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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

AVI AVIDAN and ALDON INC.,

Plaintiffs,

 v.

MICHAEL BECKER and MICHAEL 

BECKER FINANCIAL CO., LLP,

 Defendants.

11-CV-3462

OPINION

This matter comes before the Court on Defendants Michael Becker and 

Michael Becker Financial Co., LLC’s (“MBFC”) motion to dismiss the complaint 

for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). For the 

reasons discussed below, the Court will deny the motion in part and grant it in 

part.

I. Factual and Procedural Background

Plaintiff Aldon Inc. (“Aldon”) is a New Jersey corporation. Plaintiff Avi 

Avidan is a New Jersey resident and is the Chief Executive Officer of Aldon. 

Defendant MBFC is a Florida corporation. Mr. Becker is a Florida resident and is 

the managing member of MBFC. 

In 2004, Mr. Becker contacted his friend, Mr. Avidan, and asked for a loan 

to fund the operations of MBFC. On December 6, 2004, Mr. Avidan and Mr. 

Becker executed a document entitled “LOAN AGREEMENT AND 

PROMISSORY NOTE” that memorialized the loan (the “December 6th 

Agreement”), which was for $100,000. The December 6th Agreement identifies 

the borrower as “Michael Becker”, although at the end of the document Mr. 

Becker’s signature line also includes the name of his company, MBFC. The 

December 6th Agreement also identifies the lender as Aldon. As per the terms of 

the December 6th Agreement, the loan was subject to an 18% annual interest rate, 

and the borrower was to make monthly payments of $1500 commencing one 

month after execution of the agreement. The agreement also provides that a default 

that is not cured within 15 days after receipt of notice from the lender would 

constitute a material breach of the agreement. 

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On January 5, 2005, Mr. Becker requested a second loan. This loan was also 

for $100,000 and was also memorialized (the “January 5th Agreement”). In all 

respects pertinent to this case, the January 5th Agreement was identical to the 

December 6th Agreement with the exception that the January 5th Agreement 

identified the borrower as “MBFC (Michael Becker) LLC” but the signature line at 

the end of the document does not include MBFC. 

The parties executed a third loan for $100,000 on March 8, 2005 (the 

“March 8th Agreement”), again with identical terms. The March 8th Agreement 

identifies the borrower as “Michael Becker LLC” but again, only Mr. Becker’s 

name appears on the signature line. Finally, on July 5, 2005, the parties executed a 

fourth loan, this time for $200,000 (the “July 5th Agreement”). The July 5th 

Agreement identifies the borrower as “MBFC Michael Becker” but only Mr. 

Becker’s name appears on the signature line.

Plaintiffs also allege that Mr. Becker personally guaranteed repayment of all 

of the loans. Sometime thereafter, Defendants failed to comply with the terms of 

the loan agreements. On February 1, 2010, counsel for Plaintiffs mailed a notice of 

default to Mr. Becker and made a demand for full repayment of the entire 

outstanding balance of each loan. Defendants have failed to make any repayment 

since that time. Plaintiffs thereafter filed this action, alleging claims for breaches of 

the loan agreements, promissory estoppel, breaches of the implied covenants of 

good faith and fair dealing, and fraud. According to the allegations of the 

complaint, Defendants owed $1,014,516.38 at the time of the initiation of this 

action, including compounded interest. On October 27, 2011, Defendants filed this 

motion to dismiss. 

II. Legal Analysis

A. Motion to Dismiss Standard

In deciding a motion to dismiss under Rule 12(b)(6), a court must take all 

allegations in the complaint as true and view them in the light most favorable to the 

plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino

Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). This 

assumption of truth is inapplicable, however, to legal conclusions couched as 

factual allegations or to “[t]hreadbare recitals of the elements of a cause of action, 

supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 129 

S.Ct. 1937, 1949 (2009).

Although a complaint need not contain detailed factual allegations, “a 

plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires 

more than labels and conclusions, and a formulaic recitation of the elements of a 

cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). 

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Thus, the factual allegations must be sufficient to raise a plaintiff’s right to relief 

above a speculative level, such that it is “plausible on its face.” See id. at 570; see 

also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim 

has “facial plausibility when the plaintiff pleads factual content that allows the 

court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Iqbal, 129 S.Ct. at 1949 (2009) (citing Twombly, 550 U.S. at 

556). While “[t]he plausibility standard is not akin to a ‘probability requirement’ . .

. it asks for more than a sheer possibility.” Iqbal, 129 S.Ct. at 1949 (2009).

In deciding a motion to dismiss, the Court may also take judicial notice of 

certain documents without converting the motion to one for summary judgment 

under Federal Rule of Civil Procedure 56. Because the loan agreements are central 

to Plaintiffs’ claims, referenced in – and attached to – the complaint, and of 

undisputed veracity, this Court can properly take judicial notice of them. See, e.g., 

SGS U.S. Testing Co., Inc. v. Takata Corp., No. 09-CV-6007, 2010 WL 3035742, 

at *3 n.2 (D.N.J. Aug. 3, 2010).

B. Breach of Contract Claims Against Mr. Becker

First, Defendants argue that the Court must dismiss all breach of contract 

claims against Mr. Becker because Mr. Becker, in his individual capacity, is not a 

party to any of the four agreements. Defendants argue that although the December 

6th Agreement lists Mr. Becker as the borrower, the signature line clearly 

establishes that Mr. Becker signed the agreement on behalf of MBFC. Defendants 

also argue that the three subsequent agreements all clearly indicate that MBFC, 

rather than Mr. Becker, is the borrower. 

The Court is not persuaded. “The fundamental rule in construing contracts 

calls for the ascertainment of the intention of the parties in the light not only of the 

language used but also of the surrounding circumstances and the objects sought to 

be attained by them under their agreement.” Great Atlantic & Pacific Tea Co., Inc. 

v. Checcio, 762 A.2d 1057, 1061 (N.J. Super. A.D. 2000)(citations omitted). Here, 

each of the four loan agreements is subject to at least two reasonable 

interpretations: either Mr. Becker is a borrower or he is not. It is reasonably clear 

that Mr. Becker is a borrower under the December 6th Agreement based solely on 

the terms of that agreement. It is less clear that he is a borrower under the three 

subsequent agreements because the name of the identified borrower is neither 

precisely “Michael Becker” nor “MBFC” nor does Mr. Becker clearly sign any of 

the three documents solely on behalf of MBFC. In light of this ambiguity, it is fair 

for the Court to consider the circumstances surrounding the contracts. And in light 

of the allegations of the complaint, the Court could reasonably infer that the parties 

intended that both Mr. Becker and MBFC would be bound to the agreements. 

Because the Court is assessing a motion to dismiss under Rule 12(b)(6), it must 

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draw this inference in the light most favorable to the Plaintiffs and hold that the 

complaint adequately alleges facts that, if proven, could show that Mr. Becker is a 

party to the loan agreements. Thus, the Court will deny Defendants’ motion on this 

point. 

C. Breach of Contract Claims Against MBFC

Second, Defendants argue that the Court must dismiss all breach of contract 

claims against MBFC because Plaintiffs failed to comply with the notice 

provisions of the loan agreements. Defendants concede that Plaintiffs notified Mr. 

Becker of the default and made a demand for repayment, but they argue that notice 

to Mr. Becker does not constitute notice to MBFC. 

This argument also fails. Defendants are correct that the February 1, 2010 

notice is not addressed to MBFC nor does it mention MBFC, but that hardly means 

that notice to Mr. Becker was insufficient to provide notice to MBFC. First, the 

December 6th Agreement specifically indicates that notice of default must be sent 

to “3300 NE 192nd Street[,] Aventura[,] FL 33180” – the exact address to which 

Plaintiffs mailed the February 1, 2010 notice. And Second, Mr. Becker apparently 

signed at least some of the loan agreements not only on his own behalf but on 

behalf of MBFC. Thus, there are sufficient factual allegations that, if proven, could 

show that the parties intended that notice on Mr. Becker would serve as notice on 

MBFC.1 As such, the Court will deny Defendants’ motion on this point as well. 

D. Claims for Promissory Estoppel and Breach of the Implied Covenants 

of Good Faith and Fair Dealing

Third, Defendants argue that the complaint fails to allege facts supporting 

the conclusion that Defendants acted in bad faith. While bad faith is not an element 

of a cause of action for promissory estoppel, see, e.g., East Orange Bd. of Educ. v. 

New Jersey Schools Const. Corp., 963 A.2d 865, 874-75 (N.J. Super. A.D. 2009) 

(listing elements of cause of action for promissory estoppel); it is a necessary 

element of a cause of action for breach of the implied covenant of good faith and 

fair dealing. See, e.g., Seidenberg v. Summit Bank, 791 A.2d 1068, 1079 (N.J. 

Super. A.D. 2002). Here, the allegations are too bare to support a finding of bad 

faith and are thus insufficient to state a claim for breach of the implied covenant. 

Plaintiffs argue that the court may infer Defendants’ bad faith by the 

Defendants failure to repay the loan amounts. Plaintiffs further argue that 

 1 Even aside from the intentions of the parties, it also appears that the Court could impute notice on Mr. Becker to 

MBFC as a matter of law because he was the managing partner and he possessed – and exercised – the authority to 

bind MBFC to the loan agreements. See, e.g., Yeo & Yeo, P.C. v. HP/Management Group, Inc., No. 03-40340, 2009 

WL 4042971, at *4 (E.D. Mich. Nov. 20, 2009) (“[N]otice to an agent of a corporation relating to any matter of 

which the agent has the management and control is notice to the corporation.”)(quoting Fletcher Cyc. Corp. § 790).

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discovery may provide factual material sufficient to show that Defendants never 

made a good faith attempt to repay the loans and had no intention of doing so. But 

what discovery may show is not at issue here. The complaint does not provide any 

factual allegations suggesting that Defendants acted in bad faith. And the Court 

cannot infer that mere failure to repay the loans is sufficient to constitute bad faith 

– if such were the case, every borrower who ever defaulted on a loan agreement 

would be liable for breach of the implied covenant, a ridiculous result. 

Thus, the Court will deny Defendants’ motion as to Plaintiffs’ claims for 

promissory estoppel, but the Court will dismiss Plaintiffs’ claims for breach of the 

implied covenant of good faith and fair dealing. 

E. Fraud Claims

Finally, Defendants argue that Plaintiffs’ fraud allegations fail to meet the 

heightened pleading standard of Federal Rule of Evidence 9(b).2

Again, Plaintiffs invite the Court to infer fraudulent intent and the necessary 

allegations, but there are limits to the inferences the Court may draw. As with 

Plaintiffs’ allegations of bad faith, the Court cannot allow Plaintiffs to proceed to 

discovery based solely on legal conclusions that are not supported by specific 

factual allegations. This is especially true for claims falling under the heightened 

pleading requirement of Rule 9(b).

Here, Defendants 

are correct. Pursuant to Rule 9(b), the party alleging fraud must state the 

circumstances of the alleged fraud with sufficient particularity to place the 

defendant on notice of the “precise misconduct with which [it is] charged.” Lum v. 

Bank of America, 361 F.3d 217, 223-24 (3d Cir. 2004). The complaint fails to meet 

this burden because it contains no allegations establishing the date, time, or place 

of the alleged fraud or that otherwise substantiates the fraud allegations. See id. at 

224.

III. Conclusion

For the foregoing reasons, the will Court dismiss Plaintiffs’ claims for fraud 

and breach of the implied covenant of good faith and fair dealing and otherwise 

deny the motion. And because these dismissals are based on a failure to allege 

specific facts, the Court will dismiss the claims without prejudice and grant 

 2 The heightened pleading standard applies to claims for fraud arising under state law when a federal district court 

has diversity jurisdiction over the action. See Frederico v. Home Depot, 507 F.3d 188, 200-02 (3d Cir. 2007) 

(affirming dismissal of common law fraud claim arising under New Jersey law where allegations failed to meet 

heightened pleading standard of Rule 9(b)). 

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Plaintiffs leave to amend to address these specific deficiencies. See Alston v. 

Parker, 363 F.3d 229, 236-37 (3d Cir. 2004).

 /s/ William J. Martini 

WILLIAM J. MARTINI, U.S.D.J.

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