United States District Court, E.D. Tennessee
LIKOS OF TENNESSEE CORP., TED DOUKAS, ATHENA OF S.C., LLC, and FZA NOTE BUYERS, LLC, Plaintiffs,
GEORGE A. BAVELIS, Defendant.
A. Varlan CHIEF UNITED STATES DISTRICT JUDGE
civil case is before the Court on defendant's Motion to
Dismiss [Doc 9], to which plaintiffs responded [Doc. 18], and
defendant replied [Doc. 20]. Also before the Court is
plaintiffs' Motion for Summary Judgment [Doc. 13], and
Motion for Judicial Notice [Doc. 15]. For the reasons
discussed herein, the Court will grant defendant's motion
to dismiss, and deny plaintiffs' motion for summary
judgment and motion to take judicial notice as moot.
case arises due to a pending proceeding in Knox County
Chancery Court, and follows other related litigations
previously before this Court.
Stooksbury Litigation and Settlement
March 6, 2012, Robert T. Stooksbury was awarded a judgment
against Michael L. Ross, as well as several of Ross's
business entities, in the proceeding Stooksbury v. Ross,
et al., No. 3:09-cv-498 (“Stooksbury
I”) [Doc. 1 p. 3] Prior to the entry of judgment in
Stooksbury I, plaintiff Ted Doukas, through his
entity Athena of S.C., LLC (“Athena”), acquired
two notes from Sun Trust Bank secured by collateral at a Ross
property development known as Rarity Bay [Id. at 4].
In addition, Doukas, through his entity Likos, acquired
ownership from Ross of a 24-unit apartment complex known as
Vonore Apartments [Id.].
November 30, 2011, Athena filed two complaints in Knox County
Circuit Court against Ross and two of his entities, with each
complaint based on one of the notes acquired from Sun Trust
Bank [Id.]. Also on November 30, 2011, agreed
judgments were entered in each Knox County Circuit Court case
[Id. at 5]. Subsequent to the entry of these agreed
judgments, on December 15, 2011, Ross and Doukas entered into
a “Forbearance Agreement, ” in which Athena
agreed to forbear collecting on the agreed judgments for
ninety days, in exchange for Ross granting Athena a security
interest in all of his assets [Id.].
the entry of judgment in Stooksbury I, this Court
appointed Sterling Owen, IV, to serve as the Receiver over
the Ross assets [Id.]. Upon being appointed, the
Receiver identified as Receivership Assets a number of
properties in which Doukas entities, but not Doukas himself,
claimed an interest [Id. at 5-6]. As such, Athena,
Likos, and American Harper (another Doukas entity) all
asserted claims against Receivership Assets [Id. at
the Receivership was in progress, Stooksbury filed a second
lawsuit, Stooksbury v. Ross et al., No. 3:12-cv-548
(“Stooksbury II”) [Id.]. In
addition to naming Ross and a number of his entities as
defendants, Stooksbury also named Doukas, American Harper,
Athena, and Likos as defendants [Id.].
November 23-24, 2014, Doukas participated in a Judicially
Hosted Settlement Conference, as a result of which Doukas and
his entities agreed to settle their claims against
Receivership Assets [Id. at 6-7]. In exchange,
plaintiffs submit that the parties agreed that one or more of
the Doukas entities, would be given free and clear ownership
of two real properties, specifically a 24-unit and 48-unit
apartment complex [Id.]. The terms of the settlement
agreement, which were incorporated into a Report and
Recommendation, indicated that Ted Doukas was to receive a
100% interest in the properties [Stooksbury I, Doc.
1423]. No party filed an objection to the terms of the
settlement agreement as described in the Report and
Recommendation, and the Court accepted the terms in full
[Stooksbury I, Doc. 1437].
on August 17, 2015, the Receiver transferred the 24-unit and
48-unit apartment complexes via a quitclaim deed [Doc. 1 p.
7]. The Receiver executed the deeds to grantees: “Ted
Doukas and/or Assigns” [Id.]. Shortly
thereafter, on August 21, 2015, Doukas executed a document
entitled “Assignment of Receiver's Quitclaim Deeds,
” in which he assigned the deeds to Likos [Id.
2016, Likos sought a loan from Pinnacle Bank of Nashville for
$1, 400, 000 [Id. at 8]. As part of the closing of
the loan, the Bank and/or the Title Company responsible for
closing the loan requested that Doukas execute quitclaim
deeds to Likos for the 24-unit and 48-unit apartment
complexes [Id.]. On April 20, 2016, Doukas did as
requested and executed and filed two quitclaim deeds to Likos
[Id.]. On May 5, 2016, Likos closed on the loan with
Pinnacle Bank, granting Pinnacle Bank a security interest in
the two apartment complexes [Id.].
Ohio Bankruptcy Litigation
currently has a Chapter 11 bankruptcy case pending in the
United States Bankruptcy Court for the Southern District of
Ohio [Id. at 9]. As part of that case, defendant has
an adversary proceeding pending against Doukas
[Id.]. Plaintiffs submit that that the case has been
pending since October 2010, and has not resulted in any
monetary judgment against Doukas or any of his business
entities to date [Id.].
16, 2016, defendant filed a complaint in Knox County Chancery
Court, Bavelis v. Doukas and Likos of Tennessee
Corp., Case No. 191625-2, asserting that the April 20,
2016, execution of the quitclaim deeds from Doukas to Likos
was a fraudulent conveyance, and requesting that the Chancery
Court set aside the transfer [Id. at 2, 9]. In this
Chancery Court proceeding, defendant also sought a temporary
restraining order and preliminary injunction by the Chancery
Court, which the Chancery Court granted [Id. at 9].
Defendant contended that he was entitled to this relief due
to his pending claim in the Ohio bankruptcy proceeding
subsequently filed the present lawsuit, asking the Court to
issue a writ to the Chancery Court of Knox County, enjoining
the litigation between the parties in that court, and
instructing the Chancery Court to dismiss that case [Doc. 1].
Alternately, plaintiffs ask that the Court reform the
Receiver's deed, making the ...