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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND ) ) ) ) ) ) )

UNITED STATES OF AMERICA v. PAUL J. MRAZ, SR. et. al

Civil Action No. CCB-03-332 Exempt from ECF

MEMORANDUM Before the court are a motion to dismiss filed by Paul J. Mraz, Sr., a motion to dismiss, or, in the alternative, for summary judgment on Mr. Mraz's counterclaim filed by the United States, a motion to strike filed by the United States, and a motion for default judgment filed by the United States. The issues have been fully briefed and no hearing is necessary. See Local Rule 105.6. For the reasons set forth below, Mr. Mraz's motion to dismiss will be denied, the United States's motion to dismiss will be granted, the motion to strike will be granted, and the motion for default judgment will be denied. Factual Background Paul J. Mraz, Sr., the defendant in this action, was a defendant in United States v. Maryland Sand & Gravel Inc., et. al, Civil Action No. HAR 89-2869, ("the underlying action") in this court. On January 29, 1997, a judgment was entered in the underlying action against Mr. Mraz. He has yet to pay this judgment. On June 13, 1996, the Paul J. Mraz Irrevocable Retirement Trust ("the Trust") was established for the benefit of Mr. Mraz. Two of Mr. Mraz's children, Michael S. Mraz and Nancy M. Mraz, were named as trustees of the Trust. They are defendants in this action in their capacity as trustees. The United States alleges that Mr. Mraz has made a number of conveyances to the trust to avoid the

judgment against him in the underlying action, and has brought this action under the Federal Debt Collection Procedures Act ("FDCPA") to set aside these conveyances. Mr. Mraz has filed two counterclaims based on the actions of the trial attorney for the United States in the underlying action. Mr. Mraz was in the process of negotiating a settlement with the United States under which he would be relieved of any financial obligations from the judgment in exchange for providing evidence for use by the United States in subsequent related cases. The negotiations did not resolve the dispute between the parties, however, and the United States sought and obtained a default judgment against Mr. Mraz. Mr. Mraz alleges that he relied to his detriment on representations by the trial attorney about her authority to approve the settlement and seeks to recover on an estoppel theory. He further alleges that the United States had an implied contract with him which it breached. Standard for Motions to Dismiss Mr. Mraz has filed a motion to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The government's motion to dismiss Mr. Mraz's counterclaims is also governed by Rule 12(b)(6). "A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of North Carolina v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). When ruling on a 12(b)(6) motion, the court must view the complaint in the light most favorable to the plaintiff and accept the plaintiff's factual allegations, as well as all reasonable inferences therefrom, as true. See Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993); Martin, 980 F.2d at 952; Westray v. Porthole, Inc., 586 F.Supp. 834, 836 (D. Md. 1984). Consequently, a motion to dismiss under Rule 2

12(b)(6) may be granted only when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d 324, 325 (4th Cir. 1989). In addition, because the court is testing the legal sufficiency of the claims, the court is not bound by the plaintiff's legal conclusions. Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994); Labram v. Havel, 43 F.3d 918, 921 (4th Cir. 1995) (affirming Rule 12(b)(6) dismissal with prejudice because plaintiff's alleged facts failed to support her conclusion that the defendant owed her a fiduciary duty at common law); Faulkner Advertising. v. Nissan Motor Corp., 945 F.2d 694, 695 (4th Cir. 1991) ("[S]elf-serving, inaccurate legal conclusions cannot rescue a factually deficient complaint"). The Motion to Dismiss Filed by Paul J. Mraz, Sr. Defendant Paul Mraz argues that this action is time-barred. Twenty-eight U.S.C.

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