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Stanger v. Walker Land & Cattle, LLC

United States District Court, D. Idaho

March 4, 2019

E. BRUCE STANGER, MICHAEL R. STANGER, AND KIMBERLY S. KVAMME, d/b/a SOMETIMES A GREAT NOTION LAND AND CATTLE COMPANY, a partnership, Plaintiffs,
v.
WALKER LAND & CATTLE, LLC, an Idaho Limited Liability Company, and VISTA VALLEY AG, INC., an Idaho Corporation, Defendants. WALKER LAND & CATTLE, LLC, an Idaho Limited Liability Company, Counter-Claimant,
v.
E. BRUCE STANGER, MICHAEL R. STANGER, AND KIMBERLY S. KVAMME, d/b/a SOMETIMES A GREAT NOTION LAND AND CATTLE COMPANY, a partnership, Counter-Defendants.

          MEMORANDUM DECISION AND ORDER

          David C. Nye Chief U.S. District Court Judge

         I. INTRODUCTION

         Pending before the Court is Plaintiffs/Counter-Defendants' Motion to Remand to State Court (Dkt. 6), Defendants/Counter-Claimants' Motion to Dismiss (Dkt. 8), and Plaintiffs/Counter-Defendants' Motion to Dismiss Claim for Contempt (Dkt. 10). The Court held oral argument on January 4, 2019, and took the various motions under advisement.[1] At the hearing, the Court also requested additional briefing from the parties on a specific issue. The Court has received and reviewed the supplemental briefs and these matters are now ripe for the Court's consideration. Upon review, the Court GRANTS Plaintiffs/Counter-Defendants' Motion to Remand, remands this case to state court, and dismisses all other motions as moot.

         II. BACKGROUND

         A. Procedural Background

         With numerous pending motions-most of which overlap and are interrelated-it is somewhat difficult to ascertain the posture of the case and the various possible outcomes. Accordingly, the Court begins with a summary of the timing of the various motions and arguments.[2]

         On July 13, 2018, Defendant/ Counter-Claimant Walker Land & Cattle, LLC[3]removed this action to federal court. Walker Land & Cattle's purported basis for removal was that the case involves a federal question-namely its counter-claim for contempt. That claim is based upon Walker Land & Cattle's former bankruptcy case (CV-13-41437-JDP) and SAGN's perceived violations of the confirmed plan in that case.[4]

         On July 31, 2018, SAGN filed a Motion to Remand this matter to state court. In its motion, SAGN alleges that this Court lacks jurisdiction because the underlying claims are all state law claims and Walker Land & Cattle's counter-claim is without merit and was only introduced to “shoehorn” this case into federal court.

         In repose to SAGN's Motion to Remand, Walker Land & Cattle argues that because SAGN asks the Court to make a ruling on the merits of its counter-claim, SAGN's motion is really a motion to dismiss, not a motion to remand, and thus improper.

         Contemporaneously, Walker Land & Cattle filed its own motion to dismiss arguing that the underlying bankruptcy case prohibits this lawsuit (specifically that it prohibits the underlying state court claims) vis-à-vis various provisions in the confirmed plan, stays, and other orders from the prior bankruptcy case. Alternatively, Walker Land & Cattle asked the Court to simply enforce the plan injunction-even if it is unwilling to dismiss the case-and “block” this action by SAGN.

         In response to Walker Land & Cattle's Motion to Dismiss, SAGN filed a single document that served as both an objection to Walker Land & Cattle's motion but also- apparently harkening back to Walker Land & Cattle's criticism that SAGN's Motion to Remand was more of a motion to dismiss-its own Motion to Dismiss Walker Land & Cattle's counter-claim for contempt under Rule 12(b)(6).[5]

         Finally, SAGN filed a Motion to Expedite proceedings-which Walker Land & Cattle joined-asking the Court to take up these matters as quickly as possibly considering the fast approaching spring planting season. The Court GRANTED this Motion at the hearing.

         B. Factual Background

         Plaintiffs E. Bruce Stanger, Michael R. Stanger, and Kimberly S. Kvamme are siblings and partners in the ownership of Sometimes A Great Notion Land and Cattle Company, a general partnership that manages 800 acres of farm ground located near Ririe, Idaho. Defendant, Walker Land & Cattle is an Idaho limited liability company based in Idaho Falls, Idaho. Over the years, Walker Land and Cattle has leased farm ground from SAGN.

         In 2012, the parties were co-owners of real property located in Osgood, Idaho (the “Osgood Farm”) and co-owners of real property located in Ririe, Idaho (the “Ririe Farm”). On August 2, 2012, Walker Land & Cattle entered into a lease agreement whereby it agreed to lease SAGN's undivided one-half tenancy in common interest in the Osgood Farm and the Ririe Farm for a term of 25 years, with the term expiring November 20, 2037, subject to an Option to Renew for an additional 5 years through November 20, 2042.

         On November 15, 2013, Walker Land & Cattle filed a voluntary petition for reorganization under Chapter 11.

         During the course of the bankruptcy proceedings, Walker Land & Cattle indicated its intention to assume the farm lease (executed on August 2, 2012) and continue farming the Osgood and Ririe Farms.

         SAGN objected to the assumption of the farm lease, but on April 3, 2015, the bankruptcy court entered an order confirming Walker Land & Cattle's third amended plan of reorganization, which included assumption by Walker Land & Cattle of the August 2, 2012, farm lease.

         In April 2016, the parties agreed to divide the two farms between them, with Walker Land & Cattle receiving the Osgood Farm and SAGN receiving the Ririe Farm.

         On April 25, 2016, the parties signed the Partition Agreement with Amended and Restated Farm Lease. A condition precedent to closing was Walker Land & Cattle entering into an agreement to sell the Osgood Farm to an unrelated third party to facilitate plan payments. The condition precedent was satisfied.

         The Partition Agreement with Amended and Restated Farm Lease also provided that Walker Land & Cattle would lease the Ririe Farm from SAGN.

         According to SAGN, over the next two years Walker Land & Cattle failed to keep up the property per contract requirements and did not make necessary repairs. These actions resulted in various Notices of Default and ultimately the underlying lawsuit in state court for breach of contract, declaratory judgment, quiet title, and ejectment-all state law claims. For its part, Walker Land & Cattle asserts that it made all necessary repairs and that SAGN is simply trying to get out of the lease so that it can find a new tenant who will pay more in leasing fees.

         III. ...


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