The opinion of the court was delivered by: William J. Martini, U.S.D.J.
This matter comes before the Court on Defendants Michael Becker and Michael Becker Financial Co., LLC's ("MBFC") motion to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). For the reasons discussed below, the Court will deny the motion in part and grant it in part.
I.Factual and Procedural Background
Plaintiff Aldon Inc. ("Aldon") is a New Jersey corporation. Plaintiff Avi Avidan is a New Jersey resident and is the Chief Executive Officer of Aldon. Defendant MBFC is a Florida corporation. Mr. Becker is a Florida resident and is the managing member of MBFC.
In 2004, Mr. Becker contacted his friend, Mr. Avidan, and asked for a loan to fund the operations of MBFC. On December 6, 2004, Mr. Avidan and Mr. Becker executed a document entitled "LOAN AGREEMENT AND PROMISSORY NOTE" that memorialized the loan (the "December 6th Agreement"), which was for $100,000. The December 6th Agreement identifies the borrower as "Michael Becker", although at the end of the document Mr. Becker's signature line also includes the name of his company, MBFC. The December 6th Agreement also identifies the lender as Aldon. As per the terms of the December 6th Agreement, the loan was subject to an 18% annual interest rate, and the borrower was to make monthly payments of $1500 commencing one month after execution of the agreement. The agreement also provides that a default that is not cured within 15 days after receipt of notice from the lender would constitute a material breach of the agreement.
On January 5, 2005, Mr. Becker requested a second loan. This loan was also for $100,000 and was also memorialized (the "January 5th Agreement"). In all respects pertinent to this case, the January 5th Agreement was identical to the December 6th Agreement with the exception that the January 5th Agreement identified the borrower as "MBFC (Michael Becker) LLC" but the signature line at the end of the document does not include MBFC.
The parties executed a third loan for $100,000 on March 8, 2005 (the "March 8th Agreement"), again with identical terms. The March 8th Agreement identifies the borrower as "Michael Becker LLC" but again, only Mr. Becker's name appears on the signature line. Finally, on July 5, 2005, the parties executed a fourth loan, this time for $200,000 (the "July 5th Agreement"). The July 5th Agreement identifies the borrower as "MBFC Michael Becker" but only Mr. Becker's name appears on the signature line.
Plaintiffs also allege that Mr. Becker personally guaranteed repayment of all of the loans. Sometime thereafter, Defendants failed to comply with the terms of the loan agreements. On February 1, 2010, counsel for Plaintiffs mailed a notice of default to Mr. Becker and made a demand for full repayment of the entire outstanding balance of each loan. Defendants have failed to make any repayment since that time. Plaintiffs thereafter filed this action, alleging claims for breaches of the loan agreements, promissory estoppel, breaches of the implied covenants of good faith and fair dealing, and fraud. According to the allegations of the complaint, Defendants owed $1,014,516.38 at the time of the initiation of this action, including compounded interest. On October 27, 2011, Defendants filed this motion to dismiss.
A. Motion to Dismiss Standard
In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). This assumption of truth is inapplicable, however, to legal conclusions couched as factual allegations or to "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Ashcroft v. Iqbal, 556 U.S. 662, 129
Although a complaint need not contain detailed factual allegations, "a
plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." ...