Payoutone v. Coral Mortg. Bankers

• Decision Date: 09 February 2009
• Docket Number: Civil Action No. 08-cv-01617-PAB-MJW.
• Parties: PAYOUTONE, Plaintiff, v. CORAL MORTGAGE BANKERS and Darren J. Hayden, Defendants.
• Court: U.S. District Court — District of Colorado

602 F.Supp.2d 1219

PAYOUTONE, Plaintiff, v. CORAL MORTGAGE BANKERS and Darren J. Hayden, Defendants.

Civil Action No. 08-cv-01617-PAB-MJW.

United States District Court, D. Colorado.

February 9, 2009.

COPYRIGHT MATERIAL OMITTED

Jeffrey C. Keiffer, Keiffer, LLC, Littleton, CO, for Plaintiff.

Edward J. Hafer, Matthew Ray Groves, Messner & Reeves LLC, Jon F. Sands, Chelsey M. Burns, Fisher, Sweetbaum, Levin & Sands, P.C., Denver, CO, for Defendants.

ORDER

PHILIP A. BRIMMER, District Judge.

Plaintiff PayoutOne, LLC ("Payout") brings this action asserting claims against two parties that allegedly caused it harm in connection with a loan to a third party. The matter is presently before the Court on defendant Coral Mortgage Bankers' ("Coral") Amended Motion to Dismiss Pursuant to Rule 12(b)(6) [Docket No. 20]. Jurisdiction in this case is premised upon diversity of the parties as provided in 28 U.S.C. § 1332 (2006).

I. FACTS

A. Factual Background

The following facts are taken from plaintiff Payout's Amended Complaint and are presumed to be true for the purposes of this order. See Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir.2007). Josh Toerpe, who is not a party in this case, sought the assistance of plaintiff Payout in acquiring a particular piece of property in Littleton, Colorado (the "Property"). Plaintiff Payout provided Mr. Toerpe a short term "bridge loan" to assist with that acquisition. As a condition to this loan, Payout required Mr. Toerpe to refinance his debt on the Property immediately after acquisition. Through some combination of a "Conditional Approval" and emails, defendant Coral agreed to refinance Mr. Toerpe's debt on the Property. Ultimately, Mr. Toerpe was unable to refinance the debt on the Property and defaulted on his loan.

B. Procedural Background

Payout originally filed this case on June 13, 2008, in Colorado State District Court against defendant Coral alone. On July 30, 2008, Coral removed the case to this Court pursuant to 28 U.S.C. § 1441 [Docket No. 1]. On October 22, 2008, Magistrate Judge Michael J. Watanabe ordered Payout to file an amended complaint which reflected the fact that the State District Court judge had previously consolidated the case against Coral with a related case against an appraiser, Darren Hayden, who was involved in the transactions regarding the Property [Docket No. 15]. On October 31, 2008, Payout filed its amended complaint [Docket No. 16]. The amended complaint includes five claims for relief; the first two claims are against defendant Hayden alone, while the third, fourth, and fifth claims are asserted solely against defendant Coral.

On November 17, 2008, Coral filed a motion to dismiss. See Def. Coral Mortgage Bankers Corp.'s Mot. to Dismiss Pursuant to Rule 12(b)(6) [Docket No. 18]. Later that same day, Coral filed an amended motion to dismiss, correcting a typographical error. See Def. Coral Mortgage Bankers Corp.'s Am. Mot. to Dismiss Pursuant to Rule 12(b)(6) [Docket No. 20] ("Am. Mot. to Dismiss"). Coral's amended motion to dismiss seeks dismissal of plaintiff's third, fourth, and fifth claims as an operation of Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Within the same motion, Coral suggests that it may also be entitled to summary judgment under Federal Rule of Civil Procedure 56. On December 3, 2008, Payout responded to Coral's amended motion to dismiss [Docket No. 24]. On December 18, 2008, Coral replied [Docket No. 27]. The motion is fully briefed and ripe for review.

II. ANALYSIS

A. Motion to Dismiss for Failure to State a Claim

1. Legal Standard

Pursuant to Rule 12(b)(6), dismissal of a claim for relief is appropriate where the plaintiff fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). "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). In testing the legal sufficiency of the complaint, the Court "must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." Alvarado, 493 F.3d at 1215.

Under Rule 12(b)(6), the Court need not accept conclusory allegations as true. Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1232 (10th Cir.2002). Rather, to survive dismissal pursuant to Rule 12(b)(6), "a complaint must include `enough facts to state a claim to relief that is plausible on its face.'" TON Servs., Inc. v. Qwest Corp., 493 F.3d 1225, 1236 (10th Cir.2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 571-72, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)). The plausibility standard articulated by the Supreme Court in Twombly did not, however, displace Rule 8(a)(2), which requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2); see Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (per curium). "Specific facts are not necessary; the statement need only `give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Id. (quoting Twombly, 127 S.Ct. at 1964).

2. Supplemental Documents

In its motion to dismiss, defendant Coral notes that the Tenth Circuit has held that "[a] written document that is attached to the complaint as an exhibit is considered part of the complaint and may be considered in a Rule 12(b)(6) dismissal." Hall v. Bellmon, 935 F.2d 1106, 1112 (10th Cir. 1991) (citing Fed.R.Civ.P. 10(c) ("A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.")) However, the documents which defendant Coral would like the Court to consider in ruling on the motion to dismiss are not attached to the complaint. Instead, they are attached to its amended motion to dismiss. Therefore, Hall v. Bellmon will not serve as justification for the Court's looking beyond the complaint itself in the context of Coral's amended motion to dismiss.

On the other hand, the Tenth Circuit also decided that a "district court may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity." Alvarado, 493 F.3d at 1215 (quoting Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir.2002)). In the present case, the parties offer and discuss the "Conditional Approval" allegedly issued by defendant Coral to Mr. Toerpe. See Am. Mot. to Dismiss ¶ 12; id., Ex. 2. While this document arguably qualifies as "central" to Payout's claims, and the parties contest its effect, not its authenticity, I do not consider this document in ruling on Coral's motion to dismiss. For the purposes of this Order, the characterization in the complaint is sufficient to establish its impact on Coral's motion to dismiss. See Am. Compl. ¶ 12. Furthermore, although plaintiff Payout refers to "emails" in its complaint, see id. ¶ 30, and both parties provide certain emails in connection with the motion to dismiss, see Am. Mot. to Dismiss, Exs. 2, 3, 4, 5; Exhibits to Pl.'s Verified Resp. to Mot. to Dismiss, Exs. 2, 3 [Docket No. 25], there is no indication that the included emails amount to all or even part of the emails referred to in the amended complaint. Therefore, they will not be considered as part of my analysis of this motion. Cf. Alvarado, 493 F.3d at 1216 (stating that certain evidence "likely should have been excluded" from a 12(b)(6) analysis where it was not clear that the portion considered represented all of the relevant excerpts).

3. Evaluation of Plaintiff's Claims

A federal court with diversity-based jurisdiction over a case applies the laws of the forum state in analyzing the underlying claims. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Essex Ins. Co. v. Vincent, 52 F.3d 894, 896 (10th Cir.1995). Cases that have been removed under 28 U.S.C. § 1441(a) are no different. See Headrick v. Atchison, T. & S.F. Ry. Co., 182 F.2d 305, 309 (10th Cir.1950) ("It is a well established principle that in removal cases the Federal Court must apply the state law and the state policy.").

a. Breach of Contract

Plaintiff Payout's third claim for relief asserts a breach of contract by defendant Coral. To state a claim for breach of contract under Colorado law, a plaintiff must sufficiently plead the following elements: (1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff. W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo.1992).

The first step in establishing the existence of a contract is a showing that it was properly formed. Contract formation requires mutual assent to an exchange between competent parties—where an offer is made and accepted—regarding a subject matter which is certain, and for which there is legal consideration. See Indus. Prods. Int'l, Inc. v. Emo Trans, Inc., 962 P.2d 983, 988 (Colo.App.1997).

Although Payout's amended complaint demonstrates only a semblance of an agreement between it and Coral, given all reasonable inferences, an agreement is pled nonetheless. First plaintiff Payout asserts, "Defendant Coral promised plaintiff they would refinance Mr. Toerpe's Property debt, and on June 15, 2006, issued a Conditional Approval to Mr. Toerpe." Am. Compl. ¶ 12. Then it asserts that "[p]ursuant to e-mails and verbal exchanges, Coral expressly promised to refinance Mr. Toerpe's Property debt after Mr. Toerpe acquired the Property." Id. ¶ 30. Finally, Payout avers that "[i]n return and as consideration for Coral's contractual promise, plaintiff loaned Mr. Toerpe $475,500." Id...