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Sompo Japan Insurance Company of America, Inc. v. Alliance Transportation Group

June 8, 2009

SOMPO JAPAN INSURANCE COMPANY OF AMERICA, INC., A NEW YORK CORPORATION, AND SOMPO JAPAN CLAIM SERVICES (AMERICA), INC., A NEW YORK CORPORATION, PLAINTIFFS,
v.
ALLIANCE TRANSPORTATION GROUP, LLC, AN ILLINOIS LIMITED LIABILITY CORPORATION, AND PETKO TCHALAKOV, INDIVIDUALLY AND DOING BUSINESS AS ALLIANCE TRANSPORTATION, DEFENDANTS.



The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

I. Background

On February 5, 2007, Plaintiffs Sompo Japan Insurance Company of America, Inc. and Sompo Japan Claim Services (America), Inc. (collectively "Sompo") filed a complaint alleging fraud, forgery, and breach of contract by Alliance Transportation Group, LLC ("Alliance"). Alliance made an offer of judgment under Federal Rule of Civil Procedure 68, which Sompo accepted. Therefore, on January 22, 2008, this Court entered judgment [30] in favor of Sompo and against Defendant Alliance in the amount of $100,000. At that time, the Court granted Sompo leave to file an amended complaint [29] adding a defendant.

On February 11, 2008, Sompo filed an amended complaint [31] naming Petko Tchalakov ("Tchalakov"), a former Alliance manager, as a defendant. The amended complaint alleges fraud and forgery by Tchalakov. The case against Tchalakov proceeded to a bench trial [60] on May 13, 2009. At trial, the Court heard Tchalakov's testimony. The parties subsequently submitted proposed findings of fact and conclusions of law [61, 62].

In this memorandum opinion and order, the Court sets forth (i) its findings of fact concerning the matters before the Court for decision and (ii) its conclusions of law. The Court notes that its factual findings are based on the parties'proposed findings of fact and the documentary evidence and testimony presented at trial, at which time the Court had the opportunity to observe and evaluate the credibility of the sole witness, Mr. Tchalakov. On the basis of the findings of fact and conclusions of law stated below, the Court enters judgment for Defendant on the two counts of Plaintiffs' amended complaint directed against him.

II. Findings of Fact

A. Alliance

Until approximately the middle of 2007, Alliance was an Illinois Limited Liability Company engaged in the trucking business. Tr. at 9-11. The original owners of Alliance were Bogi Enterprises and Pidi Enterprises, each of which initially owned 50% of Alliance. Tr. at 57. Tchalakov's wife, Diane, was the sole owner of Pidi Enterprises. Tr. at 58. At no time did Petko Tchalakov have an ownership interest in Alliance. Tr. at 60.

When Alliance was first founded, Tchalakov and Radoslav Bogdanov, one of the owners of Bogi Enterprises, were its managers. Tr. at 10. As managers, Tchalakov and Bogdanov had check endorsement and check writing authority for Alliance. Tr. at 10, 62.

In January 2006, Bojidar Gogov ("Gogov") purchased a 48% interest in Alliance; Bogi Enterprises and Pidi Enterprises each retained a 26% ownership interest. Tr. at 58. At that time, Tchalakov was in charge of Alliance' s safety department. In that position, Tchalakov' s duties included managing and hiring drivers, monitoring the company's safety compliance, and handling claims. Tr. at 58. Beginning in January 2006, Gogov was responsible for the accounting department. Tr. at 59. As the head of the accounting department and Alliance's majority shareholder, Gogov' s approval was required for the issuance of all checks after January 2006. Tr. at 60-62. However, Gogov did not have check endorsement and check writing authority until approximately August 2006. Tr. at 59-60.

B. Events Giving Rise to Sompo's Claims

In 2006, DOV, a transportation brokerage company, hired Alliance to transport several truckloads of plasma monitors for Fujitsu. Tr. at 11-12, 34. One of the truckloads was stolen while in Alliance's possession and the monitors were never recovered. Tr. at 12. As a result of the theft, Sompo Japan Insurance Company, Fujitsu' s insurer, made a claim upon Alliance. Tr. at 13. Alliance submitted that claim to its liability insurer, Lloyds of London. Tr. at 13. In May 2006, Lloyds of London agreed to settle the claim with Sompo Japan. Tr. at 13. Pursuant to that agreement, Lloyds of London agreed to pay Sompo $99,000 and Alliance agreed to cover its $1,000 deductible, for a total settlement to Sompo of $100,000. Tr. at 13-14. Tchalakov approved the settlement, including Alliance's agreement to pay its $1,000 deductible to Sompo. Tr. at 13. At that time, Alliance had the funds to pay its $1,000 deductible. Tr. at 14.

Lloyds of London' s $99,000 settlement check mistakenly was sent to Global Systems Inc., which cashed the check. Tr. at 18. On June 21, 2006, Global Systems issued a replacement check in the amount of $99,000 made payable to both Alliance and Sompo. Tr. at 17-18. Global Systems send the replacement ...


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