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South East Enterprise Group LLC v. Gill

United States District Court, M.D. Georgia, Columbus Division

May 29, 2015

SOUTH EAST ENTERPRISE GROUP LLC, et al., Plaintiffs,
v.
JOHN GILL, et al., Defendants.

ORDER

CLAY D. LAND, District Judge.

This action is the third in a series of civil cases before this Court involving the same main characters fighting over the Gill Family Cornerstone Trust enterprise, built by John Gill. Before the fighting began, John Gill amassed an empire of rental properties, took a vow of poverty, placed the properties into holding trusts that benefitted the Cornerstone Trust, and continued to manage the properties (and derive benefit from them) with the help of Kevin Hartshorn and Dan Van Gasken. But then John Gill was convicted of crimes in Florida, and he fled the country instead of reporting to prison. The power vacuum created by John Gill's absence pitted Hartshorn and Van Gasken against John Gill's brother Loren. They have been fighting in this Court ever since, most recently filing this third separate lawsuit. Contending that this latest action is nothing new, Defendants seek judgment on the pleadings based on res judicata .

In the first action, Eastern Property Development, LLC and South East Enterprise Group, LLC v. Loren Gill, 4:11-cv-62 ("Trespass Action"), Eastern Property and SEE, which are managed by Hartshorn and Van Gasken, accused Loren of breaking into their offices, changing their locks, diverting their funds to his bank account, and generally meddling with their operations during the summer of 2011. Eastern Property and SEE brought claims against Loren Gill for trespass, conversion, and interference with contractual relations. In September 2012, a jury found in favor of Eastern Property and SEE and against Loren Gill on those claims.

In the second action, Kaitlyn Gill and Lauren Gill v. Loren Gill and Elm Leasing, LLC, 4:12-cv-77 ("Elm Leasing Action"), John Gill's daughters-Kaitlyn and Lauren, who were beneficiaries of the Cornerstone Trust-formed an alliance with Van Gasken, trustee of the real estate holding trusts that benefit the Cornerstone Trust, against their uncle Loren. They accused Loren of working with John Gill to divert Cornerstone Trust assets to Loren's own company. The Gill daughters brought claims against Loren under the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962, 1964. Van Gasken did not assert RICO claims in that case. Rather, Van Gasken brought a conversion claim against Loren Gill on behalf of the real estate holding trusts. In September 2014, a jury found in favor of Van Gasken on his claim against Loren Gill. And the jury found that while Loren Gill engaged in a pattern of racketeering activity, that pattern of racketeering activity caused $0 in damages to the Gill daughters.

In the present action, Plaintiffs SEE, Eastern Property, Hartshorn as trustee of the Cornerstone Trust, Van Gasken as trustee of the real estate holding trusts, Order of the IAL, Inc., and Multi Marts Corp. square off against Defendants John Gill, Loren Gill, Michael Gill (John and Loren's brother), PMCA, LLC (a company the Gill brothers control), and Steve Thomas. Plaintiffs allege a federal RICO claim against Defendants, claiming that Defendants formed an enterprise in 2011 and, using the U.S. mail and interstate wire communications, have engaged in a fraudulent scheme to deprive Plaintiffs of money and injure their business. Am. Compl. ¶¶ 37, 68, ECF No. 23. Based on the same allegations, Plaintiffs also assert state law claims for interference with contract and interference with a prospective business advantage.

Defendants seek judgment on the pleadings, arguing that all of Plaintiffs' claims are barred by res judicata . Defendants alternatively seek dismissal of Plaintiffs' RICO claims for failure to state a claim and Plaintiffs' failure to comply with the Court's rules regarding RICO claims. As discussed below, Defendants' Motion for Judgment on the Pleadings (ECF No. 34) is granted in part and denied in part.

JUDGMENT ON THE PLEADINGS STANDARD

"Judgment on the pleadings is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law." Perez v. Wells Fargo, N.A., 774 F.3d 1329, 1335 (11th Cir. 2014) (internal quotation marks omitted). "In determining whether a party is entitled to judgment on the pleadings, " the Court must "accept as true all material facts alleged in the non-moving party's pleading" and "view those facts in the light most favorable to the non-moving party." Id.

FACTUAL ALLEGATIONS

Plaintiffs base their claims in the present action on Defendants' alleged conduct during two main timeframes: 2011 and 2015. Plaintiffs allege that during 2011:

1. Loren Gill forged papers stating that he was a trustee of the real estate holding trusts managed by SEE and Eastern Property, then sent those papers via interstate wire communications. Am. Compl. ¶ 49.
2. Relying on the forged document stating that he was a trustee of the real estate holding trusts, Loren Gill sent an interstate wire communication purporting to fire Van Gasken from his role as trustee. Id. ¶ 50. Loren Gill also used the forged documents to assume management of SEE and Eastern Property. Id. ¶ 51. He also opened a bank account in Columbus, Georgia so that he could divert money to himself from SEE and Eastern Property, and he used the interstate wires to divert the funds. Id. ¶¶ 52-53.
3. Loren Gill filed a fraudulent Notice of Claim of Ownership in the Muscogee County, Georgia Superior Court stating that Loren Gill was the president of Multi Marts and that Van Gasken had never owned any Multi Marts stock, then caused the notice to be sent via U.S. mail. Id. ¶ 54.
4. Loren Gill made an affidavit falsely stating that he was a trustee of the real estate holding trusts, then filed it in the Muscogee County, Georgia Superior Court and caused it to be sent via U.S. mail. Id. ¶ 55.
5. Loren Gill created a fraudulent deed purporting to transfer property owned by Van Gasken to himself, then caused the deed to be mailed via U.S. mail and to be recorded in the County Recorder's Office in Pierce County, Washington. Id. ¶ 56. He also filed a lien on the property. Id. ¶ 57.
6. Loren Gill filed a false statement in this Court swearing that he was a trustee of the real estate holding trusts when he knew he was not. Id. ¶ 59.
7. John Gill induced Loren Gill to threaten to injure Plaintiffs' property. Id. ¶¶ 35, 61.
8. Loren Gill sent a letter via U.S. mail to every SEE and Eastern Property tenant instructing the tenants to pay their rent to his company, even though his company had no ...

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