International Bank of Commerce v. Saenz (In re Saenz)

516 B.R. 423
CourtUnited States Bankruptcy Court, S.D. Texas
DecidedAugust 8, 2014
DocketBankruptcy No. 13-70423; Adversary No. 13-07028
StatusPublished
Cited by2 cases

This text of 516 B.R. 423 (International Bank of Commerce v. Saenz (In re Saenz)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Bank of Commerce v. Saenz (In re Saenz), 516 B.R. 423 (Tex. 2014).

Opinion

MEMORANDUM OPINION

MARVIN ISGUR, Bankruptcy Judge.

On March 7, 2014, Humberto Saenz, Jr. filed a motion to dismiss International Bank of Commerce’s (“IBC”) Complaint for Determination of Non-Dischargeable Debt. (Case No. 13-7028, ECF No. 1). IBC fails to state a direct fraud claim for an exception to discharge under § 523(a)(2). IBC also fails to state a derivative fraud claim under § 523(a)(2).

IBC may be given an opportunity to replead its derivative fraud claim under § 523(a)(2). If Gomez attempts to replead his § 523(a)(2) claim, then IBC will be granted leave to amend its equitable sub-rogation claim under § 523(a)(2). IBC’s claims for direct fraud and indemnification under § 523(a)(2) are dismissed. Accordingly, the motion is granted in part and denied in part.

Procedural Background

In December of 2012, Jose Gomez and JMG JMG Ventures, LLC (“Gomez”) filed an amended petition in their state court lawsuit against Saenz, Pizza Patron Inc. (“PPI”), Lone Star National Bank and International Bank of Commerce (“IBC”). The lawsuit arises from a business transaction between Gomez and Saenz. On November 26, 2013, IBC filed a Complaint for Determination of Non-dischargeable Debt under 11 U.S.C. § 523(a)(2)(A). (ECF No. 1). Gomez’s amended state court lawsuit is attached as an Exhibit to the Complaint.

On March 7, 2014, Saenz filed a motion to dismiss IBC’s complaint. (ECF No. 19). On March 28, 2014, IBC filed (i) its First Amended Complaint and (ii) a response to [427]*427Saenz’s motion to dismiss. (ECF No. 21; ECF No. 22). On April 2, 2014, Saenz filed (i) a reply to IBC’s response and (ii) a motion to strike IBC’s First Amended Complaint. (ECF No. 23). On June 20, 2014, IBC filed a response to Saenz’s motion to strike. (ECF No. 24). On June 24, 2014, Saenz filed a reply to IBC’s response. (ECF No. 25). Finally, on July 15, 2014, IBC filed a reply to Saenz’s reply. (ECF No. 26).

Background Facts

On October 15, 2009, Gomez signed a Purchase-Sale Agreement for the purchase of Saenz’s equipment and inventory, and for the Pizza Patron franchise in Rio Grande City. On February 8, 2010, Gomez obtained a $287,200.00 loan from Lone Star Bank in connection with the purchase. Gomez contends that Saenz and IBC Bank created false profit and loss reports for the franchise and presented them to Gomez prior to the sale in order to induce him to buy the franchise and help him secure financing with Lone Star Bank. Specifically, Gomez claims that IBC’s loan officer, Elizabeth Goana, “created Good Will Value along with the Profit and Loss documents that were provided to Plaintiffs in order to induce the Plaintiffs to purchase the franchise and thereby pay off the balance of the loan of the business.” (ECF No. 1-1 at 10).

In IBC’s Original Complaint, it admits that it created Profit and Loss reports for the Pizza Patron franchise, but alleges that it relied on numbers provided to them by Saenz. (ECF No. 1 at 3). In its Amended Complaint, IBC alleges that it simply provided Saenz with blank financial statement forms. (ECF No. 21 at 4). IBC further alleges that “Saenz represented to IBC that he needed a finance statement and IBC may have provided him a blank one. Saenz then presented a filled out Finance Statement which he alleged was filled out by IBC. IBC was injured as a result of this misrepresentation by Saenz to Gomez and IBC.” (ECF No. 21 at 4).

IBC requests a declaration that (i) “the Saenz Defendants, jointly and severally, are liable to IBC for any liability assessed against IBC in favor of the Gomez Plaintiffs” and (ii) that the Court declare “that the judgment debt awarded to IBC as to Saenz, including attorneysf] fees and costs, is non-dischargeable under section 523(a)(2)(A) of the Bankruptcy Code.” (ECF No 1 at 6).

Rule 12(b)(6) Standard

Saenz’s motion to dismiss for failure to state a claim for which relief can be granted is filed under Fed. R. Bankr.P. 7012, which incorporates Fed. R. Civ. P. 12(b)(6). The Court reviews motions under Rule 12(b)(6) by “accepting all well-pleaded facts as true and viewing those facts in the light most favorable to the plaintiffs.” Stokes v. Gann, 498 F.3d 483, 484 (5th Cir.2007) (per curiam). However, the Court “will not strain to find inferences favorable to the plaintiff.” Southland Sec. Corp. v. INSpire Ins. Solutions Inc., 365 F.3d 353, 361 (5th Cir.2004) (internal quotations omitted).

To avoid dismissal for failure to state a claim, a plaintiff must meet Fed.R.Civ.P. 8(a)(2)’s pleading requirements. Rule 8(a)(2) requires a plaintiff to plead “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R.Civ.P. 8(a). In Ashcroft v. Iqbal, the Supreme Court held that Rule 8(a)(2) requires that “the well-pleaded facts” must “permit the court to infer more than the mere possibility of misconduct.” 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Rule 8(a)(2)). “Only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d [428]*428929 (2007)). “[A] complaint does not need detailed factual allegations, but must provide the plaintiffs grounds for entitlement to relief — including factual allegations that when assumed to be true raise a right to relief above the speculative level.” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir.2009) (internal quotation marks removed).

Rule 9

Fraud claims must, in addition, meet Fed.R.Civ.P. 9(b)’s heightened pleading requirements. Under Rule 9(b), fraud claims must be alleged with particularity concerning the circumstances of the fraud. Fed.R.Civ.P. 9(b). See Oppenheimer v. Prudential Sec. Inc., 94 F.3d 189, 195 (5th Cir.1996) (upholding district court’s dismissal of fraud claims where the plaintiff failed to allege when an allegedly fraudulent sales charge was incurred or the extent of her damages); Red Rock v. JAFCO Ltd., 1996 WL 97549, at *3 (5th Cir.1996) (holding that the plaintiffs allegations did not satisfy Rule 9(b) where they failed to allege the time, place, or content of any misrepresentations). “To plead fraud adequately, the plaintiff must ‘specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.’” Sullivan v. Leor Energy, LLC,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
516 B.R. 423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-bank-of-commerce-v-saenz-in-re-saenz-txsb-2014.