Dieter Huckestein v. Timothy L. Blixseth et al, No. 2:2010cv04228 - Document 25 (C.D. Cal. 2011)
Court Description: ORDER DENYING 18 Motion to Dismiss by Judge Dean D. Pregerson. For the foregoing reasons, the court DENIES Defendants Motion to Dismiss. (See Order for Details). (sch)
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Dieter Huckestein v. Timothy L. Blixseth et al Doc. 25 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 DIETER HUCKESTEIN, 12 Plaintiff, 13 14 15 v. TIMOTHY L. BLIXSETH and BLIXSETH GROUP OF WASHINGTON LLC, limited liability company, 16 17 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 10-04228 DDP (PJWx) ORDER DENYING MOTION TO DISMISS [Motion filed on November 3, 2010] 18 Presently before the Court is Timothy Blixseth and Blixseth 19 Group of Washington, LLC’s (collectively “Defendants”) Motion to 20 Dismiss. 21 Huckstein (“Huckstein”). 22 papers, considering the arguments therein, and hearing oral 23 argument, the court DENIES the motion. 24 I. 25 Defendants motion is opposed by Plaintiff Dieter After reviewing the parties’ moving BACKGROUND On or about December 21, 2005,Huckstein and World Cup LLC 26 entered into an employment agreement (“Employment Agreement”) in 27 which Huckstein became the President and Chief Executive Officer of 28 World Cup LLC. (First Amended Complaint “FAC” ¶ 7.) Pursuant to Dockets.Justia.com 1 the terms of the Employment Agreement, Huckstein was to be employed 2 in such capacity for a five-year term starting February 15, 2006. 3 (Id. ¶ 8.) 4 Agreement included certain pledges of property and indemnity and 5 also contained provisions in the case of termination. 6 Important for purposes of this lawsuit, the Employment Section 8.2 of the Employment Agreement provided that “[a]s 7 compensation for entering into this Agreement, [World Club] agrees 8 to cause a Lot within the Yellowstone Mountain Club Subdivision, 9 Big Sky, Montana, to be conveyed to Huckestein.” (Id. ¶ 10.) 10 Section 15.1 of the Employment Agreement provided that 11 Huckestein may terminate the agreement for any reason upon ninety 12 days notice and receive no further compensation following the 13 ninety day period. 14 (Id. ¶ 11.) Section 15.2 of the Employment Agreement provided that World 15 Club may terminate the agreement “for any reason upon written 16 notice to Huckestein and the payment to Huckestein of the Base 17 Compensation owning [sic] under the remaining terms of this 18 Agreement, or thirty (30) months worth of Base Compensation 19 payments, whichever is less.” (Id. ¶ 12.) 20 Section 15.3 of the Employment Agreement provided that 21 Huckestein may also elect to terminate the Agreement upon ninety 22 days written notice and be compensated as set forth in Paragraph 23 15.2if any of the following conditions or events occur: 24 (1) Timothy L. Blixseth no longer Manager of World Club or 25 Yellowstone Mountain Club, LLC,(2) Timothy L. Blixseth no longer 26 controls at least fifty percent (%50) of World Club or Yellowstone 27 Mountain Club, LLC, or (3) World Club is in material breach of the 28 2 1 Agreement and has failed to cure the breach within a reasonable 2 time of written notice. 3 (Id. ¶ 13.) Section 17 of the Employment Agreement set out an indemnity 4 agreement that stated that World Club would “indemnify Huckestein 5 in his capacity as an employee and agent of [World Club], and hold 6 [Huckestein] harmless from any and all cost, expense or liability, 7 of any nature, arising out of or relating to any acts, omissions or 8 decisions made by him on behalf or in the course of performing 9 services for [World Club] . . . .” (Id. ¶ 14.) Section 17 also 10 stated that Huckestein would be “named insured under all liability 11 insurance policies now in force or hereafter obtained covering any 12 officer or director of [World Club] in his capacity as an officer 13 or director.” 14 (Id.) Section 19 of the Employment Agreement states that Huckestein 15 and World Club agree to mediate any dispute under the Agreement. 16 Section 22 states that the Employment Agreement is to be governed 17 by the laws of the state of Washington. 18 (Id. ¶¶ 15-16.) On February 16, 2006, Blixseth and Huckestein entered into an 19 operating agreement for Yellowstone Club World, LLC (“YCW”). 20 ¶ 17.) 21 ownership interest, and Huckestein became a member of YCW with a 22 ten percent ownership interest. 23 World Club and Huckestein entered into a First Amendment to the 24 Employment Agreement, whereby YCW was substituted as a party in 25 place of World Club. 26 (Id. Blixseth became a member of YCW, with a ninety percent (Id. ¶¶ 17-18.) In September, (Id. ¶ 22.) In late 2006, Blixseth and his wife filed for dissolution of 27 their marriage in Superior Court in California, and in June 2008 28 the couple executed a Marital Settlement Agreement (“MSA”) whereby 3 1 Blixseth’s ninety percent interest in YCW was transferred, or would 2 soon be transferred, to his wife. 3 terminated Blixseth’s management of YCW and stated that: 4 (Id. ¶ 24.) The MSA also [Blixseth] will assume responsibility for the employees of YCW and relieve [Edra Blixseth] of future obligations with regard thereto, other than the obligation to provide Dieter Huckestein with either a lot at the Yellowstone Club or the payment he is due in lieu thereof. 5 6 7 (Id. ¶ 26.) In July 2008, Huckestein notified Blixseth of 8 his resignation, and he specifically invoked Section 15.3 of 9 the Employment Agreement in so doing. (Id. ¶¶ 28-29.) In 10 September 2008, Blixseth Group (or “BGW”) assumed all of the 11 obligations Blixseth owed to the YCW employees and 12 Huckestein. (Id. ¶ 33.) 13 In March 2009, Edra Blixseth filed a petition for 14 bankruptcy under Chapter 11, and a Bankruptcy Court appointed 15 a Trustee for the YCW bankrupt estate. (Id. ¶¶ 41-42.) In 16 November 2009, Huckestein filed a proof of claim against YCW, 17 seeking 4.2 million for the unpaid Base Compensation and Lot 18 under the Employment Agreement. In turn, the Trustee of the 19 YCW estate asserted claims against Huckestein. Ultimately, 20 Huckestein and YCW settled and reached a mutual agreement 21 that was approved by the bankruptcy court. (Id. ¶¶ 44-47.) 22 That settlement included costs that were charged to 23 Huckestein for acts he performed while employed by YCW. (Id. 24 ¶ 48.) 25 Now, Huckestein brings suit against Blixseth and BGW. 26 Huckestein alleges five causes of action. The first four 27 claims are based on the Employment Agreement and are 28 4 1 contractual. The fifth and final claim is against Blixseth 2 alone as the alter ego of YCW. 3 II. (Id.) LEGAL STANDARD 4 A. 5 Rule 8 of the Federal Rules of Civil Procedure “requires Rule 12(b)(6) 6 more than labels and conclusions, and a formulaic recitation 7 of the elements of a cause of action will not do . . . 8 Factual allegations must be enough to raise a right to relief 9 above the speculative level.” Bell Atlantic Corp. v. 10 Twombly, 550 U.S. 544, 555 (2007). 11 12(b)(6) motion to dismiss for failure to state a claim, “all 12 allegations of material fact are accepted as true and should 13 be construed in the light most favorable to the plaintiff.” 14 Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 15 When considering a A court need not accept as true conclusory allegations 16 or allegations stating a legal conclusion. 17 Sec. Litig., 89 F.3d 1399, 1403 (9th Cir. 1996); Iqbal v. 18 Ashcroft, 129 S.Ct. 1937, 1940-41 (2009) (“mere conclusions[] 19 are not entitled to the assumption of truth.”). 20 properly dismisses a complaint on a Rule 12(b)(6) motion 21 based upon the “lack of a cognizable legal theory” or “the 22 absence of sufficient facts alleged under the cognizable 23 legal theory.” 24 696, 699 (9th Cir. 1990). 25 “plausible grounds to infer” that their claims rise “above 26 the speculative level.” 27 U.S. 544, 127 S. Ct. 1955, 1965 (2007). 28 plaintiffs’ obligation requires more than “labels and In re Stac Elecs. A court Balistreri v. Pacifica Police Dep’t, 901 F.2d The plaintiffs must allege Bell Atlantic Corp. v. Twombly, 550 5 That is, the 1 conclusions” or a “formulaic recitation of the elements of a 2 cause of action.” 3 Id. at 1964-65. “Generally, a district court may not consider any 4 material beyond the pleadings in ruling on a Rule 12(b)(6) 5 motion.” 6 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). 7 which is properly submitted as part of the complaint may be 8 considered.” 9 III. DISCUSSION 10 Hal Roach Studios, Inc. v. Richard Feiner & Co., “However, material Id. Defendants seek to dismiss Huckestein’s contractual 11 claims on the grounds that (1) Defendants are not parties to 12 the Employment Agreement; (2) Huckestein is barred from 13 raising them by res judicata; and (3) Huckestein’s alter ego 14 claim is the property of the bankruptcy trustee. 15 response, Huckestein counters (1) that Defendants expressly 16 assumed the obligations in the Employment Agreement, and are 17 therefore the proper party for enforcement of that agreement; 18 (2) res judicata does not apply because the earlier 19 settlement involved different parties; and (3) his alter ego 20 claim is not the property of the bankruptcy estate. (Pl’s 21 Opp’n 2:21-27-3:1-5.) 22 In In support of their various arguments, both parties rely 23 on extrinsic evidence that goes beyond the pleadings. 24 general, a court does not look beyond the pleadings when 25 considering a motion to dismiss. 26 250 F.3d 668, 690 (9th Cir. 2001) (holding that the district 27 court erred in granting a motion to dismiss by relying on 28 extrinsic evidence and by taking judicial notice of disputed 6 In Lee v. City of Los Angeles, 1 matters of fact in support of its ruling). A court may take 2 judicial notice of “matters of public record” without 3 converting a motion to dismiss into a motion for summary 4 judgment. 5 (9th Cir. 1986). 6 a fact that is “subject to reasonable dispute.” 7 Evid. 201(b). 8 dismiss would require the court to resolve facts that are 9 subject to reasonable dispute, and Plaintiff has alleged MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 But a court may not take judicial notice of Fed. R. Here, resolution of Defendants’ motion to 10 “plausible grounds to infer” that his claims rise “above the 11 speculative level.” 12 dismissal of Plaintiff’s complaint is not appropriate. 13 IV. 14 15 Therefore, the court concludes that CONCLUSION For the foregoing reasons, the court DENIES Defendants’ Motion to Dismiss. 16 17 18 19 IT IS SO ORDERED. 20 21 22 Dated: January 19, 2011 DEAN D. PREGERSON United States District Judge 23 24 25 26 27 28 7
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