Granting Hands LLC v. Spencer

Filing 54

Order Accepting 53 Findings and Recommendation of the United States Magistrate Judge. The court grants Defendant's 30 Motion to Dismiss and dismisses without prejudice Plaintiff's claims for fraud, fraudulent conveyance, civil conspirac y, concerted action to commit conversion, declaratory judgment, restitution, unjust enrichment, and an accounting pursuant to Rule 12(b)(6). The court, however, grants Plaintiff leave to file an amended pleading correcting the deficiencies identified by Magistrate Judge Rutherford by 9/12/2024. (Ordered by Judge Sam A. Lindsay on 8/29/2024) (axm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
GRANTING HANDS LLC,
Plaintiff,
v.
RAD EXOTICS LLC, JUSTIN
SPENCER, and DAVID SIGLER,
Defendants.

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Civil Action No. 3:23-cv-02408-L

ORDER

The Findings, Conclusions, and Recommendation of the United States Magistrate Judge
Rebecca Rutherford (“Report”) (Doc. 53) was entered on July 31, 2024, recommending that the
court grant Defendant Justin Spencer’s (“Mr.Spencer”) Motion to Dismiss pursuant to Federal
Rule of Civil Procedure 9(b) and 12(b)(6) (Doc. 30) in part and allow Plaintiff to amend its
complaint.
Plaintiff filed this case on October 6, 2023, in the 193rd Judicial District Court of Dallas
County, Texas. (Doc. 2) Plaintiff alleged claims against Defendants for (1) breach of contract; (2)
conversion; (3) fraudulent conveyance; (4) declaratory judgment; (5) fraud; (6) concerted action
to commit conversion and conspiracy to defraud; (7) restitution; and (8) accounting. See Am.
Compl. On October 10, 2023, Plaintiff served Mr. Spencer (Doc. 1). Before Plaintiff served RAD
Exotics and Mr. Sigler, Mr. Spencer removed this action to federal court on October 30, 2023
(Doc. 1).
Defendant filed the pending Motion to Dismiss on January 25, 2024 (Doc. 30). Mr. Spencer
argues that Plaintiff has failed to allege facts sufficient to state a claim that he is personally liable
Order – Page 1

for any amounts owing on the loan (Doc. 30). Mr. Spencer argues that Plaintiff has not alleged that
he is a party to the loan documents and that he executed a personal guarantee (Doc. 30). Regarding
Plaintiff’s alter ego theory, Mr. Spencer argues that Plaintiff has failed to allege facts to show
misconduct necessary to pierce RAD Exotics’ corporate veil (Doc. 30). Mr. Spencer further
contends that Plaintiff’s pleadings fail the heightened requirement for fraud under Federal Rule of
Civil Procedure 9(b) (Doc. 30). Plaintiff filed a response, and Mr. Spencer filed a reply.
The magistrate judge found that Plaintiff plausibly alleges a breach of contract claim
against Defendant (Doc. 53). The magistrate judge also determined that Plaintiff failed to plausibly
allege claims for fraud, fraudulent conveyance, civil conspiracy, concerted action to commit
conversion, declaratory judgment, restitution, unjust enrichment, and an accounting (Doc. 53). The
magistrate judge further determined that Plaintiffs request for declaratory judgment should be
rejected as duplicative.
Having considered the Complaint, Motion, Report, file, record, and relevant law, the court
determines that the magistrate judge’s findings and conclusions in the Report are correct and
accepts them as those of the court. Accordingly, the court grants Defendant’s Motion to Dismiss
and dismisses without prejudice Plaintiff’s claims for fraud, fraudulent conveyance, civil
conspiracy, concerted action to commit conversion, declaratory judgment, restitution, unjust
enrichment, and an accounting pursuant to Rule 12(b)(6) (Doc. 30.) The court, however, grants
Plaintiff leave to file an amended pleading correcting the deficiencies identified by Magistrate
Judge Rutherford by September 12, 2024. After the amended pleading is filed, no further
amendments will be allowed as to whether a claim has been stated.

Order – Page 2

It is so ordered this 29th day of August, 2024.

_________________________________
Sam A. Lindsay
United States District Judge

Order – Page 3