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Home v. Altrider, LLC

United States District Court, W.D. Washington, Seattle

October 6, 2017

LOK HOME, an Ohio citizen, Plaintiff,
ALTRIDER, LLC, a Washington Limited Liability Company; JEREMY LEBRETON, a Washington citizen; and DOES 1 through 10, inclusive, Defendants.




         This matter comes before the Court on Defendant Jeremy LeBreton's Motion for Judgment on the Pleadings. Dkt. #20. Mr. LeBreton “moves this Court pursuant to Rule 12(c) to enter judgment dismissing Plaintiff's allegations of alter ego liability because Plaintiff voluntarily dismissed the necessary party, Altrider (who cannot be rejoined)…” Id. at 1. Plaintiff opposes this Motion arguing that his claims against Defendant LeBreton can proceed. Dkt. #24. For the reasons below, the Court DENIES Defendant LeBreton's Motion.

         II. BACKGROUND[1]

         A. Factual Background

         Altrider manufactures and sells accessories and gear for “adventure touring motorcycles and waterproof adventure luggage.” Dkt. #13 at 3. Altrider registered as a Washington State Limited Liability Company in December of 2008. On or about September 26, 2009, Altrider's managing members, Defendant LeBreton and his then-wife Brianna Home entered into an agreement (“Operating Agreement”) to share ownership with Plaintiff, Brianna's father. This agreement divided ownership as follows: 40% for Defendant LeBreton, 40% for Brianna Home, and 20% for Plaintiff Lok Home. Id. at 4.

         On November 16, 2015, Defendant LeBreton and Brianna Home dissolved their marriage and entered a Divorce Decree. The Divorce Decree provides that Brianna Home's 40% ownership will transfer to LeBreton once he removes Brianna Home from an unrelated Altrider Small Business Administration (“SBA”) loan. According to the Amended Complaint, LeBreton has not complied with the Divorce Decree, and has not removed Brianna Home from the SBA loan. As of November 16, 2015, LeBreton has and controls all rights attendant to Brianna Home's 40% ownership in Altrider, including distribution, voting and management rights. Id.

         Plaintiff Home alleges that he has made several personal loans to Altrider, over several years, totaling hundreds of thousands of dollars. The Amended Complaint attaches an “Altrider, LLC Balance Sheet as of December 31, 2015, ” showing a “long term liability” of $407, 321.98 to Plaintiff Lok Home. Dkt. #13-2. On October 15, 2015, Plaintiff demanded repayment of his loans in an October 15, 2015, email to LeBreton and Altrider. Plaintiff states that he has “continued to demand repayment of his personal loans to Defendants in various emails after October 15, 2015, through the present.” Dkt. #13 at 9. On January 6, 2016, Plaintiff sent an email to Defendant LeBreton stating in part “I also need you to provide a loan and back interest repayment plan for the Personal loan I have with Altrider. A reasonable interest rate would be the same interest as the SBA loan carries.” Dkt. #13-3 at 3. On January 23, 2016, LeBreton responded with an email acknowledging the existence of a debt of $407, 321 to Plaintiff and stating “[s]tarting Feb 1st, Altrider will begin to repay the 407k loan over 10 years at an interest rate of 2.5%. Payments will be issued the 1st of every month.” Id. at 2. This email was sent by Defendant LeBreton acting as the President of Altrider. Id. LeBreton and Altrider have since failed to repay Mr. Home.

         Plaintiff has added additional facts to his Amended Complaint addressing Defendant LeBreton's status as an alter-ego of Altrider. Plaintiff alleges that LeBreton acts as Altrider's manager-in-chief, and has “failed to follow LLC formalities, failed to provide annual reports to its members, and failed to keep adequate limited liability company records.” Id. at 5. Plaintiff alleges that Altrider is not adequately capitalized, that LeBreton has commingled funds, and that LeBreton has personally benefitted from the loan agreements at issue by using Altrider's funds for his own personal non-business use. Id. Plaintiff cites to Findings of Fact and Conclusions of Law in the divorce case referenced above. Id.

         This action was filed on September 30, 2016. Dkt. #1. Plaintiff amended his Complaint on April 17, 2017. Dkt. #13. Plaintiff alleges causes of action against Altrider and LeBreton for breach of loan agreements, breach of repayment agreement, unjust enrichment, and breach of the implied covenant of good faith and fair dealing. Id.

         On June 9, 2017, the parties, including Defendant LeBreton and then-Defendant Altrider, stipulated to the voluntary dismissal of Altrider without prejudice. Dkt. #19. The Court entered that stipulation and ordered dismissal. Dkt. #23. The instant Motion followed on August 1, 2017. Dkt. #20.


         A. Legal Standard

         A Rule 12(c) motion is appropriate to address a plaintiff's failure to state a claim and failure to join a necessary party under Rule 19. Rule 12(h)(2). “Analysis under Rule 12(c) is ‘substantially identical' to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (citations and internal quotation marks omitted); see also United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1053 (9th Cir. 2011). In making a Rule 12(b)(6) assessment, the court accepts all facts alleged in the complaint as true, and makes all inferences in the light most favorable to the non-moving party. Baker v. Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (internal citations omitted). However, the court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678. This requirement is met when the plaintiff ‚Äúpleads factual content that allows the court to draw the reasonable inference that ...

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