Opinion
No. 02-2593-GTV
October 2, 2003
MEMORANDUM AND ORDER
The court has under consideration the second motion to dismiss (Doc. 39) filed by Defendants JDN Real Estate, JDN Realty Corporation, JDN Development Company, Belle Meade Acquisition Corporation, and Developers Diversified Realty Corporation. After this court granted in part and denied in part Defendants' first motion to dismiss, Plaintiff Terra Venture, Inc., filed an amended complaint, alleging claims against Defendants for breach of contract, breach of fiduciary duty, promissory estoppel, and an accounting.
The case arises out of two written agreements between Plaintiff and Defendant JDN Real Estate relating to the development of a 100-acre tract of land. The court has previously recounted the relevant facts of this case in Terra Venture. Inc. v. JDN Real Estate, No. 02-2593-GTV, 2003 WL 21003504 (D. Kan. Apr. 24, 2003), and will not repeat them here. For the following reasons, the court denies Defendants' motion to dismiss (Doc. 39).
I. STANDARD FOR JUDGMENT
Defendants move to dismiss Plaintiff's amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.A Rule 12(b)(6) motion to dismiss will be granted only if it appears beyond a doubt that the plaintiff is unable to prove any set of facts entitling him to relief under his theory of recovery. Conlev v. Gibson 355 U.S. 41, 45-46 (1957). "All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true." Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984). The court must view all reasonable inferences in favor of the plaintiff, and the pleadings must be liberally construed. Id.: Fed.R.Civ.P. 8(f). The issue in reviewing the sufficiency of a complaint is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fiztgerald, 457 U.S. 800 (1982).
II. DISCUSSION A. Claims Relating to the Auto Mall
Defendants first argue that the court should dismiss Plaintiff's claims for lost profits and the value of land stemming from a failed auto mall deal. Plaintiff alleges that as part of its transaction with Defendants, Plaintiff was to buy a tract of land, and had it done so, Plaintiff would own the valuable land and would have earned substantial profits. Defendants ask the court to dismiss the claims because Plaintiff failed to allege that Defendants agreed to transfer the land to Plaintiff Defendants also argue that such a deal is not contemplated in any of the written agreements between the parties and is therefore barred by the Kansas statute of frauds.
On the record before it, the court cannot conclude that Plaintiff could prove no set of facts entitling it to recovery. Defendants' argument is more appropriate for a summary judgment motion than a motion to dismiss. Defendants' motion is denied on such basis.
B. Failure to Allege that Plaintiff was a Real Estate Broker
Defendants next claim that Plaintiff's claim for leasing commissions fails because Plaintiff did not allege that it or its employees were duly licensed real estate brokers as required by Marcotte Realty Auction. Inc. v. Schumacher, 589 P.2d 570, 574 (1979). As Plaintiff notes, the statute at issue in Schumacher was superseded in 1980 by a statute that does not require a plaintiff to specifically plead that he was a licensed real estate broker. See Kan. Stat. Ann. § 58-3038. The court rejects Defendants' argument that Plaintiff must plead that it was a broker as a condition precedent to bringing suit. Defendants' motion is denied on these bases.
C. Enforceability of the Fee Agreement
Defendants next argue that the fee agreement between the parties is unenforceable because it does not contain all the terms regarding Plaintiff's compensation. Because the fee agreement was to last for more than one year, Defendants submit that it is governed by the statute of frauds.
The fee agreement, which was attached to Plaintiff's amended complaint, provides that Plaintiff could earn commissions for leasing the property. The agreement does not specify how the commissions would be calculated and states that the commissions would be negotiated at the time of any transactions.
Again, the court cannot conclude based on the record before it that Plaintiff could prove no set of facts entitling it to relief. Defendants' motion is denied on such basis.
D. Breach of Fiduciary Duty Claim
Finally, Defendants submit that the court should dismiss Plaintiff's breach of fiduciary duty claim because Plaintiff has failed to plead facts from which the court can infer a "conscious assumption" of a fiduciary duty by Defendants, as required by Kansas law. Defendants made the same argument in their first motion to dismiss, and the court dismissed Plaintiff's claim for breach of fiduciary duty. Plaintiff resubmitted the claim in its amended complaint.In Plaintiff's amended complaint, Plaintiff specifically alleges facts regarding each of the elements of a fiduciary relationship. Plaintiff alleges that it reposed trust in Defendants to consummate transactions in a timely manner; that Defendants were in a superior position to Plaintiff; that Defendants consciously assumed a fiduciary duty to Plaintiff; that Defendants agreed to act primarily for Plaintiff's benefit; and that the property, interest, and authority of Plaintiff was placed in the charge of Defendants.
The court has reviewed Plaintiff's amended complaint and determines that Plaintiff's allegations are not conclusory and are sufficient to state a claim. Defendants' motion is denied on such basis.
Defendants also argue that Plaintiff cannot base its claim for breach of fiduciary duty on the parties' joint venture or agency. The court need not reach these arguments because it has already determined that Plaintiff's claim survives Defendants' motion to dismiss.
III. CONCLUSION
The court has reviewed all of the parties' arguments, even those not specifically addressed in this Memorandum and Order, and concludes that Plaintiff has sufficiently stated claims to survive a motion to dismiss. Plaintiff's claims may be subject to dismissal at a later time, but the court declines to do so now based on the record before it.
IT IS, THEREFORE, BY THE COURT ORDERED that Defendants' motion to dismiss (Doc. 39) is denied.
Copies or notice of this order shall be transmitted to counsel of record.