After Plaintiff Shelley Bandy (“Bandy”) filed her initial complaint against Defendants A Perfect Fit for You, Inc. (“Perfect Fit”), Margaret Gibson (“M. Gibson”), and Ronald Gibson (“R. Gibson”), the court appointed a receiver to manage Perfect Fit. On December 8, 2016, the receiver filed a Motion for Clarification, requesting that the Court expand his authority to that of a receiver of an insolvent corporation under N.C. Gen. Stat. § 1-507.1. The court denied the motion and held that it appeared that Goines was appointed as a prejudgment receiver pursuant to N.C. Gen. Stat. § 1-502(1). The court granted the State of North Carolina leave to intervene as a plaintiff on February 15, 2017, and the State filed an intervenor complaint the same day, bringing claims against Perfect Fit for breach of their Medicaid Provider Agreement and for unjust enrichment, seeking the repayment of all amounts that the State paid to Perfect Fit for Medicaid claims.
The receiver then filed an answer, admitting the material allegations in the State’s complaint and bringing crossclaims for breach of fiduciary duty, fraudulent transfers, and unjust enrichment on behalf of Perfect Fit against Bandy, M. Gibson, R. Gibson, R. Wayne Gibson, Inc., d/b/a Gibson Construction Co., Inc., and RW & MA, LLC (for simplicity, all Gibson-related parties will hereinafter be referred to as the “Gibson Defendants”). The receiver also brought a claim for indemnity and contribution against M. Gibson, alleging that she either participated in or failed to stop Perfect Fit from making the fraudulent Medicaid claims, resulting in Perfect Fit’s liability to the State and federal governments. The receiver also alleged that M. Gibson made improper transfers of funds to herself and to the other Gibson Defendants. The Gibson Defendants filed a motion to strike the cross-claims under Rule 12(f), or in the alternative to dismiss them under Rule 12(b)(1) or Rule 12(b)(6).
- A receiver appointed under N.C. Gen. Stat. § 1-502(1) has any powers granted under N.C. Gen. Stat. § 1-507.1 through 1-507.11, including the authority ability to institute suit for recovery of property.
- Perfect Fit’s allegations that M. Gibson transferred Perfect Fit’s assets from Perfect Fit to the Gibson Defendants in order to remove them from the reach of the State of North Carolina were insufficient for the receiver to state a claim under the Uniform Voidable Transactions Act, since the receiver has not alleged that Perfect Fit was a “creditor” of the Gibson Defendants, or that the Gibson Defendants were “debtors” to Perfect Fit.
- Perfect Fit’s allegations that Perfect Fit was injured by M. Gibson’s breach of fiduciary duty, which may render Perfect Fit liable to the State of North Carolina, were sufficient at the motion-to-dismiss stage of the litigation to state a claim for indemnity by Perfect Fit against M. Gibson.
Motion to strike under Rule 12(f): DENIED
Motion to dismiss crossclaims under Rule 12(b)(1): DENIED
Motion to dismiss crossclaims under Rule 12(b)(6): GRANTED IN PART, DENIED IN PART
Receiver’s crossclaim for fraudulent transfer DISMISSED. Receiver’s crossclaims for breach of fiduciary duty, unjust enrichment, and indemnity/contribution remain.
For additional detail, you can read the full opinion HERE.
Cite: Bandy v. A Perfect Fit for You, Inc., No. 16 CVS 456, 2018 WL 1187991 (N.C. Super. Ct. Mar. 7., 2018).