3:24-ap-03004
Bankr. S.D.W. Va.Mar 26, 2025Background
- Brianne Larisse Hurd and Rodney Brian Hurd (“the Hurds”) filed for Chapter 7 bankruptcy protection on April 12, 2024.
- Prior to the bankruptcy, on July 6, 2023, the Hurds had borrowed $6,000 from Terry Pearsall to repay debts and avoid eviction.
- After borrowing, the Hurds allegedly refused repayment and a default judgment was entered against them in state court for $6,000 plus costs and interest.
- Pearsall commenced an adversary proceeding seeking a ruling that this judgment debt should be excepted from discharge under 11 U.S.C. § 523(a)(2)(B) due to alleged fraud.
- The court addressed several procedural motions from both parties, including motions to strike, to quash, and for summary judgment, and considered whether Pearsall’s complaint stated a claim for nondischargeability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Nondischargeability under § 523(a)(2)(B) | The judgment is nondischargeable due to a false written statement about financial condition. | No such statement or fraud; complaint insufficient. | Dismissed: Complaint fails to allege required facts/elements of § 523(a)(2)(B) fraud. |
| Sufficiency of the Complaint | Complaint alleges facts sufficient for relief | Insufficient factual allegations and no fraud | Complaint does not meet Rule 8/9(b) standards—dismissed for failure to state a claim. |
| Timing and Use of Written Statement | Later texts refusing payment show fraud | Statements made after loan are irrelevant | Post-loan statements cannot support claim; no pre-loan written misrepresentation pled. |
| Pending Procedural Motions | Motions should be addressed on merits | Motions are moot if complaint dismissed | All pending motions denied as moot following dismissal of complaint. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standards for plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility requirement for complaints)
- Erickson v. Pardus, 551 U.S. 89 (all factual allegations must be taken as true at 12(b)(6) stage)
- McCleary–Evans v. Md. Dep't of Transp., State Highway Admin., 780 F.3d 582 (Rule 8 pleading standard)
- Conley v. Gibson, 355 U.S. 41 (standard for stating a claim)