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Smokiam RV Resort LLC v. William Jordan Capital Inc.

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

December 27, 2017

WILLIAM JORDAN CAPITAL, INC., et al., Defendants.



         This matter comes before the Court on Defendants' motion to dismiss Plaintiff's First Amended Complaint (Dkt. No. 25). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary, hereby DENIES the motion (Dkt. No. 25) for the reasons explained herein, and DIRECTS Plaintiff to file its proposed Second Amended Complaint (Dkt. No. 27 at 24-31) within ten (10) days of this order.

         I. BACKGROUND

         The Court described the underlying facts of this case in a previous order (Dkt. No. 20) and will not repeat them here. The Court previously dismissed Plaintiff's claims with prejudice, except for claims Plaintiff brought under the Washington Consumer Protection Act (“WCPA”), Wash. Rev. Code § 19.86. et seq., which the Court dismissed without prejudice and with leave to amend. (Dkt. No. 20.) Plaintiff has since filed a First Amended Complaint (Dkt. No. 23).

         Defendants again move to dismiss (Dkt. No. 25). Plaintiff, in opposing Defendants' motion, includes a proposed Second Amended Complaint. (Dkt. No. 27 at 24-31.)


         Defendants move to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 25.) Defendants assert the Court lacks subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1332 because Plaintiff, a limited liability company (“LLC”), does not properly plead the citizenship of its member and is unable to satisfy the amount in controversy. (Id. at 8) Defendants further assert an LLC cannot bring a WCPA claim and even if it could, Plaintiff fails to allege sufficient facts to show the required elements of injury or causation. (Id. at 11.)[1]

         A. 12(b)(1) Motion

         A motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(1) asserting lack of subject matter jurisdiction may be a facial or factual challenge. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In a facial attack, the defendant asserts that the plaintiff's allegations are insufficient on their face to confer federal jurisdiction. In reviewing such an attack, the Court assumes all material allegations in the complaint are true. Thornhill Publ'g Co. v. General Tel. Elec., 594 F.2d 730, 733 (9th Cir. 1979). Here, Defendants facially attack Plaintiff's First Amended Complaint, asserting that it does not identify the citizenship of Plaintiff's members. (Dkt. No. 25 at 9-10.) Defendants are correct. A complaint containing claims by an LLC must identify the citizenship of its members in order to establish the Court's jurisdiction. W.D. Wash Local Civ. R. 8. In response, Plaintiff submits a proposed Second Amended Complaint that cures this facial deficiency. (See Dkt. No. 27 at 24 ¶ 1) (declaration from Bradley Ellis that he is a citizen of Washington and is the sole member of Plaintiff Smokiam RV Resort, LLC). Pursuant to Federal Rule of Civil Procedure 15(a)(2), the Court GRANTS Plaintiff leave to amend its First Amended Complaint, as proposed. Plaintiff is DIRECTED to docket the Second Amended Complaint, as proposed, within ten (10) days of this order. This amendment resolves Defendants' first challenge.

         Defendant also brings a factual challenge, asserting Plaintiff fails to plausibly allege that the amount in controversy exceeds $75, 000. (Dkt. No. 25 at 10.) Normally, once the moving party factually attacks a district court's subject matter jurisdiction, the non-moving party must put forward “evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). But for purposes of the amount in controversy, “[t]he sum claimed by the plaintiff controls so long as the claim is made in good faith.” Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000). “To justify dismissal, it must appear to a legal certainty that the claim is really for less than the jurisdictional amount.” Id. (internal quotation marks and citation omitted). Defendants argue that the only damages Plaintiff plausibly asserts is $15, 000 in additional interest accrued as a result of Defendants' alleged errors in processing Plaintiff's payments, related attorney fees, and punitive damages. (Dkt. No. 30 at 8.) In making its argument, Defendants dismiss Plaintiff's allegations of “substantial additional costs to obtain permanent financing” resulting from Defendants' actions, which Plaintiff asserts exceeds $660, 000. (Dkt. No. 23 at 6). Plaintiff supports its allegations with declarations from Plaintiff's sole member and Plaintiff's banker. (See Dkt. Nos. 28, 29.) The Court may consider materials beyond the complaint in reviewing a factual attack on subject matter jurisdiction. McCarthy v. U.S., 850 F.2d 558, 560 (9th Cir. 1988). Given Plaintiff's assertions and related evidence, the Court concludes that it is far from a legal certainty that the amount of Plaintiff's claim is less than $75, 000. Plaintiff sufficiently alleges an amount in controversy in excess of the jurisdictional minimum.

         On this basis, Defendants' 12(b)(1) motion to dismiss is DENIED.

         B. 12(b)(6) Motion

         A court must dismiss an action if a plaintiff “fails to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Under Rule 12(b)(6), the Court accepts all factual allegations in the complaint as true and construes them in the light most favorable to the nonmoving party. Vasquez v. L.A. County, 487 F.3d 1246, 1249 (9th Cir. 2007). However, to survive a motion to dismiss, a plaintiff must cite facts supporting a “plausible” cause of action, consistent with Federal Rule of Civil Procedure 8(a)(2). Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). A claim has “facial plausibility” when the party seeking relief “pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 672 (2009) (quotations omitted). Although the Court must accept as true a complaint's well-pleaded facts, “conclusory allegations of law and unwarranted inferences will not defeat an otherwise proper motion to dismiss.” Vasquez, 487 F.3d at 1249 (quotation omitted).

         Plaintiff alleges Defendants violated WCPA based on the manner in which they serviced Plaintiff's loan. (Dkt. No. 23 at 6-8.) A properly plead WCPA claim requires facts demonstrating the following elements: (1) an unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) that impacts the public interest, (4) that causes injury to the Plaintiffs' business or property, and (5) causation. Hangman Ridge Training Stables v. Safeco Title Ins. Co., 719 P.2d 531, 533 (Wash. 1986). Defendants assert Plaintiff, as an LLC, lacks standing to bring a WCPA claim. (Dkt. No. 25 at 12-15.) Moreover, ...

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