Sobel Building Development Partners v. Broach (In re Sexton)

MEMORANDUM OF DECISION

Plaintiff Sobel Building Development Partners (“Sobel”) seeks declaratory relief against William H. Broach (the “Trustee”) declaring its right to a fund of $71,000 (the “Sale Proceeds”) in the Trustee’s possession. The Trustee moves to dismiss the complaint for failure to state a claim. For the reasons stated below, the motion is granted without prejudice. Although the two theories pleaded are not legally sufficient, it appears that Sobel is capable of pleading a legally sufficient claim.

SUMMARY OF FACTS

For the purpose of determining a motion to dismiss for failure to state a claim, all well pleaded allegations of fact in the complaint are presumed to be true. Russell v. Landrieu, 621 F.2d 1037, 1039 (9th Cir.1980). The complaint alleges the following facts in support of Sobel’s claims for relief:

Prior to the commencement of this bankruptcy case, Sobel leased certain commercial real property to Reps West Sales, Inc. (“Reps West”). The above-captioned debtors (the “Sextons”) are the controlling shareholders and officers of Reps West.. The Sextons executed a written guaranty in favor of Sobel guarantying Reps West’s obligations to Sobel under the…