United States District Court, S.D. Mississippi, Southern Division
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
GUIROLA, JR., CHIEF U.S. DISTRICT JUDGE
THE COURT is the  Motion for Summary Judgment filed by
Plaintiff RDS Real Estate, LLC, against Defendant Abrams
Group Construction, LLC, on RDS's claim for declaratory
judgment against Abrams. Having considered the parties'
submissions and the relevant law, the Court is of the opinion
that genuine issues of material fact remain for resolution by
to the  Amended Complaint, in 2009, Plaintiff RDS Real
Estate contracted with another entity, S&S Construction,
LLC, “to construct a building in Ocean Springs, Jackson
County, Mississippi, that would be used for medical office
space . . . .” (Id. at 4 (¶26)). RDS
alleges that soon after it “accepted occupancy of the
building, ” it began experiencing problems, including
roof leaks, as a result of unworkmanlike construction.
(See Id. at 5 (¶¶ 35-36)).
claims that “[i]n the time frame around December 2010
through April 2011, S&S Construction, LLC sold all its
assets to Abrams Group Construction, LLC.”
(Id. at 6 (¶42)). It also states that in July
2011, “Abrams Group Construction, LLC or S&S
Construction, LLC changed the name of S&S Construction,
LLC to Abrams Group Construction, LLC with the Mississippi
Board of Contractors[, ]” although RDS did not have
knowledge that S&S “had ceased doing business or
that it had changed its name.” (See Id. at 6-7
(¶¶ 48, 56)).
contends that it eventually incurred approximately $214,
000.00 in costs “to correct the construction defects
caused by S&S.” (See Id. at 8-9
(¶¶ 64-70)). It then filed a lawsuit in this
district against S&S and Abrams, but later dismissed
Abrams without prejudice and proceeded to arbitration with
S&S. The arbitration resulted in “an award in favor
of RDS in the amount of $240, 898.14[, ]” which the
district court affirmed and on which its entered a final
judgment. (See Id. at 9-10 (¶¶ 82-86)).
RDS alleges that “[t]he judgment has not been paid[,
and that] S&S has made representations that is has no
money to pay the . . . judgment.” (See Id. at
10 (¶¶ 86-87)).
result, RDS instituted this action against Abrams; George
Spellmeyer, Norma Spellmeyer, and Michael Spellmeyer
(collectively, “the Spellmeyer defendants”); and,
by later amendment, Tusitala, Inc. RDS alleges that the
Spellmeyer defendants “are, or were, members of
S&S”, (see Id. at 13 (¶123)), and
seeks to pierce S&S's and Tusitala's corporate
veil. It also “requests a declaratory
judgment that the judgment RDS obtained against S&S also
applies to Abrams, as they are the same entity. In other
words, RDS requests a declaratory judgment that both S&S
and Abrams are jointly and severally liable for the full
amount of damages.” (See Id. at 11
(¶¶ 100-01); see also Id. at 13
(¶120)). It asserts that “Abrams should be liable
to RDS for the judgment under theories of estoppel, merger
and other successor liability theories.” (See
Id. at 12 (¶¶ 102-03); see also Id.
at 13 (¶120), 17 (¶157)).
now moved for summary judgment on its declaratory judgment
claim against Abrams. Abrams has opposed the Motion, and RDS
has filed a Rebuttal.
summary judgment motion shall be granted “if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). If the movant carries its
burden of demonstrating the absence of a genuine issue of
material fact, the burden shifts to the non-movant to show
that summary judgment should not be granted. Celotex
Corp. v. Catrett, 477 U.S. 317, 323-25 (1986).
“[T]he court must view the facts in the light most
favorable to the non-moving party and draw all reasonable
inferences in its favor.” Deville v.
Marcantel, 567 F.3d 156, 164 (5th Cir. 2009). “In
reviewing the evidence, the court must ‘refrain from
making credibility determinations or weighing the
evidence.'” Id. (citation omitted).
conducted the required review, the Court finds that genuine
issues of material fact remain with respect to RDS's
claim for declaratory judgment against Abrams. Accordingly,
the Court will deny summary judgment.
stated that it is a Mississippi limited liability company and
that S&S is an Alabama limited liability company. The
Court's review of Mississippi and Alabama law shows that
“[i]n the context of the present case, no true
conflicts exists between the laws of these two states, and
choice of law analysis is, therefore, unnecessary.”
See Tupelo Mfg. Co. v. Cope Indus., Inc., No.
1:05CV114-B-D, 2006 WL 1313809, at *1 (N.D. Miss. May 11,
2006). The general rule in both states is “that a
corporation which acquires the assets, but not the stock of
another corporation, is not obligated for the liabilities of
the acquired corporation.” Paradise Corp. v.
Amerihost Dev., Inc., 848 So.2d 177, 179 (Miss. 2003).
Furthermore, although the case law refers to
“corporations, ” there is no authority for
applying a different rule in cases involving limited
liability companies, such as this one.
are four exceptions to the general rule. Those exceptions are
“in instances where: (1) the successor expressly or
impliedly agrees to assume the liabilities of the
predecessor; (2) the transaction may be considered a de facto
merger; (3) the successor may be considered a ‘mere
continuation' of the predecessor; or ...