IN THE CIRCUIT COURT OF THE

SECOND JUDICIAL CIRCUIT, IN AND

FOR *** COUNTY, FLORIDA

CASE NO.: 2010-

BANK, as successor in interest

To BANK.

Plaintiff,

vs.

*** TRUST COMPANY, as trustee for the

benefit of JANET L. *** IRA, DAVID L. ***,
individually and JANET L. ***, Individually,
Defendants.
_____________________________________/

MOTION IN OPPOSITION TO PLAINTIFF’S

MOTION FOR DEFAULT AND
DEFENDANT’S MOTION TO DISMISS

COMES NOW Defendant’s, DAVID L. *** and JANET L. ***, by and through their
undersigned attorney and for their motion to dismiss pursuant to Rules 1.130, and 1.140(b),
Fla. R. Civ. P. state:
1. Fla. R. Civ. P. 1.130(a) provides in pertinent part: “All bonds, notes, bills of
exchange, contracts, accounts, or documents upon which action may be brought or defense
made, or a copy thereof or a copy of the portions thereof material to the pleadings, shall be
incorporated in or attached to the pleading.”
2. Plaintiff has attached a copy of a promissory note executed by *** Trust
Company, Trustee FBO Janet L. ***, IRA, as borrower, evidencing a loan made to Defendant’s
IRA.
3. The promissory note, prepared by the plaintiff, specifically states “As to ***
Trust’s interest in the property, Apalachicola State Bank hereby understands in the event of
default under this note, our only recourse against *** Trust is the foreclosure of the mortgage
on real estate securing this debt” evidencing Plaintiff’s understanding that a personal guaranty
would be unenforceable and in violation of the existing IRS Code, and it’s assurance to the
Defendants that the guaranty did not supersede the additional terms in the note and mortgage.
4. Plaintiff has attached a copy of a mortgage executed by BORROWER and ***
Trust Company, Trustee FBO Janet L. *** IRA evidencing the property securing payment of
the note.
5. The mortgage, prepared by the plaintiff, specifically states “As to *** Trust’s
interest in the property, ***a State Bank hereby understands in the event of default under this
note, our only recourse against *** Trust is the foreclosure of the mortgage on real estate
securing this debt” evidencing Plaintiff’s understanding that a personal guaranty would be
unenforceable and in violation of the existing IRS Code, and it’s assurance to the Defendants
that the guaranty did not supersede the additional terms in the note and mortgage.
6. Plaintiff has attached a copy of the guaranty prepared by the Plaintiff, which
Plaintiff required Defendants to sign at closing. Defendant was provided assurances by Plaintiff
representatives that the guarantees would not be enforced as the IRA was a non-recourse
debt for which the borrower could not be personally liable.
7. IRS Code 4975(c)(1) states in pertinent part: “For purposes of this section, the
term “prohibited transaction” means any direct or indirect (A) sale or exchange, or leasing, of
any property between a plan and a disqualified person; (B) lending of money or other
extension of credit between a plan and a disqualified person.”
8. The owner of an IRA Account is considered a “disqualified person” for purposes
of the prohibited transaction rule of Code Section 4975. Harris v. Commissioner, 76 T.C.M. 748
(U.S. Tax Ct. 1994).
9. A personal guarantee by an IRA owner on the loan made to an IRA would be a
prohibited transaction under Code Section 4975. Dept. of Labor Advisory Opinion 1990-23A.
10. Plaintiff has filed their Complaint against David L. ***, Individually and Janet L.
***, individually, based on the guaranty executed in connection with the mortgage loan made to
the Janet L. *** IRA.
11. The guarantee attached to the complaint was executed in clear violation of the
IRS Code as a prohibited transaction causing the guaranty to be void ab initio.
12. Defendants move to dismiss the Plaintiff’s Complaint for failing to state a cause
of action upon which relief may be granted under Fla. R. Civ. P. 1.140(b).

MOTION IN OPPOSITION TO MOTION FOR DEFAULT

1. Plaintiff served Defendants on September 21, 2010.

2. Defendant’s filed a Motion to Enlarge Time to File Response on October 4,
2010 in order to obtain counsel.
 3. Defendant’s retained counsel and counsel filed a Notice of Appearance on
October 20, 2010.

CERTIFICATE OF SERVICE
The undersigned certifies that a true copy of this document has been sent by U.S. mail
and fax to *** Attorney for Plaintiff on this ____ day of October, 2010.

Attorney for Defendant