556 B.R. 676
Bankr. E.D. Pa.2016Background
- Debtor Alan Wolf owned 90% of Modern Classics, Inc., a collector-car dealership; transactions were often conducted on Modern Classics letterhead.
- In Feb. 1999 Jordan paid $59,000 for a 1953 Cadillac (the "Eldorado"); the invoice referenced Modern Classics but the check was made payable to and deposited by Wolf personally.
- The Eldorado was never delivered; Wolf later sold it to a third party; Jordan accepted a proposed replacement (the "Speedster") but that was never completed.
- After delay and partial communications, Jordan sued Modern Classics in 2012 (obtained & later opened default judgment); Modern Classics filed chapter 7 in 2013.
- Jordan filed a proof of claim for $85,186.89 in Wolf’s 2015 Chapter 13 case; Wolf objected, asserting the contract was with Modern Classics, not him personally.
- At trial the court found Wolf performed plan obligations and there were funds to pay allowed claims, but sustained Wolf’s objection and disallowed Jordan’s claim against Wolf individually.
Issues
| Issue | Jordan's Argument | Wolf's Argument | Held |
|---|---|---|---|
| Whether Wolf, not Modern Classics, was party to the sale contract | Relying on course of dealing: all communications with Wolf, checks payable to Wolf, Wolf endorsed/deposited funds personally, and Wolf signed invoice | Documentary communications were on Modern Classics letterhead; invoice identified Modern Classics; Jordan previously sued Modern Classics (not Wolf) in 2012 | Contract was with Modern Classics, not Wolf personally; claim against Wolf for breach disallowed |
| Whether unanswered Requests for Admission (RFA) judicially bind Wolf to admit he contracted individually | RFAs (unanswered) and Rule 36 should deem admissions, proving Wolf was contracting personally | RFAs were ambiguous as to whether acts were on behalf of Modern Classics; Wolf contested the facts in pleadings and at trial; court should allow withdrawal of deemed admissions under Rule 36(b) | Court allowed withdrawal/amendment of deemed admissions; RFAs did not conclusively establish personal contract with Wolf |
| Whether unjust enrichment liability attaches to Wolf for corporate receipt of Jordan’s payment | Jordan: Wolf personally received and deposited the $60,000, so it is inequitable for him to retain benefit | Wolf: separate corporate identity shields him absent additional facts showing personal inequity or alter-ego conduct | Unjust enrichment not proven: mere receipt of corporate payment (even into a personal account) without a developed record showing inequitable, individualized benefit is insufficient |
| Burden of proof after objection to proof of claim | Jordan: his filed proof of claim is prima facie valid; Objector must prove invalidity | Wolf: objector met burden of production; ultimate burden remains with claimant to prove claim | After Wolf’s production, Jordan bore ultimate burden and failed to prove claim against Wolf personally; claim disallowed |
Key Cases Cited
- Airco Indus. Gases, Inc. v. Teamsters Health & Welfare Pension Fund, 860 F.2d 1028 (3d Cir.) (Rule 36 admissions conclusive absent withdrawal)
- Gwynn v. City of Philadelphia, 719 F.3d 296 (3d Cir.) (Rule 36(b) factors for withdrawal: presentation of merits and prejudice)
- U.S. v. Petroff-Kline, 557 F.3d 285 (6th Cir.) (withdrawal may be imputed from party’s actions)
- Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147 (6th Cir.) (oral arguments can suffice to seek withdrawal of admissions)
- Dependahl v. Falstaff Brewing Corp., 491 F. Supp. 1188 (E.D. Mo.) (permitting withdrawal where defendant consistently contested matters and plaintiff did not act as if admissions were accepted)
- EBC, Inc. v. Clark Bldg. Sys., Inc., 618 F.3d 253 (3d Cir.) (elements and limits of unjust enrichment doctrine)