United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Lynn Winmill, U.S. District Court Judge.
before the Court is Defendant's Motion to Dismiss (Dkt.
3). The motion is fully briefed, and the Court finds the
matter appropriate for decision without oral argument. For
the reasons described below, the Court will deny
Defendant's Motion to Dismiss.
Leanna Howard filed a complaint against Defendant Selene
Finance LP in District Court in Clearwater County, Idaho on
November 16, 2018. Ms. Howard asserted claims of conversion
and unjust enrichment against Selene Finance, arguing that
the Defendant wrongfully negotiated a $100, 400 insurance
check under Plaintiff's insurance policy. Ms. Howard
alleges that Selene Finance had no legal right to the
insurance proceeds, and that Selene Finance failed to respond
to Plaintiff's reasonable demand for those funds. Selene
Finance removed the case to this Court on December 18, 2018
on the basis of diversity jurisdiction. Selene Finance now
moves to dismiss Ms. Howard's Complaint in its entirety
under Federal Rule of Civil Procedure 12(b)(6).
Rule of Civil Procedure 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 a Rule 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. at 555. 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. 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. Where a complaint pleads facts
that are “merely consistent with” a
defendant's liability, it “stops short of the line
between possibility and plausibility of ‘entitlement to
relief.'” Id. at 557.
Supreme Court identified two “working principles”
that underlie Twombly in Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). First, the court need not accept as true
legal conclusions that are couched as factual allegations.
Id. Rule 8 does not “unlock the doors of
discovery for a plaintiff armed with nothing more than
conclusions.” Id. at 678-79. Second, to
survive a motion to dismiss, a complaint must state a
plausible claim for relief. Id. at 679.
“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.” Id.
Rule 12(b)(6), the Court may examine documents referred to in
the complaint, although not attached thereto, without
transforming the motion to dismiss into a motion for summary
judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076
(9th Cir. 2005).
The Deed of Trust Does Not Preclude Ms. Howard's Claims
for Conversion and Unjust Enrichment
Finance moves to dismiss Ms. Howard's claims of
conversion and unjust enrichment on the basis that Ms. Howard
has no right to recover any of the funds at issue. Dkt. 3-1
at 2. As proof, Selene Finance points to a Deed of Trust,
which Plaintiff references throughout her complaint, and
which Defendant attaches to its Motion to Dismiss. See
Id. Defendant argues that the Court should consider the
Deed of Trust, that it controls the rights and obligations of
the parties, and that it should prevent Ms. Howard from
bringing claims for conversion and unjust enrichment in the
first place. Id.
Court has evaluated the Deed of Trust, but does not agree
that it controls the outcome of the case. The Ninth Circuit
has pointed out that at the motion to dismiss stage a
district court should not assume the truth of an incorporated
document if there are factual disputes about its application.
See e.g. Sgro v. Danone Waters of N. Am., Inc., 532
F.3d 940, 942, n.1 (9th Cir. 2008) (finding it proper to
consider disability benefits plan referenced in complaint,
but declining to accept truth of the plan's contents
where the parties disputed whether defendant actually
implemented the plan according to its terms); see also
Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1003
(9th Cir. 2018) (“[I]t is improper to assume the truth
of an incorporated document if such assumptions only serve to
dispute facts stated in a well-pleaded complaint.”).
Furthermore, under Idaho law, if there is ambiguity
surrounding the language of a deed of trust like the one at
issue here, contract interpretation and meaning become
questions of fact, not appropriate for determination at the
motion to dismiss stage. Foster v. Johnstone, 685
P.2d 802, 806 (Idaho 1984).
result, although the Court may consider the Deed of
Trust, it does not have enough facts to determine whether the
Deed of Trust is still in effect. The parties disagree
whether the Deed of Trust still applies following the
foreclosure on January 20, 2016, and subsequent sale of the
property secured by the Deed. See Dkt. 1-3 ¶10-11, Dkt.
3-1 at 1-2, Dkt. 6 at 5. Ms. Howard argues the Deed of Trust
“was extinguished by the Trustee's Deed on January
20, 2016, and the coverage period for the policy in force on
that date was November 1, 2015 to November 1, 2016. Compl. at
¶¶ 10-11.” Dkt. 6 at 5. Selene Finance, on
the other hand, contends that the “Deed of