Bustos v. Dennis et al

Filing 71

ORDER denying 57 Motion for Reconsideration; ORDER denying 63 Motion to Dismiss; ORDER denying 68 Motion to Strike; Signed by Judge Kent J. Dawson on 3/29/2019. (Copies have been distributed pursuant to the NEF - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ERNEST BUSTOS,

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Case No. 2:17-CV-00822-KJD-VCF
Plaintiff,

ORDER

v.
GREGG A. DENNIS, d/b/a, IIS BENEFIT
ADMINISTRATORS, et al.,
Defendant.

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Presently before the Court is Defendants’ Motion to Dismiss Plaintiff’s Second Amended

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Complaint (#63). Plaintiff filed a response in opposition (#67) to which Defendants replied

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(#69). Also before the Court is Plaintiff’s First Motion for Reconsideration (#57). Defendants

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filed a response in opposition (#58) to which Plaintiff replied (#62). 1 Finally before the Court is

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Plaintiff’s Motion to Strike Declaration (#68). Defendants filed a response in opposition (#70).

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Generally, motions to strike are disfavored. The issues raised by Plaintiff are best served being

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presented in opposition to the motion to dismiss. The Court is well aware of the standards

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governing motions to dismiss. The Court is capable of disregarding evidence outside the

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amended complaint without an unnecessary round of briefing that delays the consideration of the

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issues on their merits. The motion to strike is denied.

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I. BACKGROUND and ANALYSIS

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On March 20, 2018, the Court granted Defendants’ motion to dismiss but granted pro se
Plaintiff the opportunity to file an amended complaint. Plaintiff did so on April 9, 2018 (#56).

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Having read and considered Plaintiff’s motion for reconsideration and good cause lacking, it is denied.
Further having filed a second amended complaint in accordance with the Court’s order it is moot.

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Defendants have now moved to dismiss the second amended complaint for virtually the identical

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reasons it moved to dismiss the initial complaint. Having read and considered the Second

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Amended Complaint (“SAC”) (#56) and the briefing on the motion to dismiss the SAC, the

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Court finds that the SAC cures the deficiencies of the initial complaint and adequately alleges

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alter ego liability.
Contracts are construed from the written language of the document and enforced as

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written. Ellison v. Cal. State Auto. Ass’n, 797 P.2d 975, 977 (Nev. 1990). Nevada law requires a

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plaintiff bringing a breach of contract action to demonstrate “(1) the existence of a valid contract,

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(2) a breach by the defendant, and (3) damage as a result of the breach.” Saini v. Int’l Game

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Tech., 434 F. Supp.2d 913, 919–920 (D. Nev. 2006) (quoting Richardson v. Jones, 1 Nev. 405

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(Nev. 1865)). Specifically, “failure to perform one’s obligations within the express terms of an

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agreement constitutes a literal breach of contract.” Id. at 923. Plaintiff has adequately alleged

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breach.

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To establish a claim for breach of the implied covenants of good faith and fair dealing, a

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plaintiff must prove: (1) the existence of a contract between the parties; (2) that defendant

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breached its duty of good faith and fair dealing by acting in a manner unfaithful to the purpose of

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the contract; and (3) the plaintiff's justified expectations under the contract were denied. See

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Perry v. Jordan, 900 P.2d 335, 338 (1995) (citing Hilton Hotels Corp. v. Butch Lewis Prod. Inc.,

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808 P.2d 919, 922–23 (1991)). To the extent that Plaintiff has alleged breach of the implied

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covenant of good faith and fair dealing, he has alleged factual allegations that meet the standard.

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Defendants also seek to dismiss alleging that Plaintiff’s alter ego allegations are

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insufficient. In order to state a claim for alter-ego liability in Nevada, a plaintiff must allege that:

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(1) the corporation is influenced and governed by the person asserted to be the alter ego; (2)

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there is such unity of interest and ownership that one is inseparable from the other; and (3) the

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facts are such that adherence to the corporate fiction of a separate entity would, under the

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circumstances, sanction fraud or promote injustice. See Nev. Rev. Stat. § 78.747; see also Polaris

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Industrial Corp. v. Kaplan, 747 P.2d 884, 886 (Nev. 1987). “The question of whether a

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stockholder, director or officer acts as the alter ego of a corporation must be determined by the

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court as a matter of law.” NRS § 78.747. “There is no litmus test for determining when the

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corporate fiction should be disregarded; the result depends on the circumstances of each case.”

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Polaris Industrial, 747 P.2d at 887. Plaintiff’s updated factual allegations meet the test to allege

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unity of interest and ownership necessary to survive a motion to dismiss. See Lorenz v. Beltio,

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Ltd., 114 Nev.795, 808, 963 P.2d 488, 497 (Nev. 1998).

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While the Court questions the ability of Plaintiff to prove the existence of the alleged

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contracts at trial, his complaint sufficiently alleges the facts necessary to raise intentional

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interference with prospective economic advantage and intentional interference with contract

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claims. See J.J. Industries, LLC v. Bennett, 71 P.3d 1264, 1267 (Nev. 2003); Leavitt v.Leisure

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Sports Incorporation, 734 P.2d 1221, 1225 (Nev. 1987).

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II. CONCLUSION

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Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss Plaintiff’s
Second Amended Complaint (#63) is DENIED;
IT IS FURTHER ORDERED that Plaintiff’s First Motion for Reconsideration (#57) is
DENIED;
IT IS FURTHER ORDERED that Motion to Strike Declaration (#68) is DENIED.
Dated this 29th day of March, 2019.

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_____________________________
Kent J. Dawson
United States District Judge

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