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Kinard v. Gallina

United States District Court, S.D. Georgia, Statesboro Division

May 18, 2017

JOHN GALLINA, Individually and as Agent of Purple Heart Homes, Inc., DALE BEATTY, Individually and as Agent of Purple Heart Homes, Inc., ASHELY DOANE, Individually and as Agent of Purple Heart Homes, Inc., JIM LONCAR, Individually and as Agent of Purple Heart Homes, Inc., and PURPLE HEART HOMES, INC., Defendants.



         The present action stems from an unfortunate dispute between a charity seeking to assist wounded veterans, Purple Heart Homes, Inc. ("Purple Heart Homes''), and a wounded veteran it sought to assist, Hamilton Kinard. At this stage the Court must determine if the complaint filed by Mr. Kinard and his wife contains claims for which the law provides a remedy and whether those claims are supported by factual allegations of sufficient specificity. (Doc. 5.) The Court finds the complaint deficient in both regards.

         I. Background

         Purple Heart Homes is a charity established by wounded veterans for wounded veterans. After sustaining serious injuries in Operation Iraqi Freedom, John Gallina and Dale Beauty saw a need for housing that could properly accommodate disabled veterans. (Doc. 5 at 2.) lip. 2008, they established Purple Heart Homes to address that need. (Id.)

         Purple Heart Homes helps place veterans in new, handicap-accessible homes at a substantial discount. (Id.) It does this by requiring that participating veterans take out two loans, one worth approximately 20% of the home's value and a second worth the remaining amount. (Id.) If the veteran successfully pays off the 20% loan, then Purple Heart Homes waives repayment of the second loan. (Id.) Thus, qualifying veterans can receive handicap-accessible housing at a nearly 80% discount. (Id. at 3.)

         On May 8, 2013, Plaintiffs entered into a contract ("the Contract") with Purple Heart Homes to purchase a house. (Doc. 1-2 at 3.) The Contract set the purchase price at $175, 000, and it required Plaintiffs to obtain two loans: a "First Priority Loan'7 worth $31, 500, and a "Second Priority Loan" worth $145, 000. (Id.) The Contract also contained several important provisions. First, the Contract established that it, alone, i "shall be deemed to contain all of the terms and conditions agreed upon, it being understood that there are no outside representations, warranties, or agreements, either written or oral." (Id. at 6.) Second, it provided that "[t]he Buyer acknowledges that this is an 'AS IS' purchase. The Buyer is relying solely on his/her inspection of the Property and any private inspections that the Buyer chooses to obtain." (Id.) Third, the Contract specified that "the Seller cannot provide any warranty on any repairs or renovations that they had performed on the property." (Id.) Fourth, it admitted that "the Seller has agreed to perform certain repairs and i modifications to the Property, " and it listed those repairs in Exhibit D. (Id.) Finally, the Contract clarified that "the Buyer acknowledges that they have been advised to consult competent legal counsel before entering into a real estate purchase agreement, " and "that a Private Home Inspection is recommended." (Id.)

         On July 22, 2013, Plaintiffs gaye a Promissory Note to Purple Heart Homes. (Doc. 1-2 at 16.); The Note provided that it should be marked "Paid and Satisfied" and the related security deed canceled within six months of either the Borrower successfully paying off the First Priority Loan or fifteen years, whichever occurred first. (Id.)

         On February 15, 2016, Plaintiffs filed a lawsuit in state court. (Doc. 1-1 at 11.) Plaintiffs make three allegations in their complaint. First, Plaintiffs allege that Defendants breached two separate contracts, (Id. at 12.) Plaintiffs allege that Defendants breached the original Contract for sale and a second, subsequent contract formed through the legal concept of novation. Plaintiffs claim damages in excess of $500, 000 as a result of Defendants' alleged breach of both contracts.

         Second, Plaintiffs allege that "Defendants were negligent in purporting to perform" the Contract. (Id. at 14.) Plaintiffs assert that "Defendants intentionally allowed inept and unqualified supervision and inept and unqualified volunteers to engage upon the repairs and construction promised." (Id.) Plaintiffs also assert that "Plaintiffs show that Defendants have exhibited a pattern of such breach of contract and such negligence in their prior dealings with other veterans." (Id.) Plaintiffs' complaint, however, does not provide any additional allegations detailing such prior negligence.

         Finally, Plaintiffs allege a claim for stubborn litigiousness. (Id.) Plaintiffs allege only that "Defendants have acted in bad faith, have been stubbornly litigious, and have caused Plaintiffs undue and unnecessary trouble and expense in terms of O.C.G.A. § 13-6-11 and Plaintiffs are entitled to an award of reasonable attorney fees and their costs and expenses." (Id.) Plaintiffs provide no further details supporting this allegation.

         In April 2016, Defendants removed the case to this Court, asserting diversity jurisdiction under 28 U.S.C. § 1331. (Doc. 1.) Plaintiffs made no attempt to amend their complaint after removal. Defendants now move to dismiss Plaintiffs' complaint. (Doc. 5.)

         II. Legal Standard

         "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 556 U.S. 544, 570 (2007)). Applying this standard requires a two-part test. See id. at 679. First, the Court asks whether the plaintiff has stated specific facts supporting a claim rather than mere legal conclusions. Id. Second, it asks whether those facts might plausibly give rise to a right to relief. Id. at 680.

         The first prong of the inquiry requires that the plaintiff plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. While the Court must accept as "true all of the allegations contained in a complaint, " it must not "accept as true a legal conclusion couched as a factual allegation." Id. Generalized conclusions and "bare allegations" will not allow the plaintiff to "unlock the doors of discovery." See id. The plaintiff ...

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