Smith v. Smith (In re Smith)

• Decision Date: 02 April 2013
• Docket Number: Bankruptcy No. 12–70281–JTL.,12–7023.,Adversary Nos. 12–7022
• Citation: 489 B.R. 875
• Court: U.S. Bankruptcy Court — Middle District of Georgia
• Parties: In re Charles D. SMITH & Annie L. Smith, Debtors. Alice J. Smith, Plaintiff, v. Charles D. Smith, Defendant. In re Charles D. Smith & Annie L. Smith, Debtors. Terrance Brown & Melissa Brown, Plaintiffs, v. Charles D. Smith, Defendant.

489 B.R. 875

In re Charles D. SMITH & Annie L. Smith, Debtors.

Alice J. Smith, Plaintiff,

v.Charles D. Smith, Defendant.

In re Charles D. Smith & Annie L. Smith, Debtors.

Terrance Brown & Melissa Brown, Plaintiffs,

v.Charles D. Smith, Defendant.

Bankruptcy No. 12–70281–JTL.

Adversary Nos. 12–7022, 12–7023.

United States Bankruptcy Court,

M.D. Georgia,

Valdosta Division.

April 2, 2013.

Melissa Brown, Norman Park, GA, pro se.

Terrance Brown, Norman Park, GA, pro se.

Alice J. Smith, Conyers, GA, pro se.

T. Lee Bishop, Jr., Albany, GA, Jack Wilkes Carter, Carter & Carter Attorneys at Law L.L.C., Adel, GA, for Defendant, Charles D. Smith.

Memorandum Opinion

JOHN T. LANEY, III, Chief Judge.

These matters come before the Court on similar motions in each adversary proceeding. In both proceedings, the debtor-defendant moves to dismiss for failure to state a claim upon which relief can be granted, moves to strike certain complaint allegations, and moves for a more definite statement. The Court heard oral arguments on the motions November 6, 2012. At the conclusion of the hearing, the Court took the matters under advisement. For the reasons set forth below, the Court will grant in part and deny in part the debtor's motions, and the Court will grant the plaintiffs in both matters 21 days to amend their complaints.

I. Background

The debtor filed his Chapter 7 case on February 28, 2012. Despite being the defendant in three pending Colquitt County Superior Court matters initiated by Ms. Smith and Mr. and Mrs. Brown, the debtor did not include the plaintiffs on his original list of creditors, nor did he include the lawsuits on his Statement of Financial Affairs. The plaintiffs therefore did not receive notice from the Clerk's Office of the debtor's bankruptcy. On May 22, the debtor amended his Schedule F and Statement of Financial Affairs to include Ms. Smith and her two lawsuits against the debtor. The debtor gave an incorrect address for Ms. Smith, but she was informed of the bankruptcy on May 26 through correspondence from the superior court regarding the stay of her lawsuits. The debtor did not amend to add the Browns or their lawsuit until July 13. The Court does not know whether the Browns had actual notice of the debtor's bankruptcy before receiving notice from the Clerk's Office. Because of the delay, on July 23, the debtor moved for an extension of deadlines to object to exemptions, to object to discharge, and to file a complaint to determine dischargeability of debts.

Before Ms. Smith or the Browns appeared in the case, the Court entered a discharge order on June 8. On June 12, Ms. Smith filed a document in the debtor's bankruptcy case captioned as a motion for stay relief but asking the Court to determine the dischargeability of the claims in her superior court actions. At the July 25 hearing on the motion, the Court clarified that the proper way to ask for a determination of dischargeability is through an adversary proceeding; if the debt is determined nondischargeable, the Court would grant relief to prosecute the claims.

Ms. Smith filed her adversary proceeding pro se on September 18. Her state court actions—and her adversary complaint—allege harassment, slander, libel, threats of physical harm, stalking, and the filing of false complaints. She alleges fraud under § 523(a)(2), fraud or defalcation while in a fiduciary capacity under § 523(a)(4), and willful and malicious injury under § 523(a)(6). She also alleges that the debtor's discharge was obtained through fraud and thus the debtor's discharge should be revoked under § 727(d)(1). The Browns, also pro se, filed their adversary proceeding on September 20. They also have a pending-but-stayed lawsuit in Colquitt County Superior Court. The complaint indicates the action involves real estate the debtor sold to the Browns, but the record is unclear precisely what the issues are in that lawsuit. The adversary complaint alleges fraud in that transaction under § 523(a)(2) and willful and malicious injury under § 523(a)(6). The Browns also seek a discharge revocation under § 727(d)(1).

In response to each complaint, the debtor moved to dismiss for failure to state a claim upon which relief can be granted, moved to strike certain allegations, and moved for a more particular statement. The debtor asserts numerous defects in each complaint. To be exact, the debtor asserts 16 violations of the Federal Rules of Bankruptcy Procedure in the Smith complaint and 23 in the Brown complaint. The Court took the matters under advisement at the November 6 hearing on the motions.

While researching the matter, the Court came across Scott v. Williams (In re Williams), 302 B.R. 923 (Bankr.M.D.Ga.2003) (Laney, J.), in which this Court adopted a test to determine when the Court should lift the stay to allow a movant to resume a pending state court action. Thus the Court, in the past, had stated a party could get stay relief, before determining dischargeability, to continue in a pending lawsuit, whereas in the present case, the Court told Ms. Smith she must first file an adversary proceeding. The Court wishes to be consistent, so the Court set a hearing in the main case on Ms. Smith's original motion, which the Court treated as a motion for stay relief.

The Court heard arguments on the motion on January 24, 2013. The Court found that Ms. Smith did not meet her burden under In re Williams and that stay relief was not appropriate. The Browns, never having moved for stay relief, were not a party to the hearing. The Court again took under advisement the sufficiency of Smith and Brown complaints.

II. Analysis

The general rules of pleading in adversary proceedings are in Federal Rule of Bankruptcy Procedure 7008, which adopts Federal Rule of Civil Procedure 8.¹ Federal Rule 8(a)(2) requires a complaint to contain “a short a plain statement of the claim showing that the pleader is entitled to relief.” This rule establishes “liberal pleading standards.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). It requires only “that the claim for relief be stated with brevity, conciseness, and clarity, a standard articulated many times over by federal courts throughout the country.” Wright & Miller, Federal Practice and Procedure: Civil 3d § 1215. The complaint “does not need detailed factual allegations.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). It need only contain enough facts to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Id. (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (ellipsis in original). Under this “notice pleading” standard, a plaintiff need not specifically plead every element of the cause of action or allege a specific fact for each element if the allegations and reasonable inferences therefrom establish the plaintiff states “some viable legal theory.” American Federation of Labor and Congress of Industrial Organizations v. City of Miami, Florida, 637 F.3d 1178, 1186 (11th Cir.2011); see also Lee v. Caterpillar, Inc., 496 Fed.Appx. 914, 2012 WL 5458179, at *1 (11th Cir.2012). Moreover, Federal Rule 8(e) requires courts to construe pleadings “so as to do justice.” This means that “the complaint is to be liberally construed in favor of plaintiff.” Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969).

Despite this leniency, a “complaint must contain enough facts to make a claim for relief plausible on its face; a party must plead ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Resnick v. AvMed, Inc., 693 F.3d 1317, 1324–25 (11th Cir.2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). Moreover, certain matters require more specific pleading. Relevant to this opinion is Federal Rule 9(b), applicable to adversary proceedings through Bankruptcy Rule 7009, which requires a party alleging fraud to state the circumstances constituting fraud with particularity. Federal Rule 9(b) is an exception to the simplified standard of Rule 8(a), see Swierkiewicz v. Sorema N. A., 534 U.S. 506, 513, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), but Rule 9(b) does “not abrogate the concept of notice pleading.” U.S. ex rel. Clausen v. Laboratory Corp. of America, Inc. 290 F.3d 1301, 1310 (11th Cir.2002).

Ms. Smith and the Browns filed their complaints pro se.² Pro se parties are afforded more leniency with their pleadings than attorneys: “[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.” Erickson, 551 U.S. at 94, 127 S.Ct. 2197 (quoting Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976)); see also Alba v. Montford, 517 F.3d 1249, 1252 (11th Cir.2008) (“ [P]ro se pleadings are held to a less strict standard than pleadings filed by lawyers and thus are construed liberally.”). But pro se filers are still required to follow the “minimum pleading standards” of the Federal Rules, McMahon v. Hunter, 2007 WL 1952906, at *6 (M.D.Fla.2007), and “a filer's pro se status does not excuse her from compliance with the Federal Rules of Civil Procedure.” King v. ADT Security Services, 2007 WL 2713212, at *13 (S.D.Ala.2007) (citing Albra v. Advan, Inc., 490 F.3d 826, 829 (11th Cir.2007)). And “this leniency does not give a court license to serve as de facto counsel for a party ... or to rewrite an otherwise deficient pleading in order to sustain an action.” GJR Investments, Inc. v. County of Escambia, Florida, 132 F.3d 1359, 1369 (11th Cir.1998) (citations omitted), overruled on other grounds by Randall v. Scott, 610 F.3d 701, 709 (11th Cir.2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).

When considering pre-answer motions questioning the sufficiency of a complaint, the Court “must...