Coan v. Dunne

          ORDER DENYING MOTION OF SEAN DUNNE TO BE DROPPED AS A PARTY DEFENDANT

          Jeffrey Alker Meyer United States District Judge

         Defendant Sean Dunne moves to be dropped as a party defendant from this action. Because I conclude that Dunne has been properly joined as a defendant and that the interests of justice warrant a joint trial with him and his co-defendants, I will deny the motion.

         Background

          This case is a consolidated action involving claims by a bankruptcy trustee seeking to recover assets relating to the bankruptcy of Sean Dunne. See In re Dunne, No. 13-50484 (Bankr. D. Conn.). Dunne was a prominent real estate developer in Ireland with a reported net worth of more than $900 million in 2007. Doc. #50 at 2. But Dunne soon suffered devastating financial reversals after the global financial crisis struck in 2008, and this has set in motion years of efforts by creditors and bankruptcy trustees in the United States and Ireland to recover from him.

         In 2010 the government of Ireland created the National Asset Management Agency (“NAMA”) to acquire troubled bank assets and other obligations. Ibid. In the meantime, Dunne and his spouse-defendant Gayle Killilea-moved to Greenwich, Connecticut in 2010. Ibid.; Doc. #1-1 at 15. In 2012 Dunne consented to a stipulated judgment against him and in favor of a NAMA-related entity known as National Asset Loan Management, Ltd. (“NALM”) for about $235 million stemming from personal guarantees that Dunne had given to secure debt for his companies. Ibid.

         NALM soon suspected that Dunne was concealing assets, and so NALM filed an action in 2012 in the Connecticut Superior Court claiming that Dunne had fraudulently transferred various assets to others including his spouse Gayle Killilea Dunne. Id. at 3. This state court lawsuit named the following defendants: Gayle Killilea, Mountbrook USA LLC, Molly Blossom LLC, Barclay Beattie & Brown, LLC, Wahl, LLC, Thomas Heagney, Esq., John Slane, Esq., and the law firm Heagney Lennon & Slane. The lawsuit alleged fraudulent transfer of Dunne's interest in a Geneva apartment to Killilea (Count I), fraudulent transfer of his interest in two companies-Mountbrook USA and Molly Blossom LLC-to Killilea (Count II), fraudulent transfer of monies and assets to Killilea (Count III), violations of the Uniform Fraudulent Transfer Act, Conn. Gen. Stat. § 52-552A et seq. (Count IV), unjust enrichment (Count V), and a claim for an accounting (Count VI).

         While this state court action was pending, Dunne filed for bankruptcy in March 2013 in the U.S. Bankruptcy Court in the District of Connecticut, and his creditors soon commenced a bankruptcy action against him as well in Ireland. Doc. #50 at 3-4. In January 2015, Dunne waived his discharge in the U.S. bankruptcy action, and the bankruptcy trustee-plaintiff Richard Coan-moved to intervene in the state court action and to remove it to this Court. Id. at 4; Doc. #1. The Court granted the Trustee's motion to intervene and denied defendants' motion to remand. Doc. #38.

         In March 2015, the Trustee commenced a separate and somewhat duplicative adversary proceeding in the Bankruptcy Court against Killilea and other defendants but not Dunne. See Coan v. Killilea, Adv. Proc. No. 15-05019 (D. Conn.). The Trustee alleged 35 causes of action based on alleged fraudulent transfer of assets or money to Killilea from 2005 to 2008, including claims that Dunne had fraudulently transferred certain interests to Killilea. Doc. #50 at 4-5.

         A few years passed before the case became active again on my docket. On July 27, 2018, I entered an order for trial to commence in May 2019. Doc. #46. I also granted the Trustee's unopposed motion to consolidate the removed state court action and the adversary proceeding that had been proceeding on a separate track in the Bankruptcy Court. Doc. #52.

         In October 2018, three of the defendants-Killilea, Mountbrook USA, LLC and Wahl, LLC-moved to dismiss the accounting claim. Doc. #55. Dunne did not join in this motion.^[1]After considering the parties' briefing and hearing oral argument, I denied this motion without prejudice to renewal at trial. Doc. #82; Doc. #99 at 13.

         Discussion

          Dunne argues that the Court should exercise its authority under Rule 21 of the Federal Rules of Civil Procedure to dismiss him from this action. Rule 21 provides in full:

Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may ...