Wireman v. Park Nat'l Corp.

• Decision Date: 30 September 2020
• Docket Number: CIVIL ACTION NO. 1:19-cv-01068-TFM-B
• Parties: LARRY WIREMAN and JUDY WIREMAN Plaintiffs, v. PARK NATIONAL CORPORATION, SE PROPERTY HOLDINGS, LLC, SOUTHEAST PROPERTY SOLUTIONS LLC, and FICTITIOUS DEFENDANTS, A through H inclusive, Whether singular or plural which Injured the Plaintiffs, Defendants.
• Court: U.S. District Court — Southern District of Alabama

LARRY WIREMAN and JUDY WIREMANPlaintiffs, v. PARK NATIONAL CORPORATION, SE PROPERTY HOLDINGS, LLC,SOUTHEAST PROPERTY SOLUTIONS LLC, and FICTITIOUS DEFENDANTS,A through H inclusive, Whether singular or plural which Injured the Plaintiffs, Defendants.

CIVIL ACTION NO. 1:19-cv-01068-TFM-B

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

September 30, 2020

MEMORANDUM OPINION AND ORDER

Pending before the Court is the DefendantsPark National Corporation, SE Property Holdings, LLC, and Southeast Property Solutions, LLC's Motion to Dismiss the Complaint and Memorandum in Support of Motion to Dismiss.Doc. 7, filed December 18, 2019.Defendants move the Court dismiss the Complaint filed by Plaintiffs because the claims fail to state a cause of action pursuant to Fed. R. Civ. P. 12(b)(6), or violate the rules of pleading pursuant to Fed. R. Civ. P. 8andFed. R. Civ. P. 9.Id. at 2.Plaintiffs responded to the motion (Doc. 10, filed 01/10/20), and Defendants filed a reply (Doc. 11, filed 01/17/20).Thus, the motion is ripe for review.After careful review of the pleadings, motion, response, reply, and the relevant law, the CourtGRANTSDefendants' Motion to Dismiss for the reasons articulated below.

I.PARTIES

Larry Wireman("L. Wireman") and Judy Wireman("J. Wireman")(collective, the "Plaintiffs") filed suit against Park National Corporation("Park"), SE Property Holdings, LLC ("SEPH"), and Southeast Property Solutions, LLC("SPS")(collective, the "Defendants") seeking damages for breach of contract, breach of fiduciary duty, fraud, unjust enrichment, and civil conspiracy.

II.JURISDICTION AND VENUE

The Court has subject matter jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1332.A federal court has diversity jurisdiction over a civil action between citizens of different states where the amount in controversy exceeds $75,000, exclusive of interest and costs.28 U.S.C. § 1332(a)(1).The parties do not contest personal jurisdiction or venue, and the Court finds that sufficient support exists for both.

The Court finds sufficient support that Plaintiffs and Defendants are citizens of different states.Plaintiffs are resident citizens of Baldwin County, Alabama.SeeDoc. 1-1¶ ¶ 1 and 2.Park is an Ohio corporation with its principal place of business in Ohio.SEPH is an Ohio limited liability company whose principal place of business is in Ohio and its sole and only member is Park National Corporation.SPS is an Ohio limited liability company whose principal place of business is in Ohio and its sole and only member is Robert Meyers, a resident of Mansfield, Ohio.SeeDoc. 1 ¶¶ 9 -11.

The Court finds sufficient support that the amount in controversy exceeds $75,000, exclusive of interest and costs.The Plaintiffs allege damages of $955,549.77 and $1,010,538.07.SeeDoc. 1-1 ¶¶ 33 and 37.Therefore, this Court has jurisdiction over this action because the Plaintiffs and Defendants are completely diverse in citizenship, and the amount in controversy exceeds $75,000, exclusive of interest and costs.

III.FACTUAL AND PROCEDURAL BACKGROUND

In this Motion to Dismissthe Defendants ask the Court to dismiss the complaint in its entirety.Plaintiffs entered into loan agreements with Vision Bank.¹Plaintiffs defaulted under the loan agreements and SEPH, Vision Bank's successor-in-interest, demanded to be paid.Doc. 1-1 at ¶¶ 14-19.Plaintiffs paid SEPH $4,814,102.76, which included "unspecified fees of $1,010,538.07."Plaintiffs withheld and disputed the alleged amount owed for attorney fees.Id.at ¶ 24.SEPH informed Plaintiffs that it would not consider the loans fully satisfied and would not forgive $13 million in default interest charges and late fees until all attorney's fees were paid under the provisions of the Modified Promissory Notes.Id.at ¶ 26.SEPH emailed Plaintiffs four loan statements alleging Plaintiff owed $955,549.77 in incurred legal fees plus late charges and interest.Id.at ¶ 28.Under "duress"Plaintiffs paid the alleged balance owed under the loan agreements including attorney's fees, late charges and interests to avoid being charged default interest and late fees.Id.at ¶ 29.Plaintiffs allege that the fee of $1,010,538.07 was not properly disclosed nor was it a permitted fee under the associated loan documents "resulting in a breach of the contracts and/or in violation of the law."Id.at ¶ 37.

On November 7, 2019, Plaintiffs originally filed their complaint in the Circuit Court of Baldwin County.Doc. 1-1.They bring the following claims against Defendants: (1) breach of contract, (2) breach of fiduciary duty, (3) fraud, (4) unjust enrichment, and (5) civil conspiracy.Id.On December 11, 2019, Defendants removed the case to this Court based on diversity jurisdiction.Doc. 1 at ¶ 3.On December 18, 2019, Defendants filed their motion to dismiss Plaintiffs' complaint.Doc. 7.Plaintiffs timely responded in opposition on January 10, 2020, to which Defendants filed their reply on January 17, 2020.Docs. 10, 11.Therefore, the motion isfully briefed and ripe for adjudication.

IV.STANDARD OF REVIEW

Pursuant to Fed. R. Civ. P. 12(b)(6), a trial court is authorized to dismiss an action where the allegations in the complaint fail to state a claim upon which relief can be granted."To survive 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.'"Ashcroft v. Iqbal, 566 U.S. 662, 668, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868(2009)(quotingBell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929(2007)).Courts are to apply a two-pronged approach when considering a motion to dismiss: "1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, 'assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'"Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290(11th Cir.2010)(quotingIqbal, 556 U.S. at 679, 129 S. Ct. at 1950).Importantly, "courts may infer from the factual allegations in the complaint 'obvious alternative explanation[s],' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer."Id.(quotingIqbal, 556 U.S. at 682, 129 S. Ct. at 1951-52).To survive a motion to dismiss, a complaint must state on its face a plausible claim for relief, and "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949.Unless the plaintiffs have "nudged their claims across the line from conceivable to plausible, their complaint must be dismissed."Twombly, 550 U.S. at 570, 127 S. Ct. at 1974."The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully."Iqbal, 556 U.S at 678, 129 S. Ct. at 1949(quotingTwombly, 550 U.S at 556, 127 S. Ct. at 1965).

Pursuant to Fed. R. Civ. P. 9(b), plaintiffs must satisfy a heightened pleading standard, which requires fraud to be pled with particularity.For the claims of fraud, "a party must state with particularity the circumstances constituting fraud or mistake."Fed. R. Civ. P. 9(b);see alsoFeldman v. American Dawn, Inc., 849 F.3d 1333, 1340(11th Cir.2017);Lamm v. State St. Bank & Trust, 749 F.3d 938, 951(11th Cir.2014)(negligent misrepresentation);Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291(11th Cir.2010)(racketeering acts)."[A]plaintiff must allege: '(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the [p]laintiffs; and (4) what the defendants gained by the alleged fraud.'"Am. Dental, 605 F.3d at 1291(quotingBrooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380-81(11th Cir.1997)).A "formulaic recitation of the elements of a cause of action will not do."Twombly, 550 U.S. at 555.

V.DISCUSSION AND ANALYSIS

There are two preliminary issues to resolve.First, both the Plaintiffs and Defendants have attached extra documents with their pleadings for the Court to consider.It appears the Plaintiffs intended to attach a copy of the Modified Promissory Notes with the Complaint, but inadvertently did not include the attachment.This intention is evidenced by ¶ 20 in the Plaintiffs' Complaint—"A copy of those loan modifications are attached hereto as Exhibit "A."Doc. 1-1.Defendants attached copies of the Modified Promissory Notes as Exhibit A in their Motion to Dismiss.Doc. 7-2.Pursuant to the "incorporation by reference" doctrine, the Court may consider the Modified Promissory Notes in evaluating the Plaintiffs' allegations and in ruling on Defendants' Motion to Dismiss.In Horsley v. Feldt, 304 F.3d 1125(11th Cir.2002), the Court set out the "incorporation by reference" doctrine "under which a document attached to a motion to dismiss may be consideredby the Court without converting the motion into one for summary judgment."Id. at 1134."Incorporation by reference" applies "if the attached document is: (1) central to the plaintiff's claim; and (2) undisputed.SeeHarris v. Ivax Corp., 182 F.3d 799, 802 n. 2(11th Cir.1999)."Undisputed" in this context means that the authenticity of the document is not challenged.See, e.g., Day v. Taylor, 400 F.3d 1272, 1276(11th Cir.2005).It is clear that the terms of the Modified Promissory Notes are central to the plaintiffs' claim because the plaintiffs allege the Defendants breached these agreements.The authenticity of the Modified Promissory Notes is not in dispute.²

Second, the Court acknowledges that J. Wireman is not a party to the...