Apex Energy Solutions of Seattle LLC v. Foit

District Court, W.D. Washington·Decided September 22, 2025·No. 2:24-cv-00672·Unknown

Opinion

WESTERN DISTRICT OF WASHINGTON APEX ENERGY SOLUTIONS OF Case No. C24-672-RSM SEATTLE, LLC, ORDER RE: MOTIONS FOR SUMMARY Judgment Debtor, JUDGMENT v. CHRISTPOHER L. HUBBARD, Judgment Creditor and Plaintiff, v. MICHAEL FOIT and PAUL LEWIS, Defendants.

I. INTRODUCTION This matter comes before the Court on the parties’ Motions for Summary Judgment. Dkts. #34 and #38. Neither party has requested oral argument, and the Court finds that it can rule without oral argument. For the reasons below, the Court GRANTS Plaintiff’s Motion and DENIES Defendants’ Motion. II. BACKGROUND A. Underlying Litigation This case comes from Plaintiff’s ongoing efforts to collect his awarded judgment in the underlying King County Superior Court Case, No. 19-2-13540-9 SEA. Dkt. #39 (“Downs Decl.”) at Ex. 8. Defendants founded Apex Energy Solutions (the “Apex conglomerate”) over twenty years ago and Apex Energy Solutions of Seattle, LLC (“Apex Seattle”), in August 2017. Id. at Ex. 1. Defendants Foit and Lewis were the CEO and CFO of Apex Seattle, the only members, managers, or otherwise controlling figures of the company, and owned 88% (Foit) and 12% (Lewis) interests. Id. at Exs. 2-4; Dkt. #35 (“Foit Decl.”) at ⁋ 5. Defendant Foit hired Plaintiff at Apex Seattle on July 25, 2025. Id. at Ex. 5. While employed, Defendants “controlled and made all decisions regarding compensation of [Plaintiff] Hubbard, including the amount of his salary, annual performance bonuses, year-end EBITA bonuses, commissions, and chargebacks . . . [and] when and if Hubbard was paid.” Dkts. #38 at 3; #39-6 (“Lasko Dep.”) at 18:12-23 (stating payroll concerns went to Defendant Foit). On May 21, 2019, after terminating Plaintiff’s employment, Defendants decided to file suit (as Apex Seattle) against Plaintiff in King County Superior Court for several claims. Id. at Ex. 3 (“Foit Dep.”) at 19:14-16 and Ex.6 (“Lasko Dep.”) at 14:4-7. Plaintiff filed counterclaims for willfully withholding wages. On August 19, 2021, the jury reached a verdict for Plaintiff, finding that Apex Seattle willfully withheld Plaintiff’s W-2 wages of $17,808.05, commission of $15,480.94, and EBITDA bonus of $115,000, and that Apex Seattle unlawfully rebated Plaintiff’s commissions as “chargebacks” for $18,529.88. Id. at Ex.7 (“Verdict Form”). On October 6, 2021, the trial court entered a total judgment of $532,636.16 for Plaintiff, which would “bear interest at the rate of 12% per annum in post-judgment interest from the date of entry until paid in full.” Id. at 8, “Judgment.” Due to all of Apex Seattle’s assets being sold during litigation (detailed below), Apex Seattle did not pay the judgment. On December 20, 2021, the trial court granted Plaintiff’s motion to initiate supplemental proceedings under RCW 6.32.270. Id. at 16. After two years of this, including examinations and interrogatories, the trial court granted Plaintiff’s motion to add Defendants Foit and Lewis as third-party defendants for violating Washington’s Voidable Transfers Act, RCW 1940 et seq. Id. at Ex. 19. After adding Defendants, Plaintiff successfully moved for an expedited trial date on the sub-proceedings of March 25, 2024. Id. at Ex. 20. Around two weeks later, Defendants moved to disqualify the judge, which was denied on October 19, 2023. Id. at Exs. 21-22. Defendants then moved to dismiss for lack of personal jurisdiction, which was denied on April 30, 2024. Id. at Ex. 23. On May 15, 2024, Defendants removed these sub-proceedings to this Court. Dkt. #1. On May 20, 2024, Plaintiff moved to remand, which this Court denied on August 9, 2024. Dkts. #7 and #21. On November 11, 2024, Plaintiff filed a summary judgment motion, which he withdrew on November 27. Dkts. #26 and #30. On March 31, 2025, Defendants filed their instant Motion for Summary Judgment. Dkt. #34. Plaintiff filed his instant Motion for Summary Judgment on April 1, 2025. Dkt. #38. B. Apex Sale During the above state litigation, in 2020, Defendants sold the Apex conglomerate to Great Day Improvements, LLC (“Great Day”), including company-owned Apex Seattle and the conglomerate’s proprietary marketing system, patented software and technology, all branding logos and trademarks, and all assets. Id. at 1-2. This sale closed on November 18, 2020. Dkt. #39-11, “Asset Purchase Agreement.” This was “structured as an aggregate sale through which Great Day agreed to pay a lump sum amount [of roughly $23-24 million] for the entirety of the Apex conglomerate. Id. at 2; Dkt. #36-2 (“Lewis Dep.”) at 17:16; Dkt. #35 (“Foit Decl.”) at ⁋ 7. Counsel for Apex Seattle disclosed this sale to Plaintiff’s counsel. Id.; Dkt. #38 at 4. However, Defendant Foit testified in his August 2020 deposition they planned to keep Apex Seattle “as a going concern” and “business,” though he also stated in his July 2023 declaration that they reached sale terms with Great Day in “August or early September 2020.” Dkt. #39-3 (“Foit Dep.”) at 23:21-23 and Ex. 9 (“Foit Decl.”) at ⁋ 13; Dkt. #35 (“Foit Decl.”) ⁋ 6 (“In 2018, I started to seriously consider selling Apex Energy . . . In approximately November 2019, Great Day . . . offered to purchase”). The purchase agreement was executed by Defendants. Dkt. #39- 11 (“Asset Purchase Agreement”). On November 18, 2020, Great Day wired the $23-24 million to Sciotoville Management, LLC (“Sciotoville”), who then wired portions to Apex Energy shareholders. Dkt. #35 (“Foit Decl.”) at ⁋ 10. Apex Seattle was allotted $436,307 of the purchase price. Id. at Ex. B. After the sale, Apex Seattle had approximately $750,000 in its operating account. Dkt. #39-28 (“Foit Dep.”) at 49:9-13 and Ex. 31. Sciotoville then transferred money to Apex Seattle for “wind down” operations because “Apex Seattle had few assets and little cash” (Dkt. #35 (“Foit Decl.”) at ⁋ 12). This included “over $180,000” between December 2020 and May 2021 attorney’s fees incurred in the state litigation. Dkts. #34 at 7 and #43 at 17. Sciotoville was created on May 26, 2020, and dissolved on November 5, 2024. Dkt. #39- 29. It operated as a “management entity” that charged management fees from the company- owned stores, such as Apex Seattle. Dkt. #35 (“Foit Decl.”) at ⁋ 3. Defendants were the sole owners and managers of Sciotoville. Dkt. #39-28 (“Foit Dep.”) at 37:16-22. Defendants also determined to put the sale proceeds from Great Day into Sciotoville’s holding account. Id. at 18:22-25. Defendants also received payments from Sciotoville to their personal accounts. Id. at 19:1-5, 32:5-25, and 33:1-15. Along with the sale proceeds, Defendants also made the decision to transfer other Apex assets to Sciotoville to “put into one account so we [Defendants] could just take care of stuff from one place rather than four or five.” Id. at 40:3-7. This included a $650,000 transfer from Apex Seattle to Sciotoville on November 17, 2020, which included a $311,000 management fee. Id. at 39:1-25 and 40:1-15 (describing $650,000 transfer); Dkt. #44 (“Lewis Dep.”) at 35:12-11 and 37:25-38:1-5 (describing $311,000 fee). The money transferred back to Apex Seattle for “wind down” operations came from this amount. Dkt. #43 at 20. Defendant Foit also testified that Apex Seattle had access to approximately $400,000 for post- sale costs. Dkt. #44 (“Foit Dep.”) at 57:16-25 and 58:1-25. Plaintiff alleges there is no genuine issue of material fact that the above transfers are fraudulent under Washington’s Uniform Fraudulent Transfer Act (“UFTA”), RCW 19.40, and requests the Court enter a judgment for the amount of the state court judgment, plus interest and fees. Dkt. #38. Defendant alleges that there is no genuine issue of material fact that Plaintiff ha

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