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Ras Land Holdings LLC v. Litchfield Building Center, Inc.

United States District Court, D. Minnesota

June 12, 2015

RAS Land Holdings LLC, RAS Equipment & Leasing LLC, and RAS Contracting LLC, Plaintiffs,
v.
Litchfield Building Center, Inc., Kim R. Keithahn, and Thomton, Sperry, Jenson & Keithahn, Ltd., Defendants.

John G. Westrick, Esq., Westrick & McDowall-Nix, PLLP, counsel for Plaintiffs.

Brian A. Dillon, Esq., and Andrew J. Steil, Esq., Gray Plant Mooty Mooty & Bennett, PA, counsel for Defendant Litchfield Building Center, Inc.

Charles E. Jones, Esq., Meagher & Geer, PLLP, counsel for Defendants Kim R. Keithahn and Thomton, Sperry, Jenson & Keithahn, Ltd.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on a Motion to Dismiss Pursuant to Rule 12(b)(6) brought by Defendants Kim R. Keithahn ("Keithahn") and Thomton, Sperry, Jenson & Keithahn, Ltd. (the "Thomton Law Firm") (Doc. No. 6), and a Conditional Motion for Leave to Amend Complaint brought by Plaintiffs RAS Land Holdings LLC, RAS Equipment & Leasing LLC, and RAS Contracting LLC ("Plaintiffs") (Doc. No. 13). For the reasons set forth below, the Court grants the motion to dismiss and denies the motion for leave to amend.

BACKGROUND

In October 2013, Defendant Litchfield Building Center, Inc. ("LBC") sued Richard A. Smith and various entities owned by Smith, including RAS International LLC, RAS Trucking LLC, and Independent Rep and Sales Co. LLC (collectively, the "RAS Judgment Debtors"), in Minnesota State Court. (Doc. No. 1, Compl. ¶ 14; Doc. No. 11, Jones Aff. ¶ 2, Ex. A ("State Compl.").)[1] LBC was represented by Defendants Keithahn and the Thomton Law Firm. (State Compl.) In the state court action, LBC alleged that it entered into oral agreements with the RAS Judgment Debtors regarding the construction of portable homes for the North Dakota oil field market. ( Id. ¶¶ 5-6.) Specifically, LBC alleged that it agreed to build portable homes and the RAS Judgment Debtors agreed to sell and transport the homes to buyers in North Dakota. ( Id. ) LBC further alleged that the RAS Judgment Debtors partially performed, but then defaulted on its payment obligations, and that the RAS Judgment Debtors owed LBC more than $380, 000. ( Id. ¶¶ 7-12; see also Compl. ¶ 14.)

In the state court action, LBC obtained a Temporary Restraining Order ("TRO") preventing the RAS Judgment Debtors from "conveying, assigning, removing, encumbering, or transferring" certain equipment that LBC alleged the RAS Judgment Debtors purchased with monies it owed LBC. (Jones Aff. ¶ 4, Ex. C ("TRO") Findings of Fact ¶¶ 5-6 and Order ¶ 2; Compl. ¶¶ 16-18.) LBC also obtained a default judgment against the RAS Judgment Debtors. (Jones Aff. ¶ 5, Ex. D.) The state court issued a writ of execution, allowing the Sheriff to satisfy the judgment in favor of LBC out of personal property belonging to the RAS Judgment Debtors. ( Id. ¶ 8, Ex. G; Compl. ¶ 21.) Pursuant to this writ, the Sheriff's Office took possession of various items of personal property. (Jones Aff. ¶ 9, Ex. H ¶ 28; Compl. ¶¶ 21-25.) The RAS Judgment Debtors moved to vacate the default judgment, but the state court denied their motion. (Jones Aff. ¶ 9, Ex. H.)

While the RAS Judgment Debtors' motion to vacate was pending in state court, Plaintiffs initiated the present lawsuit in federal court. (Compl.) Plaintiffs assert three causes of action against LBC and its attorneys, Keithahn and the Thomton Law Firm: (1) Deprivation of Property under 42 U.S.C. § 1983; (2) conversion; and (3) trespass to chattels. Plaintiffs challenge the Sheriff's seizure of property, asserting that the property seized belonged to them and/or a non-party named Brittney Jean Hoeschen (the daughter of Richard A. Smith, one of the RAS Judgment Debtors), not the RAS Judgment Debtors. ( Id. ¶¶ 15-16, 27-29.) Plaintiffs argue that LCB's attorneys listed specific property in motion papers that belonged to Plaintiffs, not the RAS Judgment Debtors.[2] Plaintiffs allege that Defendants failed to properly ascertain the ownership of the items and did not perform due diligence before having the property seized. ( Id. ¶¶ 32, 41-43.) Plaintiffs further allege that no notice was given to Plaintiffs (who were not parties to the state court action), yet the state court granted relief and allowed execution of the writ. ( Id. ¶¶ 31, 42.)

Keithahn and the Thomton Law Firm now move to dismiss the claims against them for failure to state a claim under Rule 12(b)(6). Plaintiffs move for leave to amend their Complaint conditionally within 30 days should the Court grant the motion to dismiss, or in the alternative, request that the supplemental state law claims be dismissed without prejudice.

DISCUSSION

I. Motion to Dismiss

In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged. Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint, matters of public record, orders, materials embraced by the ...


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