Kabins Family Limited Partnership et al v. Chain Consortium et al

Filing 465

ORDER that Defendants/Cross-Defendants Todd Bergman and T.W.B. Enterprises, Inc.s Motion to Dismiss 444 is DENIED. Signed by Judge Gloria M. Navarro on 6/14/12. (Copies have been distributed pursuant to the NEF - ECS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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KABINS FAMILY LIMITED
PARTNERSHIP, et al.,

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Plaintiffs,
vs.

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CHAIN CONSORTIUM, et al.,

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Defendants.

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Case No.: 2:09-cv-01125-GMN-RJJ
ORDER

On April 28, 2011, Defendants/Cross-Claimants Benessere, LLC; Cipriani, LLC; Gila

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Bend 384, LLC; Buckeye 80 West Three, LLC; and Buckeye Canamex 77 One, LLC

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(collectively, “the Benessere Parties”) filed their Second Amended Cross-Claim (ECF No. 343)

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against Defendants/Cross-Defendants Todd Bergman and T.W.B. Enterprises, Inc.

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(collectively, “Bergman”). The following day, the Benessere Parties filed their Errata (ECF

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No. 346).
Now pending before the Court is the Motion to Dismiss filed by Bergman. (ECF No.

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444.) The Benessere Parties filed a Response (ECF No. 448) and Bergman filed a Reply (ECF

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No. 452).

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I.

BACKGROUND

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In December 2009, the Benessere Parties filed their original cross-claims (ECF No. 173)

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against Bergman, as part of their responsive pleading to the initiating Complaint (ECF No. 1) in

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this case. These were: (1) declaratory relief; (2) implied indemnity; and (3) contribution. (ECF

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No. 173.) In December 2010, Bergman filed a motion to dismiss the cross-claims. (ECF No.

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191.) At a hearing on March 26, 2010, Judge Philip M. Pro, the then-presiding judge in this

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case, granted the motion without prejudice. (Mins. of Proceedings, March 26, 2010, ECF No. 255)

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The Benessere Parties then filed their First Amended Cross-Claim (ECF No. 267) on

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April 21, 2010, asserting the following causes of action: (1) civil conspiracy; (2) unjust

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enrichment; (3) conversion; (4) implied/equitable indemnity; and (5) contribution. Bergman

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subsequently filed a Motion to Dismiss (ECF No. 291). The Court granted Bergman’s Motion

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to Dismiss and gave the Benessere Parties leave to amend. (Order, July 28, 2010, ECF No. 314)

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Nine months later, on April 28, 2011, the Benessere Parties filed their Second Amended

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Cross-Claim (ECF No. 343), alleging: (1) civil conspiracy; (2) unjust enrichment; (3) conversion;

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(4) implied/equitable indemnity; and (5) contribution. The Benessere Parties’ Errata (ECF No.

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346) was filed the following day, clarifying that the Second Amended Cross-Claim was not

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intended to “waive, dismiss and/or surrender” any of the claims relating to all other parties in

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the instant action, particularly as alleged in their initial filing (ECF No. 173) on December 2,

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2009.
Almost a year later, on March 26, 2012, Bergman filed the instant Motion to Dismiss

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(ECF No. 444). Bergman did not file an Answer to the Second Amended Cross-Claim.

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II.

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LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action

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that fails to state a claim upon which relief can be granted. See North Star Int’l. v. Arizona

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Corp. Comm’n., 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss

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under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the

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complaint does not give the defendant fair notice of a legally cognizable claim and the grounds

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on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering

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whether the complaint is sufficient to state a claim, the Court will take all material allegations

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as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v.

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Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

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The Court, however, is not required to accept as true allegations that are merely

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conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action

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with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a

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violation is plausible, not just possible. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing

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Twombly, 550 U.S. at 555) (emphasis added).

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III.

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DISCUSSION
This action arises out of investments by Plaintiffs Kabins Family Limited Partnership

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and Lori C. Kabins, as trustee for Lori C. Kabins Separate Property Trust (collectively, “Kabins

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Plaintiffs”). The Benessere Parties allege that Mark B. Kabins also made investments as alter

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ego of Kabins Plaintiffs.

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The Benessere Parties allege that Jeff Chain, as Manager of the Benessere Parties, mis-

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appropriated the Kabins investment funds, and that “by giving monies not entitled to give and

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by receiving monies not entitled to receive, Chain and Bergman . . . knowingly converted

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monies rightfully belonging to [the Benessere Parties].” (Second Am. Cross-Cl., 8:¶37, ECF

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No. 343.) The Benessere Parties allege Chain “had certain contractual and fiduciary duties of

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good faith and loyalty, among others,” and that Bergman and Chain “acted in concert and

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conspired between themselves to violate Chain’s contractual and fiduciary duties of good faith

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and loyalty, among others.” (Second Am. Cross-Cl., 4:¶11, 5:¶16, ECF No. 343.) The

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Benessere Parties allege that this conspiracy took the form of illegal and improper commissions

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and finder’s fees which Chain gave Bergman from the investment funds, which were the

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property of the Benessere Parties. (Second Am. Cross-Cl., 5:¶16, 8:¶38, ECF No. 343.) The

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Benessere Parties further allege that Bergman’s receipt of the monies to which Bergman was

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not entitled constitutes unjust enrichment.

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Unjust Enrichment, Conversion and Civil Conspiracy

In the Court’s July 28, 2010, Order, the civil conspiracy and conversion claims were

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dismissed with leave to amend. The Court stated that the Benessere Defendants “must allege

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facts indicating the elements of a civil conspiracy and/or conversion, such as ‘Bergman agreed

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with Chain to assist him in misappropriating funds. . . .’” (Order, July 28, 2010, 19:23-24–20:1-

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2, ECF No. 314.) The Court also dismissed the unjust enrichment claim with leave to amend,

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stating that “[i]t is possible that the Benessere Defendants are attempting to allege that

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Bergman’s payments were made out of funds misappropriated by Chain, but this is not clear.”

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(Id. at 20:10-11.)

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Here, the Court finds that the Benessere Parties have sufficiently amended their Cross-

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Claims for Unjust Enrichment, Conversion and Civil Conspiracy, that the Benessere Parties

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have given Bergman fair notice of legally cognizable claims and the grounds on which they

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rest, and that the facts pled by the Benessere Parties show that violations are plausible.

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Accordingly, the motion to dismiss will be denied as to these claims.

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2.

Implied/Equitable Indemnity and Contribution

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The Benessere Parties have alleged that Bergman caused at least a part of any harm that

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Plaintiffs attribute to the Benessere Parties. In the Court’s July 28, 2010 Order, the claims for

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indemnity and contribution were dismissed with leave to amend because the Benessere Parties

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had not pled enough facts to support the claims. (Order, July 28, 2010, 20:21-24–21:1, ECF No.

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314.)

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Here, the Benessere Parties appear to have added only two paragraphs in support of their

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claims for indemnity and contribution. (See Second Am. Cross-Cl., 9:¶45, 11:¶52, ECF No.

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343.) However, these paragraphs do not allege any facts, and instead describe the Kabins

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Plaintiffs’ allegations and the Benessere Parties’ denials of the allegations. Despite the lack of

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factual support in these paragraphs, the Court finds that the Benessere Parties have nevertheless

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sufficiently alleged facts to support their claims for implied/equitable indemnity and

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contribution, because they have now sufficiently alleged the claims for unjust enrichment,

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conversion and civil conspiracy, as discussed above. Accordingly, the motion to dismiss will

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be denied as to these claims.
The Court has considered Bergman’s remaining arguments for dismissal, and finds them

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unpersuasive. The Benessere Parties’ cross-claims have now been sufficiently pled, and this

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action should proceed to discovery.

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IV.

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CONCLUSION
IT IS HEREBY ORDERED that Defendants/Cross-Defendants Todd Bergman and

T.W.B. Enterprises, Inc.’s Motion to Dismiss (ECF No. 444) is DENIED.
DATED this 14th day of June, 2012.

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____________________________
Gloria M. Navarro
United States District Judge

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