Wells Fargo Bank, N.A. v. Thomasson

• Decision Date: 29 November 2012
• Docket Number: Civil Case No. CCB-12-967
• Citation: Wells Fargo Bank, N.A. v. Thomasson, Civil Case No. CCB-12-967 (D. Md. Nov 29, 2012)
• Parties: WELLS FARGO BANK, N.A. v. SHERRYLYN DIANE THOMASSON, et al.
• Court: U.S. District Court — District of Maryland

WELLS FARGO BANK, N.A.

v.SHERRYLYN DIANE THOMASSON, et al.

Civil Case No. CCB-12-967

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Dated: November 29, 2012

MEMORANDUM

PlaintiffWells Fargo Bank, N.A.("Wells Fargo") initiated this action against DefendantSherrylyn Diane Thomasson a/k/a Sherrylyn Black¹("Ms. Black") and other defendants(primarily the "Thomasson children" and the "Trustee"), alleging that Ms. Black and her co-defendants benefited from fraudulent conveyances made by Ms. Black's now-deceased husband, James W. Thomasson, Sr.("Mr. Thomasson").Now pending is Ms. Black's motion to dismiss the complaint for failure to state a claim upon which relief can be granted.The issues in this case have been fully briefed and no oral argument is necessary.See Local Rule 105.6(D. Md. 2011).For the following reasons, Ms. Black's motion to dismiss will be granted in part and denied in part.

BACKGROUND

Taken in the light most favorable to the plaintiff, the facts of this case are the following.In 2005 and 2006, Wells Fargo made a series of loans that were guaranteed by Mr. Thomasson. Compl. ¶¶ 15-42.The total amount due and owing on those loans is $16,390,995.39.Compl., Ex. A.Mr. Thomasson died on September 15, 2011.Compl.¶ 3.Prior to his death, Mr. Thomasson engaged in two transactions transferring certain ofhis property interests to his spouse.Compl.¶¶ 44-64.First, on May 20, 2010, Mr. Thomasson executed a deed conveying his fee simple interest in real property in Easton, Maryland to himself and Ms. Black as tenants by the entireties for no consideration ("the Property Transfer").Compl.¶¶ 44-45, 51.Second, also in 2010, Mr. Thomasson transferred monies from bank accounts in his name to accounts held as tenants by the entireties with Ms. Black ("the Monetary Transfer").Compl.¶¶ 58.The Monetary Transfer totaled approximately $500,000 ("the Money").Compl.¶¶ 58-59.²Wells Fargo contends that both transfers were made in an effort to avoid Mr. Thomasson's obligations to Wells Fargo.Compl.¶¶ 56, 63.

On March 12, 2012, Wells Fargo filed a claim against the estate of Mr. Thomasson before the Register of Wills of Talbot County, Maryland.Mot. to Dismiss, Ex. 1.Four other creditors also filed claims against the estate.Mot. to Dismiss, Ex. 2.The amount of Wells Fargo's claim is $16,439,132.04.Id.

On March 29, 2012, Wells Fargo filed the instant lawsuit against Ms. Black and the other defendants, alleging, in relevant part, that the Property Transfer and the Money Transfer constituted fraudulent conveyances.

ANALYSIS

Ms. Black contends that Wells Fargo's complaint should be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6) motion tests the sufficiency of a complaint and does not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses."Presley v. City of Charlottesville, 464 F.3d480, 483(4th Cir.2006)(internal quotation marks and alterations omitted)(quotingEdwards v. City of Goldsboro, 178 F.3d 231, 243(4th Cir.1999)).When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true" and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff."Ibarra v. United States, 120 F.3d 472, 474(4th Cir.1997).

To survive a motion to dismiss, the factual allegations of a complaint, assumed to be true, "must be enough to raise a right to relief above the speculative level."Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555(2007).The plaintiff's obligation is to show sufficiently the "grounds of his entitlement to relief," offering "more than labels and conclusions."Id.It is not sufficient that the well-pleaded facts suggest "the mere possibility of misconduct."Ashcroft v. Iqbal, 556 U.S. 662, 679(2009).Rather, to withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face," meaning the court could draw "the reasonable inference that the defendant is liable for the conduct alleged."Id. at 678(internal quotations and citation omitted).

Ms. Black asserts that Wells Fargo's complaint must be dismissed for two reasons.First, she contends that Wells Fargo is attempting to circumvent the probate process by using this litigation to improve its position relative to the other creditors of the Thomasson estate.Second, she contends that the other creditors are necessary parties to this litigation, and that joinder of the other creditors would defeat diversity of citizenship.

In its complaint, Wells Fargo seeks several different types of relief against Ms. Black.First, Wells Fargo seeks a declaration that the Property Transfer and the Monetary Transfer were fraudulent.Second, Wells Fargo seeks to set aside those transfers.Third,in the alternative, Wells Fargo seeks a monetary judgment against Ms. Black for an amount equal in value to the transfers.For the reasons set forth below, Wells Fargo's case will proceed as to the declaratory relief and prospective set aside of the transfers, but Ms. Black's motion to dismiss will be granted as to Wells Fargo's claims for monetary relief.

Adjudication of the first two forms of relief sought by Wells Fargo present no issues with respect to the jurisdiction of the probate court or the rights of the other creditors of the Thomasson estate.If the transfers to Ms. Black are declared fraudulent and are set aside, the transferred property would revert to the Thomasson estate.³Any proceeds from the Monetary Transfer and from the sale of the real property would be divided among all of the estate's creditors by the probate court.In determining the merits of the case, this court would not "dispose of property that is in the custody of a state probate court,"Marshall v. Marshall, 547 U.S. 293, 311-12(2006), but would simply determine whether or not the transferred property properly should be in the custody of that court, rather than the custody of the transferees.SeeAbercrombie v. Andrew College, 438 F. Supp. 2d 243, 255-56(S.D.N.Y.2006)(determining that a suit did not implicate the probate exception because it "does not ask the Court to decide how to distribute any assets . . . but only to determine whether additional assets, i.e. the Property, should be added to the estate");Gearheard v. Gearheard, 406 F. Supp. 704, 706(S.D. Miss.1976)(finding that the probate exception did not apply to a suit to set aside inter vivos gifts where the suit would add assets to the estate under probate).The other creditors, then, are not necessary parties to the instant lawsuit to the extent that the onlypotential relief includes a return of assets to the estate for distribution.SeeBirely's Ex'rs v. Staley, 5 G. & J. 432, 451(Md.1833)(noting that all creditors need not be joined as parties where any judgment would benefit all estate creditors).

Wells Fargo's requests for monetary relief, however, pose a more complex question.Maryland law provides that under certain circumstances, such as where the property transferred cannot be reached, "the fraudulent transferee . . . is liable by way of personal judgment to the creditor."Molovinsky v. Fair Emp't. Council of Greater Washington, Inc., 839 A.2d 755, 767-68(Md. App.2003)(citingDamazo v. Wahby, 305 A.2d 138, 141(Md.1973)).The difficulty presented is that, in the estate context, Wells Fargo is not the only creditor.Mr. Thomasson's other creditors could have an equal claim for fraudulent transfer against Ms. Black...