NordAq Energy, Inc. v. Devine

Filing 328

ORDER RE MOTIONS TO DISMISS: granting 209 Motion to Dismiss; granting 211 Motion to Dismiss; granting 215 Motion to Dismiss for Failure to State a Claim; granting 216 Motion to Dismiss for Failure to State a Claim; granting 217 Mo tion to Dismiss; granting 219 Motion to Dismiss for Failure to State a Claim; granting 221 Motion to Dismiss for Failure to State a Claim; granting 223 Motion to Dismiss for Failure to State a Claim; granting 226 Motion to Dismiss for Failure to State a Claim; granting 228 Motion to Dismiss for Failure to State a Claim. (See Order for details).. Signed by Judge Sharon L. Gleason on 01/25/2019. (CME, COURT STAFF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

NORDAQ ENERGY, INC.,
Plaintiff and
Counter Defendant,
Case No. 3:16-cv-0267 SLG

v.
PAUL L. DEVINE, et al.,
Defendants and
Counter Plaintiffs,

Case No: 3:17-cv-0031-SLG
(Consolidated)

and
PAUL L. DEVINE,
Third-Party Plaintiff,
v.
NUOXIN CO., LTD., et al.,
Third-Party Defendants,
and
JOHN EDWARD AITKEN KIDD,
Third-Party Plaintiff,
v.
NUOXIN CO., LTD., et al.,
Third-Party Defendants.

ORDER RE MOTIONS TO DISMISS
This order addresses each of the following motions:

At Docket 209 is Plaintiff NordAq Energy, Inc.’s (“NordAq”) motion under
Rule 12(b)(6) to dismiss in part Defendant Paul L. Devine’s counterclaims filed
within his Second Amended Counterclaim (Docket 200). Mr. Devine opposed at
Docket 238. NordAq replied at Docket 270.
At Docket 211 is NordAq’s motion under Rule 12(b)(6) to dismiss in part
Defendant John Edward Aitken Kidd’s counterclaims filed within his First Amended
Counterclaim (Docket 199). Mr. Kidd opposed at Docket 239. NordAq replied at
Docket 271.
At Docket 215 is Third-Party Defendant David Pfeiffer’s motion under Rule
12(b)(6) to dismiss the claims against Mr. Pfeiffer in Mr. Devine’s Second
Amended Third-Party Complaint (Docket 201). Mr. Devine opposed at Docket
240. Mr. Pfeiffer replied at Docket 274.
At Docket 216 is Mr. Pfeiffer’s motion under Rule 12(b)(6) to dismiss the
claims against Mr. Pfeiffer in Mr. Kidd’s Second Amended Third-Party Complaint
(Docket 202). Mr. Kidd opposed at Docket 241. Mr. Pfeiffer replied at Docket 275.
At Docket 217 is NordAq’s second motion under Rule 12(b)(6) for partial
dismissal or under Rule 12(c) for partial judgment on the pleadings of Mr. Kidd’s
First Amended Counterclaim (Docket 199) for conversion against NordAq. Mr.
Kidd opposed at Docket 253. NordAq replied at Docket 269.
At Docket 219 is Third-Party Defendant Robert Warthen’s motion under Rule
12(b)(6) to dismiss the claims against Mr. Warthen in Mr. Kidd’s Second Amended

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Third-Party Complaint (Docket 202).

Mr. Kidd opposed at Docket 254.

Mr.

Warthen replied at Docket 278.
At Docket 221 is Third-Party Defendant Doris Cheng’s motion under Rules
12(b)(6) and 9(b) to dismiss the claims against Ms. Cheng in Mr. Devine’s Second
Amended Third-Party Complaint (Docket 201). Mr. Devine opposed at Docket
255. Ms. Cheng replied at Docket 273.
At Docket 223 is Ms. Cheng’s motion under Rule 12(b)(6) to dismiss the
claims against Ms. Cheng in Mr. Kidd’s Second Amended Third-Party Complaint
(Docket 202). Mr. Kidd opposed at Docket 256, and corrected his opposition at
Docket 259. Ms. Cheng replied at Docket 272.
At Docket 226 is Nuoxin Co., Ltd.’s (“Nuoxin”) motion under Rules 12(b)(6),
9(b), and 12(b)(2) to dismiss the claims against Nuoxin in Mr. Devine’s Second
Amended Third-Party Complaint (Docket 201). Mr. Devine opposed at Docket
257. Nuoxin replied at Docket 276.
At Docket 228 is Nuoxin’s motion under Rules 12(b)(6), 9(b), and 12(b)(2)
to dismiss the claims against Nuoxin in Mr. Kidd’s Second Amended Third-Party
Complaint (Docket 202). Mr. Kidd opposed at Docket 258. Nuoxin replied at
Docket 277.
Oral argument on the foregoing motions was held on August 16, 2018, at
Anchorage, Alaska.

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BACKGROUND
This order addresses the second round of motions to dismiss that have been
filed in this case. NordAq initiated this case by filing a complaint against Paul
Devine on November 18, 2016; on August 31, 2017, Mr. Devine filed a Second
Amended Answer with First Amended Counterclaims. 1 NordAq filed a motion to
dismiss the First Amended Counterclaims on September 14, 2017. 2 An order
addressing NordAq’s motion to dismiss Paul Devine’s First Amended
Counterclaim (Docket 101) was entered on February 27, 2018. 3
Much of the relevant background to this dispute is set out in the Court’s prior
order and is not repeated here. In that order, the Court dismissed Mr. Devine’s
tort claims seeking indemnification, tortious and intentional interference claims,
tort-based claims related to incentive pay, and RICO claims. The remaining claims
pleaded by Mr. Devine—consisting of claims for fraud and intentional
misrepresentation, conversion, third party beneficiary claims, and related

1

Docket 1 (Compl.); Docket 101 (Second Am. Ans. and Counterclaims). NordAq filed a Second
Amended Complaint on March 6, 2017. See Docket 23.
2

Docket 103–04.

3

Docket 194 at 25.

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conspiracy claims—were dismissed with leave to amend. 4 NordAq’s motion did
not seek dismissal of Mr. Devine’s breach of contract claim.
After the Court entered its order, two answers with counterclaims and two
third-party complaints were filed. On March 13, 2018, Mr. Devine filed a Second
Amended Answer and Second Amended Counterclaim against NordAq, 5 and
Johnathan Kidd filed a First Amended Answer and First Amended Counterclaim
against NordAq. 6 On March 19, 2018, Mr. Devine filed a Second Amended ThirdParty Complaint against Nuoxin Co., Ltd., Doris Cheng, and David Pfeiffer, 7 and
Mr. Kidd filed a Second Amended Third-Party Complaint against Nuoxin, Ms.
Cheng, Mr. Pfeiffer, and Mr. Warthen. 8
Now before the Court are several motions to dismiss various claims raised
in these four pleadings, each of which is discussed in turn below.
LEGAL STANDARDS
Many of the relevant legal standards were set out in this Court’s prior order
at Docket 194 and are not repeated here.

4

In an order on reconsideration, the Court clarified that it “intended for all tort claims that relate
to the enforcement of the employment and incentive contracts between Mr. Devine and NordAq
to be dismissed with prejudice.” Docket 196 at 1–2.

5

Docket 200.

6

Docket 199.

7

Docket 201.

8

Docket 202.

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Before a court may dismiss any portion of a complaint for failure to state a
claim upon which relief may be granted, the court must provide the plaintiff with a
statement of the deficiencies in the complaint and an opportunity to amend or
otherwise address the problems, unless to do so would be futile. 9 Granting leave
to amend may be futile where a plaintiff’s attorneys are aware “that identical claims
pled as they were in Plaintiff's complaint have repeatedly failed as a matter of
law.” 10

A

“district

court's

‘decision

to dismiss the

[second]

amended

complaint with prejudice [may be] appropriate in light of [plaintiffs’] repeated failure
to cure the deficiencies in [their] pleadings.’” 11

9

See Gordon v. City of Oakland, 627 F.3d 1092, 1094 (9th Cir. 2010) (citing Albrecht v. Lund,
845 F.2d 193, 195 (9th Cir. 1988)).
10

Rodriguez v. Wells Fargo Bank, N.A., No. 2:11-CV-00553 JAM, 2011 WL 2946381, at *3 (E.D.
Cal. July 21, 2011); see also id. at *2 (“Allowing Plaintiff leave to amend this claim would be
futile; Plaintiff's attorneys have previously pled causes of action for breach of fiduciary duty
under similar circumstances, which were all dismissed when the defendant lending institution
raised the same issue . . . .”); Jang v. 1st United Bank, No. 2:11-CV-02427-JAM, 2012 WL
2959985, at *3 (E.D. Cal. July 19, 2012) (“The Court further finds that allowing Plaintiffs leave to
amend their TILA claim would be futile . . . . [I]n their Motion to Dismiss, Defendants address
several other cases brought by Plaintiffs' former attorney, where allegations identical to Plaintiffs'
regarding equitable tolling were found to be insufficient at the pleading stage. Plaintiffs do not
respond to this in their Opposition, and instead simply argue that their claim was adequately
pled.” (citations omitted)).
11

Destfino v. Reiswig, 630 F.3d 952, 959 (9th Cir. 2011) (first, third and fourth alteration in original)
(emphasis in original) (quoting Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir.1993)).
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DISCUSSION
1. NordAq’s motion for partial dismissal of Paul L. Devine’s Second
Amended Counterclaim
At Docket 209, NordAq moves to dismiss a portion of the Second Amended
Counterclaim that Mr. Devine filed after the Court’s order on NordAq’s first motion
to dismiss. 12 At issue in this motion are the following claims for relief: fraud and
misrepresentation

(intentional

and

negligent),

acting-in-concert

(or

civil

conspiracy), and punitive damages. In support of the motion, NordAq argues that
Mr. Devine’s tort-based counterclaims continue to be improperly based upon
NordAq’s alleged contractual promises, alleged misrepresentations regarding
things Nuoxin would do for NordAq, and statements or promises that NordAq
maintains are not actionable, such as concern for Mr. Devine’s well-being. NordAq
maintains all of these claims should be dismissed with prejudice, as further
attempts to state valid counterclaims for these causes of action would be futile. 13
There

are

several

aspects

to

Mr.

Devine’s

fraud/intentional

misrepresentation counterclaim. First, Mr. Devine maintains that acting through
Doris Cheng, NordAq agreed with him to modify his employment agreement and
to pay him as a consultant with an increased incentive bonus. He alleges that
NordAq made these promises, but they were misrepresentations and fraudulent

12

See also Docket 213 (Errata); Docket 200 (Devine’s Second Amended Answer and Second
Amended Counterclaim Against NordAq).

13

See Docket 210 (NordAq’s Memorandum in Support of Motion to Dismiss) at 2–3.

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because, according to Mr. Devine, NordAq never intended to honor them. Mr.
Devine appears to argue that he should be able to maintain tort claims for this
alleged conduct because he is unable to maintain them as breach of contract
claims in light of the terms of the 2012 employment contract, which he maintains
expressly prohibited oral modification. 14 But this argument is without merit; even
if the 2012 employment contract prohibited oral modification, that does not mean
that an alleged breach of a subsequent oral modification of that agreement sounds
in tort.

NordAq is entitled to dismissal with prejudice of this aspect of the

fraud/misrepresentation claim.
The second aspect of Mr. Devine’s fraud/misrepresentation counterclaim
alleges that Mr. Pfeiffer, allegedly acting on behalf of NordAq, told Mr. Devine that
he was concerned for Mr. Devine’s well-being and would carry out Mr. Devine’s
best interests. The Court agrees with NordAq that such statements, even if made,
are not actionable in tort for fraud/misrepresentation. 15
Another aspect of Mr. Devine’s fraud/misrepresentation claims appears to
be for injuries that NordAq incurred, and particularly as to Nuoxin’s alleged
promises to it. The Court agrees with NordAq’s analysis that Mr. Devine lacks
standing to assert any claim that NordAq may have against Nuoxin, as it is the

14

See Docket 238 at 11–12.

15

Docket 210 at 12–13.

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corporation itself, and not any individual shareholder, that may have suffered the
alleged harm identified by Nuoxin’s failure to invest additional monies in NordAq. 16
The Court previously dismissed Mr. Devine’s negligent misrepresentation
claim against NordAq and no material changes have been made to that claim by
Mr. Devine after leave to amend was granted. Accordingly, that claim will also be
dismissed with prejudice at this time.
In light of the foregoing, both the related acting-in-concert (civil conspiracy)
and punitive damages claims related to the fraud/misrepresentation claims must
also be dismissed with prejudice. To the extent Mr. Devine continues to maintain
a claim for litigation conduct, including seeking recovery of the attorney’s fees
awarded against him previously in this case, such allegations fail as a matter of
law at this time. 17
Accordingly,

NordAq’s

motion

to

dismiss

all

of

Mr.

Devine’s

fraud/misrepresentation claims, and associated acting-in-concert and punitive
damages claims, at Docket 209 will be granted. In light of Mr. Devine’s “repeated
failure to cure the deficiencies in [his] pleadings,” these claims will be dismissed
with prejudice. 18
16

See Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1326–27 (Alaska 1997) (permitting certain
shareholders direct action against corporation alleging unlawful shareholder distribution plan,
where direct action “only way to provide an adequate remedy” and “corporation may not be
entitled to any damages from the shareholders who received payments”).

17

See Docket 210 at 16–17; Docket 200 at 24, ¶ 3. This Court addressed Mr. Devine’s litigation
conduct claim in its prior order of dismissal. See Docket 194 at 20–21.
18

Destfino v. Reiswig, 630 F.3d 952, 959 (9th Cir. 2011) (quoting Neubronner v. Milken, 6 F.3d

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2. NordAq’s Motion for Partial Dismissal of John Kidd’s First Amended
Counterclaims
At Docket 211, NordAq moves to dismiss with prejudice all of Mr. Kidd’s
counterclaims against NordAq apart from the breach of contract claims. This
includes Mr. Kidd’s claims for fraud/misrepresentation, acting-in-concert, and
punitive damages.
NordAq argues that dismissal of Mr. Kidd’s tort counterclaims is warranted
for the same basic reasons that it sought dismissal of Mr. Devine’s tort
counterclaims. One aspect of Mr. Kidd’s fraud/misrepresentation counterclaim
appears to be that NordAq promised Mr. Kidd that he would receive a salary at an
increased rate after the Nuoxin transaction closed in 2014. Similar to Mr. Devine’s
counterclaim alleging a modified employment contract, this aspect of Mr. Kidd’s
fraud/misrepresentation counterclaim alleges a breach of contract claim. It is not
a viable tort cause of action.
Another aspect of Mr. Kidd’s fraud/misrepresentation claims appears to be
for injuries that occurred to NordAq, and particularly as to Nuoxin’s alleged
promises to it. The Court agrees with NordAq’s analysis that Mr. Kidd lacks
standing to assert any claim that NordAq may have against Nuoxin and/or Doris
Cheng in this regard, as it is the corporation itself, and not any individual

666, 672 (9th Cir.1993)).
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shareholder, that may have suffered any alleged compensable harm related to
Nuoxin’s failure to invest additional monies in NordAq. 19
Finally, Mr. Kidd alleges that NordAq committed the torts of fraud and
misrepresentation in 2015 through Ms. Cheng when she omitted communicating
to Mr. Kidd at that time that NordAq would challenge Mr. Kidd’s stock holdings later
in 2016.

These so-called “promises by omission” are not actionable against

NordAq as fraudulent misrepresentations. Mr. Kidd cites to no authority for the
proposition that a non-closely held corporation such as NordAq can be held liable
in tort when one member of the corporation’s board does not share certain
information about the corporation’s future intended actions with another board
member, even if it were to be proven that Ms. Cheng knew in 2015 that NordAq
intended to take action against Mr. Kidd’s shares later in 2016. 20
Because the Court finds that Mr. Kidd has failed to plead any viable claim
for fraud/misrepresentation (including any claim for negligent misrepresentation),
the corresponding claims for acting-in-concert (or civil conspiracy) and punitive
damages will also be dismissed. In addition, any claims related to an alleged
“litigation campaign” against Mr. Kidd should be dismissed, for the reasons set out

19

See Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1326–27 (Alaska 1997).

20

In addition, as further discussed below with respect to Mr. Kidd’s conversion claim, the claim
relates to NordAq stock that was held by Nordik Energy Partners, a limited liability company in
which Mr. Kidd was a member. Mr. Kidd has not adequately pleaded that his own stock was
taken, which is critical to showing that he was actually harmed by a NordAq board member’s
alleged failure to disclose. See Docket 271 at 12, n.18.

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in the Court’s prior order of dismissal and in the preceding discussion in this order
with respect to Mr. Devine. 21
The Court also finds that Mr. Kidd’s counterclaims against NordAq should
be dismissed with prejudice. Although normally a court should grant at least one
opportunity to amend before dismissing a claim with prejudice, here the Court finds
that dismissal with prejudice is warranted for the following reasons: the Court has
previously issued an order of dismissal as to Mr. Devine’s counterclaims, who had
pled claims substantially similar to Mr. Kidd’s, and granted leave to amend as to
those claims. But, as discussed above, Mr. Devine has failed to state viable tort
claims on his next attempt, and dismissal of those claims with prejudice will be
granted. Mr. Devine and Mr. Kidd are represented by the same attorneys in this
case. 22 As such, the Court finds that granting Mr. Kidd leave to amend in an effort

21

See supra note 17 and accompanying text.

22

See Jang v. 1st United Bank, No. 2:11-CV-02427-JAM, 2012 WL 2959985, at *3 (E.D. Cal.
July 19, 2012) (“The Court further finds that allowing Plaintiffs leave to amend their TILA claim
would be futile . . . . [I]n their Motion to Dismiss, Defendants address several other cases
brought by Plaintiffs' former attorney, where allegations identical to Plaintiffs' regarding equitable
tolling were found to be insufficient at the pleading stage. Plaintiffs do not respond to this in their
Opposition, and instead simply argue that their claim was adequately pled.” (citations omitted));
Rodriguez v. Wells Fargo Bank, N.A., No. 2:11-CV-00553 JAM, 2011 WL 2946381, at *2 (E.D.
Cal. July 21, 2011) (“Allowing Plaintiff leave to amend this claim would be futile; Plaintiff's
attorneys have previously pled causes of action for breach of fiduciary duty under similar
circumstances, which were all dismissed when the defendant lending institution raised the same
issue . . . .”); id. at *3 (“In light of the dearth of facts in Plaintiff’s complaint, and Plaintiff’s
attorneys’ knowledge that identical claims pled as they were in Plaintiff's complaint have
repeatedly failed as a matter of law, allowing leave to amend would be futile.”).

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to plead a viable claim for fraud/malpresentation against NordAq (either intentional
or negligent) 23 would be futile.
3. Motion to Dismiss Claims Against David Pfeiffer in Paul L. Devine’s
Second Amended Third Party-Complaint
At Docket 215, David Pfeiffer moves to dismiss Paul Devine’s Second
Amended Third-Party Complaint (Docket 201) against Mr. Pfeiffer. The motion
seeks dismissal of all the claims that Mr. Devine asserted against Mr. Pfeiffer:
fraud/misrepresentation, tortious interference with contract, conspiracy and actingin-concert, conversion, breach of contract, and punitive damages.

In his

opposition, Mr. Devine indicates that he “drops and no longer asserts his claims
for conversion and breach of contract against Mr. Pfeiffer.” 24 Therefore, each of
those claims will be dismissed with prejudice.
With respect to Mr. Devine’s fraud/misrepresentation claims against Mr.
Pfeiffer, one aspect appears to allege that Mr. Pfeiffer fraudulently misrepresented
to Mr. Devine that he would “carry out the best interests of Devine, Kidd, and
Clearview by, inter alia, making sure that Devine’s and Kidd’s monies received
from NordAq were properly accounted for via the Clearview entity when in fact
Pfeiffer and NordAq would then subsequently claim in this lawsuit that this
structure was done in an effort to conceal and misappropriate funds from
23

As further explained by NordAq at Docket 271, pp. 16–17, Mr. Kidd’s negligent
misrepresentation claims are inadequately pleaded.
24

Docket 240 (Opp’n) at 3.

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NordAq.” 25 The Court finds dismissal of these claims is warranted, in part because
the third-party complaint contains no allegations that specifically explain what, if
anything, Mr. Pfeiffer allegedly did wrong with respect to Clearview, when he
committed those alleged wrongs, and how those alleged wrongs harmed Mr.
Devine. 26
A second aspect of Mr. Devine’s fraud/misrepresentation claim alleges that
Mr. Pfeiffer told Mr. Devine that he “was concerned for Mr. Devine’s wellbeing” and
“would not act to take advantage” of Mr. Devine’s health issues. 27 This claim
relates to the eventual entry of an award of attorney’s fees against Mr. Devine in
this case that were incurred by NordAq in the default proceedings. 28 As explained
above, however, with respect to NordAq, these assertions, even if made by Mr.
Pfeiffer, are not actionable fraudulent misrepresentations. 29
In light of the Court’s prior order on NordAq’s motion to dismiss against Mr.
Devine, which granted leave to amend, the Court finds that dismissal of these
related claims against Mr. Pfeiffer with prejudice is warranted, as according to Mr.
Devine an additional opportunity to try to file an amended complaint that would

25

Docket 240 at 5–6 (emphasis omitted) (citing Docket 201, ¶ 52(c)(1)).

26

See Docket 194 at 8–14.

27

Docket 240 at 6 (emphasis omitted) (citing Docket 201, ¶ 52(c)(2)).

28

See Docket 39 (Motion to Vacate Clerk’s Entry of Default); Docket 87 (Order and Opinion re
Motion for Default Judgment and Motion to Vacate) at 10.

29

See supra note 15 and accompanying text.

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state a viable cause of action for fraud/misrepresentation against Mr. Pfeiffer
appears to be futile. 30
Mr. Devine also brings a claim for tortious interference with contract against
Mr. Pfeiffer. Here, Mr. Devine groups Mr. Pfeiffer together with the other third party
defendants he has named—Doris Cheng and Nuoxin—and asserts that they
together conspired to cause NordAq to breach its employment contact with Mr.
Devine. But as Mr. Pfeiffer correctly notes, Mr. Devine alleges no facts that
plausibly explain when, how, and in what manner Mr. Pfeiffer interfered with Mr.
Devine’s employment contract, his compensation, or any incentive-bonus
arrangement that Mr. Devine may have had with NordAq. 31
Mr. Devine appears to acknowledge that Mr. Pfeiffer cannot be held liable
under this tort when Mr. Pfeiffer was acting as NordAq’s agent. 32 But Mr. Devine
maintains that he has also pleaded that each of the third-party defendants acted
to pursue their own self-interests or the interests of others. 33

However, the

allegations he makes in that regard are vague and conclusory. Mr. Devine fails to
identify any self-interest that could have motivated Mr. Pfeiffer—that is, Mr. Devine
does not explain how Mr. Pfeiffer personally benefitted from allegedly interfering in

30

See supra note 22.

31

Docket 215 at 17–18.

32

See Docket 240 at 14.

33

Docket 240 at 14.

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NordAq’s employment contract with Mr. Devine. These same infirmities underlie
the acting-in-concert (civil conspiracy) claim. 34 Allegations of a conspiracy or
concerted action must be supported by well-pleaded material facts; such
allegations are not present in the Third-Party Complaint. 35
Based on the foregoing, the Court finds that Mr. Devine’s Third-Party
Complaint against Mr. Pfeiffer should be dismissed in its entirety for failure to state
a plausible claim for relief.

Further, the dismissal should be with prejudice,

because given the Court’s prior instructions to Mr. Devine with respect to the rules
of pleading, and the subsequent Third-Party Complaint that was filed, the Court
finds that an opportunity for amendment to permit the filing by Mr. Devine of
another Third-Party Complaint against Mr. Pfeiffer would be futile.
4. Motion to Dismiss Claims Against David Pfeiffer in John Kidd’s Second
Amended Third-Party Complaint
At Docket 216, Mr. Pfeiffer moves to dismiss all of the claims that Mr. Kidd
brought against him. In his response, Mr. Kidd indicates that he is dropping his

34

See Docket 201 at 30–32, ¶¶ 68–74; Docket 240 at 14–15.

35

See Wasco Prods., Inc. v. Southwall Techs., Inc., 435 F.3d 989, 991 (9th Cir. 2006), cert.
denied, 549 U.S. 817 (2006) (noting that Rule 9(b) requires a plaintiff to “plead, at a minimum,
the basic elements of a civil conspiracy if the object of the conspiracy is fraudulent”); Docket 201
at 30–31, ¶ 69 (alleging conspiracy to “mask . . . fraudulent and deceptive conduct”). Mr.
Devine’s civil conspiracy claim is also derivative of his other claims, each of which will be
dismissed. See Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007); Docket 201 at 32, ¶
73.

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claim for breach of contract against Mr. Pfeiffer. 36 Presently at issue are Mr. Kidd’s
claims against Mr. Pfeiffer for tortious interference with contract and conversion.
With respect to the tortious interference claim,

Mr. Kidd alleges in

generalized terms that Mr. Pfeiffer, in cooperation with co-defendants Warthen,
Nuoxin, and Cheng, was acting in his own self-interest to interfere with Mr. Kidd’s
contract with NordAq, as he was “motivated by a continuing desire to . . . financially
ruin . . . Kidd.” 37 But as with Mr. Devine’s tortious interference claim against Mr.
Pfeiffer, Mr. Kidd has not alleged any facts that plausibly explain when, how, and
in what manner Mr. Pfeiffer intentionally interfered with Mr. Kidd’s employment or
other contractual relationship he may have had with NordAq. Mr. Kidd cites
extensively to portions of his Second Amended Third-Party Complaint in asserting
that he has alleged facts sufficient to infer that Mr. Pfeiffer tortuously interfered with
Mr. Kidd’s contract(s) with NordAq, but the cited paragraphs contain no specific
factual allegations—only conclusory statements. 38 The Court’s order on the first
motion to dismiss set forth the elements for this tort under Alaska law to Mr. Devine,
who is represented by the same attorney as Mr. Kidd in this action. 39 But the
Second Amended Third-Party Complaint fails to describe with any particularity the

36

Docket 241 at 4. Mr. Kidd’s Second Amended Third-Party Complaint does not assert a fraud
or misrepresentation claim against Mr. Pfeiffer. See Docket 241 at 6.

37

Docket 202 at 30, ¶ 69.

38

See Docket 241 at 6–8 (citing Docket 202 at 29–32, ¶¶ 66–70, 75).

39

See Docket 194 at 17–18; see Cornelison v. TIG Ins., 376 P.3d 1255, 1269 (Alaska 2016).

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alleged wrongful conduct of Mr. Pfeiffer and explain how that alleged wrongful
conduct caused NordAq to breach its contract(s) with Mr. Kidd.

Given the

procedural posture of the case and the terms of the Court’s order on the first motion
to dismiss, the Court finds that permitting Mr. Kidd leave to amend to attempt to
plead a tortious interference claim against Mr. Pfeiffer would be futile. Therefore,
Mr. Kidd’s tortious interference with contract claim against Mr. Pfeiffer will be
dismissed with prejudice. Likewise, the acting-in-concert and civil conspiracy
claims related to such tort must also be dismissed with prejudice for failure to state
a claim for relief.
Mr. Kidd’s conversion claim appears to be premised on the stock that he
held in a distinct legal entity, Nordik Energy Partners. As stated by Mr. Kidd in the
Second Amended Third-Party Complaint, the “vast majority” of the NordAq shares
at issue in the conversion claim were held by Nordik, and not by Mr. Kidd
personally. 40 The viability of such a claim is thoroughly discussed in the parties’
briefing with respect to NordAq’s second motion for partial dismissal at Docket 217,
which focuses on Mr. Kidd’s conversion claim against NordAq. For the same
reasons discussed immediately below in Part 5 of this order, Mr. Kidd’s conversion
claim against Mr. Pfeiffer will be dismissed with prejudice for failure to state a claim
for relief.

40

Docket 202 at 20–21, ¶ 49.

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5. NordAq’s Second Motion for Partial Dismissal Under Fed. R. Civ. P.
12(b)(6) or for Partial Judgment on the Pleadings Under Fed. R. Civ. P.
12(c) [John Kidd’s Conversion Claim]
At Docket 217, NordAq moves to dismiss the conversion counterclaim that
Mr. Kidd pleaded against it at Docket 199. The counterclaim is focused on the
stock that Mr. Kidd owned in a separate legal entity, Nordik Energy Partners LLC.
Specifically, it alleges that in February 2016, Nordik owned “1,001,982 shares of
NordAq . . . . Thus, as a 40 % owner in Nordik, Mr. Kidd owned approximately
400,000 shares of NordAq at that time.” 41
NordAq’s motion is based on its assertion that “[a]s a matter of law, Nordik’s
property is not Kidd’s property. AS 10.50.350(a). Kidd lacked a possessory
interest in the NordAq stock that he asserts was taken from Nordik,” and thus “he
cannot establish that NordAq was a legal cause of loss to him.” 42
Mr. Kidd responds by implicitly acknowledging that NordAq’s legal argument
has merit with respect to his shares in Nordik. Nowhere in his opposition does he
explain how he has stated a viable claim for conversion against NordAq for the
stock that he held in Nordik. Rather, in his opposition Mr. Kidd now asserts that in
addition to the shares he held in Nordik, he also directly owned some shares in

41

Docket 199 at 27, ¶ 50.

42

Docket 218 at 6; see AS 10.50.350(a) (“Property transferred to or otherwise acquired by a
limited liability company is the property of the company and is not the property of the members
individually.”).

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NordAq. Appended to Mr. Kidd’s opposition is documentation which purports to
show that 13,558 shares of NordAq stock was issued directly to Mr. Kidd in 2009. 43
In reply, NordAq notes that Mr. Kidd did not contest that Nordik’s property is
not his property. And it maintains that Mr. Kidd’s allegations concerning the 13,558
shares are entirely new and that a claim based on those shares “cannot be
reasonably inferred from the allegations stated in his counterclaim.” 44 NordAq also
appends to its reply documentation that it indicates purports to show that Mr. Kidd
continues to directly own shares of NordAq stock. 45
NordAq (and all the other parties that Mr. Kidd alleges wrongfully converted
Mr. Kidd’s NordAq shares) is entitled to dismissal of the conversion claim to the
extent it is based upon Mr. Kidd’s ownership of stock in Nordik. The dismissal of
all such claims will be with prejudice because it would be futile for Mr. Kidd to plead
a plausible conversion claim based on Nordik’s stock.
With respect to any NordAq stock personally held by Mr. Kidd, the Court
does not read Mr. Kidd’s current pleadings to state a claim for the conversion of
that stock. Rather, the Court agrees with NordAq that the clear focus of the
pleadings is on Mr. Kidd’s stock in Nordik. Mr. Kidd may seek to file a motion to
amend his pleadings to raise such a claim, but in light of NordAq’s attachments to

43

Docket 253-1 at 2.

44

Docket 269 at 3.

45

Docket 269-1 at 1–4.

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its reply, it is not at all clear whether Mr. Kidd and his counsel have yet undertaken
the reasonable inquiry required by Rule 11(b) of the Federal Rules of Civil
Procedure with respect to that stock, which would be a necessary predicate prior
to the filing of a motion to amend on that basis.
6. Motion to Dismiss Claims Against Robert Warthen in John Kidd’s Second
Amended Third-Party Complaint [Fed. R. Civ. P. 12(b)(6)]
At Docket 219, Mr. Warthen seeks dismissal of each of the claims brought
against him by Mr. Kidd in his Second Amended Third-Party Complaint (Docket
202). 46 Mr. Kidd’s pleading listed claims for fraud, misrepresentation, tortious
interference with contract, conspiracy and acting-in-concert, conversion, and
punitive damages. In his response to the motion, Mr. Kidd indicates that he is
dropping “his claims for fraud and breach of contract against Mr. Warthen.” 47 Mr.
Kidd’s opposition does not address the claim for misrepresentation, which the
Court also finds was effectively dropped by Mr. Kidd as well. The Court discusses
the remaining claims in turn.
The tortious interference with contract claim that Mr. Kidd brings against Mr.
Warthen is similar to the tortious interference claims brought by both Mr. Kidd and
Mr. Devine against Mr. Pfeiffer, in that it fails to state a plausible claim for relief.
As with those claims, Mr. Kidd groups Mr. Warthen together with the other third
46

Paul Devine did not name Mr. Warthen as a defendant in his Second Amended Third-Party
Complaint. See Docket 201.
47

Docket 254 at 4.

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party defendants he has named and asserts that they together conspired in some
unspecified manner at some unspecified time and place to cause NordAq to
breach its employment contract with Mr. Kidd. Similar to the allegations brought
against Mr. Pfeiffer, Mr. Kidd alleges no facts that plausibly explain when, how,
and in what manner Mr. Warthen interfered with Mr. Kidd’s contractual
relationship(s) with NordAq. 48
As with Mr. Devine, Mr. Kidd appears to acknowledge that Mr. Warthen
cannot be held liable under this tort when he was acting as NordAq’s agent. 49 But
Mr. Kidd maintains that he has also pleaded that each of the third-party defendants
acted to pursue their own self-interests or the interests of others. However, similar
to his allegations against Mr. Pfeiffer, the allegations he makes in that regard
against each of the third-party defendants are vague and conclusory. 50 Mr. Kidd
fails to identify any self-interest that motivated Mr. Warthen—that is, Mr. Kidd does
not explain how Mr. Warthen personally benefitted from allegedly interfering in
NordAq’s contractual relationship(s) with Mr. Kidd. These same infirmities underlie
the associated acting-in-concert (civil conspiracy) claim.

Allegations of a

conspiracy or concerted action must be supported by well-pleaded material facts;

48

See Docket 202 at 29–30, ¶¶ 66–72.

49

See Docket 254 at 6–7.

50

See supra notes 32–35 and accompanying text; Docket 202 at 30, ¶ 69.

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such allegations are not present in the Second Amended Third-Party Complaint
against Mr. Warthen. 51
On the conversion claim, even assuming that liability for an alleged
conversion of Mr. Kidd’s stock in Nordik could extend to Mr. Warthen, Mr. Kidd has
failed to state a claim for conversion against Mr. Warthen with respect to Nordik’s
stock ownership in NordAq, for the same reasons discussed above with respect to
Mr. Kidd’s conversion claim against NordAq. And as also discussed above, the
Court does not read the Second Amended Third-Party Complaint to state a
plausible claim for relief with respect to NordAq stock that Mr. Kidd may have
himself owned. 52
For the foregoing reasons, the Court will grant the motion to dismiss Mr.
Kidd’s Second Amended Third-Party Complaint at Docket 219 against Robert
Warthen in its entirety. The dismissal will be with prejudice because granting Mr.
Kidd leave to amend to plead viable claims for tortious interference with contract,
conspiracy and acting-in-concert, and/or conversion would be futile.
7. Motion to Dismiss Devine’s Second Amended Third-Party Complaint
Against Cheng and Joinder

51

See Wasco Prods., Inc. v. Southwall Techs., Inc., 435 F.3d 989, 991 (9th Cir. 2006), cert.
denied, 549 U.S. 817 (2006); Docket 202 at 31, ¶ 74 (alleging existence of conspiracy with
object of “breaching contracts and committing fraud upon Mr. Kidd”).

52

See supra Part 5.

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At Docket 221, third-party defendant Doris Cheng moves to dismiss all of
the claims brought by Paul Devine against her. The Second Amended Third-Party
Complaint

included

the

following

claims

against

Ms.

Cheng:

fraud/misrepresentation, interference with contract or prospective advantage,
conversion, breach of contract, litigation-related claims, and associated claims for
civil conspiracy and punitive damages. 53 In his opposition, Mr. Devine drops his
claims for conversion and breach of contract against Ms. Cheng. 54 Thus, the Court
turns to the remaining claims.
One aspect of Mr. Devine’s fraud/misrepresentation claim against Ms.
Cheng focuses on statements she allegedly made regarding whether Nuoxin
would be providing additional funds to invest in NordAq in the fall of 2014. The
Court agrees with Ms. Cheng’s analysis of this claim: it fails to state each of the
requisite elements of the test. First, the alleged statements made by Ms. Cheng
regarding Nuoxin’s second investment are not statements that are actionable for
fraud; they are not false or misleading factual statements. Second, there is no
showing that Mr. Devine could have justifiably relied on the statements that were
made, or that he in fact did so. 55

53

Docket 201 at 24–35, ¶¶ 51–87.

54

And even if such justifiable reliance had

Docket 255 at 4.

55

The Court finds Ms. Cheng’s analysis of the 2014 Subscription Agreement to be persuasive in
this regard. See Docket 273 at 3 (“[T]he allegedly offending emails and oral statement cannot
be justifiably relied upon to trump a written Subscription Agreement.”); Docket 255 at 12–13.
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theoretically been pleaded with particularity, there is no showing that any such
reliance on the purported statement by Mr. Devine caused him any loss. In short,
Mr. Devine has failed to state a viable claim for fraud/misrepresentation against
Ms. Cheng with respect to Nuoxin’s potential investment in NordAq in the fall of
2014. And the Court is persuaded by Ms. Cheng’s analysis of the standing issue—
Mr. Devine would not have standing as an officer or shareholder to sue for injuries
to the corporation. 56
Mr. Devine alleges other types of fraudulent misrepresentations by Ms.
Cheng. He asserts that her promises to increase his compensation must be
tortious misrepresentations because an oral modification of the employment
agreement between Mr. Devine and NordAq was prohibited. 57 For the same
reasons that the Court rejected this reasoning when argued by Mr. Devine against
NordAq, the Court finds Mr. Devine has failed to state a fraud/misrepresentation
claim against Ms. Cheng on this basis. 58
For the foregoing reasons, Ms. Cheng’s motion to dismiss all the
fraud/misrepresentation claims brought against her by Mr. Devine will be granted,
and for the same reasons set forth above that dismissed other claims with

56

See Docket 222 at 6; cf. Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1327 (Alaska 1997)
(noting that a shareholder generally may not bring a cause of action against a corporation for
wrongs to the corporation, and permitting suit only because shareholder suffered an injury
separate and distinct from other shareholders).

57

Docket 255 at 15.

58

See supra note 14 and accompanying text.

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prejudice at this juncture, that dismissal will be with prejudice. Permitting Mr.
Devine an opportunity to amend to state a valid cause of action against Ms. Cheng
related to the Nuoxin investment or to promises concerning Mr. Devine’s
compensation would be futile.
The tortious interference of contract claim against Ms. Cheng will be
dismissed with prejudice for the same reasons that the Court dismissed these
claims against Mr. Pfeiffer and Mr. Warthen:

they are vague, conclusory,

nonspecified allegations that fail to conform to the pleading requirements of Rule
8 of the Federal Rules of Civil Procedure. 59
Likewise, any litigation-related claims against Ms. Cheng will be dismissed
with prejudice, although it is not clear whether Mr. Devine intended to continue to
assert any such claims at this time. 60
8. Doris Cheng’s Motion to Dismiss Kidd’s Second Amended Third-Party
Complaint and Joinder
At Docket 223, Ms. Cheng seeks dismissal of the claims brought against her
in John Kidd’s Second Amended Third-Party Complaint. The claims pleaded
against

her

include

fraud/misrepresentation,

tortious

interference

with

contract/prospective advantage, conversion, breach of contract, and associated

59

See supra notes 31–33 and accompanying text; notes 37–39 and accompanying text.

60

See Docket 255 at 18.

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claims for civil conspiracy and punitive damages. In his response, Mr. Kidd drops
his claim for breach of contract against Ms. Cheng. 61
For the same reasons as discussed above with respect to each of the
remaining claims, Ms. Cheng’s motion to dismiss the entirety of Mr. Kidd’s Second
Amended Third-Party Complaint against her at Docket 223 will be granted, and the
dismissal will be with prejudice in light of the futility of amendment.
9. Nuoxin’s Motions to Dismiss John Kidd’s Claims Against Nuoxin (Docket
228) and Paul Devine’s Claims Against Nuoxin (Docket 226).
Nuoxin seeks dismissal of the claims brought by both John Kidd and Paul
Devine against it. It seeks dismissal for both failure to state a claim and for lack of
personal jurisdiction as to each Third-Party Complaint. The Court does not reach
the personal jurisdiction argument, as it finds that dismissal of all claims brought
by both Mr. Devine and Mr. Kidd against Nuoxin is warranted for failure to state a
claim, based on the same reasoning applied above as to NordAq, as applicable,
and the remaining third-party defendants. Accordingly, the motions at Docket 226
and Docket 228 will both be granted for failure to state a claim. For the same
reasons set forth above that dismissed other claims with prejudice at this juncture,
that dismissal will be with prejudice.
CONCLUSION
In light of the foregoing, IT IS ORDERED as follows:

61

Docket 259 at 4.

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1. NordAq’s Motion for Partial Dismissal of Paul Devine’s Second Amended
Counterclaim at Docket 209 is GRANTED. Mr. Devine’s counterclaims
against NordAq Energy, Inc., for fraud, misrepresentation (intentional and
negligent), and the related claims of acting-in-concert and punitive damages
are DISMISSED with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to
state a claim upon which relief can be granted.
2. NordAq’s Motion for Partial Dismissal of John Kidd’s First Amended
Counterclaim at Docket 211 is GRANTED. Mr. Kidd’s counterclaims against
NordAq Energy, Inc., for fraud, misrepresentation (intentional and
negligent), and the related claims of acting-in-concert and punitive damages
are DISMISSED with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to
state a claim upon which relief can be granted.
3. David Pfeiffer’s motion to dismiss claims against David Pfeiffer in Paul L.
Devine’s Second Amended Third-Party Complaint at Docket 215 is
GRANTED, and all the claims against Mr. Pfeiffer as pleaded in that
complaint are DISMISSED with prejudice under Fed. R. Civ. P. 12(b)(6) for
failure to state a claim upon which relief can be granted.
4. David Pfeiffer’s motion to dismiss claims against David Pfeiffer in John
Edward Kidd’s Second Amended Third-Party Complaint at Docket 216 is
GRANTED and all such claims are DISMISSED with prejudice under Fed.

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R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be
granted.
5. NordAq’s motion for dismissal of John Kidd’s conversion claim at Docket
217 is GRANTED, and the claim for conversion with respect to any shares
of stock held by Mr. Kidd in Nordik Energy Partners, LLC, is DISMISSED
with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief can be granted.
6. Mr. Warthen’s motion to dismiss claims against Robert Warthen in John
Kidd’s Second Amended Third-Party Complaint at Docket 219 is GRANTED
in its entirety, and all the claims against Mr. Warthen as pleaded in that
complaint are DISMISSED with prejudice under Fed. R. Civ. P. 12(b)(6) for
failure to state a claim upon which relief can be granted.
7. Doris Cheng’s Motion to Dismiss Devine’s Second Amended Third-Party
Complaint Against Cheng at Docket 221 is GRANTED in its entirety, and all
the claims against Ms. Cheng as pleaded in that complaint are DISMISSED
with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief can be granted.
8. Doris Cheng’s Motion to Dismiss Kidd’s Second Amended Third-Party
Complaint Against Cheng at Docket 223 is GRANTED in its entirety, and all
the claims against Ms. Cheng as pleaded in that complaint are DISMISSED
with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon

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which relief can be granted.
9. Nuoxin’s Motion to Dismiss For Failure to State a Claim as to Paul Devine
(at Docket 226) and John Kidd (at Docket 228) are both GRANTED in their
entirety, and all the claims against Nuoxin as pleaded in the Second
Amended Third-Party Complaints of both Mr. Devine and Mr. Kidd are
DISMISSED with prejudice under Fed. R. Civ. P. 12(b)(6) for failure to state
a claim upon which relief can be granted.
DATED this 25th day of January, 2019 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE

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