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Xtra Lease, LLC v. United Transport

May 5, 2011

XTRA LEASE, LLC, PLAINTIFF,
v.
UNITED TRANSPORT, INC., AN INDIANA CORPORATION,
AS SUCCESSOR TO ID UNITED TRANSPORT CORP., AN ILLINOIS CORPORATION;
UNIVET LLC, AN INDIANA LIMITED LIABILITY COMPANY;
IRMANTAS ZILYS, AN INDIVIDUAL; AND DIANA ZILYS, AN INDIVIDUAL, DEFENDANTS.



The opinion of the court was delivered by: Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

Plaintiff XTRA Lease, LLC ("Plaintiff" or "XTRA Lease") seeks recovery of a default judgment it won in Missouri state court against a now-dissolved corporation, ID United Transport, Inc. XTRA Lease has moved for summary judgment against Defendants Univet LLC ("Univet") and United Transport, Inc. ("United") on a theory of successor liability. They also seek summary judgment against the individual defendants on a corporate veil-piercing theory. For the following reasons, Plaintiff's motion is granted for successor liability against Univet and denied as to all other claims and parties.

I. FACTS

The Parties

Plaintiff XTRA Lease is a Delaware limited liability company with its principal place of business in Saint Louis, Missouri.

Defendant United Transport ("United") is an Indiana corporation with its principal place of business in Indiana. It was formed on April 16, 2008. United Transport's President and sole shareholder is Irmantas Zilys. United Transport is an over-the-road trucking corporation that operates within a 300-mile radius of northwest Indiana. It works directly with customers in need of shipping and caters to those customers by offering enclosed "dry van" trucks, refrigerated trucks, and flat-beds. Approximately eighty percent of United Transport's revenues come from a company for which United Transport hauls paper products. That company is new to United Transport and was not a customer of any of the other entities relevant to this lawsuit.

Defendant Univet is an Indiana limited liability company founded on June 16, 2008. Univet's sole shareholder is Diana Zilys.

Irmantas and Diana Zilys, husband and wife, reside together in Naperville, Illinois.*fn1

Their respective companies occupy neighboring suites, units D1-A and D1-B, at 8300 Broadway in Merrillville, Indiana.

ID United Transport ("ID United"), an Illinois corporation, was operational from 2003 to 2008. It was administratively dissolved on September 11, 2009. Plaintiff states - and Defendants do not contest - that Mr. and Mrs. Zilys were the only shareholders of ID United and that they "served as President and Vice-President, respectively." This is slightly confusing, because corporate records attached as exhibits indicate that while Irmantas Zilys was indeed President of ID United, one Diana Popovaite served as Secretary (not Vice President) of the now-defunct corporation. Zilys and Popovaite were also ID United's directors. Given that the Zilyses do not contest that they were the sole owners and officers of ID United, I presume that Diana Popovaite is also (or now) known as Diana Zilys and that she was technically a Secretary, not a Vice President.

ID United's business was over-the-road trucking. Its specific business model was to work through transportation brokers to provide trucking services in the lower forty-eight states. They exclusively used non-refrigerated, enclosed "dry vans" as their haulers.

The Lease

There is no dispute that, beginning in 2005, Plaintiff and ID United entered into an Equipment Lease Agreement (the "Lease"), under which ID United leased trailers from Plaintiff in exchange for payment. The arrangement evidently worked for both parties for some time, but in 2007 ID United's business began to flag. By March of 2008, the Zilyses, as officers and directors of ID United, decided that the corporation could not survive in its present form. They therefore decided to start off on a "different venture" and ultimately opted to locate that venture in Indiana to take advantage of what they determined to be a more favorable tax and business climate.

With respect to the Lease, Irmantas Zilys swears via affidavit that he spoke with Alex Koch, an operations manager of Plaintiff, in May of 2008. Mr. Koch is claimed to have assured Mr. Zilys that if ID United simply returned the leased trailers in short order, they would be relieved of further payments.

The Missouri Judgment

Citing "obligations due and owing" under the Lease in the amount of $155,066.21 stemming from the period of June and July 2008, Plaintiff sued ID United in the Circuit Court of St. Louis County, Missouri. The complaint in that suit was filed on December 16, 2008. It is uncontested that Irmantas Zilys, as registered agent, accepted service of that complaint on behalf of ID United on August 14, 2009. Recognizing service of process and seeing no answer or other plea, the Circuit Court entered a default judgment against ID United on October 16, ...


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