J. Lloyd International, Inc v. Super Wings International, Ltd

Filing 53

ORDER denying 50 Motion to Dismiss by Super Wings International, Ltd. Signed by Chief Judge Linda R Reade on 12/06/2016. (jjh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
J. LLOYD INTERNATIONAL, INC.,
Plaintiff,

No. 15-CV-74-LRR

vs.

ORDER

SUPER WINGS INTERNATIONAL,
LTD.,
Defendant.
SUPER WINGS INTERNATIONAL,
LTD.,
Counter Claimant,
vs.
J. LLOYD INTERNATIONAL, INC.,
Counter Defendant.
____________________
I. INTRODUCTION
The matter before the court is Defendant Super Wings International, Ltd.’s (“SWI”)
“Rule 17 Motion to Dismiss for Failure to Prosecute in the Name of the Real Party in
Interest or, in the Alternative, Judgment on the Pleadings as to Count II” (“Motion”)
(docket no. 50).
II. RELEVANT PROCEDURAL HISTORY
On August 13, 2015, Plaintiff J. Lloyd International, Inc. (“JLI”) filed a Complaint
(docket no. 2), alleging two claims against SWI: (1) breach of written contract and (2)
conversion. On September 4, 2015, SWI filed a Motion to Dismiss (docket no. 9)
pursuant to Federal Rule of Civil Procedure 12, which the court denied in an Order
(docket no. 28) dated February 8, 2016. On February 25, 2016, SWI filed an Answer

(docket no. 31), denying liability and alleging two counterclaims against JLI: (1) a request
for declaratory judgment; (2) breach of contract; (3) breach of implied contract; and (4)
unjust enrichment.

In the Answer, SWI further raises the affirmative defense that

“Plaintiff is not the real party in interest.” Answer at 12. On March 21, 2016, JLI filed
an Answer to the Counterclaims (docket no. 32). Dispositive motions for the instant case
were due on September 16, 2016. See Revised Scheduling Order and Discovery Plan
(docket no. 29). A jury trial is scheduled to begin on January 16, 2017. See Feb. 2, 2016
Order (docket no. 27). In addition to the instant case before the court, the parties have
litigated various matters in the bankruptcy proceedings of JLI’s founder, Jody Keener. See
In re Jody L. Keener, Bankr. No. 14-01169 (Bankr. N.D. Iowa 2014); Keener v. Super
Wings Int’l, Ltd. (In re Jody L. Keener), Bankr. No. 14-01169, Adversary No. 14-09061
(Bankr. N.D. Iowa 2014).
On November 15, 2016, SWI filed the Motion. On December 2, 2016, JLI filed
a Resistance (docket no. 52). Neither party requests oral argument and the court finds that
oral argument is unnecessary. The court finds it unnecessary to await a reply brief prior
to ruling on the Motion. See LR 7(g) (“[T]he court may elect to rule on a motion without
waiting for a reply brief.”).
III. ANALYSIS
In the Motion, SWI argues that the Complaint must be dismissed due to JLI’s
“failure to prosecute in the name of the real party in interest.” Motion at 3. Specifically,
SWI claims that JLI assigned to Keener “all right, title and interest” in the property at
issue in the instant action. Id. at 1-2 (quoting Complaint ¶ 22). Because of this purported
assignment of rights, SWI argues that Keener—not JLI—is the real party in interest. Id.
at 2. Assuming that Keener is the real party in interest, SWI further argues that the
Complaint must be dismissed because Keener is collaterally estopped from pursuing the
instant suit because the underlying assignment of rights was deemed collusive during

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Keener’s bankruptcy proceedings. Id.
Initially, the court notes that SWI filed the Motion two months after the dispositive
motions deadline and, therefore, the Motion is untimely and shall be denied on that
ground. With respect to the merits, the Motion effectively asks the court to find that JLI
validly assigned its rights to Keener, such that JLI cannot maintain this action. However,
SWI has not produced the instrument in which JLI purportedly assigned its rights to
Keener, nor has SWI produced any other evidence weighing on the validity of such
assignment. See T. Zenon Pharms., LLC v. Wellmark, Inc., 876 N.W.2d 813, 2015 WL
9450469, at *13 (Ct. App. Iowa 2015) (unpublished table decision) (stating the legal test
for establishing a valid assignment). The court recognizes that the Complaint references
JLI’s assignment of rights to Keener, Complaint ¶ 22, but the Complaint proceeds to
acknowledge that the validity of the assignment was an unsettled issue in the associated
bankruptcy proceedings and might be deemed invalid, id. ¶ 25.1 In any event, the parties
have long since completed discovery and, at this late stage in the proceedings, the court
need not accept the allegations in the Complaint as true.
In short, the court finds that the Motion is (1) untimely and (2) devoid of any basis
from which the court might determine whether any assignment is valid. Therefore, the
court shall deny the Motion with respect to SWI’s arguments regarding the real party in
interest. See Sara Lee Corp. v. Homasote Co., 719 F. Supp. 417, 427 (D. Md. 1989)
(declining to render a ruling as to real party in interest where the factual record is unclear
regarding the validity of an assignment). The parties are advised to comply with the

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In December of 2015, the assignment was in fact deemed invalid in the bankruptcy
proceedings. See Ruling on Debtor’s Motion to Compromise, In re Jody Keener, Bankr.
No. 14-01169 (docket no. 538) (Bankr. N.D. Iowa Dec. 29, 2015) at 11-15 (chronicling
two instances in which the assignment was raised during the bankruptcy proceedings and
“conclud[ing] that JLI—not Keener personally—continues to own and assert all rights” in
the property underlying this action, despite the purported assignment).
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remaining deadlines in this case.
Additionally, because the court denies the Motion with respect to any purported
assignment of rights to Keener, the court also denies SWI’s request for judgment on the
pleadings as to Count 2 of the Complaint. See Motion at 2. Such request for judgment
on the pleadings relies on SWI’s alternative argument that JLI assigned all rights to the
disputed property to Keener, except for intellectual property rights. Id. For the reasons
described above, and in light of the record, the court cannot rule on the validity of such
assignment, irrespective of its purported scope. Therefore, the court denies the Motion
with respect to SWI’s request for judgment on the pleadings as to Count 2.
IV. CONCLUSION
In light of the foregoing, the Motion (docket no. 50) is DENIED.
IT IS SO ORDERED.
DATED this 6th day of December, 2016.

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