United States District Court, D. South Carolina, Greenville Division
OPINION AND ORDER
C. Coggins, Jr. United States District Judge.
matter is before the Court on Defendants Candy Kern-Fuller
and the Upstate Law Group's (“the Upstate
Defendants”) Motion to Dismiss for Failure to State a
Claim and Defendants Bradling Financial Group, Mark Corbett,
and Veteran's Benefit Leverage's (“the Corbett
Defendants”) Motion to Dismiss. ECF Nos. 39, 60.
Plaintiffs filed Responses in Opposition, and the Upstate
Defendants filed a Reply. ECF Nos. 48, 53, 62. Accordingly,
the Motions are ripe for review.
bring this action seeking a declaration that Defendants
violated 38 U.S.C. § 5301(a) and 37 U.S.C. § 701
and seeking damages for Defendants' alleged violations of
the Racketeer Influenced and Corrupt Organizations Act
(“RICO”) and civil conspiracy. Plaintiffs allege
that Defendants maintained websites designed to attract
veterans in need of money. Plaintiffs contend that Defendants
promised an up-front lump sum in exchange for the
veteran's agreement to sell a portion of their military
pension to an investor and to allow Defendants to deduct
certain fees. Plaintiffs assert that Corbett operated
websites designed to attract prospective veterans and once
they signed the agreements, their pensions were redirected to
Kern-Fuller's IOLTA account; Kern-Fuller would then
distribute the proceeds.
their Motion, the Upstate Defendants argue that Plaintiffs
have failed to allege sufficient allegations to state a claim
against them with respect to Plaintiffs' request for
declaratory judgment and their claims under RICO and civil
conspiracy. The Upstate Defendants also assert that this
action is barred by the applicable statute of limitations.
The Corbett Defendants join in the Upstate Defendants'
Motion and assert that the arguments raised by the Upstate
Defendants apply with equal force to them.
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails “to state
a claim upon which relief can be granted.” Such a
motion tests the legal sufficiency of the complaint and
“does not resolve contests surrounding the facts, the
merits of the claim, or the applicability of defenses . . . .
Our inquiry then is limited to whether the allegations
constitute ‘a short and plain statement of the claim
showing that the pleader is entitled to relief.'”
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992) (internal quotation marks and citation
omitted). In a Rule 12(b)(6) motion, the court is obligated
to “assume the truth of all facts alleged in the
complaint and the existence of any fact that can be proved,
consistent with the complaint's allegations.”
E. Shore Mkts., Inc. v. J.D. Assocs. Ltd.
P'ship, 213 F.3d 175, 180 (4th Cir. 2000). However,
while the Court must accept the facts in a light most
favorable to the nonmoving party, it “need not accept
as true unwarranted inferences, unreasonable conclusions, or
survive a motion to dismiss, the complaint must state
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570(2007). Although the
requirement of plausibility does not impose a probability
requirement at this stage, the complaint must show more than
a “sheer possibility that a defendant has acted
unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A complaint has “facial plausibility”
where the pleading “allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
“[m]alice, intent, knowledge, and other conditions of a
person's mind may be alleged generally, ” when a
party alleges “fraud or mistake, ” he or she
“must state with particularity the circumstances
constituting fraud or mistake.” Fed.R.Civ.P. 9(b).
Particularity requires that the claimant state “the
time, place, and contents of the false representations, as
well as the identity of the person making the
misrepresentation and what he obtained thereby.”
Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 784 (4th Cir. 1999) (quoting 5 Charles Alan Wright
and Arthur R. Miller, Federal Practice and Procedure: Civil
§ 1297 at 590 (2d 1990)). A primary purpose of Rule 9(b)
is to ensure “that the defendant has sufficient
information to formulate a defense by putting it on notice of
the conduct complained of.” Harrison, 176 F.3d
at 784 (internal citations omitted). Lack of compliance with
Rule 9(b)'s pleading requirements is treated as a failure
to state a claim under Rule 12(b)(6). See United States
ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125
F.3d 899, 901 (5th Cir. 1997).
of Plaintiffs' Amended Complaint seeks a declaratory
judgment that Defendants' conduct violates the Federal
Anti-Assignment Acts. ECF No. 17 ¶ 79. The Upstate
Defendants and the Corbett Defendants have moved to dismiss
this claim, alleging that they are not parties to the
contracts at issue in this case and, thus, that the Court
cannot declare their acts unlawful. In response, Plaintiffs
contend that the Court has the authority to declare that
Defendants' conduct in perpetuating a scheme to violate
the Federal Anti-Assignment Acts was unlawful. After a review
of the arguments of the parties and the relevant law, the
Court concludes that the Upstate Defendants and the Corbett
Defendants' Motions to Dismiss Count I of the Amended
Complaint should be denied.
Declaratory Judgment Act provides that, ‘[i]n a case of
actual controversy within its jurisdiction . . . any court of
the United States . . . may declare the rights and other
legal relations of any interested party seeking such
declaration, whether or not further relief is or could be
sought.'” MedImmune, Inc. v. Genentech,
Inc., 549 U.S. 118, 126 (2007) (quoting 28 U.S.C. §
2201(a)). The Supreme Court of the United States has
“explained that the phrase ‘case of actual
controversy' in the Act refers to the type of
‘Cases' and ...