IOU Cent. Inc. v. Bliss

Decision Date13 January 2022
Docket NumberCivil Action 1:20-cv-03244-CMA-NYW
PartiesIOU CENTRAL INC., d/b/a IOU FINANCIAL INC., Plaintiff, v. NANCY LYNN BLISS, and BEVERLY ANN AUSTIN as Trustee for the B Austin 2015 Revocation Trust, a/k/a Bev Nour Eldin, Defendants.
CourtU.S. District Court — District of Colorado

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Nina Y. Wang United States Magistrate Judge

This action is before the court on Defendant Nancy L. Bliss's (Defendant Bliss” or Defendant) Motion to Dismiss Amended Complaint (Motion to Dismiss or “Motion”) [Doc. 43, filed August 25, 2021]. The undersigned considers the Motion to Dismiss pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated January 14, 2021 [Doc. 5], and Memorandum dated August 30, 2021 [Doc. 46].[1] This court concludes that oral argument will not materially assist in the resolution of these matters. Accordingly, having carefully reviewed the Motion to Dismiss, the docket, and applicable law, this court respectfully RECOMMENDS that Defendant's Motion to Dismiss be GRANTED IN PART AND DENIED IN PART.

FACTUAL BACKGROUND

The following facts are drawn from the operative Amended Complaint [Doc. 25] and taken as true for the purposes of the instant Motion. Plaintiff IOU Central, Inc. d/b/a IOU Financial, Inc. (Plaintiff or “IOU”) alleges that it issued loans, to which property owned by Defendant Bliss is attached as collateral. See [Doc. 25]. Specifically, Defendant Bliss and her spouse, Kent Bliss (Mr. Bliss), who is not a party to this action, resided at a property in Texas located at 4608 Ruiz Street, Austin Texas, 787233, Parcel Id. 5660-007-008, and “described as Lot 34 Block 18 Muller Subdivision Section VI, in Travis County Texas” (the “Texas Property”).[2] [Id. at ¶ 8]. Defendant and Mr. Bliss owned the Texas Property beginning September 30 2014, pursuant to a warranty deed and two deeds of trust executed that day. [Id. 9]. Additionally, Plaintiff alleges that Defendant Bliss “derives her sole income” from Intercom, Inc. (“Intercom”), a Texas company where Mr. Bliss serves as President. [Id. at ¶ 12].

I. The First Loan

On August 25, 2017, Mr. Bliss submitted a loan application to IOU for a commercial loan for him and Intercom (“First Loan”), and IOU alleges the loan was “actually also for Defendant Bliss who knew of, benefitted, consented and ratified the Loan.” [Id. at ¶ 13]. Four days later, Intercom executed and delivered a promissory note (“First Note”) to IOU for a gross loan amount of $275, 000.00, which also included a security agreement (“First Security Agreement”) “by which Debtors and [Intercom] encumbered their property and assets as collateral for the Note.” [Id. at ¶¶ 14-18]; see also [id. at ¶ 3 (defining “Debtor” as Kent Bliss)]. Mr. Bliss ultimately executed a Guaranty of the First Note and Security Agreement to IOU's Georgia office website, thus “consenting to Georgia law.” [Id. at ¶ 19].

Plaintiff alleges that Defendant Bliss, Mr. Bliss, and Intercom intended to encumber “the property and assets” of Intercom and Mr. Bliss “as collateral under the [First] Note, Guarantees and Security Agreement, ” [id. at ¶ 20], and that such property became so encumbered, “including the Texas Property, ” [id. at ¶ 21]. IOU claims it was “induced to make the Loan to Defendants providing the Funds based on their representations of (a) their ownership of their property and assets, secured as collateral under the Security Agreement and (b) their compliance with the Instruments (c) upon which IOU materially relied in providing them with the Funds.” [Id. at ¶ 26].

In December 2017, Defendant Bliss and Mr. Bliss sought to separate their marital property through the execution of a Separation Agreement. [Id. at ¶ 28].

II. The Second Loan

On September 26, 2018, Mr. Bliss submitted another loan application to IOU, seeking a second commercial loan for Mr. Bliss and Intercom, and IOU alleges the loan was “actually also for Defendant Bliss who knew of, benefitted, consented and ratified the Loan” (“Second Loan”). [Id. at ¶ 29]. However, Defendant Bliss and Mr. Bliss “did not disclose their separation agreement to IOU, which relied upon their marriage and property, assets and proceeds” in approving the Second Loan for $216, 000.00. [Id. at ¶¶ 30-31]. On October 2, 2018, Mr. Bliss “executed/approved” a promissory note (“Second Note”) for Intercom to IOU, along with a “loan guaranty fee, confirming all information, [and] consenting to Georgia law” for the Second Loan. [Id. at ¶ 31]. The Second Note contains similar terms as the First Note, “including joint liability for its debt.” [Id. at ¶ 32]. The Security Agreement in the Second Note (“Second Security Agreement”) also encumbered all property and assets of Intercom and Mr. Bliss. [Id. at ¶ 33]. Defendant Bliss is Mr. Bliss's “successor or assignee” under the Second Note. [Id. at ¶ 34]. The Second Loan defaulted soon after it closed. See [id. at ¶¶ 31, 37].

IOU alleges that Defendant Bliss and Mr. Bliss failed to disclose or misrepresented to IOU various issues related to the loans, including the following:

(1) Defendant Bliss and Mr. Bliss “were jointly obtaining and benefitting from the Loan, but [did] not intend to or could not perform the Loan”; (2) Mr. Bliss and Intercom intended to declare bankruptcy for the purpose of evading a “prior suit” filed by IOU in October 2019 related to the Second Loan, [3]“disposed of their property and assets in both bankruptcies, ” and that such bankruptcy was ultimately dismissed;
(3) On November 2, 2018, Defendant Bliss and Mr. Bliss “fraudulently and covertly sold and conveyed the Texas Property” to another Texas company in an effort to “hinder, defraud or delay enforcement of IOU's Second Loan” as to the Texas Property; and
(5) The sale of the Texas Property and purchase of the Colorado Property occurred before, and are not subject to, Mr. Bliss's bankruptcy, as reflected in the bankruptcy schedules and the December 2017 Separation Agreement.

[Id. at ¶ 37]. IOU also alleges that “traceable proceeds [from] the sale of the Texas Property are subject to the Second Loan, but were instead used by [Defendant] Bliss” to purchase a home located in El Paso, Colorado (“Colorado Property”) on or about November 19, 2018. [Id. at ¶ 37(d)]. IOU alleges Defendant Bliss purchased the Colorado Property “to hinder, delay or defraud enforcement of the Loans on this concealed property.” [Id.]. In providing both Loans, IOU “materially relied upon the representations of [Mr. Bliss] and [Intercom] they were solvent and able to satisfy the debt, particularly as [Mr. Bliss] represented that he jointly owned the Texas Property” with Defendant Bliss. [Id. at ¶ 38].

PROCEDURAL BACKGROUND

On October 30, 2020, IOU filed this action against Defendant Bliss to add her to the Loan documents, obtain judgment against her for the debt, and attach and sell her property and assets, including the Colorado Property. [Doc. 1; Doc. 25 at ¶ 40]; see generally [Doc. 1]. On November 3, 2020, IOU recorded a lis pendens on the Colorado Property, “detailing this case and the claims in the case.” [Doc. 25 at ¶ 41]. On November 12, 2020 Defendant Bliss purportedly sold the Colorado Property to Defendant Beverly Ann Austin (Defendant Austin), who in turn filed a “Statement of the Trust” with El Paso County. [Id. at ¶¶ 42, 44]. Plaintiff alleges that Defendant Austin “acquired her alleged interest in the Colorado Property” with “notice and knowledge of IOU's superior interest” in that property per the lis pendens and the Georgia case. [Id. at ¶ 45]; see also [id. at ¶ 37(f)]. Additionally, IOU alleges that Defendant Austin's “Statement of Trust and the Deed of the Colorado Property” did not comply with a Colorado statute regarding conveyances of real property by omitting several details, including the names of the beneficiaries and the grantee's authority. [Id. at ¶ 46]. IOU also alleges that Defendant Bliss “breached and defaulted upon the [loan] Instruments, which she never cured, failing to make payments or otherwise comply with them and she is liable to IOU under the Instruments and for her other misconduct with Defendant Austin, ” [id. at ¶ 47], including that Defendant Bliss's “property and assets are secured as collateral, ” [id. at ¶ 50].

IOU asserts seven claims against Defendants: (1) Declaratory and Equitable Relief as to Defendant Bliss (Claim One); (2) Breach of Instruments and Related Relief as to Defendant Bliss (Claim Two); (3) Quantum Meruit/Unjust Enrichment and Related Relief as to Defendant Bliss (Claim Three); (4) Conveyance to Defraud and Related Relief as to All Defendants (“Claim Four”); (5) Equitable Lien/Mortgage and Related Relief as to All Defendants (“Claim Five”); (6) Constructive Trust and Related Relief as to All Defendants (“Claim Six”); and (7) Judicial Foreclosure and Related Relief as to All Defendants (“Claim Seven”)[4]. [Doc. 25 at 10-16].

On November 18, 2020, the undersigned entered an Order setting the Scheduling Conference for January 20, 2021, and directing the Parties to file the Consent/Non-Consent Form regarding the consent of the parties to the jurisdiction of a magistrate judge by January 6, 2021. [Doc. 4]. The Parties ultimately did not consent, and this case was randomly reassigned to Judge Christine M. Arguello, [Doc. 7], and referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(A) and (B) and Fed.R.Civ.P. 72(a) and (b), [Doc. 9 filed January 14, 2021]. On January 14, 2021, the undersigned sua sponte reset the Scheduling Conference to March 3, 2021 on the basis that it did not appear that service on Defendant Bliss had been effectuated. [Doc. 10]. On March 1, Plaintiff moved for an extension of time “to effect transfer and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT