UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

Ft Lauderdale Division

www.flsb.uscourts.gov

In re:

KISMA WILLIAMS REEFE Case No. 21-13961-PDR

Chapter 7

Debtor

_____________________________/

NATIONWIDE JUDGMENT RECOVERY, INC. 

Plaintiff, 

KISMA WILLIAMS REEFE Adv Pro. No. 21-01246-PDR-A

Defendant. 

_______________________________________/

MOTION TO DISMISS

Kisma Vonetta Reefe, Debtor/Defendant, moves pursuant to Fed. R. Civ. P.

12(b)(6), applicable herein through application of Fed. R. Bankr. P. 7012, to dismiss the

complaint, with prejudice, for failure to state a cause of action, and says:

1. First of all, the Complaint is a classic “shotgun pleading”, which should be

dismissed by the Court under binding precedent. Clifford v. Federman, 855

Fed.Appx. 525, 5281 (11th Cir 2021), Vibe Micro, Inc. v. Shabanets, 878 F.3d

1291, 1295 (11th Cir. 2018). Count 2 incorporates by reference the entirety of the

preceding 32 paragraphs.

1

 See Fed. Rule of Appellate Procedure 32.1 generally governing citation of

judicial decisions issued on or after Jan. 1, 2007. See also U.S. Ct. of App. 11th

Cir. Rule 36-2.

Case 21-01246-PDR Doc 11 Filed 09/29/21 Page 1 of 8
2. In the first 18 paragraphs of the Complaint, it is alleged that there was a Ponzi

scheme, Ms. Reefe received more funds from the scheme than she “invested”, and

a judgment for recovery of the “net winnings” was entered against her. In other

words, Ms. Reefe was the recipient of a fraudulent transfer.

3. Specifically, in paragraph 8, it is admitted that, the “Receiver [was] authorized ...

to initiate legal proceedings seeking the avoidance of fraudulent transfers,

disgorgement of profits, and any other legal and equitable relief ... necessary to

recover ... assets for the benefit of the Receivership estate.” 

4. Nowhere is it alleged that the Receiver pursued Ms. Reef for:

a. the violation of any of the Federal securities laws (as that term is defined in

section 3(a)(47) of the Securities Exchange Act of 1934), any of the State

securities laws, or any regulation or order issued under such Federal or State

securities laws; or

b. common law fraud, deceit, or manipulation in connection with the purchase

or sale of any security.

5. Nowhere does the Plaintiff allege, or attach any exhibit to demonstrate that the

judgment against Ms. Reef results from:

a. the violation of any of the Federal securities laws (as that term is defined in

section 3(a)(47) of the Securities Exchange Act of 1934), any of the State

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Case 21-01246-PDR Doc 11 Filed 09/29/21 Page 2 of 8
securities laws, or any regulation or order issued under such Federal or State

securities laws; or

b. common law fraud, deceit, or manipulation in connection with the purchase

or sale of any security.

6. Ms. Reefe not having been found to have violated any Federal securities laws, or

having engaged in common law fraud, deceit, or manipulation in connection with

the purchase or sale of any security, it follows that the judgment against her is as

the recipient of a fraudulent transfer, not for making a fraudulent transfer.

7. Exhibit A quantifies that Ms. Reefe received “$55,149.26 in net winnings...”

8. Exhibit B gratuitously demonstrates the evidence upon which the judgment

against Ms. Reef was based.

9. In the 27 pages of Exhibit C, Ms. Reefe is not mentioned.

10. Exhibit D is duplicative of the information in Exhibits A and B, simply reiterating

the amount of “net winnings” received by Ms. Reefe.

11. Exhibit E shows the assignment of Exhibit D to the Plaintiff.

12. Other than a passing reference to “her participation and recruitment efforts”2 there

is no support for the notion that Ms. Reefe was anything more than lucky in that

she received more than she “invested” in a Ponzi scheme.

2

 Paragraph 10.

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COUNT 1

13. In Count 1, the Plaintiff attempts to jam a square peg into a round hole, and fails. 

The judgment against Ms. Reefe is simple money judgment avoiding her receipt of

a fraudulent transfer.

14. The Plaintiff admits, in paragraph 26, that “The Final Judgment against the

Defendant Debtor, entered in Bell v. Disner on August 14, 2017 and attached hereto as

Exhibit “A,” is a debt owed by the Defendant Debtor for the fraudulent transfers

she received as a result of her participation in the ZeekRewards Ponzi scheme.” 

Emphasis added.

15. Plaintiff’s adverbial analysis that “it is clear that the judgment held by Nationwide

Judgment Recovery, Inc. was a result of the Defendant’s fraudulent conduct...” is

exactly the opposite of what the judgment represents.

16. To only a delusional Plaintiff would it be “evident in this matter that both

requirements of 11 U.S.C. § 523(a)(19) have been met.”

17. There is neither a reasonable legal, nor factual basis for the relief sought in Count

1.

WHEREFORE, Ms. Reefe requests entry of an order dismissing Count 1, with

prejudice.

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COUNT 2

18. In Count 2 is where the Plaintiff gets really creative.

19. Without citation to supportive authority, and without regard to undermining

authority, the Plaintiff interprets the Husky decision to extend exceptions from

discharge under 11 U.S.C. § 523(a)(2) to all recipients of fraudulent transfers.

20. The Eleventh Circuit has recently interpreted Husky more narrowly, and consistent

with the courts in this District which have also interpreted the breadth of the

dictum in Husky.

“The statutory provisions [of the Bankruptcy Code] governing

nondischargeability reflect a congressional decision to exclude

from the general policy of discharge certain categories of

debts,” on the theory that some categories of debt “outweigh[ ]

the debtors’ interest in a complete fresh start.” Grogan, 498

U.S. at 287, 111 S.Ct. 654. Fraud is one such category of debt,

and “[c]ourts have generally interpreted § 523(a)(2)(A) to

require the traditional elements of common law fraud.” In re

Bilzerian, 153 F.3d 1278, 1281 (11th Cir. 1998) (Bilzerian II).

As the creditor, Mr. Jayo had to prove the following by a

preponderance of the evidence to establish nondischargeability

under § 523(a)(2)(A): (1) that Mr. Harris used false pretenses,

or made a false representation, or committed actual fraud; (2)

that he relied on Mr. Harris’ conduct; (3) that his reliance was

justified; and (4) that Mr. Harris’ conduct caused his loss. See

id.; In re Bilzerian, 100 F.3d 886, 892 (11th Cir. 1996)

(Bilzerian I). See also Field v. Mans, 516 U.S. 59, 74-75, 116

S.Ct. 437, 133 L.Ed.2d 351 (1995) (“§ 523(a)(2)(A) requires

justifiable, but not reasonable, reliance”).

Consistent with our decision in Bilzerian II, a leading

bankruptcy treatise explains that the false pretense and false

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representation prongs of § 523(a)(2)(A) each require an

“intentional wrong”—the false pretense or the false

representation “must have been knowingly and fraudulently

made.” 4 Collier on Bankruptcy, ¶ 523.08[1][d] (16th ed.

2018) (collecting circuit and district court cases). “Such a

construction ... is consonant with equity, and consistent with

the object and intention of Congress in enacting a general law

by which the honest citizen may be relieved from the burden of

hopeless insolvency.” Neal v. Clark, 95 U.S. 704, 709, 24 L.Ed.

586 (1877).

The actual fraud prong “encompasses forms of fraud, like

fraudulent conveyance schemes, that can be effected without a

false representation. ... [A]nything that counts as ‘fraud’ and is

done with wrongful intent is ‘actual fraud.’ ” Husky Int'l

Electronics, Inc. v. Ritz, 578 U.S. 356, 136 S. Ct. 1581, 1586,

194 L.Ed.2d 655 (2016). See also id. at 1587 (declining to set

out a definition of fraud “for all times and circumstances”)....

Neither [Plaintiff] nor [Defendant] take issue with any of these

general principles. We decide this case, therefore, on the

understanding that [Plaintiff] had to show intentional

misconduct on the part of [Defendant].

In re Harris, 3 F.4th 1339, 1344–45 (11th Cir. 2021).

SEPH nonetheless asserts that Gaddy's post-guaranty transfers

of assets render the judgment debt exempt from discharge

because Gaddy made those transfers to hinder its collection. In

doing so, SEPH relies largely on a strained interpretation of,

and dicta in, the Supreme Court's 2016 decision in Husky

International Electronics, Inc. v. Ritz, ––– U.S. ––––, 136 S.

Ct. 1581, 194 L.Ed.2d 655 (2016). But Husky does not advance

SEPH's position.

In Husky, the Supreme Court reviewed the ruling of the Court

of Appeals for the Fifth Circuit that the “obtained by ... actual

fraud” language in § 523(a)(2)(A) requires a fraud that

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“involves a false representation to a creditor,” 136 S. Ct. at

1585, something not typically present in the fraudulent transfer

context. Reversing the Fifth Circuit, the Supreme Court held

that “[t]he term ‘actual fraud’ in § 523(a)(2)(A) encompasses

forms of fraud, like fraudulent conveyance schemes, that can be

effected without a false representation.” Id. at 1586. In doing

so, the Court reached the same conclusion the Seventh Circuit

had reached sixteen years earlier in McClellan v. Cantrell, 217

F.3d 890 (7th Cir. 2000), the other case upon which SEPH

heavily relies.

But the facts of Husky and McClellan are distinguishable, and

their holdings are narrow.

In Re Gaddy, 977 F.3d 1051, 1056–57 (11th Cir. 2020), cert. denied sub

nom. SE Prop. Holdings, LLC v. Gaddy, 209 L. Ed. 2d 548 (Apr. 19, 2021).

Two additional cases undermine the rogue interpretation of Husky urged by the

Plaintiff; In re Rivera, No. 19-26136-SMG, 2020 WL 4018986, at *2 (Bankr. S.D. Fla.

July 16, 2020); In re Ortega T., 573 B.R. 284, 294–95 (Bankr. S.D. Fla. 2017); and In re

Disbrow, No. 17-22480-EPK, 2019 WL 4439897, at *12–13 (Bankr. S.D. Fla. Apr. 22,

2019).

Wherefore, for the Plaintiff’s total failure to plead an exception from discharge,

Kisma Vonetta Reefe requests entry of an order dismissing this proceeding, with

prejudice.3

3

 “[T]he bankruptcy court correctly determined that SEPH was not entitled

to leave to amend its adversary complaint because such amendment would have

been futile.” Gaddy, at 1060.

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was served via

notice of electronic filing on September 29, 2021, to all parties receiving electronic

notice including: Martin L Sandler, Esq on behalf of Plaintiff Nationwide Judgment

Recovery, Inc., martin@sandler-sandler.com.

Respectfully submitted,

FLORIDA BANKRUPTCY GROUP, LLC.

4121 N 31st Avenue

Hollywood, Fl 33021-2011

954-893-7670/954-252-2540 Fax

By: s/ Kevin C Gleason 

Bankruptcylawyer@aol.com

Fla Bar No. 369500

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