United States District Court, D. South Carolina, Spartanburg Division
OPINION AND ORDER
BRUCE HOWE HENDRICKS, District Judge.
This matter is before the Court on the defendants' motion to dismiss. (ECF No. 13.) The plaintiff has pled claims for (1) fraudulent inducement; (2) fraud; (3) negligent misrepresentation; (4) aiding and abetting; (5) civil conspiracy; (6) breach of contract; and (7) breach of contract accompanied by fraudulent act. The defendants contend that the case must be dismissed because (1) it is untimely, according to applicable statute of limitations; (2) the plaintiff has failed to join necessary and indispensable parties; and the Complaint fails to plead any plausible claim for relief.
The facts of the Complaint, taken in the light most favorable to the plaintiff, are as follows. The plaintiff is an individual residing in the State of Kentucky. (ECF No. 1 ¶ 1.) Defendants Dwight Bennett and Larry Bennett are individuals residing in the state of South Carolina. Id. ¶¶ 2, 3. Defendant Advance Mortgage Source, Inc., d/b/a South Carolina Mortgage Associates ("SCMA") is a South Carolina company. Id. ¶ 4. In July 2010, Defendant Larry Bennett, who at the time was an operations manager for Defendant SCMA, contacted the plaintiff. Id. ¶ 7. Larry Bennett advised the plaintiff that he and SCMA were looking for investors in an "ultra-safe" investment. Id. ¶ 8. Larry Bennett informed the plaintiff that the investment included lending one hundred and fifty thousand ($150, 000.00) dollars to William Marango ("Marango") and Mojave Property ("Mojave") to secure financing as a down payment on the Wolf Ridge Ski Resort located in North Carolina. Id. ¶ 9. In return, the plaintiff would receive a return of his principle investment, as well as a return on the investment in the amount of forty thousand ($40, 000.00) dollars, on or before September 3, 2010. Id. ¶ 15. Further, the plaintiff would receive five hundred ($500.00) dollars per week in the event the transaction did not close on or before September 3, 2010. Id. ¶ 16. Larry Bennett advised the plaintiff that Marango and Mojave would secure the investment through an apartment located in Limestone, Aroostook County, Maine, which would be used as collateral. Id. ¶ 10. Larry Bennett advised the plaintiff that the apartment complex was listed for sale for over one million two hundred thousand ($1, 200, 000.00) dollars and was only encumbered by one (1) mortgage in the amount of one hundred and fifty thousand ($150, 000.00) dollars. Id. ¶ 11.
On or about August 4, 2010, Larry Bennett emailed the plaintiff the Mortgage Note and Mortgage Deed for the apartment complex along with wiring instructions for the one hundred and fifty thousand ($150, 000.00) dollars. Id. ¶ 14. Further, Larry Bennett allegedly assured the plaintiff that after the funds were transferred and the Mortgage Note was executed, he would personally file the Mortgage Note and the Mortgage Deed in the state and county in which the apartment complex was located. Id. The plaintiff promptly wired the requested funds per instructions. Id. On August 9, 2010, and again on August 13, 2010, the plaintiff sent emails to Larry Bennett inquiring if the closing date for the Wolf Ridge Ski Resort had been established, to which he received no response. Id. ¶ 17. On or about October 4, 2010, the plaintiff received a five hundred ($500.00) dollar check from Marango, individually, for late fees under the Mortgage Note. Id. ¶ 18. This is allegedly the only correspondence between the plaintiff and Marango. See Id. ¶¶ 7-33. When the plaintiff attempted to negotiate the check, it was returned as having "not sufficient funds" ("NSF"). Id. ¶ 18. After receiving the NSF payment, the plaintiff contacted Larry Bennett to advise him of the NSF check and requested a copy of the recorded deed that Larry Bennett promised and represented to the plaintiff that he, or SCMA, had recorded in August 2010. Id. ¶ 19.
After some time, the plaintiff learned that the deed had not been recorded; he eventually filed the Note and Deed himself. Id. ¶¶ 21-23. From October 2010 to May 2011, numerous emails and telephone calls were exchanged between the plaintiff and Larry Bennett in which Bennett, on behalf of SCMA, promised that the closing of the Wolf Lodge Ski Resort would occur "in the near future" and that the plaintiff's investment was safe. Id. ¶ 24.
In May 2011, a senior mortgage holder foreclosed and sold at auction the Maine apartment complex that was allegedly securing the plaintiff's investment. Id. ¶ 25. The complex sold for one hundred and eighty-seven thousand ($187, 000.00) dollars, which did not exceed the first lien holder's secured amount, allegedly in direct conflict with the defendants' earlier assurances that the property was only encumbered by one mortgage in the amount of one hundred and fifty thousand ($150, 000.00) dollars. Id. The plaintiff received no monies from the sale of the apartment complex. Id. In June 2011, the plaintiff contacted Defendant Dwight Bennett, president of SCMA, regarding the events surrounding the loan, representations made by Larry Bennett and SCMA, Larry Bennett and SCMA's failure to record the Mortgage Note and Mortgage Deed and the sale of the Maine apartment complex. Id. ¶ 26. As a result of this conversation, Dwight Bennett, on behalf of SCMA, sent an offer letter to the plaintiff in Kentucky advising the plaintiff that the closing of Wolf Ridge Ski Resort was "imminent." Id. ¶ 27. Dwight Bennett further offered to pay one-half (½) or ninety thousand ($90, 000.00) dollars of SCMA's commission on the sale of the ski resort in exchange for the plaintiff's agreement to forgo filing litigation against Dwight Bennett, Larry Bennett, or SCMA. Id. The plaintiff did not accept this offer and did not sign the offer letter. Id. ¶ 28.
In January 2012, the plaintiff retained a South Carolina law firm and sent a demand letter to Defendant SCMA that was rejected. Id. ¶ 29. Despite the demand by the plaintiff, the defendants allegedly refused to comply. Id. ¶ 30. On May 23, 2013, the plaintiff commenced a lawsuit against Defendants in Jefferson County, Kentucky seeking to recover actual and punitive damages for the conduct described above. Id. ¶ 31. The defendants removed the lawsuit to federal court and moved to dismiss the action on the grounds that defendants were not subject to personal jurisdiction in the State of Kentucky. Id. ¶ 32. On November 12, 2013, the United States District Court for the Western District of Kentucky dismissed the claims against these defendants based on lack of personal jurisdiction. Id. ¶ 33.) On March 20, 2014, the plaintiff filed the instant action. (ECF No. 1).
A plaintiff's complaint should set forth "a short and plain statement... showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Rule 8 "does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To show that the plaintiff is "entitled to relief, " the complaint must provide "more than labels and conclusions, " and "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. In considering a motion to dismiss under Rule 12(b)(6), the Court "accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff...." Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009). Notably, "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement" do not qualify as well pled facts.
To survive a Rule 12(b)(6) motion to dismiss, a complaint must state "a plausible claim for relief." Iqbal, 129 S.Ct. at 1950. "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. Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). Stated differently, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id. (quoting Fed.R.Civ.P. 8(a)). Still, Rule 12(b)(6) "does not countenance... dismissals based on a judge's disbelief of a complaint's factual allegations." Colon Health Centers of Am., LLC v. Hazel, 733 F.3d 535, 545 (4th Cir. 2013) (quoting Neitzke v. Williams, 490 U.S. 319, 327 (1989)). "A plausible but inconclusive inference from pleaded facts will survive a motion to dismiss...." Sepulveda-Villarini v. Dep't of Educ. of Puerto Rico, 628 F.3d 25, 30 (1st Cir. 2010) (Souter, J.).
The standard for motions pursuant to Federal Rule of Civil Procedure 12(b)(7) will be discussed below.
The Court has concerns about the quality of the case against the defendants and never wants litigation to proceed unnecessarily. At the same time, the Court is constrained by various standards of review to be cautious in presuming too much or taking too convincingly the plea of a party, especially a defendant, that things are not what they seem to be. Our system of justice does best with more information not less. ...