United States District Court, D. Utah
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 ...