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Ashmore v. Barber

United States District Court, D. South Carolina

September 1, 2016

Beattie B. Ashmore, In His Capacity as Court-Appointed Receiver for Ronnie Gene Wilson and Atlantic Bullion and Coin, Inc., Plaintiff,
v.
Dewey Barber, Defendant.

          ORDER AND OPINION

         Plaintiff Beattie B. Ashmore (“Plaintiff”), in his capacity as court-appointed Receiver for Ronnie Gene Wilson (“Wilson”) and Atlantic Bullion and Coin, Inc. (“AB&C”), filed the instant action against Defendant Dewey Barber (“Defendant”) to recover grossly excessive payments received by Defendant as a return on his investment in the Wilson-AB&C Ponzi scheme.[1] (ECF No. 1.)

         This matter is before the court as a result of Defendant's Motion to Dismiss pursuant to Rules 12(b)(2), 12(b)(3), 12(b)(5) and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 7.) Plaintiff opposes Defendant's Motion to Dismiss in its entirety. (ECF No. 9.) For the reasons set forth below, the court DENIES WITHOUT PREJUDICE Defendant's Motion to Dismiss.

         I. RELEVANT BACKGROUND TO PENDING MOTION

         Plaintiff is the court appointed Receiver in In Re: Receiver for Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc., C/A No. 8:12-cv-02078-JMC, ECF No. 1 (D.S.C. July 25, 2012), a case related to the instant matter. Plaintiff alleges that “[o]n October 21, 2008, Defendant made an ‘investment' [in the Wilson-AB&C Ponzi scheme] of $31, 280.00.” (ECF No. 1 at 4 ¶ 24.) Subsequently, “Defendant received $74, 260.00 in returns [from the Wilson-AB&C Ponzi scheme] on March 1, 2010, resulting in a profit of $42, 980.00.” (Id. at ¶ 25.)

         Based on his appointment as Receiver tasked with “locating, managing, recouping, and distributing the assets of the Wilson-AB&C investment scheme, ” Plaintiff commenced the instant action against Defendant on November 5, 2015, asserting claims for fraudulent transfer (in violation of the Statute of Elizabeth, SC Code Ann. § 27-23-10 (2014) and/or the Georgia Uniform Fraudulent Transfer Act, Ga. Code Ann. §§ 18-2-70-18-2-80 (2010)) and unjust enrichment. (ECF No. 1 at 1 ¶ 1 & 6 ¶ 37-7 ¶ 51.) On January 4, 2016, Defendant filed the instant Motion to Dismiss. (ECF No. 7.) Thereafter, on January 22, 2016, Plaintiff filed a Memorandum in Opposition to Defendant's Motion to Dismiss (ECF No. 9).

         II. JURISDICTION

         The court has jurisdiction over this matter under 28 U.S.C. § 1331 pursuant to Plaintiff's allegation that the Complaint “is so related to the In Re Receiver, 8:12-CV-2078-JMC case and the underlying criminal case, United States v. Wilson, et al, 8:12-cr-00320[, ]” cases in which the court has jurisdiction, “that it forms part of the underlying case or controversy.” (ECF No. 1 at 1 ¶ 3.) The court may properly hear Plaintiff's state law claims for fraudulent transfer and unjust enrichment based on supplemental jurisdiction since these claims “are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy . . . .” 28 U.S.C. § 1367(a).

         III. LEGAL STANDARD

         A. Motion to Dismiss for Lack of Personal Jurisdiction

         When a defendant challenges the court's personal jurisdiction under Rule 12(b)(2), plaintiff has the burden of proving that jurisdiction exists “by a preponderance of the evidence.” In re Celotex Corp., 124 F.3d 619, 628 (4th Cir. 1997). “[W]hen, as here, a district court rules on a Rule 12(b)(2) motion without conducting an evidentiary hearing or without deferring ruling pending receipt at trial of evidence relevant to the jurisdictional issue, but rather relies on the complaint and affidavits alone, ‘the burden on the plaintiff is simply to make a prima facie showing of sufficient jurisdictional basis in order to survive the jurisdictional challenge.'” Id.; see also New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005) (noting that a plaintiff need only make a prima facie showing of jurisdiction when the court does not conduct an evidentiary hearing). In deciding whether plaintiff has met this burden, the court construes all disputed facts and draws all reasonable inferences from the proof in favor of jurisdiction. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003); Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). In ruling on a motion to dismiss for lack of personal jurisdiction, the court may consider evidence outside of the pleadings, such as affidavits and other evidentiary materials, without converting the motion to dismiss into a motion for summary judgment. Magic Toyota, Inc. v. Se. Toyota Distribs., Inc., 784 F.Supp. 306, 310 (D.S.C. 1992).

         B. Motion to Dismiss for Improper Venue

         A motion to dismiss for improper venue is brought pursuant to Rule 12 of the Federal Rules of Civil Procedure. “Unlike a Rule 12(b)(6) motion, evidence outside the pleadings may be ‘freely consider[ed]' in ruling on a Rule 12(b)(3) motion.” Am. Ins. Mktg. Corp. v. 5 Star Life Ins. Co., 958 F.Supp.2d 609, 612 (D. Md. July 26, 2013) (citing Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 550 (4th Cir.2006)). “A plaintiff is obliged, however, to make only a prima facie showing of proper venue in order to survive a motion to dismiss.” Aggarao v. MOL Ship Mgmt. Co., Ltd., 675 F.3d 355, 366 (4th Cir. 2012) (citation omitted). In assessing whether the plaintiff has made this showing, courts must “view the facts in the light most favorable to the plaintiff.” Id. (citation omitted).

         C. Motion to Dismiss for Insufficient Service of Process

         The court has the discretion to dismiss a case under Fed.R.Civ.P. 12(b)(5) for insufficient service of process. Reinhold v. Tisdale, C/A No. 8:06-3311-MBS-BHH, 2007 WL 2156661, at *3 (D.S.C. Apr. 30, 2007) (citing Dimensional Commc'ns, Inc. v. OZ Optics, Ltd., 218 F.Supp.2d 653, 655 (D.N.J. 2002)). “When personal jurisdiction is challenged as a result [of] alleged improper service, ‘[a] trial court may consider evidence by affidavit, depositions or live testimony without converting the proceeding to one for summary judgment.'” Lail v. United States, C/A No. 3:11-cv-0977-TLW-TER, 2012 WL 3779386, at *6 (D.S.C. Aug. 10, 2012) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). Sufficiency of service of process is generally governed by Fed.R.Civ.P. 4.

         D. Motion to Dismiss for Failure to State a Claim

         A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         A Rule 12(b)(6) motion “should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., 7 F.3d at 1134. “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, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. (citing Twombly, 550 U.S. at 556).

         IV. ANALYSIS

         A. Dismissal for Lack of Personal Jurisdiction

         1. The Parties' Arguments

         Defendant first argues that the court lacks personal jurisdiction over him because Plaintiff failed to timely file copies of the Complaint and the Order of Appointment in the Southern District of Georgia within 10 days of his appointment. (ECF No. 7 at 5-7.) In support of this argument, Defendant asserts that the Order of Appointment was executed on July 25, 2012 and the Complaint and Order of Appointment were filed in the Southern District of Georgia on August 7, 2012, which is 13 days later. (Id. at 6.) Defendant further asserts that pursuant to the jurisdictional prerequisites of 28 U.S.C. § 754, Plaintiff's late filing divests him of “jurisdiction and control over any property in the Southern District of Georgia.” (Id ...


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