Cushman & Wakefield U.S., Inc. v. 3551 and 3371 N Buffalo Owner LLC

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Cushman & Wakefield U.S., Inc., 2:25-cv-00631-MDC doing business as, Cushman & Wakefield 4 ORDER DENYING DEFENDANTS’ Plaintiff(s), MOTION FOR BOND (ECF NO. 8) AS [5] MOOT; GRANTING DEFENDANTS’ vs. MOTION TO DISMISS (ECF NO. 14); AND [6] GRANTING DEFENDANTS’ MOTION TO 7 3551 and 3371 N Buffalo Owner LLC, et al., EXTEND TIME (ECF NO. 19) NUNC PRO TUNC 8 Defendant(s). 9 The defendants filed a Motion for Bond, a Motion to Dismiss, and a Motion for an Extension of 10 Time (ECF Nos. 8, 14, and 19). The Court DENIES the defendants’ Motion for Bond as MOOT. ECF 11 No. 8. The defendants’ Motion to Extend Time is GRANTED nunc pro tunc. ECF No. 19. The 12 defendants’ Motion to Dismiss is GRANTED without prejudice. ECF No. 14. 13 I. BACKGROUND 14 This is a commercial real estate case. The parties dispute a commission amount allegedly due 15 to the plaintiff real estate brokerage company by defendant 3351 and 3371 N Buffalo Owner, LLC. 16 The other defendant companies and individuals are named as alter egos. The disputed commission is 17 being held in escrow. 18 II. DEFENDANTS’ MOTION FOR BOND 19 The plaintiff is a Missouri company and the defendants removed this case pursuant to diversity 20 jurisdiction. ECF No. 1. The defendants seek a cost bond pursuant to NRS 18.130(1). ECF No. 8. The 21 plaintiff does not dispute the bond requirement, and incorporated in its response, is the sworn 22 undertaking (i.e., bond) by the plaintiff. ECF No. 9. Defendants did not dispute that the undertaking 23 set forth in the response satisfied NRS 18.130. The Court thus denies the defendants’ Motion for Bond 24 as moot. [25] 1 III. DEFENDANTS’ FIRST MOTION TO EXTEND TIME 2 The defendants asked for an eleven-day extension of time to file its reply to the Motion to 3 Dismiss. ECF No. 19. Plaintiff opposes because it does not believe that counsel’s workload and a 4 planned vacation constitutes sufficient cause. ECF No. 20. Defendants filed the reply on time. ECF 5 No. 21. 6 Plaintiff’s opposition to defendant’s request for extension is not reasonable. Plaintiff does not 7 articulate any specific, actual prejudice resulting from defense counsel’s extension request. 8 Defendants’ request is modest and based in part on a previously planned vacation of its counsel, James 9 Whitmire, which is objectively reasonable and sufficient good cause. The Court expects counsel to 10 cooperate, accommodate, and extend professional and personal courtesies. The State Bar of Nevada 11 also expects lawyers to show and extend personal and professional courtesies. Among other things, 12 the Creed of Professionalism and Civility adopted by State Bar of Nevada Bar on January 19, 2023 13 (rev. 06/21/23) expressly provides that lawyers: 14 11 [W]ill endeavor to accommodate previously scheduled dates for 15 hearings, depositions, meetings, conferences, vacations, seminars, or other functions of other counsel. [16] 17 12 [W]ill explain to our clients that cooperation is the professional norm. We will explain how procedural agreements do not compromise the clients’ [18] interests. [20] Id. Refusals for modest and reasonable extensions are not only petty but distract from the merits. [21] The Court warns the parties and counsel that failure to cooperate, accommodate, and extend [22] professional and personal courtesies will result in sanctions to the party and to counsel. The [23] defendants’ Motion to Extend Time is granted nunc pro tunc. [24] // [25] 1 IV. DEFENDANTS’ MOTION TO DISMISS 2 Defendant 3551 and 3371 N Buffalo Owner LLC filed an answer (ECF No. 15), but the rest of 3 the defendants’ filed a joint motion to dismiss (ECF No. 14). The defendants seeking dismissal argue 4 they are not parties to the contract and that the Court lacks jurisdiction over them. 5 A. Legal Standard 6 A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can 7 be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide “a short and plain 8 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2); Bell 9 Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual 10 allegations, it demands more than “labels and conclusions or a formulaic recitation of the elements of a 11 cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). “Factual allegations 12 must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 . “To 13 survive a motion to dismiss, a complaint must contain sufficient factual matter to ‘state a claim for 14 relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (citation omitted). 15 In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when 16 considering motions to dismiss. First, a district court must accept as true all well-pled factual 17 allegations in the complaint; however, legal conclusions or mere recitals of the elements of a cause of 18 action, supported only by conclusory statements, are not entitled to the assumption of truth. Id. at 678 . 19 Second, a district court must consider whether the factual allegations in the complaint allege a 20 plausible claim for relief. Id. at 679 . Where the complaint does not permit the court to infer more than 21 the mere possibility of misconduct, the complaint has “alleged—but it has not show[n]—that the 22 pleader is entitled to relief.” Id. When the claims in a complaint have not crossed the line from 23 conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570 . 24 The alter-ego theory of personal jurisdiction is a “narrow exception” to the general rule that [25] 1 company contacts are not imputed to an owner. Viega GmbH v. Eighth Jud. Dist. Ct., 130 Nev. 368 , 2 376, 328 P.3d 1152 , 1157 (2014). This Court generally looks to Nevada law when addressing claims 3 of alter ego. See Budnick v. Your Mgmt., LLC, 2010 WL 11575643 , at *3 (D. Nev. Feb. 11, 4 2010)(“The determination of whether an individual is the alter ego of a corporation is governed by 5 Nevada state law.”)(citing Towe Antique Ford Foundation v. IRS, 999 F.2d 1387 (9th Cir. 1993)). But 6 this Court is not limited only to Nevada law when addressing Nevada corporate matters, such as alter 7 ego. This Court may also rely on Delaware authorities as persuasive in interpreting Nevada corporate 8 law. See Hilton Hotels Corp. v. ITT Corp., 978 F. Supp. 1342, 1346 (D. Nev. 1997)(where “there is 9 no Nevada statutory or case law on point for an issue of corporate law, this Court finds persuasive 10 authority in Delaware case law.”). See also Complaint, ECF No. 1 at ¶10 (referencing Delaware law). 11 The elements of alter ego are: 12 (1) the corporation must be influenced and governed by the person asserted to be the alter ego; (2) there must be such unity of interest and ownership that one is 13 inseparable from the other; and (3) the facts must be such that adherence to the corporate fiction of a separate entity would, under the circumstances, sanction [14] fraud or promote injustice….It is not necessary that the plaintiff prove actual fraud. It is enough if the recognition of the two entities as separate would result [15] in an injustice. [16] Polaris Indus. Corp. v. Kaplan, 103 Nev. 598, 601 , 747 P.2d 884, 886 (1987)(citing McCleary Cattle [17] Co. v. Sewell, 73 Nev. 279, 282 , 317 P.2d 957 , 959 (1957). See Complaint, ECF No. 1 at ¶¶2, 19. [18] Mere breach of contract claims are not the type of injustice sufficient to establish alter ego. [19] Mobil Oil Corp. v. Linear Films, Inc., 718 F. Supp. 260, 268 (D. Del. 1989). “[T]his type of [20] “injustice” is not what is contemplated by the common law rule that piercing the corporate veil is [21] appropriate only upon a showing of fraud or something like fraud….To hold otherwise would render [22] the fraud or injustice element meaningless, and would sanction bootstrapping.” Id. Thus, when a [23] plaintiff alleges only contract claims, plaintiff is required to sufficiently plead fraud or something like fraud [24] with respect to the transaction at issue, which this Court has previously determined requires a heightened [25] 1 pleading standard: 2 Additionally, fraud is a necessary element of the alter ego doctrine…Thus, a party pleading alter ego must satisfy the heightened pleading standard of 3 Fed.R.Civ.P. 9(b)…. Fraud under Fed.R.Civ.P. 9(b) requires a party to state with particularity the circumstances constituting [the] fraud. Thus to [4] sufficiently plead fraud a plaintiff must provide an account of the time, place, and specific content of the false representations, as well as the identities of the [5] parties to the misrepresentations…. Additionally, fraudulent intent must be 6 proven with facts, and may not be inferred solely from a company's “bleak financial condition. [7] Interactive Fitness, Inc. v. Basu, No. 2:09-CV-01145-KJD, 2011 WL 1870597 , at *6 (D. Nev. May 13, [8] 2011)(internal quotations and citations omitted). [9] B. Analysis [10] Plaintiff asserts only contract related claims (i.e., breach of contract, regular breach of implied [11] covenant of good faith and fair dealing, and an alternative claim for unjust enrichment). The only [12] defendant to the agreement giving rise to plaintiff’s claims is 3351 and 3371 N. Buffalo Owner, LLC [13] (“Defendant-Owner”). See Complaint, ECF No. 1 at ¶¶2, 19. Per plaintiff’s allegations, all actions [14] relative to plaintiff’s claims were taken by or on behalf of Defendant-Owner. Id. at ¶¶23, 25, 27, 28, [15] 29, 30, 31. Plaintiff does not allege any actions taken by defendants Wellness Holdings GP, LLC [16] (“Wellness Holdings”), Wellness Real Estate Holdings LLC (“Wellness Real Estate”), Jeffrey Bogino [17] (“Bogino”) or Patrick Haynes (“Haynes”) relative to his claims. Instead, plaintiff attempts to hold [18] these defendants liable for Defendant-Owner’s alleged breach of contract under an alter ego theory. [19] Whether the court has personal jurisdiction over moving defendants is irrelevant unless the [20] plaintiff can state a claim against them. Here, plaintiff does not assert any direct claims against moving [21] defendants. Instead, moving defendants’ liability is vicarious/indirect via the plaintiff’s claims against [22] the Defendant-Owner. Plaintiff has not sufficiently alleged alter ego. Plaintiff’s complaint merely [23] recites some of these alter ego elements and adding general, conclusory allegations of [24] “undercapitalization” and “comingling of funds” which are not related to the transaction at issue. See [25] 1 Complaint, ECF No. 1 at ¶¶6-13. Under federal law, a plaintiff does not sufficiently plead alter go by 2 merely reciting the elements of such liability. See Ashcroft v. Iqbal, 556 U.S. 662, 678 , 129 S. Ct. 3 1937, 1949 (2009)(“a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ 4 requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of 5 action will not do”). “Conclusory allegations of ‘alter ego’ status are insufficient to state a claim. 6 Rather, a plaintiff must allege specific facts supporting both of the necessary elements. Gerritsen v. 7 Warner Bros. Ent. Inc., 116 F. Supp. 3d 1104, 1136 (C.D. Cal. 2015)(citations omitted). Plaintiff must 8 sufficiently allege alter ego before the Court will reach the personal jurisdiction issue. The plaintiff 9 will not be prejudiced by dismissal at this stage because the full amount of the commission is being 10 held in escrow. 11 In addition, plaintiff fails to allege how adherence to the corporate fiction of defendants a 12 Wellness Holdings, Wellness Real Estate, Bogino, or Haynes would “sanction fraud or promote 13 injustice.” Polaris Indus. Corp., 103 Nev. at 601 , 747 P.2d at 886 . As stated above, plaintiff has 14 simply asserted breach of contract claims, where the entire disputed commission of $274,400.00 15 remains in escrow. See Complaint, ECF No. 1 at ¶¶29, 30. Because plaintiff’s claims are mere 16 contractual claims, plaintiff is required to sufficiently plead fraud or something like fraud with respect 17 to the transaction at issue to establish the fraud or injustice element of his alter ego claim. Mobil Oil 18 Corp. 718 F. Supp. at 268 . Plaintiff fails to allege any fraud or injustice to state alter ago liability. In 19 sum, plaintiff does not allege sufficient facts to state alter ego liability against defendants Wellness 20 Holdings, Wellness Real Estate, Bogino, or Haynes. 21 Plaintiff requests leave to amend if the complaint is dismissed. "If a complaint is dismissed for 22 failure to state a claim, leave to amend should be granted 'unless the court determines that the 23 allegation of other facts consistent with the challenged pleading could not possibly cure the 24 deficiency.'" DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber [25] 1 || Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393 , 1401 (9th Cir. 1986)). Because it does not 2 || appear that amendment would be futile, leave to amend 1s granted. 3 ACCORDINGLY, 4 IT IS ORDERED that: ° 1. Defendants’ Motion for Bond (ECF No. 8) is DENIED AS MOOT. ° 2. Defendant’s Motion to Dismiss (ECF No. 14) is GRANTED without prejudice and with leave to amend. 3. Ifthe plaintiff elects to do so, it must file the amended complaint by August 25, 2025. 0 4. Defendants’ Motion to Extend Time (ECF No. 19) is GRANTED nunc pro tune. 11 DATED: August 11, 2025. “p, 12 a a IT IS SO ORDERED. ZL 13 ft fA __ □□ Holt. Maximiiidino'\D. 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