486 B.R. 518
Bankr. D.N.M.2013Background
- Pro se plaintiffs Danbom allege defendant forged a joint insurance check and stole $12,496.37; they seek non-dischargeability of the debt in bankruptcy.
- They filed an adversary proceeding objecting to discharge under 11 U.S.C. §§ 727 and 1328, later treated as a § 523 nondischargeability action.
- There is a related state-court judgment in Roosevelt County Magistrate Court awarding $12,496.37 with 8.75% interest, arising from forgery and embezzlement claims.
- The September 2005 insurance claim check was made out to Prewitt Mobile Service and Charlie or Lisa Danbom; the check was allegedly forged on September 21, 2005.
- The court notes the complaint states plausible claims under § 523(a)(2)(A), § 523(a)(4), and/or § 523(a)(6); it recognizes pro se pleading standards and rejects a strict Conley-era dismissal unless beyond doubt no relief is possible.
- The matter is a core proceeding and the motion to dismiss is denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint states a claim for nondischargeability | Danbom argues the facts show fraud/embezzlement warranting §523(a) relief | Prewitt argues the complaint fails to state a claim | Yes; the complaint states a plausible nondischargeability claim under §523(a) |
| Whether the complaint must cite §523(a) specifically | Danbom’s pleadings show relief under §523 despite mislabeling | Prewitt contends specific subsection labeling is required | No; §523 labeling not required; relief can be determined from the pleading |
| Whether the complaint adequately pleads fraud under Rule 9(b) | Danbom pleads circumstances of fraud; sufficient to notice defendant | Prewitt argues Rule 9(b) requires more particularity | Yes; circumstancias of fraud are pled with sufficient particularity |
| Whether the complaint sufficiently alleges the underlying theory (fraud/defalcation/embezzlement/larceny) | Danbom’s facts can be read to support §523(a)(2)(A), (4), or (6) | Defendant argues lack of explicit theory | Yes; facts support multiple §523(a) theories |
| Whether the court should strictly construe discharge exceptions at this stage | Strict construction against creditors would be inappropriate here | Strict construction favors defendants; trial will refine proof | No; plaintiff’s allegations fall within one or more §523(a) exceptions at this stage |
Key Cases Cited
- Hall v. Bellmon, 935 F.2d 1106 (10th Cir.1991) (liberal pro se pleading standard; notice and plausibility guidance)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleadings must show plausible claims, not merely possible)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (facial plausibility required for claims to survive dismissal)
- Casanova v. Ulibarri, 595 F.3d 1120 (10th Cir.2010) (liberal construction of pro se pleadings under Bell Atlantic/Iqbal standard)
- Hebbe v. Pliler, 627 F.3d 338 (9th Cir.2010) (liberal construction of pro se complaints remains appropriate)
- Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163 (10th Cir.2010) (pro se pleadings and notice sufficiency under Rule 9(b) and 8)
- Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246 (10th Cir.1997) (circumstances of fraud must be pled with time/place/contents as applicable under Rule 9(b))
- United States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163 (10th Cir.2010) (relator pleading standards apply to fraud claims)