United States District Court, D. Colorado
ORDER ON MOTION TO DISMISS
Y. Wang United States Magistrate Judge
matter comes before the court on Defendant Jennifer
Hart's (“Defendant Hart” or “Ms.
Hart”) Fed.R.Civ.P. 12(b)(2) & 12(b)(6) Motion to
Dismiss (“Motion to Dismiss” or
“Motion”). [#20]. The Parties consented to have
the undersigned Magistrate Judge preside over this action
fully for all purposes. See [#27]; 28 U.S.C. §
636(c); Fed.R.Civ.P. 73. Having considered the Motion, the
applicable case law, the entire docket, and having
entertained oral argument at the September 5, 2018 Motion
Hearing, the court DENIES the Motion to
Dismiss for the reasons stated herein.
court draws the following facts from the Amended Complaint
and presumes they are true for purposes of the instant
Motion. Plaintiffs Neil and Caroline Stewart (collectively,
“Plaintiffs” or the “Stewarts”) bring
this action against Defendants John West (“Mr.
West”) and Ms. Hart (collectively,
“Defendants”) in their individual capacities as
well as in their capacities as co-trustees of The Margaret E.
Hart Trust, Dated September 10, 2008
(“Trust”). See generally [#19]. The dispute
concerns a real estate transaction involving property located
in Avon, Colorado (the “Property”). See
[id. at ¶ 1]. Defendant West and his wife built
the Property in 2000, lived at the Property, and owned the
Property until about 2008 when they transferred ownership to
the Trust. See [id. at ¶¶ 6-9].
allege that the Trust listed the Property for sale in or
around 2016, and that Defendant Hart “traveled to
Colorado to help prepare the Property to be listed for sale,
which preparations included cleaning up the Property.”
[Id. at ¶ 12]. About 2017 the Stewarts sought
to purchase the Property. See [id. at
¶¶ 1, 2, 13]. On or about September 5, 2017,
Defendants signed the Property Disclosure regarding the
Property, see [#1-1], and indicated that they
“did not know” whether the Property had any
issues with moisture and/or water damage, roof leaks, roof
damage, hazardous and/or biohazardous materials, or other
environmental problems. See [#1-1; #19 at ¶
14]. The Stewarts hired a roofer to inspect the
Property's roof-the inspection revealed some repairs, but
the roofer could not determine whether the repairs were for
leakage or routine maintenance. See [id. at
¶ 16]. The Stewarts then inquired whether the roof had
ever leaked or had any other problems given that leakage
could have serious structural ramifications; Defendants
responded through their real estate agent that the roof
“never had any leaks or other problems.”
[Id. at ¶¶ 17-19]. An inspection of the
Property did not reveal any water damage or mold
contamination, though Plaintiffs allege they were unaware at
the time that the Inspector could not access the attic
because personal property obstructed the attic hatch.
See [id. at ¶ 20].
unaware of any defects with the Property, and in reliance on
Defendants' disclosures, the Stewarts purchased the
Property. See [id. at ¶¶ 21-22;
#1-2]. Ahead of closing Defendant Hart allegedly traveled to
the Property to pack Defendant West's belongings and
furniture and to clean the Property. [#19 at ¶ 24]. The
Stewarts closed on the Property on or around October 20,
2017. [Id. at ¶ 25]. But at some point,
following closing, Plaintiffs “discovered significant
mold contamination throughout the [Property], including in
the attic.” [Id. at ¶ 26]. Plaintiffs
further discovered an oscillating fan and roof vents in the
attic, and that the roof had dealt with leakage in the past,
prompting a roofing contractor to submit a proposal to
Defendant West for repairs needed to the roof. See
[id. at ¶¶ 26-28]. The Stewarts further
allege that Defendant West had dealt with roof issues in the
past. [Id. at 6].
then initiated this action asserting claims for fraudulent
nondisclosure against Defendants in their individual and
co-trustee capacities for allegedly concealing and failing to
disclose the nature and extent of the roof issues and for
breach of contract against Defendants in their capacities as
co-trustees for alleged breach of the Real Estate Contract
that obligated Defendants to “disclose to [the
Stewarts] any latent defects actually known by Seller.”
See [#19 at ¶ 29-43; #1-2 at 13]. On June 1,
2018, Ms. Hart answered the Amended Complaint in her capacity
as co-trustee of the Trust [#21], but moved to dismiss the
fraudulent nondisclosure claim against her in her individual
capacity. [#20]. She argues first that the court lacks
personal jurisdiction over her in her individual capacity
because she has no connection to Colorado; second, if the
court does have personal jurisdiction over her in her
individual capacity, she personally owed no duty to disclose
to Plaintiffs given her limited role as co-trustee.
[Id. at 4]. The Stewarts have since responded [#24],
Ms. Hart replied [#30], and the court entertained oral
argument on the Motion to Dismiss on September 5, 2018 [#38].
The Motion is now ripe for disposition.
12(b)(2) of the Federal Rules of Civil Procedure allows a
defendant to challenge the court's personal jurisdiction
over the named parties. Fed.R.Civ.P. 12(b)(2). Plaintiffs
bear the burden of demonstrating that the court has personal
jurisdiction over Ms. Hart. See Dudnikov v. Chalk &
Vermilion Fine Arts, 514 F.3d 1063, 1069 (10th Cir.
2008). When, as here, the district court decides a Rule
12(b)(2) motion to dismiss without holding an evidentiary
hearing, “the plaintiff need only make a prima facie
showing of personal jurisdiction to defeat the motion.”
AST Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d
1054, 1057 (10th Cir. 2008). “The plaintiff[s] may make
this prima facie showing by demonstrating, via affidavit or
other written materials, facts that if true would support
jurisdiction over the defendant.” OMI Holdings,
Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091
(10th Cir. 1998). The court's focus is upon Defendant
Hart's relationship with the District of Colorado and
this litigation; so long as it creates a substantial
connection” with this District, even a single act can
support jurisdiction. Leachman Cattle of Colorado, LLC v.
Am. Simmental Ass'n, 66 F.Supp.3d 1327, 1336 (D.
Colo. 2014). In considering whether Ms. Hart has sufficient
contacts with this District to support the court's
exercise of personal jurisdiction, the court must accept all
well pleaded facts, and must resolve any factual disputes in
favor of Plaintiffs. See Wenz v. Memery Crystal, 55
F.3d 1503, 1505 (10th Cir. 1995).
Rule 12(b)(6) a court may dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion
under Rule 12(b)(6), the court must “accept as true all
well-pleaded factual allegations . . . and view these
allegations in the light most favorable to the
plaintiff.” Casanova v. Ulibarri, 595 F.3d
1120, 1124 (10th Cir. 2010) (quoting Smith v. United
States, 561 F.3d 1090, 1098 (10th Cir. 2009)). A
plaintiff may not rely on mere labels or conclusions,
“and a formulaic recitation of the elements of a cause
of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Rather, “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, 129 S.Ct. 1937, 1949
(2009); see also Robbins v. Oklahoma, 519 F.3d 1242,
1247 (10th Cir. 2008) (explaining that plausibility refers
“to the scope of the allegations in a complaint,
” and that the allegations must be sufficient to nudge
a plaintiff's claim(s) “across the line from
conceivable to plausible.”). The court may also
consider materials beyond the complaint if the documents are
central to the plaintiff's claims, referred to in the
complaint, and if the parties do not dispute their
authenticity. See Cty. of Santa Fe, N.M. v. Public Serv.
Co. of N.M., 311 F.3d 1031, 1035 (10th Cir. 2002).
Ultimately, the court must “determine whether the
complaint sufficiently alleges facts supporting all the
elements necessary to establish an entitlement to relief
under the legal theory proposed.” Forest Guardians
v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
requirement that a court have personal jurisdiction flows
from the Due Process Clause. It represents a restriction on
judicial power not as a matter of sovereignty, but as a
matter of individual liberty.” Peay v. BellSouth
Med. Assistance Plan, 205 F.3d 1206, 1210 (10th Cir.
2000) (brackets, ellipses, and internal quotation marks
omitted). “To obtain personal jurisdiction over a
nonresident defendant in a diversity action, a plaintiff must
show that jurisdiction is legitimate under the laws of the
forum state and that the exercise of jurisdiction does not
offend the due process clause of the Fourteenth
Amendment.” Far W. Capital, Inc. v. Towne, 46
F.3d 1071, 1074 (10th Cir. 1995). “Colorado's
long-arm statute, Colo. Rev. Stat. § 13-1-124, extends
jurisdiction to the [United States] Constitution's full
extent. The personal jurisdiction analysis here is thus a
single due process inquiry.” Old Republic Ins. Co.
v. Cont'l Motors, Inc., 877 F.3d 895, 903 (10th Cir.
2017) (internal case citations omitted).
exercise jurisdiction in harmony with due process,
defendant must have minimum contacts with the forum state,
such that having to defend a lawsuit there would not offend
traditional notions of fair play and substantial
justice.” Shrader v. Biddinger, 633 F.3d 1235,
1239 (10th Cir. 2011) (brackets and internal quotation marks
omitted). The minimum contacts may give way to specific or
general jurisdiction. See Intercon, Inc. v. Bell Atl.
Internet Sols., Inc., 205 F.3d 1244, 1247 (10th Cir.
2000). General jurisdiction exists when the defendant's
contacts with the forum are “‘so continuous and
systematic as to render [it] essentially at home in the forum
State.'” Fireman's Fund Ins. Co. v. Thyssen
Min. Const. of Canada, Ltd., 703 F.3d 488, 493 (10th
Cir. 2012) (quoting Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915, 919 (2011)). Specific
jurisdiction exists when a defendant purposefully directs her
activities to residents of the forum, and the cause of action
arises out of those activities. See Melea, Ltd. v. Jawer
SA, 511 F.3d 1060, 1066 (10th Cir. 2007).
undisputed that the court does not have general jurisdiction
over Ms. Hart and, thus, I focus on specific jurisdiction. To
exercise specific jurisdiction over Ms. Hart Plaintiffs must
make a prima facie showing of Ms. Hart's contacts with
the forum that are more than just “random, fortuitous,
or attenuated”, such that she should “reasonably
anticipate being haled into court there.” Monge v.
RG Petro-Mach. (Grp.) Co. Ltd., 701 F.3d 598, 613 (10th
Cir. 2012). The court must therefore examine the
“quantity and quality” of Ms. Hart's contacts
with Colorado and determine whether a nexus exists between
those contacts and Plaintiffs' cause of action. See
Emp'rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618
F.3d 1153, 1160 (10th Cir. 2010).