Tana S. Cutcliff; James A. Fields; Joshua P. Haeflinger; LaDonna S. Henderson, (as Trustee for LaDonna S. Henderson Living Trust); Patricia A. Reitz, (as Trustee for Frances L. Reitz Trust); Terry J. Schippers; James D. Teegarden, II; Michael S. Trom; James D. Fields Plaintiffs - Appellants
Nathan Paul Reuter; Kathleen Reuter Defendants - Appellees Vertical Group, LLC Defendant
Submitted: November 14, 2017
from United States District Court for the Western District of
Missouri - Jefferson City
COLLOTON and GRUENDER, Circuit Judges, and HOLMES,  District
GRUENDER, Circuit Judge.
(the "Creditors") are attempting to collect on
judgments against Vertical Group, LLC ("Vertical")
and Nathan Reuter by levying assets now belonging to
Nathan's wife, Kathleen. For the reasons that follow, we
affirm the district court'sorders granting summary judgment
to Kathleen and to Nathan and denying partial summary
judgment to the Creditors.
have previously explained, the Creditors are a group of
victims defrauded by a Ponzi scheme run by Nathan and several
associates under the aegis of Vertical. See Cutcliff v.
Reuter, 791 F.3d 875, 878-80 (8th Cir. 2015).
2006, the Creditors brought suit against Nathan and Vertical
to recover their lost investments. Vertical failed to defend
that action, and the district court entered an order of
default without awarding damages. For his part, Nathan filed
for bankruptcy protection, and the district court closed the
original matter pending the outcome of the bankruptcy
proceedings. The bankruptcy court awarded the Creditors
actual and punitive damages. Cutcliff v. Reuter (In re
Reuter), 427 B.R. 727, 766-68, 779 (Bankr. W.D. Mo.
2010), aff'd, 443 B.R. 427 (B.A.P. 8th Cir.
2011), aff'd, 686 F.3d 511 (8th Cir. 2012). The
district court then reopened the Creditors' original case
and entered a final judgment against Vertical with damages.
Cutcliff v. Reuter, No. 2:06-cv-04123-NKL, 2014 WL
229179, at *3 (W.D. Mo. Jan. 21, 2014).
present appeal arises from a creditors' bill that the
Creditors filed to execute these judgments. Because Nathan
and Vertical are unable to satisfy these judgments
themselves, the Creditors are targeting assets that formerly
belonged to Nathan and Kathleen as tenants by the entirety.
The Reuters transferred these assets to a revocable trust in
2005 (the "Trust"). However, Kathleen revoked the
Trust and transferred the assets to her exclusive possession.
Thus, the Creditors seek to levy assets now held exclusively
so, the Creditors allege that Vertical was a "sham
company" that masked an underlying partnership (the
"Tortfeasor Partnership") consisting of the
Reuters, as tenants by the entirety, and the other
individuals who perpetrated the fraud. They seek to pierce
Vertical's corporate veil; reach the Tortfeasor
Partnership, including the Reuters' tenancy by the
entirety; and levy the Reuters' assets, which are now
owned individually by Kathleen. In the alternative, the
Creditors allege that Nathan fraudulently transferred his
portion of the Trust to Kathleen.
Kathleen, and the Creditors each sought some form of summary
judgment. The district court denied the Creditors' motion
for partial summary judgment, granted Kathleen summary
judgment on all claims pertaining to her, and granted Nathan
summary judgment on all counts related to the Trust. Pursuant
to the parties' stipulation, the district court dismissed
the remaining claims. The Creditors timely appealed.
review de novo the district court's grant of
summary judgment. Tension Envelope Corp. v. JBM Envelope
Co., 876 F.3d 1112, 1116 (8th Cir. 2017). A motion for
summary judgment should be granted only if there is no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
mentioned, the Creditors first seek to pierce Vertical's
corporate veil to reach the Tortfeasor Partnership. See
Saxton v. St. Louis Stair Co., 410 S.W.2d 369, 376
(Mo.Ct.App. 1966). Assuming they are able to pierce the veil,
the Creditors further argue that Nathan's interest in
Vertical was created, funded, and held by the Reuters as
tenants by the entirety. Because all partners are jointly and
severally liable for the partnership's debts and
obligations, see Mo. Rev. Stat. § 358.150.1,
the Creditors maintain that the Reuter entirety is liable for
the Tortfeasor Partnership's obligations, see Dwyer
v. ING Inv. Co., 889 S.W.2d 902, 906 (Mo.Ct.App. 1994).