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Byler v. Leader

November 12, 2010

ESTATE OF JERRY L. BYLER, PLAINTIFF,
v.
ALASKAN LEADER, OFFICIAL NO. 558637, ITS ENGINES, MACHINERY, APPURTENANCES, ETC., IN REM, AND PRIOR ALASKAN ADVENTURE TOURS, IN PERSONAM, DEFENDANTS,
CITY AND BOROUGH OF YAKUTAT, DOCKET 100 INTERVENOR.



The opinion of the court was delivered by: John D. Roberts United States Magistrate Judge

ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE MOTIONS FOR ARREST WARRANT AND APPOINTMENT OF SUBSTITUTE CUSTODIAN AND FINDINGS REGARDING ALL PENDING ISSUES

Plaintiff filed the instant Motion at Docket 100. The Intervenor, City and Borough of Yakatut (CBY) filed a Partial Opposition at Docket 104. Plaintiff filed a Reply at Docket 107 and CBY filed a Surreply at Docket 108. The court deems the Surreply properly filed and reviews all of the above documents for consideration with this motion. This Order is also intended to address any lingering issues from the evidentiary hearing on August 23, 2010 and all issues under advisement by the magistrate judge. Many of the issues raised by CBY are not ripe. The court encourages the settlement of these issues through early motion practice.

I. Factual History

The parties have a long, involved history. In November of 2008, CBY won an Alaska Superior Court action against AAT and began foreclosing on its assets to enforce a tax lien, interest and attorney's fees. Prior to the judgment, AAT transferred all of its assets to its owner, Kimberly Riedel-Byler. Ms. RiedelByler then transferred all of the assets to ABC Leasing, LLC, of which she was the sole owner. A subsequent State court action resulted in a second judgment against AAT in favor of CBY in March of 2010. Upon examination of the transfers, the State court deemed them fraudulent and awarded CBY additional attorney's fees.

On July 7, 2008, prior to the entry of the second judgment, and prior to AAT's bankruptcy filings, Ms. Riedel-Byler, acting on behalf of AAT, entered into a 2.5 million dollar settlement with Darren Byler, her husband, to settle a wrongful death claim for Jerry Byler's estate. Darren Byler is Jerry Byler's son. Kimberly Riedel-Byler is Jerry Byler's daughter-in-law.

The July 7, 2008 agreement, Exhibit A to Docket 8, purports to settle the Estate's unspecified claim for 2.5 million dollars. The declaration of Darren Byler, at Docket 6, states that the 2.5 million dollar settlement was for the wrongful death claim of the estate of Jerry L. Byler. According to the agreement, the debt is secured by creating a priority under the Vessel's marine mortgage. The first party was given full control over the Vessel and it's equipment until July 7, 2010 when the debt became due. On September 5, 2008, ABC Leasing, LCC (ABC), signed a document entitled "Preferred Mortgage of Vessel" acknowledging the 2.5 million dollar debt to the Estate and "mortgaging" the Alaskan Leader to the Estate with additional covenants creating possible additional indebtedness if the covenants were not met.

After a State court jury found that AAT's transfer of its assets were fraudulent conveyances, but before entry of the second judgment against AAT and Ms. Riedel-Byler, the Estate filed this action, immediately accompanied by the March 16, 2010 motion for arrest of the Alaskan Leader that the Estate now seeks to withdraw.

II. Procedural History

The procedural history in this case is no less long or complicated. A brief explanation of how the Plaintiff came to file the instant motion is helpful. The magistrate judge denied Plaintiff's initial Motion to Arrest the Vessel at Docket 10.

In the Order, the court found that the mortgage was likely not bona fide and that the Alaska Superior Court's rulings referencing fraudulent conveyances might be binding on the parties.*fn1 Plaintiff filed a Motion for Reconsideration at Docket 12. Prior to ruling on the motion, the proceedings were stayed pending resolution of a matter involving the parties in federal bankruptcy court. On June 22, 2010, CBY filed a Notice of Ripeness for Hearing on Motion [12] for Reconsideration and Motion [27] for Pre-Arrest Hearing at Docket 41 indicating some issues were ready for this court's consideration. The parties briefed issues regarding the arrest of the Vessel at Dockets 46, 58, 74, 75, 77, 79 and 80. The court held an evidentiary hearing on August 23, 2010.

At the evidentiary hearing, the court took CBY's Motion and Memorandum to Create Interim Receivership, Docket 71, under advisement. The court issued an Order Creating Interim Receivership to Lease and or Operate Vessels at Docket 95. This order encompasses several issues argued at the evidentiary hearing. The Order did not, however, address the arrest of the Vessel or the appointment of a substitute custodian. Due to the nature of the agreed Receivership and the status of the Vessels per the Order, the court issued an order at Docket 96 regarding Plaintiff's Motion for Relief at Docket 74. Therein, the court directed the Plaintiff to clarify how the issues of arrest and the appointment of a substitute custodian should be handled in light of the Order creating a receivership. The Plaintiff then filed the Motion at Docket 100 asking the court to strike those motions.

III. Issues Presented

This order will address the issues outlined in Plaintiff's Motion to Strike and all issues under advisement from previous motions addressed at the evidentiary hearing on August 23, 2010. Specifically, this order addresses the following issues:

1) whether to grant the Plaintiff's motion to strike motions to arrest the vessel Alaskan Leader and appurtenances; 2) whether to grant the Plaintiff's motion to strike motions to appoint a substitute custodian; 3) whether the court has in rem jurisdiction to hear this matter; 4) whether the Plaintiff has made a prima facie showing regarding the cause of Jerry Byler's death; 5) whether the Plaintiff has authority to bring the current action as "subsequent administration" of the estate; 6) whether Plaintiff has waived it's ...


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