Federal Deposit Insurance Corporation v. Gannett et al

Filing 26

ORDER granting Kathryn Gannett's 9 Motion to Dismiss. Mrs. Gannett shall be dismissed as a party. (See document for further details). Signed by Judge James A Teilborg on 7/13/11.(LAD)

Download PDF
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 The Federal Deposit Insurance) Corporation solely as Receiver for) ) Wheatland Bank, ) ) Plaintiff, ) ) vs. ) ) Douglas Gannett and Kathryn Gannett,) ) husband and wife, ) ) Defendants. No. CV10-02726-PHX-JAT ORDER 16 Currently pending before the Court is Defendant Kathryn Gannett’s Motion to 17 Dismiss (Doc. 9). The Court now rules on the Motion. 18 BACKGROUND 19 This case arises from an alleged breach of contract by Defendant Douglas Gannett. 20 For a Rule 12(b)(6) Motion, all the well-pleaded allegations of the Complaint are deemed 21 true. Movsesian v. Victoria Versicherung AG, 629 F.3d 901, 905 (9th Cir. 2010). On or 22 about October 1, 2008, Wheatland Bank made a loan of $130,000 to 2nd Ave. Holdings, 23 LLC. Defendant Douglas Gannett, manager of 2nd Ave. Holdings, made a personal guaranty 24 of the loan. At that time, both Douglas Gannett and his wife, Defendant Kathryn Gannett, 25 were domiciled in Illinois, although they are now residents of Arizona. 26 2nd Ave. Holdings defaulted on the loan, and Douglas Gannett failed to pay as 27 guarantor. Plaintiff Federal Deposit Insurance Corporation (“FDIC-R”), solely as Receiver 28 1 for Wheatland Bank, has filed this action seeking judgment for $125,000 plus continuing 2 interest, attorneys’ fees, costs, and such other relief as the Court deems just. FDIC-R seeks 3 to collect against the separate and community property of Douglas Gannett. 4 FDIC-R asserts that Kathryn Gannett is joined solely to ensure compliance with 5 A.R.S. § 25-215(D) to the extent that recovery under the guaranty may be from the Gannetts’ 6 community property. No judgment is sought against the separate property of Kathryn 7 Gannett. 8 LEGAL STANDARD 9 Kathryn Gannett has moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to 10 dismiss all claims against her. The Court may dismiss a complaint for failure to state a claim 11 under 12(b)(6) for two reasons: 1) lack of a cognizable legal theory and 2) insufficient facts 12 alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 13 699 (9th Cir. 1990). 14 To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet the 15 requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a “short and 16 plain statement of the claim showing that the pleader is entitled to relief,” so that the 17 defendant has “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell 18 Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 19 41, 47 (1957)). 20 Although a complaint attacked for failure to state a claim does not need detailed 21 factual allegations, the pleader’s obligation to provide the grounds for relief requires “more 22 than labels and conclusions, and a formulaic recitation of the elements of a cause of action 23 will not do.” Id. (internal citations omitted). The factual allegations of the complaint must 24 be sufficient to raise a right to relief above a speculative level. Id. Rule 8(a)(2) “requires a 25 ‘showing,’ rather than a blanket assertion, of entitlement to relief. Without some factual 26 allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of 27 providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds’ on which the 28 claim rests.” Id. at 556 n.3 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure -2- 1 §1202, pp. 94, 95(3d ed. 2004)). 2 Rule 8’s pleading standard demands more than “an unadorned, the-defendant- 3 unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(citing 4 Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked assertions will 5 not suffice. Id. To survive a motion to dismiss, a complaint must contain sufficient factual 6 matter, which, if accepted as true, states a claim to relief that is “plausible on its face.” Id. 7 Facial plausibility exists if the pleader pleads factual content that allows the court to draw 8 the reasonable inference that the defendant is liable for the misconduct alleged. Id. 9 Plausibility does not equal “probability,” but plausibility requires more than a sheer 10 possibility that a defendant has acted unlawfully. Id. “Where a complaint pleads facts that 11 are ‘merely consistent’ with a defendant’s liability, it ‘stops short of the line between 12 possibility and plausibility of entitlement to relief.’” Id. (citing Twombly, 550 U.S. at 557). 13 In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts 14 alleged in the complaint in the light most favorable to the drafter of the complaint, and the 15 Court must accept all well-pleaded factual allegations as true. See Shwarz v. United States, 16 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, the Court does not have to accept as true 17 a legal conclusion couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 18 (1986). 19 ANALYSIS 20 Kathryn Gannett argues that FDIC-R has failed to state a claim against her as a matter 21 of law. In support of its claim, FDIC-R cites A.R.S. § 25-215(D), which reads, “Except as 22 prohibited in § 25-214, either spouse may contract debts and otherwise act for the benefit of 23 the community. In an action on such a debt or obligation the spouses shall be sued jointly. 24 . . .” Ariz. Rev. Stat. Ann. § 25-215(D) (2007). FDIC-R offers no other grounds in its 25 Complaint for relief against Kathryn Gannett.1 “In determining the propriety of a Rule 26 27 28 1 Although not raised in the Complaint, FDIC-R now asserts that Illinois law should control the Court’s analysis. While the Response makes first mention of this argument, it -3- 1 12(b)(6) dismissal, a court may not look beyond the complaint to a plaintiff’s moving papers, 2 such as a memorandum in opposition to a defendant’s motion to dismiss.” Schneider v. 3 California Dep’t of Corr., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998). 4 The exception to § 25-215(D) is § 25-214, which reads, in relevant part, “Either 5 spouse separately may acquire, manage, control or dispose of community property or bind 6 the community, except that joinder of both spouses is required in . . . [a]ny transaction of 7 guaranty, indemnity or suretyship.” Ariz. Rev. Stat. Ann. § 25-214(C) (2007). “Joinder” in 8 this section refers not to joinder of parties under Federal Rules of Civil Procedure 19 or 20, 9 but to the execution of the guaranty. See Rackmaster Sys., Inc. v. Maderia, 193 P.3d 314, 10 317 (Ariz. Ct. App. 2008). The plain meaning of § 25-214(C) is that both spouses must sign 11 a guaranty in order to bind the community under Arizona law. See id.; Citibank (Arizona) 12 v. Van Velzer, 982 P.2d 833, 837 (Ariz. Ct. App. 1998), cited with approval in Butler v. IMA 13 Regiomontana S.A. de C.V., No. 98-16735, 2000 WL 127125, at *7 n.6 (9th Cir. Feb. 3, 14 2000). 15 The Complaint does not allege that Kathryn Gannett was a party to the guaranty. The 16 guaranty does not bear her signature (Doc. 1-1). Kathryn Gannett was joined solely to 17 comply with the requirements of § 25-215(D) regarding recovery against community 18 property, but § 25-214(C) makes clear that such recovery is impossible without her signature 19 on the guaranty. A.R.S. § 25-215(D) therefore cannot be the basis for this claim against 20 Kathryn Gannett, and the Court will grant Kathryn Gannett’s Motion to Dismiss. 21 Accordingly, 22 IT IS ORDERED GRANTING Defendant Kathryn Gannett’s Motion to Dismiss 23 24 25 26 27 28 does not cite to any Illinois law. Furthermore, the Illinois statute referenced in oral argument—750 Ill. Comp. Stat. 65/12 (2011)—does not appear to apply to this case. While it does speak to one spouse binding the other in contracts and encumbrances, it is expressly limited to situations where a court has granted special powers to one spouse following the imprisonment of or abandonment by the other spouse. See id.; 750 Ill. Comp. Stat. 65/11 (2011). Because FDIC-R has not cited to any relevant Illinois law in support of its claim, the Court will not consider FDIC-R’s Illinois law argument. -4- 1 2 (Doc. 9). Mrs. Gannett shall be dismissed as a party. DATED this 13th day of July, 2011. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?