Wmcv Phase 3 Llc v. Shushok & Mccoy Inc.

• Decision Date: 05 October 2010
• Docket Number: Case No. 2:10–cv–00661–GMN–RJJ.
• Parties: WMCV PHASE 3, LLC, Plaintiff,v.SHUSHOK & McCOY, INC., et al., Defendants.
• Court: U.S. District Court — District of Nevada

750 F.Supp.2d 1180

WMCV PHASE 3, LLC, Plaintiff,

v.SHUSHOK & McCOY, INC., et al., Defendants.

Case No. 2:10–cv–00661–GMN–RJJ.

United States District Court, D. Nevada.

Oct. 5, 2010.

Craig Francis Robinson, II, Terry A. Coffing, Marquis & Aurbach, Las Vegas, NV, for Plaintiff.Brandon P. Kemble, Joshua M. Dickey, Bailey Kennedy, Michael B. Lee, Kravitz Schnitzer Sloane Johnson & Eberhardy, Las Vegas, NV, Gary E. Schnitzer, Kravitz Schnitzer Sloane Johnson & Eberhardy, Chtd., Henderson, NV, for Defendants.

ORDER

GLORIA M. NAVARRO, District Judge.

This case arises out of the failure of commercial tenants to pay rent and subsequent fraud by Plaintiff's former collection agency. Pending before the Court are Defendant's Motion to Dismiss or for Summary Judgment (ECF No. 9); Defendants' Motion to Dismiss (ECF No. 11); and Plaintiff's Counter–Motion for Summary Judgment (ECF No. 16). For the reasons given herein, the Court denies Defendant's Motion to Dismiss or for Summary Judgment (ECF No. 9), denies Defendants' Motion to Dismiss (ECF No. 11) in part and grants it in part, with leave to amend in part; and grants Plaintiff's Counter–Motion for Summary Judgment (ECF No. 16) in part and denies it in part.

I. FACTS AND PROCEDURAL HISTORYA. The Leases

Plaintiff WMCV Phase 3, LLC (“WMCV”) owns a parcel of property located at 455 S. Grand Central Pkwy. in Las Vegas, Nevada that makes up part of the World Market Center Las Vegas. (Compl. ¶¶ 9–10). On August 7, 2006, Plaintiff's predecessor-in-interest entered into a lease agreement (“the Global Accents Lease”) with Defendant Global Accents, Inc. for the space designated as C–875, to commence on July 1, 2008. ( Id. ¶¶ 11–12). The Global Accents Lease was later amended to change the leased space to C–775. ( Id. ¶ 14). On or about August 1, 2008, Global Accents failed to pay rent, despite several requests, and it was evicted on or about December 30, 2008, still owing Plaintiff $360,831. ( Id. ¶¶ 16–19). On May 21, 2007, Plaintiff entered into a lease agreement (“the Couture Lease”) with Defendant Couture International, Inc. (“Couture”) for the space designated as C–1164, to commence on July 1, 2008. ( Id. ¶¶ 21–22). On or about August 1, 2008, Couture failed to pay rent, despite several requests, and it was evicted on or about December 31, 2008, still owing Plaintiff $695,500.32. ( Id. ¶¶ 24–27). Plaintiff has been unable to lease either C–775 or C–1164 to new tenants. ( Id. ¶¶ 20, 28).B. The Fraud

In or about 2007, Plaintiff hired Defendant Shushok & McCoy, Inc. (“Shushok”) as a commercial collection agent to recover past due amounts from tenants such as Global Accents and Couture. ( Id. ¶ 29). However, Shushok had no authority to enter into agreements with tenants on behalf of Plaintiff. ( Id. ¶ 30). In March and June of 2009, Plaintiff instructed Shushok to cease collection activities against Global Accents and Couture, respectively. ( Id. ¶¶ 31–32). On or about June 26, 2009, both Nino Torres (Client Services Manager for Shushok) and Defendant Matthew J. Travis (President and CEO of Shushok) acknowledged in separate electronic writings that Shushok was no longer retained by Plaintiff. ( Id. ¶¶ 33–34).

In or about July 2009, Defendant Richard Birdwell signed a “Lease Termination and Release Agreement” (“the Couture Release”) on behalf of Shushok and falsely represented himself to be “Counsel” for “World Market Center Las Vegas, [Inc.],” purporting to release Couture from its liability under the Couture Lease in exchange for $20,000 to be paid—and which was paid—directly to Shushok. ( Id. ¶¶ 35–43). The Couture Release is falsely dated May 21, 2007, the same date Plaintiff and Couture entered into the Couture Lease. ( Id. ¶ 38). Birdwell was not Plaintiff's agent or employee of any sort, and neither he nor Shushok were authorized to enter into any agreement on behalf of Plaintiff. ( Id. ¶¶ 44–46). Plaintiff discovered the existence of the Couture Release when Couture contacted Plaintiff on or about January 9, 2010 to inform Plaintiff that it had been released and believed there was no longer any dispute over the Couture Lease. ( Id. ¶ 49). Defendant Matt Turner, on behalf of Shushok and falsely representing himself as the “Director” of “World Market Center Las Vegas, [Inc.]” entered into a similar “Lease Termination and Release Agreement” (“the Global Accents Release”) with Global Accents in exchange for $8200 to be paid—and which was paid—directly to Shushok. ( Id. ¶¶ 50–55). Turner was not Plaintiff's agent or employee of any sort, and neither he nor Shushok were authorized to enter into any agreement on behalf of Plaintiff. ( Id. ¶¶ 57–59). Plaintiff has received no part of the funds paid in exchange for these purported releases and believes that Shushok continues to pursue collections from current and past WMCV tenants without authorization. ( Id. ¶¶ 48, 60–61).

C. Procedural History

Plaintiff sued Defendants in state court on thirteen causes of action: (1) Injunctive Relief (Shushok, Travis, Turner, and Birdwell); (2) Intentional Misrepresentation; (3) Civil Conspiracy; (4) RICO Violations Under Nevada Revised Statutes (“NRS”) § 207.470; (5) Conversion (Shushok, Travis, Turner, and Birdwell); (6) Intentional Interference with Contractual Relations (Shushok, Travis, Turner, and Birdwell); (7) Breach of Lease (Global Accents); (8) Breach of Lease (Couture); (9) Breach of Implied Covenant of Good Faith and Fair Dealing (Shushok, Global Accents, Couture); (10) Unjust Enrichment; (11) Declaratory Relief; (12) Special Damages, Attorney's Fees and Costs; and (13) Punitive Damages. Defendants removed pursuant to 28 U.S.C. § 1332. Plaintiff is a Delaware limited liability company. (ECF No. 1 ¶ 12). Defendant Shushok is a Texas corporation with its principal place of business in Texas, and Defendants Travis, Turner, and Birdwell are citizens of Texas. ( Id. ¶¶ 13–16). Defendant Global Accents is a California corporation with its principal place of business in California. ( Id. ¶ 17). Defendant Couture is a Quebec corporation with its principal place of business in Quebec, Canada. ( Id. ¶ 18).

Three motions are pending before the Court. First, Global Accents has moved to dismiss or, in the alternative, for summary judgment, based purely on its contention that the Global Accents Release is valid and enforceable. Second, Plaintiff has moved for offensive summary judgment on its claim for declaratory relief, asking the Court to declare that the Global Accents Release is not valid against Plaintiff. Third, Defendants Shushok, Travis, Turner, and Birdwell (“the Texas Defendants”) have moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2) and for failure to state a claim under Rules 12(b)(6) and 9(b).

II. LEGAL STANDARDSA. Rule 12(b)(2)

Before answering, a defendant may move to dismiss for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). Removal to federal court does not operate as a waiver of this defense. Morris & Co. v. Skandinavia Ins. Co., 279 U.S. 405, 409, 49 S.Ct. 360, 73 L.Ed. 762 (1929). Personal jurisdiction over a nonresident defendant is established where: (1) there is personal jurisdiction under the laws of the state where it is asserted; and (2) the exercise of jurisdiction satisfies due process. Chan v. Soc'y Expeditions, Inc., 39 F.3d 1398, 1404–05 (9th Cir.1994). Because Nevada's long arm statute by its terms extends personal jurisdiction over defendants to the limits of the state and federal constitutions, see Nev.Rev.Stat. § 14.065(1), and because the Nevada Constitution does not appear to impose any restrictions on the exercise of personal jurisdiction beyond those imposed by the Due Process Clause of the Fourteenth Amendment, see Nev. Const. art. 1, § 8, cl. 5, the test in Nevada is essentially a one-step test under the Due Process Clause of the Fourteenth Amendment, see U.S. Const. amend. XIV § 1.

For a non-resident defendant, the assertion of jurisdiction is constitutionally proper under the Due Process Clause of the Fourteenth Amendment only where there are continuous and systematic contacts with the forum state (general jurisdiction), Bauman v. DaimlerChrysler Corp., 579 F.3d 1088, 1094 (9th Cir.2009), or when there are sufficient minimal contacts with the forum state such that the assertion of personal jurisdiction does not offend “traditional notions of fair play and substantial justice” (specific jurisdiction), Int'l Shoe Co. v. State of Wash., Office of Unemployment Compensation & Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). The standard for specific jurisdiction has been restated using different verbiage. See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) (“[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” (citing Int'l Shoe Co., 326 U.S. at 319, 66 S.Ct. 154)); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (“[T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” (citing Kulko v. Super. Ct. of Cal., 436 U.S. 84, 97–98, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978))).

The Ninth Circuit has constructed a three-part test from these cases: (1) the defendant must have purposely availed itself of the privilege of conducting activities in the forum; (2) the plaintiff's claim must arise out of that activity; and (3) the exercise of jurisdiction must be reasonable. Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990). The third...