AMTAX Holdings 2001-VV, LLC et al v. Warren Homes, LLC et al

Filing 263

ORDER and REASONS - Presently before the Court are four motions filed by Plaintiffs, Counterclaim Defendants, and/or Defendant Victor S. Loraso, Jr.. (See Rec. Docs. 84, 85, 173, and 220). IT IS ORDERED that Loraso's motions to dismiss (Rec. Do cs. 173 and 220) are DENIED. IT IS ORDERED that the Plaintiffs' and Counterclaim Defendants' motions to dismiss are GRANTED for essentially the reasons set forth in the memoranda submitted in support of their motions (Rec. Docs. 84-2, 85-2, 141, and 142), as stated within document. Signed by Judge Kurt D. Engelhardt on 9/24/2015. (cbs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
AMTAX HOLDINGS 2001-VV, LLC, ET AL.

CIVIL ACTION

VERSUS

NO. 14-2652

WARREN HOMES, LLC, ET AL.

SECTION “N” (1)
ORDER AND REASONS

Presently before the Court are four motions filed by Plaintiffs, Counterclaim
Defendants, and/or Defendant Victor S. Loraso, Jr. ("Loraso"). See Rec. Docs. 84, 85, 173, and
220.1 The Court rules on each as stated herein.
I.

Defendant Laraso's Motions to Dismiss (Rec. Doc. 173 and 220)
Plaintiffs allege that the necessary subject matter jurisdiction over this dispute is

provided by the federal diversity statute, 28 U.S.C. §1332, which grants to federal courts original
jurisdiction over all civil actions where the matter in controversy exceeds $75,000 and is between
citizens of different states. 28 U.S.C. § 1332. As construed by the United States Supreme Court,
§1332 requires “complete diversity” of citizenship such that diversity jurisdiction is not present if
one of the plaintiffs shares the same state citizenship as one of the defendants. Strawbridge v.
Curtiss, 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806).

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Plaintiffs are AMTAX Holdings 2001-VV, LLC, AMTAX Holdings 248, LLC,
AMTAX Holdings 2001-UU, LLC, AMTAX Holdings 249, LLC, and AMTAX Holdings 250, LLC
(hereinafter, "Plaintiffs'" or "the AMTAX Entities”). The Counterclaim Defendants are Hunt
Companies, Inc., and Hunt Capital Partners, LLC (collectively, "Counterclaim Defendants" or
"Hunt"). Mr. Loraso is the only remaining defendant. All of the other defendants have reached a
settlement of all claims with Plaintiffs. See Rec. Docs. 258, 259, and 262.

Loraso's motions to dismiss, filed pursuant to Rule 12(b)(1), 12(b)(6), and 12(b)(7)
of the Federal Rules of Civil Procedure, contend, as an initial matter, that diversity of citizenhsip
subject matter jurisdiction is absent. Specifically, Loraso maintains that Plaintiffs' claims do not
exceed $75,000, and that the limited partnerships involved herein2 are indispensable parties to the
instant action such that Plaintiffs' claims cannot be adjudicated in their absence. And, because the
limited partnerships and Loraso share Louisiana citizenship, adding the limited partnerships as
parties deprives this Court of subject matter jurisdiction. Loraso additionally contends that
Plaintiffs' claims warrant dismissal because Plaintiffs' allegations relative to them "fail to state a
claim upon which relief can be granted", i.e. a legally cognizable claim. See Fed. R. Civ. P.
12(b)(6).
Having carefully considered the parties' submissions, the record in this matter, and
applicable law, IT IS ORDERED that Loraso's motions to dismiss (Rec. Docs. 173 and 220) are
DENIED. As urged by Plaintiffs, their claims seeking declaratory and injunctive relief exceed
$75,000 in value. Further, although the scope of Plaintiffs' claims initially was arguably unclear,
Plaintiffs' later submissions clarify and confirm that they do not seek derivative relief herein for
claims belonging to the limited partnerships.3 Specifically, Plaintiffs affirmatively represent:
Essentially, the AMTAX Entities have made claims to vindicate their
exclusive rights under the Partnership Agreements, to recover their
fees and distributions that the Defendants’ conduct deprived them of,
and to recover their interest in monies that the Defendants’ stole
from the Partnerships. The AMTAX Entities have not sought relief
or vindication with respect to any rights of the Partnerships.

2

The Louisiana limited partnerships are Ames Garden Estates Limited Partnership,
Canary Homes, L.P., Hnasko Affordable Homes, ALPIC, Robin Homes, L.P., and Smith Square
Development Limited Partnerships (hereinafter, the "limited partnerships").
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Nor have any of the limited partnerships sought to intervene.
2

See Plaintiffs' sur-reply, Rec. Doc. 234, p. 3 (emphasis in original).
Given this affirmative limitation on the relief that is sought, and may be granted
herein, relative to Plaintiffs' claims, the Court is satisfied that the limited partnerships are not
indispensable parties to this litigation such that diversity of citizenship jurisdiction remains intact.
Of course, should later proceedings in this matter reveal that Plaintiffs have expanded their claims
to include those seeking relief properly sought by and awarded to the limited partnerships, the
question of jurisdiction shall again be considered upon motion by Loraso or sua sponte. See Steel
Co. v. Citizens for a Better Env't, 523 U.S. 83, 94–95 (1998); Fed. R. Civ. P. 12(h)(2) (failure to join
person required by Rule 19(b) may be raised at trial); Fed R. Civ. P. 12(h)(3) (“If the court
determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”);
Equal Emp't Opportunity Comm'n v. Agro Distrib., LLC, 555 F.3d 462, 467 (5th Cir. 2009) (even
if not raised by a party, court must consider subject matter jurisdiction sua sponte).
As stated above, Loraso's first motion (Rec. Doc. 173) also seeks dismissal, pursuant
to Rule 12(b)(6), on additional grounds. Specifically, Loraso contends that the additional defaults
set forth in Plaintiffs' amended complaint (Rec. Doc. 153), which was filed on May 2015, cannot
justify Loraso's prior removal, in November 2014, as general partner of the Ames Garden Estates
Limited Partnership. The Court finds the motion to lack merit for essentially the reasons stated by
Plaintiffs in their opposition memorandum. See Rec. Doc. 176, pp.19 of 23 - 21 of 23.
II.

Plaintiffs' and Counterclaim Defendants' Motions to Dismiss (Rec. Docs. 84 and 85)
Plaintiffs' and Counterclaim Defendants' motions to dismiss (Rec. Docs. 84 and 85)

are filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, which authorizes
motions asserting, as a defense, that a pleading "fail[s] to state a claim upon which relief can be
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granted." See Fed. R. Civ. P. 12(b)(6). Pertinent to this inquiry, where the well-pleaded facts of a
complaint or, in this instance, a counterclaim, do not permit a court to infer more than the mere
possibility of misconduct, the pleading has alleged – but it has not ‘show[n]' – "that the pleader is
entitled to relief'" as required. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Fed. Rule Civ.
P. 8(a)(2)). Thus, the allegations "must make relief plausible, not merely conceivable, when taken
as true." United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009); see also
Bell Atlantic v. Twombly, 550 U.S. 544, 555 (“Factual allegations must be enough to raise a right
to relief above the speculative level . . . on the assumption that all the allegations in the complaint
are true (even if doubtful in fact).”).
Although a complaint or counterclaim does not need “detailed factual allegations, .
. . more than labels and conclusions are necessary, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550 U.S. at 555 (internal citations and quotations omitted);
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.”). Similarly, courts “are not bound
to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S.
265, 286 (1986); see also Iqbal, 556 U.S. at 678 (“tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions.”). “Nor does a complaint
suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S.
at 678 (quoting Twombly, 550 U.S. at 557); see also Christopher v. Harbury, 536 U.S. 403, 416
(2002) (elements of a plaintiff's claim(s) “must be addressed by allegations in the complaint
sufficient to give fair notice to a defendant”). Rather, the requisite facial plausibility exists when
the factual content plead allows the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged.” Id. (emphasis added). Applying the foregoing principles to the
allegations of Loraso's counterclaim, IT IS ORDERED that the Plaintiffs' and Counterclaim
Defendants' motions to dismiss are GRANTED for essentially the reasons set forth in the
memoranda submitted in support of their motions (Rec. Docs. 84-2, 85-2, 141, and 142). In short,
Loraso's allegations do not contain sufficient factual information for the Court to draw a reasonable
inference of actionable wrongdoing by Plaintiffs and Counterclaim Defendants.
New Orleans, Louisiana, this 24th day of September 2015.

_____________________________________
KURT D. ENGELHARDT
United States District Judge

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