Bury v. NCS Power Inc.,et al, No. 3:2012cv05641 - Document 53 (W.D. Wash. 2012)
Court Description: ORDER granting in part and denying in part 37 Motion; granting in part and denying in part 43 Motion to Dismiss for Failure to State a Claim and granting in part and denying in part 25 Motion to Dismiss for Failure to State a Claim signed by Judge Benjamin H Settle. Bury shall file an amended complaint no later than 11/16/12. Joyce Chandler and Leanne Erdelbrock are terminated. (MET)
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Bury v. NCS Power Inc.,et al Doc. 53 1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 ROBERT F. BURY, 9 Plaintiff, 10 v. 11 NCS POWER, INC., et al., 12 Defendants. CASE NO. C12-5641 BHS ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS AND GRANTING PLAINTIFF LEAVE TO AMEND 13 14 This matter comes before the Court on Defendants Douglas and Joyce Chandler’s 15 (“Chandlers”) motion to dismiss (Dkt. 25), Defendant Leanne Erdelbrock’s 16 (“Erdelbrock”) motion to dismiss (Dkt. 37), and Defendant Lumeria Research, Inc.’s 17 (“Lumeria”) motion to dismiss (Dkt. 43). The Court has considered the pleadings filed in 18 support of and in opposition to the motions and the remainder of the file and hereby 19 grants in part and denies in part the motions for the reasons stated herein. I. PROCEDURAL HISTORY 20 21 On July 19, 2012, Plaintiff Robert Bury (“Bury”) filed a complaint against 22 numerous defendants. Dkt. 1. On August 24, 2012, Bury filed an amended complaint ORDER - 1 Dockets.Justia.com 1 (“FAC”) after numerous defendants filed motions to dismiss his original complaint. Dkt. 2 19. In the amended complaint, Bury asserts breach of contract, violation of RCW 3 49.52.070, successor liability/alter ego, and unjust enrichment/quantum meruit. Id. 4 On August 31, 2012, the Chandlers filed a motion to dismiss. Dkt. 25. On 5 September 11, 2012, Bury responded. Dkt. 29. On September 28, 2012, the Chandlers 6 replied. Dkt. 45. 7 On September 20, 2012, Erdelbrock filed a motion to dismiss. Dkt. 37. On 8 October 8, 2012, Bury responded. Dkt. 46. 9 On September 24, 2012, Lumeria filed a motion to dismiss. Dkt. 43. On October 10 8, 2012, Bury responded. Dkt. 47. 11 II. FACTUAL BACKGROUND 12 On June 1, 2011, Bury signed an Employment Agreement (“Agreement”) to be 13 NCS Power, Inc.’s (“NCS”) CEO with an annual compensation of $200,000. FAC, ¶ 8. 14 Lance Chandler was the majority shareholder of NCS. Id., ¶ 3. Doug Chandler was 15 Chairman of the Board of Directors of NCS. Id., ¶ 25. Bury alleges that he worked for 16 NCS for over a year and that NCS did not pay him any wages. Id. ¶ 11. Bury also 17 alleges that Lance and Douglas Chandler wrongfully diverted NCS’s funds to other 18 corporations in which they were officers. Id. ¶¶ 22–40. 19 III. DISCUSSION 20 A. Standard 21 Motions to dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil 22 Procedure may be based on either the lack of a cognizable legal theory or the absence of ORDER - 2 1 sufficient facts alleged under such a theory. Balistreri v. Pacifica Police Department, 2 901 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the 3 complaint is construed in the plaintiff's favor. Keniston v. Roberts, 717 F.2d 1295, 1301 4 (9th Cir. 1983). To survive a motion to dismiss, the complaint does not require detailed 5 factual allegations but must provide the grounds for entitlement to relief and not merely a 6 “formulaic recitation” of the elements of a cause of action. Bell Atlantic Corp. v. 7 Twombly, 127 S. Ct. 1955, 1965 (2007). Plaintiffs must allege “enough facts to state a 8 claim to relief that is plausible on its face.” Id. at 1974. 9 In the event the court finds that dismissal is warranted, the court should grant the 10 plaintiff leave to amend unless amendment would be futile. Eminence Capital, LLC v. 11 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 12 B. Mrs. Chandler and Erdelbrock 13 Mrs. Chandler and Erdelbrock move to dismiss Bury’s claims against them 14 because their only involvement is this matter is their marriages to the alleged wrongdoers. 15 Bury fails to cite any legal authority for the proposition that an individual’s spouse is 16 personally liable for the alleged wrongs of the individual. Moreover, no amendment can 17 cure the lack of a cognizable claim against Mrs. Chandler or Erdelbrock. Therefore, the 18 Court grants Mrs. Chandlers (Dkt. 25) and Erdelbrock’s (Dkt. 37) motions to dismiss and 19 dismisses Bury’s claims with prejudice. 20 C. Marital Community 21 In Washington, the community is liable for the tort of a member spouse where 22 “‘the act constituting the wrong either (1) results or is intended to result in a benefit to the ORDER - 3 1 community or (2) is committed in the prosecution of the business of the community.’” 2 Clayton v. Wilson, 168 Wn.2d 57, 63 (2010) (quoting LaFramboise v. Schmidt, 42 Wn.2d 3 198, 200 (1953)). 4 In this case, Bury has alleged a basis for individual liability against Douglas 5 Chandler and the estate of Lance Chandler. FAC, ¶¶ 22–40. Although Erdelbrock argues 6 that Bury has failed to allege that Lance Chandler had check writing authority at NCS, 7 Bury alleges that “Lance Chandler advised the employees, at one time, that he had 8 procured a party to purchase $2,000,000 of stock shares of NCS and he would pay all 9 delinquent wages from the sales funds.” Id. ¶ 28. Bury has also alleged that Douglas and 10 Lance Chandler’s wrongful acts were committed with the intent to benefit their respective 11 marital communities. Id. ¶¶ 3–4. Therefore, Bury has alleged sufficient facts to state a 12 claim for relief and the Court denies the motions to dismiss the marital communities. 13 D. Successor Liability 14 Bury asserts a claim against Lumeria under the title “Successor/Alter Ego 15 Liability.” FAC at 8 (“Third Claim for Relief”). Bury explicitly states that Defendant 16 Allyn Group was an alter ego of NCS (FAC, ¶ 44) and that Lumeria was a successor in 17 interest to NCS (FAC, ¶ 46). To the extent that Bury asserts a claim that Lumeria is an 18 alter ego, Bury has failed to explicitly allege this theory. Moreover, the alter ego theory 19 is cognizable only between a corporation and its shareholders, not a corporation and a 20 corporation. Morgan v. Burks, 93 Wn.2d 580, 585 (1980). Therefore, the Court grants 21 Lumeria’s motion on this issue and dismisses Bury’s alter ego claim with prejudice. 22 ORDER - 4 1 With regard to successor liability, Bury asserts two theories for successor liability: 2 continuation of ownership and a fraudulent effort to avoid liabilities. Dkt. 47 at 6–7. 3 Reading the complaint in the light most favorable to Bury, he has alleged sufficient facts 4 to state a claim under either theory. Therefore, the Court denies Lumeria’s motion to 5 dismiss this cause of action. 6 E. Unjust Enrichment and Quantum Meruit 7 Unjust enrichment and quantum meruit are based on the notion of implied 8 contracts. See Young v. Young, 164 Wn.2d 477, 483–487 (2008). In this case, Bury 9 claim is based on the Agreement, an actual contract not an implied contract. Therefore, 10 the Court grants the motions to dismiss this claim. The Court dismisses with prejudice Bury’s claim against the Chandlers and 11 12 Erdelbrock because any amendment would be futile. The Court, however, is unable to find that any amendment would be futile against 13 14 NCS and Lumeria because Bury alleges that he worked for NCS for seven day after the 15 Agreement expired. Therefore, the Court grants Bury leave to amend this claim. 16 F. Motion to Strike 17 Bury references a prior state court action against NCS for unpaid wages. FAC, ¶ 18 39. The Chandlers move to strike this paragraph 39 because it is an immaterial matter. 19 The Court agrees. Therefore, the Court grants the Chandlers’ motion to strike. IV. ORDER 20 21 Therefore, it is hereby ORDERED that the Chandlers’ motion to dismiss (Dkt. 22 25), Erdelbrock’s motion to dismiss (Dkt. 37), and Lumeria’s motion to dismiss (Dkt. 43) ORDER - 5 1 are GRANTED in part and DENIED in part as stated herein. The Clerk is directed to 2 terminate Mrs. Chandler and Erdelbrock. Bury shall file an amended complaint 3 consistent with this opinion no later than November 16, 2012. 4 Dated this 1st day of November, 2012. A 5 6 BENJAMIN H. SETTLE United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ORDER - 6
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