United States District Court, W.D. North Carolina, Charlotte Division
Kenneth D. Bell, United States District Judge.
MATTER is before the Court on the defendants Robert
McCoy, III's and Flash Autos, LLC's Partial Motion to
Dismiss the Third Complaint (Doc. No. 50), Robert McCoy,
III's and Flash Auto, LLC's Motion for More Definite
Statements (Doc. No. 52), and the McCoy Joint Revocable
Trust's Motion to Dismiss (Doc. No. 56).
Court has carefully reviewed and considered the Third Amended
Complaint (Doc. No. 41), the parties' motions and briefs,
and all other relevant portions of the record. For the
reasons stated herein, the Court will GRANT IN
PART and DENY IN PART Robert McCoy,
III's and Flash Auto, LLC's Partial Motion to Dismiss
the Third Amended Complaint; DENY Robert
McCoy, III's and Flash Auto, LLC's Motion for More
Definite Statements; and DENY McCoy Joint
Revocable Trust's Motion to Dismiss.
this action is still in the pleadings stage, there have been
extensive prior proceedings which have been detailed in
numerous orders by this Court and the Bankruptcy Court. The
orders detailing prior proceedings include: (1) Order
Concerning Interim Servicing of Accounts of Vehicle Buyers
and Order Setting Hearing on Preliminary Injunction (Bankr.
Doc. No. 8); (2) Order Granting Motions for Preliminary
Injunction and Other Emergency Relief (Bankr. Doc. No. 26);
(3) Order Finding Certain Defendants in Civil Contempt and
Continuing Pretrial Conference (Bankr. Doc. No. 47); (4)
Order of U.S. Bankruptcy Judge Recommending Withdrawal of
Reference of Adversary Proceeding for Further Civil, and
Potentially Criminal, Contempt Proceedings (Doc. No. 1); (5)
Supplemental Order (To November 21, 2018 Order Recommending
Withdrawal) (Doc. No. 2); and (6) Order to Show Cause (Doc.
No. 60). This Court has twice referred this matter to the
United States Attorney for the Western District of North
Carolina for criminal prosecution and investigation into
Robert McCoy, Jr.'s (“McCoy Jr.”) and Misty
McCoy's actions related to this case. (Doc. Nos. 3, 71).
history of the case shows that this matter arises from a
dispute between McCoy Motors, LCC (“McCoy
Motors”), a South Carolina used car dealership, its
owners McCoy Jr. and Misty McCoy, and Ace Motor Acceptance
Corporation (“Ace”), one of McCoy Motors'
lenders. In January 2018, Ace entered into a series
of written agreements with the Original Defendants. Pursuant
to the Agreements, Ace provided initial financing to purchase
vehicles for ultimate sale by McCoy Motors and later
purchased “receivables from the financing” of
a Chapter 11 Debtor in Possession in the Western District of
North Carolina. After a loan payment default by McCoy Motors,
Ace attempted to recover its property and repossess its
collateral from the Original Defendants. The Original
Defendants resisted Ace's recovery by blocking access to
the premises, suing the repossession agents, and swearing out
criminal warrants against Ace's employees. Ace then filed
suit to liquidate its debt and obtain judicial assistance in
recovering the collateral.
filed its original complaint in June 2018 in the United
States Bankruptcy Court for the Western District of North
Carolina seeking, among other things, injunctive relief
prohibiting asset transfers, the recovery of collateral, and
damages arising out of breach of contract. Ace filed its
first amended complaint on July 10, 2018, asserting another
claim for relief against McCoy Jr. The parties bringing the
present motions, Robert McCoy III (“McCoy III”),
Flash Autos, LLC (“Flash Autos”) and the McCoy
Joint Revocable Trust (“Trust”) were not
mentioned in Ace's initial or first amended
second amended complaint added Flash Autos and McCoy III as
defendants and was filed on December 19, 2018. After filing
the seconded amended complaint, Ace became aware of
additional factual allegations that arose after it had filed
the second amended complaint. Accordingly, Ace was permitted
to file a third amended complaint (“TAC”) (Doc.
No. 41) in light of these new allegations. The TAC combines
the allegations in the prior complaints, deletes several
matters which have been ruled on by the Bankruptcy Court, or
which are moot, and alleges new facts and counts against
McCoy III, Flash Autos, and the Trust. McCoy III and Flash
Autos now move to dismiss eight of the eleven claims alleged
against them and move for more definite statements on the
remaining three claims. The Trust seeks to dismiss the one
claim alleged against it.
STANDARD OF REVIEW
Motions to Dismiss
Federal Rule of Civil Procedure 8(a)(2), a complaint must
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.”Fed. R.
Civ. P. 8(a)(2). However, “Rule 8(a)(2) still requires
a ‘showing,' rather than a blanket assertion, of
entitlement to relief.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 n.3 (2007).
purpose of a motion to dismiss under Rule 12(b)(6) is to test
the legal sufficiency of the complaint, not to resolve
conflicts of fact or to decide the merits of the action.
Edwards v. City of Goldsboro, 178 F.3d 231, 243-44
(4th Cir. 1999). In considering a motion to dismiss, the
court assumes the truth of all facts alleged in the complaint
and the existence of any fact that can be proved, consistent
with the complaint's allegations. Erickson v.
Pardus, 551 U.S. 89, 94 (2007). “The issue is not
whether a plaintiff will ultimately prevail but whether the
claimant is entitled to offer evidence to support the
claims.” Revene v. Charles County Comm'rs,
882 F.2d 870, 872 (4th Cir. 1989) (quoting Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974)).
the “‘[f]actual allegations must be enough to
raise a right to relief above the speculative level' and
have ‘enough facts to state a claim to relief that is
plausible on its face.'” Wahi v. Charleston
Area Med. Ctr., Inc., 562 F.3d 599, 616 n.26 (4th Cir.
2009) (quoting Twombly, 550 U.S. at 555);
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)
(“While legal conclusions can provide the framework of
a complaint, they must be supported by factual
allegations.”). “[A] plaintiff's obligation
to provide the grounds of his entitle[ment] to relief
requires more than labels and conclusions, and a formulaic
recitation of a cause of action's elements will not
do.” Twombly, 550 U.S. at 555 (citations
omitted). Moreover, a court “need not accept the legal
conclusions drawn from the facts” nor “accept as
true unwarranted inferences, unreasonable conclusions, or
arguments.” Eastern Shore Mkts., Inc. v. J.D.
Assocs. Ltd. P'shp., 213 F.3d 175, 180 (4th Cir.
Motion for More Definite Statement
Rule of Civil Procedure 12(e) allows a party to move for a
more definite statement when the pleading “is so vague
or ambiguous that the party cannot reasonably prepare a
response.” F.R.C.P. 12(e). “Unlike a motion to
dismiss for failure to state a claim, which attacks the legal
sufficiency of a complaint, a motion for a more definite
statement focuses on whether a party has enough information
to frame an adequate answer.” Fogner v. Am. Home
Mortg. Servicing, No. 1:11-CV-1073, 2012 U.S. Dist.
LEXIS 194690, at *2 (M.D. N.C. 2012) (citing Re/Max, LLC
v. Underwood, No. WDQ-10-2367, 2011 U.S. Dist. LEXIS
55943 (D. Md. May 25, 2011); Frederick v. Koziol,
727 F.Supp. 1019, 1020-21 (E.D. Va. 1990)).
McCoy III's and Flash Autos' Motion to
III and Flash Autos move for the following claims to be
dismissed: Preliminary Injunction (Claim 16); Payment of
Legal Fees and Costs Incurred (Claim 13); Conspiracy to
Defraud and/or Aiding and Abetting Fraudulent Transfers
(Claim 10); Conversion (Claim 9); Unfair and Deceptive Trade
Practices (Claims 12 and 17); Violation of Automatic Stay
(Claim 11); Constructive Trust (Claim 15); and Successor
Liability (Claim 19) as to McCoy III individually.
Preliminary Injunction & Successor Liability as to McCoy
III and Flash Autos contend that Ace's claim for
preliminary injunction must be dismissed because it is
“a remedy, not an independent cause of action.”
(Doc. No. 51, at 7). Ace does not contest the defendants'
motion with respect to its claim for preliminary injunction.
(Doc. No. 61, at 4). Therefore, the defendants' motion to
dismiss Claim 16 is granted to the extent that a claim for a
preliminary injunction is not recognized as an independent
cause of action, but this ruling does not affect the
availability of this relief in the future if it becomes
III argues that he can not be held liable individually as a
“successor” of McCoy Motors and that to the
extent any such claim exists against McCoy III, it would be
covered under Ace's claim for piercing the corporate veil
or voidable transfers. (Doc. No. 51, at 15). Ace does not
contest McCoy III's motion to dismiss its claim for
successor liability as to McCoy III. Therefore, the Court
will grant McCoy III's motion to dismiss Claim 19 as to
McCoy III only.
Payment of Legal Fees and Costs Incurred
asserts that it is entitled to legal fees and costs under
North Carolina General Statute § 6-21.2, Rule 11, and 28
U.S.C. § 1927. (Doc. No. 51, ¶ 405). McCoy III and
Flash Autos argue that Ace's claim for payment of legal