Jiajing (Beijing) Tourism Co., Ltd v. Kaplan

CourtDistrict Court, D. Massachusetts
DecidedJuly 9, 2024
Docket1:22-cv-11189
StatusUnknown

This text of Jiajing (Beijing) Tourism Co., Ltd v. Kaplan (Jiajing (Beijing) Tourism Co., Ltd v. Kaplan) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jiajing (Beijing) Tourism Co., Ltd v. Kaplan, (D. Mass. 2024).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS ___________________________________ ) JIAJING (BEIJING) TOURISM CO., LTD,) ) Plaintiff, ) ) v. ) CIVIL ACTION ) No. 22-11189-WGY CAROLYN S. KAPLAN, ) AEROBALLOON USA, INC., ) ) Defendants. ) ___________________________________)

YOUNG, D.J. July 9, 2024

FINDINGS OF FACT AND RULINGS OF LAW I. INTRODUCTION This is the sequel to civil action no. 20-11313-WGY, aff’d Jiajing (Beijing) Tourism Co., Ltd. v. Aeroballoon USA, Inc., 2024 WL 723982 (1st Cir. 2024) (“Jiajing I”). Here, Jiajing (Beijing) Tourism (“Jiajing”) attempts to recover a debt owed to it by a Massachusetts hot air balloon company, Aeroballoon USA, Inc. (“Aeroballoon”). Ibid. In this suit, Jiajing brings claims against Aeroballoon’s owner’s wife, Carolyn S. Kaplan (“Kaplan”), seeking recovery of monetary transfers her husband made to her to avoid paying his debt to Jiajing. In its initial Complaint, Jiajing brought eight claims: fraudulent transfer pursuant to Massachusetts General Laws chapter 109A Section 5(a)(1) (Count I); fraudulent transfers pursuant to Massachusetts General Laws chapter 109A Section 5(a)(2)(i) (Count II); fraudulent transfers pursuant to Massachusetts General Laws chapter 109A Section 5(a)(ii) (Count III); fraudulent transfers pursuant to Massachusetts General Laws chapter 109A Section 6(a) (Count IV); fraudulent transfers pursuant to Massachusetts General Laws chapter 109A Section 6(b)

(Count V); imposition of constructive trust (Count VI); imposition of resulting trust (Count VII); and unjust enrichment (Count VIII). Not. Removal , ECF 1-3 (“Compl.”). II. PROCEDURAL HISTORY On July 15, 2022, Jiajing filed this Complaint against Kaplan and her co-defendant, Aeroballoon, in the Massachusetts Superior Court sitting in and for the County of Suffolk. Def.’s Mem. Supp. Summ. J. 6-7, ECF No. 68. Kaplan and Aeroballoon timely removed to this Court on July 22, 2022. Notice of Removal, ECF No. 1. On December 19, 2022, Kaplan and Aeroballoon both filed individual motions to dismiss the action. After oral argument on each motion, both were denied. Defs.’

Mot. Dismiss, ECF. Nos. 28, 30; Electronic Clerk’s Notes, ECF No. 51. Kaplan then filed a motion for partial summary judgment as to Counts II, III, IV, and V of Jiajing’s complaint on December 14, 2023. Def.’s Mem. Supp. Summ. J. 11. Aeroballoon filed its own motion for summary judgment on January 19, 2024, as to Counts I-V of the Jiajing’s complaint. Def.’s Mot. Summ. J., ECF No. 74. At oral argument on the motions, Aeroballoon withdrew its motion for summary judgment, and the Court granted Kaplan’s motion for partial summary judgment as to Counts II, III, IV, and V1 Electronic Clerk’s Notes, ECF No. 88. Pretrial conference followed, at which the Court dismissed the defendant

Aeroballoon without prejudice. Electronic Clerk’s Notes, ECF No. 96. This trial followed on April 1-4, 2024. Electronic Clerk’s Notes, ECF No. 97. At the conclusion of trial, this Court announced a partial ruling, including a finding that during the relevant period, Aeroballoon was insolvent and that, therefore, under a theory of constructive fraud, a judgment in favor of Jiajing was warranted. The Court did not calculate the specific award at that time, instead choosing to wait until a calculation of marital interest could be completed. The Court also stated that it could not conclude, by a preponderance of the evidence, that Kaplan knew of the actual fraudulent transfers perpetrated by

Kaplan’s husband, David A. Hase (“Hase”). Finally, the Court

1 Kaplan’s motion for partial summary judgment resulted in the Court determining that: (a) all claims seeking to recover constructively fraudulent transfers (Counts II through IV) made before July 15, 2018, were time-barred by the applicable four- year limitations period set forth in Mass. Gen. L. Ch. 109A, § 10(b); and (b) all claims seeking to recover insider transfers (Count V) were time-barred by the one-year limitations period set forth in Mass. Gen. L. Ch. 109A, § 10(c). See Transcript of 1:22-cv-11189-WGY, United States District Court for the District of Massachusetts (Mar. 7, 2024) 10:15-20, ECF No. 93. reserved judgment on whether the issues raised at trial were subject to issue preclusion due to privity between Kaplan and Hase. III. FINDINGS OF FACT A. The Parties

Plaintiff Jiajing (Beijing) Tourism Co., Ltd is a corporation organized under the laws of the People's Republic of China. Compl. 2. Defendant Aeroballoon is a corporation duly organized under the laws of the Commonwealth of Massachusetts. Id. Defendant Kaplan is an individual residing in Massachusetts. Kaplan is the wife of Hase, Aeroballoon’s sole owner, director, officer, and controlling shareholder. Id. On or around January 14, 2016, Kaplan’s co-defendant, Aeroballoon, entered into a contract to sell air balloons to Jiajing. Def.’s Mem. Supp. Summ. J. 2. Between January 2, 2016, and May 18, 2016, Jiajing made three payments to Aeroballoon totaling $1,018,940.00 (50% of the contract value).

Id. at 3. B. Previous Litigation After a contract dispute arose between Jiajing and Aeroballoon, on June 8, 2018, Jiajing filed a request for arbitration, pursuant to the terms of its contract with Aeroballoon, with the Chinese International Economic and Trade Arbitration Commission (“Chinese Commission”). Jiajing achieved an arbitration judgment in its favor from the Chinese Commission in the amount of $1,410,739.01. Def.’s Mem. Supp. Summ. J. 2-5. That award was confirmed by this Court on April 21, 2021. Order Conf. Arbitration Award, ECF No. 56, No. 20-cv-11313-WGY (Jiajing (Beijing) Tourism Co. Ltd. v. AEROBALLOON USA, INC.).

After receiving the arbitration award from the Chinese Commission, Jiajing filed suit against Aeroballoon and Hase in this Court (Jiajing I), claiming not only a right to the arbitration award and related relief, but also both fraudulent transfer and constructive trust (Count III) and violations of Massachusetts General Laws chapter 93A (Count IV) against Hase. Am. Compl., ECF No. 10, No. 20-cv-11313-WGY (Jiajing (Beijing) Tourism Co. Ltd. v. AEROBALLOON USA, INC.). After a three-day jury trial in this Court, a jury determined that Hase was liable for all claims Jiajing brought against him. Jury Verdict, ECF No. 228, No. 20-cv-11313-WGY (Jiajing (Beijing) Tourism Co. Ltd. v. AEROBALLOON USA, INC.). On May 16, 2023, this Court issued

final judgment and ordered Aeroballoon and Hase to pay Jiajing $1,410,739.01, together with attorneys’ fees and interest. Final J, ECF No. 256, No. 20-cv-11313-WGY (Jiajing (Beijing) Tourism Co. Ltd. v. AEROBALLOON USA, INC.). This action stems from Jiajing’s continued efforts to recover Aeroballoon and Hase’s debt. Def.’s Mem. Supp. Summ. J. 2. C. The Kaplan Transfers During discovery in preparation for the trial against Aeroballoon and Hase, Jiajing recovered bank records for Aeroballoon, Hase, and Kaplan. Between February 24, 2016, and February 12, 2021, Kaplan received thirty-one (31) money

transfers (the “Kaplan Transfers”) directly or indirectly from Aeroballoon into her joint accounts with Hase, either the couple’s Bank of America Joint Checking Account (the “Joint Checking Account”) or the couple’s Bank of America Joint Money Market account (the “Joint Money Market Account”). Def.’s Mem. Supp. Summ. J. 10. Fifteen (15) Kaplan Transfers occurred prior to June 8, 2018, the date on which Jiajing first notified Hase of its request for arbitration with the Chinese Commission. Compl. ¶¶ 39-50. A lawyer by trade, Kaplan claims that she was entirely unaware of the sources of her family’s finances. See Transcript of 1:22-cv-11189-WGY, United States District Court for the

District of Massachusetts (Apr. 1, 2024) 103:4-5, 109:8-9, ECF No. 103 (“I guess I just don’t know where the money came from.”); id.

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