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Haworth, Inc. v. Janumpally

United States District Court, E.D. North Carolina, Western Division

May 31, 2019

HAWORTH, INC., a Michigan corporation, Plaintiff,
SHIRISHA JANUMPALLY, M.D. an individual; SILVIJA VALLERU, D.D.S. an individual; SURESH VENKAT DOKI an individual; LIONSHEAD ENTERPRISES CORPORATION a Delaware corporation; WILLIAM INMAN COMPANY, LLC a Florida limited liability company; ATTRACTCAPITAL, LLC a New York limited liability company, Defendants.[1]



         This matter is before the court on motion for summary judgment filed by defendant AttractCapital, LLC (“Attract”) (DE 89). Plaintiff responded in opposition, and defendant Attract replied. In this posture, the issues raised are ripe for ruling. For the following reasons, the motion is denied.


         Plaintiff commenced this action on August 18, 2017, and filed amended complaint on November 21, 2017, asserting claims arising out of indebtedness owed to plaintiff by non-party Miller's of Columbia, Inc. (“MOC”). Plaintiff asserts claims on its own behalf, as a creditor of MOC, and as assignee of MOC and certain MOC shareholders, against defendants on the basis of their involvement in a leveraged buyout transaction of MOC and other financial transactions that allegedly rendered MOC insolvent for a period of time. As pertinent to the instant motion, plaintiff asserts one claim against defendant Attract for fraudulent transfer under N.C. Gen. Stat. § 39-23.4(a)(2) (“Count VIII”).[2]

         After defendants, including defendant Attract, filed answers in August and September, 2018, the court entered a case management order, on November 1, 2018, which sets an October 31, 2019, deadline for discovery, and a December 15, 2019, deadline for dispositive motions. The court noted that the parties planned an early mediation to take place by January 31, 2019.

         Defendant Attract filed the instant motion for summary judgment on December 20, 2018, seeking judgment as a matter of law on the sole claim remaining against it. Defendant Attract relies upon a memorandum in support, statement of material facts, and an appendix attaching declarations by defendants Shirisha Janumpally (“Janumpally”), Silvija Valleru (“Valleru”), and Suresh Venkat Doki (“Doki”).

         Plaintiff responded on January 17, 2019, relying upon an opposing statement of material facts, a declaration by an attorney for plaintiff, Emily S. Rucker (“Rucker”), and an appendix including an “Amended Closing Statement.” (DE 100 at 1).

         The parties noted in joint statement filed February 8, 2019, that early mediation had resulted in impasse.


         In early 2016, defendants Janumpally and Valleru “undertook to purchase ownership interests in” MOC (hereinafter the “Transaction”). (Def's Stmt. (DE 91) ¶ 1). MOC had its own consultant for the Transaction, defendant The Inman Company. (Id. ¶ 4). An “Amended Closing Statement” for the Transaction, specifying “Funding Date of March 2, 2016, ” shows a payment to defendant Attract in the amount of $ 70, 000.00, and a payment to “MPL Law Firm, LLP” in the amount of $35, 500.00. (Pl's App'x, Amended Closing Statement (DE 100) at 2). On the same page, it states “Sources of Funds” are from Janumpally and Valleru. (Id.). The funds used to pay defendant Attract and MPL Law Firm, LLP, were sent from MOC's “bank account” to defendant Attract and the MPL Law Firm, LLP. (Def's Stmt. (DE 91) ¶ 9; Pl's Stmt. (DE 97) ¶ 9).


         A. Standard of Review

         Summary judgment is appropriate where “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). The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the non-moving party must then “come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal quotation omitted).

         Only disputes between the parties over facts that might affect the outcome of the case properly preclude entry of summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (holding that a factual dispute is “material” only if it might affect the outcome of the suit and “genuine” only if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party). “[A]t the summary judgment stage the [court's] function is not [itself] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Id. at 249. In determining whether there is a genuine issue for trial, “evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [non-movant's] favor.” Id. at 255; see United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (“On summary judgment the inferences to be drawn from the underlying facts contained in [affidavits, attached exhibits, and depositions] must be viewed in the light most favorable to the party opposing the motion.”).

         Nevertheless, “permissible inferences must still be within the range of reasonable probability, . . . and it is the duty of the court to withdraw the case from the [factfinder] when the necessary inference is so tenuous that it rests merely upon speculation and conjecture.” Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 241 (4th Cir. 1982) (quotations omitted). Thus, judgment as a matter of law is warranted where “the verdict in favor of the non-moving party would necessarily be based on speculation and conjecture.” Myrick v. Prime Ins. Syndicate, Inc., 395 F.3d 485, 489 (4th Cir. 2005). By contrast, when “the ...

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