United States District Court, D. Colorado
ERYN R. MEGNA, ROBERT V. MEGNA, and BACKSTREET BISTRO, LLC, Plaintiffs,
LITTLE SWITZERLAND OF AMERICA CANDY FACTORY, INC., KRISTINE M. ULLEMEYER, and HAYES ULLEMEYER, Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE
Kathleen M. Tafoya United States Magistrate Judge.
case comes before the court on Defendants' “Motion
to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1) and (6).”
(Doc. No. 26). Defendants incorporate by reference arguments
made in an earlier motion. (Doc. No. 15
[Mot.]). Plaintiffs filed their response on June
26, 2017 (Doc. No. 28 [Resp.]), and Defendants filed their
reply on July 11, 2017 (Doc. No. 29 [Reply]).
assert claims pursuant to 42 U.S.C.§§ 1982 and
1985(3). (See First Amend. Compl. ¶1.) The case
arises from the use of a property vis-à-vis
restrictive covenants. Plaintiffs allege that “because
of Defendants' coordinated conduct, Plaintiffs have been
discriminatorily prevented from using their property on an
equal basis with other current and former owners/tenants of
the Complex.” Id. at 13. Plaintiff seeks
monetary, declaratory, and injunctive relief. (Id.
Lack of Subject Matter Jurisdiction
Rule of Civil Procedure Rule 12(b)(1) empowers a court to
dismiss a complaint for lack of subject matter jurisdiction.
Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a
judgment on the merits of a plaintiff's case; rather, it
calls for a determination that the court lacks authority to
adjudicate the matter-attacking the existence of jurisdiction
not the allegations of the complaint. See Castaneda v.
INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing
federal courts are courts of limited jurisdiction and may
only exercise jurisdiction when specifically authorized to do
so). The burden of establishing subject matter jurisdiction
is on the party asserting jurisdiction. Basso v. Utah
Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). A
court lacking jurisdiction “must dismiss the cause at
any stage of the proceedings in which it becomes apparent
that jurisdiction is lacking.” See Basso, 495
F.2d at 909. The dismissal is without prejudice. Brereton
v. Bountiful City Corp., 434 F.3d 1213, 1218 (10th Cir.
2006); see also Frederiksen v. City of Lockport, 384
F.3d 437, 438 (7th Cir. 2004).
12(b)(1) motion to dismiss “must be determined from the
allegations of fact in the complaint, without regard to mere
conclusionary allegations of jurisdiction.”
Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir.
1971). When considering a Rule 12(b)(1) motion, however, the
Court may consider matters outside the pleadings without
transforming the motion into one for summary judgment.
Holt v. United States, 46 F.3d 1000, 1003 (10th Cir.
1995). Where a party challenges the facts upon which subject
matter jurisdiction depends, a district court may not presume
the truthfulness of the complaint's “factual
allegations . . . [and] has wide discretion to allow
affidavits, other documents, and [may even hold] a limited
evidentiary hearing to resolve disputed jurisdictional facts
under Rule 12(b)(1).” Id.
Failure to State a Claim Upon Which Relief Can Be
Rule of Civil Procedure 12(b)(6) provides that a defendant
may move to dismiss a claim for “failure to state a
claim upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6) (2007). “A court reviewing the sufficiency of
a complaint presumes all of plaintiff's factual
allegations are true and construes them in the light most
favorable to the plaintiff.” Hall v. Bellmon,
935 F.2d 1106, 1198 (10th Cir. 1991). “To survive a
motion to dismiss, 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, 556 U.S. 662, 678 (2009) (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Plausibility, in the context of a motion to dismiss,
means that the plaintiff pleaded facts which allow “the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. A
complaint warrants dismissal if it fails “in
toto to render [plaintiff's] entitlement to relief
plausible.” Twombly, 550 U.S. at 569 n.14.
this, the court need not accept conclusory allegations
without supporting factual averments. Southern Disposal,
Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir.
1998). “[T]he tenet that a court must accept as true
all of the allegations contained in a complaint is
inapplicable to legal conclusions.
Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S at 678. Moreover,
“[a] pleading that offers ‘labels and
conclusions' or ‘a formulaic recitation of the
elements of a cause of action will not do.' Nor does the
complaint suffice if it tenders ‘naked
assertion[s]' devoid of ‘further factual
enhancement.'” Id. (citation omitted).
“Where a complaint pleads facts that are ‘merely
consistent with' a defendant's liability, it
‘stops short of the line between possibility and
plausibility of ‘entitlement to relief.' ”
Id. (citation omitted).
initial matter, and because Defendants pursue dismissal under
Rule 12(b)(1) and Rule 12(b)(6), the Court must first
determine the appropriate vehicle for disposition. Defendants
argue that Rule 12(b)(1) is appropriate. The Court disagrees.
See Wheeler v. Hurdman, 825 F.2d 257, 259 (10th Cir.
1987) (If “the jurisdictional question is intertwined
with the merits of the case, the issue should be resolved
Defendants' arguments under Rule 12(b)(1) and Rule
12(b)(6) are “virtually identical”-highlighting
the entanglement between the jurisdictional question with the
merits of the case. Resp. at 5. Because of such entanglement,
and in light of the Hurdman and Fowler
decisions, Rule 12(b)(6) provides the proper vehicle for
disposition. See Fowler v. United States, 647 F.3d
1232, 1237 (10th Cir. 2011) (explaining that “a great
deal turns on [whether the jurisdictional question is
intertwined with the merits of the case] because Rule
12(b)(6) or Rule 56 would provide more procedural safeguards
to the plaintiff than does Rule 12(b)(1)”).
holding that Rule 12(b)(6) is controlling, the Court is
presented with a further threshold issue-i.e., how
to treat the multiple documents (no less than 11) filed by
Defendants in support of their Rule 12(b)(6) Motion to
Dismiss. (Doc. No. 13, Exhibits A-J.)
onset, the Court is minded to disregard the exhibits given
the procedural safeguards that underscore Rule 12(b)(6)
disposition. The Federal Court Rules of Civil Procedure
provide that if “matters outside the pleading are
presented to and not excluded by the court, the motion shall
be treated as one for summary judgment and disposed of as
provided in Rule 56, and all parties shall be given
reasonable opportunity to present all material made pertinent
to such a motion by Rule 56.” Fed.R.Civ.P. 12(d);
Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215
(10th Cir. 2007). Notwithstanding the usual rule, “[a]
district court may consider documents referred to in
the complaint [yet separate to the complaint] if the
documents are central to the plaintiff's claim and the
parties do not dispute the documents'
authenticity.” Jacobsen v. Deseret Book Co.,
287 F.3d 936, 941 (10th Cir.2002) (emphasis added);
Alvarado, 493 F.3d at 1215.
principles make two things clear: (1) consideration of
documents outside the pleadings is discretionary, and (2) to
consider such documents is the exception to Rule 12(b)(6). In
fact, a too liberal application of the exception to allow
extrinsic materials could swallow the rule mandated by
Fed.R.Civ.P. 12(d). In the abstract, this makes sense since
disposition at the summary judgment stage allows further
factual development through discovery-therefore, providing a
plaintiff with ample opportunity to rely on such discovery
before the plaintiff's Seventh Amendment right to trial
by jury is trounced through early dismissal. See
U.S. Const. amend. VII.
the extrinsic documents proffered by Defendants are more apt
to Rule 56(a) disposition-not a motion to dismiss under Rule
12(b)(6). Putting aside the length (and number) of the
extrinsic documents, the Court is minded that Defendants'
proffered materials may require interpretation beyond the
four corners of each document (some of which are contracts).
See Lake Durango Water Co., Inc. v. Pub. Utils.
Comm'n, 67 P.3d 12, 20 (Colo. 2003) (addressing
whether contracts can be considered as questions of law and
when extrinsic evidence is required when ambiguity arises);
see also Dorman v. Petrol Aspen, Inc., 914 P.2d 909,
912 (Colo. 1996).
example, what do the terms “unsightly object or
nuisance” mean? Likewise, what constitutes
“peaceful enjoyment?” (Doc. No. 14-3, Exhibit C,
Declaration Of Grants, Covenants, Conditions And Restrictions
Establishing A Plan For Condominium Ownership of B & B
Condominium Complex.) The parties haven't briefed these
terms. Facially, they present interpretive ambiguities
requiring further extrinsic evidence beyond what is before
the Court. It is this concern, coupled with the
“powerful presumption” against rejecting
pleadings for failure to state ...