Allen v. Campbell
| Decision Date | 23 November 2020 |
| Docket Number | Case No. 4:20-cv-00218-DCN |
| Parties | MICHAEL ALLEN, an individual; CAMP BENCH HOLDINGS, LLC, an Idaho limited liability company; CAMP BENCH RIVER HOLDING, LLC, an Idaho limited liability company; CAMPBELL FARMS, INC., an Idaho corporation, Plaintiffs, v. NEIL CAMPBELL, an individual, Defendant. |
| Court | U.S. District Court — District of Idaho |
Pending before the Court are Defendant Neil Campbell's Motion to File a Sur-Reply (Dkt. 33) and second Motion to Dismiss (Dkt. 35). Having reviewed the record and briefs, the Court finds that the facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding further delay, and because the Court finds that the decisional process would not be significantly aided by oral argument, the Court will decide the Motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(1)(B). Upon review, and for the reasons set forth below, the Court GRANTS the Motion to File a Sur-Reply and DENIES the second Motion to Dismiss.
Having secured a declaratory judgment in state court that an enforceable contract exists (the "Contract"), Plaintiffs Michael Allen and the business entity Plaintiffs listed in this Order's caption ("the Entities") filed their Complaint before this Court. Dkt. 1. Plaintiffs allege breach of contract and seek an order of specific performance, other equitable relief, and/or damages. Id. at 10-11. The Contract Plaintiffs allege Campbell has violated provides for Campbell to transfer his interest in the Entities in exchange for certain real property and $85,000. Id. ¶ 17. The Contract also calls for Campbell's release from any obligations relating to the Entities.1 Id. The state court acknowledged the language of the Contract as follows:
Plaintiffs allege they were prepared to fulfill their end of the bargain only to receive a refusal on Campbell's part to perform. See id. ¶¶ 19-31. They go on to allege that they "tendered performance to Campbell—proposing an escrow agreement to accomplish thetransfer needed to (1) ensure all parties honor their obligations and (2) satisfy the title company assisting with the financing transaction that will satisfy the existing loans with the Bank." Id. ¶ 26. Plaintiffs continue their allegations, stating that "Campbell responded, through counsel . . . , that 'Your client Allen has not and cannot perform the requirements of the agreement'" and that "'Campbell will not be signing the documents attached to your email.'" Id. ¶¶ 30-31.
On May 13, 2020, Plaintiffs filed an Emergency Motion for Permanent Injunction. Dkt. 5. The Court did not hold an expedited hearing because Allen filed a Motion to Dismiss for lack of diversity jurisdiction (Dkt. 14), which appeared plausible on its face and gave the Court serious concerns as to its jurisdiction over this case. After thorough review and a hearing on the matter, however, the Court ultimately denied this first Motion to Dismiss. Dkt. 29.
The Court thereafter ordered Campbell to respond to Plaintiffs' Emergency Motion for an Injunction,2 and has set a hearing for the same. Campbell filed his response (Dkt. 31), and Plaintiffs replied (Dkt. 32). As part of their Reply, Plaintiffs disclosed for the first time that a bank was taking the initial steps of foreclosure on one of the Entities' loans. Id. at 3. This prompted Campbell to move the Court for leave to file a sur-reply. Dkt. 33.Campbell also filed the pending second Motion to Dismiss. Dkt. 35. In the Motion to Dismiss, Campbell argues that the Entities lack standing and should be dismissed. He also argues that the Complaint should be dismissed for failure to state a claim upon which relief may be granted.
Plaintiffs responded to both motions. They first objected to Campbell's request to file a sur-reply. Dkt. 34. They then disputed Campbell's bases for dismissal. Dkt. 36. Campbell replied on the issue of dismissal. Dkt. 37. Both motions are now ripe.
The Court first addresses the two issues in the Motion to Dismiss: standing and failure to state a claim upon which relief may be granted. Then, having explained why the Court will not dismiss this case, the Court succinctly addresses the issue of a sur-reply.
Campbell's first contention is that the Entities lack standing and are not entitled to seek relief under 28 U.S.C. § 2202. That statute provides, "Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment." Id. Campbell claims that the Entities Dkt. 35-1, at 8. Campbell broadly concludes that none of the elements ofstanding are met; however, all his arguments focus solely on the injury-in-fact element of standing.3 Accordingly, the Court directs its focus to that element.
Article III of the United States Constitution constrains the judicial power of federal courts to "cases" and "controversies." The doctrine of standing is rooted in the traditional understanding of what a case or controversy is under Article III. Town of Chester, N.Y. v. Laroe Estates, Inc., 137 S. Ct. 1645, 1650 (2017). As such, federal courts have an obligation to determine that the litigants before them have Article III standing. Frank v. Gaos, 139 S. Ct. 1041, 1046 (2019); Va. House of Delegates v. Bethune-Hill, 139 S. Ct. 1945, 1951 (2019) (). The party invoking a federal court's jurisdiction must establish standing. Wittman v. Personhuballah, 136 S. Ct. 1732, 1736 (2016); Colwell v. Dep't of Health and Human Servs., 558 F.3d 1112, 1121 (9th Cir. 2009). An absence of standing requires dismissal for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011).
At an "irreducible minimum," standing requires three elements to be met: (1) the party invoking federal jurisdiction must have suffered some actual or threatened injury; (2)the injury must be fairly traceable to the challenged conduct; and (3) a favorable decision must be likely to redress the injury. See, e.g., Virginia House of Delegates v. Bethune-Hill, 139 S. Ct. 1945, 1950 (2019); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992); Hajro v. U.S. Citizenship & Immigration Servs., 811 F.3d 1086, 1102 (9th Cir. 2016). These elements are commonly referred to as injury-in-fact, causation, and redressability, respectively. Although the standing inquiry "often turns on the nature and source of the claim asserted," its primary focus is on "whether the plaintiff is the proper party to bring the suit." Raines v. Byrd, 521 U.S. 811, 818 (1997) (cleaned up).
Campbell's argument that the Entities lack standing is unpersuasive because both premises it rests upon are without merit. First, contrary to Campbell's initial assertion, the Entities are parties to the Contract. The Contract identifies them by name. It refers to them as actors with duties, and it imposes specific obligations on them. Dkt. 32, at 5. Moreover, as the state court explained, "it was necessary for the [Entities] to be made specific parties to the [Contract] since Allen and Campbell represented themselves as well as their interests in the entities." Dkt. 36, at 3 (emphasis added). These facts establish that the Entities were indeed parties to the Contract.4
Idaho law supports this conclusion as well. Because Allen and Campbell were the only persons with interests in the Entities and acted as their agents, Allen and Campbell's decision to obligate the Entities to specific actions bound the Entities under Idaho contractual law. See Primera Beef, LLC v. Ward, 457 P.3d 161, 166 (Idaho 2020) ; Rowland v. Rowland, 633 P.2d 599, 605 (Idaho 1981) ().
Next, Campbell's second argument—that the Entities did not obtain a declaratory judgment—is undermined by the language of the state court's ruling. In a ruling after the declaratory judgment, the state court plainly stated that the Entities obtained a declaratory judgment:
Campbell asserts that he must be considered prevailing party against the entities since the entities did not prevail in any matter. However, as evident from the complaint, the entities also sought a declaratory judgment as to the contract. While there may have been standing issues as to the entities' ability to assert such claim, that issue was never litigated. Therefore, the entities, along with Allen, were successful in obtaining declaratory judgment.
Dkt. 36, at 4-5, Ex. A.
Campbell asserts that this was dictum and related only to the award of attorney fees and costs. Campbell also argues that, because the court did not amend its judgment toinclude the Entities, the judgment does not extend to them. Dkt. 37, at 2. Campbell does not offer any supporting legal...
To continue reading
Request your trial