Ledford v. AVCO Finance (In re Durham)

56 B.R. 145, 1985 Bankr. LEXIS 4703
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedDecember 26, 1985
DocketBankruptcy No. 3-84-02525; Adv. No. 3-85-0006
StatusPublished
Cited by1 cases

This text of 56 B.R. 145 (Ledford v. AVCO Finance (In re Durham)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ledford v. AVCO Finance (In re Durham), 56 B.R. 145, 1985 Bankr. LEXIS 4703 (Ohio 1985).

Opinion

DECISION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

THOMAS F. WALDRON, Bankruptcy Judge.

This is a case arising under 28 U.S.C. § 1334(a) and having been referred to this court is determined to be a core proceeding under 28 U.S.C. § 157(b)(2)(A), (F). This matter is before the court on defendant’s motion to dismiss, plaintiff’s memorandum contra defendant’s motion to dismiss, plaintiff’s motion for summary judgment, defendant’s memorandum contra plaintiff’s motion for summary judgment, and plaintiff’s supplemental memorandum contra defendant’s motion to dismiss and in support of his motion for summary judgment.

Plaintiff’s complaint alleges that a preference, as defined in 11 U.S.C. § 547(b), was granted to defendant-creditor, Avco Finance, by the debtors, Larry David Durham and Kathy M. Durham. No facts were asserted in the complaint itself setting forth the grounds on which the alleged preference supposedly arose. The plaintiff merely attached as exhibits copies of a proof of claim filed by the defendant, copies of two Ohio Certificates of Title with defendant’s liens noted thereon, a copy of the debtors’ promissory note to defendant, and a copy of a disclosure statement.

In response to plaintiff’s complaint, the defendant filed a motion to dismiss under ■Bankr.R. 7012 and Fed.R.Civ.P. 12(b)(6) on the ground that the plaintiff had failed to “state a claim upon which relief can be granted.” No memoranda or affidavits were filed in support of this motion.

The first issue to be addressed, therefore, is whether the defendant has met his burden of proving that no claim for relief has been stated by plaintiff. 2A J. Moore & J. Lucas, Moore’s Federal Practice ¶ 12.07 [2.-5] at 12-63 (2d ed. 1985). The court finds defendant did not meet this burden.

Fed.R.Civ.P. 8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The general rule is “that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Westlake v. Lucas, 537 F.2d 857, 858-59 (6th Cir.1976); Davis H. Elliot Co. Inc. v. Caribbean Utilities Co., Ltd., 513 F.2d 1176, 1182 (6th Cir.1975); Omaha National Bank v. T & T Parts Warehouse, Inc. (In re T & T Parts Warehouse, Inc.), 39 B.R. 399 (Bankr.W.D. Mi.1984) [hereinafter In re T & T Parts ]. The rationale behind the general rule derives from the finality of sustaining such a motion. Because dismissal of an action constitutes a judgment on the merits and is accorded preclusive effect, the courts generally disfavor granting a motion to dismiss. J. Moore, supra.

While the plaintiff in the instant case could have filed a pleading which better connected the attached documents to the proposition he sought to argue, still he is not required to explain in detail his entire claim. Westlake at 858; In re T & T Parts at 400. All the plaintiff is required to do by his pleading is give fair notice to his opponent of what his claim is and the grounds on which it rests. Conley, 355 U.S. at 47, 78 S.Ct. at 102. Here, the plaintiff clearly gave the defendant-creditor fair notice of his claim against him. He identified the section of law as 11 U.S.C. § 547(b) which sets forth the nature of the [147]*147claim — that the creditor received preferential treatment — , and the relief sought— avoidance of the defendant-creditor’s security interest as a secured claim. The plaintiff also submitted supporting documents identifying the transaction in question and the relationship between the parties. Consequently, since the defendant-creditor was at a minimum put on notice of the claim against him, his motion to dismiss on the ground that the plaintiff has stated no claim for relief is hereby DENIED.

In his motion contra to plaintiff’s motion for summary judgment, however, the defendant raises an issue that would ordinarily warrant issuing an order of dismissal — i.e., that plaintiff as Chapter 13 Trustee had no standing to avoid a preference under 11 U.S.C. § 547(b). J. Moore, supra ¶ 12.07 [2.-5] at 12-68. This court has previously ruled that a Chapter 13 Trustee has standing to bring a preference action under § 547(b). Ledford v. Roth Realty, Inc. (In re Lonsbury) Case No. 3-83-00199; Adversary No. 3-83-0242 (Bankr.S.D.Oh. Aug. 1, 1983) (copy attached). Consequently, we find this claim of the defendant to be without merit.

Also pending in this action is plaintiff’s motion for summary judgment, brought pursuant to Bankr.R. 7056 and Fed.R. Civ.P. 56 on the grounds that the pleadings demonstrated no genuine issue as to any material fact and that the plaintiff is entitled to judgment as a matter of law, to which defendant has submitted a memorandum in opposition.

Plaintiff asserts that plaintiff-trustee has set forth a prima facie case of a preference under 11 U.S.C. § 547(b),1 and that the defendant-creditor does not meet the exception set forth in 11 U.S.C. § 547(c)(3)(B) which states:

(c) The trustee may not avoid under this section a transfer—
(3) That creates a security interest in property acquired by the debtor—
(A) to the extent such security interest secures new value that was—
(i) given at or after the signing of a security agreement that contains a description of such property as collateral;
(ii) given by or on behalf of the secured party under such agreement;
(iii) given to enable the debtor to acquire such property; and
(iv) in fact used by the debtor to acquire such property; and

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Bluebook (online)
56 B.R. 145, 1985 Bankr. LEXIS 4703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ledford-v-avco-finance-in-re-durham-ohsb-1985.