United States District Court, D. Colorado
ERYN R. MEGNA, ROBERT V. MEGNA, BACKSTREET BISTRO, LLC, Plaintiffs,
LITTLE SWITZERLAND OF AMERICA CANDY FACTORY, INC., KRISTINE M. ULLEMEYER, HAYES ULLEMEYER, Defendants.
OPINION AND ORDER
RAYMOND P MOORE United States District Judge.
22, 2017, plaintiffs Eryn R. Megna (“Mrs.
Megna”), Robert V. Megna (“Mr. Megna”), and
Backstreet Bistro, LLC (“the Bistro”)
(collectively, “plaintiffs”) filed a First
Amended Complaint (“the FAC”) against Little
Switzerland of America Candy Factory, Inc., Kristine M.
Ullemeyer (“Mrs. Ullemeyer”), and Hayes Ullemeyer
(“Mr. Ullemeyer”) (collectively,
“defendants”). (ECF No. 25). Therein, each
individual plaintiff raised claims against defendants
pursuant to 42 U.S.C. § 1982 (“§ 1982”)
and 42 U.S.C. § 1985(3) (“§ 1985(3)”),
as well as numerous claims under State law. (Id.)
6, 2017, defendants filed a motion to dismiss all claims
asserted against them in the FAC (“the motion to
dismiss”), pursuant to Fed.R.Civ.P. 12(b)(1) and
12(b)(6) (“Rule 12(b)(6)”). (ECF No. 26.)
Plaintiff subsequently filed a response (ECF No. 28), and
defendants filed a reply (ECF No. 29). The Court referred the
motion to dismiss to U.S. Magistrate Judge Kathleen M.
Tafoya. (ECF No. 27.)
before the Court is the Report and Recommendation
(“R&R”) of the Magistrate Judge, recommending
denying the motion to dismiss. (ECF No. 31.) The R&R
advised the parties that they had 14 days to file specific
written objections to the R&R in order to preserve de
novo review. (Id. at 14-15.) Fourteen days later,
defendants filed objections to the R&R. (ECF No. 33.)
Plaintiffs did not file any objections to the R&R, but,
did file a response to defendants' objections (ECF No.
Review of a Report and Recommendation
district court may refer pending motions to a magistrate
judge for entry of a report and recommendation. 28 U.S.C.
§636(b)(1)(B); Fed.R.Civ.P. 72(b). The court is free to
accept, reject, or modify, in whole or in part, the findings
or recommendations of the magistrate judge. 28 U.S.C.
§636(b)(1); Fed.R.Civ.P. 72(b)(3). A party is entitled
to a de novo review of those portions of the report
and recommendation to which specific objection is made.
See Fed.R.Civ.P. 72(b)(2), (3). “[O]bjections
to the magistrate judge's report and recommendation must
be both timely and specific to preserve an issue for de novo
review by the district court or for appellate review.”
United States v. 2121 E. 30 St., 73 F.3d 1057, 1060
(10th Cir. 1996); see also See Summers v. Utah, 927
F.2d 1165, 1167 (10th Cir. 1991) (“In the absence of
timely objection, the district court may review a
magistrate's report under any standard it deems
appropriate.”). Furthermore, arguments not raised
before the magistrate judge need not be considered by this
Court. Marshall v. Chater, 75 F.3d 1421, 1426 (10th
Cir. 1996) (“Issues raised for the first time in
objections to the magistrate judge's recommendation are
The Magistrate Judge's Recommendations and
Magistrate Judge, first, recommended disposing of the motion
to dismiss solely under Rule 12(b)(6) because defendants'
jurisdictional questions were intertwined with the merits of
the case. (ECF No. 31 at 4-5.) The Magistrate Judge further
recommended declining to consider various documents
defendants had attached to a prior version of the motion to
dismiss. (Id. at 5-7.) Defendants do not raise any
objections to these recommendations. (See ECF No. 33
at 1-2.) As a result, the Court ADOPTS the R&R to the
extent it recommends disposing of the motion to dismiss under
Rule 12(b)(6) only and declining to consider the documents
attached to a prior version of the motion to dismiss.
Magistrate Judge, next, recommended rejecting defendants'
argument that claim and issue preclusion barred
plaintiffs' claims. (ECF No. 31 at 7-8.) The Magistrate
Judge found an analogous case persuasive, and that defendants
failed to sufficiently develop this argument and failed to
address plaintiffs' arguments in opposition thereto.
(Id.) Defendants do not object to this
recommendation either. (ECF No. 33 at 1-2.) As a result, the
Court ADOPTS the R&R to the extent it recommends
rejecting claim and issue preclusion as bases for dismissing
Magistrate Judge, next, recommended denying the motion to
dismiss with respect to plaintiffs' § 1982 claims.
(ECF No. 31 at 9-13.) The Magistrate Judge found that the FAC
alleged the first element of a § 1982 claim in alleging
facts suggesting defendants has a discriminatory intent in
applying restrictive covenants against only
African-Americans. (Id. at 9-10) The Magistrate
Judge found that the FAC alleged the second element of a
§ 1982 claim in alleging that defendants'
enforcement of restrictive covenants interfered with
plaintiffs' use of their property. (Id. at
10-13.) The Magistrate Judge found that interfering with
plaintiff's use of their property was a sufficient legal
basis to pursue a § 1982 claim, and the FAC's
allegations were sufficient to show that defendants had
interfered with plaintiffs' use of their property.
(Id.) The moving defendants object to the Magistrate
Judge's recommendation that plaintiffs have set forth a
legally sufficient § 1982 claim, and, even if it was
legally sufficient, that they have sufficiently alleged that
defendants denied plaintiffs use of their property.
(See ECF No. 33 at 1-2.)
Magistrate Judge, next, recommended that the motion to
dismiss should be denied with respect to plaintiffs'
§ 1985(3) claim. (ECF No. 31 at 13.) The Magistrate
Judge found that § 1985(3) effectively adds a conspiracy
component to § 1982, and thus, because the allegations
with respect to § 1982 were sufficient, they were also
sufficient under § 1985(3). (Id.) The moving
defendants object to this recommendation on the same grounds
raised with respect to plaintiffs' § 1982 claims.
(ECF No. 33 at 9.)
Magistrate Judge, next, recommended that supplemental
jurisdiction should be exercised over plaintiffs' State
law claims because plaintiffs' federal claims remained.
(ECF No. 31 at 13.) Defendants do not raise any objection to
this recommendation. (See ECF No. 33 at 1-2.) In any
event, because the Court agrees that plaintiffs' federal
claims should not be dismissed, the Court ADOPTS the R&R
to the extent it recommends exercising supplemental
jurisdiction over plaintiffs' State law claims.
Motion to Dismiss Standard
evaluating a motion to dismiss under Rule 12(b)(6), a court
must accept as true all well-pleaded factual allegations in
the complaint, view those allegations in the light most
favorable to the non-moving party, and draw all reasonable
inferences in the plaintiff's favor. Brokers'
Choice of America, Inc. v. NBC Universal, Inc., 757 F.3d
1125, 1135-36 (10th Cir. 2014); Mink v. Knox, 613
F.3d 995, 1000 (10th Cir. 2010). In the complaint, the
plaintiff must allege a “plausible” entitlement
to relief. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555-556, 127 S.Ct. 1955 (2007). “Asking for
plausible grounds … does not impose a probability
requirement at the pleading stage; it simply calls for enough
fact to raise a reasonable expectation that discovery will
reveal evidence of [prohibited conduct].” Id.
at 556. Conclusory allegations, ...