United States District Court, D. Idaho
BEN THOMAS, an individual, and LINDA FERRIS, an individual, Plaintiffs,
BOB and KELLY THOMAS, husband and wife, Defendants.
MEMORANDUM DECISION AND ORDER RE: DEFENDANTS' (1) RULE 12(b)(6) MOTION TO DISMISS DAMAGE CLAIMS; (2) RULE 12(b)(7) MOTION TO DISMISS DAMAGE CLAIMS; AND (3) RULE 12(b)(1) MOTION TO DISMISS CLAIMS FOR DISSOLUTION OF PARTNERSHIP, WIND-UP, AND SETTLEMENT OF PARTNERSHIP ACCOUNTS, AND CONSTRUCTIVE TRUST (Docket No. 6)
RONALD E. BUSH, Magistrate Judge.
Now pending before the Court is Defendants' (1) Rule 12(b)(6) Motion to Dismiss Damage Claims; (2) Rule 12(b)(7) Motion to Dismiss Damage Claims; and (3) Rule 12(b)(1) Motion to Dismiss Claims for Dissolution of Partnership, Wind-Up, and Settlement of Partnership Accounts, and Constructive Trust (Docket No. 6). Having carefully considered the record, participated in oral argument, and otherwise being fully advised, the undersigned enters the following Memorandum Decision and Order:
1. Plaintiffs Ben Thomas and Linda Ferris (collectively "Plaintiffs") and Defendants Bob Thomas and Kelly Thomas (collectively "Defendants") are partners in the Thomas Brothers Ranch partnership (the "Partnership"). See Compl., ¶ 7 (Docket No. 1). The Partnership has no partnership agreement. See id . at ¶ 8.
2. The Partnership owns a substantial ranch in Oreana, Idaho. See id . at ¶ 9. The Defendants live on the ranch with their adult sons, operating a separate cattle grazing operation. See id . at ¶¶ 10-11. Plaintiff Ben Thomas lives in Woodland, Washington; Plaintiff Linda Ferris lives in Palmer, Alaska. See id . at ¶¶ 1-2.
3. According to Plaintiffs, Defendant Bob Thomas "makes decisions regarding the [P]artnership, and does not allow or accept oversight regarding his decisions" which, in turn, alienates Plaintiffs from the Partnership's business. Id . at ¶¶ 12-13. Plaintiffs contend that "[t]his alienation has allowed [Defendants] to violate their duties to the [P]artnership through allowing the use of [P]artnership property to operate other cattle grazing operations and as a personal residence and source of funds." Id . at ¶ 14. For example:
a. Defendants "have built their personal residence on the ranch property and have not compensated the [P]artnership for their use." Id . at ¶ 15.
b. Defendant Bob Thomas "has denied access to the ranch property and the books of the partnership, because [Plaintiffs] were unwilling to sign a personal guaranty for additional financing." Id . at ¶ 16.
c. Defendant Bob Thomas "increased the [P]artnership's line of credit significantly over the last year, with no input or consent from [Plaintiffs]." Plaintiffs believe that "this line of credit supports [Defendants'] lifestyle on the ranch, and the separate grazing operation, rather than the [Partnership]." Id . at ¶¶ 17-18.
4. Plaintiffs claim to have put money into the Partnership throughout its existence. See id . at ¶ 20.
5. The Partnership turned a profit for the past four to five years, but no money has been paid to Plaintiffs. See id . at ¶ 21.
6. The parties dispute the best use of the Partnership's real property - Plaintiffs "believe it could be put to better use as vacation property or hunting grounds in addition other valuable uses, " while Defendants "believe it should be continued to be used for their cattle gazing operation and personal residence." Id . at ¶¶ 22-24. Plaintiffs "believe that to continue to use the ranch for cattle grazing and as [Defendants'] residence would be to commit waste upon the property." Id . at ¶ 25. Plaintiffs submit that "there is a clear conflict between that which is best for the [P]artnership and that which most benefits [Defendants] and their family." Id . at ¶ 26.
7. Plaintiffs believe that the total value of the Partnership, minus liabilities, is in excess of $4.6 million. See id . at ¶ 27.
8. Through this action, Plaintiffs assert the following claims: (1) Dissolution of Partnership, Wind-Up, and Settlement of Partnership Accounts (Count I); (2) Violation of Statutory Duties/Breach of Fiduciary Duty (Count II); (3) Conversion of Partnership Property (Count III); (4) Unjust Enrichment (Count IV); (5) Constructive Trust (Count V); (6) Trespass to Partnership Realty (Count VI). See id . at ¶¶ 28-50.
9. Defendants now move to dismiss Plaintiffs' Complaint, arguing that (1) certain of Plaintiffs' causes of action (identified by Defendants as "damage claims") are unaccompanied by sufficiently-detailed allegations and should be dismissed for failure to state a claim, putting into question the amount-in-controversy requirement for subject matter jurisdiction; and (2) the Partnership - not Plaintiffs - is the only party that can bring the damage claims, and the Partnership's corresponding joinder in the action as a plaintiff would destroy complete diversity, leaving this Court without subject matter jurisdiction. See Mem. in Supp. of Mot. to Dismiss, pp. 2-10 (Docket No. 7).
A. Legal Standards
1. FRCP 12(b)(6): Failure to State a Claim Upon Which Relief Can Be Granted
FRCP 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief, " in order to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by an FRCP 12(b)(6) motion to dismiss "does not need detailed factual allegations, " it must set forth "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id .
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id . at 570. When reviewing a complaint under this Rule, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. See Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell, 550 U.S. 544 at 555. In other words, the complaint must plead "enough facts to state a claim to relief that is plausible on its face." Id . at 570. 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. Id . at 556. 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. Id . "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
A dismissal without leave to amend is improper unless it is beyond doubt that the complaint "could not be saved by any amendment." Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009). The Ninth Circuit has held that "in dismissal for failure to state a claim, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990). The issue is not whether ...