During the settlement negotiations between HGD and the
Brindley Estate, counsel for the Brindley Estate and Jeffrey
Brindley contacted counsel for Whitney to make an offer to
purchase Whitney's bankruptcy claim against the
Chatelains. Discussions among the Brindley Estate, Jeffrey
Brindley, and Whitney-which were not disclosed to HGD while
HGD and the Brindley Estate negotiated a settlement-yielded a
sharing agreement. The sharing agreement provided that the
Brindley Estate would pay the attorney's fees for
reopening the bankruptcy proceedings against the Chatelains
and Whitney would equally divide any recovery through the
bankruptcy proceedings with the Brindley Estate. Jeffrey
Brindley guaranteed the performance of the Estate.
contends that the sharing agreement between the Brindley
Estate, Jeffrey Brindley, and Whitney violated the settlement
agreement between HGD and the Brindley Estate. HGD also
asserts claims for fraud and deceit against the Brindley
Estate and conspiracy to commit fraud and deceit against
Whitney, the Brindley Estate, and Jeffrey Brindley, all based
on conduct related to the settlement between HGD and the
Brindley Estate. In its counterclaim, the Estate alleges that
HGD breached the release provisions of the settlement
to Federal Rule of Civil Procedure 56, the defendants ask the
Court to enter judgment in their favor on HGD's claims.
(Doc. 124). HGD asks the Court to enter judgment in its favor
on its breach-of-contract claim and on the Estate's
counterclaim. (Doc. 127). For the reasons discussed below,
the Court will grant the defendants' motion for summary
judgment, and the Court will grant HGD's motion for
summary judgment on the defendant's counterclaim.
SUMMARY JUDGMENT STANDARD
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.”
Fed.R.Civ.P. 56(a). To demonstrate that there is a genuine
dispute as to a material fact that precludes summary
judgment, a party opposing a motion for summary judgment must
cite “to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations
(including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials.”
Fed.R.Civ.P. 56(c)(1)(A). “The court need consider only
the cited materials, but it may consider other materials in
the record.” Fed.R.Civ.P. 56(c)(3). When considering a
summary judgment motion, the Court must view the evidence in
the record in the light most favorable to the non-moving
party and draw reasonable inferences in favor of the
non-moving party. White v. Beltram Edge Tool Supply,
Inc., 789 F.3d 1188, 1191 (11th Cir. 2015).
practice, cross motions for summary judgment may be probative
of the nonexistence of a factual dispute, but this procedural
posture does not automatically empower the court to dispense
with the determination [of] whether questions of material
fact exist.” Ga. State Conference of the NAACP v.
Fayette Cty. Bd. of Comm'rs, 775 F.3d 1336, 1345
(11th Cir. 2015) (quoting Lac Courte Oreilles
Band of Lake Superior Chippewa Indians v. Voigt, 700
F.2d 341, 349 (7th Cir. 1983)) (internal quotation marks and
brackets omitted). “If both parties proceed on the same
legal theory and rely on the same material facts . . . the
case is ripe for summary judgment.” Ga. State Conf.
of NAACP, 775 F.3d at 1345 (quoting Shook v. United
States, 713 F.2d 662, 665 (11th Cir. 1983)) (internal
quotation marks omitted).
HGD's arbitration award against BCCI
BCCI executed various agreements in 1989 and 1990 for
construction of a condominium development on a municipal golf
course in Huntsville, Alabama. (Doc. 125, p. 6; Doc. 128, pp.
1-2). Nelson Chatelain is the sole shareholder of HGD. (Doc.
125, pp. 4, 6; Doc. 128, p. 2). Robert Brindley, Sr. solely
owned BCCI. Dissatisfied with one another's performance
under the agreements, the parties entered into an arbitration
that resulted in a $376, 316.75 award in favor of HGD. (Doc.
126-1, p. 230); see Huntsville Golf Dev., Inc. v.
Brindley Constr. Co., Inc., 2011 WL 3420602, at *2 (M.D.
Tenn. Aug. 4, 2011) [hereinafter HGD 1]. HGD filed a
complaint in the United States District Court for the
Northern District of Alabama to have the arbitration award
confirmed, and the Court entered a judgment on the award in
December 1992. (Doc. 31 in Case No.
92-cv-02008-ELN). Seeking to have its judgment satisfied by
BCCI assets in Tennessee, HGD registered its judgment and
“filed applications for writs of execution . . .
requesting garnishment or execution in the United States
District Court for the Middle District of Tennessee.”
HGD 1, 2011 WL 3420602, at *2. The
Tennessee district court dismissed the garnishments after a
Tennessee bank filed a motion to quash based on its superior
interest in BCCI's assets. Id.
The Chatelains' Chapter 11 proceedings
Chatelains filed for bankruptcy in the United States
Bankruptcy Court for the Northern District of Alabama in May
1992, in part due to losses they sustained in the dealings
between HGD and BCCI. (Doc. 126-1, pp. 31, 33; see
also Doc. 128, p. 2). Whitney Bank, one of the
Chatelains' creditors, asserted an unsecured claim in the
bankruptcy proceeding for more than $1, 000, 000 based on a
judgment in Louisiana. (Doc. 126-1, p. 177; Doc. 127-17, p.
6; Doc. 126-7, p. 2). BCCI was also a party in interest in
the bankruptcy proceeding. (See Doc. 127-3, p. 2;
Doc. 128, p. 2). HGD was not a party to the Chatelains'
bankruptcy and has never filed for bankruptcy. (See
generally Case No. 92-81161-EDB-11).
November 1993, the United States Bankruptcy Court for the
Northern District of Alabama confirmed the Chatelains'
plan of reorganization. (Doc. 127-4, pp. 1-4). The
confirmation order included the following provision:
[O]ne of the [Chatelains'] corporations, Huntsville Golf
Company, of which they are the sole shareholders, has a
judgment against Brindley Construction Company in the
approximate amount of $350, 000. It should be noted that the
debtor, Nelson Chatelain, has an account receivable against
this corporation in the approximate amount of $300, 000. The
testimony given at the hearing indicated that this judgment
cannot be collected because Brindley Construction Company
does not have the funds. It is the opinion of this Court that
the debtors should attempt to collect this judgment, and that
any funds which are collected shall be subjected to the
jurisdiction of this Court and made available for
distribution to the unsecured creditors.
(Doc. 127-4, p. 3) (emphasis removed). The Chatelains did not
appeal the final order or contest the provision requiring
that funds from any future collection of HGD's
arbitration award would be used to pay the Chatelains'
unsecured bankruptcy creditors. See Huntsville Golf Dev.,
Inc. v. Whitney Bank, No. 5:13-CV-671, 2014 WL 1117640,
at *4 (N.D. Ala. Mar. 19, 2014) [hereinafter HGD 2].
HGD enforces ...