198 Trust Agreement v. Caams, LLC, Civil Action No. 14-cv-01264-RM-KMT

CourtUnited States District Courts. 10th Circuit. United States District Court of Colorado
Writing for the CourtJudge Raymond P. Moore
Docket NumberCivil Action No. 14-cv-01264-RM-KMT
Decision Date30 March 2015

CAAMS, LLC, Defendant.

Civil Action No. 14-cv-01264-RM-KMT


March 30, 2015

Judge Raymond P. Moore


This matter concerns Plaintiff's, The 198 Trust Agreement, dated December 15, 2010, and any amendments thereto ("The 198 Trust") Complaint (ECF No. 1) against Defendant, CAAMS, LLC ("CAAMS") for conversion and civil theft. (ECF No. 1 ¶¶ 29-42.) At issue is a DeHavilland DHC-6-200 aircraft with a United States Registration Number of N226CS (the "Aircraft").

On June 10, 2014, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendant moved to dismiss the Complaint based upon its contention that Colorado's economic loss rule bars both of Plaintiff's claims. (ECF No. 10.) That motion is fully briefed. (ECF Nos. 10; 111; 12; 30; 30-1; 30-2; 30-3.)

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On February 6, 2015, the Court, sua sponte, ordered the parties to file cross briefs as to how, pursuant Rule 17 of the Federal Rules of Civil Procedure, Plaintiff is the real party in interest and has capacity to sue. (ECF No. 24.) The parties filed responsive briefs. (ECF Nos. 28; 31.)

On March 6, 2015, Plaintiff filed a motion ("March 6 Motion") to "amend the case caption to reflect Plaintiff's name as "The 198 Trust.'" (ECF No. 36 at 1.) Alternatively, Plaintiff moved the Court to "join as a plaintiff Plaintiff's trustee, 'The Bank of Utah, not in its individual capacity but solely as Owner Trustee of The 198 Trust Agreement dated December 15, 2010, and any amendments thereto'" (hereinafter "Owner Trustee") pursuant to Rule 17(a)(3) of the Federal Rules of Civil Procedure. (ECF No. 36 at 1.) Defendant filed a brief in response to Plaintiff's March 6 Motion. (ECF No. 38.) Defendant does not object to Plaintiff's request to change Plaintiff's name in the caption. (ECF No. 38 at 1.) Defendant opposes Plaintiff's March 6 Motion to join Owner Trustee as a plaintiff. (ECF No. 38 at 1-3.) Plaintiff filed a reply brief in support of its March 6 Motion. (ECF No. 44.)

For the following reasons, the Court (1) DISMISSES the Complaint (ECF No. 1); (2) DENIES Plaintiff's March 6 Motion (ECF No. 36); and (3) DENIES as MOOT Defendant's motion to dismiss (ECF No. 10).

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The following facts are taken from Plaintiff's Complaint (ECF No. 1). Plaintiff did not attach the trust agreement to the Complaint nor provide it to the Court. (See generally Dkt.)

Plaintiff is a "trust organized under the laws of Utah 'for the sole and exclusive benefit of Owner Trustee, Trustor and the Bank' (collectively, the 'Beneficiaries')." (ECF No. 1 ¶ 1.) Plaintiff was formed with the trustor's intent to "purchase and hold [the Aircraft], with title thereto to be held in name of the beneficiary, Owner Trustee, who is defined in The 198 Trust Agreement as the Bank of Utah. . . ." (ECF No. 1 ¶ 1.)

Plaintiff alleges "Defendant has taken intentional tortious actions, in the form of conversion and civil theft of the Aircraft, against Plaintiff and its beneficiaries. . . ." (ECF No. 1 ¶ 4.) Plaintiff alleges, however, that "Owner Trustee has been the owner of record and registered owner of the Aircraft as shown in the Federal Aviation Administration's Aircraft Registry." (ECF No. 1 ¶ 8.)

On December 29, 2010, Plaintiff leased the Aircraft to Rampart Aviation, LLC ("Rampart") pursuant to a six-year aircraft lease agreement. (ECF No. 1 ¶ 9.) On September 29, 2012, Rampart entered into an aircraft sublease agreement (the "Sublease") for the Aircraft with Defendant for a term of three months. (ECF No. 1 ¶ 10.) On October 10, 2012, Defendant, Aero Ruta Maya, S.A. ("ARMSA"), Rampart, Owner Trustee, and Zions Credit Corporation, N.A. ("Bank") entered into a sub-sublessee consent agreement. (ECF No. 1. ¶¶ 1, 14, 16.) Subsequently, Rampart and Defendant amended the Sublease to extend it. (ECF No. 1 ¶¶ 17, 18.)

"Since the expiration of the Sublease . . . Defendant has failed or refused to return the Aircraft to Rampart." (ECF No. 1 ¶ 21.)

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A. Real Party in Interest

Federal Rule of Civil Procedure 17(a)(1) requires that "[a]n action must be prosecuted in the name of the real party in interest." "[T]he real party in interest is the one who, under applicable substantive law, has the legal right to bring suit." Fed. Deposit Ins. Corp. v. Geldermann Inc., 975 F.2d 695, 698 (10th Cir. 1992) (citation omitted). The Court "may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action." Fed. R. Civ. P. 17(a)(3). The Court's decision whether to join or substitute a party as a "real party in interest" under Rule 17(a) is reviewed for an abuse of discretion. Scheufler v. Gen. Host Corp., 126 F.3d 1261, 1270 (10th Cir. 1997) (citations omitted).

B. Capacity to Sue

Federal Rule of Civil Procedure 17(b) provides that the

[c]apacity to sue or be sued is determined as follows:

(1) for an individual who is not acting in a representative capacity, by the law of the individual's domicile;

(2) for a corporation, by the law under which it was organized; and

(3) for all other parties, by the law of the state where the court is located. . . . Fed. R. Civ. P. 17(b).

C. Rule 12(b)(6) Motion

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ.

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P. 8(a)(2). Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must be dismissed if it does not plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted).

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, . . . a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. . . ." Id. at 555 (citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. A "plaintiff must 'nudge [] [his] claims across the line from conceivable to plausible' in order to survive a motion to dismiss. . . . Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis in original, internal citation and quotation omitted).

The Tenth Circuit Court of Appeals has held "that plausibility refers to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs have not nudged their claims across the line from conceivable to plausible." Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012) (internal quotation and citation omitted). The Tenth Circuit has further noted "that the nature and specificity of the allegations required to state a plausible claim

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will vary based on context." Id. (Internal quotation and citation omitted.) Thus, the Tenth Circuit "concluded the Twombly/Iqbal standard is 'a middle ground between heightened fact pleading, which is expressly rejected, and allowing complaints that are no more than labels and conclusions or a formulaic recitation of the elements of a cause of action, which the [Supreme C]ourt stated will not do.'" Id. (Citation omitted.)

For purposes of a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all well-pled factual allegations in the complaint as true and resolve all reasonable inferences in a plaintiff's favor. Morse v. Regents of the Univ. of Colo., 154 F.3d 1124, 1126-27 (10th Cir. 1998) (citation omitted); Seamons v. Snow, 84 F.3d 1226, 1231-32 (10th Cir. 1996) (citations omitted). However, "when legal conclusions are involved in the complaint 'the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to [those] conclusions. . . .'" Khalik, 671 F.3d at 1190 (quoting Iqbal, 556 U.S. at 678). "Accordingly, in examining a complaint under Rule 12(b)(6), [the court] will disregard conclusory statements and look only to whether the remaining, factual allegations plausibly suggest the defendant is liable." Id.


A. Whether Plaintiff Has the Capacity to Sue

Under Rule 17(b), "capacity" refers to a "party's personal right to litigate in a federal court." Esposito v. United States, 368 F.3d 1271, 1273 (10th Cir. 2004) (internal quotation and citation omitted). Because this matter involves a suit brought by a trust (ECF No. 1 ¶ 1) in the United States District Court for the District of Colorado, capacity to sue is determined by Colorado substantive law. Fed. R. Civ. P. 17(b)(3). In Colorado, "'[c]apacity' refers to a party's personal right to come into court. It deals with the personal qualifications of a party to litigate,

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and it typically is determined without regard to the particular claim or defense being asserted." SMLL, L.L.C. v. Peak Nat'l Bank, 111 P.3d 563, 566 (Colo. App. 2005) (citation omitted).

Plaintiff fails to identify any source of law providing it with the capacity to sue. (See generally ECF No. 28.) Under...

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