Superior Home Mortgage, LLC v. Marbury
1:19-cv-01056
| W.D. Tenn. | Oct 21, 2019Background
- Plaintiffs Superior Home Mortgage, LLC (f/k/a B&H Finance, LLC) and Roger Swaim sued multiple defendants, alleging fraud, tortious misrepresentation, conspiracy, breach of contract, unjust enrichment, conversion, and fraudulent transfers to evade creditors.
- Defendants include Jennifer Hall and her husband Billy Hall; complaint alleges Jennifer (an officer/member of B&H entities) diverted funds and transferred monies to Billy Hall or benefited him.
- Plaintiffs seek declaratory relief that defendants hold assets obtained by fraudulent schemes and ask that indebtedness be transferred to plaintiffs to satisfy judgment.
- Billy Hall, proceeding pro se, moved to dismiss and sought sanctions, arguing he was named merely to harass him and relying on Rule 11 (and generally citing sanctioning authority).
- The court declined to consider an unattached signed statement of Jennifer Hall offered by Billy Hall, and found Hall offered no supporting facts or explanation for sanctions.
- Applying the Rule 12(b)(6)/Twombly-Iqbal standard, the court concluded plaintiffs pleaded sufficient factual allegations tying Billy Hall to fraudulent transfers and benefits, so the complaint states plausible claims against him; the motion was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sanctions are warranted under Rule 11/§1927/inherent power | Plaintiffs implicitly defend the complaint as grounded in plausible allegations and do not concede misconduct | Hall: he was named solely to harass; requests sanctions | Denied — Hall offered no factual support or explanation for sanctions; court may impose sanctions but plaintiff's filing not shown frivolous |
| Whether complaint fails to state a claim under Rule 12(b)(6) | Plaintiffs: complaint alleges fraud, transfers, benefits to Billy Hall, conversion and injury — sufficient to plead plausible claims | Hall: complaint insufficient; seeks dismissal | Denied — factual allegations, if proven, could make Hall liable; complaint meets Twombly/Iqbal plausibility standard |
| Whether court may consider extrinsic signed statement submitted by Hall | Plaintiffs: objected; statement not part of complaint and was not attached to motion | Hall: relied on Jennifer Hall’s signed statement (not attached) | Court did not consider the unattached statement; motions considered on complaint allegations |
Key Cases Cited
- RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125 (6th Cir. 1996) (standard for Rule 12(b)(6) motion testing legal sufficiency of complaint)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard requires more than labels and conclusions)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must plead factual content allowing reasonable inference of defendant's liability)
- Husky Int’l Elecs., Inc. v. Ritz, 136 S. Ct. 1581 (2016) (recipient of fraudulent conveyance may be liable when requisite intent is shown)