Ubriaco v. Martino

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------X
In re
Lynn A. Martino,
Debtor.
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Anthony Ubriaco,
Plaintiff.
- against-
Lynn A. Martino,
Defendant.
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Chapter 7
Case No. 1-09-42480-jf
Adv. Pro. No. 1-09-01279-jf
DECISION AND ORDER GRANTING
MOTION TO DISMISS FOR A FAILURE TO STATE A CLAIM
UPON WHICH RELIEF CAN BE GRANTED
APPEARANCES:
Anthony Ubriaco
442 Vernon Avenue
Staten Island, N.Y. 10309
Paul Hollender, Esq.
Corash & Hollender, PC
1200 South Avenue, Suite 201
Staten Island, N.Y. 10314
Attorney for Defendant
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Anthony Ubriaco commenced this adversary proceeding against Lynn A. Martino, the
debtor/defendant, seeking a determination that a pre-petition state court judgment obtained by
him against Ms. Martino is nondischargeable. Presently before the Court is Ms. Martino’s
motion to dismiss the adversary proceeding (“Motion to Dismiss”) pursuant to Fed. R. Bankr. P.
7012(b) and Fed. R. Civ. P. 12(b)(6), contending that Mr. Ubriaco’s complaint failed to state a
claim upon which the requested relief can be granted. Specifically, Ms. Martino avers that Mr.
Ubriaco’s 	complaint 	failed 	to 	specify 	the 	law 	and 	allege 	facts 	upon 	which 	the
nondischargeability claim is based.
Upon review of the complaint, the Motion to Dismiss, Mr. Ubriaco’s affidavit in
opposition, and Ms. Martino’s reply to Mr. Ubriaco’s opposition, and after hearing oral
argument, the Court concludes that the complaint should be dismissed. 	The complaint, even
when read in a light most favorable to Mr. Ubriaco, is devoid of any legal or factual foundation
on which an entitlement to relief can rest. Accordingly, Ms. Martino’s Motion to Dismiss is
granted.
I.
This adversary proceeding arises out of a longstanding litigious and rancorous dispute
between siblings and their respective interests as remaindermen in their familial home.1
1 On January 3, 2000, the parties’ father conveyed by deed a life tenancy in his home to himself, with equal
remainder interests to his children, Ms. Martino and Mr. Ubriaco. On January 3, 2000, Ms. Martino, Mr. Ubriaco
and their father also entered into an agreement that if the property was sold, Ms. Martino would first be paid $60,000
for improvements she made to the property, with the remaining net proceeds to be split equally between Ms.
Martino and Mr. Ubriaco. In September 2000, for some disputed reason, Mr. Ubriaco and his father conveyed the
property to Ms. Martino in fee simple. The father died in 2002. See ECF Docket Number 6, Exhibit “D”.
The
dispute began shortly after the property’s sale by Ms. Martino in January 2005. Ms. Martino
retained the entire proceeds of the sale. Mr. Ubriaco claimed a right to a portion of the proceeds.
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On or about April 1, 2005, Mr. Ubriaco commenced a lawsuit against his sister, Ms. Martino, in
the Supreme Court of the State of New York, County of Richmond (“State Court”). At issue in
the lawsuit, was whether an earlier transfer of the property by Mr. Ubriaco and his father to Ms.
Martino was solely for the purpose of facilitating a refinance of the mortgage or an outright
transfer of ownership. On June 27, 2008, the State Court, after a trial, issued a decision in which
it found that the property transfer was an accommodation for refinancing and that Ms. Martino
breached an agreement requiring that the proceeds from the sale of the property be shared with
Mr. Ubriaco. ECF Docket Number 6, Exhibit “D”. The State Court entered a judgment in Mr.
Ubriaco’s favor in the amount of $321,299, representing the sum owed to him from the property
sale.
Some nine months later, on March 31, 2009, Ms. Martino filed a petition for relief under
Chapter 7 of Title 11 of the United States Code (“Bankruptcy Code”). Mr. Ubriaco commenced
the instant adversary proceeding, pro se, seeking to except the judgment from discharge. The
three page complaint is most conspicuous in its misreading of the State Court decision,
pronouncements of Mr. Ubriaco’s need for money, manifestations of his anger with Ms.
Martino’s conduct and concludes with the following prayer for relief:
This Honorable and Respected Court should not be innocently
used as a vehicle to further aid and assist my sister in her willful
ways. I respectfully request that this court allows [sic] me, an
aggrieved person to preserve [my] judgment and permit [me] to
continue to seek some measure of justice in the collection of the
judgment from the not so innocent debtor, Lynn Martino.
ECF Docket Number 1, at 3. Ms. Martino filed an answer in which she admitted that a State
Court judgment had been entered against her, but denied all other allegations in the complaint.
As part of her affirmative defenses, Ms. Martino asserted that (1) Mr. Ubriaco lacked standing
and (2) Mr. Ubriaco failed to state a claim. Ms. Martino subsequently filed the Motion to
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Dismiss based upon her affirmative defenses. 	At oral argument, counsel for Ms. Martino
withdrew the portion of the Motion to Dismiss based upon lack of standing and proceeded only
on the second ground. Accordingly, we address only the merits of whether Mr. Ubriaco’s
complaint states a claim upon which relief can be granted.
II.
Bankruptcy relief embodies a policy of freeing a debtor from financial burdens so as to
allow an unencumbered fresh start. The discharge is the vehicle that enables the debtor to start
anew, free from the weight of oppressive preexisting debt. A discharge “operates as an injunction
against the commencement or continuation of an action, the employment of process, or an act, to
collect . . . any . . . debt as a personal liability of the debtor” that arose prior to the filing of a
petition for relief. 11 U.S.C. § 524(a)(2). The Bankruptcy Code, however, provides that the
“fresh start” policy at times must yield to certain exceptions. Local Loan Co. v. Hunt, 292 U.S.
234, 244 (1934). 	A creditor can except from discharge and seek to collect pre-petition debt, if
such debt is proven to be of the kind specified in 11 U.S.C. § 523(a). To do so, a creditor must
file an adversary proceeding against the debtor requesting a determination of dischargeability.
Fed. R. Bank. P. 7001(6).
The procedural rules governing an adversary proceeding generally conform to the Federal
Rules of Civil Procedure.2
2 As such, many Federal Rules of Civil Procedure are made applicable to bankruptcy adversary proceedings under
Part VII of the Federal Rules of Bankruptcy Procedure. All references, hereinafter, to a “Rule” refer to the Federal
Rules of Civil Procedure.
The Federal Rules of Civil Procedure mandate certain basic
requirements for a complaint that are designed to ensure that fair notice is provided to
defendants. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must
contain (1) a short and plain statement of the grounds for the court's jurisdiction; (2) a short and
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plain statement showing entitlement to relief and (3) a demand for the relief sought. Fed. R. Civ.
P. 8(a). When a complaint fails to meet these requirements, it is subject to dismissal.
Rule 12(b)(6) authorizes a defendant to move, before even filing a responsive pleading,
for the dismissal of a complaint when the complaint fails to set forth a claim upon which relief
can be granted. The purpose of such a motion is to test the formal sufficiency of a complaint and
not the substantive merits of a claim. See Koppel v. 4987 Corp., 167 F.3d 125, 133 (2d Cir.
1999); Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779
(2d Cir. 1984); Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980). Where causes of actions
are fatally flawed, dismissal is warranted under Rule 12(b)(6) to spare litigants the burdens of
unnecessary pre-trial and trial activity. Advanced Cardiovascular Sys., Inc. v. SciMed Life Sys.,
988 F.2d 1157, 1160 (Fed.Cir. 1993).
The standard by which to determine the sufficiency of a complaint is predicated upon
satisfying the notice pleading requirements set forth in Rule 8(a)(2) for showing that the plaintiff
is entitled to relief. City of Clinton v. Pilgrim's Pride Corp., 653 F. Supp. 2d 669, 671 (N.D. Tex.
2009); In re Bunker Exploration Co., 42 B.R. 297, 300 (Bankr. W.D. Okl. 1984). In reviewing
the complaint, a court must construe the complaint in the light most favorable to the plaintiff and
accept all of the plaintiff’s well pleaded factual allegations as true. See Ashcroft v. Iqbal, − U.S.
− , 129 S. Ct. 1937, 1949-50 (2009); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Acito v.
IMCERA Group, Inc., 47 F.3d 47, 51 (2d Cir. 1995); Allen v. Westpoint Pepperell, Inc., 945 F.2d
40, 44 (2d Cir. 1991). The court’s inquiry is limited to whether the complaint asserts a legal
claim supported by enough factual allegations indicating that the plaintiff has a plausible
entitlement to relief under the stated claim. See Iqbal, 129 S. Ct. at 1949-50.
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III.
A claim is more than a theory or assertion on which a court can grant relief. It is defined
as “[t]he aggregate of operative facts giving rise to a right enforceable by a court.” Black's Law
Dictionary (8th ed. 2004). A plaintiff’s obligation to plead a claim under Rule 8(a)(2) requires
more than a blanket assertion of entitlement to relief. Twombly, 550 U.S. at 555, n.3. Thus,
conclusory allegations or mere speculation about facts that might conceivably establish a claim
for relief are insufficient. See Iqbal, 129 S. Ct. at 1950 (“Rule 8 . . . does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions.”). Nevertheless, detailed
factual allegations of every element of a claim are not necessary. See Notinger v. Costa (In re
Robotic Vision Sys.), 374 B.R. 36, 43 (Bankr. D.N.H. 2007) (“A plaintiff need not plead
sufficient facts to establish a prima facie case”). To survive a Rule 12(b)(6) motion to dismiss, a
plaintiff must provide some specific factual allegations to give the defendant enough notice of
the claim to allow the defendant the ability to frame a responsive pleading. Twombly, 550 U.S. at
555, n.3; Ricciuti v. New York City Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991).
To sustain a claim, therefore, the plaintiff must provide enough factual allegations to
have “nudged [the] claims across the line from conceivable to plausible. . . . .” Twombly, 550
U.S. at 570. As the United States Supreme Court recently explained, “[a] claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949; see
also 	Twombly, 	550 	U.S. 	at 	556 	(noting 	enough 	factual 	content 	exists 	where complaint
demonstrates reasonable expectation that discovery will reveal some evidence to support
requested relief). Simply put, a complaint should generally contain some allegations as to
what each defendant did to him or her; when the defendant did it;
how the defendant's action harmed him or her; and, what specific
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legal right the plaintiff believes the defendant violated. After all,
these are, very basically put, the elements that enable the legal
system to get weaving - permitting the defendant sufficient notice
to begin preparing its defense and the court sufficient clarity to
adjudicate the merits.
Nasious v. Two Unknown B.I.C.E. Agents, 492 F.3d 1158, 1163 (10th Cir. 2007); see also Roe v.
Aware Woman Ctr. for Choice, 253 F.3d 678, 683 (11th Cir. 2001); Harker v. Wells Fargo Bank,
NA (In re Krause), 414 B.R. 243, 258 (Bankr. S.D. Ohio 2009) (“a complaint that alleges that a
defendant caused a plaintiff's injury, without explaining how, does not meet the requirements of
Rule 8(a) and therefore cannot survive a Rule 12(b)(6) motion”).
IV.
Where, as here, the plaintiff is not represented by counsel, we must evaluate the
complaint with heightened sensitivity to ensure the complaint is “construed so as to do justice”
as required by Rule 8(e). In re Henderson, 2010 WL 411097, at *7 (Bankr. N.D.N.Y. 2010). A
complaint drafted by a pro se litigant is held to a lower standard than pleadings prepared by an
attorney. Estelle v. Gamble, 429 U.S. 97, 106 (1976). Thus, however inartful a pro se complaint
is drafted, it should be read more liberally. Id; Erickson v. Pardus, 551 U.S. 89, 94 (2007).
Nevertheless, there are limits to which a court may hold a pro se litigant to a less exacting
standard. Goodman v. Mr. Goodbuys of New York Corp., Inc. (In re Mr. Goodbuys of New York
Corp., Inc.), 164 B.R. 24, 27-28 (Bankr. E.D.N.Y. 1994). An incomprehensible complaint that
neglects to specify any claims and/or supporting facts is inexcusable. Cintron-Luna v. Roman-
Bultron, 2009 U.S. Dist. LEXIS 108347, at *7 (D.P.R. 2009). Without either some factual
allegations or grounds upon which a claim rests, it is hard to see how a plaintiff could satisfy the
requirement of providing fair notice of the nature of the claim. Twombly, 550 U.S. at 555, n.3.
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In this proceeding, the most generous reading of Mr. Ubriaco’s complaint cannot save it
from dismissal. To be excepted from discharge, a debt must be shown to fall within one of the
subparagraphs specified in Section 523(a) of the Bankruptcy Code. Nowhere in the complaint
does Mr. Ubriaco even identify a statutory basis for a finding of nondischargeability. Rather, the
text of the complaint is marked by emotion and rambling rhetorical fervor, but lacks any
meaningful detail. The complaint is premised upon Mr. Ubriaco’s demands that his “status as a
creditor seeking justice stand” and that accordingly his “judgment against debtor stand”. ECF
Docket Number 1. 	Mr. Ubriaco is seemingly obsessed with a belief that Ms. Martino is a bad
person for not sharing with him the proceeds of the property sale. The complaint, however, does
not allege any facts supportive of a claim or even inferring that a claim for relief exists under the
Bankruptcy Code.
Throughout the complaint, Mr. Ubriaco complains mightily about being wronged by Ms.
Martino’s conduct. He states that his sister “abused” him, “willfully defrauded” him and
“fraudulently transferred” property. 	Mr. Ubriaco, however, fails to allege any facts underlying
Ms. Martino’s charged misconduct. When considering the lack of any factual content in the
complaint in conjunction with the absence of any specifically enumerated subparagraph of
Section 523(a), one is unable to fathom the basis of Mr. Ubriaco’s request for relief. See
generally Drake v. Ft. Collins, 927 F.2d 1156, 1159 (10th Cir. 1991) (“the court will not
construct arguments or theories for the plaintiff in the absence of any discussion of those
issues.”). Nevertheless, even if the Court assumed that the Complaint was based on either
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Section 523(a)(2), (4), or (6), there are just no underlying facts pled supportive of fraud, false
pretenses, or willful and malicious injury, to establish a claim under one of these subparagraphs.3
Mr. Ubriaco bases his complaint wholly on broad conclusory accusations. Most notably,
Mr. Ubriaco declares that he was defrauded when Ms. Martino sold the property and retained the
proceeds. Although couched as a factual statement, fraud is actually a legal conclusion that must
be determined by a court. See generally Penn-America Ins. Co. v. Himowitz (In re Himowitz),
162 B.R. 109, 113 (Bankr. D.N.J. 1993); In re Sepco, Inc., 36 B.R. 279, 287 (Bankr. D.S.D.
1984). Standing alone, such a bald assertion cannot support the culpability requirement needed to
prevent a debt from being discharged. See Twombly, 550 U.S. at 557 (“a conclusory allegation .
. . does not supply facts adequate to show illegality.”). The tenet that a court must accept as true
all of the allegations of a complaint is inapplicable to legal conclusions. Iqbal, 129 S. Ct. at
1949; Papasan v. Allain, 478 U.S. 265, 286 (1986)(stating on a motion to dismiss, courts “are
not bound to accept as true a legal conclusion couched as a factual allegation.”).
Mr. Ubriaco believes that the State Court decision upon which his judgment is based
supports his nondischargeability claim. 	He is mistaken. 	The state court decision is anchored
upon a finding that Ms. Martino breached the January 3, 2000 agreement with her brother and
father that if the property was sold, after giving Ms. Martino credit for certain improvements she
made to the property, the sale proceeds would be shared equally between the two siblings. There
were no findings by the State Court of fraudulent conduct or tortuous activity by Ms. Martino. A
breach of contract or agreement, without more, does not give rise to an exception to discharge
under any of the subparagraphs of Section 523(a). See Hernandez v. Nunez, (In re Nunez), 400
B.R. 869, 876 (Bankr. S.D. Fla. 2008); In re D’Atria, 128 B.R. 71, 76 (Bankr. S.D.N.Y. 1991)
3 The remaining subparagraphs of Section 523(a) cover categories of debts which do not even remotely encompass
Mr. Ubriaco’s claim. They cover, among other things, taxes, domestic support obligations, criminal fines or
restitution, unscheduled debt, penalties payable to government other than tax penalties, and student loans.
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(“A breach of contract is not tantamount to fraud.”); Cloyd v. GRP Records (In re Cloyd), 238
B.R. 328, 336 (Bankr. E.D. Mich. 1999); In re Fitzgerald, 109 B.R. 893, 897 (Bankr. N.D. Ind.
1989); Tomlin v. Crownover (In re Crownover), 417 B.R. 45, 54 (Bankr. E.D. Tenn. 2009);
Businger v. Storer (In re Storer), 	380 B.R. 223, 235 (Bankr. D. Mont. 2007); Groth Servs. v.
McDowell (In re McDowell), 299 B.R. 552, 555 (Bankr. N.D. Iowa 2003); Sandak v. Dobrayel
(In re Dobrayel), 287 B.R. 3, 12 (Bankr. S.D.N.Y. 2002); Electrolux Fin. Corp. v. Grant (In re
Grant), 325 B.R. 728, 734 (Bankr. W.D. Ky. 2005).
V.
Based on all of the foregoing, Ms. Martino’s motion to dismiss is granted.
IT IS SO ORDERED.
Dated: Brooklyn, New York
April 28, 2010
s/Jerome Feller
Jerome Feller
United States Bankruptcy Judge
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