Adema Technologies, Inc v. Eiffert et al

Filing 52

ORDER Adopting in Part and Rejecting in Part 46 Report and Recommendations, and denying 8 Motion to Dismiss Plaintiff's Verified Complaint or, in the Alternative, Motion for a More Definite Statement, by Judge Christine M. Arguello on 3/19/14.(dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 13-cv-01139-CMA-BNB
ADEMA TECHNOLOGIES, INC., d/b/a GLORIA SOLAR (USA),
Plaintiff,
v.
PATRINA EIFFERT, and
IMAGINIT, INC.,
Defendants.

ORDER ADOPTING IN PART AND REJECTING IN PART JANUARY 29, 2014
AMENDED RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

This case was referred to United States Magistrate Judge Boyd N. Boland
pursuant to 28 U.S.C. § 636 and Fed. R. Civ. P. 72. (Doc. # 4.) On January 29, 2014,
Judge Boland issued an Amended Recommendation on Defendant’s Motion to Dismiss
Plaintiff’s Verified Complaint or, in the Alternative, Motion for a More Definite Statement.
(Doc. # 8.) In that Recommendation, Judge Boland recommended that the Court grant
in part and deny in part Defendant’s Motion. (Doc. # 46.) Specifically, Judge Boland
ruled that Plaintiff has standing to bring its claims, but that it failed to state a claim with
respect to its declaratory claim pursuant to the alter ego doctrine. Consequently, Judge
Boland reasoned, “in the absence of allegations plausibly stating a claim to pierce
corporate veils, Plaintiff may not bring its claims for conversion and theft against
ImaginIt and Eiffert.” (Id., at 9.) Judge Boland also found that Plaintiff’s “failure to

state a plausible claim against Defendants renders the spoliation claim moot insofar
as it relates to any claims asserted in this case.” (Id.) Having recommended the
dismissal of all claims, Judge Boland recommended that the complaint too be
dismissed. On February 12, 2014, Plaintiff filed a timely objection to Judge Boland’s
Recommendation. (Doc. # 47.) Defendants responded (Doc. # 48), and Plaintiff
replied (Doc. # 51.)
The Court will first discuss Plaintiff’s objection to Judge Boland’s
recommendation that its declaratory judgment claim be dismissed because that
determination impacts the parties’ other arguments regarding the Recommendation.
After reviewing the standard for piercing the corporate veil, Judge Boland determined
that the “only material allegation on that issue is that ImaginIt may have paid some of
[Solar Frame Work’s (“SWF”)] bills. That allegation alone, taken as true, is insufficient
to pierce SFW’s corporate veil.” However, Plaintiff also pleaded facts relating to
whether the corporations operated as distinct legal entities, the funds and assets are
comingled, and the corporations were used as “mere shells.” See McCallum Family
LLC v. Winger, 221 P.3d 69, 73-74 (Colo. App. 2009); see also (Doc. # 1, at 14-16.)
In addition, Plaintiff alleges that “an equitable result will be achieved by disregarding
the corporate entities . . . .” (Doc. # 1, at 21.) Although this Court agrees with Judge
Boland that Plaintiff could have asserted additional facts to bolster its contentions, 1
Plaintiff’s allegations are sufficient to nudge its claim just across the line from
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Plaintiff seems to concede as much in its objection, in which it asks this Court to permit it
to file an amended complaint with “additional factual information” acquired through discovery.
While the Court acknowledges such an amendment may be helpful to clarify its claims, a motion
to amend must be made in a separate document. See D.C.COLO.LCivR 7.1(III)(d).

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conceivable to plausible. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). 2
Based on this determination, the Court also rejects the recommendation that Plaintiff’s
spoliation claim should be dismissed as moot.
Defendants, in their response to Plaintiff’s objection, ask this Court to revisit
Judge Boland’s determination that Plaintiff has standing to assert its claims. Under
Colorado law, “an alter ego action to pierce the corporate veil belongs to the creditors
of the corporation, not the corporation itself.” (Doc. # 46, at 4) (citing In re M & L Bus.
Mach. Co., Inc., 136 B.R. 271, 278 (Bankr. D. Colo. 1992) aff'd, 160 B.R. 850 (D. Colo.
1993)). However, Defendants argue that Judge Boland should have also “address[ed]
the standing issue with respect to Plaintiff’s conversion and civil theft claims.” (Doc.
# 48, at 2.) The Court has already acknowledged that a claim based on the alter ego
theory is not in itself a claim for substantive relief, but is instead a theory of liability.
See 1 Fletcher Cyc. Corp. § 41.10; see also Swinerton Builders, 272 P.3d at 1177.

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Plaintiff also contends that Judge Boland’s recommendation should be overruled because
it recommended dismissal of its conversion and civil theft claims as dependent on its claim
for declaratory judgment that ImaginIt’s and SFW’s corporate status should be disregarded
because they are alter egos of Eiffert and ImaginIt, respectively. The Court recognizes that
although typically corporations insulate officers from personal liability, in Colorado, Plaintiff
may plead claims separate and apart from the alter ego doctrine if it sufficiently pleads that
a corporate officer committed a tortious act. See, e.g., Snowden v. Taggart, 17 P.2d 305,
307 (Colo. 1932); Tatten v. Bank of Am. Corp., 912 F. Supp. 2d 1032, 1039 (D. Colo. 2012).
However, it seems that this objection is moot based on the Court’s determination that Plaintiff
sufficiently pleaded its declaratory judgment claim based on the alter ego doctrine. Moreover,
“an action to pierce the corporate veil is not a separate and independent cause of action, but
rather is merely a procedure to enforce an underlying judgment.” Swinerton Builders v. Nassi,
272 P.3d 1174, 1177 (Colo. App. 2012) (citations omitted). Accordingly, if Plaintiff intended to
assert its claims for conversion and civil theft independent of the alter ego doctrine, it seems
that the declaratory claim is superfluous.

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Accordingly, because Plaintiff seeks to pursue its claims based on alter ego theory,
it has standing. See In re M & L Bus. Mach. Co., Inc., 136 B.R. at 278.
As required by 28 U.S.C. ' 636(b), the Court has conducted a de novo review
of this matter, including carefully reviewing all relevant pleadings, the Report and
Recommendation, and Plaintiff=s Objection to the Report and Recommendation.
Based on this de novo review, it is ORDERED that the January 29, 2014 Amended
Recommendation of United States Magistrate Judge Boyd N. Boland (Doc. # 46) is
ADOPTED AND AFFIRMED in part as to the standing issue and REJECTED in part
as to the failure to state a claim. It is
FURTHER ORDERED that Defendant’s Motion to Dismiss Plaintiff’s Verified
Complaint or, in the Alternative, Motion for a More Definite Statement (Doc. # 8) is
DENIED.
DATED: March

19 , 2014
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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