Cox-Tanner v. Taylor, Bean & Whitaker Mortg. Corp. (In re Taylor, Bean & Whitaker Mortg. Corp.), CASE NO.: 3:09-bk-7047-JAF

• Decision Date: 24 October 2011
• Docket Number: CASE NO.: 3:09-bk-7047-JAF,Adversary No.: 3:11-ap-326-JAF
• Parties: In re: TAYLOR, BEAN & WHITAKER MORTGAGE CORPORATION, Debtors. JONI COX-TANNER, CHARLES TANNER, SANDY SMITH, MICHAEL ELLIOTT, DIANNA L. ELLIOTT, JAY D. OYLER, LARRY WESLEY, TAM STOUT, LINDA BACON, MARK ARMOUR, on behalf of themselves and others similarly situated, Plaintiffs, v. TAYLOR, BEAN & WHITAKER MORTGAGE CORPORATION, Defendant,
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida

IN RE: TAYLOR, BEAN & WHITAKER MORTGAGE CORPORATION, Debtors.
JONI COX-TANNER, CHARLES TANNER, SANDY SMITH, MICHAEL ELLIOTT, DIANNA L. ELLIOTT, JAY D. OYLER,
LARRY WESLEY, TAM STOUT, LINDA BACON, MARK ARMOUR, on behalf of themselves and others similarly situated, Plaintiffs,
v.
TAYLOR, BEAN & WHITAKER MORTGAGE CORPORATION, Defendant,

CASE NO.: 3:09-bk-7047-JAF
Adversary No.: 3:11-ap-326-JAF

UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

Dated: October 24, 2011

ORDER GRANTING IN PART MOTION TO DISMISS CLASS ACTION COMPLAINT

This proceeding is before the Court on Defendant Taylor, Bean, & Whitaker Corporation's ("TBW") Motion to Dismiss Plaintiffs' Pro Se Class Action Complaint (Doc. 8; see also Doc. 1) and Plaintiffs' responses in opposition thereto (collectively, the "Responses") (Docs. 10, 11, 14, 15, 16).¹ For the reasons that follow, the Motion (Doc. 8) will be granted to the extent set forth herein.

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Background

On August 24, 2009, TBW filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, thereby commencing Case No. 3:09-bk-7047-JAF. On June 15, 2010, Lee B. Farkas, TBW's former Chairman, was indicted by the federal government for conspiracy, bank fraud, wire fraud, and securities fraud (Doc. 184-8 at 2-31). See also United States v. Farkas, Case. No. 1:10-CR-200-LMB (E.D. Va. June 15, 2010). On April 19, 2011, Mr. Farkas was found guilty of fourteen (14) counts related to conspiracy, bank fraud, wire fraud, and securities fraud (Doc. 184-8 at 72-76). Mr. Farkas is presently incarcerated.

Plaintiffs initiated this Adversary Proceeding on June 21, 2011 by filing the instant Class Action Complaint ("Complaint") (Doc. 1) on behalf of themselves and others similarly situated. Although it is difficult to unravel the precise factual assertions in Plaintiffs' Complaint, the gravamen of their claim(s) appear to relate to TBW's selling and/or servicing of Plaintiffs' residential mortgages (see Doc. 1 at 4-5, 8, 13-19).

Plaintiffs delineate the following five counts in the Complaint: (I) violation of the federal Racketeer Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C. § 1962; (II) "Abuse of Process and Funds"; (III) violation of the Unfair and Deceptive Trade Practices Act, 15 U.S.C. § 45(a); "Unclean Hands"; (IV) "Common Law Fraud - Deceit"; and (V) "Wrongful Tort" (Doc. 1 at 16-19).

Motion to Dismiss Standard

A motion to dismiss pursuant to Rule 12(b) tests the sufficiency of a complaint and asks the court to determine whether the complaint sets forth sufficient factual allegations to establish a claim for relief. To survive a Rule 12(b) motion, the complaint must contain enough factual matter (taken

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as true) to "raise [the] right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[N]aked assertions devoid of further factual enhancement" will not satisfy Rule 8(a)(2)'s requirement of a short plain statement of the claim showing the pleader is entitled to relief. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 557) (internal quotations omitted). A "formulaic recitation of the elements of a cause of action will not do." Id.

Thus, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the conduct alleged." Twombly, 550 U.S. at 555. A mere possibility that the defendant acted in contravention to the law will not suffice. Id. Although a court must accept all well pleaded facts as true, it is not required to accept legal conclusions. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009). A complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Iqbal, 129 S. Ct. at 1949.

Pro se complaints, however, are to be held to a less stringent standard than those drafted by an attorney. Wright v. Newsome, 795 F.2d 964, 967 (11th Cir. 1986). Nonetheless, while pro se pleadings are to be "liberally construed," Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998), the Court is not obligated to re-write a deficient complaint. See Peterson v. Atlanta Hous. Auth., 998 F.2d 904, 912 (11th Cir. 1993); see also Olsen v. Lane, 832 F. Supp. 1525, 1527 (M.D. Fla. 1993) ("pro se litigant must still meet minimal pleading standards").

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Discussion

TBW moves to dismiss the Complaint arguing, inter alia, that Plaintiffs have failed to meet the pleading standards and failed to state a claim for relief (Doc. 8). The Court agrees. For the reasons stated below, Plaintiffs' Complaint will be dismissed without prejudice.

I. Putative Class Action

As an initial matter, pro se litigants may not represent a class. See Wallace v. Smith, 145 F. App'x 300, 302 (11th Cir. 2005).² One of the rationales behind this rule is the requirement that the representative party fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a)(4). "The ability to protect the interests of the class depends, in part, on the quality of counsel, and the competence of a layperson representing himself is considered too limited to allow him to risk the rights of others." Wesley v. U.S. Dist. Ct. for the S. Dist. of Fla., No. 09-23090-CIV, 2009 WL 3617814, *1 (S.D. Fla. Oct. 29, 2009) (citing Gonzales v. Cassidy, 474 F.2d 67 (5th Cir. 1973)).³ Furthermore, federal courts allow a party to plead and conduct their own cases personally or by way of counsel. 28 U.S.C. § 1654. As discussed more comprehensively below, Plaintiffs will be permitted to file an amended complaint; however, they will only be permitted to bring claim(s) on behalf of themselves. While Plaintiffs may join together in this proceeding, they shall not purport to represent a putative class.⁴

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II. Sufficiency of the Pleadings

Irrespective of the fact Plaintiffs may not represent a class, the Complaint (Doc. 1) is due to be dismissed for failure to satisfy the pleading requirements of both the Federal Rules of Bankruptcy Procedure and the Federal Rules of Civil Procedure. To be more precise, despite the liberal pleading standards and the leniency granted to pro se litigants, Plaintiffs' Complaint has failed to provide sufficient, coherent factual allegations to survive the motion to dismiss stage of the proceeding. The assertions in Plaintiffs' Complaint are neither short nor plain, and the allegations are not simple, concise, and direct. See Fed. R. Civ. P 8. Plaintiffs' Complaint is convoluted and repetitious, and difficult to understand at times.

Although Plaintiffs are proceeding pro se, they remain "subject to the relevant law and rules of this Court, including the Federal Rules of Civil Procedure. Moon v. Newsome, 863 F.2d 835, 837 (11th Cir. 1989). Fed. R. Civ. P. 10(b) requires that "a party must state their claims . . . in separately numbered paragraphs, each limited as far as practicable to a single set of circumstances," and that "[i]f doing so would promote clarity, each claim founded on a separate transaction or occurrence . . . must be stated in a separate count . . . ."

Here, the paragraphs of the Complaint are not numbered, the Complaint contains run-on sentences (see, e.g., Doc. 1 at 19), and the factual allegations contain lengthy quotations from portions of hearings that have taken place in the underlying bankruptcy case (Doc. 1 at 9-13). One such quotation is presented in a single-spaced paragraph that continues for a full page and a half

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(Doc. 1 at 11-13). Plaintiffs also failed to delineate clearly the facts which support each cause of action they intended to pursue against TBW. See Fed R. Civ. P. 10(b).

While some of the claims Plaintiffs attempt to raise—like their RICO Act count and their common law fraud count—are apparent from the face of the Complaint, Plaintiffs referenced legal claims that were unrelated to their delineated counts. For instance, Plaintiffs mention "Florida unfair and deceptive trade practices" and constitutional violations; however, it is difficult to discern facts that support the plausibility of...