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Bank of the Ozarks v. Perfect Health Skin and Body Center PLLC

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

May 24, 2019

BANK OF THE OZARKS, Plaintiff,
v.
PERFECT HEALTH SKIN AND BODY CENTER PLLC, and THEODORE BASH, an individual, Defendants.

          Patricia T. Morris, Magistrate Judge.

          ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT IN PART

          Thomas L. Ludington, United States District Judge.

         On June 12, 2018, Plaintiff Bank of the Ozarks (Bank OZK) filed a complaint against Defendants Perfect Health Skin and Body Center, PLLC (Perfect Health), and one of its alleged members, Dr. Theodore Bash. ECF No. 1. The complaint alleges that Perfect Health is in default of its obligations under an Equipment Financing Agreement between Bank of the Ozarks and Perfect Health, and that $139, 822.38 remains due and owing under the Equipment Financing Agreement. The complaint asserts six counts for relief, including a breach of Dr. Bash's guaranty of Perfect Health's obligation under the Equipment Financing Agreement (Count I); breach of the Equipment Financing Agreement by Perfect Health (Count II); breaches of contracts implied in law, implied in fact, and promissory estoppel against both Defendants (Counts III, IV, and V); and one count for claim and delivery of collateral subject to the Bank OZK's security interest (Count VI).

         On June 20, 2018, Bank OZK filed an ex parte motion for possession pending final judgment. ECF No. 6. The motion asserted that Bank OZK has a security interest in, among other things, certain equipment: 5 QANS Assessment Systems (5-QANS), and an “Aspen Laser System” (Laser). The Equipment Financing Agreement was attached to the motion, as well as the UCC financing statement, reflecting Bank OZK's security interest in the equipment. ECF No. 6-2, 6-3. The motion asserted that the collateral is in imminent danger and sought possession of the collateral pending final judgment. The motion also requested an ex parte restraining order pending a hearing on the motion for possession pending final judgment. On June 21, 2018, the Court entered an order denying Bank OZK's request for an ex parte restraining order, and scheduling the motion for possession pending judgment for hearing. ECF No. 7. The Court explained that Bank OZK did not make the requisite showing required by MCR 3.105 (E)(1)(b) for an ex parte restraining order. A hearing on the motion for possession pending judgment was held on July 11, 2018. The motion was granted. ECF No. 20.

         Defense counsel filed a motion to withdraw, which was granted. Attorney James Meyer was substituted as counsel for Dr. Bash. Attorney Veronica Turner later filed an appearance on behalf of Dr. Bash as well. Defendant Perfect Health was directed to secure new counsel but has not done so. On November 19, 2018, Plaintiff moved for partial summary judgment against Defendant Bash on Count I (Breach of Guaranty) and Count III (Breach of Contract), which was granted. Plaintiff's amended complaint also contains the following counts, which appear on a cursory review to have been pled, at least in significant part, in the alternative to Counts I and III: Count IV (Breach of Contract Implied in Law); Count IV[1] (Breach of Contract Implied in Fact); and Count V (Promissory Estoppel). The amended complaint also contains pending counts for Fraud (Count VI); Conversion (Counts VII, VIII); RICO violation (Count IX); and Claim & Delivery (against Perfect Health only) (Count X). Plaintiff has not sought summary judgment or voluntary dismissal of those counts.

         On December 12, 2018, the Court granted the parties' stipulation to extend dates by 90 days, setting a new discovery deadline of March 19, 2019, and a dispositive motion deadline of April 22, 2019. ECF No. 44. On February 27, 2019, Plaintiff sought entry of default against Defendant Perfect Health, which was granted. Plaintiff has not yet sought a default judgment.

         On April 22, 2019, Defendant Theodore Bash filed a motion for summary judgment. ECF No. 57. The motion addresses the pending counts for breach of implied contract and promissory estoppel, repeating for the most part the same arguments already addressed in the order granting summary judgment on the express contract. The motion also addresses the pending counts for fraud, conversion, and violation of RICO. Plaintiff responded on May 13, 2019.

         I.

         The following facts were set forth in the Court's previous order granting summary judgment in part. ECF No. 46. The facts are derived from the exhibits attached by the parties to their briefing on the previous motion for summary judgment. ECF Nos. 39, 43. Perfect Health Skin and Body PLLC (Perfect Health) did business as O Bella Aesthetics, a medical spa in Okemos, MI. See Pl. M. Summ. J. Ex. 1, Corp. Res., ECF No. 39-1, PageID.331. According to corporate formation documents dated November 30, 2012, Richard MacAuley was the registered agent and sole member of Perfect Health Skin and Body Center PLLC. See Def. Resp. Ex. B, Corp. Filings, ECF No. 43-3, PageID.504. He was also listed as the owner of Perfect Health. Id. Subsequent filings listed MacAuley as the registered agent, but did not list members of the LLC. Id.

         A resolution dated June 17, 2015 provides that:

Perfect Health Skin and Body Center, PLLC is owned 100% by Ted Bash. Richard MacAuley has no ownership interest in the company. Richard MacAuley shall be removed from company bank account(s) effective as of June 1, 2015. Richard MacAuley shall remain as clinic medical director until further notice.

Pl. M. Summ. J. Ex. 1, Corp. Res., ECF No. 39-1 at PageID.331.

         Dr. Bash denies any knowledge of this corporate resolution, denies signing the resolution, and denies that he has ever been a member, owner, managing partner, managing director, employee, agent, or representative of Perfect Health. Def. Resp. Ex. A, Bash Aff. ¶ 6, ECF No. 43-2, PageID.493. No. documents have been produced identifying Dr. Bash as an agent or member of Perfect Health.

         In July of 2016, an equipment financing agreement was entered into between Bank OZK and Perfect Health. Pl. M. Summ. J. Ex. 2, Equip. Finance Agt., ECF No. 39-1, PageID.333. Dr. Bash's name is signed thereto. Id. PageID.337. He claims that this signature was forged by someone with no authority ...


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