Centier Bank v. Ransom (In re Ransom)
Decision Date | 28 September 2011 |
Docket Number | ADVERSARY NO. 11-2047,CASE NO. 10-25767 JPK |
Parties | In re: SHARON ALICIA RANSOM, Debtor. CENTIER BANK, Plaintiff, v. SHARON ALICIA RANSOM, Defendant. |
Court | U.S. Bankruptcy Court — Northern District of Indiana |
This adversary proceeding was commenced by a complaint filed on March 25, 2011 by the plaintiff Centier Bank ("Centier") against the debtor Sharon Alicia Ransom ("Ransom"). The complaint seeks to except from discharge certain debts alleged by Centier to be owed it by Ransom pursuant to provisions of 11 U.S.C. § 523(a)(2), 11 U.S.C. § 523(a)(4) and 11 U.S.C. § 523(a)(6). On May 16, 2011, Ransom filed a motion to dismiss, along with a brief in support thereof, based exclusively on Fed.R.Bankr.P. 7012(b)/Fed.R.Civ.P. 12(b)(6). Centier has not filed a response to the that motion. The court has jurisdiction of this adversary proceeding pursuant to 28 U.S.C. § 1334(b), 28 U.S.C. § 157(a) and (b), and N.D.Ind.L.R. 200.1. This adversary proceeding is a core proceeding under 28 U.S.C. § 157(b)(2)(I).
The motion to dismiss filed by Ransom is based solely on the face of the complaint; no matters outside of the pleadings have been presented to the court. Federal Rule of Civil Procedure 12(b)(6), made applicable to adversary proceedings by Fed.R.Bankr.P. 7012(b), provides for the defense of "failure to state a claim upon which relief can be granted". As this court stated in the case of Weichman v. Lazzaro, et al., 422 B.R. 143, 156 (Bankr. N.D. Ind. 2010):
Fed.R.Civ.P. 12(b)(6), incorporated into contested matters by operation of Fed.R.Bankr.P. 7012(b), provides that "(e)very defense, in law or fact, to a claim for relief in any pleading . . . shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . . (6) failure to state a claim upon which relief can be granted." Rather than state the Rule 12(b)(6) defense which it has raised in a responsive pleading (i.e., an answer), the defendant has exercised the option provided to it by Rule 12(b) to assert that defense in a separate motion which raises the ground of "failure to state a claim upon which relief can be granted" as a defense to the plaintiff's action. Properly understood, this defense asserts that based upon the allegations/ averments of the plaintiff's complaint, the complaint does not state any cognizable legal basis upon which any relief requested by the complaint can be granted in relation to the defendant.
Under Fed.R.Bankr.P. 7008(a)/Fed.R.Civ.P. 8(a), a complaint must contain a short and plain statement of the grounds for the court's jurisdiction, a short and plain statement of the claim demonstrating that the pleader is entitled to relief, and a demand for the relief sought. In addition, when a claim in the complaint is based on fraud, Fed.R.Bankr.P. 7009(b)/Fed.R.Civ.P. 9(b) provides that a party must particularly state the circumstances constituting the fraud.1 This court in In re Weichman, 422 B.R. 143, 146-47 (Bkrptcy. N.D. Ind, 2010) extensively reviewed the criteria against which the sufficiency of a complaint is to be judged generally and in circumstances when fraud is pled, stating the following:
As the court stated in Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-57 (2007):
The foregoing are the basic standards by which the sufficiency of a complaint is judged against a challenge pursuant to Rule 12(b)(6). In addition, when allegation are fraud are made, or are necessary to be made to sustain a claim, Fed.R.Civ.P. 9(b) [ ] comes into play. The rule states:
Application of the requirements of Rule 9(b) is also straightforward. The manner in which compliance is to be had with the rule has been well-defined by the United States Court of Appeals for the Seventh Circuit. In Graue Mill Development Corp. v. Colonial Bank & Trust Company of Chicago, 927 F.2d 988, 992-93 (7th Cir. 1991), the following was stated:
Graue Mill's second argument on appeal is that the district court erred in dismissing the RICO counts in its complaint for failure to allege predicate acts of fraud with sufficient specificity. The starting point for pleading fraud claims under RICO is Rule 9(b) of the Federal Rules of Civil Procedure. That rule states that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." (emphasis added). Rule 9(b) effectively carves out an exception to the otherwise generally liberal pleading requirements under the Federal Rules. We read 9(b) to mean that RICO plaintiffs, like all other parties pleading fraud in federal court, must " 'state the time, place and content' " of the alleged communications perpetrating the fraud. U.S. Textiles Inc. v. Anheuser Busch Cos., 911 F.2d 1261, 1268 n. 6 (7th Cir.1990) (quoting New England Data Servs. Inc. v. Becher, 829 F.2d 286, 291 (1st Cir. 1987)); see also Moore v. Kayport Package Express, 885 F.2d 531, 540 (9th Cir.1989). Most importantly, complaints charging fraud must sufficiently allege the defendant's fraudulent intent. See Haroco v. American Nat'l Bank & Trust Co., 747 F.2d 384, 403 (7th Cir.1984), aff'd on other grounds, 473 U.S. 606, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985). "Cryptic statements" suggesting fraud are not enough; " '[m]...
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