United States District Court, D. Utah, Central Division
JUST U.S. REALTORS, LLC, on behalf of itself and all others similarly situated, Plaintiff,
NUDGE, LLC, BUYPD, LLC, INCOME PROPERTY USA, LLC, INSIDER'S CASH, LLC, RYAN POELMAN, GUARDIAN LAW, LLC, AMERICAN LEGAL & ESCROW, LLC, INVICTUS LAW, LLC, and BLAIR R. JACKSON, Defendants.
ORDER AND MEMORANDUM DECISION
CAMPBELL U.S. DISTRICT COURT JUDGE.
Just Us Realtors, LLC filed this case, a putative class
action, against a number of individuals and limited liability
corporations that sold and financed real estate through
investor training seminars. Just Us Realtors, which bought a
house through the seminars, alleges that the Defendants
misrepresented the ownership and value of the real estate it
offered for sale and fraudulently induced it and other
investors to overpay for property. It brings claims under the
Racketeering Influenced and Corrupt Organizations Act (RICO)
and state law. The Defendants have filed four motions to
dismiss the case under Federal Rule of Civil Procedure
12(b)(6). The court will grant the motions to dismiss, but
allow Just Us Realtors to file a motion to amend with a
proposed amended complaint to cure the pleading deficiencies
resolve the Defendants' motions to dismiss, the court
accepts the well-pleaded facts of the complaint as true, and
draws all reasonable inferences in favor of the Plaintiff.
Brokers' Choice of Am., Inc. v. NBC Universal,
Inc., 861 F.3d 1081, 1105 (10th Cir. 2017).
Defendants in this case fall into one of three categories
depending on their role in the alleged scheme to sell real
estate: (1) the “Property Defendants”: Nudge,
LLC; Buy PD, LLC; Income Property USA, LLC; and Ryan Poelman;
(2) the “Cash Defendant”: Insider's Cash,
LLC; and (3) the “Attorney Defendants”: Blair R.
Jackson and three law firms he allegedly controls or
represents-Invictus Law, LLC; Guardian Law, LLC; and American
Legal & Escrow, LLC.
to the complaint, the Property Defendants canvassed the
United States for sellers of distressed real estate. Rather
than buy the real estate outright, the Property Defendants
entered into contingency agreements to buy the real estate
themselves only after securing customers who would buy the
same real estate at a significant markup. And to recruit
their customers, the Property Defendants organized real
estate investment training seminars sponsored by Scott and
Amie Yancey from the television show “Flipping Las
Vegas.” At the initial free training seminars, the
Property Defendants offered attendees the chance to pay for
additional seminars that culminated with the “Buying
Summit”-an event in Las Vegas at which the Property
Defendants would offer “exclusive access” to buy
the distressed properties, which they called
“turnkey” “performing assets.”
(Compl. ¶¶ 12, 44(a), ECF No. 2.)
December of 2014, Iris Hoard saw a television commercial
advertising a free Yancey-sponsored seminar. She and her
partner Douglas Foster (the two members of Just Us Realtors)
attended the seminar, called the “Simple Real Estate
Program, ” where they were encouraged to attend
additional trainings. Later that month, they paid $1, 197 to
attend a three-day “Real Estate Workshop.” They
then paid $12, 500 to attend a “Boots on the
January of 2015, shortly after the Boots on the Ground
seminar, the Property Defendants began recruiting Ms. Hoard
and Mr. Foster to attend the upcoming Buying Summit in Las
Vegas. The Property Defendants sent the two a series of
emails advertising the event as a place “to get some
deals done, ” (id. ¶ 44(a)), and to
purchase “performing assets” provided by BuyPD
and Income Property USA. (Id. ¶ 72.) Ms. Hoard
and Mr. Foster signed up for the Buying Summit by telephone,
paying $17, 497 for entry.
Hoard and Mr. Foster attended the Buying Summit in February
of 2015. At the Summit, the Property Defendants attempted to
convince attendees to buy homes it was offering for sale. A
workbook provided to attendees represented that the Property
Defendants had performed due diligence, conducted market
research, and relied on “Trusted Informants” and
“Inside Information” to vet the properties.
(Id. ¶ 48.) The workbook also represented that
the Property Defendants had “Bought” homes from
“MOTIVATED SELLERS” and chosen homes with
“Positive Cash Flow.” (Id. ¶ 49.)
Mr. Poelman made many of these same representations in live
presentations at the Summit.
February 13, 2015, the second day of the Buying Summit, Ms.
Hoard and Mr. Foster met with Jonny Payne, a BuyPD
“real estate consultant, ” who showed them on a
laptop computer a single-family house available to purchase.
Mr. Payne told the two that they had limited time to purchase
the property because the “portfolio” would
quickly expire and the property would be sold to someone
else. (Id. ¶ 80.) Ms. Hoard and Mr. Foster
agreed to buy the house, which was located in St. Louis,
Missouri, for a purchase price of $54, 200 (a voucher
effectively lowered the price to $52, 950, though additional
fees ultimately pushed the total price to $56, 792).
time of the sale, the Defendants made a number of
representations concerning the ownership of the St. Louis
house. Mr. Payne provided Ms. Hoard and Mr. Foster with a
document he prepared, titled “Purchase Details, ”
which stated that the house was being “Purchased
From” Income Property USA. (Id. ¶ 82.) He
also gave them a “Property Analysis Report”
containing a “title summary” prepared by Guardian
Law. The title summary read that “[t]itle to the Fee
Simple estate . . . is at the Effective Date [February 13,
2015] to be vested in: 5 Choices, LLC by Warranty Deed”
(5 Choices, a now defunct company, was allegedly controlled
by Nudge). (Ex. E to Pl.'s Opp. to Mots. to Dismiss, ECF
Just Us Realtors agreed to buy the house, the Defendants set
in motion two sets of transactions. First, the Property
Defendants acquired title to the house from the actual owner,
Venus Properties, for $39, 000. Guardian Law facilitated the
transfer of title from Venus Properties to an entity called
American Real Estate Investments, LLC, and then to 5 Choices.
Insider's Cash, American Legal & Escrow, and Guardian
Law (advertised at the Buying Summit as “Strategic
Partners”) effectuated the sale of the house to Just Us
Realtors- and did so in a way that masked the $39, 000 Venus
Properties sale. Insider's Cash provided Just Us Realtors
with a three-year, $40, 300 bridge loan, removing the need
for a conventional lender that might conduct due diligence
into the actual value of the property. Additionally, the
Property Defendants required that Just Us Realtors grant
American Legal & Escrow power of attorney to complete
transaction paperwork, and assigned Guardian Law to act as
the title and escrow agent for Just Us Realtors'
transaction. In that way, Guardian Law acted as the title and
escrow agent for Just Us Realtors as it simultaneously
effectuated the “secret” title transfers from
Venus Properties to the Property Defendants. As a
consequence, Just Us Realtors closed on the St. Louis house
without any knowledge of its title history (including the
$39, 000 sale) or the house's true value. According to
Just Us Realtors, it was left owing more than the house was
worth, and unable to refinance its balloon-payment bridge
2016, after Buying Summit attendees began to question the
propriety of the Defendants' business practices, Ms.
Hoard and other attendees received the following email from
Bill Knowlton, an attorney from Defendant Invictus Law:
My name is Bill Knowlton, and our Firm has had the privilege
of representing BuyPD for the last 5 years. As you can likely
appreciate, I was very surprised to read this e-mail string
and some of the comments made by some of my client's
customers. It is very unfortunate these frustrations
exist-and I would like to offer some insights, and potential
resolutions for each and every one of you.
While I do not know all of the facts of your concerns that
precipitated the creation of this e-mail, what I do know is
that my client has gone above-and-beyond with its clients in
the past. I have no doubt that, given the chance, they can
(and will) resolve any and all concerns some of you may be
My client does everything in its power to ensure the
investment properties it sells offer the greatest value to
its customers. Despite thousands of happy customers and
buyers over the years, occasionally a problem arises.
Unfortunately, real estate is unique. Tenants are not
perfect. Contractors can be less than forthright.
Misunderstandings and miscommunications occur.
That said, however, my client has a long and distinguished
history of dealing with these issues head-on, and addressing
them directly in a positive and reasonable manner.
I have no doubts they will do the same here. To that end, I
would respectfully request each of you contact me
individually to discuss our concerns, and I will work
directly with my client to reach a resolution.
I look forward to working with each of you.
Sincerely yours, Bill Knowlton, Esq. Invictus Law, P.C.
(Compl. ¶ 105.)
Realtors filed this case as a class action,  alleging
violations of RICO as well as state law claims of civil
conspiracy, breach of fiduciary duty (and aiding and abetting
the breach), and fraud against each Defendant.
Defendants have arranged themselves into four groups for the
purpose of defending this lawsuit: (1) American Legal &
Escrow, Invictus Law, and Mr. Jackson (collectively, the
“Jackson Defendants”); (2) Insider's Cash;
(3) Nudge, BuyPD, Income Property USA, and Mr. Poelman
(collectively, the “Poelman Defendants”); and (4)
Guardian Law. Each group has filed a motion to dismiss
pursuant Federal Rule of Civil Procedure 12(b)(6). The
Defendant groups all raise essentially the same arguments
concerning the sufficiency of Just Us Realtors'
Complaint-that Just Us Realtors has not pled sufficient facts
to support RICO or state law claims, and has not pled the
alleged fraud with particularity under Federal Rule of Civil