Gigliotti v. Gigliotti , 619 F. App'x 200 ( 2015 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 14-4031
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IN RE: RONALD D. GIGLIOTTI and CAROL A. GIGLIOTTI,
Debtors
DANIEL R. BLACK; CARYN BLACK,
Appellants
v.
RONALD D. GIGLIOTTI; JOHN C. GIGLIOTTI;
CHRISTOPHER J. GIGLIOTTI; GIGLIOTTI AVIGNON, INC.;
THE GIGLIOTTI GROUP INC.; JANE OR JOHN DOE,
personal representatives Christopher J. Gigliotti, Sr. dec'd
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On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(District Court Civil Nos. 2-14-cv-02733, 2-14-cv-02734)
District Judge: Honorable Michael M. Baylson
Submitted Under Third Circuit LAR 34.1(a)
July 10, 2015
BEFORE: FUENTES, NYGAARD, and ROTH, Circuit Judges
(Filed: October 16, 2015)
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OPINION*
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NYGAARD, Circuit Judge.
Daniel and Caryn Black appeal the order of the District Court that affirmed the
Bankruptcy Court’s dismissal of their suit against Ronald and John Gigliotti. The Blacks
contend the District Court erred by failing to reverse the Bankruptcy Court’s ruling that
the Blacks failed to meet their burden of proof to pierce the corporate veil of Gigliotti
Avignon Associates, LLC. They also say the District Court improperly affirmed the
Bankruptcy Court’s denial of a motion to compel, impacting the Bankruptcy Court’s
deliberation of the motions for summary judgment. We will affirm the District Court’s
order.
This opinion does not have any precedential value. Therefore, our discussion of
the case is limited to covering only what is necessary to explain our decision to the
parties. We reach the same initial conclusion as the Bankruptcy Court and District Court:
the case that is before us turns on whether the corporate veil of Gigliotti Avignon can be
pierced to enable the Blacks to recover from Ronald and John Gigliotti on a state court
judgment against the company.
The Blacks contend that there is no dispute that, on a number of occasions, large
deposits were made into a Gigliotti Avignon escrow account, and that a short time later a
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
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withdrawal would be made in a similar amount. However, the Blacks—who hold the
evidentiary burden here—wished the District Court to infer solely from this account
activity that Gigliotti Avignon masked, essentially, a criminal operation.
The District Court correctly reasoned that the Bankruptcy Court did not err by its
conclusion that averring account activity, alone, falls far short of their burden. The
District Court properly determined that the Bankruptcy Court referenced the correct legal
standard to evaluate the significance of the record presented by the Blacks, and it
correctly decided that they did not provide any evidence of, for instance:
[G]ross undercapitalization, failure to observe corporate
formalities, nonpayment of dividends, insolvency of debtor
corporation, siphoning of funds from the debtor corporation
by the dominant stockholder, nonfunctioning officers and
directors, absence of corporate records, and whether the
corporation is merely a façade for the operations of the
dominant stockholder.
Pearson v. Component Tech Corp., 247 F.3d 471, 484-85 (3d Cir. 2001); see also Trs of
the Nat’l Elevator Ind. Pension, Health Benefit and Educ. Funds v. Lutyk, 332 F.3d 188,
194 (3d Cir. 2003).
As a result, the District Court correctly affirmed the Bankruptcy Court ruling that
the Blacks failed to meet their evidentiary burden to pierce the corporate veil.1 This
made it impossible to impose any obligation arising from the state court judgment on
Ronald and John Gigliotti personally. Without such claims, there is no question that the
Blacks’ causes of action for nondischargeability are moot because they do not have any
1
We do not reach the participation doctrine argument advanced by the Blacks to hold
Ronald and John Gigliotti personally liable for malfeasance and tortious conduct because
they never pleaded the participation doctrine.
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enforceable obligations against Ronald and John Gigliotti that could be non-
dischargeable. (11 U.S.C. §§ 523(a)(2), (a)(4)).
Finally, the Blacks attempt to use Fed. R. Civ. P. 37 to link their late-filed and
unsupported motion to compel (denied by the Bankruptcy Court) to a proposition that
alleged “withheld materials” should have been removed from the record, gutting support
for the Gigliottis’ motion for summary judgment. We see no error by the District Court
in its conclusion that the Blacks’ own motion for summary judgment signaled their
understanding that discovery was closed. The District Court correctly ruled that the
Bankruptcy Court’s disposition of the late-filed motion to compel was well within its
discretion. Moreover, the record amply supported summary judgment in favor of John
and Ronald Gigliotti.
For all of these reasons, we will affirm the order of the District Court.
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