Worldclear Ltd. v. Akirix, LLC

          MEMORANDUM DECISION AND ORDER

          Dale A. Kimball, United States District Judge.

         This matter is before the court on Plaintiff Worldclear Limited's Motion to Amend Complaint and Defendant Akirix, LLC's Motion to Dismiss. The court does not believe that a hearing would significantly aid in its determination of these motions. Having fully considered the motions, memoranda, and exhibits submitted by the parties and the facts and law relevant to these motions, the court issues the following Memorandum Decision and Order.

         BACKGROUND

         Worldclear brought this action relating to an alleged withholding of Worldclear's funds against Akirix. Worldclear's original Complaint asserted causes of action for breach of fiduciary duty, breach of contract, unjust enrichment, conversion, fraud in the inducement, fraud, conspiracy to defraud, and accounting/constructive trust. Akirix filed a Motion to Dismiss on October 31, 2017. Worldclear filed the present Motion to Amend on December 11, 2017. Since the statutorily required 21-day limit to amend as a matter of course has passed, Worldclear requests leave to amend.

         Worldclear's proposed Amended Complaint seeks to remove five causes of action alleging conversion, fraud in the inducement, fraud, conspiracy to defraud, and accounting/constructive trust. In addition to removing causes of action, Worldclear also seeks to address the factual deficiencies alleged by Akirix in its Motion to Dismiss.

         DISCUSSION

         Worldclear requests leave to amend the complaint to focus on contractual and related equitable issues. Akirix opposes Worldclear's Motion to Amend because Akirix claims that the proposed amendments would be futile. Rule 15 governs the amendment of pleadings and states that when leave of court is necessary “[t]he court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a). Courts have held that refusing leave to amend is rare and generally only justified upon a “showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). The “court properly may deny a motion for leave to amend as futile when the proposed amended complaint would be subject to dismissal for any reason, including that the amendment would not survive a motion for summary judgment.” Bauchman v. West High School, 132 F.3d 542, 562 (10th Cir. 1997).

         A. Request to Remove Causes of Action

         Worldclear proposes limiting the scope of the complaint by eliminating Claims V-IX, which include conversion, fraud in the inducement, fraud, conspiracy to defraud, and accounting/constructive trust. Akirix does not oppose dismissing Claims V-IX. Therefore, the court grants Worldclear leave to eliminate these claims in furtherance of the “just, speedy, and inexpensive determination” of this proceeding. Fed.R.Civ.P. 1.

         B. Request to Address Factual Deficiencies

         Worldclear proposes amending the Complaint to address the deficiencies alleged by Akirix in its Motion to Dismiss for failure to state a claim. Akirix opposes Worldclear's amendment to Counts I-IV as “futile, ” see Frank, 3 F.3d at 1365, because even an amended complaint would allegedly “be subject to dismissal.” See Bauchman, 132 F.3d at 562. Unlike in Bauchman, at this stage of pleading the appropriate dismissing motion is not a motion for summary judgment, but rather a motion to dismiss. When evaluating a 12(b)(6) motion to dismiss, this court accepts all well-pled facts as true and views them in the light most favorable to the plaintiff. Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009). “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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, (2007)). A claim is facially plausible if the plaintiff has pled “factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         1. Breach of Fiduciary Duty

         Worldclear claims that Akirix breached its fiduciary duty. Akirix counters that it never acted as a fiduciary. Akirix further analogizes its relationship with Worldclear to banking and cites First Sec. Bank of Utah v. Banberry Development Corp., 786 P.2d 1326, 1333 (Utah 1990), for the proposition that even a long-standing banking relationship does not create a fiduciary relationship. However, the First Sec. Bank court also recognized that “the cases [Defendant] cites in support of his view stand for narrow propositions, . . . [T]o determine whether a fiduciary duty should be implied in law due to the factual situations surrounding the transaction and the relationship of the parties, we consider the following principles.” Id. at 1333-34. The court then lists several principles to evaluate this relationship, including (1) peculiar confidence placed in one individual by another, (2) a duty to act primarily for the benefit of another, (3) a position to have and exercise influence over another, (4) a condition of superiority over the other, or (5) the property of one party being placed in charge of another. Id. at 1334.

         To support its claim for breach of fiduciary duty, Worldclear alleges that Akirix held a certain amount of Worldclear's funds to facilitate transfers. Worldclear then asserts that Akirix breached this duty when it “cut off Worldclear's access to the Akirix system” and refused to return or account for the funds. This allegedly caused damages in the amount of $4, 330, 196.79. Taking Worldclear's well-pled claim as true, Akirix held more than four million dollars for Worldclear and has failed to account for that money. This court finds that these facts are sufficient to meet the ...