Poulos v. Poulos, 2016 NCBC 71.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION COUNTY OF CUMBERLAND 15 CVS 1116
MARIA HONTZAS POULOS, ) Plaintiff, ) ) v. ) ) JOHN E. POULOS, M.D.; ICARIAN ) PARTNERS, LLC; MEEJ, LLC; JEP ) OPINION AND ORDER ON MOTION INVESTMENTS, LLC; OCIE F. MURRAY, ) FOR SUMMARY JUDGMENT JR. as Trustee of the John E. Poulos Family) Trust; EMANUEL POULOS, as Named ) Beneficiary of the John E. Poulos Family ) Trust; and ELIZABETH POULOS, as ) Named Beneficiary of the John E. Poulos ) Family Trust, ) Defendants. )
THIS CAUSE was designated a mandatory complex business case by Order of
the Chief Justice of the North Carolina Supreme Court, pursuant to N.C. Gen. Stat.
§ 7A-45.4(b) (hereinafter, references to the North Carolina General Statutes will be
to “G.S.”), and assigned to the undersigned Special Superior Court Judge for Complex
Business Cases.
THIS MATTER comes before the Court upon Defendant Ocie F. Murray, Jr.’s,
(“Murray”) as trustee of the John E. Poulos Family Trust, Motion for Summary
Judgment1 (“Murray Motion”) and Defendants John E. Poulos, Icarian Partners,
LLC, MEEJ, LLC, and JEP Investments, LLC’s (collectively the “Poulos Defendants”)
Motion for Summary Judgment (“Poulos Defendants’ Motion”) pursuant to Rule 56 of
1As discussed infra, Plaintiff has taken a voluntary dismissal of her claims against the Family Trust and Murray as its trustee. the North Carolina Rules of Civil Procedure (“Rule(s)”) and Rule 15 of the General
Rules of Practice and Procedure for the North Carolina Business Court (“BCR”). The
Court heard oral arguments on the Motions on May 12, 2016.
THE COURT, having considered the Motions, briefs in support of and
opposition to the Motions, the oral arguments, and other appropriate matters of
record, FINDS and CONCLUDES that the Murray Motion should be GRANTED, but
that Murray and the John E. Poulos Family Trust should remain in the case as
nominal defendants for purposes of providing complete relief to Plaintiff should she
prevail, and that the Poulos Defendants’ Motion should be GRANTED in part, and
DENIED in part.
The Armstrong Law Firm, P.A., by L. Lamar Armstrong, Jr., Esq., and L. Lamar Armstrong, III, Esq., for Plaintiff.
The Law Offices of Lonnie M. Player, Jr., PLLC, by Lonnie M. Player, Jr., Esq., and Jennifer L. Malone, Esq., and MCCOY WIGGINS CLEVELAND & O’CONNOR, PLLC, by Richard M. Wiggins, Esq., and Kenneth B. Dantinne, Esq., for the Defendants.
McGuire, Judge.
I. INTRODUCTION.
1. This lawsuit arises from the breakdown of the marriage of Plaintiff
Maria Hontzas Poulos (“Plaintiff”) and Defendant John E. Poulos, M.D. (“Dr. Poulos”)
and their subsequent divorce. Plaintiff alleges that Dr. Poulos determined that the
marriage was headed towards a divorce and made a series of fraudulent transfers of
the couple’s marital assets, first into a limited liability company in which he was the
sole interest owner, and then into an irrevocable trust for the benefit of the couple’s children, Emanuel and Elizabeth. Plaintiff alleges that Dr. Poulos transferred the
couple’s assets to the trust to keep Plaintiff from being able to claim them as part of
an equitable distribution in the divorce. Plaintiff contends that Dr. Poulos’ conduct
breached the fiduciary duty he owed her as his wife and constituted a fraud, and asks
that the trust be voided and for an accounting of the assets held by the trust. Dr.
Poulos denies these allegations and contends that he transferred the assets into the
limited liability company, and then the trust, to put the couple’s assets outside the
reach of creditors in the event of malpractice suits, and as part of his “estate planning”
for the couple. He also claims that he truthfully disclosed the purposes of the
transfers to Plaintiff. Finally, Dr. Poulos contends that the transfers into the trust
did not benefit him personally since he too is now unable to access those assets.
Poulos Defendants seek summary judgment as to all of Plaintiff’s claims.
II. FACTUAL AND PROCEDURAL BACKGROUND.
2. Plaintiff and Dr. Poulos married on January 25, 1992. Dr. Poulos is a
licensed physician and Plaintiff a licensed dentist; both practice in Fayetteville,
North Carolina. Elizabeth Poulos (“Elizabeth”) is the daughter, and Emanuel Poulos
(“Emanuel”) is the son, of Plaintiff and Dr. Poulos. Elizabeth and Emanuel have been
named as nominal defendants only because they are the beneficiaries of Defendant
John E. Poulos Family Trust (“the Family Trust”).
3. Over the course of their marriage, Plaintiff and Dr. Poulos apparently
accumulated a relatively large amount of real property, and some investment assets,
and owned them through various limited liability companies. The record reflects that at or about the occurrences relevant to this lawsuit, the couples’ assets had a value
of more than $4 million. (Exh. 31 - Icarian Financial Statement 6/30/12. 2)
4. Defendant Icarian Partners, LLC (“Icarian”) is a North Carolina limited
liability company (“LLC”). (Exh. 6 - Icarian Articles of Organization ¶ 1.) Icarian
was formed on December 31, 2007, as a member-managed LLC. Dr. Poulos and
Arthur Patelos (“Patelos”) executed Icarian’s original operating agreement in
January 2008. (Exh. 7 - Icarian Original Operating Agreement.) The original
operating agreement provided that Dr. Poulos and Patelos were each 50% interest
holders in Icarian. (Id. ¶ 3.) On January 28, 2010, Dr. Poulos bought Patelos’ interest
in Icarian. (Exh 11 - Bill of Sale - Patelos’ Interest in Icarian to Dr. Poulos.) On April
12, 2012, Dr. Poulos amended the operating agreement to make Icarian a manager-
managed LLC. (Exh. 29 - Amended Icarian Operating Agreement.) Although Dr.
Poulos claims, and the corporate documents in the record indicate, that he has been
the 100% owner of Icarian since January 28, 2010, Icarian’s 2010 and 2011 tax
returns and 2010 and 2011 Schedule K-1s issued to Plaintiff and Dr. Poulos
(collectively, the “Tax Documents”) list Plaintiff as a 50% owner of the company.
(Exh. 22 - Icarian 2010 Tax Return; Exh. 23 - Maria’s 2011 Schedule K-1 for Icarian;
Exh. 24 - Dr. Poulos’ Schedule K-1 for Icarian; Exh. 32 - Icarian 2011 Tax Return.)
5. Defendant MEEJ, LLC (“MEEJ”) was formed on September 2, 2004, as
a manager-managed North Carolina LLC. (Exh. 2 - MEEJ Operating Agreement.)
Dr. Poulos was originally the 100% interest owner in MEEJ, but later transferred
2 All Exhibit references are to the exhibits filed by Plaintiff in opposition to the Motions unless
otherwise noted. parts of his interest to Plaintiff, Elizabeth, and Emanuel. At the times relevant to
this matter MEEJ’s ownership was as follows: Plaintiff - 57%; Dr. Poulos - 37%;
Elizabeth Poulos - 3%; and, Emanuel Poulos - 3%. (Exh. 3 - Assignments of Interest
in MEEJ.) At all times, Dr. Poulos was the sole manager of MEEJ.
6. Defendant JEP Investments, LLC (“JEP”) was formed on July 10, 2008,
as a member-managed North Carolina LLC. Dr. Poulos and Plaintiff each held a 50%
interest in JEP (Exh. 8 - JEP Operating Agreement, Schedule 1.) On December 9,
2008, JEP became a manager-managed LLC with Dr. Poulos serving as its sole
manager. (Exh. 10 - Amendment to JEP Articles of Organization.)
7. During 2010 and 2011, Plaintiff and Dr. Poulos experienced serious
marital problems. (Compl. ¶ 22.) It is undisputed that on January 19, 2011, Dr.
Poulos paid attorney Renny Deese (“Deese”) $100 for a consultation. (Exh. 13 - Credit
Card Statement.) Deese practices “family law,” and does not do tax or estate planning
work. (Exh. 46 - Dep. of R. Deese pp. 5-6.) While the Court held that the substance
of their communication was protected by attorney-client privilege (Order on Mot. to
Compel ¶ 4.), Dr. Poulos admitted in his deposition that he did not discuss estate
planning with Deese during the consultation. (Exh. 47 - Dep. of J. Poulos p. 52.)
8. On January 28, 2011, Dr. Poulos and Plaintiff executed a General
Warranty Deed and two Deeds of Gift transferring property from MEEJ to Icarian
(the “MEEJ Transfers”) (Exhs. 15 - Deed-MEEJ to Icarian, 16 - Deed-MEEJ to Icarian
(3 tracts), and 17 - Deed-MEEJ to Icarian (Laurel Fork).) Both Dr. Poulos and
Plaintiff signed each of the deeds. (Id.) 9. On January 28, 2011, Dr. Poulos and Plaintiff executed a Deed of Gift
transferring five parcels of real property from JEP to Icarian (the “JEP Transfer”).
(Exh 14 - Deed-JEP to Icarian.) Both Dr. Poulos and Plaintiff signed the Deed of Gift.
(Id.)
10. On February 11, 2011, Dr. Poulos formed the Family Trust as an
irrevocable trust. The Family Trust named Murray as its trustee, and Elizabeth and
Emanuel as its beneficiaries. (Exh. 19 - John E. Poulos Family Trust.) Plaintiff was
not required to sign any of the documents related to the creation of the Family Trust,
and she claims she did not know of the existence of the trust until she conducted
discovery in this lawsuit. (Exh. 50 - Maria Poulos Aff. ¶ 50.) Plaintiff does not allege
Dr. Poulos made any representations to her regarding the creation of the Family
Trust.
11. On February 11, 2011, after forming the Family Trust, Dr. Poulos
transferred 90% of the membership interest in Icarian to the Family Trust (the “Trust
Transfer”). (Exh. 20 - Transfer into Family Trust.) Plaintiff did not sign any
documents related to the Trust Transfer. Plaintiff claims she did not know about the
Trust Transfer or what assets the Family Trust held until she conducted discovery in
this lawsuit. (Exh. 50 - Maria Poulos Aff. ¶ 50.) Plaintiff does not allege Dr. Poulos
made any representations to her regarding the creation of the Trust Transfer.
12. On February 11, 2011, Dr. Poulos also transferred a 5% interest in
Icarian to Plaintiff (the “Maria Transfer”), and retained the remaining 5% interest in Icarian for himself. (Exh. 21 - 5% Transfer to Maria.) Plaintiff signed the
“Assignment of LLC Membership Interest” making the Maria Transfer. (Id.)
13. In March 2012, Dr. Poulos transferred membership interests he held in
two other LLCs to Icarian,3 and on March 29, 2012, he amended Icarian’s Articles of
Organization, changing it from a member-managed to a manager-managed LLC. On
April 12, 2012, he amended Icarian’s Operating Agreement, naming himself its sole
manager. (Exh. 29 - Amended Icarian Operating Agreement.)
14. Plaintiff alleges that Dr. Poulos procured her signatures on the
documents making the MEEJ, JEP, and Maria Transfers by fraud. (Exh. 50 - Maria
Poulos Aff. ¶¶ 10–28; Compl. ¶ 65.) Plaintiff claims that Dr. Poulos presented her
with only the signature pages of the transfer documents, never asked her to read the
documents, and never described the documents she was signing. (Compl. ¶¶ 11, 14–
16.) Plaintiff usually did not ask Dr. Poulos about the documents because she
“trusted him.” (Id. ¶ 17.) On the occasions when Plaintiff asked Dr. Poulos about the
documents, he responded that the documents were “so we don’t get sued” or “for our
retirement.” (Id. ¶ 18.) On other occasions, Dr. Poulos volunteered that the
documents were “so we don’t get sued” or “for our retirement.” (Id. ¶ 19.) Dr. Poulos
never explained to Plaintiff what he meant by “so we don’t get sued” or “for our
retirement.” (Id. ¶¶ 23–24.) Nevertheless, Plaintiff claims that she relied on Dr.
3 On March 10, 2012, Dr. Poulos transferred a 50% interest in AJ Properties of Fayetteville,
LLC to Icarian (“AJ Transfer”), and on March 16, 2012, Dr. Poulos transferred a 33.3% interest in Bear Plus One, LLC to Icarian (“Bear Plus Transfer”). Poulos’ representations and believed that he was acting in her “best interests.” (Id.
¶¶ 25–28.)
15. Dr. Poulos’ testimony regarding the purposes behind the asset transfers
and what, if anything, he told Plaintiff about the transfers is somewhat vague. In his
testimony, Dr. Poulos claimed his goals were to establish a long-term vehicle to hold
assets for their children, to protect those assets from both creditors and potential
malpractice liability, and to avoid negative tax consequences from a potential change
to estate tax laws. (Exh. 47 - Dep. of J. Poulos pp. 7, 14, 44, 53.) Dr. Poulos claimed
that he discussed the purposes for the transfers into Icarian with Plaintiff. (Id. pp.
44, 53, 99–111.) Dr. Poulos testified that he told Plaintiff the following:
We need to make sure that our assets are protected, that we’re protected from any type of liability from malpractice or any creditors in case something goes wrong in one of these LLCs, and we need to make sure our kids are always going to be taken care of, and we need to, you know, make sure there will be no issues with fighting.
(Id. p. 44.) Dr. Poulos did not claim that he told Plaintiff the transfers were made for
tax purposes. Plaintiff denies that Dr. Poulos told her that any of the documents she
signed were for protection of their assets from malpractice lawsuits or were for estate
planning purposes. (Exh. 50 - Maria Poulos Aff. ¶¶ 21, 22.)
16. Dr. Poulos also claimed that he involved Maria in his meetings with
Murray, the estate attorney who advised Dr. Poulos regarding the transfers of assets
between the LLCs and the creation of the Family Trust. (Exh. 47 - Dep. of J. Poulos
pp. 45–46.) Plaintiff denies that Murray ever discussed the Family Trust with her.
(Exh. 50 - Maria Poulos Aff. ¶ 49.) Murray denied that he had ever met with Plaintiff and that Dr. Poulos had included Plaintiff in their meetings. (Exh. 44 - Dep. of O.
Murray pp. 47–48.)
17. Plaintiff alleges that the properties and other assets transferred in the
JEP, MEEJ, Icarian, and Trust Transfers were marital property that would have
been subject to equitable distribution in the divorce proceedings. (Compl. ¶ 57.)
Plaintiff claims “the Trust now owns substantial assets that I once owned or had a
marital interest in.” (Exh. 50 - Maria Poulos Aff. ¶ 41.) Plaintiff alleges that Dr.
Poulos transferred property as part of a scheme “to avoid equitable distribution of at
least half of these properties to [her].” (Compl. ¶ 58.)
18. On June 21, 2013, Plaintiff filed a domestic complaint against Dr. Poulos
in the District Court of Cumberland County (13 CVD 4950) as the dependent spouse
and primary caretaker of their two children. On July 12, 2013, Plaintiff and Dr.
Poulos physically separated. (Compl. ¶ 19.) On July 15, 2013, Plaintiff filed a second
domestic complaint against Dr. Poulos in Cumberland County (13 CVD 5523) as the
dependent spouse seeking post-separation support, alimony, and equitable
distribution of marital assets (both domestic cases will collectively be referred to as
the “domestic proceeding”). (Compl. ¶¶ 18–20.)
19. On February 11, 2015, Plaintiff initiated this action in Cumberland
County Superior Court, alleging that Dr. Poulos, in late 2010 and early 2011,
fraudulently transferred marital assets to defraud Maria from receiving her fair
share of marital and divisible property in the planned separation and divorce (the
“Fraudulent Scheme”). (Compl. ¶ 23.) In the Complaint, Plaintiff makes claims for Fraud (“Count I”), Constructive Fraud/ Breach of Fiduciary Duty (“Count II”), and
Fraudulent Transfers (“Count III”). Additionally, Plaintiff seeks to set aside the
Family Trust (“Count IV”) and requests an Accounting (“Count V”).
20. On March 20, 2015, Poulos Defendants filed a motion to dismiss and
motion to strike and, on June 2, 2015, the Court issued an Order and Opinion
granting in part and denying in part those motions. The Court’s Order did not
dismiss any of the claims currently at issue.
21. On February 15, 2016, Murray, as trustee of the Family Trust, filed the
Murray Motion. Murray and the Trust sought summary judgment as to Counts III,
IV, and V, apparently believing that the claims for fraud, breach of fiduciary duty,
and constructive fraud were not alleged against them. At the hearing, however,
Plaintiff’s counsel informed the Court that it was taking a voluntary dismissal of its
claims against Murray and the Family Trust because Plaintiff believed the Court of
Appeals’ holding in Ward v. Fogel, 237 N.C. App. 570, 580–81, 768 S.E.2d 292, 300–
01 (2014), precluded her claims because Plaintiff had not been involved in “a distinct
agreement or transaction” with Murray or the Family Trust. Although Plaintiff’s
counsel did not expressly so state, Plaintiff’s contention implies that Plaintiff
intended to bring the fraud, breach of fiduciary duty, and constructive fraud claims
against Murray and the Family Trust. Plaintiff’s counsel did request that Murray
and the Family Trust be retained as nominal parties in this action to the extent
necessary to carry out any order the Court may enter. Therefore, Plaintiff’s claims
in this action against Murray and the Family Trust should be DISMISSED without prejudice. Murray and the Family Trust will remain nominal defendants in this
action to the extent they are necessary parties to carrying out any relief ordered by
the Court.
22. On February 29, 2016, Poulos Defendants filed a Motion for Summary
Judgment seeking summary judgment as to all of Plaintiff’s claims. The Poulos
Defendants’ Motion has been fully briefed and argued, and is ripe for determination.
III. ANALYSIS
23. “Summary judgment is appropriate if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with affidavits, if any,
show that there is no genuine issue of material fact and that any party is entitled to
judgment as matter of law.” Variety Wholesalers, Inc. v. Salem Logistics Traffic
Servs., LLC, 365 N.C. 520, 523, 723 S.E.2d 744, 747 (2012). An issue is “material” if
its “resolution . . . is so essential that the party against whom it is resolved may not
prevail.” McNair v. Boyette, 282 N.C. 230, 235, 192 S.E.2d 457, 460 (1972). The
moving party bears “the burden of clearly establishing lack of a triable issue” to the
trial court and may meet this burden by “proving an essential element of the opposing
party’s claim does not exist, cannot be proven at trial, or would be barred by an
affirmative defense.” Variety Wholesalers, Inc., 365 N.C. at 523, 723 S.E.2d at 747.
All evidence is viewed in the light most favorable to the nonmoving party and with
the benefit of all reasonable inferences. Bruce-Terminix Co. v. Zurich Ins. Co., 130
N.C. App. 729, 733, 504 S.E.2d 574, 577 (1998). a. Breach of Fiduciary Duty.
24. Plaintiff’s second claim is for breach of fiduciary duty and constructive
fraud (Count II). Plaintiff alleges that “as [Plaintiff]’s husband, Dr. Poulos, owed a
fiduciary duty to [Plaintiff] to manage and dispose of the marital property in her best
interests” and “took advantage of” Plaintiff’s trust and confidence in him to “benefit
himself.” (Compl. ¶¶ 86, 88–89. 4) Plaintiff contends that Dr. Poulos’
misrepresentations and omissions regarding the reasons he was making the transfers
of the couple’s assets breached the fiduciary duty Dr. Poulos owed Plaintiff. Dr.
Poulos concedes that he owed Plaintiff a fiduciary duty as her husband at the time
the transfers were made. (Poulos Defs.’ Br. Supp. Summ. J. 9.) Nevertheless, he
argues that he did not breach his fiduciary duty because he explained the reasons for
the transfers to Plaintiff and did not make any misrepresentations to Plaintiff. Dr.
Poulos further contends that the undisputed evidence establishes that he did not
personally benefit from the transfers since, like Plaintiff, he was left with a 5%
interest in Icarian, and he too cannot reach the assets in the Family Trust.
25. To establish a breach of fiduciary duty, one must show (1) the existence
of a fiduciary duty, and (2) that the fiduciary failed to “act in good faith and with due
regard to plaintiff’s interests.” White v. Consolidated Planning Inc., 166 N.C. App.
4 Plaintiff also alleged that Dr. Poulos owed her a fiduciary duty as a member of Icarian,
MEEJ and JEP. (Compl. ¶ 87.) Plaintiff, however, made no argument in her brief in support of a claim of fiduciary duty arising from her membership in the LLCs. Since Dr. Poulos has conceded he owed Plaintiff a fiduciary duty as her husband, the Court need not address Plaintiff’s claim for breach of fiduciary duty arising from Plaintiff’s membership in the LLCs. 283, 293, 603 S.E.2d 147, 155 (2004).5 A fiduciary relationship “exists in all cases
where there has been a special confidence reposed in one who in equity and good
conscience is bound to act in good faith and with due regard to the interests of the
one reposing confidence.” Harrold v. Dowd, 149 N.C. App. 777, 784, 561 S.E.2d 914,
919 (2002).
26. It is well-settled in North Carolina that the spousal relationship is the
most confidential of all relationships and is a fiduciary one. Eubanks v. Eubanks, 273
N.C. 189, 195–96, 159 S.E.2d 562, 567 (1968) (“[T]he relationship between husband
and wife is the most confidential of all relationships, and transactions between them,
to be valid, must be fair and reasonable.”). Nevertheless, “our Courts have found that
a spouse only breaches a fiduciary duty owed to the other spouse within the context
of a distinct agreement or transaction between the spouses.” Ward v. Fogel, 237 N.C.
App. at 580, 768 S.E.2d at 300 (citing Smith v. Smith, 113 N.C. App. 410, 413, 438
S.E.2d 457, 459 (1994) (emphasis added). In addition, where a transferee of property
stands in a confidential or fiduciary relationship to the transferor, it is not only the
duty of the transferee to exercise the utmost good faith in the transaction, but also to
disclose to the transferor all material facts relating thereto. Vail v. Vail, 233 N.C.
5 A claim for breach of fiduciary duty also requires proof of an injury or harm proximately
caused by the breach of duty. BDM Investments v. Lenhil, Inc., 2014 NCBC LEXIS 6, **29- 30 (2014) (citing Jay Grp., Ltd. v. Glasgow, 139 N.C. App. 595, 600-01, 534 S.E.2d 233, 237 (2000)); See also Green v. Freeman, 367 N.C. 136, 141, 749 S.E.2d 262, 268 (2013) (“The first issue before us is whether there was sufficient evidence, as a matter of law, that Corinna breached a fiduciary duty owed to plaintiffs, proximately causing injury to them.”). Defendant has not argued that Plaintiff failed to present evidence of an alleged injury. Nevertheless, the Court concludes that Plaintiff has presented sufficient evidence to raise an issue of material fact regarding whether she was injured by Dr. Poulos’ actions. 109, 114, 63 S.E.2d 202, 206 (1951) (“[I]t is the duty of a person in whom confidence
is reposed by virtue of the situation of trust arising out of a confidential or fiduciary
relationship to make a full disclosure of any and all material facts within his
knowledge relating to a contemplated transaction with the other party to such
relationship, and any concealment or failure to disclose such facts is a fraud.”).
27. Dr. Poulos had a fiduciary duty to Plaintiff as her husband at the time
of the MEEJ and JEP Transfers, and had a duty to disclose to Plaintiff all material
facts regarding those transactions. Plaintiff’s evidence is that Dr. Poulos induced her
to sign the documents transferring her interests in MEEJ and JEP to Icarian, of
which Dr. Poulos was the 100% owner, by telling her only that the documents were
“so we don’t get sued” and “for our retirement.” Dr. Poulos did not provide the
documents to Plaintiff nor permit her to review the documents. Dr. Poulos argues
that, even accepting Plaintiff’s evidence, the explanation that the transfers were
being made “so we don’t get sued” and “for our retirement” were not material
misrepresentations or omissions that would constitute a breach of his fiduciary duty.
The Court disagrees. The transfers of real property from one LLC to another
obviously would not prevent Plaintiff or Dr. Poulos from being sued. Nor did the
transfers accomplish any discernible retirement objective. Although the statements
“so we don’t get sued” and “for our retirement” may be vaguely suggestive of Dr.
Poulos’ alleged purposes in making the transfers, they do not, on their face,
adequately describe the so-called asset protection and estate planning goals Dr.
Poulos claims he sought to accomplish. The Court concludes that issues of material fact exist as to whether Dr. Poulos breached his fiduciary duty to Plaintiff by
misrepresenting or failing to disclose the purposes of the MEEJ and JEP Transfers
and, accordingly, the Poulos Defendants’ Motion addressing Plaintiff’s claim for
breach of fiduciary duty regarding the MEEJ and JEP Transfers should be DENIED.
28. Plaintiff’s claim for breach of fiduciary duty as it applies to the Trust
Transfer raises a separate question, however, because those were discreet actions by
Dr. Poulos that did not involve agreements or transactions between Plaintiff and Dr.
Poulos. See Ward, 237 N.C. App. at 580, 768 S.E.2d at 300 (claim for breach of
fiduciary duty must “arise within the context of a distinct agreement or transaction
between the spouses” (citation omitted)). Plaintiff presented evidence Dr. Poulos
created the Trust and made the Trust Transfer without Plaintiff’s participation or
knowledge. Neither involved an agreement between Dr. Poulos and Plaintiff.
Plaintiff does not claim that Dr. Poulos made any misrepresentations to her
specifically about the Trust Transfer or purpose of the Trust Transfer. Plaintiff
admitted that she did not even know of the existence of the Family Trust or that it
held the interest in Icarian until she learned of it during this lawsuit.
29. The Court concludes that the record evidence, viewed in the light most
favorable to Plaintiff, establishes that Plaintiff was not a party to the agreements or
transactions creating the Family Trust or the Trust Transfer. Accordingly, “[b]ecause
plaintiff’s claims regarding the [Family] trust do not arise ‘within the context of a
distinct agreement or transaction between the spouses,’ there was no fiduciary duty
owed to plaintiff sufficient to survive summary judgment . . . .” Id. at 580–81, 768 S.E.2d at 300 (citation omitted). Poulos Defendants’ Motion addressing Plaintiff’s
claim for breach of fiduciary duty regarding the creation of the Family Trust and the
Trust Transfer should be GRANTED.
b. Constructive Fraud
30. “To assert a claim of constructive fraud, plaintiff must allege: ‘(1) a
relationship of trust and confidence, (2) that the defendant took advantage of that
position of trust in order to benefit himself, and (3) that plaintiff was, as a result,
injured . . . .’” Ellison v. Alexander, 207 N.C. App. 401, 408, 700 S.E.2d 102, 108
(2010) (citations omitted). Our Supreme Court has held:
Constructive fraud differs from actual fraud in that ‘‘it is based on a confidential relationship rather than a specific misrepresentation.” Implicit in the requirement that a defendant “[take] advantage of his position of trust to the hurt of plaintiff,” is the notion that the defendant must seek his own advantage in the transaction; that is, the defendant must seek to benefit himself.
Barger v. McCoy Hillard & Parks, 346 N.C. 650, 666, 488 S.E.2d 215, 224 (1997)
(citing Terry v. Terry, 302 N.C. 77, 85, 273 S.E.2d 674, 678–79 (1981)). Like a breach
of fiduciary duty, a constructive fraud based on a spousal relationship must occur
within the context of a transaction or agreement between the spouses. Ward, 237
N.C. App. at 580, 768 S.E.2d at 300.
31. Since the parties were in a fiduciary relationship, Plaintiff must show
that Dr. Poulos sought to benefit himself from his alleged breach of fiduciary duty.
Plaintiff contends that Dr. Poulos benefitted himself at Plaintiff’s expense by: (a) the
“intangible benefit of satisfaction or pleasure” from preventing Plaintiff access to the
transferred property in a potential divorce; (b) the “benefit of power and authority” from “retaining . . . control over the [Family] Trust”; (c) receiving “asset protection
from malpractice liability and avoiding the estate tax exemption”; (d) payment of the
$100 professional fee to Renny Deese through an Icarian credit card; and, (e) being
able to make loans to Icarian for which he received as security the potential to obtain
50% ownership in the properties owned by Icarian in the event of default on the loans.
(Pl.’s Br. Opp. Mot. Summ. J. 19–20.)
32. Plaintiff correctly asserts that “[a] presumption of fraud arises where
the fiduciary in a confidential relationship benefits in any way from the relationship.”
Lancaster v. Lancaster, 138 N.C. App. 459, 462, 530 S.E.2d 82, 84 (2000) (holding
that husband and wife had physically separated and, therefore, husband did not owe
wife a fiduciary duty at the time they entered into separation and property settlement
agreement; accordingly, court did not address issue of whether husband received a
“benefit” from breach of duty). North Carolina’s appellate decisions addressing the
issue, however, have held that a defendant sought to benefit himself only when he
benefitted himself in some tangible manner, and have not expressly recognized an
intangible benefit as sufficient to sustain a claim for constructive fraud. Compare
Link v. Link, 278 N.C. 181, 193, 179 S.E.2d 697, 704 (1971) (defendant husband took
advantage of relationship with wife to obtain shares of stock as part of a separation
agreement); Terry, 302 N.C. at 84, 273 S.E.2d at 678 (defendant used position of trust
and confidence to take advantage of his ill brother and purchase his business at a
price below market value); Vail, 233 N.C. at 115, 63 S.E.2d at 207 (defendant son
benefitted when he took advantage of relationship of trust to obtain deed to property from his mother); with Barger, 346 N.C. at 666, 488 S.E.2d at 224 (holding that the
“benefit” of continued business relations between the plaintiff and the defendant is
insufficient to maintain a claim of constructive fraud). Accordingly, the Court
concludes that any “satisfaction” Dr. Poulos derived in preventing Plaintiff from
reaching the property in the Family Trust during the divorce proceeding is not
sufficient to support a claim for constructive fraud since “satisfaction” is a state of
mind with no discernable tangible value. Similarly, the Court concludes that any
alleged benefit of holding “power and authority” over the Family Trust (apparently
through his position as manager of Icarian (Pl.’s Br. Opp. Summ. J. 4)) is not the type
of tangible benefit that would support a claim for constructive fraud. In addition,
Plaintiff concedes that Dr. Poulos did not gain management authority of Icarian
through his alleged misrepresentations, but “has always managed Icarian.” (Id. 4–5.)
33. With regard to the alleged asset protection and tax benefits6 that may
have flowed to Dr. Poulos, Plaintiff does not dispute that she would have enjoyed the
same benefits. (Id. 19.) Those benefits do not support her constructive fraud claim
because they were not gained by Dr. Poulos specifically at her expense. Barger, 346
N.C. at 666, 488 S.E.2d at 224.
34. It is undisputed that on January 19, 2011, Dr. Poulos used an Icarian
credit card to pay the $100 fee for consulting with attorney Renny Deese (Exh. 47 -
Dep. of J. Poulos pp. 166–67; Exh. 13 - Credit Card Statement.) Plaintiff argues that
6 There is no evidence in the record that either Dr. Poulos or Plaintiff received any tax benefits
from the transactions. To the extent Dr. Poulos believed that there was going to be a change to the estate tax laws that might make the couple’s estate taxable upon their deaths, it is undisputed that the change to the law never occurred. the payment of this fee constitutes a benefit in the form of “payment of personal
expenses through the [Family] [T]rust funds.” (Pl.’s Br. Opp. Summ. J. 19.) This
payment, however, occurred nine days before Dr. Poulos made the first of the
allegedly fraudulent MEEJ and JEP Transfers, and over three weeks before Dr.
Poulos created the Family Trust. In other words, the payment was not made out of
Family Trust funds, and any benefit Dr. Poulos received by payment of the fee by
Icarian could not have resulted from his alleged misrepresentations and omissions
surrounding the transfers.
35. Plaintiff also contends that Dr. Poulos benefitted from three loans he
made to Icarian between August 2013, and March 2014. (Exh. 37 - Promissory Note
(Bridges); Exh. 39 - Promissory Note (Smith St.); Exh. 40 - Promissory Note (Wyrd
St.).) Dr. Poulos loaned Icarian a total of approximately $173,000. The loans were
interest-free, and repayable upon the sale of specific pieces of real property
(apparently owned by Icarian). In each of the promissory notes, Dr. Poulos took as
security a 50% ownership interest in the piece of real property in the event of a
default. (Id.) There is no evidence that Icarian defaulted on any of the loans resulting
in Dr. Poulos receiving an ownership interest in the properties. More significantly,
Plaintiff has not explained how the loans benefitted Dr. Poulos,7 or how such benefit
accrued to Dr. Poulos as a result of him taking advantage of his fiduciary relationship
with Plaintiff.
7 In fact, the loans appear to be for the benefit of Icarian, an entity in which Plaintiff and Dr.
Poulos both have identical 5% ownership interests. 36. Plaintiff has failed to present evidence that creates an issue of material
fact as to whether Dr. Poulos benefited himself at Plaintiff’s expense, the Poulos
Defendants’ Motion regarding Plaintiff’s claim for constructive fraud should be
GRANTED.8
c. Fraud
37. In Count I of the Complaint, Plaintiff alleges that “Dr. Poulos
fraudulently omitted and failed to disclose” that the purpose of the Icarian Transfer,
the Maria Transfer, and the Trust Transfer was to “deprive [Plaintiff] of distribution
of marital property in the support case.” (Compl. ¶ 78.) Plaintiff alleges that to the
extent she signed certain documents that made the transfers, Dr. Poulos obtained her
signature by the same misrepresentations and omission underlying her claims for
breach of fiduciary duty. (Id. ¶ 79.)
38. While “[f]raud has no all-embracing definition. . . . [I]n general terms
fraud may be said to embrace ‘all acts, omissions, and concealments involving a
breach of legal or equitable duty and resulting in damage to another, or the taking of
undue or unconscientious advantage of another.’” Vail, 233 N.C. at 113, 63 S.E.2d at
205 (citation omitted). Nevertheless, “the following essential elements of actual fraud
are well-established: (1) [f]alse representation or concealment of a material fact, (2)
reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in
8 Plaintiff’s claim for constructive fraud arising from the creation of the Family Trust and the
Trust Transfer are also subject to dismissal because they did not involve an agreement or transaction between Plaintiff and Dr. Poulos. Ward, 237 N.C. App. at 580-81, 768 S.E.2d at 300. Poulos Defendants’ Motion regarding those claims should be GRANTED for this reason as well. fact deceive, (5) resulting in damage to the injured party.” Ragsdale v. Kennedy, 286
N.C. 130, 138, 209 S.E.2d 494, 500 (1974). Although reasonable reliance on an
allegedly false representation usually is necessary to show fraud, it is not necessary
where the existence of a confidential or fiduciary relationship creates a duty to
disclose between the parties to the transaction. Vail, 233 N.C. at 116, 63 S.E.2d at
207. "It is a well-settled principle of the law of fraud . . . that it is the duty of a person
in whom confidence is reposed by virtue of the situation of trust arising out of a
confidential or fiduciary relationship to make a full disclosure of any and all material
facts within his knowledge relating to a contemplated transaction with the other
party to such relationship, and any concealment or failure to disclose such facts is a
fraud.” Id. at 114, 63 S.E.2d at 206 (internal quotation marks omitted). In addition,
where a fiduciary relationship exists, a deceived party is not required to exercise due
diligence in discovering the fraud. Id. at 116, 63 S.E.2d at 207.
39. As a preliminary matter, for the same reasons that Plaintiff’s claims for
breach of fiduciary duty and constructive fraud regarding the creation of the Family
Trust and the Trust Transfer must be dismissed, so too must her claim for fraud
based on those actions. The creation of the Family Trust and the Trust Transfer did
not involve an agreement or transaction between Plaintiff and Dr. Poulos. Ward, 237
N.C. App. at 580, 768 S.E.2d at 300 (the plaintiff “was not induced into agreeing to
[the trust’s] terms” and her “claim for fraudulent inducement” regarding creation of
the trust failed). 40. Dr. Poulos argues that Plaintiff’s fraud claims cannot succeed because
she has not presented evidence that would create a genuine issue of fact about his
alleged intent in making the MEEJ and JEP Transfers as part of his overall purpose
of protecting the couple’s assets and passing the assets to their children. Our
appellate courts have recognized, however, that:
[S]ummary judgment is generally inappropriate in an action for fraud. The existence of fraud necessarily involves a question concerning the existence of fraudulent intent, and the intent of a party is a state of mind generally within the exclusive knowledge of the party. That state of mind must, by necessity, be proved by circumstantial evidence.
Lewis v. Blackman, 116 N.C. App. 414, 419, 448 S.E.2d 133, 136 (1994) (citations
omitted). Whether allegedly fraudulent representations or concealments were
calculated or intended to deceive are questions of fact generally left to the jury if the
circumstances could demonstrate fraudulent intent. Latta v. Rainey, 202 N.C. App.
587, 599, 689 S.E.2d 898, 909 (2010) (emphasis added). Viewed in the light most
favorable to Plaintiff, she has presented evidence that Dr. Poulos misrepresented or
failed to disclose the purpose behind the MEEJ and JEP Transfers, and did not inform
her that he had created the Family Trust or made the Trust Transfer. Dr. Poulos
took these actions almost immediately after the couple began marriage counseling in
early 2011, and after he had consulted with a family law attorney. Dr. Poulos claims
to have involved Plaintiff in his meeting with Murray to create the Family Trust, but
Murray denies Dr. Poulos involved the Plaintiff. The Court believes a reasonable
juror could conclude that Dr. Poulos made the transfers into Icarian, an entity in which he claimed 100% ownership and was the only manager, in order to be able to
transfer the couple’s assets into the Family Trust without having to involve Plaintiff.
41. The Court concludes that genuine issues of material fact exist as to Dr.
Poulos’ intent in making the MEEJ and JEP Transfers that foreclose finding as a
matter of law that he did not have a fraudulent intent. Therefore, Poulos Defendants’
Motions addressing Plaintiff’s fraud claims regarding the MEEJ and JEP Transfers
are DENIED.
d. Violation of Uniform Voidable Transactions Act
42. In Count III of her Complaint, Plaintiff alleges that Dr. Poulos’ transfers
of property were in violation of the Uniform Fraudulent Transfer Act, G.S. § 39-23.1,
et seq. (in 2014, the UFTA became the Uniform Voidable Transactions Act (“UVTA”)).
More particularly, Plaintiff alleges that Dr. Poulos made the MEEJ, JEP, Maria, and
Trust Transfers “with an intent to hinder, delay and defraud [Plaintiff] from
obtaining her interest in marital property”, and without receiving “reasonably
equivalent value” from the Family Trust. (Compl. ¶¶ 92, 98.) Plaintiff contends the
transfers are voidable pursuant to G.S. §§ 39-23.5(a) and 39-23.4. (Id. ¶¶ 102, 103.)
43. To proceed with a cause of action under the UVTA, Plaintiff must have
standing as a creditor. See Maloney v. Alliance Dev. Group, LLC, 2006 NCBC LEXIS
14, at *14–15 (N.C. Super. Ct. 2006) (citing G.S. §§ 39-23.4 (a), 39-23.5(a), 39-23.7(a)).
To have standing as a creditor, one must have a “claim,” defined as a “right to
payment.” G.S. § 39.23.1(3)–(4). A “right to payment,” can be unliquidated,
contingent, unmatured, or disputed, and need not be reduced to a judgment. G.S. § 39-23.1(3). “Transfers” under the UVTA are defined as “every mode . . . of disposing
of or parting with property belonging to the debtor.” G.S. § 39-23.1(12).
44. G.S. § 39-23.5(a)9 protects creditors “whose claim arose before the
transfer was made or obligation was incurred.” To establish a claim, a creditor must
establish that the debtor made a transfer “without receiving a reasonably equivalent
value in exchange for the transfer or obligation,” and that the debtor was insolvent
at the time of the transfer or become insolvent10 as a result of the transfer. G.S. § 39-
23.5(a) (emphasis added). Defendant argues that Plaintiff does not qualify as a
“present creditor” under the statute because she has alleged that “she became a
creditor of Dr. Poulos, as defined by G.S. § 39-23.1, when the support case was filed
(July 15, 2013), or, alternatively, at the very earliest when the Poulos Separation
occurred (July 12, 2013).” (Compl. ¶ 94.) Since all of the transfers at issue occurred
on or before February 11, 2011, Defendant argues that Plaintiff was not a creditor at
the time of the transfers. Despite the allegations in the Complaint, however, Plaintiff
now contends that she had existing “claims” against Dr. Poulos as of February 11,
2011, based on the allegedly unlawful transfers made on January 28, 2011. (Pl. Br.
Opp. Mot. Summ. J. 23.) The Court does not need to address Plaintiff’s status as a
creditor, however, since she has not presented evidence that Dr. Poulos was insolvent
or became insolvent as a result of the transfers. To the contrary, Plaintiff admitted
that she did not believe Dr. Poulos had ever been unable to pay his debts. (M. Poulos
9 Plaintiff does not contend that she has a claim under G.S. § 39-23.5(b). 10 “A debtor is insolvent if, at a fair valuation, the sum of the debtor's debts is greater than
the sum of the debtor's assets”, and “[a] debtor that is generally not paying the debtor's debts as they become due . . . is presumed to be insolvent.” G.S. § 39-23.2. Dep. pp. 60–61, 64.) Plaintiff has not presented any evidence that at any time
relevant to this action Dr. Poulos’ debts exceeded his assets. Plaintiff has failed to
present evidence in support of an essential element of her claim under G.S. § 39-
23.5(a). Accordingly, Poulos Defendants’ Motion regarding this claim should be
GRANTED.
45. Plaintiff also makes a claim under G.S. § 39-23.4(a), which applies to
both present and future creditors. The statute provides as follows:
(a) A transfer made or obligation incurred by a debtor is fraudulent as to creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(a) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(b) intended to incur, or believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.
46. Plaintiff contends that the Trust Transfer is voidable under G.S. § 39-
23.4(a)(2) because Dr. Poulos transferred the property “[w]ithout receiving a
reasonably equivalent value in exchange for the transfer or obligation.” (Compl. ¶ 98.)
Dr. Poulos argues that a settlor does not have to receive any consideration in
exchange for a transfer of property to a trust. Ridge v. Bright, 244 N.C. 345, 349, 93
S.E.2d 607, 610 (1956). In Ridge, the Court held It is not an essential feature of the trust creation that the settlor has received a benefit from the trustee, cestui, or another . . . . If the settlor has otherwise effectively completed the trust, the fact that he has received nothing in return for the transfer of the equitable or legal and equitable property interest is immaterial.
Id., 93 S.E.2d at 611. Since consideration was not necessary to effectuate the Trust
Transfer, Plaintiff’s claim under G.S. § 39-23.4(a)(2) fails.
47. With regard to Plaintiff’s claim under G.S. § 39-23.4(a)(1) (“Transfer or
obligation voidable as to present or future creditors”), Poulos Defendants do not deny
that Plaintiff is a future creditor. (Murray Br. Supp. Summ. J. 9).11 Nevertheless,
they contend Plaintiff cannot succeed on this claim because G.S. § 39-23.4(a)(1) only
allows future creditors to attack a fraudulent transfer when the transfer was
intended to hinder, delay, or defraud a then-existing creditor at the time of transfer.
(Murray Br. Supp. Summ. J. 9–11.) In support of this argument, Poulos Defendants
cite Norman Owen Trucking, Inc. v. Morkoski, 131 N.C. App. 168, 506 S.E.2d 267
(1998), a case decided under the common law in effect prior to passage of the UFTA.
In Norman Owen Trucking, the Court of Appeals cited “the applicable fraudulent
conveyance principles” under North Carolina common law, including the following:
If the conveyance is voluntary, and the grantor did not retain property fully sufficient and available to pay his debts then existing, it is invalid as to creditors; but it cannot be impeached by subsequent creditors without proof of the existence of a debt at the time of its execution, which is unpaid, and when this is established and the conveyance avoided, subsequent creditors are let in and the property is subjected to the payment of creditors generally.
11 Dr. Poulos specifically incorporates Murray’s brief in support of summary judgment as to
the Fraudulent Transfer (Count III), Setting Aside the Trust (Count IV), and Accounting (Count V) claims. (Poulos Defs.’ Br. Supp. Summ. J. 11.) Id. at 173, 506 S.E.2d at 271 (citing Aman v. Waller, 165 N.C. 224, 227, 81 S.E. 162,
164 (1914)). Poulos Defendants contend that G.S. § 39-23.4(a)(1) must be interpreted
as consistent with this principle and “therefore operates to allow a future creditor to
attack a fraudulent transfer that occurred prior to the future creditor’s standing as a
creditor, but only if the transfer was intended to hinder, delay, or defraud a then-
existing creditor at the time of the transfer.” (Murray Br. Supp. Summ. J. 10
(emphasis in original).)
48. The Court is not persuaded by Poulos Defendants’ argument. First, the
principle cited in Norman Owen Trucking applies to transfers by the debtor that
leaves the debtor with insufficient assets to pay “his debts then existing.” 131 N.C.
App. at 173, 506 S.E.2d at 271. A claim under § 39-23.4(a)(1), unlike subsection (a)(2),
does not require that the transfer make the debtor insolvent or potentially insolvent.
Rather, it is sufficient if the creditor challenging the transaction shows that the
transfer was intended to “hinder, delay, or defraud any creditor.” The Official
Comments to the UVTA make this conclusion clear, providing that “there is no
requirement in § 4(a)(1) that the intent referred to be directed at a creditor existing
or identified at the time of the transfer” and “[d]iminution of the assets available to
the debtor’s creditors is not necessarily required to ‘hinder, delay, or defraud’
creditors.” The Court rejects Dr. Poulos’ argument that G.S. § 39-23.4(a)(1) implicitly
requires a then-existing creditor at the time of fraudulent transfer for a future
creditor to void the transaction. 49. For Plaintiff’s UVTA claim to survive summary judgment she also must
present evidence that creates an issue of fact as to whether Dr. Poulos intended to
“hinder, delay, or defraud” her through the property transfers. “[I]ntent is an
operation of the mind, it should be proven and found as fact, and is rarely to be
inferred as a matter of law.” Estate of Hurst v. Jones, 230 N.C. App. 162, 170, 750
S.E.2d 14, 20 (2013) (citation omitted). Because intent is difficult to prove, G.S. § 39-
23.4(b) provides a non-exhaustive list of factors to be considered in determining
intent. Hurst, 230 N.C. App. at 170, 750 S.E.2d at 20. Such factors include: the
debtor retained possession or control of the property transferred after the transfer;
the transfer or obligation was disclosed or concealed; the transfer was substantially
all the debtor’s assets; the debtor absconded; the debtor removed or concealed assets;
the transfer occurred shortly before or shortly after a substantial debt was incurred;
and, the debtor transferred the assets in the course of legitimate estate or tax
planning. G.S. § 39-23.4(b).
50. Plaintiff has presented evidence that Dr. Poulos failed to disclose and
concealed from her the creation of the Family Trust and the Trust Transfer, that the
assets transferred were substantially all of the couple’s marital assets, and that after
the Trust Transfer, Dr. Poulos appointed himself sole manager of Icarian, retaining
control over properties that were allegedly once part of their marital estate. Dr.
Poulos counters that the property transfers were effectuated in the course of
legitimate estate and tax planning and that Plaintiff filed for divorce not “shortly
after” the transfers, but over two years after Dr. Poulos executed the Trust Transfer. The Court concludes that there is sufficient, albeit circumstantial, evidence to create
a genuine issue regarding Dr. Poulos’ intent and for Plaintiff’s G.S § 39-23.4(a)(1)
claim to survive summary judgment. Therefore, the Poulos Defendants’ Motion
regarding Plaintiff’s UVTA claim should be DENIED.
e. Setting Aside the Family Trust and Accounting.
51. In Count IV of the Complaint, Plaintiff seeks an order setting aside the
Family Trust under the North Carolina Uniform Trust Code (“UTC”), G.S. §§ 36C-1-
101 et seq., on the grounds of fraud. The UTC provides that a trust “is voidable to the
extent that its creation was induced by fraud, duress, or undue influence.” G.S. §
36C-4-406.
52. Here, the Court already has determined that Poulos Defendants’ Motion
as to Plaintiff’s claim for fraud arising from the creation of the Family Trust and the
Trust Transfer must be dismissed. Therefore, the Poulos Defendants’ Motion as to
Count IV should be GRANTED.12
53. In her claim for an accounting, Plaintiff requests a “complete and
accurate accounting by Dr. Poulos, the LLCs, and the [Family] Trust of all properties
owned, acquired, or transferred by Dr. Poulos, the LLCs, and the Trust.” (Compl. ¶
113.) The Court interprets this request as seeking an accounting of the real property
and other assets transferred into Icarian for purposes of determining the amount to
which Plaintiff may be entitled if she prevails on her claims, and not as seeking to
12 To the extent Plaintiff requests that a constructive trust be placed on the assets that may
be determined to have been improperly transferred in the MEEJ and JEP Transfers (Comp. ¶¶ 118–19) the Court does not believe such request is the subject of the Poulos Defendants’ Motion, and the Court declines to address dismissal of such request. have an accounting of the Family Trust itself. Accordingly, to the extent Poulos
Defendants seek summary judgment regarding Plaintiff’s claim for an accounting of
the real property and other assets transferred into Icarian, the motion should be
DENIED.
THEREFORE, it is ordered that:
54. Poulos Defendants’ Motion as to Plaintiff’s claims for breach of fiduciary
duty and fraud arising from the MEEJ and JEP Transfers are DENIED.13 Poulos
Defendants’ Motion as to Plaintiff’s claim for breach of fiduciary duty and fraud
arising from the creation of the Family Trust and Trust Transfer are GRANTED.
55. Poulos Defendants’ Motion as to Plaintiff’s claim for constructive fraud
is GRANTED.
56. Poulos Defendants’ Motion as to Plaintiff’s request to set aside the
Family Trust is GRANTED.
57. Poulos Defendants’ Motion as to Plaintiff’s request for an accounting of
the real property and other assets transferred into Icarian is DENIED.
This the 26th day of September, 2016.
/s/ Gregory P. McGuire Gregory P. McGuire Special Superior Court Judge For Complex Business Cases
13 To the extent Plaintiff has attempted to raise claims for breach of fiduciary duty, constructive fraud, or fraud arising from the AJ and Bear Plus Transfers, the record evidence establishes that neither of those transfers involved an agreement or transaction between Plaintiff and Dr. Poulos. (Exhs. 24–26, 33–35.) Poulos Defendants’ Motion as to Plaintiff’s claims for breach of fiduciary duty, constructive fraud, and fraud arising from the AJ and Bear Plus Transfers is GRANTED.