Opinion
BANKRUPTCY NO.: 5-10-bk-00307, ADVERSARY NO.: 5-10-ap-00183.
September 7, 2010
{ Nature of Proceeding : Defendant's [Town Country Leasing, LLC] Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b) and Fed.R.Bankr.P. 7012 (Doc. #7)}
OPINION
Drafted with the assistance of Richard P. Rogers, Law Clerk.
On May 14, 2010, the Plaintiffs filed a Complaint to Declare Judgment Lien Void Under Section 11 U.S.C. Section 547(b). The allegations of the Complaint essentially parrot the statutory requirements necessary to avoid a preferential transfer under 11 U.S.C. § 547(b) of the Bankruptcy Code. The Complaint was met by Defendant's Motion to Dismiss which questions the standing of the Plaintiffs to bring a preferential transfer Complaint against the Defendant.
Section 547(b) empowers the trustee with the right to avoid preferential transfers. See 11 U.S.C. § 547(b). Within certain stated parameters, however, debtors may initiate to conclusion preferential transfer actions on their own behalf pursuant to 11 U.S.C. § 522(h). For its part, the Defendant's Brief raises issues addressing the extent to which Plaintiffs can use Section 547 to avoid the full amount of the judgment lien and question the extent to which alleged exemptions may be impaired under 11 U.S.C. § 522. In the Plaintiffs' response to Defendant's Motion to Dismiss and Brief in Support, Plaintiffs raise both factual allegations and legal issues which arguably support their position that they have standing pursuant to 11 U.S.C. § 522(h) to bring the underlying preference action under Section 547(b). Nevertheless, factual allegations that do not appear in the Complaint cannot be considered in disposing of the immediate Motion.
Keeping in mind the current procedural posture of the underlying adversary proceeding, I will rule on the Defendant's Motion to Dismiss by looking to the four corners of the underlying adversary Complaint and the Motion to Dismiss under the dictates of Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008). In reviewing the underlying Complaint under those standards, I find that the Plaintiffs have not alleged, in their Complaint, sufficient factual or legal elements to prove standing to bring the underlying preferential Complaint against the Defendant. See In re Andrews, 262 B.R. 299 (Bankr.M.D. Pa. 2001); Howe v. Creditors Interchange Receivables Management, LLC, et al. (In re Howe), 2009 WL 2916935 (Bankr.E.D.Pa., May 27, 2009) and Suelflow v. Ambank (In re Suelflow), 2008 WL 5157864 (Bankr.D.N.M., July 28, 2008). I find that the Complaint does not state a claim for which relief can be granted against the Defendant.
The Motion to Dismiss filed by the Defendant, Town Country Leasing, LLC, is granted.
However, the Plaintiffs are hereby granted leave to file an Amended Complaint in conformance with this Opinion on or within thirty (30) days of the Order accompanying this Opinion, should the Plaintiffs choose to proceed further with this litigation.
My Order will follow.
Dated: September 7, 2010
Notice Recipients
Recipients submitted to the BNC (Bankruptcy Noticing Center) without an address: Recipients of Notice of Electronic Filing: Recipients submitted to the BNC (Bankruptcy Noticing Center):
District/Off: 0314-5 User: CSisk Date Created: 9/7/2010 Case: 5:10-ap-00183-JJT Form ID: pdf003 Total: 6 dft Town Country Leasing, LLC TOTAL: 1 aty Deirdre Marie Richards drichards@lammrubenstone.com aty Tullio DeLuca tullio.deluca@verizon.net TOTAL: 2 pla Kenneth L. Satterfield 43 Gardner Road Newfoundland, PA 18445 pla Wanita A. Satterfield 43 Gardner Road Newfoundland, PA 18445 dft Charles J. DeHart, III 8125 Adams Drive Suite A Hummelstown, PA 17036 TOTAL: 3