United States District Court, W.D. Washington, Seattle
Honorable Richard A. Jones United States District Judge.
matter comes before the Court on Defendant Camp Korey's
Motion to Dismiss. Dkt. # 7. For the reasons that follow, the
Court DENIES Camp Korey's motion.
Court recites the facts as Plaintiff Elbridge and Debra
Stuart Family Foundation (the “Stuart
Foundation”) alleges them in its complaint, suggesting
no opinion as to whether those allegations will prove true.
The Court cites the numbered paragraphs of the complaint
using paragraph (¶) symbols.
2009, Elbridge H. Stuart III, whose great-grandfather founded
the Carnation Milk Company, established the Stuart Foundation
with inheritance funds after his father passed away.
¶¶ 6, 10. Stuart was on the board of directors at
Camp Korey, a non-profit organization that operates camps for
seriously-ill children in Washington. ¶ 7. At the time,
Camp Korey owned a parcel of land in Carnation, Washington
upon which the Carnation Milk Company originally had been
located (“Carnation Farms”). ¶ 8. Camp
Korey, however, was in financial distress. ¶ 9. As a
solution, the Stuart Foundation formed Carnation Farms, LLC,
which purchased Carnation Farms and then leased it back to
Camp Korey. ¶¶ 11-12. The lease was for a period of
up to thirty years and the annual rent was $1.00. ¶ 12.
2012, Ann Stuart Lucas, Stuart's aunt and fellow board
member, informed Camp Korey that she intended to create an
endowment called the Elbridge and Evelyn Stuart Endowment for
Camp Korey (the “Stuart Endowment” or
“endowment agreement”). ¶ 13. Her first
contribution to the endowment was $30, 000. Id. A
month later, Lucas notified Camp Korey that it would not
receive disbursements from the endowment until the corpus
reached $1, 000, 000 and that “should Camp Korey at
Carnation Farms cease to exist, I require that the endowment
corpus be given to the [Stuart Foundation].” ¶ 14.
Over the following years, Lucas donated or raised nearly $1,
000, 000 for the Stuart Endowment. ¶ 16. By accepting
and depositing these donations into a bank account designated
for the endowment, Camp Korey accepted and agreed to the two
restrictions imposed by Lucas on the endowment. ¶ 17.
When raising money, Lucas relied on Camp Korey's
acceptance of these restrictions by discussing them with
donors, most of whom were members of the Stuart family who
intended for their donations to benefit charitable activities
at Carnation Farms. ¶ 18.
2016, Stuart resigned from the board of Camp Korey. ¶
20. Days later, Carnation Farms, LLC notified Camp Korey that
it was in default of several lease provisions. ¶ 21.
Following a second notice of default, Camp Korey agreed to
vacate Carnation Farms no later than September 30, 2016.
consequence of Camp Korey's departure from Carnation
Farms, the Stuart Foundation demanded that Camp Korey forfeit
the Stuart Endowment in accordance with Lucas'
restrictions. ¶ 23. Camp Korey refused. Id.
August 29, 2016, the Stuart Foundation filed the instant
complaint alleging claims for breach of contract,
¶¶ 24-27, and declaratory relief, ¶¶
28-29. Camp Korey now moves to dismiss the complaint under
Federal Rule of Civil Procedure 12(b)(6). Dkt. # 7. The
Stuart Foundation opposes the motion. Dkt. # 13.
Rule of Civil Procedure 12(b)(6) permits the Court to dismiss
a complaint for failure to state a claim. The rule requires
the Court to assume the truth of the complaint's factual
allegations and credit all reasonable inferences arising from
those allegations. Sanders v. Brown, 504 F.3d 903,
910 (9th Cir. 2007). The Court “need not accept as true
conclusory allegations that are contradicted by documents
referred to in the complaint.” Manzarek v. St. Paul
Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th
Cir. 2008). The plaintiff must point to factual allegations
that “state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 568 (2007).
deciding whether a complaint states a claim for relief, the
Court may consider “documents incorporated into the
complaint by reference, and matters of which a court may take
judicial notice.” Tellabs, Inc. v. Makor Issues
& Rights, Ltd., 551 U.S. 308, 322 (2007). A document
incorporated by reference may be relied upon “if the
plaintiff refers extensively to the document or the document
forms the basis of the plaintiff's claim.”
United States v. Ritchie, 342 F.3d 903, 908 (9th
Cir. 2003). “Documents not physically attached to the
complaint may be considered only if (1) their authenticity is
not contested and (2) the complaint necessarily relies on
them.” F.D.I.C. v. Clementz, No. C13-737-MJP,
2013 WL 6212166, at *1 (W.D. Wash. Nov. 27, 2013) (citing
Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994),
overruled on other grounds by Galbraith v. Cty. of Santa
Clara, 307 F.3d 1119 (9th Cir. 2002)).