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Yellowstone Poky, LLC v. First Pocatello Associates, L.P.

United States District Court, D. Idaho

August 23, 2017

YELLOWSTONE POKY, LLC, an Idaho Limited Liability Company, Plaintiff,
v.
FIRST POCATELLO ASSOCIATES, L.P., Defendant. FIRST POCATELLO ASSOCIATES, L.P., Counterclaimant,
v.
YELLOWSTONE POKY, LLC, an Idaho Limited Liability Company, and FEATHERSTON HOLDINGS, INC. Counterdefendant.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill, Chief Judge.

         INTRODUCTION

         This action involves the claim by Yellowstone Poky that Defendant First Pocatello Associates, L.P. failed to perform its obligations under a real estate purchase and sale agreement (the “Agreement”) between First Pocatello and Yellowstone Poky's successor in interest. Yellowstone Poky brings claims for breach of contract, unjust enrichment, and promissory estoppel.

         Pending before the Court is a series of motions, including: Defendant's Partial Motion to Dismiss for Failure to State a Claim (Dkt. 7); Defendant's Motion to Strike Affidavit of Counsel (Dkt. 16); Plaintiff's Motion to Amend the Complaint (Dkt. 24); Plaintiff's Motion for Joinder (Dkt. 25); a Motion to Intervene filed by Roger Featherston (Dkt. 26); and Defendant's Motion to Dismiss for Lack of Jurisdiction (Dkt. 30).

         The Court heard oral argument on this first series of motions on March 2, 2017. Subsequently, the Court issued a Memorandum Decision and Order finding that “Plaintiff's jurisdictional allegations are facially deficient due to the failure to assert a valid assignment of the underlying Agreement” from FHI to Yellowstone Poky. Mem. Decision & Order at 10, Dkt. 50. The Court granted Plaintiff leave to file an amended complaint for the sole purpose of curing the defective jurisdictional allegations and deferred ruling on the remaining motions. Id. at 11.

         On March 22, 2017, Plaintiff filed its First Complaint pursuant to that Order. First Am. Compl. and Jury Demand, Dkt. 51. The new pleading alleges that FHI assigned its interest in the Agreement to Yellowstone Poky. Id. ¶ 29. It also purports to align FHI as a Plaintiff. Id. ¶ 30.

         A second series of motions ensued. These include Defendant's Motion to Strike Amended Complaint (Dkt. 54), in which First Pocatello argues that FHI was improperly realigned as a co-plaintiff without leave of the Court. Also before the Court are Plaintiff's Motion to Strike Extraneous Pages of Defendant's Reply Memorandum and Declaration of Howard D. Burnett (Dkt. 60) and Plaintiff's Second Motion to Amend/Correct Complaint and Realign Parties (Dkt. 61).

         This Memorandum Decision and Order addresses the all pending motions, except the recently-filed Motions for Preliminary Injunction (Dkt. 67) and Expedited Discovery (Dkt. 68).

         DISCUSSION

         1. Defendant's Motion to Strike Amended Complaint (Dkt. 54)

         First Pocatello seeks to strike portions of Yellowstone Poky's First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(f). Specifically, First Pocatello objects to the purported designation of Featherston Holdings, Inc. (FHI) as a named plaintiff and inclusion of related allegations in Paragraph 30.

         In its March 8, 2017 Memorandum Decision & Order (Dkt. 50), this Court granted Plaintiff leave to file an amended complaint, pursuant to 28 U.S.C. § 1653, “for the sole purpose of curing the defective jurisdictional allegations.” The First Amended Complaint properly includes additional allegations regarding Yellowstone Poky's acquisition of rights in the underlying Agreement. However, the addition of FHI as a named Plaintiff exceeds the bounds of 28 U.S.C. § 1653 and the leave granted by this Court. Section 1653 allows amendments to cure defective allegations of jurisdiction but does not permit amendments “to produce jurisdiction where none actually existed before.” Newman- Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 831 (1989). It does not, therefore, authorize the addition of a new plaintiff to cure a lack of subject matter jurisdiction. See Field v. Volkswagenwerk AG, 626 F.2d 293, 306 (3d Cir. 1980); Aetna Cas. & Sur. Co. v. Hillman, 796 F.2d 770, 776 (5th Cir. 1986).

         Accordingly, the Court will grant Defendant's Motion, pursuant to Rule 12(f), and strike any reference to FHI as a Plaintiff in the First Amended Complaint.

         2. Plaintiff's Motion to Strike Defendant's Reply Brief and Burnett Declaration (Dkt. 60)

         Plaintiff filed a motion to strike extraneous pages of the Defendant's Reply Memorandum to its Motion to Strike the Amended Complaint (Dkt. 59) and the entirety of the Declaration of Howard D. Burnett (Dkt. 59-1), which was attached as an exhibit to that reply brief.

         Plaintiff argues that Defendant's Reply Memorandum consisted of twelve pages and therefore violated Idaho Local Civil Rule 7.1, which limits reply briefs to ten pages without express leave of the Court. In imposing length limits on party submissions, however, courts customarily exclude the case captions, tables of contents, tables of citations, signature blocks, certificates of service, and other such items. Defendant's Reply Memorandum consists of only ten (10) pages when excluding the case caption and “Certificate of Service.” The Court will therefore deny Plaintiff's Motion to Strike Defendant's Reply Memorandum.

         Plaintiff argues that the Declaration of Howard D. Burnett, filed in support of the above-mentioned Reply Memorandum, should be stricken pursuant to Federal Rule of Civil Procedure 6(c) and Idaho Local Civil Rule 7.1. The Court finds it unnecessary to consider the admissibility of the declaration as it was not relevant to the Court's ruling on Defendant's Motion to Strike. Plaintiff's Motion to Strike the Declaration of Howard D. Burnett will be denied as moot.

         3. Defendant's Motion to Dismiss for Lack of Jurisdiction (Dkt. 30)

         First Pocatello moved to dismiss Yellowstone Poky's complaint for lack of subject matter jurisdiction, on three distinct grounds. The Court rejected two of these grounds in its March 8 Memorandum Decision and Order (Dkt. 50).[1] On the third ground for dismissal-failure to plead existence of a valid assignment-the Court granted Yellowstone Poky leave to amend its defective jurisdictional allegations. Plaintiff thereafter filed a First Amended Complaint which now asserts a valid assignment of the underlying Agreement:

29. Featherston Holdings, Inc. assigned and transferred all of its interest in the Agreement to Yellowstone Poky. Roger Featherston is the principal owner and manager of Yellowstone Poky and the president of Featherston Holdings, Inc. Roger Featherston has authority to bind both entities. Roger Featherston entered into the assignment on behalf of Featherston Holdings, Inc. and assigned and transferred all of Featherston Holdings' interest in the Agreement effective March 15, 2016.

         This paragraph alleges sufficient facts regarding Yellowstone Poky's ownership of the contractual rights at issue so as to establish its standing to pursue this action. Accordingly, the Court will deny First Pocatello's Motion to Dismiss for Lack of Jurisdiction (Dkt. 30).

         4. Plaintiff's Motion for Joinder (Dkt. 26)

         Yellowstone Poky has moved to join its real estate broker, Intermountain Real Estate Idaho, LLC d/b/a Coldwell Banker Commercial Advisors (CBCA), and Don Zebe, the actual realtor involved in the transaction, as Defendants to the Complaint. Joinder of Zebe would destroy complete diversity, as both Yellowstone Poky and Zebe are citizens of Idaho. Therefore, the Court must consider the effect of 28 U.S.C. § 1447(e), which governs post-removal joinder of non-diverse defendants.

         A. Legal Standard - 28 U.S.C. § 1447(e)

         28 U.S.C. § 1447(e) provides that “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” The decision regarding joinder is committed to the trial court's discretion. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998). In deciding whether to grant leave to join, the Court may consider factors such as:

(1) whether the party sought to be joined is needed for just adjudication and would be joined under Federal Rule of Civil Procedure 19(a); (2) whether the statute of limitations would preclude an original action against the new defendants in state court; (3) whether there has been unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal jurisdiction; (5) whether the claims against the new defendant appear valid; and (6) whether denial of joinder will prejudice the plaintiff.

IBC Aviation Servs. v. Compania Mexicana De Aviacion, 125 F.Supp.2d 1008, 1011 (N.D. Cal. 2000).

         B. Analysis

         (i) Classification as “Required” ...


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