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LLC v. Glieberman

United States District Court, E.D. Michigan, Southern Division

December 22, 2016

BR NORTH 223, LLC, Plaintiff,
v.
BERNARD GLIEBERMAN, ET AL., Defendants.

          R. Steven Whalen United States Magistrate Judge.

         OPINION AND ORDER: (1) GRANTING PLAINTIFF'S OBJECTION (ECF NO. 33); (2) ADOPTING THE MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION BUT MODIFYING IT SUCH THAT DEFENDANT LINDSEY BOBAY-GLIEBERMAN IS DISMISSED WITHOUT PREJUDICE (ECF NO. 32): (3) DENYING AS MOOT THE MOTION TO DISMISS THE COMPLAINT (ECF NO. 10): AND (4) GRANTING THE MOTION TO DISMISS THE AMENDED COMPLAINT AS TO DEFENDANTS LONIE GLIEBERMAN. LINDSEY BOBAY-GLIEBERMAN. AND BLACK BEAR (ECF NO. 20)

          PAUL D. BORMAN UNITED STATES DISTRICT JUDGE

         Now before the Court is Plaintiff BR North's Objections to Magistrate Judge R. Steven Whalen's September 11, 2015 Report and Recommendation. (ECF No. 32, Report and Recommendation.) The Report and Recommendation recommended that this Court deny as moot Defendants Lonie Gleiberman ("Lonie"), Lindsey Bobay-Glieberman ("Bobay"), and Black Bear, Inc.'s ("Black Bear") Motion to Dismiss the original complaint and grant their Motion to Dismiss the First Amended Complaint. (ECF Nos. 10 & 20.) Plaintiff filed an Objection to the Report and Recommendation dated September 28, 2015 (ECF No. 33). Thereafter, Defendants Lonie, Bobay and Black Bear filed a Response to Plaintiffs Objection and Plaintiff filed a reply. (ECF Nos. 34 & 35.)

         This Court reviews de novo the portions of a report and recommendation to which objections have been filed. 28 U .S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Having conducted a de novo review of the parts of the Magistrate Judge's Report and Recommendation to which valid objections have been filed pursuant to 28 U.S.C. § 636(b)(1), the Court will deny the Plaintiffs objection, adopt the Magistrate Judge's Report and Recommendation, dismiss as moot Defendant Lonie, Bobay and Black Bear's Motion to Dismiss the Complaint and grant their Motion to Dismiss the First Amended Complaint.

         I. BACKGROUND

         On November 24, 2014, Plaintiff filed the present civil action against Defendants Bernard Gleiberman, Sandra Glieberman, Lonie Glieberman, Lindsey Bobay-Glieberman, Jeffrey Katzen, Tracey Katzen, Black Bear, Inc., Lontray Enterprises, LLC, Digim, Inc., Ditigal Image, LLC and alleged that Defendants fraudulently transferred assets in violation of Michigan law. (ECF No. 1.)

         On January 16, 2015, three of the Defendants, Lonie Glieberman ("Lonie"), Lindsey Bobay-Glieberman ("Bobay"), and Black Bear, Inc. ("Black Bear"), filed a Motion to Dismiss the complaint. (ECF No. 10.) On February 9, 2015, Plaintiff filed its First Amended Complaint ("FAC"). (ECF No. 19.) Then, on February 26, 2016, Lonie, Bobay, and Black Bear filed a Motion to Dismiss Plaintiffs FAC. (ECF No. 20.) Plaintiff filed a response to the motion to dismiss the FAC and Defendants Lonie, Bobay, and Black Bear filed a reply. (ECF Nos. 24 & 29.) The Court referred the motions to dismiss to Magistrate Judge R. Steven Whalen. (ECF No. 22.)

         On the same day that Plaintiff filed its response to the Motion to Dismiss the FAC, Plaintiff also filed a Motion for Leave to file a Second Amended Complaint and Consolidate this Action into E.D. Mich. Case No. 13-mc-50297. (ECF No. 25.) This Court also referred that motion to the Magistrate Judge, and it remains pending. (ECF No. 27.)

         On September 11, 2015, Magistrate Judge Whalen issued a Report and Recommendation regarding Defendants Lonie, Bobay, and Black Bear's Motions to Dismiss and recommended that this Court dismiss the motion to dismiss the original complaint as moot based upon the filing of the FAC. (ECF No. 32.) Magistrate Judge Whalen also recommended granting the Motion to Dismiss the FAC but "without prejudice to an independent decision on Plaintiffs pending motion for leave to file second amended complaint." (ECF No. 32, at 1.)

         As set forth in the Report and Recommendation, Magistrate Judge Whalen determined that Plaintiff failed to allege any affirmative acts of concealment on the part of Defendants Lonie, Black Bear, and Bobay in the FAC regarding the Black Bear transfer. Accordingly, the six-year statute of limitations on Plaintiffs Michigan Uniform Fraudulent Transfer Act ("MUFTA") claims could not be tolled as to those three defendants. (ECF No. 32, *6-7.) The Magistrate Judge also determined that the MUFTA allegations against Defendant Black Bear were not plausible because it was the transferred asset and therefore not a proper party to the action. (Id., at *8-9.) Additionally, the Magistrate Judge concluded that Plaintiffs MUFTA allegations against Defendant Bobay were not plausible because Plaintiff failed to make any claim that the transferor specifically intended her to benefit from the transaction as required by statute. (Id., at *9.) The Magistrate Judge also held that in light of his determination that Defendant Bernard Glieberman "continues to own the Digim stock" in the case, In re Certification of Judgment, 13-mc-50297, that Plaintiffs "fraudulent transfer claims as to Digim are moot." (ECF No. 32, at *9.) Finally, the Magistrate Judge noted that he would address "the interplay between a supplementary proceeding, a statute of limitations, and an allegedly fraudulent transfer of property" when he decided Plaintiffs pending motion for leave to file a second amended complaint and consolidation. (ECF No. 32, at *8, n. 4.)

         On November 2, 2015, Defendant Bernard Glieberman filed a "Notice of Filing of Petition in Bankruptcy" and that provided that "under the Bankruptcy Code, the above proceedings are stayed until further order of the Bankruptcy Court." (ECF No. 36, see also E.D. Mich. Bankr. Case No. 15-55996.) Then, on October 12, 2016, Plaintiff filed a Notice in this Action providing that the Bankruptcy Court entered an order "Granting BR North 223, LLC's Motion for Relief from Automatic Stay, permitting BR North 223, LLC to prosecute claims pertaining to Black Bear, Inc. in the actions titled BR North, LLC v. Bernard Glieberman, et al, Case No. 2:14-cv-14488-PDB-RSW and/or BR North, LLC v. Bernard Glieberman, et ai, Case No. 13-mc-50297-PDB-RSW." (ECF No. 37, Ex. 1.)

         II. STANDARD OF REVIEW

         Pursuant to Federal Rule of Civil Procedure 72(b) and 28 U.S.C. § 636(b)(1), the Court conducts a de novo review of the portions of the Magistrate Judge's Report and Recommendation to which a party has filed "specific written objections" in a timely manner. Lyons v. Comm 'r Soc. Sec,351 F.Supp.2d 659, 661 (E.D. Mich. 2004). Only those objections that are specific are ...


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