532 B.R. 231
Bankr. M.D. Penn.2015Background
- Debtor (Paul Dizinno) filed Chapter 7 on November 14, 2014; creditor/pro se Tomey sought to except $4,400 of loans from discharge or deny discharge and filed an adversary complaint treated under Fed. R. Bankr. P. 7001.
- Tomey’s complaint was a 14‑page unsigned narrative without numbered paragraphs and included irrelevant material; he initially failed to pay the adversary filing fee and the complaint lacked a signature line execution.
- Tomey alleges Debtor obtained multiple unwritten loans totaling $4,400 by promising to repay within a year, obtain additional work, and cut expenses; Debtor allegedly did not repay and did not take the promised steps.
- Debtor moved to dismiss for noncompliance with bankruptcy pleading rules (Fed. R. Bankr. P. 9010 and 9011) and for failure to state a claim under Fed. R. Bankr. P. 7012(b)(6) (incorporating Fed. R. Civ. P. 12(b)(6)).
- Court found the pleading defective (unspecified dates/amounts, no numbered paragraphs, unsigned) and that § 523(a)(2)(A) fraud claims require particularized pleading under Rule 9(b); allowed limited leave to amend but dismissed § 727(a)(3) claim with prejudice and denied jury demand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint complies with Fed. R. Bankr. P. 9010/9011 | Tomey filed narrative complaint (pro se) and did not sign but argues merits should proceed | Debtor: complaint must be signed and use numbered paragraphs limited to single circumstances | Dismissed for noncompliance; leave to amend within 30 days; amended complaint must be signed and conform to Rule 9010 |
| Whether fraud claim under § 523(a)(2)(A) is sufficiently pleaded | Tomey: Debtor made misrepresentations of intent to repay inducing loans totaling $4,400 | Debtor: complaint lacks particularity as to who/what/when/where/how required by Rule 9(b) | Dismissed for failure to plead fraud with particularity but plaintiff given leave to file an amended complaint alleging specific misrepresentations, timing, reliance, and loss |
| Whether denial of discharge claims under § 727(a)(3), (4), (5) are viable | Tomey alleges false oaths, missing assets, and lack of records / transfers | Debtor: schedules and facts do not support denial; claim lacks specificity and value allegations | §727(a)(3) dismissed with prejudice; §727(a)(4) and (5) dismissed without prejudice with leave to amend only if specific false statements and asset values/ losses are pleaded |
| Whether Tomey is entitled to jury trial | Tomey demanded jury trial for discharge/exceptions | Debtor: bankruptcy adversary for discharge/exception is equitable, no jury right | Denied: no Seventh Amendment jury right for §523 or §727 proceedings in bankruptcy court |
Key Cases Cited
- Kingman Park Civic Ass’n v. Williams, 348 F.3d 1033 (D.C. Cir.) (purpose of Rule 12(b)(6) is to test legal sufficiency)
- Carino v. Stefan, 376 F.3d 156 (3d Cir.) (accept well‑pleaded allegations and view in plaintiff’s favor on motion to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (distinguish conclusions from well‑pleaded factual allegations)
- Field v. Mans, 516 U.S. 59 (justifiable reliance requirement in §523 fraud context)
- Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786 (3d Cir.) (alternative means to satisfy Rule 9(b) particularity)
- Meridian Bank v. Alten, 958 F.2d 1226 (3d Cir.) (standards for recordkeeping expectations for unsophisticated debtors)
- Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (proceedings charactered as equitable do not carry Seventh Amendment jury right)