BENTON – In courts of three states, father John Kenneth Coil and son John Altaire Coil both claim full ownership of Dr. John’s adult boutique in Wood River.
Senior U.S. District Judge Phil Gilbert stayed their proceedings in his court on March 1, until another court determines ownership.
Gilbert found his abstention was appropriate to conserve scarce judicial resources and provide a comprehensive dispensation of litigation.
Father John and son John portray each other as crooks on a grand scale.
In January 2019, John Altaire sued John Kenneth in Dallas County, Texas.
He sought to block his father’s sale of property on Anaheim Drive in Dallas, alleging fraud, gross negligence, and breach of fiduciary duty, and seeking direct recovery under Texas business organization code.
His complaint asserted claims for himself and for AVE Inc., a Texas corporation that owns Dr. John’s in Wood River.
On April 26, 2019, John Altaire opened an account at Renasant Bank in Mobile, Ala. with a check for $1,455,497.56.
John Kenneth called the bank three days later and said his son stole the money.
Each man told the bankers he owned AVE Inc.
The bankers placed a hold on the money and tried to figure out who had authority to dispose of it.
On Aug. 5, 2019, John Kenneth sued his son in Madison County circuit court.
He claimed John Altaire stole the check and sought a ruling that he owns ATE Inc. and all corporations within it.
He claimed his son signed an agreement to sell an AVE Inc. property in Austin and tried to sell property of a subsidiary in Tucson, Ariz. He claimed his son took $585,000 from subsidiaries in November 2018.
“John A. Coil suffers from paranoid schizophrenia, and does not let even close family members know where he is,” he wrote.
He stated that his son’s belongings were at 100 North Wood River Avenue, and he could be served there “or wherever he may be found.”
He sued without counsel.
On Oct. 1, 2019, Renasant Bank filed an interpleader action at U.S. district court in Mobile seeking to determine ownership.
In Madison County, Tom Maag of Wood River took John Kenneth’s case and moved for summary judgment last March.
He sought $2.5 million in actual damages and $7.5 million in punitive damages.
Associate Judge Clarence Harrison classified the suit as derivative and found he couldn’t enter judgment.
Maag amended the complaint last Sept. 28, to assert claims for John Kenneth as an individual, for John Kenneth as owner of AVE Inc., and for AVE Inc.
John Altaire removed the action to district court on Nov. 4.
His counsel Rostyslaw Smyk of Chicago proposed to turn AVE Inc. from plaintiff to defendant, “because its interests are aligned with John A. Coil.”
Smyk argued that John Kenneth pleaded guilty to transportation of obscene materials and mail fraud in district court for Western Texas.
“As part of his plea agreement, John Kenneth Coil forfeited any and all ownership in or other interest he had in AVE, including any partnership interest therein, stock, inventory, fixtures,” Smyk wrote.
“Because John Kenneth Coil never owned any stock in AVE, however, the forfeiture of his stock in AVE never actually occurred.”
On Nov. 30, he moved to dismiss John Kenneth’s action, transfer it to district court in Mobile, or stay it pending resolution in Mobile.
Smyk offered as an alternative a transfer to district court in Northern Texas, “where John A. Coil and AVE are citizens, where John Kenneth Coil resided his whole life until fleeing to Illinois in November 2017 as a result of legal issues, and where John Kenneth Coil’s wife continues to live.”
He wrote that in Mobile, John Altaire and AVE Inc. filed a cross claim against John Kenneth and John Altaire’s brother John Asar Coil.
He wrote that a former half owner of AVE Inc. intervened in Mobile to assert an interest under terms of his agreement to sell in 2005.
He wrote that in Dallas, John Kenneth and AVE Inc. filed a counterclaim against John Altaire.
Maag objected to Smyk’s motion on Jan. 27.
He wrote that John Altaire never owned AVE Inc., “but very much wishes he did.”
“Courts in Illinois are entitled to opine and rule on who owns businesses headquartered in their state whether a claimant is located here or not,” Maag wrote.
He claimed that if a court found John Kenneth owned all of AVE Inc. and forfeited all of it, which he disputed, John Altaire doesn’t own it either.
He attached a sworn statement of John Kenneth, stating he didn’t leave Texas due to legal issues of any kind.
“My business has been good in Illinois and surrounding areas, and the cost of living has been much slower,” the statement reads.
He wrote that his son moved to Illinois in 2018, “and I was happy to have him here and hopeful for the future with him."
He wrote that John Altaire lived in the basement of corporate headquarters, and many of his possessions remained in the basement.
He wrote that it’s easy to live in the basement, as Wood River police rented part of the building and made a full kitchen.
He also wrote that he did in fact forfeit property and the U.S. has no claim on any portion of his property including AVE Inc.
Gilbert found the court in Mobile has devoted significant resources to making sense of the complexities of this case.
He wrote that in December, the court there held that it had jurisdiction.
“While the father argues that the Southern District of Alabama’s finding of jurisdiction was dubious and unlikely to survive appellate review, that is not for this court to decide,” Gilbert wrote.
“The court will therefore stay this case until either the Texas state court or the Southern District of Alabama determines the ownership of AVE Inc.”