United States of America for the use of Lister Harrell, Saraland, LLLP, and Paradise Farms, Inc. v. Todd Boudreaux, et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
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No. 19-14721
Non-Argument Calendar
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D.C. Docket No. 3:19-cv-00030-DHB-BKE
In re: TODD BOUDREAUX,
LIBERTY MUTUAL INSURANCE CO.,

Debtors.

__________________________________________________________________

UNITED STATES OF AMERICA FOR THE USE OF LISTER
HARRELL, SARALAND, LLLP, and PARADISE FARMS, INC.

Plaintiff - Appellant,

versus

TODD BOUDREAUX,
LIBERTY MUTUAL INSURANCE CO.,

Defendants - Appellees.
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Appeal from the United States District Court
for the Southern District of Georgia
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(September 30, 2020)

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Before BRANCH, GRANT and MARCUS, Circuit Judges.

PER CURIAM:

Lister Harrell, Paradise Farms, Inc., and Saraland, LLLP (collectively,
“Harrell” or “the Appellants”) appeal a bankruptcy court order dismissing their
adversary complaint against Todd Boudreaux and Liberty Mutual Insurance
Company. The complaint alleged that Boudreaux breached his duties as trustee in
this bankruptcy case. Boudreaux and Liberty Mutual, which issued a bond covering
Boudreaux in the performance of his trustee obligations, filed motions to dismiss the
complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
See Fed. R. Bankr. P. 7012(b) (extending Rule 12(b) of the Federal Rules of Civil
Procedure to adversary proceedings). The bankruptcy court granted the motions,
and the district court affirmed. After thorough review, we affirm as well.
“As the second court to review the judgment of the bankruptcy court, we
review the order of the bankruptcy court independently of the district court.” In re
TOUSA, Inc., 680 F.3d 1298, 1310 (11th Cir. 2012). We review either court’s
determinations of law de novo. Id. Thus, we review de novo a dismissal for failure
to state a claim, and like the previous courts, we must accept the allegations in the
complaint as true and construe the facts in the light most favorable to the plaintiff.
In re Fernandez-Rocha, 451 F.3d 813, 815 n.3 (11th Cir. 2006).
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The essential facts, taking the allegations in the complaint as true and
construing them in favor of the Appellants, are these. On March 29, 2012, Lister
Harrell filed a Chapter 11 bankruptcy petition on behalf of Saraland, LLLP. Harrell,
as limited partner, controls 99% of Saraland. Paradise Farms, Inc., as general
partner, owns the remaining 1%.
1
One year later, on March 29, 2013, the bankruptcy
court appointed Todd Boudreaux trustee of Saraland’s Chapter 11 case. Liberty
Mutual issued a surety bond covering Boudreaux’s performance of his duties as
trustee. The bankruptcy court converted Saraland’s case to Chapter 7 on December
30, 2015. Boudreaux continued on as trustee until December 27, 2016, when he
was replaced following his resignation as a Chapter 7 trustee in the Southern District
of Georgia.
On April 4, 2018, Harrell, Saraland, and Paradise Farms commenced an
adversary proceeding against Boudreaux and Liberty Mutual. Their complaint
alleged that, on April 10, 2013, Harrell and his attorney met with Boudreaux to
discuss the payment in full of Saraland’s creditors and the dismissal of its bankruptcy
case. One week later, Boudreaux let Harrell know it would take $6 million to pay
off Saraland’s creditors in full and asked that the two meet on April 22, 2013 to
discuss Harrell’s plan to satisfy Saraland’s debts.

1
Harrell is the sole shareholder of Paradise Farms.
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At that meeting, Harrell told Boudreaux about a commitment from H.G.
Youmans, of Youmans Wood and Timber, to purchase timber on property owned by
Saraland. Harrell planned to use those proceeds to pay Saraland’s obligations to its
creditors. But, according to Harrell, Boudreaux didn’t do anything to investigate the
viability of Youman’s commitment. Instead, on May 1, 2013, “aided by Dodge
County District Attorney Tim Vaughn,” Boudreaux “unlawfully and illegally seized
property from” Harrell’s home and sold it. Two days later, on May 3, 2013, Harrell
“was illegally and unlawfully arrested and incarcerated as a result of actions by
Dodge County District Attorney Tim Vaughn,” although Harrell’s complaint did not
specify of which crimes he was allegedly accused. Harrell remained incarcerated
until October 7, 2013, when he was released on bond. Meanwhile, on May 31,
Boudreaux “filed an interim report with the” bankruptcy court in which he
“wrongfully accused” Harrell “of crimes, misappropriation of property and other
wrongful acts.” This report, Harrell complained, made no mention of Youman’s
commitment to purchase timber from Saraland’s property.
From these allegations, Harrell raised six counts: (1) breach of fiduciary duty;
(2) commingling funds; (3) conversion; (4) fraud; (5) accounting; and (6) breach of
bond. The complaint also sought punitive damages, payment of attorneys’ fees, and
to hold Liberty Mutual liable under Boudreaux’s surety bond. On May 29, 2018,
Boudreaux and Liberty Mutual filed separate motions under Federal Rule of Civil
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Procedure 12(b)(6) to dismiss the complaint in its entirety for failure to state a claim.
The bankruptcy court granted the motions. The district court affirmed, and this
timely appeal followed.
First, we are unpersuaded by Harrell’s argument that the bankruptcy court
failed to rule on Harrell’s one fraud count, and, thus, that this count still remains
live. When presented with this argument, the district court held that it “utterly
fail[ed] to comprehend Appellants’ assertion that the Bankruptcy Court did not
address the fraud claim.” We agree with the district court. As the record reflects,
and Harrell himself concedes, the bankruptcy court “dismissed the entire complaint,”
and thus, it “obviously” dismissed “each and every” count in the complaint. Indeed,
in its thorough, 67-page opinion, the bankruptcy court squarely held that the
doctrines of res judicata and collateral estoppel bar “the claims set forth in the
complaint.” On this record, the bankruptcy court need not have said anything more.
See Fed. R. Civ. P. 52(a)(3) (“The court is not required to state findings or
conclusions when ruling on a motion under Rule 12 . . . .”); Fed. R. Bankr. P. 7052
(extending Rule 52 of the Federal Rules of Civil Procedure to adversary
proceedings).
Harrell’s only other claim on appeal is that the bankruptcy court erred in
concluding that the fraud claim against Boudreaux was time barred. The district
court declined to address this argument, and we need not address it either. Harrell
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has not challenged the bankruptcy court’s holding that res judicata and collateral
estoppel compel dismissal of his lawsuit. That means he has abandoned any
challenge to the bankruptcy court’s ruling on that score, see Access Now, Inc. v. Sw.
Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004), and nothing we say about any
statute of limitations could affect the outcome of this appeal. See Sapuppo v.
Allstate Floridian Ins. Co., 739 F.3d 678, 680 (11th Cir. 2014) (“To obtain reversal
of a district court judgment that is based on multiple, independent grounds, an
appellant must convince us that every stated ground for the judgment against him is
incorrect. When an appellant fails to challenge properly on appeal one of the
grounds on which the district court based its judgment, he is deemed to have
abandoned any challenge of that ground, and it follows that the judgment is due to
be affirmed.”). Accordingly, we affirm.
AFFIRMED.
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