1 

UNITED STATES BANKRUPTCY COURT 

 EASTERN DISTRICT OF VIRGINIA 

Alexandria Division 

In re: ) 

 ) Case No. 19-13288-BFK 

 ) Chapter 7 

Gaby A. Touma ) 

 Debtor ) 

**************************************************************************** 

Susan Courtney ) 

 Plaintiff ) 

 ) 

v. ) Adversary Proceeding No. 

 ) 19-01123-BFK 

 ) 

Gaby A. Touma ) 

 Defendant ) 

 ) 

 

AMENDED MEMORANDUM IN SUPPORT OF 

GABY A. TOUMA’S MOTION TO DISMISS 

 COMES NOW the Debtor/Defendant, Gaby A. Touma, (“Touma”) by and 

through his counsel, and states the following in support of his Motion to Dismiss: 

SUMMARY 

The Complaint must be dismissed for three reasons: 

1. The Complaint fails to state a claim for exemption to discharge 

pursuant to 11 U.S.C. § 523(a)(2) because Plaintiff, Susan Courtney (“Courtney”) 

baldly asserts fraud and deceit against Touma in his individual and/or personal 

capacity, without any specific facts relative to Touma in support thereof. Courtney’s 

allegations are not pled with particularity as required by Fed. R. Civ. P. 9 (b). The 

Complaint attempts to piggyback on claims Courtney made against GN Auto by 

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virtue of Courtney and GN Auto, LLC’s (“GN Auto”) contractual and statutory 

relationship. 

2. The Complaint fails to state a claim for exemption pursuant to 11 

U.S.C. § 523(a)(4), as there is no evidence that Courtney and Touma were in a 

fiduciary relationship or contractual relationship. The only relationship between 

Courtney and GN Auto was contractual, and there was no such relationship 

between Courtney and Touma. Accordingly, there is no claim for fraud or 

defalcation while acting in a fiduciary capacity, as Courtney has not pled any facts 

that would support a fiduciary relationship between herself and Touma. 

3. The Complaint fails to state a claim upon which relief may be granted 

pursuant to 11 U.S.C. § 523(a)(6). Courtney fails to plead facts consistent with 

“willful and malicious injury by the debtor” against either the company, GN Auto, 

or Touma. The Complaint is devoid of facts in support of actual malice by Touma 

against Courtney that would support the non-dischargeability of debt pursuant to § 

523(a)(6). 

For the reasons stated herein, and those to be argued at the hearing in this 

matter, Courtney’s Complaint to Determine Dischargeability of Debt must be 

dismissed for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). 

FACTUAL BACKGROUND 

 Courtney alleges that on May 28, 2016, she purchased a 2007 Jaguar XK 

from GN Auto. (Complaint, ¶ 15) Based on the Buyer’s Order, the Dealership was 

“GN Auto of Chantilly” and the sales contract was signed by Alex Toledo, an 

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authorized representative of the dealership. (Complaint, Exhibit 3) Courtney states 

that GN Auto, LLC was the licensed Motor Vehicle Dealer (¶ 5). 

 Courtney alleges several failures of GN Auto, to wit, advertising an 84 

month warranty for the specified vehicle (¶ 13) but then selling the vehicle as is (¶ 

17); failing to display a used car buyers guide on the vehicle (¶ 20); failing to timely 

and properly transfer title of the vehicle to Courtney and register the vehicle in 

Courtney’s name (¶ 25), and refusing to refund Courtney’s money when she 

cancelled the transaction (¶29-30). 

Although Courtney asserts general facts that can be used to sustain an action 

for breach of contract against GN Auto, there are no allegations of specific conduct 

that give rise to an action for fraud, breach of fiduciary duty, or willful or malicious 

conduct against GN Auto. 

 As to Touma, Courtney alleges that as the dealer-operator for GN Auto, he 

supervised, approved, and maintained the content of GN Auto’s website (¶11), and 

that Touma was responsible for ensuring titles to vehicles sold by GN Auto were 

timely registered and transferred (¶24). Further, Courtney alleges that Touma 

created, implemented and ratified all the polices and actions of GN Auto, (¶ 34) and 

that he was aware of and allowed to continue the allegedly deceptive practices 

described in the Complaint. (¶35-36) There are no allegations of the specific conduct 

of Touma that give rise to an action for fraud, breach of fiduciary duty, or willful or 

malicious conduct. 

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 Courtney makes several allegations jointly against “Touma and GN Auto,” 

and attempts to cast facts supportive of a breach of contract claims as elements of a 

tort. Courtney alleges that both Touma and GN made misrepresentations with full 

knowledge of their falsity or in reckless disregard of the truth, (¶ 41) that GN Auto 

and Touma’s actions were willful and wanton, (¶ 43) and that the dealer and the 

dealer-operator intended Courtney to rely upon the misrepresentations. (¶ 44) As a 

factual matter, Courtney does not allege with the required specificity the actual 

words of any statements of Touma, or the time or place of such statements. 

Courtney does not allege any facts indicating Touma’s knowledge of any statements 

or their alleged falsity, or any facts that establish willful and wanton behavior and 

intent to have Courtney rely on those statements. 

 Courtney fails to allege any facts in support of her allegations that Touma’s 

actions were separate and distinct from those of GN Auto’s, and cites no basis for 

her contention that Touma is personally liable for the representations, acts and 

omissions of material fact made by GN Auto. (¶48). 

 Courtney details the history of the litigation between Courtney and GN Auto 

and Touma, which was based on contract claims and alleged statutory relief under 

the Virginia Consumer Protection Act. The matter proceeded in arbitration “by 

virtue of the contract” as noted by Hon. Alfred D. Swersky in the arbitration award, 

(Exhibit 3) and not with regard to any torts. Following protracted litigation in the 

Circuit Court of Fairfax County and the Virginia Supreme Court, Touma filed his 

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notice of bankruptcy on October 3, 2019, prior to the confirmation and/or entry of 

any arbitration award as a judgment of the Court.1 (¶55-56) 

LEGAL STANDARD 

1. A motion to dismiss is appropriate when a complaint fails to state a 

cause of action upon which relief can be granted Fed. R. Civ. P. 12(b)(6). Rule 

12(b)(6) is made applicable to bankruptcy matters by Federal Bankruptcy Rule 

7012(b). 

2. Complaints are dismissed when they fail to assert a legal theory that is 

recognized by the law or to allege sufficient facts to support a cognizable legal 

theory. See Smile Care Dental Group v Delta Dental Plan of Cal., 88 F.3d 780, 783 

(9th Cir. 1996). 

3. All allegations and favorable inferences that can be drawn from those 

allegations will be viewed in a light most favorable to the non-moving party. 

Albright v. Oliver, 510 U.S. 266, 267 (1994). 

4. Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain 

“a short and plain statement of the claim showing that the pleader is entitled to 

                                                            

1 Although not specifically described in the Complaint, the substance of the refusal of the Fairfax 

Circuit Court to confirm the arbitration award against Touma was based on evidence that GN Auto’s 

attorney, who has since been disbarred for his actions, failed to appear and defend Touma or GN 

Auto in arbitration, and thus, the arbitration award was essentially a default judgment. Touma has 

repeatedly under oath stated that the first he learned that he had been subject to arbitration 

personally was two months after the arbitration awards, on November 4, 2017. 

Consistent with TKC Aero. Inc. v. Muhs (n re Muhs) 923 F.3d 377 (4th Cir. 2019) there is no 

collateral estoppel as a matter of law in the instant case because the issues are not identical, nor 

were the issues in the first action resolved by a final judgment on the merits. By virtue of the issues 

not being identical, the current action cannot be afforded collateral estoppel based on a 

determination that the issue was essential to the final judgment. Courtney’s Complaint in the 

underlying matter included counts for fraud, violation of the Virginia Consumer Protection Act, and 

breach of warranty. Additionally, there was no final judgment, as Touma filed for bankruptcy prior 

to the entry of any such Order. 

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relief.” The United States Supreme Court adopted the plausibility pleading 

standard in Bell Atl. v. Twombly, 550 U.S. 544 (2007). 

5. “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 (2009) (quoting Twombly, 550 U.S. at 570). 

6. The Court shall not accept that a cause of action for relief to be granted 

is probable based on bald allegations; the allegations must reach a level that make 

the cause of action plausible: “The plausibility standard is not akin to a ‘probability 

requirement’ but it asks for more than a sheer possibility that a Defendant has 

acted unlawfully...Where a Complaint pleads facts that are ‘merely consistent with’ 

a Defendant’s liability, it ‘stops short of the line between possibility and plausibility 

of entitlement to relief.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). 

7. “[L]abels and conclusions,” “a formulaic recitation of the elements of a 

cause of action,” and “naked assertions devoid of further factual enhancement” do 

not state a claim and are not assumed to be true. Id. (internal citations and 

quotations omitted). 

ARGUMENT 

I. Count I Fails to State a Claim for Exemption to Discharge 

Pursuant to 11 U.S.C. § 523(a)(2)(A) 

8. 11 U.S.C. § 523(a)(2)(A) states that “A discharge...does not discharge 

an individual debtor from any debt...for money, property, services, or an extension, 

renewal, or refinancing of credit, to the extent obtained by....false pretenses, a false 

representation, or actual fraud...” For the reasons stated herein, Count I fails to 

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state a claim upon which relief may be granted, and Count I should be dismissed 

with prejudice. 

a. Courtney Fails to Plead Fraud with Particularity 

9. Courtney’s Count I fails to allege any supportable fact in furtherance of 

her claim. Count I, which consists entirely of two paragraphs, incorporates the prior 

paragraphs of the complaint, and restates § 523(a)(2(A), claiming that “Courtney’s 

claims against Touma are based on Touma’s false pretenses, false representations 

and/or actual fraud”. (¶ 58) 

10. Pursuant to Red. R. Civ. P. 9 (b), made applicable to adversary 

proceedings by Bankruptcy Rule 7009, “in alleging fraud or mistake, a party must 

state with particularity the circumstances constituting fraud or mistake. Malice, 

intent, knowledge, and other conditions of a person’s mind may be alleged 

generally.” F. R. Civ. P. 9 (b). 

11. The “circumstances” required to be pled with particularity under Rule 

9(b) are “the time, place, and contents of the false representations, as well as the 

identity of the person making the misrepresentation and what he obtained thereby.” 

Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 980 (4th Cir. 1990). Mere 

allegations of “fraud by hindsight” will not satisfy the requirements of Rule 9(b). 

Hillson Partners Ltd. Partnership v. Adage, Inc., 42 F.3d 204, 209 (4th Cir. 1994). 

12. The Rule has four purposes: first, the rule ensures that the defendant 

has sufficient information to formulate a defense by putting it on notice of the 

conduct complained of...second, Rule 9(b) exists to protect defendants from frivolous 

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suits. A third reason for the rule is to eliminate fraud actions in which all the facts 

are learned after discovery. Finally, Rule 9(b) protects defendants from harm to 

their goodwill and reputation. United States ex rel. Stinson, Lyons, Gerlin & 

Bustamante, P.A. v. Blue Cross Blue Shiled of Georgia, 755 F. Supp. 1055, 1056-57 

(S.D. Ga. 1990) see also Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 

(4th Cir. 1999). 

13. Lack of compliance with Rule 9(b)’s pleading requirements is treated 

as a failure to state a claim under Rule 12(b)(6). See United States ex rel. Thompson 

v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 901 (5th Cir. 1997). 

14. There are no facts in the complaint that support the legal conclusion 

that Touma, separate and apart from GN Auto, did anything that could be 

considered fraudulent. There is no recitation of the time, place, and contents of any 

alleged false representation or what was obtained from any alleged false 

representation. 

15. Courtney’s bald allegations that Touma supervised and/or maintained 

the company website, (¶ 12) that Touma was the owner, managing officer, dealeroperator, and primary policy maker (¶33) and various allegations that Touma and 

GN jointly made willful misrepresentations and/or concealments (¶¶ 39-48) are not 

only are conclusory in nature, but fail to describe a fraudulent representation or a 

fraudulent act and fail to distinguish acts of GN Auto from those of Touma. 

16. Courtney fails to meet the pleading requirements for fraud claims 

pursuant to Fed. R. Civ. P. 9(b). Courtney’s formulaic recitation that Touma is 

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personally liable for the acts and omissions of GN Auto (¶48) lacks the specificity 

and particularity needed to form a cognizable claim. 

17. The pleading does not put Touma on notice as to the claims against 

him such that he may properly prepare his defense. Courtney does not explain why 

she contends how any representation of GN was fraudulent as opposed to merely 

wrong, or Touma is personally liable for the alleged misrepresentations of GN Auto, 

nor does she distinguish which actions in paragraphs 39-47 were allegedly done by 

Touma, and which were attributable to GN Auto. This is insufficient to allege the 

“time, place, and contents of the false representations” per Lasercomb America, Inc. 

v. Reynolds, 911 F.2d 970, 980 (4th Cir. 1990). 

18. Entirely devoid of facts in support of her legal conclusions, Courtney’s 

Count I fails to plausibly make a claim fraud against Touma as required by Fed. R. 

Civ. P. 9(b). Because Courtney fails to plead a claim upon which relief may be 

granted, Count I should be dismissed with prejudice. 

II. Count II Fails to State a Claim for Exemption to Discharge 

Pursuant to 11 U.S.C. § 523(a)(4) 

19. 11 U.S.C. § 523(a)(4) states that “A discharge...does not discharge an 

individual debtor from any debt...for fraud or defalcation while acting in a fiduciary 

capacity, embezzlement, or larceny.” For the reasons stated herein, Count II fails to 

state a claim upon which relief may be granted, and Count II should be dismissed 

with prejudice. 

a. The Complaint fails to allege a fiduciary relationship between 

Touma and Courtney 

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20. Courtney does not cite any authority or facts in support thereof that 

would constitute a fiduciary relationship between Courtney and Touma. As pled in 

the Complaint, Touma was the dealer-operator for the GN Auto dealership. (¶ 24) 

There are no assertions that Touma was the agent for Courtney, the presumed 

principal, or any other factual scenario that could create a fiduciary relationship. 

21. Agents are fiduciaries and owe their principals a strict duty of loyalty. 

Bocek v. JGA Assocs., LLC, 537 F. App’x 169, 176 (4th Cir. 2013). Virginia courts 

vigilantly police the border between tort and contract law so as to avoid turning 

every breach of contract into a tort. Id. at 177. 

22. Under Virginia law, member-managers of the LLC owe fiduciary 

duties to the LLC only if the operating agreement so states, but do not owe them to 

other members. See Va. Code § 13.1-1024.1; see also WAKA, LLC v. Humphrey, 73 

Va. Cir. 310 (Fairfax County 2007). 

23. Pursuant to Va. Code § 13.1-1024.1, the only duties of a manager of an 

LLC is that the “manager shall discharge his or its duties as a manager in 

accordance with the manager’s good faith business judgment of the best interests of 

the limited liability company.” This good faith requirement is not akin to a fiduciary 

duty. 

24. The United States Bankruptcy Court for the Eastern District of 

Virginia addressed the issue of fiduciary duties among LLC members in the context 

of determining the non-dischargeability of debt under § 523(a)(4). See KMK 

Factoring, LLC v. McKnew (In re McKnew), 270 B.R. 593 (Bankr. E.D. Va. 2001). 

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The Court found that there are no fiduciary obligations among and between LLC 

members. Id. at 708. The Court noted that the Virginia LLC Act allowed members 

to transact business with the LLC in the same way as non-members. See Va. Code § 

13.1-1026. 

25. Touma did not even have a fiduciary duty to other members of the 

LLC, let alone a fiduciary relationship with a customer of GN Auto. 

26. Courtney does not allege sufficient facts to establish that Touma owed 

any fiduciary duties to Courtney. Courtney’s allegation that [Touma] as dealer 

operator had a fiduciary obligation to process and complete the registration of 

vehicles and was required to transfer title to his customers (¶ 60) is conclusory in 

nature and fails to state any authority in support of this alleged fiduciary 

relationship. Courtney attempts to characterize a contract action between herself 

and GN Auto into a tort claim against Touma. 

27. Courtney pleads that she purchased a vehicle from GN Auto, and 

attaches the contract between herself and GN Auto. Touma did not sign the 

contract, rather, the authorized representative of GN Auto, Alex Toledo, executes 

the agreement on behalf of GN Auto. (See Exhibit 2) 

28. The arbitrator in the underlying case acknowledges that the parties 

are before him for a claim “arising out of the sale of an automobile” and in 

arbitration “by virtue of the contract between the parties.” (See Exhibit 3, p.1) 

29. No facts pled to suggest Touma owes a fiduciary obligation to members 

of the public such as Courtney. Courtney has failed to allege the basis for claiming 

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Touma had a fiduciary duty to her as a prospective buyer when GN Auto had no 

fiduciary duty to Courtney by virtue of the contract of sale. 

30. Va. Code § 1542, dealing with the temporary registration of vehicles, 

details the implied contractual obligations of motor vehicle dealers, including the 

specific process for registering a vehicle purchased from a dealer. Additionally, § 

1542 details the buyer’s rights if the dealer is unable to produce the certificate of 

title, namely that he or she shall have the right to return the vehicle. See Va. Code § 

1542 (D). Courtney’s remedy if she failed to receive good title to the vehicle was to 

return the vehicle. There is no remedy for Courtney in tort. 

31. Additionally, Va. Code § 1542 (E) provides the repercussion for the 

dealer if the provisions of the section are not complied with—the Commissioner of 

Motor Vehicles, may suspend, after hearing, the right of the dealer to issue 

temporary certificates of registration. See Va. Code § 1542 (E). The Code does not 

create an agent-principal relationship between a dealer and a customer, nor a 

private cause of action for a wronged customer. 

32. No duties are created by contract or statute between employees or 

members of a dealer and a customer. 

33. Because Courtney has not pled a valid fiduciary relationship between 

herself and Touma, her claim for “fraud and defalcation while acting in a fiduciary 

relationship” fails as a matter of law. Count II should be dismissed with prejudice. 

b. Courtney fails to plead facts sufficient to support her claim of 

defalcation while acting in a fiduciary capacity 

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34. Defalcation is defined as a failure to account for money or property 

that have been entrusted to another. In re Twitchell, 72 B.R. 431 (Bkrptcy D. Utah 

1987). The term is often used to describe a broad variety of misfeasance. See In re 

Weaver, 41 B.R. 649 (Bkrptcy W.D. Okla. 1984). 

35. In her Complaint, Courtney also alleges that...Touma’s failure to 

register a vehicle sold by his dealership and his failure to transfer title of a vehicle 

sold by his dealership, and [sic] are a defalcation while acting in a fiduciary 

capacity. (¶ 61) 

36. Courtney fails entirely to pled what “money or property” of hers has 

been entrusted to Touma or what “money or property” of hers for which Touma has 

failed to account. As discussed supra, Touma had no fiduciary relationship with 

Courtney. Courtney provides no basis for her legal conclusion that a failure to 

register a vehicle is a defalcation. 

37. Courtney’s pleading is insufficient to satisfy the pleading requirements 

under Ashcroft v. Iqbal, 556 U.S. 662 (2009). Courtney’s claim does not contain 

specific facts or omissions by Touma such that he could admit or deny each 

allegation: “[L]abels and conclusions,” “a formulaic recitation of the elements of a 

cause of action,” and “naked assertions devoid of further factual enhancement” do 

not state a claim and are not assumed to be true. Id. 

38. Courtney’s pleading is deficient under Fed. R. Civ. Pro. 8 (a)(2), 

requiring a “short and plain statement of the claim showing that the pleader is 

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entitled to relief”. There are no facts upon which Courtney’s conclusions of law are 

based. Count II should be dismissed with prejudice. 

c. Even if Touma had a fiduciary duty to Courtney, Courtney’s 

claims are time-barred 

39. Even if this Court should find Touma was in a fiduciary relationship 

with Courtney, her claims for breach of fiduciary duty are time-barred. A claim for 

breach of fiduciary duty is not a claim of fraud, and the statutory period of 

limitations of actions accrued upon the breach, not the discovery of the breach. 

Schonfeld v. Toll Bros., Inc., 51 Va. Cir. 134 (Fairfax County 1999). 

40. Va. Code § 8.01-248 states that “every personal action...for which no 

limitation period is otherwise prescribed, shall be brought within two years after 

the right to bring such action has accrued. Va. Code § 8.01-230 proves that the 

accrual of a right of action begins to run from the date the injury is sustained and 

not when the damage is discovered. 

41. Courtney alleges she bought a vehicle from GN Auto on May 28, 2016 

(¶ 15). She has not, in any prior litigation, advanced a claim against Touma for 

breach of fiduciary duty. As such, Courtney had until May 28, 2018 to bring a claim 

of breach of fiduciary duty against Touma. Because this Complaint was filed on 

December 20, 2019, Courtney’s claim is time-barred. 

III. Count III Fails to State a Claim for Exemption to Discharge 

Pursuant to 11 U.S.C. § 523(a)(6) 

42. 11 U.S.C. § 523(a)(6) states that “A discharge...does not discharge an 

individual debtor from any debt...for willful and malicious injury by the debtor to 

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another entity or to the property of another entity.” For the reasons stated herein, 

Count III fails to state a claim upon which relief may be granted, and Count III 

should be dismissed with prejudice. 

a. Courtney’s Claims Do Not Meet The Malice Pleading Standard 

43. The Supreme Court has held that § 523(a)(6) requires “a deliberate or 

intentional injury, not merely a deliberate or intentional act that leads to injury.” 

Kawaauhau v. Geiger, 523 U.S. 57, 61 (1998). 

44. Likewise, the Fourth Circuit has held that a creditor challenging 

dischargeability under § 523(a)(6) must prove that the debtor had an “inten[t] to 

injure.” In re Duncan, 448 F.3d 725, 730 (4th Cir. 2006). In a proceeding involving § 

523(a)(6), ‘willful and malicious’ conduct requires a finding of a specific intent to 

injure. TKC Aero. Inc. v. Muhs (In re Muhs), 923 F.3d 377, 384 (4th Cir. 2019). 

45. Courtney’s only allegations regarding Touma’s intent are ¶ 42 

“Courtney [sic] and GN Auto made the above-described misrepresentations, 

concealment and commissions of material facts with the intent to mislead 

Courtney,” that the actions were willful, wanton, and with reckless disregard to 

their truth and Courtney’s rights (¶ 43) 

46. Such allegations do not identify any “misrepresentation” by Touma, 

nor do they identify any facts supporting the mere conclusion of the intent to 

mislead. See, Igbal. Nor do such allegations meet the pleading standard for malice 

as described in Kawaauhau and its progeny. Taken in the light most favorable to 

Courtney, at best it can be inferred that Touma without owing any duty to Courtney 

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intended to represent that the vehicle had an 84 month warranty and that Touma, 

as dealer-operator, and without any duty to Courtney, intentionally did not place 

the used car sticker in the window as required by law, and that Touma, without any 

duty to Courtney, did not intend to properly transfer the title to Courtney. These 

allegations do not amount to a deliberate intent, on the part of Touma specifically, 

to injure Courtney. 

47. Additionally, Courtney’s allegations of malice do not rise to the level 

required under Virginia law. Courtney must plead pursuant to an actual malice 

standard, or malice in-fact, to wit, that Touma was so reckless or negligent as to 

evince a conscious disregard to Courtney’s rights; that is, whether Touma, contrary 

to an established duty, acted wantonly, oppressively, or with such malice as to 

evince a spirit of mischief or criminal indifference to civil obligations. Jordan v. 

Sauve, 219 Va. 448 (1978). 

48. Courtney cannot establish any duty owned by Touma to Courtney and 

cannot attribute any action to Touma, separate and apart from GN Auto’s actions as 

the dealer, that would meet the “spirit of mischief or criminal indifference” standard 

such that would confer non-dischargeability of any claim against Touma. Courtney’s 

claim under § 523(a)(6) must be dismissed. 

b. Courtney Attempts To Pierce GN Auto’s Limited Liability 

Company Veil Without Claiming A Basis To Do So 

49. Courtney’s claim pursuant to § 523(a)(6) fails as a matter of law 

because Courtney fails to plead factual allegations against Touma in his individual 

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and personal capacity, apart from any actions on behalf of GN Auto, that give rise to 

a claim of malice. 

50. Courtney’s Count III, consists entirely of incorporating the previous 

paragraphs of the Complaint and states that “Courtney’s claims against Touma 

arise from Touma’s willful and malicious actions, and are thus a nondischargeable 

debt pursuant to 11 U.S.C. § 523(a)(6).” (¶63) 

51. In her recitation of facts, Courtney alleges “Touma was aware of the 

deceptive practices described herein” (¶ 35) and that Touma and GN Auto, jointly, 

made a series of misrepresentations that they knew were false or with reckless 

disregard of the truth. (¶ 41) Courtney also alleges that the misrepresentations 

“were committed by Touma and GN willfully, wantonly and with reckless disregard 

to their truth and to Courtney’s rights.” (¶ 43) 

52. Other than baldly assert that “Touma is personally liable for the 

representations, acts and omissions of material fact made by GN Auto,” (¶ 48) there 

are no facts or allegations of specific actions Touma took that would give rise to a 

claim for willful and malicious action under § 523(a)(6). 

53. For example, there are no allegations that Touma ever spoke to 

Courtney, promised her anything, signed the contract on behalf of GN Auto, or had 

anything whatsoever to do with the Courtney transaction. There are no allegations 

that GN Auto was the alter-ego for Touma, that there was a failure to follow limited 

liability company formalities, or any other allegation that would confer personal 

liability on Touma for the acts of GN Auto. 

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54. Courtney attempts to transfer GN Auto’s alleged liability to Touma 

without any basis for such transfer. Essentially, Courtney is attempting to pierce 

the limited liability company veil without meeting the pleading standard for such a 

claim. 

55. Like a corporation, a limited liability company shields its members 

from personal liability for actions taken by the limited liability company. Gowin v. 

Granite Depot, LLC, 272 Va. 246, 255 (2006). In Virginia, a limited liability 

company is a legal entity separate and distinct from its members. Thus, when a 

plaintiff has a claim against a limited liability company, the plaintiff may only 

pursue that claim against the limited liability company itself and not its members. 

In re White, 412 B.R. 860, 864-865. 

56. Under Virginia law, the immunity of members who compose a legal 

entity is a basic provision of statutory and common law and supports a vital 

economic policy underlying the whole corporate concept. Cheatle v. Rudd's 

Swimming Pool Supply Co., Inc., 234 Va. 207, 212 (1987). 

57. Virginia treats piercing the veil of traditional corporations and other 

limited liability entities in the same manner. See CF Trust, Inc. v First Flight Ltd. 

P’Ship, 266 Va. 3, 9 (2003); A.G. Dillard, Inc. v. Stonehaus Constr., LLC, 2016 Va. 

Unpub. LEXIS 16. 

58. Although there is no single rule or criterion that can be applied to 

determine whether piercing the limited liability company’s veil is justified, “it is 

generally understood that “one who seeks to disregard the [limited liability] entity 

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must show that the [member] sought to be held personally liable has controlled or 

used the [limited liability company] to evade a personal obligation, to perpetrate 

fraud or a crime, to commit an injustice, or to gain an unfair advantage.” O’Hazza v. 

Executive Credit Corp., 246 Va. 111, 115 (1993); see also Van Buren v. Earl Ronald 

Poston Old Meadow, LLC, 97 Va. Cir. 229 (2017). The same general principles that 

apply to corporations...apply to limited liability companies. See Mid Atl. Eng’g Tech. 

Servs. V. Miller Hardman Designs, LLC, 86 Va. Cir. 337, 339 (2013). 

59. Here, there are no allegations that Touma was attempting to hide 

behind GN Auto while personally perpetrating fraud or somehow evading his 

personal obligations. Rather, Courtney is attempting to attribute the alleged bad 

business practices of GN Auto to Touma, on the sole basis that Touma was GN 

Auto’s dealer-operator. Such baseless allegations, without any specific supporting 

facts regarding Touma’s actions, are insufficient to make a plausible claim against 

Touma pursuant to § 523(a)(6). 

60. Courtney fails to allege willful and malicious actions against Touma to 

satisfy the pleading requirement, and she fails in her attempt to confer GN Auto’s 

alleged liability to Touma. Count III should be dismissed with prejudice. 

c. Even if Courtney had a Claim for Willful and Malicious 

Conduct, Courtney’s claims are time-barred 

61. Even if this Court should find Courtney makes a plausible claim for 

willful and malicious conduct against Courtney, these claims are time-barred. 

62. Va. Code § 8.01-248 states that “every personal action...for which no 

limitation period is otherwise prescribed, shall be brought within two years after 

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the right to bring such action has accrued. Va. Code § 8.01-230 proves that the 

accrual of a right of action begins to run from the date the injury is sustained and 

not when the damage is discovered. 

63. Courtney alleges she bought a vehicle from GN Auto on May 28, 2016 

(¶ 15). She has not, in any prior litigation, advanced a claim against Touma for 

willful and malicious injury that was specifically plead and separate and apart from 

any alleged liability of the dealer, GN Auto. As such, Courtney had until May 28, 

2018 to bring a claim regarding any alleged specific willful and malicious actions 

against Touma. Because this Complaint was filed on December 20, 2019, Courtney’s 

claim is time-barred. 

CONCLUSION 

 Neither Counts I, II, or III state a claim upon which relief may be granted 

and the Complaint fails as a matter of law. There are no facts pled sufficient to 

make a claim for fraud, defalcation in a fiduciary capacity, and/or actual malice. 

Touma is entitled to judgment in his favor, and discharge of his debt as brought 

against him by Courtney. 

 WHEREFORE, for the reasons stated above, and for any that may be argued 

at the hearing on this matter, the Debtor/Defendant, Gaby A. Touma, respectfully 

requests this Honorable Court GRANT the Motion to Dismiss, award him attorney 

fees and costs pursuant to Rule 7054, and any other such relief that this Court 

deems just and proper. 

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 Respectfully Submitted, 

 GABY A. TOUMA 

 By Counsel 

WESTLAKE LEGAL GROUP 

 /s/ Jacqueline A. Kramer .

Thomas K. Plofchan, Jr., VSB # 34536 

Jacqueline A. Kramer, VSB # 88877 

46175 Westlake Drive, Suite 320 

Potomac Falls, Virginia 20165 

(703) 406-7616 – Telephone 

(703) 444-9498 – Facsimile 

tplofchan@westlakelegal.com

jkramer@westlakelegal.com

Counsel for Debtor/Defendant 

CERTIFICATE OF SERVICE 

 I hereby certify that on this 23nd day of January, 2020 I served a copy of the 

foregoing Amended Memorandum in Support of Gaby A. Touma’s Motion to Dismiss 

upon the following via the CM/ECF system to: 

Thomas R. Breeden, Esq. 

Thomas R. Breeden, PC 

10326 Lomond Drive 

Manassas, VA 20109 

(703) 361-9277 

trb@breedenlaw.com

Attorney for Plaintiff 

Janet M. Meiburger 

The Meiburger Law Firm, P.C. 

1493 Chain Bridge Road, Suite 201 

McLean, VA 22101-5726 

trustee@meiburgerlaw.com 

Trustee 

 /s/ Jacqueline A. Kramer .

Jacqueline A. Kramer

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