Case Summary:
The creditor filed an adversary proceeding alleging that his investment in a failed real estate development was procured by fraud on the part of the debtor/defendant. The debtors moved to dismiss the case for failure to state a claim upon which relief can be granted, and for failure to allege fraud with sufficient particularity. A complaint need not contain exhaustive factual allegations, but the plaintiff’s obligation to demonstrate relief requires more than labels and conclusions. The plaintiff’s complaint failed to provide the “content” of the alleged misrepresentation, and the failure to identify the fraudulent statements or the reasons why they were fraudulent did not satisfy the particularity requirements of the federal rules. As such, the complaint was properly dismissed. As the plaintiff had already been afforded an opportunity to amend the complaint, dismissal would be with prejudice.

Statute/Rule References:
11 U.S.C.§ 523(a)(2)(A) -- Nondischargeability - Fraud

Key Terms:
Fraud
Motion to Dismiss