IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT, IN AND FOR *** COUNTY, FLORIDA CASE NO.

: 2010BANK, 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 PLAINTIFFS MOTION FOR DEFAULT AND DEFENDANTS MOTION TO DISMISS COMES NOW Defendants, 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. IRA. 3. The promissory note, prepared by the plaintiff, specifically states As to *** Trusts 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 Plaintiffs understanding that a personal guaranty would be unenforceable and in violation of the existing IRS Code, and its 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 *** 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 Defendants

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 *** Trusts 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 Plaintiffs understanding that a personal guaranty would be unenforceable and in violation of the existing IRS Code, and its 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. 10. A personal guarantee by an IRA owner on the loan made to an IRA would be a Plaintiff has filed their Complaint against David L. ***, Individually and Janet L. prohibited transaction under Code Section 4975. Dept. of Labor Advisory Opinion 1990-23A. ***, individually, based on the guaranty executed in connection with the mortgage loan made to the Janet L. *** IRA. 11. 12. The guarantee attached to the complaint was executed in clear violation of the Defendants move to dismiss the Plaintiffs Complaint for failing to state a cause IRS Code as a prohibited transaction causing the guaranty to be void ab initio. of action upon which relief may be granted under Fla. R. Civ. P. 1.140(b). MOTION IN OPPOSITION TO MOTION FOR DEFAULT 1. 2. Plaintiff served Defendants on September 21, 2010. Defendants filed a Motion to Enlarge Time to File Response on October 4,

2010 in order to obtain counsel.

3.

Defendants 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