- Sheehan v. Saoud (4th Cir., 2016) (Unpublished Opinion dated 5/24/2016 No. 15-1338)
- Unpublished Opinion AFFIRMING the ruling of the United States District Court for the Northern District of West Virginia (1:11-cv-00163-IMK-JSK) of 01/28/15. See 526 B.R. 166 (2015).
- Procedural context:
- Chapter 7 Trustee Sheehan sought to recover certain assets, payments and claims regarding fraudulent transfers for the benefit of the bankruptcy estate. The Trustee sought this recovery from the prior principal of the debtor, the purchaser and an asset holding company related to the debtor. Certain claims were settled and prior to trial both the Trustee and defendant Scott ( a medical practitioner in the business and insider) filed Motions for Summary Judgment. The court granted partial summary judgment and denied other claims. At trial, the only issue put to the jury regarded the fraudulent transfer of the practice's real estate assets and the related payments made in consideration of its sale. The jury found in favor of the former principal of the practice and the district court affirmed the verdict. The Trustee filed the instant notice of appeal on April 01, 2015.
- Former principal (Allen Saoud) of a corporation holding a medical practice was accused of certain frauds related to medical reimbursements and was subsequently banned from further practice by consent. He then sold the practice and its real estate to certain insiders of the business. Payments were alleged to have been diverted and proceeds of the sale of real assets paid to the benefit of Saoud rather than the debtor entity. The Debtor's petition for relief was initiated and signed by Sauod who was at that point not affiliated with the debtor and admitted this fact at the first meeting of the creditors. Application of West Virginia law related to fraudulent transfers and the tolling or expiration of the related statue of limitation was central to the recovery claims expressed by the Trustee. Trustee Sheehan assigned error to the trial court rulings as: "(1) whether the district court erred when it concluded that the doctrine of adverse domination did not toll the statute of limitations/repose under the West Virginia Uniform Fraudulent Transfer Act; (2) whether the district court erred in applying the statute of limitations/repose to find that evidence of a transfer in 2008 was outside the statute of limitations/repose because it was a payment due under what purported to be a contract signed in 2005; (3) whether the district court erred in concluding that a cause of action for civil conspiracy under West Virginia law could not be based on a violation of the West Virginia Uniform Fraudulent Transfer Act even where plaintiff attempted to prove a subjective violation of the statute with 'actual intent to hinder, delay, or defraud.'"
- Circuit Judges J. Harvie Wilkenson, III and Paul V. Niemeyer, and United States District Judge or the District of South Carolina David C. Norton, sitting by designation. Judge Norton wrote the opinion, in which Judge WIlkinson and Judge Niemeyer joined.
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