United States District Court, D. Colorado
MCWHINNEY HOLDING COMPANY, LLLP, a Colorado Limited Liability Partnership, MCWHINNEY CENTERRA LIFESTYLE CENTER, LLC, a Colorado Limited Liability Company, and CENTERRA LIFESTYLE CENTER, LLC, a Delaware Limited Liability Company, Plaintiffs,
v.
G. DAN POAG, an individual; JOSHUA D. POAG, an individual; an individual acting as co-trustee of the Josh and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Josh and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Dan Poag 2004-GST Exempt Trust; TERRY W. McEWEN, an individual; POAG & McEWEN LIFESTYLE CENTERS - CENTERRA, LLC, a Delaware Limited Liability Company; POAG & McEWEN LIFESTYLE CENTERS, LLC, a Delaware Limited Liability Company; POAG LIFESTYLE CENTERS, LLC, a Delaware Limited Liability Company; POAG SHOPPING CENTERS, LLC, a Delaware Limited Liability Company; PM LIFESTYLE SHOPPING CENTERS, LLC, a Delaware Limited Liability Company; POAG BROTHERS, LLC, a Tennessee Limited Liability Company; JEREMY M. POAG, an individual acting as co-trustee of the Josh and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Josh and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Dan Poag 2004-GST Exempt Trust; D. MARK POAG, an individual acting as co-trustee of the Josh and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Chloee Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Josh and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Jeremy and Dan Poag 2004-GST Exempt Trust; an individual acting as co-trustee of the Mark and Dan Poag 2004-GST Exempt Trust; DOE INDIVIDUALS 1-10; DOE TRUSTS 11-30; and ROE CORPORATIONS 31-60; Defendants.
ORDER ON MOTION TO AMEND PLAINTIFFS' FIRST
AMENDED COMPLAINT
R.
BROOKE JACKSON, UNITED STATES DISTRICT JUDGE
Plaintiffs
move for leave to file a Second Amended Complaint
(“SAC”) in which it seeks to add five claims and
two individual defendants. ECF No. 129 (red-lined version of
the proposed SAC at ECF No. 129-2). The various existing
defendants and one proposed defendant filed opposition
briefs. ECF Nos. 133, 137, 138, 149, 169. The motion became
ripe for review upon the filing of plaintiffs' five reply
briefs. ECF Nos. 140, 172, 173, 174, 175. On review of the
motion and briefs, the Court GRANTS plaintiffs' motion in
part and DENIES it in part.
I.
BACKGROUND
Plaintiffs
and defendants have been in continuous litigation since 2011.
Because of the lengthy and factually intensive background of
this case, I will not repeat most of my previous background
discussions that I have covered in two previous orders.
See ECF Nos. 78, 106. Instead, I will primarily
focus on the events that have occurred since my most recent
order, ECF No. 106, dated September 28, 2018.
The
trial in the first phase of the state court litigation
(“Phase I”) occurred in June 2017 in the District
Court of Larimer County, Colorado. Following a 13-day bench
trial, Honorable Thomas R. French determined that Poag &
McEwen Lifestyle Centers - Centerra, LLC
(“P&M”) breached its contractually imposed
fiduciary duties owed to McWhinney Centerra Lifestyle Center,
LLC (“MCLC”) and to Centerra Lifestyle Center,
LLC (“CLC”) under the express terms of the
Operating Agreement. See Phase I Judgment, ECF No.
22-1 at 34-70. Judge French found P&M liable to MCLC for
$42, 006, 032.50. Id. at 69. The state court
reserved plaintiffs' alter ego claims for the second
phase of the state court litigation (“Phase II”).
In the
Phase II bench trial, held in the last week of November 2018,
Judge French heard evidence of whether Poag & McEwen
Lifestyle Centers, LLC (“PMLC”) and P&M were
alter egos. See Phase II Judgment, ECF No. 132. On
December 28, 2018 the court issued its opinion in which it
found that PMLC and P&M were separate entities and not
alter egos under Delaware law. Id. at 28. Phase II
is currently on appeal to the Colorado Court of Appeals.
Returning
to the case in this Court, I held a status conference on
February 26, 2019. At the parties' request, I agreed to
bifurcate the case in similar fashion as the state court
proceedings. On January 6, 2020 I will hear the fraudulent
inducement claims and other related claims. However, I stayed
plaintiffs' alter ego and fraudulent transfer claims
pending the appeal of Phase II and that decision's
potential collateral estoppel effect.
II.
STANDARD OF REVIEW
Fed. R.
Civ. P. 15(a)(2) instructs that leave to amend should be
freely granted when justice so requires. This Court freely
permits parties to amend their pleadings absent “a
showing of undue delay, undue prejudice to the opposing
party, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or futility of
amendment.” Frank v. U.S. West, Inc., 3 F.3d
1357, 1365 (10th Cir. 1993). In this case, defendants'
chief argument is that the proposed amendments would be
futile. The futility question is “functionally
equivalent to the question whether a complaint may be
dismissed for failure to state a claim.” Gohier v.
Enright, 186 F.3d 1216, 1218 (10th Cir. 1999).
To
properly state a claim, the complaint must contain
“enough facts to state a claim to relief that is
plausible on its face.” Ridge at Red Hawk, L.L.C.
v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007)). A plausible claim is a claim that
“allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While
the Court must accept the well-pleaded allegations of the
complaint as true and construe them in the light most
favorable to the plaintiff, Robbins v. Wilkie, 300
F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are
not entitled to be presumed true. Iqbal, 556 U.S. at
681. However, so long as the plaintiff offers sufficient
factual allegations such that the right to relief is raised
above the speculative level, he has met the threshold
pleading standard. See, e.g., Twombly, 550
U.S. at 556; Bryson v. Gonzales, 534 F.3d 1282, 1286
(10th Cir. 2008).
Plaintiffs'
motion for leave to amend is somewhat unique in that
plaintiffs argue the merits of their proposed claims. See
generally ECF No. 129 at 5-14. In turn, defendants treat
the motion as a Rule 12(b)(6) motion, attacking the proposed
claims as futile for failure to state a claim. Because most
of the claims are fully briefed, I too analyze the fully
briefed claims under the Rule 12(b)(6) standard. I now turn
to the proposed claims.
III.
ANALYSIS
A.
Aiding and Abetting Breach of Contractually Imposed
Fiduciary Duties against Josh, Dan, Terry, David, PMLC,
PMLSC, Chloee, Poag Brothers, and Trustee
defendants.
Plaintiffs'
proposed third claim for relief is the tort of aiding and
abetting a breach of contractually imposed fiduciary duties.
ECF No. 129-2 at 65. Plaintiffs argue that a “party is
liable for aiding and abetting if ‘the party whom the
defendant aids performs a wrongful act that causes an injury,
the defendant is generally aware of his role as part of an
overall illegal or tortious activity at the time that he
provides the assistance, and the defendant knowingly and
substantially assists the principal violation.'”
ECF No. 129 at 5 (quoting Holmes v. Young, 885 P.2d
305, 308 (Colo.App. 1994) (citing Restatement (Second) of
Torts § 876(b) (1977))). As evidenced by plaintiffs'
cited authority, plaintiffs treat this claim as a tort.
Consequently, defendants argue that the economic loss rule
bars this claim. I agree with defendants.
I have
already ruled that any post-contractual tort claims are
barred by the economic loss rule. ECF No. 106 at 28-35. The
wrongful conduct plaintiffs allege in this proposed claim
stems from the operating agreement. Stated another way,
plaintiffs have failed to allege a claim that “stem[s]
from a tort duty independent of the contract.” Van
Rees v. Unleaded Software, Inc., 373 P.3d 603, 605
(Colo. 2016).[1] This principle applies to the officers,
directors, and owners of the Poag and McEwen entities
because, “[w]hen the economic loss rule bars a claim
against a corporate entity, it may also bar claims against
that entity's officers and directors, even if the
officers and directors were not parties to the contract at
issue.” Former TCHR, LLC v. First Hand Mgmt.
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