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BLUE LINE COAL CO. v. EQUIBANK

February 19, 1988

Blue Line Coal Company, Inc., Anthony J. Bukovich, Jr. and Roberta J. Bukovich
v.
Equibank, Alan S. Fellheimer, William M. Densmore and John A. Kincaid, Jr.



The opinion of the court was delivered by: LUDWIG

 Ludwig, J.

 Defendants Equibank, Densmore and Kincaid move for dismissal under Fed.R.Civ.P. 12(b)(1) and 12(b)(6) or, in the alternative, for a more definite statement under Fed.R.Civ.P. 12(e).

 This action claims violations by defendants *fn1" of the Bank Company Holding Act, 12 U.S.C.A. § 1972 (1980 & West Supp. 1987), and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.A. § 1961 et seq. (1984). Additionally, the complaint alleges pendent state claims for breach of contract, interference with prospective contractual relations and breach of fiduciary duty. Jurisdiction is federal question. 28 U.S.C. § 1331.

 The complaint alleges: In 1980, plaintiff Blue Line Coal Company, Inc. obtained a line of credit from Equibank. Defendant Kincaid is an attorney for Equibank and Densmore is an Equibank employee. Plaintiffs Anthony J. Bukovich, Jr. and Roberta J. Bukovich personally guaranteed the line of credit. Individual plaintiffs also had a personal loan with Equibank. In April 1983, Equibank declared the personal loan in default. On October 1, 1983, plaintiffs and Equibank agreed to restructure the loan debt, and the bank was assigned certain Blue Line accounts receivable. On March 7, 1984 the bank unilaterally breached the workout agreement.

 I. Motion to Dismiss under Fed.R.Civ.P. 12(b)(6)

 A Rule 12(b)(6) motion functions to test the formal sufficiency of the complaint against the liberal pleading requirements of Rule 8(a). 5 C. Wright & A. Miller, Federal Practice and Procedure § 1356, at 590 (1969). Consistent with Rule 8(a), a pleading need only furnish a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a). *fn2" "The issue is not whether a plaintiff will ultimately prevail but whether claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 1686, 40 L. Ed. 2d 90 (1974); Estate of Bailey v. County of York, 768 F.2d 503, 506 (3d Cir. 1985). A complaint should not be dismissed under 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). In evaluating whether dismissal is proper, "factual allegations of the complaint are to be accepted as true," and "reasonable inferences will be drawn to aid the pleader." D.P. Enter., Inc. v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir. 1984).

 A. Bank Holding Company Act

 Count II of the complaint alleges a violation of the Bank Holding Company Act, 12 U.S.C.A. § 1972. Section 1972(1)(C) prohibits tying arrangements. It forbids banks to extend credit or furnish any service on condition "that the customer provide some additional credit, property, or service to such bank, other than those related to and usually provided in connection with a loan, discount, deposit or trust service." 12 U.S.C.A. § 1972(1)(C). Plaintiffs assert that the workout agreement is a tying arrangement in that it conditions the continuing performance of Equibank's obligations under the loan agreement on the pledge of additional collateral and security.

 Individual defendants contend that count II should fail because natural persons are not liable under the Bank Holding Company Act. Together with Equibank, they also contend that the demand for additional security and collateral is consistent with ordinary and customary banking practices and evidences prudence, not an anti-competitive device.

 The contention that § 1972 of the Bank Holding Company Act does not impose liability on individuals is well taken. See, e.g., Tose v. First Pennsylvania Bank, 648 F.2d 879, 898 n.23 (3d Cir.), cert. denied, 454 U.S. 893, 102 S. Ct. 390, 70 L. Ed. 2d 208 (1981). Accordingly, count II must be dismissed against Kincaid and Densmore.

 Although there are cases holding that a particular request for additional collateral is not an anti-tying violation of the Bank Holding Company Act, see, e.g., Nordic Bank PLC v. Trend Group, Ltd., 619 F. Supp. 542, 557 (S.D.N.Y. 1985); Freidco v. Farmers Bank, 499 F. Supp. 995, 1002 (D. Del. 1980), plaintiffs should be given an opportunity to support, through ...


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