FORBA Holdings, LLC v. LICSAC, LLC et al

Filing 39

ORDER granting 9 Defendants Motion to Dismiss. The Court, however, grants Plaintiff leave to file within 21 days an amended complaint that complies with the Twombly/Iqbal plausibility standard. If Plaintiff cannot, in good faith,4 file such a complaint, or if Plaintiff files nothing within 20 days, the case will be dismissed with prejudice. by Judge Christine M. Arguello on 1/11/2010.(erv, )

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge Christine M. Arguello Civil Action No. 09-cv-02305-CMA-MJW FORBA HOLDINGS, LLC, a Delaware limited liability company, Plaintiff, v. LICSAC, LLC, a Colorado limited liability company; DD MARKETING, INC., a Colorado corporation; DEROSE MANAGEMENT, LLC, a Colorado limited liability company; LICSAC NY, LLC, a New York limited liability company, Defendants. ORDER REGARDING DISMISSAL OF COMPLAINT This is a contract dispute. The matter is before the Court on Defendants' Motion to Dismiss Plaintiff's complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6).1 (Doc. # 9.) Plaintiff contends its complaint is sufficient under the "short and plain statement" standard required by Fed.R.Civ.P. 8(a)(2).2 Plaintiff, however, misapprehends its burden under Rule 8.3 The Supreme Court recently explained that:

Defendants also moved under Rule 9(g) because they interpret Plaintiffs' complaint to plead special damages. Given this Order, the Court need not address the Rule 9 complication. Fed.R.Civ.P. 8(a)(2)("A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief . . . "). See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
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[T]he pleading standard Rule 8 announces does not require "detailed factual allegations," but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. Id., at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). A pleading that offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." 550 U.S., at 555, 127 S.Ct. 1955. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Id., at 557, 127 S.Ct. 1955.

Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009).
Iqbal formulated a two-pronged approach for courts to apply in deciding whether a given complaint satisfies that standard. First, conclusory statements should be disregarded. Rule 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. Second, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949. In other words, assuming the truth of Plaintiff's "facts," do they reasonably imply that the Defendant is liable to the Plaintiff? Plaintiff's complaint is inadequate under this standard. It suffers from a basic flaw: conclusory allegations. Plaintiff avers two claims: (1) that Defendants have breached express warranties contained in an Asset Purchase Agreement ("APA") entered into between Plaintiff and Defendants (Doc. # 1, ¶¶ 23-28); and (2) that Defendants have breached their contractual obligations under the same APA. (Id., ¶¶ 29-34.) Both claims are predicated on identically worded allegations: that the APA contained "untrue statements of a material nature" or "omitted to state a material fact" 2

that was otherwise necessary to make the statements "not misleading." (Id., ¶¶ 21, 27, 33.) The words "untrue statement" and "of a material nature" are both conclusory, and the complaint contains no factual support indicating, for instance, how a given representation was "untrue" or how that "untrue statement" was "material". Plaintiff's complaint implies no more than the mere possibility of misconduct. It "has alleged ­ but not `show[n]' ­ `that the pleader is entitled to relief.' " Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)). Accordingly, Defendants' Motion to Dismiss (Doc. # 9) must be granted. The Court, however, grants Plaintiff leave to file within 21 days an amended complaint that complies with the Twombly/Iqbal plausibility standard. If Plaintiff cannot, in good faith,4 file such a complaint, or if Plaintiff files nothing within 20 days, the case will be dismissed with prejudice. DATED: January 11 , 2010 BY THE COURT:

_______________________________ CHRISTINE M. ARGUELLO United States District Judge

See Fed.R.Civ.P. 11(b)(3) ("By presenting to the court a pleading . . . an attorney . . . certifies that to the best of the person's knowledge . . . the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery . . .").

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