Schlossberg v. Sasscer et al

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
HOMETEST, INC. : Case No. 02-13401PM
: Chapter 7
Debtor :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
ROGER SCHLOSSBERG, TRUSTEE :
Plaintiff :
vs. : Adversary No. 05-1273PM
:
ROBERT B. SASSCER :
DALE L. ROSS :
JOHN J. HARRISON :
SAMUEL J. PALMER :
JAMES B. BLAND III :
BRIDGET M. BLAND :
Rx SOLUTIONS INTERNATIONAL, INC. :
HOMETEST Rx TEXAS, INC. :
COMPTON BASSETT ENTERPRISES LLC:
ALLSTATE FINANCIAL :
& INVESTMENT, INC. :
JMP INVESTMENT GROUP, INC. :
Defendants :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
Before the court are motions filed on behalf of Samuel J. Palmer and Allstate Financial &
Investment, Inc., seeking dismissal of Counts 22 and 23 of the Complaint that are based upon
allegations of fraud and civil conspiracy. The court will dismiss the Complaint as to Defendant
Date signed January 27, 2006
Entered: January 30, 2006 Case 05-01273 Doc 102 Filed 01/30/06 Page 1 of 3

Samuel J. Palmer (“Palmer”) and deny the motion to dismiss as to Defendant Allstate Financial
& Investment, Inc.
This Complaint is filed against 11 Defendants in 23 Counts and 225 paragraphs. It is a
glowing example of the blunderbuss school of litigation. With respect to the Defendant Palmer,
paragraph 8 of the Complaint describes him as a resident of the State of Maryland. Paragraph 47
of the Complaint states that he is an individual released pursuant to this court’s Order entered
December 18, 2003, approving an Application to Compromise Controversy filed by the Debtor
that was entered following the appointment of an Examiner to report on the Compromise. As a
part of the Compromise, Palmer received a release from any and all claims that the estate may
have had against him, known or unknown. The Complaint does not reflect that the estate ever
had a claim against Palmer. The Complaint states that Palmer and other Defendants knew that
the estate may have had preference or fraudulent conveyance claims against some or all of them.
Allstate Financial & Investment, Inc., was served through its resident agent, Palmer. All of this
does not add up to a claim against Palmer.
The Complaint further pleads at paragraph 69 that the released parties would, as a result
of approval of the Compromise, be released from certain preference claims set forth in a report
that was not shown to either the Examiner nor the Committee of Unsecured Creditors.
Paragraphs 206 and 207 of the Complaint state that the released Defendants were represented by
their fellow actors at the hearing on the Compromise and that their fellow actors falsely
represented the claims that the Debtor had against the released Defendants. The Complaint goes
on to say that the released Defendants intentionally misstated facts for the purpose of engaging in
a conspiracy.
As stated above, no cause of action has been identified that the estate held against Palmer.
All that the Complaint states are naked allegations of conspiracy and fraud, without any
particularity. Indeed, the released Defendants are lumped together, and somehow the Complaint
seems to make the other released parties as the agents and co-conspirators of Palmer. The court
finds that no cause of action is stated against Palmer. However, because of the fact that Palmer
received a release from the Debtor, the Trustee urges that this somehow serves as a basis for the
recovery of damages against him for fraud and civil conspiracy and somehow ascribes interests to
him that do not appear in the Complaint. Palmer’s motion to dismiss will be granted.
Case 05-01273 Doc 102 Filed 01/30/06 Page 2 of 3

On the other hand, the court finds that the Complaint does state a cause of action as to the
Defendant, Allstate Financial & Investment, Inc. Whether the Trustee will be able to prove this
cause of action remains to be seen, but a cause of action has been stated for the purpose of this
motion. An appropriate order will be entered.
cc:
Roger Schlossberg, Trustee, 134 W. Washington St., P.O. Box 4227, Hagerstown, MD 21741
Carol L. Hoshall, Esq., Whiteford Taylor, 7 St. Paul Street, #1400, Baltimore, MD 21202
Glenn D. Solomon, Esq. 8 Park Center Court, #200, Owings Mill, MD 21117
John D. Burns, Esq., 6303 Ivy Lane, #102, Greenbelt, MD 20770
Alan S. Kerxton, Esq., 25 W. Middle Lane, Rockville, MD 20850
Alfred L. Scanlan Jr., Esq., 2001 S Street, N.W., #310, Washington, DC 20009
Thomas O’Toole, Esq., 201 N. Charles Street, Baltimore, MD 21201
Jeffrey M. Orenstein, Esq., 15245 Shady Grove Road, #465, Rockville, MD 20850
Richard M. McGill, Esq., P.O. Box 358, 5303 West Court Dr., Upper Marlboro, MD 20773
Jayson A. Soobitsky, Esq., 8850 Columbia 100 Parkway, #303, Columbia, MD 21045
End or Memorandum
Case 05-01273 Doc 102 Filed 01/30/06 Page 3 of 3