Scottrade v. Davenport et al
Filing
114
ORDER granting 94 Third Party Defendant Arnold Faller's Motion to Dismiss. Within 10 days, counsel shall file an attorney fees and costs notice. Reasonableness will be determined by the Court. Signed by Judge Richard F. Cebull on 10/14/2011. (EMA) Modified on 10/14/2011: Hard copies mailed to Chabot, Davenport and Gibbons. (NOB)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
SCOTTRADE, INC. an Arizona,
Corporation,
Case No. CV-11-03-BLG-RFC
Plaintiff,
vs.
KRISTINE DAVENPORT,
individually, SHANE M. LEFEBER,
individually, CHRISTOPHER
GIBBONS, individually,
KIMBERLY CHABOT,
individually, PATRICIA FALLER,
individually,
ORDER DISMISSING
DAVENPORT’S CLAIMS
AGAINST ARNOLD FALLER
Defendants.
Plaintiff Scottrade, Inc., an online securities broker, filed this interpleader
action to determine the appropriate distribution of the account of James LeFeber, a
deceased account holder. Although LeFeber designated beneficiaries for his
Scottrade account by completing a Transfer on Death Beneficiary Plan Agreement
(“TOD Plan”), one of those beneficiaries, Defendant Kristine Davenport, claims
the TOD Plan is invalid and that she is entitled to his entire estate pursuant to a
2007 contract with LeFeber. Accordingly, when Davenport filed a breach of
contract lawsuit in Missoula County District Court against LeFeber’s estate,
Scottrade prudently filed this action and placed the proceeds of LeFeber’s account
in the Court registry. Scottrade has since been dismissed from this action and had
the attorney fees incurred in filing suit and obtaining a release from liability paid
from the account proceeds. Doc. 42. Pending before the Court is Third-Party
Defendant Arnold Faller’s Rule 12(b)(6) Fed.R.Civ.P. motion to dismiss the
complaint Davenport filed against him. Doc. 94.
The allegations Davenport makes against Arnold Faller mimic those she
makes against Faller’s wife, Defendant Patricia Faller (doc. 28), Defendant Shane
LeFeber (doc. 31), Defendant Christopher Gibbons (doc. 41), and Defendant
Kimberly Chabot (doc. 47). Unlike these other Defendants, however, Arnold
Faller is not a named beneficiary of the TOD Plan or LeFeber’s will, although his
wife Patricia is named as the Personal Representative of LeFeber’s estate and
inherited LeFeber’s house. Doc. 15-1. As best the Court can tell, Davenport
alleges nine causes of action against Arnold Faller: civil conspiracy, tortious
interference with contract and inheritance, undue influence, fraud, breach of
fiduciary duty, feloniously killing James LeFeber, and spoliation of evidence.
Doc. 63. Davenport also asserts a claim for punitive damages.
A claim is subject to dismissal under Rule 12(b)(6) Fed.R.Civ.P. if it lacks a
cognizable legal theory or if it fails to plead sufficient facts to state a claim for
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relief that is plausible on its face. Johnson v. Riverside Healthcare System, LP,
534 F.3d 1116, 1121-22 (9th Cir. 2008). With respect to the latter, a “complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)
quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facially
plausible complaint “pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id.
Plausible does not mean probable, but there must be more than a “sheer
possibility” of unlawful action on the part of defendant. Id. “Threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do
not suffice.” Id. “[W]here the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct, the complaint has alleged–but it has
not shown–that the pleader is entitled to relief.” Id. (internal quotations omitted).
In considering a Rule 12(b)(6) motion, courts must accept as true a
complaint’s well-pleaded allegations of material fact and construe them in the
light most favorable to the non-moving party. Daniels-Hall v. National Educ.
Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). Courts are not, however, required to
accept as true allegations that contradict exhibits attached to the complaint or
matters properly subject to judicial notice, or allegations that are merely
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conclusory, unwarranted deductions of fact, or unreasonable inferences. Id.
Like her cross-claims against the other Defendants, Davenport’s Third Party
Complaint against Arnold Faller alleges very few actual facts. Rather,
Davenport’s pleading is a collection of legal conclusions and formulaic recitations
of the essential elements of the causes of action. Of the actual few facts included
in the Complaint, only one involves Arnold Faller:
13. Defendants intentionally spoliated the evidence of their felonious
and intentional killing of the decedent by [Arnold] Faller lying to
Davenport on September 16, 2010 about the fact of decedent's death
and telling her that he was alive and well and at his home when he
was in fact dead and in the mortuary, by refusing to accede to her
demand on September 17, 2010 to preserve decedent's body at her
own expense and to conduct an autopsy at her own expense, by
refusing to accede to her demand on September 17, 2010 for a
coroner's inquest and autopsy, by refusing to tell Davenport on
September 17, 2010 where decedent's body was located and by later
unlawfully causing his body to be cremated on September 17, 2010
....
Doc. 63, ¶ 13. Every other paragraph refers generally to all “Defendants.”
Moreover, other than the paragraph alleging the contract with James LeFeber, id.
at ¶ 4, only one other paragraph goes beyond a formulaic recitation of the elements
of causes of action:
... Defendants represented to decedent that Patricia Faller was a
licensed registered nurse (RN), that she had decedent's irrevocable
power of attorney for healthcare and that she and Defendants Gibbons
and LeFeber were capable and competent to properly care for
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decedent at his home and that they would do so and that they would
ensure he would go to the hospital should he wish to go there or
should a hospice nurse decide he should be hospitalized and that he
would not suffer pain, etc ...
Id. at ¶ 10.
From these minimal factual allegations–that Arnold Faller lied to Davenport
about LeFeber’s death and refused to allow an autopsy and that Defendants told
Davenport they were taking care of LeFeber–this Court cannot draw a reasonable
inference that Arnold Faller is liable for civil conspiracy, tortious interference with
contract and inheritance, undue influence, fraud, breach of fiduciary duty, killing
James LeFeber, and intentional spoliation of evidence. Accordingly, the ThirdParty Complaint against Arnold Faller (doc. 63) must be dismissed for failure to
allege plausible causes of action.
The next question is whether dismissal should be with prejudice. Futility
alone can justify the denial of leave to amend. Swartz v. KPMG LLP, 476 F.3d
756, 761 (9th Cir. 2007). Another factor to consider in deciding whether to
dismiss with prejudice or grant leave to amend is bad faith. Schmier v. U.S. Court
of Appeals for Ninth Circuit, 279 F.3d 817 (9th Cir. 2002). Here, Davenport’s
allegations are speculative, frivolous, and in direct conflict with both LeFeber’s
TOD Plan (doc. 1-2), his will (doc. 15-1), and all other evidence in this case.
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Davenport’s baseless allegations have not only necessitated this lawsuit, but have
drastically complicated the proceedings. Dismissal must be with prejudice.
Finally, Faller asks that the Court order his attorney fees be paid out of
Davenport’s portion of LeFeber’s Scottrade account. Although the American Rule
prohibits the award of attorney fees and costs to the successful litigant in most
cases, there is an exception for vexatious litigants. Chambers v. NASCO, Inc., 501
U.S. 32, 45-46 (1991). The record makes clear that Davenport is such a litigant.
Accordingly, within ten days of the entry of this Order counsel shall file a
notice detailing the attorney fees and costs incurred by Arnold Faller in drafting
this motion to dismiss and supporting briefs. After a review for reasonableness,
the Court will direct that they be paid from Davenport’s portion of the funds held
in the Court registry.
SO ORDERED.
The Clerk of Court is directed to enter judgment of dismissal in favor of
Arnold Faller.
Dated this 14th of October, 2011.
/s/ Richard F. Cebull_____
Richard F. Cebull
U.S. District Judge
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