Webster v. Brookdale Senior Living Communities, Inc.

Filing 32

OPINION AND ORDER: Because of the futility in granting leave, plaintiff's Motion for Leave to File an Amended Complaint 24 is DENIED. Plaintiff's first Motion for Leave to File an Amended Complaint 20 is also denied as moot. T he parties shall confer and submit a proposed joint scheduling order within 30 days of this order. The schedule should include deadlines for discovery, dispositive motions, joint alternative dispute resolution report, pretrial order, and any other deadlines or provisions that the parties feel would be helpful. Signed on 3/27/2018 by Judge Ann L. Aiken. (ck)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
Case No. 3:16-cv-01060-AA
OPINION AND ORDER

ROBERT E. WEBSTER
Plaintiff,

v.
BROOKDALE SENIOR LIVING
COMMUNITIES, INC.,
Defendant.

AIKEN, District Judge:
Plaintiff, Robert E. Webster, moves for leave to file an amended complaint after I
previously granted him leave to amend his fraud claim. (doc. 19). Defendant, Brookdale Senior
Living Communities, Inc. ("Brookdale") objects, arguing that plaintiffs amended complaint has
unresolved deficiencies in various provisions. For the reasons set forth below, plaintiffs Motion
for Leave File an Amended Complaint (doc. 24) is DENIED.
BACKGROUND

The facts of this case are outlined in detail in the Court's previous Opinion and Order on
the defendant's motion to dismiss. (doc. 19). Briefly, in 2007, plaintiff began residing in
defendant's assisted living facility located in Forest Grove, Oregon. On September 25, 2015,

1 - OPINION AND ORDER

plaintiff fell while getting out of the shower. Id. at 9. He was not discovered by staff until
September 27, approximately 52 hours after he had fallen. Id.
Plaintiff then initiated this diversity action, pleading claims for negligence, breach of
contract, fraud, and violation of the Oregon Unfair Trade Practices Act ("UTPA"). He alleges
almost $3 million dollars in economic and noneconomic damages.

I previously granted

defendant's Motion to Dismiss on plaintiffs claims for breach of contract and UTPA violations.
I also dismissed plaintiffs fraud claim while granting him leave to seek amendment of his
complaint.

Plaintiff now seeks to amend his complaint regarding his fraud claims in his

proposed First Amended Complaint ("PFAC"). 1
STANDARDS

In his complaint, plaintiff must allege "enough facts to state a claim to relief that is
plausible on its face." Bell Atl. Corp. v. T·wombly, 550 U.S. 544, 570 (2007). These facts must
amount to more than a conclusory statement or a mere "formulaic recitation of the elements of a
claim." Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). Under Oregon law,
[i]n order to establish actionable fraud, the plaintiff must plead and prove the
following elements: (1) a representation; (2) its falsity; (3) its materiality; (4) the
speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it
should be acted on by the person and in the manner reasonably contemplated; (6)
the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to
rely thereon; and (9) his consequent and proximate injury.
Webb v. Clark, 546 P .2d 1078, 1080 (Or. 1976) (internal quotation marks omitted); see Oregon
Pub. Emps. ' Ret. Bd. ex rel. Oregon Pub. Emps. ' Rel. Fund v. Simat, Hel/iesen & Eichner, 83

P.3d 350, 359 (nothing the "clear and convincing" standard to prevail on a fraud claim.). To
satisfy Federal Rule of Civil Procedure 9(b) heightened pleading requirements for fraud, plaintiff

1

There are two motions two file this amended complaint (docs. 20 & 24). The present
opinion addresses the allegations and arguments raised in the second motion (doc. 24).
2 - OPINION AND ORDER

must "state the time, place and specific content of the false representations as well as the
identities of the parties to the misrepresentation." Edwards v. 1'viarin Park, Inc., 356 F.3d 1058,
1066 (9th Cir. 2004).
"The court should freely give leave [to amend] when justice so requires." Fed. R. Civ. P.
15(a)(2). In reviewing the present motions, I "consider four factors when reviewing a decision
whether to pe1mit an amendment: (1) bad faith on the paii of the plaintiffs; (2) undue delay; (3)
prejudice to the opposing party; and (4) futility of the proposed amendment." Lockheed Martin
Corp. v. Neh11orkSol.s, Inc. 194 F.3d 980, 986 (9th Cir. 1999).
DISCUSSION

In my previous opinion and order (doc. 19), based on the arguments before me at the
time, I concluded that the only missing element regarding the 9(b) standard was the alleged time
of the fraudulent statements.

I noted that "without an archived screenshot of a particular

webpage that predates the [September] 25 incident, [I] cannot conclude that plaintiffs fraud
claim meets the temporal element required for adequacy under Rule 9(b)." Id If the present
screenshots from "The Wayback Machine" attached to Plaintiffs Motion for Leave to Amend
Complaint (doc. 24) legitimately represent the timestamp on the screenshots, then the 9(b)
temporal requirement would be satisfied.

However, my consideration of the Motion for Leave

to Amend is not concluded there.
The first factor to consider I must consider is whether there is any bad faith evidenced by
plaintiff. Generally, "amendment should be permitted unless it will not save the complaint or the
plaintiff merely is seeking to prolong the litigation by adding new but baseless legal theories."
Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 881 (9th Cir. 1999); see also United States v.

Webb, 655 F.2d 977, 980 (9th Cir. 1981) (noting a requirement of"some statement of reasons or

3 - OPINION AND ORDER

findings of fact showing bad faith[.]"). Nothing in the briefings or motions suggest bad faith on
the part of plaintiff. Although ultimately the claim is pled insufficiently, that does not rise to the
level of bad faith. Accordingly, I move on to the factor of undue delay.
"Although delay is not a dispositive factor in the amendment analysis, it is relevant ...
especially when no reason is given for the delay." Lockheed, 194 F.3d at 986 (citing lviorongo
Band of lvfission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) and Swanson v. United
States Forest Serv., 87 F.3d 339, 345 (9th Cir. 1996). In submitting his amended motion, plaintiff

curiously creates two temporal situations when the purp01ied fraudulent representations took
place.

First, plaintiff elaborates on allegations from the initial complaint with respect to

representations made by Luann Arnott, executive director of the facility, in 2007. Further, he
again alleges additional fraudulent statements on Brookdale's website from 2015, which were
one of the issues discussed in my Order regarding the previous motion to dismiss. Id.

~

19-20.

Plaintiff offers no explanation of why these new representations are now being alleged.
Regardless, the amended filing does not cause undue delay and the claims are not unduly
delayed, because plaintiff raised (albeit insufficient) allegations about representations made in
2007 in the initial complaint. Fmiher, discovery of the fraud is alleged to have occurred when
plaintiff fell in September 2015. Lastly, the 2015 website claims are not delayed because,
primarily, the suit was filed in 2016, within the statute oflimitations. Or. Rev. Stat.§ 12.110(1).
With respect to the third factor, I see little to no prejudice to the opposing party in this
instance.

Any prejudice towards defendant or defense counsel in having to respond to the

motion and PFAC is de minim is. Perhaps most pe1iinent, I explicitly granted plaintiff leave to
amend on his fraud claims as district courts should "freely" do. Fed. R. Civ. Pro. 15(a).

4 - OPINION AND ORDER

It is

preferable to allow plaintiff to submit a good faith but ultimately insufficient amended complaint
than to curb to any purported prejudice, which neither party asserts here.
However, for the reasons below, I find that permitting the filing of plaintiffs PFAC
would be futile because "[a] proposed amended complaint is futile if it would be inm1ediately
subject to dismissal." Fulton v. Advantage Sales & Marketing, LLC, 2012 WL 5182805 (D. Or.
Oct. 18, 2012) (internal quotation marks omitted).
Plaintiffs PFAC still does not adequately allege facts that satisfy each of the state law
elements of fraud. "It is the conclusory nature of [plaintiffs] allegations, . . . that disentitles
them to the presumption of truth." Iqbal, 556 U.S. 662, 681. As noted above, plaintiff advances
two sets of allegations regarding fraud committed by the defendant.

The first deals with

statements allegedly made in 2007 by Luann Arnott to plaintiff, and the second deals with
statements from defendant's website in 2015. The PFAC states, in pertinent part:
13. On or about August 31, 2007 when plaintiff entered defendant's facility,
defendant's executive director Luann Arnott informed plaintiff that at all times
there would be staffing levels adequate to ensure that all medical emergencies
involving plaintiff would be discovered and acted upon in a timely fashion, and
that there would be mechanisms ... in place to detect such medical emergencies
in a timely fashion and that such mechanisms would be followed at all times [sic]
to keep him safe. Throughout his stay with defendant plaintiff was constantly
reassured by defendant's employees, including all of the facilities executive
directors subsequent to Ms. Arnott, about such specific safety protections.
First. Am. Comp!.
were false[.]" Id.

~

~

13. Plaintiff then claims "defendant knew [the statements

in~

13]

14. Paragraph 19 states that:

[i]n addition, in 2015, ... defendant Brookdale represented on its website ... that
there would be a signaling system within reach of plaintiff in the bathroom to
enable him to call for assistance if he should need assistance, "residents are
checked on multiple times per day since they need care for different things" and
"Often, if a staff member has not seen a resident for awhile, he or she may pop in
the room to check on them and make sure everything is okay."

5 - OPINION AND ORDER

PFAC

if 19. The next paragraph states that "[a]t all times material to this action,

defendant Brookdale knew that the representations in Paragraphs 19 were false" and
plaintiff "justifiably relied upon these representations." Id

if 20. Plaintiffs amended

complaint is faulty in the following respects.
A.

Plaintiff's Claim Based on the 2007 Statements ofLuann Arnott

Assuming, arguendo, that the purpmied representations from Ms. Arnott were in fact
made to defendant in 2007, the statements are not initially false, which is the second element of a
claim for fraud in Oregon. A plaintiff must set forth what is false about a statement and why it
was false when made. Alcantar v. lvfi\JL Inv'rs Servs., Inc., 2008 WL 2570938, at 4 (D. Or.
2008) ("A plaintiff demonstrates a statement was false when made if the plaintiff can
demonstrate inconsistent facts that had existed all along and were later revealed.")
Here, plaintiffs own amended complaint admits that in the past, when he has fallen, he
was discovered by staff "within several hours of falling." PFAC if 18. There are three occasions
(June 4, 2014, November 7, 2014, and May 30, 2015) where defendant maintained its alleged
representation and helped plaintiff when he had fallen. Id. In the context of a fraud claim, it is
not plausible that a party would make a fraudulent representation but act on the truth of the
representation for the following eight years. These three incidents where plaintiff was helped by
defendant in the way it purpo1iedly assured him that it would seriously undermines plaintiffs
contention that the statements were made in an attempt to defraud him. Cf Zucco Partners, LLC
v. Digimarc Corp., 552 F.3d 981, 999 (9th Cir. 2009) (noting, inter alia, that the allegations in

the amended complaint contained contradictions).
Fmiher, plaintiff fails to plead facts suppo1iing fraudulent intent on the part of Ms. Arnott
or the other employees. Plaintiff offers no examples of how he was "constantly reassured" by

6 - OPINION AND ORDER

the employees of the facility, nor does he allege which employees, specifically, offered those
assurances.

Moreover, plaintiff does not allege the specific content of the reassurances

supposedly made to him by these other employees. Besides a mention of a roll-call sheet at
meals, there is no mention of what other safety mechanisms the staff would follow at all times.
Fmiher, simply maintaining that "defendant knew [these statements] were false," is not sufficient
to establish knowledge of falsity. These are examples of the type of conclusory allegations that

Iqbal forecloses.
Plaintiff farther asserts these 2007 representations were fraudulent because "defendant
always intended to favor profit over ensuring staffing levels were at all times." PFAC

~

14. To

support this contention, plaintiff offers the facts that the staffing level was inadequate on the
night shift of September 26, 2015, and that he missed three breakfasts from September 25 to
September 27, 2015 without being checked on by staff.
However, "to establish a defendant's fraudulent intent regarding a promise to act in the
future, a plaintiff must do more than show the eventual breach of that promise." Sizer v. New

England Life Ins. Co., 871 F. Supp. 2d. 1071, 1079 (D. Or. 2012).

While the pleadings may

support the assertion that, at some point, defendant's motives for scaling back labor were
financially based, there are insufficient allegations to suggest that at the time of the

representations, defendant intended to defraud plaintiff. Again, this assertion is undercut by the
previous three instances where plaintiff was readily helped and the fact that the events cited by
plaintiff to suppmi his contentions occurred eight years after the purported representations were
made. Therefore, because plaintiff does not adequately plead facts showing that the purported
statements were false when they were made or that Ms. Arnott and other employees had intent to
defraud when making them, his claim would be subject to dismissal if amendment were allowed.

7 - OPINION AND ORDER

B.

Plaintiff's Claim Based on the 2015 Website Statements

Plaintiff also fails to allege a claim for relief for fraud based on the 2015 statements from
defendant's website. In his PFAC, plaintiff alleges that defendant represented on its website "that
there would be a signaling system within reach of plaintiff in the bathroom." PFAC at

if 19.

However, the screenshot provided plaintiff from the website only says that "[mJost assisted
living facilities have emergency call systems in every room." Attach. to PFAC at 3.

This

screenshot simply contains no assurances regarding a signaling system in the bathroom at the
Forest Grove facility. More impotiantly, plaintiff does not allege that he viewed the statements
and that they induced him to move into or stay at defendant's facility. It is especially unclear
how statements on a website from 2015 could have induced plaintiff to move into the facility
when he had already been living there since 2007.
Finally, the allegations in paragraphs nineteen and twenty evince insufficient pleading as
well.

Plaintiff includes specific examples from defendant's website of defendant's

representations. However, as defendant correctly notes, plaintiffs pleadings do not cite specific
facts regarding when plaintiff had knowledge of the statements on defendant's website and how
plaintiff"justifiably" relied on those statements to continue living in defendant's facility. PFAC

if 20, Def.'s Resp. to Pl.'s Second Mot. Leave Am. Comp!. at 8. Plaintiff does not signal any
paragraph within the PFAC that denotes the materiality of the purpotied statements. Plaintiff
cannot (as they seem to do here) implicitly rely on the potential importance of the statements but
not allege why and how the statements are material to the present action.

I agree with

defendant's argument that there is no paragraph of the amended complaint that establishes this
element.

8 - OPINION AND ORDER

The PFAC also summarily asserts that plaintiff relied on the website representations. The
allegations in

if 20 refer to the allegations

in

if

19. However, plaintiff does not present how he

relied on statements on defendant's website from 2015. By implication, the contention seems to
be that plaintiff relied on the statements on the website to continue living in defendant's facility.
With regard to these specific paragraphs in the context of the claim as a whole, the connection
between the statements on the website and plaintiffs purpmied reliance is extremely attenuated.
Similar to the discussion regarding materiality, there is no provision in the PFAC that
establishes plaintiffs right to rely on the representations made to him. Plaintiff also does little to
refute the contention that this paragraph is insufficiently pied. It is not enough to obligate the
court to draw inferences and make connections based on facts in other briefs; plaintiff must
expressly show in the complaint how the facts are applicable to the pertinent state law elements.
In short, plaintiff has insufficiently pied fraud based on the alleged representations from
2007 and 2015.

Plaintiff has had two previous opportunities to meet the fraud pleading

standards. It is unlikely that he will be able remedy these defects with regard to his fraud claim.
Therefore, the motion for leave to amend is denied, and no further leave to amend on plaintiffs
fraud claim will be allowed. The parties shall proceed on plaintiffs negligence claims.

I II
I II
I II
Ill
II I
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I II

9 - OPINION AND ORDER

CONCLUSION

Because of the futility in granting leave, plaintiffs Motion for Leave to File an Amended
Complaint is DENIED. 2 Plaintiffs first Motion for Leave to File an Amended Complaint (doc.
20) is also denied as moot. The parties shall confer and submit a proposed joint scheduling order
within 30 days of this order. The schedule should include deadlines for discovery, dispositive
motions, joint alternative dispute resolution repoti, pretrial order, and any other deadlines or
provisions that the parties feel would be helpful.
IT IS SO ORDERED.
Dated this

d.;::rJ~ofMarch 2018.

aJJ/\o~~
AnnAiken
United States District Judge

2

Plaintiffs sua sponte damages amendment is also denied because the original order that
granted leave to amend did not include leave to amend damages. ("[D]efendant's motion to
dismiss is granted with leave to amend on the temporal element required for an adequate
averment offi"aud under 9(b).").
10 - OPINION AND ORDER