Court of Appeals of Missouri, Western District, Fourth Division
from the Circuit Court of Boone County, Missouri The
Honorable Jeff Harris, Judge
Mark D. Pfeiffer, Chief Judge, and Lisa White Hardwick and
Cynthia L. Martin, Judges.
Pfeiffer, Chief Judge.
Todd Pearson ("Pearson") appeals from the Judgment
of the Circuit Court of Boone County, Missouri ("trial
court"), after a bench trial, in favor of AVO General
Services, LLC ("AVO"), on Pearson's petition
seeking relief under the Missouri Uniform Fraudulent Transfer
Act ("MUFTA"). We affirm.
and Procedural History
Hough ("Hough"), a disabled American veteran, was
the sole member of AVO, a Missouri limited liability company.
AVO was a service-disabled veteran-owned business with the
sole purpose of acquiring federal contracts. In May 2009, AVO
was awarded a federal contract, which was only available to
disabled American veterans, for a digital television project.
Pearson's limited liability company, RP Squared, LLC,
leased general office premises to AVO for six months in 2009
while AVO worked on the federal contract, which was completed
in the summer of 2009. Additionally, with regard to the 2009
federal contract, Pearson had a separate agreement with AVO
whereby AVO agreed to pay Pearson five percent of the net
project profits from the 2009 digital television federal
contract. Ultimately, Pearson's share of the net project
profits was determined to be $40, 000.
the 2009 digital television federal contract was fully
performed and AVO had been compensated, Pearson made demand
in August 2009 for the net project profit share to which he
August 2009, Needham Development Group, LLC, Mike Needham,
and Brent Wood asserted claims totaling $525, 000 for work
performed relating to the 2009 digital television federal
contract. In August and September 2009, these entities were
paid $400, 000, resulting in a remaining claimed balance as
of September 2009 of $125, 000.
October 2009, fully aware of the $165, 000 in claims that
were pending, AVO acquired ownership of real property in
Boone County, Missouri, having a fair market value of
approximately $240, 000 ("the Property"), though
the record is unclear where the consideration came from for
this acquisition. No evidence was admitted at trial
suggesting that AVO incurred debt to acquire the Property, or
otherwise used its existing assets to acquire the
Property. The purpose of this real property
acquisition was so that AVO would be able to obtain
performance bonds enabling AVO to compete for larger federal
within approximately six months, it became obvious to Hough
and AVO that the real estate purchase and corresponding
performance bonds business model would not accomplish the
desired purpose and that AVO would only seriously be
considered by the federal government for smaller contracts.
Accordingly, in May 2010, AVO transferred-for nominal
consideration- ownership of the Property to another of
Hough's solely owned limited liability companies,
Sundance Lake Surfer, LLC ("Sundance"), because
Sundance's sole purpose was real estate investment and
management. Sundance used the Property as collateral to
acquire six other real properties.
as of May 2010, AVO had remaining assets of approximately
$89, 000 cash on hand plus accounts receivable relating to
additional and continuing federal contracts. In fact, AVO
generated federal contract income of approximately $58, 000
in 2010 and $116, 000 in 2011. And, though the record does
not identify the receipts in 2012, AVO continued to receive
revenue from the federal government in 2012.
March 2010, Pearson filed suit against Hough and AVO,
alleging breach of lease and breach of contract for services
rendered by Pearson, seeking payment of the $40, 000 he was
owed ("original lawsuit"). In the original lawsuit,
Pearson alleged that though the five percent net project
profit agreement was with AVO, Hough's actions as the
sole member of AVO were such that Pearson was entitled to
pierce the corporate veil and to obtain a personal judgment
against Hough. The trial court in the original lawsuit agreed
and, in October 2011, entered judgment against both Hough and
AVO, jointly and severally, in the amount of $40, 000.
Thereafter, Hough filed for personal bankruptcy. The
bankruptcy trustee did not seek to make any claim that
Hough's personal bankruptcy estate was entitled to any
interest in the Property. After distributing the bankruptcy
estate-including a $6, 000 payment to Pearson-Hough's
remaining debts were discharged, leaving AVO as the only
party liable to Pearson for the original lawsuit judgment.
September 2013, Pearson filed the present lawsuit against AVO
and others (including Sundance) under MUFTA as a judgment
creditor. After a bench trial, judgment was entered in favor
of AVO and the other defendants.
bench-tried case, the judgment of the trial court will be
affirmed by the appellate court unless there is no
substantial evidence to support it, it is against the weight
of the evidence, it erroneously declares the law, or it
erroneously applies the law. Murphy v. Carron, 536
S.W.2d 30, 32 (Mo. banc 1976). "We view the evidence and
the reasonable inferences that may be drawn therefrom in the
light most favorable to the judgment, disregarding evidence
and inferences to the contrary." Higgins v.
Ferrari, 474 S.W.3d 630, 635 (Mo. App. W.D. 2015)
(internal quotation omitted). "Appellate courts should
exercise the power to set aside a decree or judgment on the
ground that it is 'against the weight of the
evidence' with caution and with a firm belief that the
decree or judgment is wrong." Id. (internal
quotation omitted). "We defer to the trial court's
determination of the credibility of the witnesses."
Id. (internal quotation omitted). However, we
independently evaluate the trial court's application of
the law. AAA Uniform & Linen Supply, Inc. v.
Barefoot, Inc., 17 S.W.3d 627, 629 (Mo. App. W.D. 2000).
party seeking to have a transaction declared void as
fraudulent must prove his case by clear and convincing
evidence." Bueneman v. Zykan, 52 S.W.3d 49, 54
(Mo. App. E.D. 2001). However, regardless of the burden of
proof below, our standard of review on appeal remains the
same. Ivie v. Smith, 439 S.W.3d 189, 199 (Mo. banc
asserts two points of error. First, he contends that the
trial court erred in its ruling relating to AVO's
solvency at the relevant time frame relating to the lawsuit.
Specifically, he maintains in Point I that: (a) the trial
court erroneously applied the law because it considered
factors other than AVO's debts and assets; and (b) the
weight of the evidence was against the trial court's
finding that the disputed transaction did not cause AVO's
debts to exceed its assets.Second, he contends that the trial
court erred when it found that AVO did not have actual intent
to defraud. Specifically, he maintains in Point II that: (a)
the weight of the evidence was against the trial court's
findings that five statutory badges of fraud were present;
and (b) the trial court erroneously applied the law because
it impermissibly "reverse pierced" AVO in the trial
court's analysis of the fraud claim.
Point Relied On
addressing Pearson's claims on appeal, we note that his
second point relied on contains multifarious claims of error
and, accordingly, violates Rule 84.04. Wennihan v.
Wennihan, 452 S.W.3d 723, 728 (Mo. App. W.D. 2015).
"A point relied on should contain only one issue, and
parties should not group multiple contentions about different
issues together into one point relied on." Id.
(internal quotation omitted). A misapplication-of-the-law
challenge and an against-the-weight-of-the-evidence challenge
"are distinct claims. They must appear in separate
points relied on in the appellant's brief to be preserved
for appellate review." Ivie, 439 S.W.3d at 199
n.11 (citations omitted). However, "[b]ecause we are
able to discern the claims being made and the defective
nature of the point relied on does not impede our disposition
of the case on the merits, we will exercise our discretion to
attempt to resolve the issues on the merits."
Wennihan, 452 S.W.3d at 728 (internal quotation
omitted). "We will separate [Pearson's] contentions,
as best we can discern them, and ...