Bankr. M.D.N.C.: Dark v. Thomas- Iqbal/Twombley Pleading under 11 U.S.C. § 523(a)(2)(A) regarding whether money was "Obtained" through Fraud

Summary: Dark brought an adversary proceeding seeking to have the debt of Thomas declared nondischargable pursuant to 11 U.S.C. § 523(a)(2).  Thomas moved to dismiss pursuant to Rule 12(b)(6), arguing that "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal,  129 S.Ct. 1937, 1949,  (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).  The Court ruled for Thomas finding that the complaint did not contain even a "threadbare recital of the elements" required under § 523(a)(2).  Pertinent in this case is that § 523(a)(2)(A) requires that money or property be "obtained" by fraud, false representation or false pretenses.  Here complaint alleges that the funds were obtained through a promissory note and not repaid.  The remaining allegations relate to later events and do not show that Thomas obtained the money through fraud. For a copy of the opinion, please see: Dark v. Thomas- IqbalTwombley Pleading under 11 U.S.C. § 523(a)(2)(A) regarding whether money was “Obtained” through Fraud.pdf