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Elavsky v. Bohart

United States District Court, E.D. Washington

March 29, 2018



          THOMAS O. RICE Chief United States District Judge.

         BEFORE THE COURT is Defendants' Motion to Dismiss. ECF No. 21. This matter was submitted for consideration without oral argument. The Court has reviewed the record and files herein, and is fully informed. For the reasons discussed below, Defendants' Motion to Dismiss (ECF No. 21) is GRANTED.


         On July 31, 2017, Plaintiff Marlys Appleton, proceeding pro se, filed a Complaint against Defendants Sharyl Bohart and Sandra Hohn, alleging fraud, undue influence, unjust enrichment, and constructive trust. ECF No. 1. On December 11, 2017, Defendants filed the instant Motion to Dismiss this suit under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF No. 21 at 2. Defendants assert that Plaintiff's claims are barred by the applicable statute of limitations, Plaintiff lacks standing to bring the claims, Plaintiff has not and cannot adequately plead her claims, and the action in its entirety is a collateral attack on a prior decision of a Washington State Court in an action to which Plaintiff was a party. Id. On March 28, 2018, Plaintiff filed her First Amended Complaint, alleging the same four claims. ECF No. 34.


         The following facts are drawn from Plaintiff's Complaint and are accepted as true for the purposes of the instant motion. Plaintiff is the daughter of Michal B. Elavsky and Lorrene Lillian Elavsky. ECF Nos. 1 at ¶ 4; 34 at ¶ 4. Plaintiff's parents acquired and operated a commercial dairy farm, which was held in joint tenancy. ECF Nos. 1 at ¶ 7; 34 at ¶ 11. On November 5, 1957, Plaintiff's parents divorced and Mr. Elavsky was granted full title to the dairy farm property. ECF Nos. 1 at ¶ 10; 34 at ¶ 14. Plaintiff alleges that Mr. Elavsky was granted “full title to all property to properly maintain and care for the minor children of the marriage.” ECF Nos. 1 at ¶ 10; 34 at ¶ 14. In the mid-1960s, Mr. Elavsky sold the commercial operating dairy farm, the land, buildings, and other assets. ECF Nos. 1 at ¶ 11; 34 at ¶ 18. In 1972 and 1973, Mr. Elavsky used the proceeds from the sale of the dairy farm to purchase a cherry orchard with land and buildings. ECF Nos. 1 at ¶ 12; 34 at ¶ 19. In 1977, Mr. Elavsky formed a corporation and transferred the orchard property to the newly formed corporation, Hill Top Cherries, Inc. ECF Nos. 1 at ¶ 13; 34 at ¶ 20. Mr. Elavsky owned and operated the orchard property and business until November 2010, when Defendants allegedly fraudulently induced him to sell. ECF Nos. 1 at ¶ 15; 34 at ¶ 22.

         The Defendants are the granddaughters of Mr. Elavsky's second wife, Mae Daily Brown, who died in 1993. ECF Nos. 1 at ¶ 16; 34 at ¶ 23. Ms. Bohart maintained the books for Hill Top Cherries Inc. She was an officer and a signatory on the company's bank account. ECF Nos. 1 at ¶ 20; 34 at ¶ 28. Plaintiff alleges that Defendants formed a close relationship with Mr. Elavsky and assumed a position of complete dominance over him after his wife's death in 2010. ECF Nos. 1 at ¶¶ 17-18; 34 at ¶¶ 25-27. On March 23, 2011, Plaintiff asserts that Defendants induced Mr. Elavsky to transfer the orchard property and commercial business to Defendants. ECF Nos. 1 at ¶ 23; 34 at ¶ 31. Plaintiff contends that Defendants were aware of her vested superior interest in the orchard property and business based on the 1957 divorce decree. ECF Nos. 1 at ¶ 24; 34 at ¶ 32.

         In August 2014, Plaintiff states that Mr. Elavsky voiced concern about a problem with the orchard property and requested her assistance. Plaintiff insists that he felt extremely pressured and overwhelmed by Defendants' actions. ECF Nos. 1 at ¶ 27; 34 at ¶ 35. In September 2014, Plaintiff met with a consultant to look into the issue and the consultant allegedly expressed concern regarding the flow of funds. ECF Nos. 1 at ¶¶ 28-30; 34 at ¶¶ 36-38. On August 3, 2015, Plaintiff sent a request for information to the contract servicing agency, one of the alleged facilitators of the scheme. ECF Nos. 1 at ¶ 31; 34 at ¶ 39. On August 18, 2015, Plaintiff received information from the agency and discovered that Defendants were perpetrating an elaborate ruse. ECF Nos. 1 at ¶ 32; 34 at ¶ 40.

         Plaintiff asserts that from March 23, 2011 to present, Defendants were enriching themselves at Plaintiff's expense while engaging in a mirror transaction scheme. ECF Nos. 1 at ¶ 33; 34 at ¶ 41. Defendants allegedly “reported and misclassified payments made from the false mirror transactions, as interest expense to obtain a false deduction to be netted against income flowing through flow-thru entities.” ECF Nos. 1 at ¶ 36; 34 at ¶ 44. In January 2016 and January 2017, Defendants mailed to Plaintiff allegedly fraudulent Form 1099s for filing with the IRS in order to conceal and further this scheme. ECF Nos. 1 at ¶ 37; 34 at ¶ 45. Plaintiff contends that Defendants made false representations to obtain a legally issued tax identification number to carry out this scheme, made and used false documents, made representations to Plaintiff that these false documents were valid, and that Plaintiff relied upon Defendants' false representations. ECF Nos. 1 at ¶¶ 40-44; 34 at ¶¶ 48-53. Plaintiff states that she does not have the ownership, use, and enjoyment of her property. ECF Nos. 1 at ¶¶ 46-47, 34 at ¶¶ 54-55.


         A. Standard of Review

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) addresses the court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). A Rule 12(b)(1) motion may be either facial, where the court's inquiry is limited to the allegations in the complaint; or factual, where the court may look beyond the complaint to consider extrinsic evidence. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). The burden of proof in a Rule 12(b)(1) motion is on the party asserting jurisdiction. See Sopcak v. N. Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir. 1995). In ruling on a motion to dismiss, a court must accept all factual allegations in the complaint and construe the pleadings in the light most favorable to the party opposing the motion. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court may disregard allegations that are contradicted by matters properly subject to judicial notice or by exhibit. Id. The court may also disregard conclusory allegations and arguments which are not supported by reasonable deductions and inferences. Id.

         Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss the complaint for “failure to state a claim upon which relief can be granted.” Fed. R. of Civ. P. 12(b)(6). To survive dismissal, a plaintiff must allege “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requires the plaintiff to provide “more than labels and conclusions, and a formulaic recitation of the elements.” Twombly, 550 U.S. at 555. When deciding, the court may consider the plaintiff's allegations and any “materials incorporated into the complaint by reference.” Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). A plaintiff's “allegations of material fact are taken as true and construed in the light most favorable to the plaintiff[, ]” but “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1403 (9th Cir. 1996) (citation and brackets omitted).

         B. Proper Filing of the Motion to Dismiss

         Plaintiff asserts that the time allowed for Defendants to answer the Complaint expired on September 5, 2017 and that when the Defendants filed the Motion to Dismiss, they were already in default because the time to answer the Complaint expired. ECF No. 28 at 2. Plaintiff insists that Defendants' ...

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