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John T. Hardisty v. Harold Maxine Moore

October 9, 2012


The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge


Presently before the Court is Defendant Harold Maxine Moore's ("Hal Moore") motion to dismiss the first and tenth causes of action of Plaintiff John T. Hardisty's ("Plaintiff") Third Amended Complaint ("TAC"); and a motion to strike certain portions of the TAC, filed by Hal Moore; State Insulation, LLC, an Arizona limited liability company ("State Insulation - Arizona"); State Insulation, LLC, a Nevada limited liability company ("State Insulation - Nevada"); the 1998 Harold M. Moore Revocable Trust (the "Trust"); and Elaine K. Moore, aka Melanie K. Moore ("Melanie Moore") (collectively referred to as the "Defendants"). (Doc. No. 26.) In accordance with Civil Local Rule 7.1.d.1, the Court finds this motion suitable for determination on the papers and without oral argument. Accordingly, the motion hearing scheduled for October 12, 2012 is hereby vacated. For the reasons set forth below, the Court GRANTS Defendant Hal Moore's motion to dismiss, and GRANTS Defendants' motion to strike.


This action arises from Defendant Hal Moore's investment in a limited liability company known as Legacy Pointe, LLC ("Legacy Pointe"). The "sole purpose" of the company was "to acquire, develop, construct, own, operate and sell an apartment project" located in Knoxville, Tennessee (the "Project"). (TAC, Exh. 3.) Hal Moore initially invested $1.5 million as a capital contribution in the company to obtain fifty percent (50%) interest in Legacy Pointe. He also invested millions more in the form of loans and additional capital contributions. (TAC ¶¶ 49, 50, 51, 54, 58, 77, Exh. 3.)

Plaintiff John Hardisty was a member and the Chief Manager of Legacy Pointe, as well as a member of Munson-Hardisty, LLC ("M-H"), the general contractor and builder of the Project. As such, he sought Hal Moore as an investor. (TAC ¶¶ 36, 43-54.) In exchange for waiving his builder's profit on the Project, Plaintiff was to receive "sweat equity" in the company. (TAC ¶ 29.) In particular, Plaintiff initially received a twenty-seven percent (27%) membership interest as the developer, and M-H received a ten percent (10%) membership interest as the builder, fifty percent (50%) of which belonged to Plaintiff. (TAC ¶¶ 29-31.)

Plaintiff alleges that Hal Moore, through fraud and coercion, divested him of his sweat equity in the Project and acquired almost all of the ownership interest in Legacy Pointe. He further alleges that Hal Moore and Melanie Moore tricked him into signing numerous documents, without reading them, which enabled Defendants to perpetrate their intended fraud. Finally, Plaintiff alleges that Defendants engaged in their fraudulent conduct as part of a single scheme to deprive him of his equity interest in Legacy Pointe and the Project. In doing so, Hal Moore allegedly breached his fiduciary duty to Plaintiff.

Plaintiff filed the initial Complaint on July 19, 2011, and shortly thereafter filed the First Amended Complaint ("FAC") on August 1, 2011. (Doc. No. 3.) Defendants Elaine Moore and Mark Peluso filed a motion to dismiss the second and fifth causes of action on October 13, 2011. (Doc. No. 10.) The Court held a hearing on the motion on December 23, 2011, and granted the motion to dismiss. (Doc. No. 16.) The second cause of action was dismissed with prejudice, and the fifth cause of action was dismissed with leave to amend. (Doc. No. 16.)

Plaintiff filed the Second Amended Complaint ("SAC") against all Defendants on January 30, 2012. (Doc. No. 23.) The first cause of action was changed into a breach of specific promise to answer for the debt of another, and the second cause of action was changed to aiding and abetting intentional torts. A motion to dismiss the first, fourth, fifth, seventh, and ninth causes of action of Plaintiff's SAC was filed on February 21, 2012. (Doc. No. 26.) An opposition and reply were filed on March 10, 2012 and March 23, 2012, respectively. (Doc. Nos. 28 and 30.) The Court granted the motion to dismiss as to the first cause of action with leave to amend and the fifth cause of action with prejudice, and denied the motion as to the fourth, seventh and ninth causes of action. (Doc. No. 33.)

Plaintiff filed the TAC against all Defendants on June 1, 2012. (Doc. No. 34.) The instant motion to dismiss and motion to strike were filed on June 20, 2012. (Doc. No. 35.) An opposition and reply were filed on July 18, 2012 and August 1, 2012 respectively. (Doc. Nos. 37 and 38.) All documents were considered in the issuance of this order.


Motion to Dismiss Under Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings, and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state a claim upon which relief may be granted. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court may dismiss a complaint as a matter of law for: (1) "lack of cognizable legal theory," or (2) "insufficient facts under a cognizable legal claim." SmileCare Dental Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). However, a complaint survives a motion to dismiss if it contains "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

Notwithstanding this deference, the reviewing court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). It is also improper for the court to assume "the [plaintiff] can prove facts that [he or she] has not alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 664. The court only reviews the contents of the complaint, accepting all factual ...

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