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Paws UP Ranch, LLC v. Green

United States District Court, D. Nevada

September 30, 2014

PAWS UP RANCH, LLC; PAWS UP CATTLE COMPANY, LLC; PAWS UP FOUNDATION; PAWS UP LAND COMPANY, LLC, Plaintiffs,
v.
CHRISTOPHER GREEN; LAWTON HALL; ALTIUM DEVELOPMENT GROUP, LP; GREENHALL CAPITOL, LLC; RIVERSIDE PREMIER DEVELOPMENT, LLC; LION SHARE CAPITOL, LLC; HAYMAN PRIVATE EQUITY; MASTER VISION GROUP, USA, INC.; SOVREN MANAGEMENT, LLC; MOUNTAIN ATLANTIC LENDING, INC.; COHEN COMMERCIAL EQUITY, LLC; EQUITY FINANCING, LTD; WORLDWIDE INVESTMENT, LLC; METROPOLITAN BANKCORP; MKS, LLC; and DOES I through X, Defendants.

ORDER

GLORIA M. NAVARRO, Chief District Judge.

Pending before the Court is the Motion for Leave to File a Second Amended Complaint (ECF No. 168) filed by Plaintiffs Paws Up Ranch, LLC ("Paws Up Ranch"), Paws Up Cattle Company, LLC ("Paws Up Cattle"), Paws Up Foundation ("Paws Up Foundation"), and Paws Up Land Company, LLC ("Paws Up Land") (collectively the "Paws Up Entities" or "Plaintiffs") on February 13, 2014. Defendant Lawton Hall ("Defendant Hall") filed his Response in Opposition (ECF No. 177) on February 27, 2014, and Plaintiffs filed their Reply (ECF No. 186) on March 10, 2014. The motion was referred to Magistrate Judge Nancy J. Koppe pursuant to 28 U.S.C. § 636(b)(1)(B) and District of Nevada Local Rule IB 1-4. On March 18, 2014, Judge Koppe recommended that this Court enter an order denying Plaintiffs' Motion for Leave to File a Second Amended Complaint. (Report & Recommendation, ECF No. 194). Plaintiffs filed their Objection to the Report & Recommendation (ECF No. 203) on April 4, 2014. Defendant Hall filed a Response to the Objection (ECF No. 206) on April 14, 2014, and Plaintiffs filed a Reply (ECF No. 207) on April 23, 2014.

Also pending before the Court is the Motion to Dismiss Amended Complaint (ECF No. 173) filed by Defendant Altium Development Group, LP ("Defendant Altium") on February 20, 2014 to which Defendant Hall filed a Non-Objection and Limited Joinder (ECF No. 182) on March 6, 2014. Plaintiffs filed a Response in Opposition (ECF No. 187) on March 10, 2014, and Defendant Altium filed its Reply (ECF No. 197) on March 20, 2014.

Finally, also pending before the Court is the Motion to Dismiss Defendant Hall's Cross-Claims (ECF No. 175) filed by Defendant Altium on February 20, 2014. Defendant Hall filed his Response in Opposition (ECF No. 183) on March 6, 2014, and Defendant Altium filed its Reply (ECF No. 192) on March 17, 2014.

I. BACKGROUND

Plaintiffs filed their Amended Complaint on October 9, 2012. (Am. Complaint, ECF No. 9). In the Amended Complaint, Plaintiffs allege that Defendant Hall and his business partner, Defendant Christopher Green ("Defendant Green"), jointly owned and operated Defendant Greenhall Capital, LLC ("Greenhall") and held themselves out as experts in arranging debt and equity financing for businesses. ( Id. ¶¶ 2, 20). Plaintiffs further allege that they entered into financial advisory and consulting agreements with Defendants Altium and Greenhall under which they paid various upfront expenses and retainer fees in excess of $1, 000, 000 for services that the Defendants never performed. ( Id. ¶¶ 23-24, 35, 37).

The overall thrust of Plaintiffs' claims is that the Defendants breached their contracts and committed fraud by accepting the upfront payments without any intention of ever performing under the contracts. ( Id. ¶¶ 40-49). Specifically, Plaintiffs assert claims against the Defendants for racketeering in violation of federal RICO laws, fraud, breach of contract, breach of the covenant of good faith and fair dealing, negligence, conversion, and unjust enrichment ( Id. ¶¶ 39-85). Plaintiffs assert that this Court has jurisdiction over these claims pursuant to diversity jurisdiction under 28 U.S.C. § 1332 and supplemental jurisdiction under 28 U.S.C. § 1367 arising from this Court's original jurisdiction over Plaintiffs' RICO claims pursuant to 28 U.S.C. § 1331. ( Id. ¶¶ 17-18).

II. LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See North Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the Court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555) (emphasis added).

In order to survive a motion to dismiss, a complaint must allege "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (internal quotation marks omitted). "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.

Furthermore, a claim of "fraud or mistake" must be alleged "with particularity." Fed.R.Civ.P. 9(b). A complaint alleging fraud or mistake must include allegations of the time, place, and specific content of the alleged false representations and the identities of the parties involved. See Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam).

III. DISCUSSION

A. Motion to Dismiss Amended ...


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