Opinion
Civil Action 1:21-cv-01024-RM-SKC
02-04-2022
CHADWICK JORDAN, Plaintiff, v. WF HOLDINGS, LLC, et al., Defendants.
RECOMMENDATION RE: MOTION TO DISMISS [#25]
S. KATO CREWS, U.S. MAGISTRATE JUDGE
In January 2018, Plaintiff Chadwick Jordan's business entity, C. Jordan, LLC, entered a contract with Huadian Power International, Co., to act as an accounts receivable agent for Huadian's customers in Canada and the United States. [Dkt. 1 at p.4; Dkt. 1-2 at p.63.] According to their agreement, the LLC would collect funds into its Wells Fargo bank account and then remit the funds according to Huadian's further instructions. [Dkt. 1-2 at pp.63-64.] Huadian was then to pay the LLC a 5% commission for each completed transaction. [Id.]
The Court uses “[Dkt. .]” to refer to specific docket entries in CM/ECF.
In February, Plaintiff deposited a check in the LLC's bank account in the amount of $93,922.37 written from the Royal Bank of Canada. A Huadian representative instructed Plaintiff to transfer $88,869.77 to a CitiBank account and to keep $4,696.12 as commission. [Id. at p.48.] Wells Fargo, however, did not permit Plaintiff to complete the wire transfer, and on April 10, 2018, it notified the LLC that RBC Royal Bank was requesting reimbursement because the deposited check was altered. [Id. at p.3.] Wells Fargo ultimately withdrew the $93,922.37 from the LLC's bank account. [Dkt. 1 at p.4.]
Plaintiff initiated this action on behalf of himself individually and asserts claims against Defendants for breach of fiduciary duty, breach of contract, and intentional interference with a prospective business advantage. [Id. at pp.5-6.].Defendants filed a Motion to Dismiss arguing Plaintiff has not established standing to bring these claims, and even if he has standing, he has failed to allege anything other than legal conclusions masquerading as facts. [Dkt. 20.] The Court has reviewed the Complaint, the Motion and related briefing, and the relevant law. No. hearing is necessary. For the following reasons, the Court RECOMMENDS Defendants' Motion be GRANTED.
Plaintiff proceeds pro se; thus, the Court liberally construes his pleadings. See Haines v. Kerner, 404 U.S. 519, 520-21 (1972). But the Court may not “supply additional factual allegations to round out a plaintiff's complaint.” Whitney v. State of New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997). Nor may a plaintiff defeat a motion to dismiss by alluding to facts that have not been alleged, or by suggesting matters that were not pleaded. Associated Gen. Contractors of Cal. Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Pro se plaintiffs must “follow the same rules of procedure that govern other litigants.” Nielsen v. Price, 17 F.3d 1276, 1277 (10th Cir. 1994).
A. Standard of Review
Federal Courts are courts of limited jurisdiction empowered by Article III of the United States Constitution to hear only certain “cases and “controversies.” Susan B. Anthony List v. Driehaus, 573 U.S. 149, 157-58 (2014). As a result, courts “are duty bound to examine facts and law in every lawsuit before them to ensure that they possess subject matter jurisdiction.” The Wilderness Soc. V. Kane Cty., Utah, 632 F.3d 1162, 1179 n.3 (10th Cir. 2011) (Gorsuch, J., concurring). Courts have an independent obligation to determine whether subject matter jurisdiction exists, even in the absence of a challenge from any party. 1mage Software, Inc. v. Reynonlds & Reynolds, Co., 489 F.3d 1044, 1048 (10th Cir. 2006) (citing Arbaugh v. Y & H Corp., 549 U.S. 500 (2006)).
B. Analysis
In their Motion, Defendants argue Plaintiff lacks standing to bring this case because his claims are based on injuries suffered by the LLC, as opposed to Plaintiff personally. [Dkt. 20 at p.8.] In his Response, Plaintiff effectively concedes the point and merely argues dismissal is a drastic measure not appropriate at this early stage of the case. [Dkt. 23 at pp.2-3.]
A plaintiff bears the burden of establishing Article III standing for each claim. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006); Bronson v. Swensen, 500 F.3d 1099, 1106 (10th Cir. 2007). “Standing under Article III of the Constitution requires that an injury be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010) (citing Horne v. Flores, 557 U.S. 443, 445 (2009)); Protocols, LLC v. Leavitt, 549 F.3d 1294, 1298 (10th Cir. 2008). For an injury to be “particularized, ” it “must affect the plaintiff in a personal and individual way.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 650 n. 1 (1992).
A review of the Complaint and its attachments clearly shows the LLC owned the Wells Fargo bank account, and the contract regarding the accounts receivable position was between Huadian and the LLC. The Complaint does not allege Plaintiff was individually damaged, that he personally owned the Wells Fargo account, or that he was personally paid or entitled to commission payments from Huadian based on deposits into the LLC's Wells Fargo account. Absent any allegations or demonstration Plaintiff suffered an individualized injury in fact, Plaintiff does not have standing to pursue his claims. See Lundstedt v. People's United Bank, No. 3:14-cv-01479 (JAM), 2015 WL 540988, at *2 (D. Conn. Feb. 10, 2015) (explaining that “a person who transfers his or her assets to an LLC has no standing to seek damages when those assets - now belonging solely to the LLC - are harmed” and dismissing the plaintiff's claims for lack of standing because the alleged injury was “an injury to an LLC, and not an injury to plaintiff”); see also Centra, Inc. v. Chandler Ins. Co., Ltd., 229 F.3d 1162 (2000) (“It is well established that, where the business or property allegedly interfered with by forbidden practices is that being done and carried on by a corporation, it is that corporation alone. . .who has a right of recovery.”) (quoting Martens v. Barrett, 245 F.2d 844, 846 (5th Cir.1957)).
Written documents attached as exhibits to a complaint are considered part of the complaint for consideration in a Rule 12(b)(6) motion. Industrial Constructors Corp. v. United States Bureau of Reclamation, 15 F.3d 963, 964-65 (10th Cir. 1994).
Each claim asserted in the Complaint belongs to the LLC.4 Thus, the Court RECOMMENDS Defendants' Motion to Dismiss [Dkt. 20] be GRANTED and this case be dismissed without prejudice.5 Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216 (10th Cir. 2006) (standing is a jurisdictional mandate and for lack of standing is inappropriate and should be without prejudice).
The parties have 14 days after service of this recommendation to serve and file any written objections to obtain reconsideration by the District Judge to whom this case is assigned. Fed.R.Civ.P. 72(b). The party filing objections must specifically identify those findings or recommendations to which the objections are made. The District Court need not consider frivolous, conclusive, or general objections. A party's failure to file such written objections to proposed findings and recommendations contained in this report may bar the party from a de novo determination by the District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676-83 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the proposed findings and recommendations within 14 days after being served with a copy may bar the aggrieved party from appealing the factual findings and legal conclusions of the Magistrate Judge that are accepted or adopted by the District Court. Thomas v Arn, 474 U.S. 140, 155 (1985); Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991).