MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Pending before the court is an appeal filed by Chapter 7 Trustee Gary A. Rosen and Southern Management Corporation Retirement Trust ("SMCRT") from a March 12, 2010, order of the United States Bankruptcy Court for the District of Maryland granting summary judgment in favor of Robert F. Rood, III, and Grace Ann Rood and denying their cross-motion for summary judgment. Because the facts and legal arguments are adequately presented in the briefs and record, oral argument is deemed unnecessary. See Fed. R.Bankr.P. 8012; Local Rule 105.6. For the reasons that follow, the order of the bankruptcy court granting summary judgment will be affirmed in part and reversed in part, the appeal from the denial of summary judgment will be dismissed, and the case will be remanded for further proceedings.

I. Background

On May 29, 2008, Robert F. Rood, IV ("Debtor"), filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code. At that time, Debtor owned and held one hundred percent interests in a number of business entities (collectively, "the Debtor Entities"), including Blue Horseshoe Portfolio Services, LLC ("Blue Horseshoe"), Level One Capital Partners, LLC ("Level One"), and The Source, LLC ("The Source"). On December 29, 2008, the bankruptcy court administratively consolidated the Debtor Entities' cases with Debtor's bankruptcy case.

On April 1, 2009, Mr. Rosen and SMCRT (together, "Appellants") commenced an adversary proceeding within the bankruptcy case by filing a complaint for injunctive relief, declaratory relief, and damages against fifteen defendants: Debtor, Kore Holdings, Inc. ("Kore"), seven wholly-owned Kore subsidiaries — i.e., Arcadian, Inc., First Washington Financial Corporation, Level One Mortgage Capital, Mortgage American Bankers, Source Bio-Plastics, Inc., Sunvolt, and Whiplash Motor Sports, LLC — Charles Timothy Jewell, Nik Hepler, Warren A. Hughes, Jr., First Washington Equities, LLC, and Debtor's parents, Grace Ann Rood and Robert F. Rood, III (together, "Appellees" or "Mr. and Mrs. Rood").1 (ECF No. 1, Attach. 4). The complaint alleged a Ponzi scheme orchestrated by Debtor, who, with the assistance of the individual defendants, misappropriated millions of dollars entrusted to him by SMCRT as loan investments by diverting the money through an elaborate network of business entities under his control. As to Appellees, the complaint set forth causes of action for fraud, conversion, civil conspiracy, unauthorized post-petition transfer of assets, and fraudulent conveyance. As relief, Appellants sought an accounting and turnover of estate property, injunctive relief, and a declaration that the corporate defendants were the alter egos of Debtor and the individual defendants.

On the same date they filed their complaint, Appellants also filed an emergency motion for temporary restraining order, preliminary injunction, and request for emergency hearing. On April 2, 2009, the bankruptcy court held a hearing on the emergency motion for temporary restraining order. At the outset of that hearing, counsel for Mr. Rosen advised the court that an agreement had been reached with respect to Appellees:

In re Rood, 426 B.R. 538, 544 (D.Md.2010). At the conclusion of the hearing, the bankruptcy court issued an order temporarily restraining the remaining defendants, with the exception of Mr. Jewell, from "[t]ransferring, encumbering, or impairing any property (real or personal) in their possession, custody or control," and from "engaging in any business operations, directly or indirectly, that in any way involves the sale, transfer, impairment or encumbering of any asset of their businesses." Id. at 544-45. The order set a date of April 13, 2009, for a hearing on the motion for preliminary injunction.

Shortly thereafter, Appellees filed a motion to dismiss. (ECF No. 1, Attach. 5). At the conclusion of a May 28, 2009, hearing, the bankruptcy court orally granted in part and denied in part Appellees' motion. Specifically, the court dismissed five counts as to both Mr. and Mrs. Rood — i.e., those alleging fraud, civil conspiracy, post-petition transfer of assets, accounting, and declaratory judgment/alter ego — and the count alleging conversion as to Mrs. Rood alone. The bankruptcy court's oral ruling was followed by a written order dated June 5, 2009. Mr. Rosen and SMCRT noted an appeal from that decision, and this court subsequently affirmed. See In re Rood, 426 B.R. 538 (D.Md.2010).2

The preliminary injunction motion was considered, along with a number of other motions, at court proceedings held on a series of dates in or around April 2009. On one of those dates, April 29, 2009, Appellants withdrew their request for a preliminary injunction as to Appellees after Mr. and Mrs. Rood agreed, on the record, not to make any further transfers to Debtor or any business entity affiliated with him. On August 19, 2009, the bankruptcy court issued a memorandum of decision granting Appellants' motion for preliminary injunction as to the remaining defendants. The court found, in relevant part:

In re Rood, Adv. No. 09-0188PM, 2009 WL 2923429, at *2 (Bankr.D.Md. Aug.19, 2009) (footnote omitted).

On February 5, 2010, Appellees moved for summary judgment as to the six remaining counts against them. (ECF No. 1, Attach. 11). Appellees primarily challenged the opinion of Appellants' expert that a series of purchases, payments, and wire transfers made by Blue Horseshoe, Level One, The Source, and Kore were fraudulent conveyances to Appellees that were recoverable by the bankruptcy estate. Appellees argued that the evidence in the case conclusively showed that the purchases (e.g., of vehicles and furniture) and some of the payments (e.g., of rent and legal fees) were improperly attributed to them. While they conceded that they received a number of checks and/or wire transfers from the Debtor Entities, they argued that these payments were "fair consideration" for an antecedent debt 6 owed to them by Debtor. (ECF No. 1, Attach. 13, at 28, 32-33). Specifically, they asserted that Debtor incurred a $250,000 debt to them by virtue of payments they made on his behalf in or around 2004 to cover a bounced check and to satisfy a defaulted (and fraudulently obtained) loan obligation. According to Appellees, even assuming they received all the property and money attributed to them by Appellants' expert:

(ECF No. 1, Attach. 13, at 29).

Appellees anticipated that Appellants would respond by arguing that "the debts were owed by the Debtor, but that the payments came from the Debtor's entities and, therefore, fair consideration was not provided by the entities that made the payments." (Id.). They addressed that hypothetical argument as follows:

(Id.).

On or about February 25, 2010, Appellants filed an opposition to Appellees' motion and a cross-motion for summary judgment. (ECF No. 1, Attach. 32). Appellants argued that Appellees' concession that they received certain transfers from the Debtor Entities was "not only fatal to [their] motion for summary judgment, but warrant[ed] the entry of summary judgment in favor of [Appellants]." (ECF No. 1, Attach. 31, at 13). Appellants attached to their memorandum the declaration of their expert, Suzanne Hillman, who opined that "[t]here was no consideration discovered for these transfers." (ECF No. 1, Attach. 34, at ¶ 23). According to Appellants, this assertion, and the expert report upon which it relied, was "in direct dispute with the Parents' novel attempt at establishing fair consideration" and this "dispute of fact [was] fatal to [Appellees'] request for summary judgment." (ECF No. 1, Attach. 31, at 14).3 Appellants argued that Appellees' alter ego theory was flawed because "piercing the corporate veil does not effect a change in the ownership of assets or the title to assets"; rather, "[i]t merely provides additional parties against whom liability may be established based upon their conduct." (Id. at 22). Because "[t]here [was] no dispute that the funds [transferred to Appellees] were originally the property of the Debtor Entities" and Appellees "do not claim that the Debtor Entities owed them anything," Appellants asserted, "there was a total and undisputed failure of consideration for [the] transfers." (Id.). Thus, they argued, "[t]urnover of those funds by the Parents and an entry of summary judgment against the Parents should be ordered." (Id.).

On March 11, 2010, the parties presented oral argument on their cross-motions for summary judgment. Appellees' counsel initially observed that the transfers identified by Ms. Hillman consisted of "checks made payable to Grace Rood or wires to Grace Rood," on the one hand, and "monies that were payable to third parties that are being attributed to my client[s]," on the other. (ECF No. 5, Attach. 1, at 7). Citing Appellees' "unrebutted" declarations, counsel challenged that roughly $10,000 in payments for furniture delivered to a home leased by Debtor, but co-signed by Mrs. Rood, was improperly attributed to Appellees, as were payments of rent at that home. (Id. at 7-8). With respect to a "Cadillac XLR" that was "titled in the name of Kore," Appellees contended, "[i]t is undisputed that the vehicle was turned over to [Mr.] Rood voluntarily," that Mr. Rood surrendered it upon demand of the FBI in December 2008, and that there had been no previous demand for Mr. Rood to return the vehicle. (Id. at 9). Appellees further asserted that a $5,000 payment from one of the Debtor Entities to satisfy a legal debt of a business owned by Appellees was improperly attributed to them.

After separately addressing the conversion count of the complaint, counsel turned his attention to the counts alleging fraudulent conveyance:

(ECF No. 5, Attach. 1, at 15-16).

While the wire transfer and checks at issue were paid by three of the Debtor Entities — namely, The Source, Level One, and Blue Horseshoe — Appellees observed that Appellants had argued throughout the proceedings that "those entities are the alter egos ... of the debtor" and that they "did not exist as businesses that were authorized to conduct business in the state of Maryland at the time these transfers were made." (Id. at 17). Accordingly, they argued, "any transfers that were made by those alter egos must be viewed as transfers that were made by the debtor himself and this is where judicial estoppel comes into play." (Id.). Upon further observing that the bankruptcy court had already "granted relief based upon [Appellants'] assertion of alter ego," i.e., the grant of a preliminary injunction against Kore and the Kore subsidiaries, Appellees argued that Appellants "cannot turn around now and say well, we don't really mean that." (Id. at 18). In fact, counsel conceded,

(Id. at 18-19).

In response, counsel for Appellants argued that Appellees' "analysis fails as a matter of law":

(Id. at 22-24).

At the conclusion of the hearing, the bankruptcy court orally granted Appellees' motion:

(Id. at 33).

The following day, the court issued a written order granting Appellees' motion for summary judgment, finding "no genuine issues of material fact as they relate to Grace Ann Rood and Robert F. Rood, III, and that [they] are entitled to judgment... as a matter of law," and denying Appellants' cross-motion. (ECF No. 1, Attach. 1, at 2).4 After timely noting an appeal, Appellants filed an appellate brief raising the following issues:

(ECF No. 7, at 7).

II. Standard of Review

The district court reviews a bankruptcy court's findings of fact for clear error and conclusions of law de novo. In re Official Comm. of Unsecured for Dornier Aviation (N. Am.), Inc., 453 F.3d 225, 231 (4th Cir.2006). Because the grant of summary judgment is a legal question, it is reviewed de novo under Fed.R.Civ.P. 56. See Tidewater Fin. Co. v. Williams, 341 B.R. 530, 533 (D.Md.2006) (citing Century Indemnity Co. v. Nat'l Gypsum Co. Settlement Trust (In re Nat'l Gypsum Co.), 208 F.3d 498, 504 (5th Cir.2000)).

Federal Rule of Civil Procedure 56 applies to adversary proceedings in bankruptcy cases pursuant to Fed.R.Bankr.P. 7056. It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir.2008). In other words, if there clearly exist factual issues "that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," summary judgment is inappropriate. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also JKC Holding Co. LLC v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir.2001).

When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. See Scott v. Harris, 550 U.S. 372, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007); Emmett, 532 F.3d at 297. A party who bears the burden of proof on a particular claim must factually support each element of his or her claim. Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. "[A] complete failure of proof concerning an essential element ... necessarily renders all other facts immaterial." Id. Thus, on those issues on which the nonmoving party will have the burden of proof, it is his or her responsibility to confront the motion for summary judgment with an affidavit or other similar evidence in order to show the existence of a genuine issue for trial. See Anderson, 477 U.S. at 254, 106 S.Ct. 2505; Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. "A mere scintilla of proof, however, will not suffice to prevent summary judgment." Peters v. Jenney, 327 F.3d 307, 314 (4th Cir.2003). There must be "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249, 106 S.Ct. 2505. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50, 106 S.Ct. 2505 (citations omitted).

When faced with cross-motions for summary judgment, as in this case, the court must consider "each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.), cert. denied, 540 U.S. 822, 124 S.Ct. 135, 157 L.Ed.2d 41 (2003) (internal quotation marks omitted); see also havePower, LLC v. Gen. Elec. Co., 256 F.Supp.2d 402, 406 (D.Md.2003) (citing 10A Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2720 (3rd ed.1983)). The court reviews each motion under the familiar standard for summary judgment. The court must deny both motions if it finds there is a genuine issue of material fact, "[b]ut if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment." 10A Federal Practice & Procedure § 2720.

III. Appellees' Motion for Summary Judgment

Although the bankruptcy court has provided no explanation as to the findings of fact and conclusions of law underlying its decision, it clearly adopted Appellees' alter ego argument. In the motion papers filed in the court below and in their appellate briefs before this court, the parties have assumed that the Debtor Entities at issue are the alter egos of Debtor. There has been no explicit judicial determination, however, as to whether any of the various entities involved in this case is an alter ego of Debtor or that circumstances warrant piercing the corporate veil, and the appellate record is insufficient for this court to conclude that the apparent implicit finding of the bankruptcy court to that effect was proper.

In Maryland, corporate shareholders "generally are not held individually liable for debts or obligations of a corporation except where it is necessary to prevent fraud or enforce a paramount equity." Bart Arconti & Sons v. Ames-Ennis, 275 Md. 295, 310, 340 A.2d 225 (1975). The Court of Appeals of Maryland has identified three discrete circumstances in which a corporate entity may be disregarded:

Hildreth v. Tidewater Equipment Co., Inc. 378 Md. 724, 734, 838 A.2d 1204 (2003) (quoting Herbert M. Brune, Jr., MARYLAND CORPORATION LAW AND PRACTICE, § 371 at 384 (revised ed. 1953)) (internal quotation marks omitted; emphasis in original).

The third of these circumstances "embodies what is sometimes called the `alter ego' doctrine." Hildreth, 378 Md. at 735, 838 A.2d 1204. Courts apply this doctrine "`with great caution and reluctance' and only in `exceptional circumstances.'" Id. (quoting William Meade Fletcher, FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS, § 41.10 at 574-76 (Rev. Vol. 1999)). Application of the doctrine requires a showing of:

Id. (quoting Fletcher, at 583-86). While there is "no universal rule as to specific criteria that courts will consider in determining whether to apply the doctrine," common factors include:

Id. at 735-36, 838 A.2d 1204.5 The party seeking to pierce the corporate veil bears the burden of proof. See Turner v. Turner, 147 Md.App. 350, 426, 809 A.2d 18 (2002) (citing Damazo v. Wahby, 259 Md. 627, 634, 270 A.2d 814 (1970)).

To prevail on their motion for summary judgment, the burden was on Appellees to demonstrate that circumstances were presented justifying application of the veil piercing doctrine. In their brief, Appellees point to the facts that the bankruptcy court previously found that certain entities were the alter egos of Debtor, i.e., in its memorandum of decision granting the preliminary injunction, and that Appellants, relying on Ms. Hillman's expert report, have argued in favor of piercing the corporate veils of all business entities related to Debtor throughout the adversary proceeding. The bankruptcy court's preliminary injunction ruling, however, (a) does not explicitly find that any business entity is Debtor's alter ego; (b) does not apply to Blue Horseshoe, The Source, and Level One, the Debtor Entities at issue here, as they are not defendants in the adversary proceeding; and (c) is merely a finding as to Appellants' likelihood of success on the merits. See In re Rood, 426 B.R. at 549 ("Insofar as the ultimate merits are concerned, the bankruptcy court found only that Mr. Rosen and SMCRT met their burden of establishing a likelihood of success on the merits, as any court is required to do prior to issuing a preliminary injunction."). Indeed, while a trial has apparently been held in the adversary proceeding and post-trial briefing has concluded, Judge Mannes has not yet issued a final decision.

Nor is Ms. Hillman's expert report, by itself, conclusive evidence that veil piercing is warranted. Although she submitted a declaration attesting to certain aspects of her expert report, the report itself is unsworn and consists essentially of conclusions Ms. Hillman has drawn from her review of documents and other evidence in this case. See generally Turner v. Human Genome Science, Inc., 292 F.Supp.2d 738, 743-44 (D.Md.2003) (striking unsworn expert report that "merely summarizes the conclusions contained in [the expert's] deposition testimony"); cf. Solis v. Prince George's County, 153 F.Supp.2d 793, 798 (D.Md.2001) ("As to an expert opinion, `an affidavit that states facts on which the expert bases an opinion satisfies Fed. R.Civ.P. 56(e) even though the expert does not attach the data supporting the facts.'") (quoting M & M Medical Supplies and Service, Inc. v. Pleasant Valley Hosp., Inc., 981 F.2d 160, 166 (4th Cir.1992)). Neither party has presented any evidence supporting those conclusions or demonstrating the manner in which they were drawn, and considering the extraordinary nature of the doctrines at issue, the current record is insufficient to demonstrate an absence of factual dispute. While it may be that Ms. Hillman has testified at other hearings in the adversary proceeding — and, at those hearings, documents may have been introduced that would support her opinion as to the Debtor Entities being alter egos of Debtor — this court cannot determine from the docket whether there are other portions of the bankruptcy court record that would conclusively fill the gaps.

To the extent the bankruptcy court may have adopted Appellees' judicial estoppel argument, its ruling was in error. Under some circumstances it might be appropriate to employ the doctrine of judicial estoppel in rendering summary judgment. See Lowery v. Stovall, 92 F.3d 219 (4th Cir.1996). This, however, is not one of those cases. While Appellants may have argued that the entities are alter egos of Debtor, their position thus far in the litigation does not warrant imposition of judicial estoppel. As explained by the Fourth Circuit:

Whitten v. Fred's, Inc., 601 F.3d 231, 241 (4th Cir.2010) (quoting Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir.2007)). Here, the alter ego theory has not yet been definitively accepted by the court and, most decisively, there has been no showing of bad faith on the part of Appellants. Moreover, the mere fact that Appellants have taken the position that the Debtor Entities are the alter egos of Debtor cannot substitute for a judicial finding that there are no material disputes of fact on that issue. Both of the fraudulent conveyance claims rest on the alter ego issue; as a result, the judgment of the bankruptcy court granting summary judgment in favor of Appellees will be reversed with respect to those claims.

The bankruptcy court properly granted summary judgment, however, as to the conversion claim against Mr. Rood. In their primary brief, as in the court below, Appellants scarcely address this claim, arguing only that it was among the claims that Appellees "wrongly suggest[ed]" was defeated under their veil piercing theory. (ECF No. 7, at 18). This is a mischaracterization of Appellees' argument. Before the bankruptcy court, both in the memorandum in support of their motion and at oral argument, Appellees argued at length that Mr. Rood was entitled to summary judgment on this count because money could not be the subject of the conversion claim, and the only remaining property that could potentially be implicated — i.e., the Cadillac, which was purchased by and titled in the name of Kore — was freely given to Mr. Rood for his use and was promptly turned over upon demand. (ECF No. 1, Attach. 13, at 18-21; ECF No. 5, Attach. 1, at 10-13). Those same arguments were repeated, essentially verbatim, in Appellees' brief before this court. (ECF No. 11, at 21-25). In their reply brief, Appellants merely stated that they "stand on the arguments raised in their principal brief in support of their claim." (ECF No. 12, at 2). Appellants' initial "arguments," however, do not address the relevant issues, nor does the record otherwise reflect that Mr. Rood could be liable for conversion. See In re Rood, 426 B.R. at 554 (affirming dismissal of conversion claim as to Mrs. Rood).6

IV. Appellants' Cross-Motion for Summary Judgment

Denial of a motion for summary judgment is ordinarily not appealable. As the Supreme Court of the United States recently explained in Ortiz v. Jordan, ___ U.S. ___, 131 S.Ct. 884, 891, 178 L.Ed.2d 703 (2011):

Here, the appeal from the denial of summary judgment comes as part of an appeal from the grant of summary judgment to an opposing party. Furthermore, it appears to have been included in the bankruptcy court's certification pursuant to Rule 7054:

In re Barahona, Civ. No. DKC 05-2122, 2005 WL 5759546, at *2 (D.Md. Nov.23, 2005).

It is not at all clear that the bankruptcy court would have certified the denial of summary judgment as final had it not been part of the now-reversed ruling on Appellees' motion for summary judgment. Even if it would have, this court finds that it would have been an abuse of discretion to do so. The certification procedure is not meant to be a mechanism to obtain an advisory opinion. The denial of summary judgment, by itself, was not and is not an ultimate disposition and should not be the subject of a Rule 7054 certification.

In their cross-motion for summary judgment, Appellants sought judgment as to all remaining claims against Appellees, but the argument they presented was directed only toward the claims for fraudulent conveyance. Specifically, they asserted that Appellees' acknowledgment that they received a number of checks and wire transfers from the Debtor Entities "warrant[ed] the entry of summary judgment in favor of [Appellants]." (ECF No. 1, Attach. 31, at 13). At oral argument, they asked the bankruptcy court to grant summary judgment sua sponte based on a finding that Appellees' alter ego argument "fails as a matter of law." (ECF No. 5, Attach. 1, at 30). On appeal, Appellants take issue with the bankruptcy court's implicit adoption of the alter ego theory, arguing that "[c]ourts have consistently held that the use of an alter ego theory is not a shield to liability for a fraudulent conveyance," but rather it "is only to be used as a sword when necessary to prevent fraud to hold a corporate officer or shareholder personally liable for debts of the corporation." (ECF No. 7, at 20) (emphasis in original).

Insofar as this argument relies on a finding that the transfers from the Debtor Entities to Appellees were, in fact, fraudulent conveyances, it begs the question. Indeed, Appellees contend that these were not fraudulent conveyances because they were payments made by Debtor in satisfaction of an antecedent debt. Moreover, application of the alter ego doctrine may not be as confined as Appellants suggest. As noted previously, Maryland courts "will, in a proper case, disregard the corporate entity and deal with substance rather than form, as though a corporation did not exist." Bart Arconti, 275 Md. at 310, 340 A.2d 225. Such a case is presented not only when it is "necessary to prevent fraud," but also "to enforce a paramount equity." Id. at 312, 340 A.2d 225. The alter ego doctrine may be applied "where the corporate entity has been used as a subterfuge and to observe it would work an injustice, the rationale being that if the shareholders or the corporations themselves disregard the proper formalities of a corporation, then the law will do likewise as necessary to protect individual and corporate creditors." Hildreth, 378 Md. at 735, 838 A.2d 1204 (quoting Fletcher, at 574-76) (internal quotation marks omitted). Appellants continue to rely on the equitable doctrine of corporate veil piercing in their claims against all defendants in the adversary proceeding. If ultimately successful, they may succeed in having the assets of the Debtor Entities considered to be assets of the Debtor and included in his bankruptcy estate. Until those issues are resolved, however, any determination as to the effect such a finding might have on the claims against Appellees would be premature.

V. Conclusion

For the foregoing reasons, the judgment of the bankruptcy court granting summary judgment will be affirmed in part and reversed in part, the appeal from the order denying summary judgment will be dismissed, and the case will be remanded to that court for further proceedings. A separate order will follow.