Buyers of Ritz-Carlton Vail, LLC v. RCR Vail, LLC
| Decision Date | 06 February 2013 |
| Docket Number | Civil Action No. 11-cv-01789-WYD-KLM |
| Parties | BUYERS OF RITZ-CARLTON VAIL, LLC, a New Jersey limited liability company, Plaintiff, v. RCR VAIL, LLC, a Colorado limited liability company; MATT FITZGERALD, an individual residing in Colorado; SLIFER, SMITH & FRAMPTON - VAIL ASSOCIATES REAL ESTATE, LLC, a Delaware limited liability company, Defendants. |
| Court | U.S. District Court — District of Colorado |
ORDER
THIS MATTER is before the Court on Defendant Slifer Smith & Frampton's Fed. R. Civ. P. 12(c) Motion For Judgment On The Pleadings Because Of A Lack Of Standing [ECF No. 42] and Defendant RCR Vail, LLC's Motion For Partial Judgment On The Pleadings [ECF No. 45].
This suit arises out of a dispute regarding the accommodations of a condominium located in Vail, Colorado.
Elena Kardonsky and Julia Schlovsky ("the Members") are the sole members of the plaintiff, Buyers of Ritz Carlton Vail, LLC ("BRC"). In February 2008, the Members vacationed in Vail. While there, they visited the Ritz-Carlton Vail real estate project ("Vail Ritz") preview center located in Lionshead Village. Defendants, RCR Vail, LLC, and Slifer, Smith & Frampton - Vail Associates Real Estate, LLC ("Slifer"), wereresponsible for developing, marketing, and selling the Vail Ritz. RCR and Slifer marketed the Vail Ritz as part of "Ever Vail", a planned community west of Lionshead Village and located in the "core" of Vail, Colorado. ECF No. 14, p. 3, ¶ 9. Defendant, Matt Fitzgerald, a real estate broker and Slifer employee, held a sales presentation for the Members while they visited the Vail Ritz preview center. During the presentation, Fitzgerald represented to the Members that the Vail Ritz: (1) was a Ritz-Carlton property; (2) was a "first class resort in Vail;" (3) included "all of the typical legendary amenities of a Ritz-Carlton;" (4) would be "located in a prime location without any drawbacks;" and, (5) "would have every modern convenience." ECF No. 14, p. 7, ¶ 21. Fitzgerald also represented that the Vail Ritz would be located "adjacent to a 'new gondola that [would] be fully operational prior to the completion of the Vail Ritz.'" Id.
On March 27, 2008, the Members entered into an agreement with RCR to purchase Vail Ritz condominium unit 307 [ECF No. 14-5]. The Members tendered $680,992.50 to RCR as earnest money, which was later reduced to $578,843.63 by an amendment to the agreement executed on May 31, 2009. Subsequent to entering into the agreement, the Members found out that the Vail Ritz was not a Ritz-Carlton Hotel or a Ritz-Carlton property. Rather, the Vail Ritz was a condominium project managed by Ritz Carlton Management Company. The Vail Ritz utilizes the Ritz-Carlton name and logo under a licensing agreement with the Ritz-Carlton Hotel Company, L.L.C.
Prior to closing on the agreement, the Members became aware that other parties who purchased Vail Ritz condominium units were involved in litigation regarding the purchase of their units and the units' accommodations. The Members became concerned that the Vail Ritz units were not being constructed as represented byFitzgerald, RCR, and Slifer. Specifically, the Members were concerned with whether the condominium units would include: (1) on site food service; (2) spa services; (3) a "state of the art" media room; and, (4) ski in/ski out availability. The Members were also concerned with whether the Vail Ritz could lose its "Ritz-Carlton" title on the whim of the Ritz-Carlton Management Company, LLC. Due to these concerns, the Members demanded rescission of the agreement "due to the extensive and pervasive material misrepresentations and omissions . . . made by Defendants in regard to the Vail Ritz." ECF No. 14, p. 10, ¶ 32. The Members also demanded return of the $578,843.63 earnest money. RCR refused.
On May 31, 2011, the Members assigned all claims they may have against the defendants to BRC [ECF No. 42-1]. The assignment states, in pertinent part:
Assignors [the Members] desire to assign any and all claims for damages they may have against RCR Vail, Fitzgerald and SSF [Slifer, Smith & Frampton - Vail Associates Real Estate, LLC] related to the Purchase Agreement, including, but not limited to, claims for violations of the Interstate Land Sales Fair Disclosure Act ("ILSFDA"), violations of the Colorado Consumer Protection Act ("CCPA"), misrepresentation, omission, negligence, breach of Transaction-Broker duties, Respondeat Superior, unjust enrichment, fraudulent concealment and fraudulent misrepresentation . . .
ECF No. 42-1, p. 1, ¶ 5. On November 22, 2011, BRC filed this suit against the defendants alleging 16 claims, including: (1) violations of the Interstate Land Sales Full Disclosure Act ("ILSFDA"), 15 U.S.C. § 1701, et seq.; (2) violations of the Colorado Consumer Protection Act ("CCPA"), Colorado Revised Statues § 6-1-101, et seq.; (3) violations of a real estate broker's obligations pursuant to COLO. REV. STAT. § 12-61-807(2)(b)(IV); (4) negligent misrepresentation; (5) fraudulent concealment;(6) fraudulent misrepresentation; (7) unjust enrichment; and, (8) a request for attorney fees. The Members' claims center on the allegation that Fitzgerald, RCR, and Slifer failed to disclose the true nature of the Vail Ritz. On May 25, 2012, Slifer filed a Motion for Judgment on the Pleadings [ECF No. 42], arguing that BRC lacks standing to bring this suit because Colorado law precludes a party from assigning "personal services" claims. On June 20, 2012, RCR filed a Motion for Partial Judgment on the Pleadings [ECF No. 45], arguing that: (1) the Members cannot assign their ILSFDA claims because the statute is silent on assignment and the statute is penal in nature; and, (2) BRC does not have a viable CCPA claim because the Members did not "purchase" any property from RCR and have not suffered an injury in fact.
The defendants filed Motions for Judgment on the Pleadings pursuant to FED. R. CIV. P. 12(c). "A motion for judgment on the pleading under Rule 12(c) is treated as a motion to dismiss under Rule 12(b)(6)." Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). Thus, I will analyze the defendants' motions under the framework of a Motion to Dismiss pursuant to FED. R. CIV. P. 12(b)(6).
FED. R. CIV. P. 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim upon which relief can be granted." "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201(10th Cir. 2003) (citations and quotation marks omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937 (2007).
In ruling on a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6), I "must accept all the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff." David v. City and County of Denver, 101 F.3d 1344, 1352 (10th Cir. 1996), cert. denied, 522 S.Ct. 858 (1997)(citations omitted). The plaintiff "must include enough facts to 'nudge[] [his] claims across the line from conceivable to plausible.'" Dennis v. Watco Cos., Inc., 631 F.3d 1303, 1305 (10th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Conclusory allegations are not sufficient to survive a motion to dismiss. Gallagher v. Shelton, 587 F.3d 1063, 1068 (10th Cir. 2009); see also Twombly, 550 U.S. at 546 (2007) (). General allegations "encompass[ing] a wide swath of conduct, much of it innocent" will fail to state a claim. Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008).
Slifer argues that BRC lacks standing to bring this suit because Colorado law precludes assignment of personal service claims.
"Colorado generally favors the assignment of rights pursuant to a valid contractual arrangement." Brown v. Gray, 227 F.3d 1278, 1294 (10th Cir. 2000) (citation omitted). "Causes of action which survive the death of the party entitled to sue mayordinarily be assigned, see Olmstead v. Allstate Ins. Co., 320 F. Supp. 1076, 1077 (D. Colo. 1971) (applying Colorado law), and under Colorado law all causes of action survive death except slander and libel, see Colo. Rev. Stat. § 13-20-101 (1987)." Id. "The only assignments Colorado does not allow are for claims involving matters of personal trust or confidence or for personal services." Id.
In Scott v. Fox Bros. Enters., Inc., 667 P.2d 773, 774 (Colo. Ct. App. 1983), the Colorado Court of Appeals succinctly described the factual circumstances required for services to be characterized as "personal." The issue in Scott was whether a receipt and option contract for the sale of real property was "personal in nature and, therefore, unassignable." 667 P.2d at 774. In holding that the contract was not personal in nature, and therefore assignable, the Court stated:
The presumption [that contractual rights are assignable] may be overcome only if it can be shown that the optioner would not have granted it but for his reliance upon the personal integrity, credit, or responsibility of the original optionee. If that be shown to be the case, then the optionor has acted with that degree of trust and confidence which is singularly personal to the optionee/obligor, and the option is personal in nature and not assignable.
Id. (emphasis added). Here, like in Scott, there are no facts that support the conclusion...
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