Timothy Rister v. Yadkin Bank
714 F. App'x 170
| 3rd Cir. | 2017Background
- Timothy Rister, guarantor on a defaulted SBA loan from Yadkin Bank, sued the bank pro se after receiving a demand for payment, alleging tort and contract claims related to loan fees and accounting of a $36,000 landlord construction credit.
- The District Court dismissed all counts except Count Four with prejudice for failure to state a claim and futility; Count Four (dismissed without prejudice) concerned an alleged undefined "commitment fee."
- The court invited Rister to amend only Count Four to clarify the commitment-fee allegations; Rister instead filed an amended complaint rehashing previously dismissed counts (including Counts Two, Seven, Ten) and asserting vagueness about "packaging fee" and "SBA fee."
- The District Court dismissed the amended complaint and denied Rister’s untimely motion for reconsideration and other relief; Rister appealed pro se, arguing disability accommodations and that he should have been allowed to replead the previously dismissed counts.
- The Third Circuit reviewed the 12(b)(6) dismissal de novo, reviewed denial of leave to amend and denial of reconsideration for abuse of discretion, and construed pro se pleadings liberally but limited consideration to complaint, exhibits, and consistent allegations in Rister’s response brief.
- The Third Circuit affirmed: even considering consistent response-brief allegations, Rister failed to plead plausible claims (no actionable increase in the guaranteed loan amount; fees were quantified in the commitment letter), and amendment would have been futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pro se plaintiff’s response brief allegations may be considered on a 12(b)(6) motion | Rister: court should consider allegations in his response and give accommodations for his disability | Yadkin: dismissal proper; pleadings and exhibits govern; claims meritless | Court: may consider response allegations that incorporate and are consistent with the complaint; doing so does not save Rister’s claims |
| Whether dismissal of most counts with prejudice was proper (failure to state claim / futility) | Rister: should have been allowed to amend Counts Two, Seven, Ten (core claim that bank increased amount due without notice) | Yadkin: documents and pleadings refute any improper increase; amendment would be futile | Court: dismissal with prejudice proper; no plausible allegation that loan amount increased; futility justified |
| Whether amended complaint adequately alleged undefined or undisclosed fees ("commitment fee", "packaging fee", "SBA fee") | Rister: fees were vague/ambiguous or undisclosed, warranting relief | Yadkin: commitment letter specifically quantified packaging and SBA fees; no nondisclosure | Court: fees were quantified; pleadings failed to show required nondisclosure or ambiguity; dismissal proper |
| Whether district court abused discretion denying reconsideration and additional leave to amend | Rister: court should have provided extra leave and reconsidered due to disability and failure-to-notice theory | Yadkin: denial proper given prejudice, delay, and futility | Court: no abuse of discretion; reconsideration standard narrow and amendment would be futile |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (Twombly pleading principles informing Iqbal)
- McTernan v. City of York, 577 F.3d 521 (3d Cir. 2009) (construe pro se pleadings liberally; accept well-pleaded allegations)
- Dluhos v. Strasberg, 321 F.3d 365 (3d Cir. 2003) (liberal construction of pro se pleadings)
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (court may consider complaint and exhibits relied upon)
- Howard Hess Dental Labs., Inc. v. Dentsply Int’l, Inc., 602 F.3d 237 (3d Cir. 2010) (de novo review of Rule 12(b)(6) dismissal)
- Grayson v. Mayview State Hosp., 293 F.3d 103 (3d Cir. 2002) (review standard for denial of leave to amend)
- Alston v. Parker, 363 F.3d 229 (3d Cir. 2004) (grounds for denying leave to amend: bad faith, undue delay, prejudice, futility)
- Max’s Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669 (3d Cir. 1999) (abuse-of-discretion review of reconsideration denials)
- Blystone v. Horn, 664 F.3d 397 (3d Cir. 2011) (narrow scope of motions for reconsideration)
- Mack v. Warden Loretto FCI, 839 F.3d 286 (3d Cir. 2016) (consideration of allegations in response brief when consistent with complaint)