United States District Court, D. Connecticut
UNITED STATES REGIONAL ECONOMIC DEVELOPMENT AUTHORITY, LLC, Plaintiff,
GERRY D. MATTHEWS and MATTHEWS COMMERCIAL PROPERTIES, LLC, Defendants.
RULING ON DEFENDANTS' MOTION TO DISMISS
CHARLES S. HAIGHT, JR. SENIOR UNITED STATES DISTRICT JUDGE.
case is brought pursuant to the Court's diversity of
citizenship subject matter jurisdiction. The Court initially
ordered Plaintiff to establish by affidavit the citizenship
of each party as of the date Plaintiff commenced the action
[Doc. 7]. Plaintiff filed affidavits from which the Court
concluded that the Complaint sufficiently and accurately
alleged complete diversity of citizenship, so that
jurisdiction existed in this Action [Doc. 10].
now move pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the
Complaint for failure to state a claim upon which relief can
be granted, Doc. 14 ("Defs. Br."). Plaintiff
opposes that motion, Doc. 20 ("Pl. Br.").
Defendants filed a reply brief, responding to Plaintiff's
opposition, Doc. 22 ("Reply Br."). This Ruling
resolves Defendants' motion.
motion by defendant to dismiss, the Court "must accept
as true all of the allegations contained in a complaint,
" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The facts alleged in this Plaintiff's Complaint tell a
simple if dishonorable tale.
Joseph Walsh was the managing member of Plaintiff United
States Regional Economic Development Authority, LLC
("USREDA"). Defendant Gerry D. Matthews owned and
operated Defendant Matthews Commercial Properties LLC
("MCP"), an entity engaged in the brokerage of
commercial real estate. Gerry Mathews asked Walsh to wire
funds for the purposes of repairing a property in Nantucket,
Massachusetts owned by Gerry Matthews's brother Robert V.
Matthews and to satisfy real estate taxes on Robert's
Nantucket property so that it could be sold. Walsh complied
with Gerry Matthews's request. By means of four wire
transfers between April 15, 2013 and July 26, 2013, USREDA
sent a total of $529, 843 to MPC. Defendants did not use the
funds for the stated purposes. They have failed and refused
to repay any part of the amounts received from Plaintiff.
accept each of these well-pleaded facts as true, and that the
described events occurred. Defendants contend on this motion
that notwithstanding the occurrence of those events,
Plaintiff has failed to state a legal claim against
Defendants, and thus, Defendants owe nothing to Plaintiff.
The question presented to the Court is whether Plaintiff has
stated any legal claims against Defendants.
facts recounted in this Part are derived from Plaintiff's
Complaint, [Doc. 1], and accepted as true on this motion.
April 15, 2013 through July 26, 2013, Joseph Walsh, the
managing member of USREDA, caused a total of $529, 843 to be
wired to MCP. Doc. 1 ¶ 5. These funds were solicited by
Defendants and Robert Matthews "ostensibly for the
purpose of repairing property" owned by Robert Matthews
in Nantucket, Massachusetts and "to satisfy outstanding
real estate taxes" on the property. Id. ¶
6. The funds were needed to fix the property in order for it
to be sold to a buyer in exchange for cash and a yacht.
Id. Walsh met with Gerry Matthews both at his home
and at MCP's offices in Connecticut to discuss the funds.
Id. ¶ 7. Gerry Matthews represented that both
he and MCP were assisting Robert Matthews in the sale of the
property, the sale was imminent, and the funds would be
repaid in the short-term. Id. Gerry Matthews also
stated that if the funds from the sale of the house were
insufficient, then he would repay any shortfall. Id.
Based on these representations, USREDA caused the funds to be
sent to MCP. Id. ¶ 8.
alleges that "[u]pon information and belief"
little, if any, of those funds were actually used for the
property at issue. Doc. 1 ¶ 9. Instead, MCP and Gerry
Matthews used the funds to divert them to, "among other
things, cash withdrawals of as much as $19, 000 at one time,
Gerry's mother Barbara Matthews and payment of a personal
Chase Bank credit card account." Id. In
addition, MCP wired $225, 000 to an entity called Bonaventure
22 LLC. Id. As of the filing of the Complaint on
June 30, 2016, none of the funds have been repaid by
Defendants and Defendants have not explained why the funds
were not used for the purpose represented to Walsh and
USREDA. Id. ¶ 10.
requests a judgment against Defendants in the amount of $529,
843 with interest from the date the funds were each wired,
plus the costs and disbursements of this Action. Doc. 1 at 3.
Plaintiff's Complaint does not detail any specific causes
of action against Defendants and consists of ten numbered
paragraphs. See id.
Rule 12(b)(6) motion to dismiss the Complaint invokes the
phrasing of the Rule, viz, "for failure to
state a claim upon which relief can be granted." The
Notice of Motion spells out Defendants' theory: They
contend that "in its complaint, the plaintiff has failed
to plead the necessary elements of any recognized cause of
action, including breach of contract, fraudulent
misrepresentation and negligent misrepresentation." Doc.
14 at 1.
STANDARD OF REVIEW
Federal Rules of Civil Procedure require that a pleading
contain "a short and plain statement of the claim
showing that the pleader is entitled to relief."
Fed.R.Civ.P. 8(a)(2). Rule 8(d)(1) requires that "[e]ach
allegation must be simple, concise, and direct" and
directs that "[n]o technical form is required."
Fed.R.Civ.P. 8(d)(1). Although a complaint need not provide
detailed factual allegations to survive a motion to dismiss
made pursuant to Federal Rules of Civil Procedure 12(b)(6), a
plaintiff must set forth sufficient factual allegations,
accepted as true, that "state[s] a claim to relief that
is plausible on its face." Ashcroft, 556 U.S.
at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)) (internal quotation marks omitted). The
Court is guided by "'[t]wo working
principles'" in applying this standard. Harris
v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting
Iqbal, 556 U.S. at 678).
all factual allegations in the Complaint must be accepted as
true and all reasonable inferences must be drawn in
Plaintiff's favor. See Id. The Court need not
credit "legal conclusions" or "threadbare
recitals of the elements of a cause of action supported by
mere conclusory statements." Id. (quoting
Iqbal, 556 U.S. at 678) (internal quotation marks
and alteration omitted). Second, "a complaint that
states a plausible claim for relief" will survive a
motion to dismiss and "[d]etermining whether a complaint
states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
Id. (quoting Iqbal, 556 U.S. at 679)
(internal quotation marks omitted). "Dismissal under
Federal Rule of Civil Procedure 12(b)(6) is appropriate when
'it is clear from the face of the complaint, and matters
of which the court may take judicial notice, that the
plaintiff's claims are barred as a matter of
law.'" Associated Fin. Corp. v. Kleckner,
480 F.App'x 89, 90 (2d Cir. 2012) (summary order)
(quoting Conopco, Inc. v. Roll Int'l, 231 F.3d
82, 86 (2d Cir. 2000)).
at bar begin their brief with the blunt indictment that
"the plaintiff has completely failed to satisfy the
pleading requirement of Rule 8(a)(2)." Defs. Br. at 4.
As explained supra, Rule 8(a)(2) provides: "A
pleading that states a claim for relief must contain: . . . a
short and plain statement of the claim showing that the
pleader is entitled to relief." Defendants' motion
to dismiss the Complaint presses the contention that the
pleading fails to satisfy the notice requirements of Rule
8(a)(2). Their brief lays out that theory in cursory fashion:
Not only does the Plaintiff's complaint fail to
specifically identify any particular cause of action, it also
completely fails to set forth the necessary elements of any
cognizable cause of action, such as breach of contract,
fraudulent misrepresentation or negligent misrepresentation.
The allegations of the ...