United States District Court, W.D. Washington, Seattle
ORDER DENYING PLAINTIFF'S MOTION TO DISMISS THIRD
J. Pechman, United States District Judge.
MATTER comes before the Court on Plaintiff's Motion to
Dismiss Defendants' Third Counterclaim. (Dkt. No. 16.)
The Court has reviewed the Motion, the Response (Dkt. No.
18), the Reply (Dkt. No. 19), the Surreply (Dkt. No. 21), and
all related papers.
January 29, 2013 Defendant Edward Balassanian and his
company, Be Yachts LLC (collectively,
“Defendants”), bought a yacht with a
1.8-million-dollar loan from Plaintiff, SunTrust Banks, Inc.
(“SunTrust”). (Dkt No. 8, ¶¶ 3.1-3.7;
Dkt. No. 1, ¶¶ 9-11.) On February 12, 2016, after a
series of missed payments, SunTrust repossessed the yacht and
sold it for $1, 050, 000.00. (Dkt. No. 1 ¶ 25; Dkt. No.
8, ¶¶ 16-20, 3.5-3.7.) SunTrust then filed a
Complaint for Recovery of Debt, bringing claims for breach of
contract and breach of the implied duty of good faith and
fair dealing. (Dkt. No. 1.) SunTrust seeks to recover
outstanding debts and expenses associated with the yacht,
including attorneys' fees. (Id. at 1.)
response, Defendants bring three counterclaims based on
Article Nine of the Uniform Commercial Code, as adopted in
Washington State: (1) Failure to use reasonable care in the
preservation of collateral; (2) failure to hold a
commercially reasonable sale; and (3) for statutory damages
under RCW 62A.9A-625. Plaintiff argues this third
counterclaim is an impermissible attempt to “double
dip, ” or Defendants' attempt to receive damages
exceeding those that would make them whole.
Rule 12(b)(6), the Court may dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” In ruling on a motion to dismiss, the Court
must construe the complaint in the light most favorable to
the non-moving party. Livid Holdings Ltd. v. Salomon
Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).
The Court must accept all well-pleaded allegations of
material fact as true and draw all reasonable inferences in
favor of the plaintiff. Wyler Summit P'ship v. Turner
Broad. Sys., 135 F.3d 658, 661 (9th Cir. 1998).
is appropriate where a complaint fails to allege
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A claim is plausible
on its face “when the plaintiff 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, 678 (2009). As a
result, a complaint must contain “more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555.
Motion to Strike
initial matter, Defendants move to strike much of
Plaintiff's Reply because it raises an argument not
discussed in Plaintiff's Motion to Dismiss. In that
Motion, Plaintiff solely argues that the statute at issue
bars redundant recovery. (Dkt. No. 16.) But Plaintiff makes a
separate argument in its Reply: Defendants have engaged in a
“consumer goods-transaction” and are therefore
barred from recovering statutory damages when the underlying
loan exceeds $40, 000. (Dkt. No. 19 at 3-9.)
Court has explained, new arguments should not be reserved for
a reply brief, as it gives the opposition no opportunity to
respond. Roth v. BASF Corp., No. C07-106MJP, 2008 WL
2148803, at *2 (W.D. Wash. May 21, 2008); see also United
States v. Puerta, 982 F.2d 1297, 1300 n. 1 (9th
Cir.1992). In this case, Defendants describe evidence in
their Surreply that contradicts Plaintiff's argument
(Dkt. No. 21 at 3 n.7), but because Plaintiff introduced its
argument in reply, Defendants are unable to respond; this is
the very harm the rule is meant to prevent. Defendants'
Motion to Strike is therefore GRANTED.
Motion to Dismiss
moves to dismiss Defendants' Third Counterclaim,
asserting the statute at issue, RCW 62A.9A-625, explicitly
bars Defendants from seeking statutory damages when they have
already plead claims to eliminate the deficiency judgment ...