Sibille v. Davis et al

Filing 22

MEMORANDUM OPINION AND ORDER: It is ORDERED that Defendants Rule 12(b)(6) motion to dismiss (Doc. 6 ) and Rule 12(e) motion for a more definite statement (Doc. 6 ) are DENIED as MOOT as further set out in the order. It is further ORDERED that Defendants alternative motion to strike paragraph 10 (Doc. 8 ) is DENIED as further set out in the order. Signed by Chief Judge William Keith Watkins on 11/14/2013. (dmn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
ARLYN RICE SIBILLE,
Plaintiff,
v.
T.K. DAVIS, III and PATRICIA Y.
DAVIS,
Defendants.

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CASE NO. 3:13-CV-566-WKW
[WO]

MEMORANDUM OPINION AND ORDER
This action arises under the Alabama Uniform Fraudulent Transfer Act,
Alabama Code § 8-9A-1, et seq. Before the court is Defendants T. K. Davis III
and Patricia Y. Davis’s motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) or for more definite statement pursuant to Federal Rule of Civil
Procedure Rule 12(e). (Doc. # 6.) Also before the court is Defendants’ alternative
motion to strike pursuant to Federal Rule of Civil Procedure 12(f). (Doc. # 8.)
Plaintiff Arlyn Rice Sibille has responded to both motions. (Docs. # 14, 15.)
Defendants’ Rule 12(b)(6) and Rule 12(e) motions are due to be denied as moot
based upon Plaintiff’s subsequent filing of an Amended Complaint and the
alternative Rule 12(f) motion is due to be denied.

A.

Rule 12(b)(6) and 12(e) Motions
The Amended Complaint moots the pending Rule 12(b)(6) and Rule 12(e)

motions because it cures the pleading defects of which Defendants complain. See
Rhodes v. Walgreen Co., No. 7:12cv3921, 2013 WL 3153737, at *3 (N.D. Ala.
June 18, 2013) (“[W]hile an amended complaint often moots a pending motion to
dismiss, if some of the defects raised in the original motion remain in the new
pleading, the court simply may consider the motion as being addressed to the
amended pleading. To hold otherwise would be to exalt form over substance.”
(internal quotation marks, brackets and citation omitted)). First, Defendants argue
that the original Complaint does not contain a short and plain jurisdictional
statement required by Federal Rule of Civil Procedure 8(a)(1). Plaintiff previously
represented that the jurisdictional statement in the original Complaint contained a
typographical error and moved for leave to amend the complaint. (Doc. # 18.)
The motion was granted (Doc. # 20), and Plaintiff filed an Amended Complaint
correcting the jurisdictional allegations. (Doc. # 21.) Thus, Defendants’ argument
is moot.
Second, Defendants argue that the original Complaint fails to state a claim
upon which relief can be granted pursuant to Rule 12(b)(6) or, alternatively, ask
the court to require Plaintiff to provide a more definite statement pursuant to Rule
12(e). Defendants assert that Plaintiff has failed to “state with particularity the

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circumstances constituting fraud” in accordance with Rule 9(b). (Doc. # 7 at 4.)
Defendants challenge Plaintiff’s failure to state the value of the one-half undivided
interest in the property, which Plaintiff alleges Defendants fraudulently transferred
to Mrs. Davis’s name in an effort to hinder, delay, or defraud her in violation of the
Alabama Uniform Fraudulent Transfer Act. Defendants further argue that the
original Complaint fails to state the basis for the allegations set forth in her original
Complaint, which is the basis for their Rule 12(e) motion. Defendants request that
Plaintiff satisfy these two defects pursuant to Rule 12(b)(6) and 12(e).
In her Amended Complaint, Plaintiff added the value of the one-half
undivided interest of the property at issue in paragraph 14. (Doc. # 21.) Plaintiff
also added paragraph 11 of the Amended Complaint to set out further the basis for
the allegations of her claim.
Rule 9(b) requires that a plaintiff “must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other
conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b).
Plaintiff alleges that Mr. Davis, under the guise of good faith discussions to settle a
debt owed, fraudulently transferred to his wife, Mrs. Davis, as a tenant in common,
one of his primary assets.

Plaintiff sufficiently sets forth the circumstances

surrounding the transfer, listing the approximate dates of the discussions, as well as
the date of the alleged fraudulent transfer. Based upon these allegations, the

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Amended Complaint “state[s] with particularity the circumstances constituting
fraud.” Fed. R. Civ. P. 9(b). Thus, Defendants’ Rule 12(b)(6) motion to dismiss
and Rule 12(e) motion for a more definite statement are due to be denied as moot.
B.

Rule 12(f) Motion
Defendants alternatively move for an order striking paragraph 10 of

Plaintiff’s Complaint because it improperly references inadmissible offers of
compromise by and between a co-defendant in the related state court action. (Doc.
# 8.) Paragraph 10 of the original Complaint and the Amended Complaint alleges
the following:
On or about April 27, 2011, Donald H. Allen, a co-signor of said
promissory note and acting as the authorized representative of
defendant T.K. Davis, met with plaintiff’s counsel in his office where
Allen requested additional time so that he and defendant T. K. Davis
III could make satisfactory arrangements with Plaintiff for payment.
(Doc. # 1 ¶ 10.) Defendants argue that this meeting between a co-defendant in the
state court action and Plaintiff’s counsel “clearly falls within the purview of Fed.
R. Evid. 408, which prohibits the use of compromise, offers and negotiations in
civil cases.” (Doc. # 8, at ¶ 4.) Plaintiff responds that the facts set forth in
paragraph 10 (and the added paragraph 11 of the Amended Complaint) do not
constitute a settlement offer and are relevant and material to the Davises’ intent to
hinder, delay or defraud Plaintiff in her ability to collect the funds due to her
pursuant to the promissory note subject of the state court action. (Doc. # 14 ¶ 2.)

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She further argues that Rule 408 only applies to the claim at issue in the case-inchief and thus, is not applicable in this action against the Davises. Plaintiff’s
argument is well taken.
Federal Rule of Civil Procedure 12(f) provides that a court may strike from a
pleading “an insufficient defense or any redundant, immaterial, impertinent, or
scandalous matter.”

“‘A motion to strike is a drastic remedy[,]’ which is

disfavored by the courts and ‘will usually be denied unless the allegations have no
possible relation to the controversy and may cause prejudice to one of the parties.’”
Loucks v. Shorest, LLC, 282 F.R.D. 637, 638 (M.D. Ala. 2012) (quoting Augustus
v. Bd. of Public Instruction of Escambia Cnty., Fla., 306 F.2d 862, 868 (5th Cir.
1962)). Additionally, some district courts have observed that “Rule 408 disputes
are more appropriately resolved in the context of a motion in limine instead of
prematurely through a Rule 12(f) motion.”

Sawo v. Drury Hotels Co., No.

11cv2232, 2011 WL 3611400, at *2 (D. Kan. Aug. 15, 2011) (collecting cases).
The information alleged in paragraph 10 (and added paragraph 11) of the
Amended Complaint is not redundant, immaterial, impertinent, or scandalous. The
facts are relevant to the alleged fraudulent transfer and to Mr. Davis’s “conditions
of . . . mind,” as required by Rule 9(b) when claiming fraud.
Furthermore, the facts of paragraphs 10 and 11 of the Amended Complaint
do not constitute an offer, discussions, or negotiations in an effort to settle this

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lawsuit, and Plaintiff has provided an “arguably permissible use for paragraph [10]
outside of the uses prohibited by Rule 408(a).” Sawo, 2011 WL 3611400, at*2
(citing Fed. R. Civ. P. 408(a)). The motion to strike will be denied, but the
ultimate admissibility of evidence supporting the allegations in paragraph 10 is for
the court to decide at a later stage.
C.

Conclusion
Based on the foregoing, it is ORDERED that Defendants’ Rule 12(b)(6)

motion to dismiss (Doc. # 6) and Rule 12(e) motion for a more definite statement
(Doc. # 6) are DENIED as MOOT. It is further ORDERED that Defendants’
alternative motion to strike paragraph 10 (Doc. # 8) is DENIED.
DONE this 14th day of November, 2013.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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