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Mtb Enterprises, Inc., A Utah Corporation and Michael T. Bilanzich v. Adc Venture 2011-2

May 1, 2013


The opinion of the court was delivered by: U. S. District Judge Honorable Edward J. Lodge


Before the Court in the above entitled matter is the Defendant's Motion to Dismiss pursuant to Rule 12(b)(6). The parties have filed their responsive briefing and the matter is ripe for the Court's review. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motion shall be decided on the record before this Court without oral argument.


Plaintiffs MTB Enterprises, Inc. ("MTB"), Michael T. Bilanzich, and Hairwire USA, Inc. (collectively "Plaintiffs"), brought this diversity action against Defendant ADC Venture 2011-2, LLC ("ADC") raising claims for breach of contract, reformation, declaratory judgment, injunctive relief, and successor liability. (Dkt. 1.) The claims relate to a series of agreements entered into between MTB and an entity called ANB Financial, N.A. ("ANB") on September 24, 2007. At that time, those parties entered into the Construction Loan Agreement whereby ANB agreed to loan up to Seventeen Million Dollars to MTB to develop property in Kuna, Idaho. (Dkt. 1.) The terms of the agreement called for the execution of a Line of Credit Agreement which provided that the loan would be disbursed to MTB in the form of a line-of-credit over time and that the entire amount of the loan was obligatory such that ANB could not refuse to allow MTB to draw on the line-of-credit up to the maximum amount of the loan absent certain conditions. The loan was due and payable on September 24, 2008. To date, MTB has drawn Eleven Million Dollars out on the loan. Although Six Million Dollars remains available on the loan, MTB alleges it has not been allowed to make further draws on the loan contrary to the terms of the loan agreements. (Dkt. 1.) As a result, MTB alleges it has been unable to continue to develop, improve, and ensure the viability of the real estate development project it has undertaken in Kuna, Idaho. (Dkt. 1.)

On May 9, 2008, prior to the September 2008 due date of the Construction Loan Agreement, the Office of the Comptroller of the Currency ("OCC") closed ANB and the Federal Deposit Insurance Corporation ("FDIC") was appointed as Receiver for ANB. In December of 2011, the FDIC entered into an Asset Contribution Agreement with the Defendant ADC. The Asset Contribution Agreement separated certain of ANB's assets and liabilities. The FDIC retained the liabilities and certain assets were transferred to ADC. (Dkt 13 at Ex. 2.) One of the assets transferred to ADC was the Construction Loan Agreement with MTB.

On June 28, 2012, MTB filed this action against the Defendant ADC alleging that, as ANB's successor, ADC was on notice of the breaches and assumed the obligations of ANB and the FDIC when it purchased the agreements at issue. (Dkt. 1.) ADC has filed the instant Motion to Dismiss arguing it did not assume liability for the conduct of ANB or the FDIC when it purchased certain assets and liabilities from those entities. (Dkt. 13.)


A motion to dismiss made pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a party's claim for relief. When considering such a motion, the Court's inquiry is whether the allegations in a pleading are sufficient under applicable pleading standards. Federal Rule of Civil Procedure 8(a) sets forth minimum pleading rules, requiring only a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).

A motion to dismiss will only be granted if the complaint fails to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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. 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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).Although "we must take all of the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation." Id. at 1949-50; see also Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

Therefore, "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Caviness v. Horizon Comm. Learning Cent., Inc., 590 F.3d 806, 811-12 (9th Cir. 2010) (citation omitted).


1. Nature of the Motion

The parties dispute whether this Motion is properly considered as one under Rule 12(b)(6) or if it should be converted to a Motion for Summary Judgment under Rule 56. In ruling on the Motion, ADC argues, the Court can and should take judicial notice of 1) documents held on the FDIC's public website, 2) orders and filings in other state and federal courts, and 3) the contract documents extensively referenced by MTB. (Dkt. 13 at 2.) MTB counters that ADC effectively seeks summary judgment in this Motion which is premature given that no discovery has yet taken place and there are genuine issues of material fact as to the meaning and intent of the parties' in the agreements. (Dkt. 16 at 3-4, 10.)

Generally, the Court may not consider any material beyond the pleadings in ruling on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994). If materials outside the pleadings are considered, the motion is converted to a motion for summary judgment governed by Federal Rule of Civil Procedure 56. See Jacobsen v. AEG Capital Corp., 50 F.3d 1493, 1496 (9th Cir. 1995). There are, however, times when documents other than the pleadings can be considered without converting a motion to dismiss into a motion for summary judgment. See Branch, 14 F.3d at 453. "[D]ocuments whose contents are alleged in a ...

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