Bryant v. Tamarack Municipal Association, Inc.

Filing 41

ORDER. IT IS ORDERED: Bryant's Motion to Dismiss Counterclaims 23 is DENIED. Tamarack's Alternative Motion to Amend Case Management Order and Alternative Motion for Leave to Amend the Counterclaim 26 is DEEMED MOOT. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

JEAN B. BRYANT, solely in her
capacity as court-appoointed Independent
Fiduciary for RETIREMENT
SECURITY PLAN AND TRUST,

Case No. 1:14-cv-00339-BLW
ORDER

Plaintiff,
v.
TAMARACK MUNICIPAL
ASSOCIATION, INC.,
Defendant.

INTRODUCTION
The Court has before it Bryant’s Motion to Dismiss Counterclaims (Dkt. 23), and
Tamarack’s Alternative Motion to Amend Case Management Order and Alternative
Motion for Leave to Amend the Counterclaim (Dkt. 26).
LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief,” in order to “give the [plaintiff]
fair notice of what the . . . [counterclaim] is and the grounds upon which it rests.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). While a
counterclaim attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed
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factual allegations,” it must set forth “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Id. at 555. To survive a
motion to dismiss, a counterclaim must contain sufficient factual matter, accepted as true,
to “state a claim to relief that is plausible on its face.” Id. at 570. A claim has facial
plausibility when the defendant pleads factual content that allows the court to draw the
reasonable inference that the plaintiff is liable for the misconduct alleged. Id. at 556.
The plausibility standard is not akin to a “probability requirement,” but it asks for more
than a sheer possibility that a plaintiff has acted unlawfully. Id. Where a counterclaim
pleads facts that are “merely consistent with” a plaintiff's liability, it “stops short of the
line between possibility and plausibility of ‘entitlement to relief.’ ” Id. at 557.
The Supreme Court identified two “working principles” that underlie Twombly in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true, legal
conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 67879. Second, to survive a motion to dismiss, a counterclaim must state a plausible claim
for relief. Id. at 679. “Determining whether a [counterclaim] states a plausible claim for
relief will . . . be a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Id.
Providing too much in the counterclaim may also be fatal. Dismissal may be
appropriate when the defendant has included sufficient allegations disclosing some
absolute defense or bar to recovery. See Weisbuch v. County of L.A., 119 F.3d 778, 783,
n. 1 (9th Cir. 1997) (stating that “[i]f the pleadings establish facts compelling a decision
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one way, that is as good as if depositions and other . . . evidence on summary judgment
establishes the identical facts”).
A dismissal without leave to amend is improper unless it is beyond doubt that the
counterclaim “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d
728, 737 (9th Cir. 2009) (issued 2 months after Iqbal).1 The Ninth Circuit has held that
“in dismissals for failure to state a claim, a district court should grant leave to amend
even if no request to amend the pleading was made, unless it determines that the pleading
could not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe,
Inc. v. Northern California Collection Service, Inc., 911 F.2d 242, 247 (9th Cir. 1990).
The issue is not whether plaintiff will prevail but whether he “is entitled to offer evidence
to support the claims.” Diaz v. Int’l Longshore and Warehouse Union, Local 13, 474
F.3d 1202, 1205 (9th Cir. 2007)(citations omitted).
BACKGROUND
Bryant is the court-appointed Independent Fiduciary for Retirement Security Plan
and Trust (“RSPT”). RSPT is the current lender holding loan documents related to the
Osprey Meadows Golf Course and portions of the Lodge at Osprey Meadows at the
Tamarack Resort. Tamarack is the current lessee of the Osprey Meadows Property,
subject to a holdover lease imposed after Bryant exercised RSPT’s rights under its loan
1

The Court has some concern about the continued vitality of the liberal amendment policy adopted in
Harris v. Amgen, based as it is on language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), suggesting
that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim. . ..” Given Twombly and Iqbal’s rejection
of the liberal pleading standards adopted by Conley, it is uncertain whether the language in Harris v.
Amgen has much of a life expectancy.

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documents.
Bryant filed this lawsuit against Tamarack to recover lease payments it alleges
Tamarack owes RSPT for its continued occupation and use of the Osprey Meadows
Property. Tamarack responded with two counterclaims against Bryant: (1) unpaid
assessments; and (2) unjust enrichment.
According to the pleadings, taken in the light most favorable to Tamarack as
required on this motion to dismiss, RSPT is the assignee of certain property rights in
Osprey Meadows. Those rights arise from the assignment of rents language in the
mortgage and the assignment of rents agreement for Osprey Meadows. RSPT gained
possession of these ownership interests through the agreement and assignment of sale
proceeds between RSPT and James W. Fletcher. West Mountain Golf is indebted to
Tamarack for unpaid municipal assessments, and RSPT, as West Mountain Golf’s
assignee, is liable to Tamarack for those unpaid municipal assessments. The municipal
assessments due to Tamarack have accrued from West Mountain Golf’s ownership of
certain units within the Lodge at Osprey Meadows (“Lodge”). West Mountain Golf
leased to Tamarack and agreed to Tamarack’s occupancy and operation of certain
portions of its units within the Lodge beginning in July 2009, and additional portions
beginning in May 2012. Based upon the terms of lease and occupancy agreements,
Tamarack made payments on behalf of West Mountain Golf toward the general
assessments owed to the Lodge association. In addition to the expenditures required by
the lease and occupancy agreements, Tamarack expended additional resources in the
form of administrative services, materials, payroll, labor, and professional fees in order to
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manage and operate Osprey Meadows and the occupied Lodge units. Tamarack’s
expenditure of such funds and resources has maintained the value of Osprey Meadows
and the Lodge units, and increased the value of those properties, both before and after
RSPT acquired its assignment of interests. Tamarack’s maintenance of Osprey Meadows
and the Lodge units benefits RSPT.
ANALYSIS
Tamarack asserts two counterclaims against Bryant: (1) unpaid assessments; and
(2) unjust enrichment. Bryant asks the Court to dismiss those claims without leave to
amend.
The first counterclaim requests payment of overdue municipal assessments RSPT
allegedly owes Tamarack. Tamarack cites to the Tamarack Bylaws and the Second
Amended and Restated General Declaration for Tamarack Resort as covenants which
indicate that Tamarack imposes assessments on all units in the resort. Tamarack then
asserts that as West Mountain Golf’s assignee, RSPT is liable for payment of these
assessments, which have not been paid.
This is sufficient to assert the claim for unpaid assessments and survive the motion
to dismiss. The Court will note that Tamarack acknowledges that it is not trying to collect
any dues RSPT may owe the Lodge association, and thus it may not make such an
allegation down the road – any such assertion is not in the counterclaim.
The second counterclaim is for unjust enrichment by RSPT by Tamarack. The
elements of unjust enrichment are: “(1) a benefit is conferred on the defendant by the
plaintiff; (2) the defendant appreciates the benefit; and (3) it would be inequitable for the
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defendant to accept the benefit without payment of the value of the benefit.” Indian
Springs L.L.C v. Andersen, 302 P.3d 333, 337 (Idaho 2012).
Here, Tamarack asserts that it has made payments to the Lodge to cover
assessments owed by West Mountain Golf. Tamarack asserts that it also provided
administrative services, materials, payroll, labor, and professional fees to benefit the
Lodge. Tamarack asserts that as West Mountain Golf’s assignee, RSPT has benefited
directly from these payments and services which have enhanced the value of the Lodge in
which RSPT claims an interest. Tamarack asserts that it would be inequitable for RSPT
to benefit from these payments and services, and therefore unjustly enriched. These
allegations are sufficient to avoid dismissal.
The Court will note that Tamarack will certainly need to connect the dots to some
extent in order to prevail on its counterclaims. But, as noted above, Rule 8(a)(2) requires
only “a short and plain statement of the claim showing that the pleader is entitled to
relief,” in order to “give the defendant fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955,
1964 (2007). To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570.
Tamarack has met that burden here on both counterclaims – in fact, both claims are fairly
simple, even though Tamarack will likely need to provide more evidence at trial
regarding issues such as the assignment, assessments, payments made to the Lodge,
services rendered, etc. However, the allegations in the counterclaims put Bryant on

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sufficient notice of the claims. Accordingly, the Court will deny the motion to dismiss. In
turn, the Court will deem moot the motion to amend the counterclaims.
ORDER
IT IS ORDERED:
1. Bryant’s Motion to Dismiss Counterclaims (Dkt. 23) is DENIED.
2. Tamarack’s Alternative Motion to Amend Case Management Order and
Alternative Motion for Leave to Amend the Counterclaim (Dkt. 26) is
DEEMED MOOT.

DATED: May 1, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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