Beyer Laser Center et al v. Polomsky

MOTION to Dismiss for Failure to State a Claim

D. Colo.April 6, 2017

1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 1:16-cv-03099-MEH Beyer Laser Center, LLC and Dr. Craig Beyer Plaintiffs, v. Matej Polomsky, M.D., Defendant. Plaintiffs’ Motion to Dismiss Counterclaims Plaintiffs Beyer Laser Center, LLC (“BLC”) and Dr. Craig Beyer, DO, herein move to dismiss Defendant Matej Polomsky’s Counterclaims pursuant to Fed. R. Civ. P. 12(b)(6), as the counterclaims are clearly time-barred by the applicable statutes of limitation, or Defendant has failed to plausibly state a claim under the standards announced in Bell Atlantic Corp. v. Twombly, as detailed below: I. OVERVIEW This action arises from the Defendant’s unlawful filing of a false and baseless complaint with the Colorado Department of Regulatory Agencies (“DORA”) in November 2012. As Defendant concealed his filing of the DORA Complaint, Dr. Beyer and BLC did not learn of Defendant’s DORA complaint until April 4, 2016, when Dr. Polomsky was deposed as a fact witness in a separate case. Prior to removal to this Court, Plaintiffs initiated the instant action by filing their Complaint in Colorado State District Court on October 27, 2016 bringing claims for Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 1 of 21 2 defamation, abuse of process1, malicious prosecution, intentional interference, and civil conspiracy. As noted by Defendant in his wholly unsuccessful Motion to Dismiss, [ECF No. 12], “all of [the] claims [in the Complaint] are premised upon one factual predicate-that Dr. Polomsky filed a report with the CMB…” ECF No. 18 12, p. 2 (emphasis added). In other words, all of Plaintiffs’ claims arise from the singular factual transaction or occurrence of Defendant’s improper submission of the DORA Complaint in November 2012. Following the Court’s denial of his Motion to Dismiss, Defendant filed his Answer and Counterclaims, ECF No. 30. All eight counterclaims should be dismissed for failure to state a claim upon which relief may be granted. It is clear from the face of the Defendant’s pleading that Counterclaims 1, 2, and 5, 7 and 8 are time-barred by applicable statutes of limitation. They are therefore subject to dismissal pursuant to Fed. R. Civ. P. 12(b)(6). Moreover, these claims do not arise out of the same transaction or occurrence that is the singular factual predicate of Plaintiffs’ Complaint-Defendant’s DORA Complaint. The time-barred counterclaims are therefore not saved by C.R.S. Sect. 13-80-109. With respect to Defendant’s Third, Fourth, and Sixth counterclaims, the requisite elements are supported by nothing more than threadbare and conclusory allegations. This is insufficient to survive a motion to dismiss under the standards outlined in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662; 129 S.Ct. 1937 (2009). 1 The abuse of process claim was voluntarily dismissed by Plaintiffs. Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 2 of 21 3 II. LEGAL STANDARDS A. Failure to State a Claim Upon Which Relief May Be Granted--Fed. R. Civ. P. 12(b)(6) 1. Twombly “The tenet that a court must accept a complaint’s allegations as true is inapplicable to threadbare recitals of a cause of action’s elements, supported by mere conclusory statements.” Iqbal, 129 S.Ct. at 1940, citing Twombly, 550 U.S. at 555. To survive a motion to dismiss under Rule 12(b)(6), the party asserting the claim “must allege that ‘enough factual matter, taken as true, [to make] his claim for relief ... plausible on its face.’” Jordan-Arapahoe, LLP v. Bd. Of County Com’rs of County of Arapahoe, 633 F.3d 1022, 1025 (10th Cir. 2011), citing, Twombly, 550 U.S. at 570. “A claim has facial plausibility when the [pleaded] factual content [ ] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Iqbal, 129 S.Ct. at 1940. Thus, to withstand a motion to dismiss, a pleading “must include enough facts to ‘nudge [ ] their claims across the line from conceivable to plausible.’” Twombly, 550 U.S. at 570. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. 555. Furthermore, the “factual allegations must be enough to raise a right to relief above the speculative level.” Id. In ruling on such a motion, the Court may only consider those allegations contained in the Complaint, except “the Court may consider outside documents subject to judicial notice, including court documents and matters of public record. Third, the Court may consider outside documents that are both central to the plaintiff’s claims and to which the plaintiff refers in his Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 3 of 21 4 complaint.” Carbajal v. Keefer, No. 12-cv-03231-PAB-KLM, 2016 WL 1663383, *2 (D. Colo. April 27, 2016) (internal citations omitted); Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (“Even where a document is not incorporated by reference, the court may nevertheless consider it where the complaint ‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to the complaint.” (internal citation omitted)). 2. Resolution of Statute of Limitations Affirmative Defense Under Fed. R. Civ. P. 12(b)(6) “Although a statute of limitations bar is an affirmative defense, questions regarding the statute of limitations may be resolved under Rule 12(b)(6) when it is clear from the face of the complaint that the right sued upon has been extinguished.” Int’l Bhd. Of Elec. Workers, Local, #111 v. Pub. Serv. Co. of Colorado, 176 F.Supp. 3d 1102, 1112 (D. Colo. 2016), internal citations omitted. B. Inapplicability of the ‘Revival Statute’ Determination of this Motion requires the Court, as a predicate matter, to determine the applicability of C.R.S. Sect. 13-80-109, the so-called ‘revival statute.’ C.R.S. § 13-80-109, by its title, provides that statutes of limitations are applicable to noncompulsory counterclaims. The second sentence of the statute states that “a counterclaim or set off arising out of the same transaction or occurrence which is the subject matter of the opposing party’s claim shall be commenced within one year after service of the complaint and not thereafter.” C.R.S. § 13-80- 109 (emphasis added). This second clause of Section 109 has been interpreted to allow the bringing of stale counterclaims by a defending party, but only where they arise from the same transaction or occurrence as the plaintiff’s claim(s). For example, in Makeen v. Hailey, 381 P.3d 337 (Colo. App. 2016), the most recent appellate opinion addressing the ‘revival statute,’ Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 4 of 21 5 counterclaims that would otherwise have been time-barred were allowed pursuant to C.R.S. § 13- 80-109 where it was found that they arose from the same joint real estate transaction between the parties. In contrast, in Richards Engineers, Inc. v. Spanel, 745 P.2d 1031 (Colo. App. 1987), defendant’s state fraud counterclaim was found not to be saved by C.R.S. § 13-80-109 where the complaint sounded in contract, and the counterclaim sought to be added did not relate to fraud in the making or performance of the contract. The Court’s determination of the applicability of C.R.S. § 13-80-109 to the case at hand should first be guided by the rules of statutory construction. First, to determine and give effect to the intent of the General Assembly2, “courts are to look primarily to the plain language of the statute.” Tidwell v. Bevan Properties, Ltd., 262 P.3d 964, 966-67 (Colo. App. 2011), internal citations omitted. In interpreting C.R.S. § 13-80-109, the Colorado Court of Appeals has previously found that “the plain language of the statute is clear and unambiguous.” Id. at 967. Accordingly, there should be no need to resort to extrinsic aids to determine the clear and unambiguous meaning of the phrase, “arising out of the same transaction or occurrence which is the subject matter of the opposing party’s claim.” Second, the statute’s allowance of revival of stale claims direct contravenes the purpose underlying the General Assembly’s enactment of Colorado’s various statutes of limitation. “The general purpose of statutes of limitation is to protect defendants against stale or unduly delayed claims.” Credit Suisse Securities (USA), LLC 2 The limited Colorado cases interpreting C.R.S. § 13-80-109 do not provide a great deal of insight into the purpose behind its enactment. However, a number of sister jurisdictions have ‘revival statutes,’ including Texas. In Holman Street Baptist Church v. Jefferson, 317 S.W.3d 540 (Tex. App. 2010), the Texas Appellate Court said of its analogous ‘revival statute’ that its purpose was to prevent a party waiting until an adversary’s cause of action is time-barred before pursuing its own relief on the same transaction or occurrence. Likely due to the limited situations in which such a factual scenario could arise, there is a paucity of caselaw in any jurisdiction providing in-depth discussion of the proper parameters of the application of ‘revival statutes.’ Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 5 of 21 6 v. Simmonds, 566 U.S. 221, 227 (2012). Rules of statutory construction would therefore also provide that § 13-80-109 should be construed and applied narrowly in order to best effectuate the competing legislative purposes. The balancing of these interests is in fact set forth in the statute itself, with the title of the statute providing that “limitations apply to noncompulsory counterclaims.” Against this backdrop, C.R.S. § 13-80-109 is only applicable if the counterclaim is one that is ‘compulsory’-arising out the same transaction or occurrence as the subject matter of the complaint. An accepted test for determining whether a counterclaim is compulsory is the ‘logical relationship’ test. See, e.g., In re Estate of Krotiuk, 12 P.3d 302, 303 (Colo. App. 2000). “A counterclaim is logically related to the opposing party’s claim where separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the court.” Beathune v. Cain, 494 P.2d 603, 604-605 (Colo. App. 1971). In determining whether counterclaims are compulsory under Fed. R. Civ. P. 13(a)3, a court may consider the following factors: (i) if the issues of fact and law raised by the principal claim and the counterclaim are largely the same; (ii) res judicata would bar a subsequent suit on the defendant’s claim; (iii) the same evidence supports or refutes the principal claim and the counterclaim; and (iv) there is a logical relationship between the claim and the counterclaim. Driver Music Co. v. Commercial Union Ins. Cos., 94 F.3d 1428, 1435 (10th Cir. 1996). 3 Because Colorado’s rule regarding compulsory counterclaims is nearly identical to the federal rule, courts may look to federal decisions for guidance in the interpretation and application of Colorado’s rule on compulsory counterclaims. Grynberg v. Phillips, 148 P.3d 446 (Colo. App. 2006). Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 6 of 21 7 III. ARGUMENT A. Untimely Counterclaims are Subject to Dismissal--(Counterclaims 1, 2, and 5, 7 and 8) The untimely nature of Defendant’s First, Second, Fifth, Seventh, and Eighth Counterclaims (hereinafter “Stale Counterclaims”) is apparent from the face of Defendant’s Answer and Counterclaims. Each of these Stale Counterclaims4 arises from either alleged representations from Plaintiffs leading up to Defendant’s 2011 acceptance of a fellowship, or allegations pertaining to the fellowship experience itself which ended when Defendant left in December 2012. See generally, Answer and Counterclaims, [ECF No. 30]. The statute of limitations for each of the Stale Counterclaims is three years under Colorado law. Yet, the counterclaim allegations themselves clearly delineate the accrual of the Stale Counterclaims more than four years prior to the underlying suit being filed. Paragraph 14 of Defendant’s counterclaims alleges, “shortly after Dr. Polomsky arrived at BLC, it became apparent that Dr. Polomsky had been misled regarding the nature of the ‘fellowship’ at BLC…” Answer and Counterclaims, [ECF No. 30], p. 16 (emphasis added). In other words, Defendant’s Stale Counterclaims began to accrue “shortly after” his fellowship commenced in 2012. See Id., p. 20, ¶ 50 (fellowship contract entered in 2011). The counterclaim pleading also admits actual knowledge during the pendency of the fellowship: “after realizing Plaintiffs’ misrepresentation of the nature and scope of the fellowship…” Id., p. 18, ¶ 32 (emphasis added). In no event did such claims accrue later than the date on which Dr. Polomsky ‘quit’ his fellowship in December 2012. See Id., p. 2, ¶ 7 (“Defendant admits that he left the fellowship in December 2012”). Accordingly, Defendant’s Stale Counterclaims for breach of contract, breach of fiduciary duty, 4 First Counterclaim: breach of contract: Second Counterclaim: breach of fiduciary duty; Fifth Counterclaim: fraud; Seventh Counterclaim: negligent misrepresentation; and Eighth Counterclaim: promissory estoppel. Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 7 of 21 8 fraud, negligent misrepresentation, and promissory estopped were time-barred by December 2015 at the latest; fifteen months prior to the Answer and Counterclaims [ECF No. 30] being filed. Defendant incorrectly asserts that his Stale Counterclaims are nonetheless timely, as they are saved by the revival statute. Answer and Counterclaims, [ECF No. 30], p. 14, ¶ 2. Section 13-80-109 is inapposite because Plaintiffs’ claims against Defendant and Defendant’s Stale Counterclaims do not ‘arise out of the same transaction or occurrence.’ As set forth above, Defendant himself has acknowledged that Beyer and BLC’s Complaint arises out of a singular “factual predicate-that Dr. Polomsky filed a report with the CMB…” in November 2012. [ECF No. 12], p. 2 (emphasis added). Defendant’s Stale Counterclaims are premised upon temporally and factually distinct occurrences and transactions-namely, Defendant’s dissatisfaction with his 2012 fellowship. Nor would Defendant’s Stale Counterclaims otherwise satisfy compulsory counterclaim standards under Fed. R. Civ. P. 13(a), as outlined in Driver Music Co. v. Commercial Union Ins. Cos., 94 F.3d 1428, 1435 (10th Cir. 1996). First, the issues of fact and law raised by the principal claims and counterclaims are not ‘largely the same.’ The primary claims all center on a single factual issue, while the counterclaims raise a myriad of unrelated factual allegations. The legal issues raised by the primary claims all center on Defendant’s intent and knowledge in filing the DORA Complaint. In contrast, the legal issues raised by the Stale Counterclaims involve duties allegedly owed to Defendant leading up to and during his fellowship. Second, res judicata would not bar a subsequent suit on the State Counterclaims (if they were otherwise timely). Because of the highly disparate legal and factual issues, determination of Defendant’s bad faith filing of the DORA Complaint would not preclude Defendant from later suing for breach of a fellowship Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 8 of 21 9 contract or negligent misrepresentation related to the fellowship experience (if they were otherwise timely). Third, the same evidence would not be utilized to support or refute the primary claims and counterclaims. The only evidence needed for Plaintiffs’ claims relates to Defendant’s knowledge and intent at the time of the November 2012 filing of the DORA Complaint. This evidence has no relevance to the Stale Counterclaims, which would instead delve into every aspect of the parties’ communications and interactions dating back to 2011 and continuing throughout Defendant’s fellowship experience. Finally, there is no logical relationship between the primary claims and counterclaims. The only commonalities are the parties, and the fact that the DORA Complaint was filed while Defendant was a fellow with Dr. Beyer. This is an insufficient nexus to make the Stale Counterclaims compulsory. As they do not arise out of the same singular transaction or occurrence that is the subject matter of Plaintiffs’ Complaint, Defendant’s Stale Counterclaims are not compulsory, and therefore not saved by C.R.S. §13-80-109. 1. Breach of Contract Defendant’s First Stale Counterclaim is for breach of contract. It is premised upon the assertion that the 2011 fellowship contract with BLC was breached when Defendant was not trained on certain specialty surgical procedures. Answer and Counterclaims, [ECF NO. 30], p. 20, ¶¶ 50-52. This claim accrued when the Defendant knew of the breach, or through the exercise of reasonable diligence should have known of the breach. Nelson v. State Farm Mut. Auto. Ins. Co., 419 F.3d 1117, 1121 (10th Cir. 2005); C.R.S. § 13-80-108(6). Paragraph 14 of Defendant’s counterclaims alleges, “shortly after Dr. Polomsky arrived at BLC, it became apparent that Dr. Polomsky had been misled regarding the nature of the ‘fellowship’ at BLC…” Answer and Counterclaims, [ECF NO. 30], p. 16. Accrual of the breach-of-contract claim, Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 9 of 21 10 therefore, may have been as early as “shortly after Dr. Polomsky arrived at BLC.” In no event was accrual of this claim later than December 2012 when Defendant left his fellowship. At that time, Defendant knew which procedures he had been trained on during the fellowship, and which he had not. Colorado’s statute of limitations for breach of contract actions is three years. C.R.S. § 13-80-101. Thus, Defendant’s First Counterclaim was time-barred as of December 2015, at the latest. As Defendant’s 2011 fellowship contract is a temporally and factual distinct transaction or occurrence from the November 2012 DORA complaint, the breach of contract counterclaim is not compulsory, and would not be made timely under C.R.S. § 13-80-109. 2. Breach of Fiduciary Duty Defendant’s Second Stale counterclaim is for breach of fiduciary duty, premised again on alleged failure to provide the training and fellowship experience promised. Answer and Counterclaims, [ECF No. 30], p. 21, ¶ 55. This claim accrued when Defendant knew, or through the exercise of reasonable diligence should have known, of the breach of the ‘duty’ or wrongful conduct. See, e.g., Colburn v. Kopit, 59 P.3d 295, 296-97 (Colo. App. 2002), cert denied. As set forth in discussion of Defendant’s breach of contract counterclaim, based on the allegations in the pleading, accrual occurred no later than Defendant’s departure from his fellowship in December 2012. Colorado’s statute of limitations for breach of fiduciary duty is three years. C.R.S. § 13-80-101(1)(f); Grynberg v. Total S.A., 538 F.3d 1336, 1347-1348 (10th Cir. 2008), cert denied. Thus, Defendant’s Second Counterclaim was time-barred as of December 2015, at the latest. As the training and experience that Defendant received during his 2012 fellowship is temporally and factually distinct from the single event of his filing of the DORA complaint in Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 10 of 21 11 November 2012, the breach of fiduciary duty counterclaim is not compulsory. It would therefore not be ‘revived’ by C.R.S. § 13-80-109. The claim is clearly time-barred and should be dismissed under Fed. R. Civ. P. 12(b)(6). Furthermore, Defendant has also failed to state a claim upon which relief may be granted as the element of the existence of a fiduciary duty cannot be met here. Under Colorado law, employers do not generally owe fiduciary duties to employees. Combs v. PriceWaterhouse Coopers, LLP, 382 F.3d 1196, 1200, Footnote 2 (10th Cir. 2004). 3. Fraud Defendant’s Fifth Stale Counterclaim is for fraud. Like the contract and fiduciary duty claims, it is premised on the allegation that Plaintiffs misrepresented or did not provide the promised fellowship experience. Answer and Counterclaims, [ECF NO. 30], p. 23, ¶ 74. “Under Colorado law, a claim for fraud or misrepresentation generally accrues when the plaintiff begins to suffer some injury as a result of his reliance upon the misrepresentation.” Cahill v. American Family Mut. Ins. Co., 2009 WL 973565 * 3 (D. Colo. 2009), citing, Duell v. United Bank of Pueblo, 892 P.2d 336, 340 (Colo. App. 1994). Defendant asserts that he began to suffer harm as a result of reliance on the alleged misrepresentation immediately upon acceptance of the position: “Dr. Polomsky took a year out of his life and an extremely low salary based on the promise that he would be taught the procedures Plaintiffs promised would be covered in the fellowship.” Answer and Counterclaims, [ECF NO. 30], p. 15, ¶¶ 12-13. Paragraph 14 of Defendant’s counterclaims further alleges, “shortly after Dr. Polomsky arrived at BLC, it became apparent that Dr. Polomsky had been misled regarding the nature of the ‘fellowship’ at BLC…” Answer and Counterclaims, [ECF NO. 30], p. 16. Accordingly, Defendant was aware of the alleged misrepresentation ‘shortly after’ arriving at BLC in 2011. In no event would this claim Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 11 of 21 12 have accrued any later than Defendant’s early departure from his fellowship, in December 2012, purportedly due to realization that “topics that had been promised to be part of the fellow’s training were never going to be taught.” Id., p. 18, ¶ 36. The statute of limitations for a fraud claim is three years. C.R.S. § 13-80-101(1)(c). Accordingly, Defendant’s fraud claim was time- barred as of December 2015, at the latest. As the training and experience that Defendant received during his six month fellowship, and the 2011 communications leading up to it are temporally and factually distinct from the single event of Defendant’s filing of the DORA complaint in November 2012, the fraud counterclaim is not compulsory. It would therefore not be ‘revived’ by C.R.S. § 13-80-109. The claim is clearly time-barred, and should be dismissed under Fed. R. Civ. P. 12(b)(6). 4. Negligent Misrepresentation Defendant’s Seventh Stale Counterclaim is for negligent misrepresentation, premised upon the same allegations of misrepresentation of the nature of the fellowship. As discussed above, the pleading itself states that Defendant had actual knowledge of the misrepresentation and purported harm no later than December 2012, when he left his fellowship. There is some disagreement in Colorado case law as to whether a negligent misrepresentation claim is subject to a two-year statute of limitations, or a three-year statute of limitations. See Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1537 (10th Cir. 1996) (holding that two-year limitations under C.R.S. § 13-80-102(1)(a) applies). But see, Miller v. McCloud, 2016 WL 524357 * 5 (D. Colo. 2016) (holding that three-year limitations period under C.R.S. § 13-80- 101(1)(c) is applicable). However, irrespective of which statute applies, Defendant’s negligent misrepresentation claim was time-barred by December 2015, at the latest. Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 12 of 21 13 As the training and experience that Defendant received during his 2012 fellowship is temporally and factually distinct from his filing of the DORA complaint in November 2012, the negligent misrepresentation counterclaim is not compulsory. It would therefore not be ‘revived’ by C.R.S. § 13-80-109. The claim is clearly time-barred and should be dismissed under Fed. R. Civ. P. 12(b)(6). 5. Promissory Estoppel Defendant’s Eighth Stale Counterclaim is for promissory estoppel, premised upon alleged promises concerning the nature of the fellowship that Defendant claims he relied upon in deciding to accept the fellowship. Answer and Counterclaims, [ECF NO. 30], p. 25, ¶¶ 91-94. Based on the express terms of these allegations, the underlying promises were made prior to Defendant’s acceptance of the fellowship in 2011. See Id. As set forth above, Defendant knew that the promises were unfilled no later than the time when he left his fellowship in December 2012. Promissory estoppel claims are contractual in nature, and are therefore subject to the three-year statute of limitations applicable to contract actions. Rodell v. Objective Interface Systems, Inc., 2015 WL 5728770 *3 (D. Colo. 2015). Accordingly, the promissory estoppel claim was time-barred no later than December 2015. B. Threadbare and Conclusory Allegations are Insufficient to State a Claim Upon Which Relief May Be Granted-(Third, Fourth, and Sixth counterclaims) 1. Colorado Consumer Protection Act Defendant’s Sixth counterclaim alleges a violation of the Colorado Consumer Protection Act (“CCPA”). Defendant’s pleading fails to set forth a plausible claim for relief. C.R.S. § 6-1- 113 limits a private right of action to a person who: “(a) is an actual or potential consumer of defendant’s goods, services, or property; or (b) is a successor in interest to an actual consumer…; or (c) in the course of the person’s business or occupation is injured as a result of such deceptive Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 13 of 21 14 trade practice.” To prove a claim under the CCPA, a plaintiff must show: (1) the defendant engaged in an unfair or deceptive trade practice; (2) the challenged practice occurred in the course of the defendant’s business or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant’s goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff’s injury. Rhino Linings USA, Inc. v. Rocky Mtn. Rhino Lining, Inc., 62 P.3d 142, 146-147 (Colo. 2003). With respect to elements 3-5, above, Defendant has done nothing more than set forth conclusory threadbare allegations. This is insufficient to satisfy the specificity and plausibility pleading requirements under Iqbal and Twombly. The third element of a CCPA claim is significant public impact. In support thereof, Defendant hollowly alleges, “Plaintiffs’ unfair and deceptive trade practices significantly impact the public as actual or potential consumers of medical care.” [ECF NO. 30], p. 24, ¶ 84. The counterclaims are devoid of any allegation of actual public implementation of the alleged advertising, or significant numbers of the public being actually or potentially impacted. Defendant’s allegations for this element are nothing more than a ‘threadbare recital’ or ‘mere conclusory statement.’ Per Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1940 (2009), such allegations need not be accepted as true, and are insufficient to survive a motion to dismiss. Defendant likewise provides only threadbare recitals and conclusory allegations in support of the fourth and fifth elements of his CCPA Claim-injury in fact to a legally protected interest, and causation. Defendant’s proffered support of both elements is limited to the following conclusory sentence: “Dr. Polomsky suffered direct economic harm and damages to his career and professional prospects in an amount to be proven at trial as a result of these practices.” [ECF NO. 30], p. 24, ¶ 85. The Colorado Supreme Court has established that a Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 14 of 21 15 viable claim under the CCPA requires a plaintiff to establish a causal connection between the alleged deceptive trade practice and the consumer’s harm, and an injury in fact. Garcia v. MedVed Chevrolet, Inc., 263 P.3d 92, 96 (Colo. 2011). To the extent any attenuated nexus exists between the alleged deceptive trade practices and the claimed ‘direct economic harm’ to Defendant, the counterclaims contain no factual allegations that would ‘nudge [the] claims across the line from conceivable to plausible.” Twombly, 500 U.S. at 570. Defendant has failed to meet the pleading standards under Fed. R. Civ. P. 8, as interpreted by Twombly and Iqbal, on his Colorado Consumer Protection Act counterclaim. Dismissal of this claim under Fed. R. Civ. P. 12(b)(6) is, therefore, required. 2. Malicious Prosecution The Defendant’s counterclaim for malicious prosecution fails to plausibly allege multiple elements of malicious prosecution. “The malicious prosecution tort addresses the situation where a person knowingly initiates baseless litigation.” Mintz v. Accident and Injury Medical Specialists, PC, 284 P.3d 62, 65-66 (Colo. Ct. App. 2010). In Colorado, a viable claim for malicious prosecution requires plausible allegations of the following elements: 1. the defendant contributed to bringing a prior action against the plaintiff; 2. the prior action ended in favor of the plaintiff on the merits; 3. the defendant had no probable cause; 4. the defendant acted with malice; and 5. damages. Hewitt v. Rice, 119 P.3d 541, 544 (Colo. App. 2004), aff'd, 154 P.3d 408 (Colo. 2007). Here, the Defendant has failed to plausibly allege the first, second, third, and fifth elements. a. Dr. Beyer never brought or contributed to bringing an action against the Defendant. Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 15 of 21 16 Defendant’s claim of abuse of process is based on a prior lawsuit (the “First Lawsuit”) brought by Plaintiffs against a former employee and a John Doe. The First Lawsuit was settled as to the named defendant prior to identifying the John Doe. Exhibit A, Order Dismissing “First Lawsuit.”5 Because the Defendant was never a party to the First Lawsuit, he cannot and has not plausibly alleged sufficient facts to support his allegation that Plaintiffs contributed to bringing a prior action against him. The Defendant was not named in the First Lawsuit; he was not prosecuted in the First Lawsuit. The Defendant alleges that he was the John Doe in the First Lawsuit.6 However, his expeditious and self-serving “admission” is unsupported by any fact allegation that links the Defendant to the John Doe’s unlawful conduct alleged in the First Lawsuit. The Defendant has failed to plausibly plead that Plaintiffs brought an action against him, and his claim must be dismissed under Rule 12(b)(6). b. The First Lawsuit was not resolved in favor of the Defendant. Under Colorado law, “to be terminated in favor of the malicious prosecution plaintiff, the prior proceedings must be dismissed on the merits.” Hewitt, 119 P.3d at 544 (internal citation omitted). In explaining the holding, the Hewitt court notes that Colorado courts have repeatedly held that termination resulting from negotiation, compromise, settlement, or agreement is not 5 This Court may consider outside documents subject to judicial notice, including court documents and matters of public record. Carbajal, No. 12-cv-03231-PAB-KLM, 2016 WL 1663383, *2. Here the Defendant ‘relies heavily upon [the] terms and effect’ of the order dismissing the First Lawsuit. Chambers, 282 F.3d at 15. 6 Defendant’s claim that he is the John Doe from the First Lawsuit is directly contradicted by his deposition testimony and the testimony of the named defendant in the First Lawsuit. In the First Lawsuit, the John Doe is identified as the person who filed a complaint with the DORA against Dr. Beyer on December 24, 2012 concerning crosslinking, (DORA Case No. 2013-651-A). In his April 4, 2016 deposition, Defendant denied ever submitting a complaint to DORA regarding Dr. Beyer performing crosslinking procedures. Polomsky Dep. 103:20-23 (April 4, 2016). Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 16 of 21 17 considered a favorable termination. Id. (citing Schenck v. Minolta Office Sys., Inc., 802 P.2d 1131 (Colo.App.1990); Land v. Hill, 644 P.2d 43 (Colo.App.1981); see also Bell Lumber Co. v. Graham, 74 Colo. 149, 219 P. 777 (1923). Here, the Defendant has failed to allege the First Lawsuit ended in his favor on the merits. Instead, the Defendant alleges “[t]he First Lawsuit was dismissed with prejudice on May 5, 2016, thus, resolving in favor of Defendant.” [ECF NO. 30], ¶ 69. This cleverly drafted allegation omits the factual basis of the dismissal and does not support the conclusion or inference that the First Lawsuit ended on the merits in favor of the Defendant. He was not a party to the First Law Suit. The First Lawsuit was in fact dismissed after the named parties to the First Lawsuit agreed to settle. This fact is memorialized in the court’s order dismissing the First Lawsuit. Exhibit A. For this reason, Defendant has failed to plausibly plead the second element of a claim for malicious prosecution, and his claim must be dismissed under Rule 12(b)(6). c. The Defendant fails to allege any facts supporting his allegation that Plaintiffs lacked probable cause. Under Colorado law, “probable cause exists if the claimant reasonably believes in the existence of the facts upon which the claim is based and that under such facts his claim is valid; or so believes in reliance upon advice of qualified counsel having no interest in the subject matter, after full disclosure of the facts within his best knowledge and information.” Title Guar. Co. v. Harmer, 482 P.2d 430, 432 (Colo. App. 1971) (citing Gurley v. Tomkins, 17 Colo. 437, 30 P. 344). Here, the Defendant’s bald conclusion that “Dr. Beyer’s statements concerning Defendant during the course of the First Lawsuit proceedings were made in bad faith and without probable cause” (ECF NO. 30, ¶70) is not supported by any factual allegation. The Defendant further concludes that “[i]n the First Lawsuit, Plaintiffs knowingly filed a baseless lawsuit Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 17 of 21 18 concerning the same facts and circumstances outlined by Plaintiffs in their Complaint in the present litigation.” (ECF NO. 30, ¶68). However, the Defendant fails to allege any facts related to the Plaintiffs’ knowledge or reasonable belief in the facts upon which the First Lawsuit was based. He fails to allege any facts suggesting that Plaintiff “knowingly initiate[d] baseless litigation.” Mintz, 284 P.3d 65-66. His “merely conclusory” allegations are “not entitled to the assumption of truth.” Havens v. Clements, No. 13-CV-00452-MSK-MEH, 2014 WL 1213382, *5-6 (D. Colo. Mar. 24, 2014). For this reason, Defendant has failed to plausibly plead the third element of a claim for malicious prosecution, and his claim must be dismissed under Rule 12(b)(6). d. Defendant fails to allege any facts supporting his allegation that he suffered recoverable damages as a result of the First Lawsuit. To maintain his action for malicious prosecution, the Defendant must allege that he suffered damages as a result of the First Lawsuit. Hewitt 119 P.3d at 544. Again, the Defendant only provides a merely conclusory allegation unsupported by any factual allegations. He alleges, “[a]s a result of Dr. Beyer’s conduct, Defendant suffered damages in an amount to be proven at trial.” ECF NO. 30, ¶72. Again, the Defendant relies solely on this conclusory statement. He does not allege any facts showing any injury in fact to a legally protected interest or facts showing the injury was caused by the First Lawsuit. For this reason, Defendant has failed to plausibly plead the fifth element of a claim for malicious prosecution, and his claim must be dismissed under Rule 12(b)(6). 3. Abuse of Process The fact allegations in Defendant’s counterclaims are insufficient to support his abuse of process claim. Defendant merely recites the elements of the tort without alleging any facts supporting the claim. Also, as explained above, Defendant was not a party to the First Lawsuit. Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 18 of 21 19 Under Colorado law, the elements of abuse of process are, 1. an ulterior motive in the use of judicial proceedings; 2. willful actions by a party in the use of the process which are not proper in the regular conduct of a civil action; and 3. damages proximately caused by (1) and (2). Swanson v. Bixler, 750 F.2d 810, 814 (10th Cir. 1984). a. The Defendant has not pleaded sufficient factual allegations to support his claim of ulterior motive. The Defendant’s only allegation concerning an ulterior motive is threadbare and plead upon information and belief. [ECF NO. 30], ¶60. Specifically, he alleges the First Lawsuit “was filed for an ulterior purpose, namely to harm the reputation of one or more of Dr. Beyer’s competitors in the Colorado ophthalmology community and harass individuals against whom Dr. Beyer had a personal vendetta.” Id. This allegation contains only labels and conclusions, and a formulaic recitation of the elements. Defendant’s counterclaims do not include any factual allegations concerning Dr. Beyer’s alleged ulterior motive; no factual allegations concerning a desire to harm or harass; no factual allegations concerning a “vendetta.” Although well-pled facts within a complaint will be accepted as true, “legal conclusions, bare assertions, [and] merely conclusory” allegations “are not entitled to the assumption of truth” and cannot save a deficient claim. Havens, No. 13-CV-00452-MSK-MEH, 2014 WL 1213382, *5-6. In short, the Defendant has failed to raise his alleged “right to relief above the speculative level.” Twombly, 550 U.S. at 555. For this reason, Defendant has failed to plausibly plead the first element of a claim for abuse of process, and his claim must be dismissed under Rule 12(b)(6). b. The Defendant has not pleaded any factual allegations to support his claim of damages. He was never a party to the First Lawsuit. Defendant’s claim of abuse of process is based on the First Lawsuit. As explained above, the Defendant was not a party to the First Lawsuit so it is unclear how he could have been Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 19 of 21 20 damaged by the First Lawsuit. Again, the Defendant relies on a bare conclusion: “As a result of Dr. Beyer’s conduct, Defendant suffered damages in an amount to be proven at trial.” ECF NO. 30 ¶65. The Defendant makes no allegations concerning any injury in fact to a legally protected interest proximately caused by the First Lawsuit. For this reason, Defendant has failed to plausibly plead the third element of a claim for abuse of process, and his claim must be dismissed under Rule 12(b)(6). IV. CONCLUSION The Defendant’s counterclaims are a fraught attempt to conjure up some leverage in this dispute. However, for the reasons stated above each of his counterclaims fail as a matter of law. The Plaintiffs respectfully request that the Court grant their Motion, dismissing Defendant’s First, Second, Fifth, Seventh, and Eighth Counterclaims as time-barred by the applicable statutes of limitation, and dismissing Defendant’s Third, Fourth, and Sixth Counterclaims for failure to state a plausible claim upon which relief may be granted. DATED this 6th day of April 2017. Respectfully submitted, s/ January D. Allen Thomas P. Howard Scott E. Brenner January D. Allen Thomas P. Howard, LLC 842 W. South Boulder Rd, Suite 100 Louisville, Colorado 80027 303-665-9845 Attorney for Plaintiffs Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 20 of 21 21 Certificate of Service I hereby certify that on April 6, 2017, I electronically filed the foregoing Plaintiffs’ Motion to Dismiss with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Emily F. Keimig Beth Ann Lennon 633 17th St., Suite 3000 Denver, CO 80202 ekeimig@shermanhoward.com blennon@shermanhoward.com s/ January D. Allen Case 1:16-cv-03099-MEH Document 33 Filed 04/06/17 USDC Colorado Page 21 of 21 Page 1 of 1 COURT,DISTRICT COUNTY, COLORADOBOULDER Court Address: 1777 Sixth Street P.O. Box 4249, Boulder, CO, 80306-4249 Plaintiff(s) BEYER LASER CENTER LLC et al. v. Defendant(s) RICHARD M STEWART, DR et al. COURT USE ONLY Case Number: 2015CV30732 Division: 5 Courtroom: Order: Stipulation for Dismissal with Prejudice The motion/proposed order attached hereto: APPROVED. The stipulation is approved and made an order of the court. The case is dismissed with prejudice. Issue Date: 5/5/2016 PATRICK D BUTLER District Court Judge DATE FILED: May 5, 2016 9:26 AM CASE NUMBER: 2015CV30732 Case 1:16-cv-03099-MEH Document 33-1 Filed 04/06/17 USDC Colorado Page 1 of 4 LITIGATION/4733832.1 DISTRICT COURT, BOULDER COUNTY, COLORADO 1777 6th Street Boulder, Colorado 80302 (303) 441-3750 COURT USE ONLY Plaintiffs: Beyer Laser Center, LLC Dr. Craig F. Beyer, DO v. Defendants: Richard M. Stewart, MD John Doe Attorneys for Defendant: Emily F. Keimig, No. 22634 Beth Ann Lennon, No. 46110 SHERMAN & HOWARD L.LC. 633 17th Street, Suite 3000 Denver, CO 80202 Telephone: (303) 297-2900 Facsimile: (303) 298-0940 ekeimig@shermanhoward.com blennon@shermanhoward.com Case Number: 2015CV030732 Division: 5 STIPULATION FOR DISMISSAL WITH PREJUDICE Plaintiffs, Beyer Laser Center, LLC, and Dr. Craig F. Beyer, DO, by and through their attorneys Berg Hill Greenleaf & Ruscitti LLP, and Defendant Dr. Richard M. Stewart, by and through his attorneys, Sherman & Howard L.L.C., (collectively “the Parties”), hereby respectfully submit this Stipulation for Dismissal with Prejudice (“Stipulation”) pursuant to C.R.C.P. 41(a) and C.R.C.P. 41(c) and state as follows: 1. On April 8, 2016, the parties engaged in mediation pursuant to the Court’s order requiring the parties to engage in some form of alternative dispute resolution. As a result of this mediation, Plaintiffs and Defendant Stewart agreed to resolve their disputes and enter into a Confidential Settlement and Global Release Agreement (the “Settlement Agreement”), which has been signed and executed by all of the Parties. 2. This Settlement Agreement contains a complete waiver and release of all claims brought in this lawsuit by any of the Parties. Att ach me nt to Or der - 2 015 CV 307 32 Case 1:16-cv-03099-MEH Document 33-1 Filed 04/06/17 USDC Colorado Page 2 of 4 2 LITIGATION/4733832.1 3. Pursuant to C.R.C.P. 41(a) and C.R.C.P. 41(c), all Parties hereby agree that dismissal with prejudice of all claims or counterclaims is appropriate. 4. WHEREFORE the Parties respectfully request that this matter be dismissed in its entirety, with prejudice, with each Party to bear his/its own attorneys’ fees and costs and that all pending motions be denied as moot. DATED this 4th day of May, 2016. Respectfully submitted, s/ Kathleen T. Alt___________ George V. Berg, Jr, No. 22556 Kathleen T. Alt, No. 33189 Mark D. Changaris, No. 40408 Berg Hill Greenleaf Ruscitti LLP 1712 Pearl Street Boulder, CO 80302 Telephone: 303-402-1600 Facsimile: 303-402-1601 Attorneys for Plaintiffs Beyer Laser Center, LLC, and Dr. Craig F. Beyer, D.O. s/ Beth Ann Lennon Emily F. Keimig, No. 22634 Beth Ann Lennon, No. 46110 SHERMAN & HOWARD L.L.C. 633 17th Street, Suite 3000 Denver, CO 80202 Telephone: 303-297-2900 Facsimile: 303-298-0940 Attorneys for Defendant Richard M. Stewart, M.D. Att ach me nt to Or der - 2 015 CV 307 32 Case 1:16-cv-03099-MEH Document 33-1 Filed 04/06/17 USDC Colorado Page 3 of 4 3 LITIGATION/4733832.1 CERTIFICATE OF SERVICE I hereby certify that on this 4th day of May, 2016, I electronically filed the foregoing Stipulation for Dismissal with Prejudice with the Clerk of the Court via the ICCES e-filing system, which will send notification of such filing via email to the following: George V. Berg, Jr. Kathleen T. Alt Mark D. Changaris 1712 Pearl Street Boulder, CO 80302 gvb@bhgrlaw.com kta@bhgrlaw.com mdc@bhgrlaw.com s/ Mary Ann Meise Att ach me nt to Or der - 2 015 CV 307 32 Case 1:16-cv-03099-MEH Document 33-1 Filed 04/06/17 USDC Colorado Page 4 of 4