United States District Court, D. Nevada
FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR SUN WEST BANK, Plaintiff(s),
JACQUELINE DELANEY, et al., Defendant(s)
JAMES C. MAHAN, District Judge.
Presently before the court is defendant Jacqueline Delaney's motion to dismiss (doc. # 34), in which defendant Kenneth Templeton joined (doc. # 35). Plaintiff, the Federal Deposit Insurance Corporation as receiver for Sun West Bank ("FDIC"), has responded. (Doc. # 41). Delaney has replied (doc. # 42) and Templeton has also replied (doc. # 47).
Sun West Bank ("SWB") was founded in 1998, with its headquarters in Las Vegas, Nevada. On May 28, 2010, the Nevada Department of Business and Industry, Financial Institutions Division ("NDBI") closed SWB and the FDIC was appointed as receiver.
In the instant action, the FDIC asserts two claims: (1) gross negligence pursuant to § 1821(k) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"); and (2) breach of fiduciary duty under Nevada law.
The complaint alleges that, as directors of SWB, defendants Delaney and Templeton ("defendants") were required to conduct SWB's business consistent with prudent, safe, and sound lending practices, including following SWB's lending policies and informing themselves about the risks of proposed loans. (Doc. # 1, p. 24-25).
The complaint alleges that in 2005, the board of directors established a ten-year plan to reach a $1 billion threshold in assets, and aggressively extended credit-primarily in commercial real estate and construction areas-in an effort to quickly grow SWB's assets. (Doc. # 1, p. 8). The complaint outlines six loans that defendants approved (doc. # 1, p. 14-24) and alleges that, between June 12, 2007, and May 28, 2010, defendants breached various duties by imprudently approving these loans to non-creditworthy borrowers and limited liability companies with risky characteristics (doc. # 1, p. 8). The complaint states that all six loans defaulted, causing in excess of $8 million in losses.
In the instant motion, defendants argue that Nevada's business judgment rule ("BJR") applies and both claims fail under the rule. The court will address each claim in turn.
II. Legal Standard
A court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide "[a] short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
"Factual allegations must be enough to rise above the speculative level." Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Iqbal, 556 U.S. 662, 678 (citation omitted).
In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678.
Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.
Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has "alleged-but not shown-that the pleader is entitled to relief." Id. (internal quotations omitted). When the allegations in a complaint have not crossed the line from conceivable ...