Gonzalez v. Artspace Affordable Hous., L.P.
| Decision Date | 29 January 2015 |
| Docket Number | Case No. 2:09-cv-00465-EJF |
| Parties | KRISTY A. GONZALEZ; SHAWN A. GONZALES; and ANARCHY ARTS, LLC, Plaintiffs, v. ARTSPACE AFFORDABLE HOUSING, L.P.; ARTSPACE RUBBER COMPANY, L.C.; and EVERGREEN MANAGEMENT GROUP, LLC, Defendants. |
| Court | U.S. District Court — District of Utah |
This matter comes before the Court on remand from the Court of Appeals for the Tenth Circuit.1 (ECF No. 85 at 9.) On May 21, 2009, Kristy A. Gonzalez, Shawn A. Gonzales, and Anarchy Arts, LLC filed this action against Artspace Affordable Housing, L.P. ("Artspace Affordable Housing"), Artspace Rubber Company, L.C., and Evergreen Management Group, LLC (collectively "Artspace"). (Compl. ¶¶ 5-7, ECF No. 1.) On August 14, 2013, the Tenth Circuit's Order and Judgment, (ECF No. 85 at 4-9), overturned the March 28, 2012 Ruling and Order, (ECF No. 76), granting Artspace's Motion to Dismiss for Lack of Jurisdiction, (ECF No. 41). The Tenth Circuit's decision rested on two grounds: the lack of a final state court judgment and insufficient argument on the § 1983 claim. (See ECF No. 85 at 8-9.) The Court now GRANTS Artspace's Second 12(b)(1) and (6) Motion To Dismiss and in the Alternative, First Motion for Summary Judgment, (Mot. to Dismiss, ECF No. 99).
After hearing additional argument on the § 1983 claim and reviewing the motions and memoranda provided, the Court GRANTS Artspace's Motion to Dismiss, (ECF No. 99), because issue preclusion bars Ms. Gonzalez's and Mr. Gonzales's causes of action.
The Utah state court case concluded in December 2013 determining, among other things, that Anarchy Arts, LLC owned the property seized and retained by Artspace Affordable Housing that forms the center of this litigation. Ms. Gonzalez and Mr. Gonzales, Plaintiffs in this case, are in privity with Anarchy Arts, LLC, the defendant in the state court case. Thus, Ms. Gonzalez and Mr. Gonzales cannot assert that they, and not Anarchy Arts, LLC, own the property.
Anarchy Arts, LLC, also a Plaintiff in this case, concedes res judicata bars its claims. (Pl.'s Opp'n to Defs.' Mot. to Dismiss 1, ECF No. 57.) The Court therefore DISMISSES Anarchy Arts, LLC's claims and considers the remaining claims of Ms. Gonzalez and Mr. Gonzales only.
The Complaint lacks many of the details necessary to understand the dispute at bar. Ms. Gonzalez and Mr. Gonzales do refer, however, to "Civil Number 080411274, West Jordan Division, Third District Court," a Utah trial court docket. (Compl. ¶ 18, ECF No. 1.) Federal courts may take judicial notice of state court documents on a motion to dismiss without converting the motion to a summary judgment motion. See Pace v. Swerdlow, 519 F.3d 1067, 1072-73 (). For these reasons, this Court takes judicial notice of the state court proceedings referenced in the Complaint.2
In December 2006, Ms. Gonzalez and Mr. Gonzales purchased a coffee shop, Anarchy Arts, LLC, "which included good will, furniture and equipment." (Findings of Fact & Conclusions of Law 2 ¶ 1, ECF No. 53-1.) Thereafter, Anarchy Arts, LLC and Artspace Affordable Housing entered into an agreement under which Anarchy Arts, LLC d/b/a Cup of Joe leased commercial property for the coffee shop from Artspace Affordable Housing. (See id. at 2-3 ¶ 2.) The agreement granted Artspace a security interest "'in all property of Tenant now or hereafter placed in the Premises.'" (Id.) Anarchy Arts, LLC defaulted, and on June 20, 2008, Artspace Affordable Housing filed a state court unlawful detainer action against Anarchy Arts, LLC d/b/a/ Cup of Joe. (Id. at 4 ¶¶ 5-6.)
Thereafter, Artspace Affordable Housing filed a possession bond, and on July 29, 2008 the state court issued an Order of Restitution. (Id. at 4 ¶ 7.) The Order of Restitution, issued pursuant to Artspace Affordable Housing's ex parte motion, required Anarchy Arts, LLC to vacate the coffee shop within seventy-two hours and identified the right to a hearing to contest the order. (Order of Restitution 1, ECF No. 42-4.) Based upon the Order of Restitution, Artspace Affordable Housing allowed Anarchy Arts, LLC to remove some of its property prior to locking it out of the building in August 2008. (Findings of Fact & Conclusions of Law 4 ¶ 8, ECF No. 53-1.) Anarchy Arts, LLC contested the Order of Restitution and lost. (Mins. Mot. to Set Aside Restitutio Aug. 19, 2008, attachment 1.)
On August 11, 2008, Anarchy Arts, LLC filed an Amended Answer and Counterclaim in the state court action bringing counterclaims against Artspace Affordable Housing for breach ofcontract, breach of the implied covenant of good faith and fair dealing, and misrepresentation all regarding the circumstances surrounding the lease termination. (Am. Answer & Countercl. 3-5, ECF No. 70-1.) Additionally, Anarchy Arts, LLC listed two cross-defendants, Chris Montoya and Evergreen Management Group. (Id. at 1.)
On November 1, 2008, Artspace Affordable Housing mailed Anarchy Arts, LLC a Notice of Abandonment with respect to the property remaining on premises. (Findings of Fact & Conclusions of Law ¶ 14, ECF No. 53-1.) On November 17, 2008, the state court granted Artspace Affordable Housing's motion for summary judgment. (Minute Entry Nov. 17, 2008, ECF No. 42-2.) On December 10, 2008, the state court issued a Judgment and Order against Anarchy Arts, LLC for $43,472.84. (ECF No. 42-3 at 1.)
On January 15, 2009, Anarchy Arts, LLC filed a motion to set aside the December 10, 2008 Judgment and Order. (Ruling & Order 2, ECF No. 42-5.) On July 30, 2009, the state court denied the motion, concluding "there is no basis to set aside the Judgment and Order." (Id. at 3.) On February 20, 2009, the state court issued a writ of execution permitting Artspace Affordable Housing to sell the seized property to satisfy Anarchy Arts, LLC's debt. (No. 989411274 Docket 14, Feb 20, 2009, attachment 2; Findings of Fact & Conclusions of Law 7 ¶ 19, ECF No. 53-1.)
Pursuant to the writ of execution, on April 30, 2009, Artspace Affordable Housing held a public auction, selling items from the coffee shop to the highest bidder. (Findings of Fact & Conclusions of Law 8 ¶¶ 25, 27, 30, ECF No. 53-1.) The auction raised $3,920, which Artspace Affordable Housing applied to the judgment against Anarchy Arts, LLC, reducing the amount owed to $41,623.90. (Id. at 9-10 ¶¶ 32, 41.)
On May 21, 2009, Ms. Gonzalez, Mr. Gonzales, and Anarchy Arts, LLC filed this federal court action. (Compl., ECF No. 1.) Their Complaint alleges claims against Artspace forconversion, unjust enrichment, civil conspiracy, and violation of 42 U.S.C. § 1983. (Id. at 5-8.) The claims arise from the following allegations:
Pursuant to a wrongfully issued writ or [sic] restitution, Plaintiffs were forced out of their coffe[e] shop and defendants seized all of their property-over $100,000 worth of equipment, furniture, fixtures and supplies . . . . [Artspace has] abuse[d] the legal system and process by filing a lawsuit for unlawful detainer when there was no factual or legal basis therefor . . . . [Artspace] seize[d] and retain[ed] over $100,000 worth of personal property—most of which was owned by the Gonzalezes and not Anarchy Arts . . . .
(Compl. ¶¶ 19, 24(b), 24(d), ECF No. 1.)
Artspace Affordable Housing continued to pursue the state court action, and on August 4, 2009, the state court issued a second writ of execution permitting Artspace Affordable Housing to collect money to satisfy Anarchy Arts, LLC's debt beyond that earned from the sale of assets. (No. 080411274 Docket 15, Aug. 4, 2009, attachment 2; Findings of Fact & Conclusion of Law 10 ¶ 42, ECF No. 53-1.) Anarchy Arts, LLC objected to the state court's August 4, 2009 Writ of Execution. (Findings of Fact & Conclusions of Law 10 ¶ 42, ECF No. 53-1.) On January 19, 2010, the state court issued "Findings of Fact and Conclusions of Law" denying Anarchy Arts, LLC's claims that Artspace Affordable Housing had wrongfully obtained the second writ of execution because Artspace Affordable Housing conducted a commercially reasonable sale of the collateral. (Id. at 23, ECF No. 53-1.)
On December 2, 2013, the state court issued a "Ruling and Order" granting Artspace Affordable Housing's motion for summary judgment and dismissing Anarchy's counterclaims. (ECF No. 99-19.) The order concludes by stating (Id. at 3.)
Following the Tenth Circuit's Order and Judgment, the parties began a new round of briefing and argument with the following filings: the Anarchy Plaintiffs' "Renewed Motion for Partial Summary Judgment—Amended," (ECF No. 100), and Artspace's "Second 12(B)(1) and(6) Motion To Dismiss and in the Alternative, First Motion for Summary Judgment," (ECF No. 99). Because the Court GRANTS Artspace's Motion to Dismiss, it does not reach the Renewed Motion for Partial Summary Judgment.
To withstand a motion to dismiss brought under Rule 12(b)(6), "a complaint must have enough allegations of fact, taken as true, 'to state a claim to relief that is plausible on its face.'" Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, a court must accept a complaint's well-pled factual allegations as true. McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 997 (10th Cir. 2002). However, as noted in Part I, supra, the Court may and does take judicial notice of the state court proceedings referenced in the Complaint. To survive a motion to dismiss, a complaint must set forth sufficient factual allegations to state a plausible claim for relief. Twombly, 550 U.S. at 570. "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to...
To continue reading
Request your trial