988 F.3d 260
6th Cir.2021Background
- The Boersen family operated a large, multi-entity farming business in Western Michigan and fell into distress after a poor 2016 crop year.
- Helena Agri‑Enterprises obtained a roughly $15 million judgment in 2018 against several Boersen entities and family members for unpaid credit/supplies.
- While that litigation was pending, Stacy (wife) and Nicholas (son) formed New Heights Farm I and II to farm some of the same land; they obtained leases, crop insurance, and financing using production history tied to Boersen land.
- Helena added Stacy, Nicholas, and the New Heights companies to its suit, alleging fraudulent transfers under Michigan’s Uniform Voidable Transactions Act (UVTA), successor liability, and veil piercing.
- The district court granted summary judgment for Stacy, Nicholas, and New Heights; the Sixth Circuit affirmed, holding Helena failed to show transfers by a debtor, successor/common ownership, misuse of corporate form, or entitlement to further discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| UVTA: equipment/land leases | Leases benefitted debtors; therefore they are fraudulent transfers to evade judgment | Leases were between non‑debtors; statute covers transfers "by a debtor" only; fair‑market terms | Affirmed for defendants — statute does not void transfers by non‑debtors; benefit to debtor insufficient |
| UVTA: use of production history for crop insurance | Using Boersen entities' production history = transfer of debtor asset to New Heights | Production history is not "property"/asset and no debtor transferred it to New Heights | Affirmed for defendants — production history not an asset and no qualifying transfer occurred |
| Successor liability (mere continuity) | New Heights are continuation of Boersen operation; common ownership/continuity exists | No common ownership or overlapping officers; Stacy/Nicholas were not owners/managers of indebted entities | Affirmed for defendants — plaintiff failed to show indispensable common‑ownership element |
| Veil piercing | New companies are instruments of the legacy operation used to evade creditors | Corporate formalities observed; no control by judgment debtors; no misuse causing plaintiff loss | Affirmed for defendants — no evidence to overcome presumption of corporate separateness |
| Discovery (extensions, Rule 56(d), motion to compel) | District court abused discretion by denying additional discovery and authorizations | Additional discovery would be futile, disproportional, and already allowed a meaningful period | Affirmed — no abuse of discretion; district court reasonably limited discovery under proportionality and futility concerns |
Key Cases Cited
- Mather Invs., LLC v. Larson, 720 N.W.2d 575 (Mich. Ct. App. 2006) (UVTA presumes transferor must be liable on the claim)
- Ausmus v. Perdue, 908 F.3d 1248 (10th Cir. 2018) (explaining production history in crop insurance context)
- Adkins v. Silverman, 899 F.3d 395 (5th Cir. 2018) (crop insurance and production history analysis)
- Feist Publ’ns., Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991) (facts/history are not property subject to copyright ownership)
- C.T. Charlton & Assocs., Inc. v. Thule, Inc., [citation="541 F. App'x 549"] (6th Cir. 2013) (successor liability is narrow; common ownership required)
- Turner v. Bituminous Cas. Co., 244 N.W.2d 873 (Mich. 1976) (successor liability principles)
- RDM Holdings, Ltd. v. Cont’l Plastics Co., 762 N.W.2d 529 (Mich. Ct. App. 2008) (successor liability/common ownership analysis)
- Seasword v. Hilti, Inc., 537 N.W.2d 221 (Mich. 1995) (presumption respecting corporate form)
- Wells v. Firestone Tire & Rubber Co., 364 N.W.2d 670 (Mich. 1984) (corporate entity respected absent grounds to pierce veil)
- Foodland Distribs. v. Al‑Naimi, 559 N.W.2d 379 (Mich. Ct. App. 1996) (veil piercing requires instrumentality, misuse, and plaintiff loss)
- Florence Cement Co. v. Vettraino, 807 N.W.2d 917 (Mich. Ct. App. 2011) (veil‑piercing standard reaffirmed)
- United States v. Craft, 535 U.S. 274 (2002) (separate ownership rights in married couples’ property)
- Perkins v. Am. Elec. Power Fuel Supply, Inc., 246 F.3d 593 (6th Cir. 2001) (abuse‑of‑discretion standard for discovery rulings)
- Pittman v. Experian Info. Sols., Inc., 901 F.3d 619 (6th Cir. 2018) (district courts have broad leeway over discovery)
- Inge v. Rock Fin. Corp., 281 F.3d 613 (6th Cir. 2002) (Rule 16(b)(4) good‑cause/diligence standard for scheduling order modification)
- Doe v. City of Memphis, 928 F.3d 481 (6th Cir. 2019) (factors for evaluating Rule 56(d) discovery requests)