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Koenig v. Bourdeau Construction, LLC

United States District Court, E.D. Missouri, Eastern Division

October 21, 2016

RYAN KOENIG, JAMES KOENIG, II, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BOURDEAU CONSTRUCTION LLC, Defendant.

          MEMORANDUM AND ORDER

          STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.

         This case comes before the Court on Plaintiffs' Motion for a Creditor's Bill in Equity and to Pierce the Corporate Veil to enforce their judgment against defendant. [#62]. Plaintiffs wish to reach the assets of defendant's alleged alter egos Bourdeau Contracting and James M. Bourdeau in order to satisfy a judgment against Bourdeau Construction. The matter has been fully briefed and is ready for disposition. For the following reasons, the motion will be granted in part.

         I. Factual Background

         Plaintiffs were former employees of defendant Bourdeau Construction L.L.C. who brought suit against defendant alleging that the plaintiffs were not paid in accordance with the Fair Standards Labor Act, 29 U.S.C. § 201, et seq. and Missouri's wage and hour laws. On June 20, 2014, defendant made an Offer of Judgment in favor of plaintiffs and against defendant for all causes of action alleged in the plaintiffs' complaint. [#32]. On July 10, 2014, plaintiffs accepted defendant's offer of judgment and subsequently filed a Motion for Attorneys' Fees and Costs. [#32-33]. On November 26, 2014, this Court entered its Memorandum and Order granting Plaintiffs' Motion for Attorneys' Fees and Costs pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b), and Federal Rule of Civil Procedure 68. [#42]. On January 20, 2015, this Court entered a judgment in favor of plaintiffs and against defendant in the amount of $37, 282.01, which included attorneys' fees in the amount of $25, 054.10 and costs in the amount of $563.55. [#44].

         On December 2, 2015, plaintiffs filed this Motion for a Creditor's Bill in Equity and to Pierce the Corporate Veil of Bourdeau Construction to enforce plaintiffs' judgment against Bourdeau Construction's alleged alter egos, Bourdeau Contracting, L.L.C. (“Bourdeau Contracting”) and James M. Bourdeau (“Bourdeau”) personally. [#62]. To date, the plaintiffs have recovered nothing from the January 20, 2015 judgment against defendant.

         Defendant opposes plaintiffs' motion on the basis that 1) Bourdeau Construction did not have sufficient control over Bourdeau Contracting and/or Bourdeau to make either a mere alter ego of Bourdeau Construction, 2) there is no evidence of improper actions on the part of Bourdeau Construction regarding Bourdeau Contracting and/or Bourdeau, and that no control was used to commit a fraud or wrong or violate a positive legal duty, and 3) there is no evidence that any alleged control by Bourdeau Construction over Bourdeau Contracting and Bourdeau breached a duty that proximately caused plaintiffs' injuries. [#67].

         The two limited liability companies have many similarities between them. Bourdeau Construction and Bourdeau Contracting both were created on April 1, 2004. Bourdeau is the 100% owner, sole member, and registered agent for both companies. Both companies share the same billing address --- Bourdeau's home address. However, they are slightly different. Each company maintains its own employment identification numbers. They have separate bank accounts and websites.[1] In regard to services offered, Bourdeau Construction engaged in building and remodeling residential homes, residential home additions, decks, kitchens, bathrooms, and basements, but the majority of its work was building maintenance for commercial restaurants, including roofing work for those commercial customers. Bourdeau Contracting's services, in contrast, are limited to roofing work.

         Bourdeau, in an affidavit, submitted evidence that Bourdeau Construction's business slowed down significantly in 2013 and 2014 when many of its commercial customers “sold out” to franchisees. During this time period, Bourdeau Construction lost roughly eighty percent (80%) of its business revenue. According to the affidavit, Bourdeau Construction had a net income of approximately $35, 986 in 2012, $39, 038 in 2013, and sustained a net loss of $31, 656 in 2014. To counter the losses in Bourdeau Construction, Bourdeau contributed over $40, 000 of his personal funds to the company, and he has not been repaid for those contributions. None of this information is disputed by plaintiffs. Bourdeau Construction ceases to have any employees or assets, a bank account, or any customers.

         Just two days after the Court's Memorandum and Order entered on November 26, 2014, Bourdeau Construction's bank records show that the company had a balance of $34, 747.12. The highest balance between November 28, 2014 and December 31, 2014 was $43, 754.80 on December 8, 2014. But by the end of December 2014, Bourdeau Construction's bank account was down to $8, 901.31 and was completely empty by March 31, 2015.

         During this critical time period, Bourdeau Construction's bank records show that on three occasions Bourdeau withdrew money from one company and deposited it into the other. In particular, on December 9, 2014, Bourdeau Construction transferred $1, 000 to Bourdeau Contracting. On December 16, 2014, Bourdeau Construction transferred $6, 900 to Bourdeau Contracting. On December 22, 2014, Bourdeau Contracting transferred $4, 000 back to Bourdeau Construction. These transfers resulted in a net gain for Bourdeau Contracting of $3, 900.00. Finally, Bourdeau Construction's last check went to Bourdeau himself for $1, 030.61 on March 10, 2015.

         Plaintiffs do not claim defendant improperly paid bills to other creditors. However, they contend that Bourdeau Construction's bank account was drained in a four month period and that the checks made between Bourdeau Construction and Bourdeau Contracting and Bourdeau himself are evidence of wrongdoing. These checks, however, resulted in only a $4, 930.61 net loss to the account out of $43, 754.80 total during the four-month period. Plaintiffs tacitly concede that the difference was legitimately paid to other creditors.

         II. Legal Standard

         In the absence of a controlling federal statute, the district court “has the same authority to aid judgment creditors in supplementary proceedings as that which is provided to state courts under local law.” H.H. Robertson Co. v. V.S. DiCarlo Gen., 994 F.2d 476, 477 (8th Cir. 1993) (quoting United States ex rel Goldman v. Meredith, 596 F.2d 1353, 1357 (8th Cir. 1979)). The Eighth Circuit has “recognized the availability of the creditor's bill in equity under Missouri law.” H.H. Robertson Co., 994 F.2d at 477.

         III. Creditor's Bill and ...


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