Wood v. Hurst et al

Filing 58

MEMORANDUM AND ORDER denying 34 Motion to Dismiss for Failure to State a Claim with respect to Tech-Services; granting 37 Motion to Dismiss with respect to LP. Signed by District Judge Carlos Murguia on 12/23/14. (mm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
DAVID WOOD,
Plaintiff,
v.

Case No. 14-2228-CM

LP CONVERSIONS, INC, et al.,
Defendants/Counterclaimants.

MEMORANDUM AND ORDER
Plaintiff David Wood filed his original action in Johnson County District Court, but the case
was removed to this court. Plaintiff then filed an Amended Complaint on June 11, 2014 (Doc. 8). On
July 2, 2014, defendants Joseph Deven Hurst, LP Conversions, Inc. (“LP”), and Roger Simons
answered that Amended Complaint (Doc. 11); defendant Tech-Services Inc. (“Tech-Services”) filed a
motion to dismiss plaintiff’s Amended Complaint.1 (Doc. 12.) On September 15, 2014, Tech-Services
filed its own Answer to the Amended Complaint, alleging a counterclaim against plaintiff Wood.2
(Doc. 28.) The counterclaim, however, was purportedly brought on behalf of both Tech-Services and
LP. (See Doc. 28 at 10.) Plaintiff thus filed two separate motions to dismiss that counterclaim: one
against Tech-Services (Doc. 34) and one against LP (Doc. 37).3 Those motions are currently before
the court, and the court will consider them as though they were a single motion.
II. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) governs motions to dismiss for failure to state a claim.

1

All defendants are represented by the same counsel.
Tech-Services also alleged a counterclaim against Magic Woods, Inc., which is no longer a party to this action. (See Doc.
54.)
3
Defendants Tech-Services and LP jointly filed their response to those motions. (Doc. 46.)
2

-1-

See Fed. R. Civ. P. 12(b)(6). Rule 13 governs counterclaims. See Fed. R. Civ. P. 13. The Supreme
Court set forth the new standard for pleadings in Twombly, stating that pleadings should include
“enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “The
pleading should include ‘more than labels, conclusions, and a formulaic recitation of the elements of a
cause of action.’” Ellis v. Isoray Med., Inc., No. 08-2101-CM, 2008 WL 3915097, at *1 (D. Kan. Aug.
22, 2008) (quoting In re Motor Fuel Temperature Sales Practices Litig., 534 F. Supp. 2d 1214, 1216
(D. Kan. 2008)). The court must “accept as true all well-pleaded factual allegations in the complaint
and view them in the light most favorable to the [non-movant].” Burnett v. Mtg. Elec. Registration
Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013). And the court must “resolve all reasonable inferences
in the [the non-movant’s] favor.” Diversey v. Schmidly, 738 F.3d 1196, 1199 (10th Cir. 2013) (quoting
Morse v. Regents of the Univ. of Colo., 154 F.3d 1124, 1126–27 (10th Cir. 1998)).
II. Analysis
Plaintiff requests that the court dismiss the counterclaim for three reasons: (1) the counterclaim
is a compulsory counterclaim and is thus untimely; (2) the allegations in the counterclaim are false and
frivolous; and (3) the counterclaim was asserted for an improper purpose—to avoid production of key
financial documents and information. Notably, plaintiff cites no case law in either motion. The court
will review each argument in turn.
First, plaintiff claims that the counterclaim is compulsory and, thus, LP should have asserted
the counterclaim in its Answer to plaintiff’s First Amended Complaint, which LP filed on July 2, 2014.
Although plaintiff does not cite authority for his argument, Federal Rule of Civil Procedure 13
supports plaintiff—at least with respect to LP. Fed. R. Civ. P. 13(a)(1). Defendants’ counsel does not
dispute that the counterclaim is compulsory. The court finds that defendants’ counterclaim is
compulsory. Because LP filed an Answer to plaintiff’s First Amended Complaint on July 2, 2014 that

-2-

did not assert any counterclaims, the court determines that LP waived any compulsory counterclaims
against plaintiff. Id. But defendants’ counsel argues that Tech-Services’s compulsory counterclaim
against plaintiff is timely.4 The court agrees. Tech-Services’s counterclaim against plaintiff is timely
because Rule 12 altered Tech-Services’s deadline for filing its answer to plaintiff’s Amended
Complaint. Ordinarily, a defendant must serve an answer within twenty-one days after being served
with the summons and complaint. Fed. R. Civ. P. 12(a)(1)(A)(i). If a party files a motion under Rule
12, that deadline is changed: “[I]f the court denies the motion or postpones its disposition until trial,
the responsive pleading must be served within 14 days after notice of the court’s action.” Fed. R. Civ.
P. 12(a)(4)(A). The court denied Tech-Services’s motion to dismiss the Amended Complaint (Doc.
47) on October 24, 2014. (Doc. 47.) Tech-Services therefore had until November 8, 2014 to file its
Answer. Because Tech-Services filed its Answer (Doc. 28) on September 15, 2014, Tech-Services’s
counterclaim is timely. Accordingly, Tech-Services is the only defendant with a counterclaim against
plaintiff.
Second, plaintiff claims that the allegations in the counterclaim are false and frivolous.
Plaintiff provides an email in support of his claim. (Doc. 35-1.) Tech-Services argues that this email
cannot even be considered by the court because it is outside the pleadings. The court agrees. “Where
a party has moved to dismiss under Rule 12(b)(6) . . . and matters outside of the pleadings have been
presented to the court for consideration, the court must either exclude the material or treat the motion
as one for summary judgment.” Alexander v. Oklahoma, 382 F.3d 120, 1214 (10th Cir. 2004) (quoting
Nichols v. United States, 796 F.2d 361, 364 (10th Cir. 1986)). The court declines to treat plaintiff’s
motion as one for summary judgment because discovery has yet to occur on this counterclaim. Thus,
plaintiff’s email cannot be considered by the court in evaluating Tech-Services’s motion to dismiss.

4

In the motion to dismiss with respect to Tech-Services, plaintiff does not argue that Tech-Services’s counterclaim is
untimely.

-3-

Third, plaintiff maintains the counterclaim has been asserted for an improper purpose—to
avoid production of Tech-Services’s key financial documents and information. Because plaintiff cites
no authority for this position and offers nothing but unsupported conclusions, the court is unpersuaded.
There is nothing before the court suggesting that Tech-Services has asserted this counterclaim for an
improper purpose.
IT IS THEREFORE ORDERED that plaintiff’s motion to dismiss with respect to TechServices (Doc. 34) is denied, but plaintiff’s motion to dismiss with respect to LP (Doc. 37) is granted.
The only parties to the counterclaim are Tech-Services, Inc., and plaintiff David Wood.
IT IS SO ORDERED.
Dated this 23rd day of December, 2014, at Kansas City, Kansas.
s/ Carlos Murguia
CARLOS MURGUIA
United States District Judge

5

-4-