Cypress Advisors, Inc. v. Davis

BRIEF in Support of 65 Partial MOTION to Dismiss Amended Counterclaims Pursuant to Fed. R. Civ. P. 12

D. Colo.April 21, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 16-cv-01935-MSK-MEH CYPRESS ADVISORS, INC., a Florida corporation, d/b/a The Cypress Group, Plaintiff and Counterclaim Defendant, v. KENT McCARTY DAVIS, a North Carolina citizen, a/k/a Carty Davis d/b/a Cypress International, Inc. Defendant and Counterclaim-Plaintiff, v. DEAN ZUCCARELLO, a Colorado citizen Counterclaim-Defendant. COUNTERCLAIM-DEFENDANTS’ BRIEF IN SUPPORT OF PARTIAL MOTION TO DISMISS AMENDED COUNTERCLAIMS PURSUANT TO Fed. R. Civ. P. 12(b)(6) Plaintiff and Counterclaim-Defendant Cypress Advisors, Inc. d/b/a The Cypress Group (“Cypress Advisors”) and Counterclaim-Defendant Dean Zuccarello (“Zuccarello”) (collectively “Counterclaim-Defendants”), respectfully submit this Brief in Support of Partial Motion to Dismiss Amended Counterclaims (“Motion”), requesting that the Court dismiss the following claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted: (a) All claims improperly brought under the North Carolina Uniform Partnership Act, N.C. Gen. Stat. § 59-31, et seq. (“North Carolina Partnership Act”), including: Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 1 of 17 2 declarations requested under Count Seven: Declaratory Judgment; Count Nine: Wind-Up and Accounting; and Count Ten (In the Alternative): Judicial Dissociation and/or Dissolution; (b) All claims void under the statute of frauds, including: Count Three (In the Alternative): Breach of Joint Venture Agreements; Count Four: Breach of Fiduciary Duty; Count Five (In the Alternative): Breach of Contract; Count Seven: Declaratory Judgment; and Count Eight: Constructive Fraud; (c) All claims barred by the applicable statute of limitations, including: Count One: Breach of Partnership Agreement; Count Three (In the Alternative): Breach of Joint Venture Agreements; Count Four: Breach of Fiduciary Duty; Count Five (In the Alternative): Breach of Contract; Count Six: Promissory Estoppel; Count Eight: Constructive Fraud; Count Thirteen (In the Alternative): Unjust Enrichment; and Count Fourteen (In the Alternative): Quantum Meruit; (d) All duplicative claims, including: Count Fourteen (In the Alternative) Quantum Meruit; and (e) All claims premised upon an employment relationship between the Counterclaim- Defendants and Davis including: Count Twelve (In the Alternative): Failure to Pay Wages in Violation of the North Carolina Wage and Hour Act and the Colorado Wage Act. Collectively, these claims are referred to as the “Improper Claims.” Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 2 of 17 3 INTRODUCTION Davis’s three-hundred-twenty-two allegation Amended Counterclaims1 are conclusory, contradictory, and replete with inconsistencies that render the pleading essentially incomprehensible. Davis cobles together a mass of allegations spanning over fifteen years, brings claims under several different states’ laws, and pleads separate counts for the same claim. Above all, he pushes the contours of Rule 8 pleading beyond Rule 8’s limit - making claims “in the alternative” to the point that no theory of recovery is tenable. Through this Motion, the Counterclaim-Defendants seek to weed out Davis’s defective claims. ARGUMENT The Improper Claims should be dismissed, with prejudice, pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) provides that defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1198 (10th Cir. 1991). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts, which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The Iqbal evaluation requires two prongs of 1 The Counterclaims contained on pages 16-72 of Davis’s First Amended Answer, Counterclaims, and Jury Demand filed on March 31, 2017, will be herein referred to as the “Amended Counterclaims.” Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 3 of 17 4 analysis. First, the court identifies “the allegations in the complaint that are not entitled to the assumption of truth,” that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 679-81. Second, the Court considers the factual allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. Only if the allegations state a plausible claim for relief will such claim survive a motion to dismiss. Id. at 679. A. The North Carolina Partnership Act Claims Should Be Dismissed, With Prejudice, Because the Alleged Partnership is Subject to Colorado Law (Counts Seven, Nine and Ten). Any alleged partnership or joint venture created between Zuccarello, Cypress Advisors, and/or Davis would be governed by Colorado law. Accordingly, all claims brought under the North Carolina Partnership Act fail as a matter of law. Specifically, Davis seeks certain declaratory relief under the North Carolina Partnership Act in his Count Seven (Amended Counterclaims, ¶ 254(d)), a wind-up and accounting under the North Carolina Partnership Act in Count Nine (Amended Counterclaims, ¶ 268), and a judicial dissolution under the North Carolina Partnership Act in Count Ten (Amended Counterclaims, ¶ 275). As an initial matter, as a federal court sitting in diversity, the Court must apply Colorado’s choice of law rules. See Shearson Lehman Bros. v. M & L Investments, 10 F.3d 1510, 1514 (10th Cir. 1993) (“In making choice of law determinations, a federal court sitting in diversity must apply the choice of law provisions of the forum state in which it is sitting.”) (citations omitted). Colorado courts apply the “most significant relationship” test to resolve conflict of law issues. AE, Inc. v. Goodyear Tire & Rubber Co., 168 P.3d 507, 508 (Colo. 2007). Colorado courts may also apply the “‘internal affairs’ doctrine, which provides that the right[s] of a shareholder in a foreign company (including the right to sue derivatively) are determined by Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 4 of 17 5 the law of the place where the company is incorporated.” Oteng v. Golden Star Res., Ltd., 615 F. Supp. 2d 1228, 1238 (D. Colo. 2009) (citation omitted). As adopted by Colorado, the internal affairs doctrine provides that the local law of the state of incorporation will be applied to determine the existence and extent of a director's or officer’s liability to the corporation, its creditors and shareholders, except where, with respect to the particular issue, some other state has a more significant relationship … to the parties and the transaction, in which event the local law of the other state will be applied. Ficor, Inc. v. McHugh, 639 P. 2d 385, 391 (Colo. 1982), citing Restatement (Second) of Conflict of Laws § 309 (1971). Under both the “internal affairs” doctrine and the “most significant relationship” test, Colorado law applies. Although Davis has not alleged which state the purported partnership and/or joint venture was formed in, he has alleged that the banking, book keeping, and payroll functions all occurred in Colorado. (Amended Counterclaims, ¶ 58.) Although Davis alleges that he maintained a North Carolina office of the alleged partnership, he does not allege that the partnership was based in North Carolina or that he resided in North Carolina when the partnership was formed. Compare, Amended Counterclaims, ¶ 3 (Davis has resided in North Carolina since 2003), with ¶ 31 (alleged partnership formed in 2000.) Thus, the only noteworthy contacts that Davis has alleged indicate that the formation of any purported partnership or joint venture occurred in Colorado and that that the state with the most significant relationship to the partnership is Colorado. Accordingly, under the internal affairs doctrine, all claims brought by Davis relating to the rights and relationships of the alleged partners should be brought under Colorado’s partnership law, not North Carolina’s Partnership Act. Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 5 of 17 6 Furthermore, under Colorado’s Uniform Partnership Act (1997), it is presumed that a partnership has been formed in the jurisdiction where it has its chief executive office. C.R.S. § 7-64-106(b). Here, Davis has alleged that Zuccarello, a Colorado resident, was held out as the “President,” “CEO,” and “Founding Partner” of the alleged partnership (Amended Counterclaims, ¶¶ 54-55), and that the executive office functions occur in Colorado (Amended Counterclaims, ¶ 58.) Accordingly, under Colorado law, any alleged partnership between the parties is presumed to have been formed in Colorado, and Colorado law governs the relations among the partners and between the partners and the partnership. C.R.S. § 7-64-106(a) (“the law of the jurisdiction under which a partnership is formed governs relations among the partners and between the partners and the partnership.”). Davis has not, and cannot, overcome this presumption. As such, all claims asserted by Davis under the North Carolina Partnership Act fail as a matter of law, and should be dismissed with prejudice under Rule 12(b)(6), including all declaratory relief sought by Davis in Count Seven under the North Carolina Partnership Act, as well as any wind-up and accounting in Count Nine and judicial dissolution in Count Ten asserted under the North Carolina Partnership Act. B. The Statute of Frauds Bars Davis’s Oral Contract Claims (Counts Three, Four, Five, Seven, and Eight). Oral agreements that by their terms are not to be performed within one year are void. C.R.S. § 38-10-112(a). The contracts alleged by Davis are all oral agreements that cannot be performed in a year, and therefore are barred by the statute of frauds. Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 6 of 17 7 1. The joint venture and other contract claims are barred by the statute of frauds. Davis alleges, in the alternative, that he entered into a series of joint ventures or a “years long” contract with the Counterclaim-Defendants. (Amended Counterclaims, ¶ 12(d).) Both the alleged joint venture relationship and the “years long” contractual agreement are void under the statute of frauds. Davis claims that the purpose of the joint venture was to provide “advice to clients who signed financial advisory contracts with The Cypress Group, with each such client engagement constituting a separate joint venture.” (Amended Counterclaims, ¶ 216). The engagement agreements upon which Davis bases these claims provide that, for 12 months after the contract’s engagement period has ended or terminated, if the client completes a sale to one of the prospects identified by Cypress Advisors, then the client must make a success fee payment to Cypress Advisors. (See, e.g., e-Lanes Engagement Agreement, attached hereto as Exhibit 12). Additionally, the engagement agreements provide for confidentiality and indemnification that extend indefinitely beyond the explicit engagement period. Thus, by their terms, the engagement agreements last longer than one year. Therefore, any related joint venture must necessarily last longer than one year, and the claims premised upon the oral joint venture agreements are barred by the statute of frauds. C.R.S. § 38-10-112(a), see also, Jordache Ltd. v. Oved, 40 A.D.3d 400, 2 The e-Lanes agreement is referenced and relied upon in the Amended Counterclaims and therefore can be attached to this Motion to Dismiss without conversion to a summary judgment motion. GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F. 3d 1381, 1384 (10th Cir. 1997) (“if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiff's claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.”). Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 7 of 17 8 400, 836 N.Y.S.2d 136, 137 (1st Dept. 2007) (three-year sublicense and joint venture were inextricably intertwined and therefore statute of frauds applied). Similarly, Davis’s breach of contract claims should be dismissed. Davis alleges, in the alternative, that he entered into a “years long” contractual relationship with the Counterclaim- Defendants. (Amended Counterclaims, ¶ 12(d)). This admission by itself bars the claims under the statute of frauds. See, Whatley v. Crawford & Co¸ 15 Fed. Appx. 625, 635 (10th Cir. 2001) (upholding dismissal of breach of contract claim for employment contract that could not be performed within one year). Davis premises several claims, in the alternative, upon the existent of the joint venture relationship. (See, Amended Counterclaims, Count Four: Breach of Fiduciary Duty (¶¶ 226, 229), Count Seven: Declaratory Judgment (¶¶ 253, 254(g)), Count Eight: Constructive Fraud (¶¶ 256, 258, 260)). Because the joint venture claims fail under the statute of frauds, these claims must also be dismissed as a matter of law.3 Accordingly, the Counterclaim-Defendants request that the Court dismiss the oral contract and joint venture claims, as well as the additional claims premised upon the joint ventures, with prejudice. 3 Davis also references his alternative theory of joint venture in the context of his claim for wind- up and accounting under the Colorado and North Carolina Partnership Acts. (Amended Counterclaims, ¶¶ 267, 272). While the Counterclaim-Defendants believe that relief under these partnership acts cannot be granted to a joint venture, to the extent that Davis is seeking relief under Count Nine: Wind-Up and Accounting under the oral joint venture agreements, Counterclaim-Defendants request that this claim be dismissed, with prejudice, as barred by the statute of frauds. Alternatively, the claim should be dismissed because a joint venture cannot obtain such relief under partnership law. See, C.R.S. § 7-64-803(a) (“After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership’s business.”) (emphasis added); N.C.G.S. § 59-67 (…the partners who have not wrongfully Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 8 of 17 9 C. The Breach of Contract, Breach of Fiduciary Duty, Promissory Estoppel, Constructive Fraud, Unjust Enrichment Claims, and Quantum Meruit Are Barred By The Statute of Limitations and Should be Dismissed With Prejudice (Counts One, Three, Four, Five, Six, Eight, Thirteen, and Fourteen). Davis’s breach of contract, breach of fiduciary duty, promissory estoppel, constructive fraud,4 unjust enrichment, and quantum meruit claims are barred by the statute of limitations and should be dismissed, with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6). The statute of limitations defense may be raised in a Rule 12(b)(6) motion where that defense appears clearly on the face of the complaint, which is the case here. Bullington v. United Air Lines, Inc., 186 F.3d 1301, 1310 n.3 (10th Cir. 1999) (noting that “Rule 12(b)(6) is a proper vehicle for dismissing a complaint that, on its face, indicates the existence of an affirmative defense such as noncompliance with the limitations period.”) (citation omitted); Aldrich v. McCulloch Props., Inc., 627 F.2d 1036, 1041 n.4 (10th Cir. 1980) (“While the statute of limitations is an affirmative defense, when the dates given in the complaint make clear that the right sued upon has been extinguished, the plaintiff has the burden of establishing a factual basis for tolling the statute.”) (citation omitted). Under Colorado law, a three-year statute of limitations is imposed for breach of contract, fraud, unjust enrichment, promissory estoppel, quantum meruit, and breach of fiduciary duty dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the partnership affairs.”) (emphasis added). 4 Davis brings a constructive fraud claim under both Colorado and North Carolina law. (See Amended Counterclaims, ¶ 263.) Under C.R.S. § 13-82-104(1)(b), Colorado’s statute of limitations and accrual provisions apply to the North Carolina claim, as Colorado has the most significant relationship to the controversy. (See Section A above.) To the extent C.R.S. § 13-82- 104(1)(a) applies, it is preempted by C.R.S. § 13-80-101(k), and the same result is reached - Colorado’s statute of limitations and accrual provisions apply. Burgess v. Delta Airlines, No. 10- cv-000927-LTB-CBS, 2010 WL 3801040, *2-3 (D. Colo. Sept. 22, 2010). Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 9 of 17 10 claims. C.R.S. § 13-80-101(1)(a), (c), & (f)5. A cause of action accrues when the breach, fraud, injury, loss, damage, or conduct giving rise to the cause of action is discovered or should have been discovered by the exercise of reasonable diligence. C.R.S. § 13-80-108(3), (6) & (8). In the Amended Counterclaims, Davis alleges that the Counterclaim-Defendants: (1) refused to pay Davis certain profits and other funds due to him between 2011 and 2016; and (2) wrongfully reduced his profit distributions and improperly allocated staffing resources between 2011 and 2016. (Amended Counterclaims, ¶¶ 101, 107, 130, 153.) Davis further alleges that his departure from the alleged “Cypress Partnership” was due to the insufficient allocation of staff resources. (Id. at ¶ 153.) Davis bases his breach of agreements/contracts (Id., ¶¶ 204, 222, 241), breach of fiduciary duty (Id. at ¶ 228), promissory estoppel (Id., ¶ 246), constructive fraud (Id., ¶¶ 257, 259), unjust enrichment (Id., ¶ 301), and quantum meruit claims (Id., ¶ 308) upon these alleged actions. Importantly, Davis further alleges that he was fully aware of all of these problems since 2011, and “quarrel[ed]” with Zuccarello regarding the finances and operation of the alleged partnership and “periodically complained” about the inequitable distributions of resources. (Amended Counterclaims, at ¶¶ 100, 130.) Because Davis concedes that he was well aware of the disputed allocation of resources, staffing issues, and profit distributions since 2011, his 5 See also, Sterenbuch v. Goss, 266 P.3d 428, 437 (Colo. App. 2011) (“because unjust enrichment is a form of relief in quasi-contract or contract implied in law … the time within which to assert such a claim ordinarily is assed under the three-year statute of limitations for contract actions.”) (citations omitted); Camas Colorado, Inc. v. Bd. of County Comm'rs, 36 P.3d 135, 140 (Colo. App. 2001) (quantum meruit claims are governed by three year statute of limitations under C.R.S. § 13-80-101(1)(a)) (citations omitted); Berg v. State Bd. Of Agriculture, 919 P.2d 254, 260-61 (Colo. 1996) (analysis of promissory estoppel claim based in contract under three year statute of limitations). To the extent Davis claims his promissory estoppel is Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 10 of 17 11 alleged causes of action accrued and the statute of limitations period began to run in 2011, at the latest. BP America Production Co. v. Patterson, 185 P. 3d 811, 814 (Colo. 2008) (“…actions for breach of contract are subject to a three-year limitation period, which does not accrue until the breach is, or reasonably should have been, discovered.”). Any further alleged damages that accrued after that point were merely aggravation of the earlier injury, and do not toll the statute of limitations. Davidson v. Bank of Am. N.A., 2016 U.S. Dist. LEXIS 31656 Case No. 14-cv- 01578-CMA-KMT, at *20 (Feb. 1, 2016) 6 (adopted by Davidson v. Bank of Am., N.A., Case No. 14-cv-01578-CMA-KMT, 2016 WL 922872 at *1 (March 11, 2016) (finding that where defendant was aware of breach of contract prior to statute of limitations period, “any reverberating damages that occurred later do not save [the plaintiff’s] claims from being time- barred”). The latest that Davis could have properly brought his claims was in 2014, three years after discovery of the alleged harm. C.R.S. § 13-80-101(1)(a), (c) & (f). Davis, however, filed in 2016, two years too late. Accordingly, his breach of contract, fraud, unjust enrichment, promissory estoppel, quantum meruit, and breach of fiduciary duty claims are barred by the applicable statute of limitations, and should be dismissed with prejudice as a matter of law. D. Quantum Meruit is a Form of Unjust Enrichment, and Therefore Count Fourteen Should Be Dismissed. “Quantum Meruit is a form of unjust enrichment.” Sterenbuch, 266 P.3d at 437 FN4, citing Dudding v. Norton Frickey & Assocs., 11 P.3d 441, 444 (Colo. 2000) (doctrine of quantum meruit is also termed quasi-contract or unjust enrichment); see also Hannon Law Firm, LLC v. based in tort, rather than contract, it is subject to a shorter two-year statute of limitations. 16 Colo. Prac., Employment Law & Practice § 12.14 (2d ed.). Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 11 of 17 12 Melat, Pressman & Higbie, LLP, 293 P.3d 55, 64 (Colo. App. 2011) (“In Colorado, quantum meruit is synonymous with the doctrines of quasi-contract and unjust enrichment.”) (in dissent) (citation omitted). Davis alleges both unjust enrichment in Court Thirteen and quantum meruit in Court Fourteen. As the quantum meruit claim is duplicative of the unjust enrichment claim, it should be dismissed, with prejudice. E. Davis’s Employee Wage Claim Should be Dismissed, With Prejudice, Because It Relies on Impermissibly Inconsistent Allegations (Count Twelve). Davis’s conclusory allegations that he was in an employment relationship with Cypress Advisors and/or Zuccarello are so at odds with the allegations in his Amended Counterclaims that they cannot stand. 1. Davis’s employee allegations are incompatible with the majority of his allegations. The underpinning of Davis’s case is that he entered into a partnership with Cypress Advisors and/or Zuccarello. (Amended Counterclaims, ¶ 2 “This is an action for damages, a wind-up and accounting, a declaratory judgment, and related relief arising from Counterclaim- Defendants’ wrongful termination of the Cypress Partnership… and from Counterclaim- Defendants’ refusal to pay Davis profit distributions…) (emphasis added). The alleged partnership is discussed in at least 231 of the allegations.7 Yet, in direct contradiction to the crux 6 A copy of this case is attached hereto as Exhibit 2. 7 See, e.g., Amended Counterclaims, ¶¶ 2, 4, 10, 11, 12, 15-45 (history of the alleged partnership), 46-99 (terms and operations of alleged partnership), 100-128 (alleged withheld partnership payments), 129-139 (alleged wrongful expenses of partnership), 140-199 (alleged termination of partnership), 200-208 (alleged breach of partnership agreement), 209-214 (alleged wrongful dissociation from partnership), 226, 252, 253, 254, 256, 258, 260, 261, 266-273 (wind- up and accounting of alleged partnership) 274-277 (dissolution or dissociation of partnership), 279, 280, 281, 312, 314, 315). Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 12 of 17 13 of his Amended Counterclaims, Davis also alleges that he is owed wages under an employment agreement with Zuccarello and/or Cypress Advisors. Such an inconsistent factual position is improper under Fed. R. Civ. P. 8 and cannot stand. SecureInfo Corp. v. Telos Corp., 387 F. Supp. 2d 593, 617 (E.D. Va. 2005) (dismissing claims premised upon inconsistent factual allegations). In Secure Info., the Plaintiff alleged throughout the majority of its complaint that an agency relationship existed between two defendants. 387 F. 3d at 617. Later, the plaintiff alleged claims for conspiracy between the two parties. Id. Under the applicable law, an agent could not conspire with its principal. Id. Therefore, the plaintiff asserted two wholly inconsistent factual theories to support his claim. Id. The Court held that while a plaintiff may allege alternative theories of recovery under Fed. R. Civ. P. 8, “the rule does not allow plaintiffs to make inconsistent factual allegations.” Id. citing, Aetna Cas. and Sur. Co. v. Aniero Concrete Co., Inc., 404 F. 3d 566, 594 (2d Cir. 2005) (stating that a plaintiff could not put forth alternative theories of recovery where “it must state allegations which are at odds with each other” to make out the elements of an individual claim). The Court then dismissed the conspiracy claims. Similarly, in Friendship Medical Center v. Space Rentals, 62 F.R.D. 106 (N.D. Ill. 1974), the plaintiff inconsistently alleged that (1) the plaintiff made an offer to have defendant construct a medical center addition, which the defendant did not accept, and (2) that the defendant promised to provide the medical center addition. Id. at 111-12. The Court found that the contradiction prevented the defendant from properly responding to the complaint, and that the claims were “fatally defective” and should be dismissed. Id. at 112. Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 13 of 17 14 Here, like in Secure Info. and Friendship Medical Center, Davis alleges throughout his Amended Counterclaims that he entered into a partnership or joint venture with the Counterclaim-Defendants, but changes course to make the wholly inconsistent allegation that he is owed wages under an employment agreement with the Counterclaim-Defendants. In fact, Davis even incorporates the partnership allegations into his employee wage claim, further confusing the matter. (See Amended Counterclaims, ¶ 282). These inconsistent allegations make it impossible for Counterclaim-Defendants to properly respond, and the employment- related claims in Count Twelve should thus be dismissed, with prejudice, as incompatible with the central proposition of Davis’s case. SecureInfo Corp., 387 F. Supp. 2d at 617; Friendship Medical Center, 62 F.R.D. at 112. 2. Davis’s employee allegations are conclusory and unsupported by facts. Davis’s inconsistent allegation that he was an employee of the Counterclaim-Defendants is a conclusory statement not supported by any alleged facts; indeed, the allegation is contradicted by the majority of the facts alleged in the Amended Counterclaims. Courts need not accept conclusory allegations without supporting factual averments in deciding a Rule 12(b)(6) motion. Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S at 678 (citation omitted). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (Citation omitted.) Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 14 of 17 15 Here, Davis casually states that, if he was not in a joint venture or partnership, then he was in an employment relationship with the Counterclaim-Defendants, and is thus entitled to wages under Colorado and North Carolina’s Wage Acts. (Amended Counterclaims, ¶¶ 282-295). Davis provides no factual support for these allegations, and in fact contradicts them throughout his Amended Counterclaims. Tellingly, Davis fails to even use the term “employee” in reference to himself, even when making the allegations in Court Twelve. Davis goes beyond merely failing to provide facts that support his claim that he is an employee; he painstakingly distinguishes himself from any employees of the alleged venture. (Amended Counterclaims, ¶¶ 74-76). Indeed, he specifically alleges that “[u]nlike Davis and Zuccarello these individuals received salaries or other similar compensation,” effectively negating any claim that he is entitled to a salary or other wages from Cypress Advisors or Zuccarello. (Amended Counterclaims, ¶ 74 (emphasis added).) He follows this proclamation by enumerating at least ten ways he is different from employees of the venture. (Amended Counterclaims, ¶¶ 74-76.) Davis would not only have the Court accept his baseless legal conclusion that Zuccarello and Cypress Advisors were his “employers” without factual support, he would also have the Court ignore his own voluminous contradictory allegations made throughout the Amended Counterclaims. Such allegations fly in the face of the Supreme Court’s pleading standards set forth in Towmbly and Iqbal. Iqbal, 556 U.S. at 678 (“Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’”), citing Twombly, 550 U.S. at 557. Taken in its totality, Davis has failed to plead facts that support an essential element of his claim - that he was Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 15 of 17 16 actually in an employment relationship with the Counterclaim-Defendants - and therefore Count Twelve should be dismissed, with prejudice. CONCLUSION For the reasons set forth above, the Counterclaim-Defendants request that the Court dismiss the Improper Claims with prejudice, or the Amended Counterclaims in their entirety. Dated: April 21, 2017. s/Bradford E. Dempsey Nadia G. Malik Brad E. Dempsey Brandan K. Oliver FAEGRE BAKER DANIELS LLP 1700 Lincoln Street, Suite 3200 Denver, Colorado 80203 Telephone: (303) 607-3500 Facsimile: (303) 607-3600 Email: nadia.malik@FaegreBD.com brad.dempsey@FaegreBD.com brandan.oliver@FaegreBD.com Attorneys for Plaintiff and Counterclaim-Defendant Cypress Advisors, Inc. d/b/a The Cypress Group and Counterclaim-Defendant Dean Zuccarello Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 16 of 17 17 CERTIFICATE OF SERVICE I hereby certify that on this 21st day of April, 2017, a true and correct copy of the COUNTERCLAIM-DEFENDANTS’ BRIEF IN SUPPORT OF PARTIAL MOTION TO DISMISS AMENDED COUNTERCLAIMS PURSUANT TO Fed. R. Civ. P. 12(b)(6) was e-filed with the Clerk of the Court using the CM/ECF system and such filing was sent electronically using the CM/ECF system to the following: Brandon S. Neuman Kieran J. Shanahan Shanahan Law Group, PLLC 128 E. Hargett Street, Suite 300 Raleigh, NC 27601 bneuman@shanahanlawgroup.com kieran@shanahanlawgroup.com cbattles@shanahanlawgroup.com K.C. Groves Mark E. Lacis Michael M. Lane Ireland Stapleton Pryor & Pascoe, PC 717 17th Street, Suite 2800 Denver, CO 80202 kcgroves@irelandstapleton.com mlacis@irelandstapleton.com mlane@irelandstapleton.com s/Nanette Quarnberg Legal Administrative Assistant US.111127064.06 Case 1:16-cv-01935-MSK-MEH Document 66 Filed 04/21/17 USDC Colorado Page 17 of 17 EXHIBIT 1 CONFIDENTIAL Case 1:16-cv-01935-MSK-MEH Document 66-1 Filed 04/21/17 USDC Colorado Page 1 of 5 CONFIDENTIAL Case 1:16-cv-01935-MSK-MEH Document 66-1 Filed 04/21/17 USDC Colorado Page 2 of 5 CONFIDENTIAL Case 1:16-cv-01935-MSK-MEH Document 66-1 Filed 04/21/17 USDC Colorado Page 3 of 5 CONFIDENTIAL Case 1:16-cv-01935-MSK-MEH Document 66-1 Filed 04/21/17 USDC Colorado Page 4 of 5 CONFIDENTIAL Case 1:16-cv-01935-MSK-MEH Document 66-1 Filed 04/21/17 USDC Colorado Page 5 of 5 EXHIBIT 2 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 1 of 12 Positive As of: April 21, 2017 3:21 PM Z Davidson v. Bank of Am. N.A. United States District Court for the District of Colorado February 1, 2016, Decided; February 1, 2016, Filed Civil Action No. 14-cv-01578-CMA-KMT Reporter 2016 U.S. Dist. LEXIS 31656 * KENNETH R. DAVIDSON, Plaintiff, v. BANK OF AMERICA N.A., and GREEN TREE SERVICING LLC, Defendants. Subsequent History: Adopted by, Dismissed by, Injunction denied by Davidson v. Bank of Am., N.A., 2016 U.S. Dist. LEXIS 31657 (D. Colo., Mar. 10, 2016) Prior History: Davidson v. Bank of Am. N.A., 2014 U.S. Dist. LEXIS 161631 (D. Colo., Nov. 18, 2014) Core Terms statute of limitations, mortgage, allegations, Cancel, amended complaint, injunction, RECOMMENDS, voided, foreclosure, initiate, parties, Notice, motion to dismiss, cause of action, foreclosure proceeding, bankruptcy trustee, trust deed, damages, holder, amend, intentional infliction of emotional distress, right to rescind, bankrupt estate, good faith, rescission, evidence of debt, contract claim, fair dealing, implied duty, three year Counsel: [*1] Kenneth R. Davidson, Pro se efiler, effective 6/3/2015, Plaintiff, Pro se, Highlands Ranch, CO. For Bank of America NA, Defendant: Cynthia Dawn Lowery-Graber, Morton Adam Lewis, Bryan Cave LLP- Denver, Denver, CO. For Green Tree Servicing LLC, Defendant: Bruce W. Dewald, Bruce W. Dewald, Attorney at Law, Centennial, CO; Jeffrey H. McClelland, Jeremy David Peck, Kutak Rock, LLP-Denver, Denver, CO. Judges: Kathleen M. Tafoya, United States Magistrate Judge. Opinion by: Kathleen M. Tafoya Opinion RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE Magistrate Judge Kathleen M. Tafoya This matter is before the court on Defendant Bank of America, N.A.'s ("BANA") "Motion to Dismiss Plaintiff's Amended Complaint" (Doc. No. 92 ["BANA's Mot."], filed August 24, 2015), to which Plaintiff has filed a Response. (Doc. No. 99, filed September 10, 2015). Additionally, Defendant Green Tree Servicing LLC's ("Green Tree") has filed a "Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(6)" (Doc. No. 83 ["GT's Mot."], filed August 10, 2015), to which Plaintiff has responded (Doc. No. 101, filed September 14, 2015) and Green Tree has replied. (Doc. No. 115-1 ["Reply"], filed October 22, 2015). Also before the Court is Plaintiff's "Motion [*2] for Leave to File Third Amended Complaint" (Doc. No. 109 ["Mot. to Am."], filed on September 28, 2015), to which Green Tree has responded (Doc. No. 117, filed October 22, 2015) and Plaintiff has replied. (Doc. No. 121, filed November 5, 2015.) Finally, Plaintiff has also filed a "Forthwith Motion for TRO/Permanent Injunction Against Green Tree Servicing, LLC to Resurrect a Foreclosure Order to Avoid the Six Year Statute of Limitations of the Rule 120 Case 2013CV30922" (Doc. No. 122, filed January 2, 2016), to which Green Tree has responded. (Doc. No. 126, filed January 26, 2016.) STATEMENT OF THE CASE This case involves the challenge to a foreclosure of a property in Littleton, Colorado ("Property"). (GT's Mot. at 1.) Plaintiff initially obtained the subject mortgage loan on July 19, 2005 from America's Wholesale Lender. Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 2 of 12 Page 2 of 11 (Doc. No. 79 ["Am. Comp."] at 7, filed July 24, 2015; GT's Mot. at 1; Doc. No. 83-1 ["Note"].) On that date, Plaintiff also executed a Deed of Trust encumbering the Property. (Doc. No. 83-2 ["Deed of Trust"].) Under the Deed of Trust, Plaintiff granted and conveyed the Property to Mortgage Electronic Systems, Inc. ("MERS"), solely as nominee for AWL and its successors and assigns, [*3] as security for the repayment of the Note. (Deed of Trust at 9.) Countrywide Home Loans, Inc., doing business as AWL, indorsed the Note to BANA, and BANA indorsed the Note in blank. (Note at 4.) MERS executed an Assignment of Deed of Trust to BANA on July 21, 2011. (Doc. No. 83-3.) Plaintiff contends that BANA failed to properly credit certain of his payments to his mortgage loan in 2009 and 2010. (Am. Comp. at 2-3, 7, 9.) He also alleges that BANA initiated an improper Intent to Accelerate on his mortgage loan on September 16, 2009. (Am. Comp. at 7, 9, 12.) According to Plaintiff, he was not delinquent on his mortgage payments at that time. (Id.) He also complains that BANA never disclosed within the terms of the Note the procedure for accelerating the loan. (Id.) On March 15, 2011, Plaintiff sent a Notice of Right to Cancel to BANA, purportedly pursuant to the Truth in Lending Act ("TILA"), indicating Plaintiff's intent to cancel/void the mortgage loan based on various allegations, including but not limited to, that the mortgage was obtained by wrongful acts of fraud, fraudulent inducement, concealment and fraudulent misrepresentation, BANA's failure to provide Plaintiff with required disclosures, Plaintiff's contention that BANA had voided the mortgage as [*4] a result of improper accelerations, and BANA's alleged failure to properly apply Plaintiff's mortgage payments. (Doc. No. 1 at 29-31.) BANA, by and through counsel, responded to Plaintiff's Notice of Right to Cancel on May 12, 2011, stating that TILA's right of rescission does not apply to purchase money transactions, which the Note represented as Plaintiff had used the funds from the mortgage loan to purchase the Property. (Doc. No. 1 at 33.) BANA further explained that even if a right to rescind applied, it was subject to a three year limitation and Plaintiff's mortgage was executed in 2005, six years prior to Plaintiff's Notice of Right to Cancel. (Id.) On May 26, 2011, Plaintiff filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Colorado. (BANA's Mot. at 2; Doc. No. 101-2.) Plaintiff obtained an Order of Discharge on September 2, 2011 and the case was closed on April 29, 2013. (BANA's Mot. at 2.) On June 17, 2013, BANA transferred the Note and Deed of Trust to Green Tree. (Am. Comp. at 4-5; Doc. No. 83-4.) In October 2013, Green Tree initiated a Rule 120 foreclosure action on the Note. (Am. Comp. at 5; Doc. No. 83-5.) On December 6, 2013, Green Tree filed a Motion for Order Authorizing Sale with the Douglas County District Court. [*5] (Doc. No. 83-7.) Following a hearing, Green Tree obtained an Order Authorizing Sale on January 14, 2015. (Am. Comp. at 17; Doc. No. 83-8; Doc. No. 83-10.) On February 2, 2015, Green Tree terminated the foreclosure proceedings. (Am. Comp. at 18; Doc. No. 83-9.)1 Based on the above events, Plaintiff asserts (1) breach of contract, (2) breach of the implied duty of good faith and fair dealing, (3) wrongful foreclosure, (4) a constitutional challenge to Colorado's foreclosure procedure, and (5) intentional infliction of emotional distress. By these actions, Plaintiff is seeking injunctive relief preventing Defendants from foreclosing on his Property, $1,000,000 in compensatory damages, free and clear title to the Property, declaratory judgment that Colorado foreclosure proceedings violate due process guarantees, legal fees and costs, as well as punitive damages. (Am. Comp. at 14, 22.) LEGAL STANDARDS 1. Pro Se Plaintiff Plaintiff is proceeding pro se. The court, therefore, "review[s] his pleadings and other papers liberally and hold[s] them to a [*6] less stringent standard than those drafted by attorneys." Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir. 2007) (citations omitted); see also Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594, 30 L. Ed. 2d 652 (1972) (holding allegations of a pro se complaint "to less stringent standards than formal pleadings drafted by lawyers"). However, a pro se litigant's "conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based." Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991) (citations omitted). A court may not assume that a plaintiff can prove facts that have not been alleged, or that a defendant has violated laws in ways that a plaintiff has not alleged. Associated 1 According to Plaintiff's recent filings, Green Tree initiated another foreclosure action on September 17, 2015 and obtained an Order Authorizing Sale on January 19, 2016. (Doc. No. 122 at 4; Doc. No. 124 at 1-2.) 2016 U.S. Dist. LEXIS 31656, *2 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 3 of 12 Page 3 of 11 Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S. Ct. 897, 74 L. Ed. 2d 723 (1983); see also Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (a court may not "supply additional factual allegations to round out a plaintiff's complaint"); Drake v. City of Fort Collins, 927 F.2d 1156, 1159 (10th Cir. 1991) (the court may not "construct arguments or theories for the plaintiff in the absence of any discussion of those issues").2 2. Failure to State a Claim Upon Which Relief Can Be Granted Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (citations and quotations omitted). "A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the [*8] light most favorable to the plaintiff." Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 2 Based on a thorough review of the Amended Complaint, the court finds Plaintiff has raised the five claims specified above. In addition to those five claims, Plaintiff randomly names other causes of action throughout the body of the Amended Complaint. "While the court must liberally construe a pro se litigant's complaint, 'liberal construction has its limits.'" Fick v. US Bank Nat'l Ass'n, No. 11-cv-03184-WYD-KLM, 2012 U.S. Dist. LEXIS 161120, 2012 WL 5464592, at *4 (D. Colo. Sept. 10, 2012) (quoting Langley [*7] v. Chase Home Fin., LLC, No. 1:10-cv-604, 2011 U.S. Dist. LEXIS 32897, 2011 WL 1150722, at *3 (W.D. Mich. Mar. 11, 2011)). The court does not recognize any actions beyond the five Plaintiff specifically pled and supported. The remaining and numerous theories of relief are unsupported by specific factual allegations and would leave the court in the position of constructing, via speculation, facts to support each one. This the court cannot do. See id. ("The Court should not be a pro se litigant's advocate, nor should the Court supply additional factual allegations to round out [a pro se litigant's] complaint or construct a legal theory on [her] behalf." (internal quotations omitted)). 173 L. Ed. 2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The Iqbal evaluation requires two prongs of analysis. First, the court identifies "the allegations in the complaint that are not entitled to the assumption of truth," that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 679-81. Second, the Court considers the factual allegations "to determine if they plausibly suggest an entitlement to relief." Id. at 681. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 679. Notwithstanding, the court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, [*9] supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S at 678. Moreover, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does the complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (citation omitted). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (citation omitted). ANALYSIS 1. First and Second Claims for Relief - Breach of Contract & Breach of Implied Duty of Good Faith and Fair Dealing Plaintiff asserts breach of contract and breach of the implied duty of good faith and fair dealing claims against both Defendants. To succeed on a breach of contract claim, a plaintiff must prove: (1) the existence of a contract; (2) performance by the plaintiff or some justification of non-performance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff. W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992). Additionally, "[u]nder Colorado law, every contract contains an implied duty of good faith and fair dealing." Dalton v. Countrywide Home Loans, Inc., 828 F.Supp.2d 1242, 1254-55 (D. 2016 U.S. Dist. LEXIS 31656, *6 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 4 of 12 Page 4 of 11 Colo. 2011) (internal quotations omitted). This duty does [*10] not inject substantive terms into a contract, but "requires only that the parties perform in good faith the obligations imposed by their agreement." Id. at 1255 (internal quotations omitted). A. Green Tree Plaintiff bases his contract claims against Green Tree on his contention that the Note supporting Green Tree's foreclosure actions was voided, via his Notice of Right to Cancel, prior to its transfer from BANA to Green Tree. Thus, Plaintiff's argument to support his claims is that there is no contract. Under this theory, Plaintiff could not meet the first element of his breach of contract claim. Diodosio, 841 P.2d at 1058 ("the existence of a contract"). Nor would there be a contract upon which to base a duty of good faith and fair dealing. Dalton, 828 F.Supp.2d at 1254-55. Nevertheless, because Plaintiff's contention that he voided the Note constitutes the basis for several of his requests for relief, the court will address this issue directly. Plaintiff is correct that TILA includes a right to rescind provision. It provides that if a lender fails to make the material disclosures required under TILA, the borrower has the right to rescind the mortgage agreement within three years after the date on which the transaction is consummated. See 15 U.S.C. § 1635. Plaintiff [*11] claims BANA failed to provide certain required disclosures and therefore, he executed his right under TILA to rescind the Note. (Am. Comp. at 4; Doc. No. 1 at 29-31.) However, Plaintiff's reliance on TILA's right to rescind provision is misguided, at best. First, TILA's right to rescission "does not apply to ... a residential mortgage transaction . . . ." 15 U.S.C. § 1635(e)(1). The term 'residential mortgage transaction' is defined by TILA as "a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling." 15 U.S.C. § 1602(x). In other words, the right to rescind under TILA would exist only if the Property had not itself been the security for the loan obtained to initially purchase the Property. Here, the parties do not dispute that the Property was the security for the Note. Additionally, BANA's response to Plaintiff's Notice of Right to Cancel indicates Plaintiff used the proceeds from the Note to purchase the Property. (Doc. No. 1 at 33.) If this statement is accurate, then clearly TILA's right to rescind does not [*12] apply. Second, even assuming Plaintiff already possessed the Property prior to entering into the Note, the right to rescind is still unavailable because he did not attempt to act upon it until March 15, 2011. (Note to Cancel.) Plaintiff executed the Note in 2005 and the remedy of rescission is only available for three years. 15 U.S.C. § 1635(f). Third, assuming the right of rescission did apply, which it did not, Plaintiff's unilateral act of simply sending the Notice of Right to Cancel would not void the Note. As the Tenth Circuit recently explained, "a majority of circuit courts have held 'that unilateral notification of cancellation does not automatically void the loan contract' or the security interest." Sanders v. Mountain Am. Credit Union, 621 F. App'x 520, 525 (10th Cir. 2015) (quoting Am. Mortg. Network, Inc. v. Shelton, 486 F.3d 815, 821 (4th Cir. 2007) (listing cases)). [T]he security interest becomes void when the obligor exercises a right to rescind that is available in the particular case, either because the creditor acknowledges that the right of rescission is available, or because the appropriate decision maker has so determined. Until such decision is made, the borrowers have only advanced a claim seeking rescission. Id. (quoting Large v. Conseco Fin. Servicing Corp., 292 F.3d 49, 54-55 (1st Cir. 2002)).3 It is clear that TILA's right of rescission was not available to Plaintiff in March 2011, either because it did not apply and/or because Plaintiff's attempt to rely upon it was untimely. The court finds Plaintiff's contract claims against either Green Tree or BANA based on an argument that he unilaterally voided the Note is without merit. 3 Moreover, even if the court were to honor Plaintiff's rescission, he appears to be under the mistaken belief [*13] that he would simply retain the Property without further payment. In actuality, Plaintiff would be required to return the amount of money loaned to him via the mortgage. See Sanders, 621 F. App'x at 524 ("Where, as here, a creditor has delivered money to a consumer that is used to finance real property, the consumer must tender money to the creditor, not the real property"). 2016 U.S. Dist. LEXIS 31656, *9 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 5 of 12 Page 5 of 11 B. BANA (i) Standing Plaintiff also asserts breach of contract and breach of the implied duty of good faith and fair dealing claims against BANA based on his allegations that BANA failed to properly apply and/or post various mortgage payments during 2009 and 2010 and improperly accelerated his Note in September 2009. (Am. Comp. 7- 12.) In its Motion to Dismiss, BANA first asserts that because Plaintiff's present claims were not scheduled in his 2011 bankruptcy petition, and therefore were neither administered [*14] nor abandoned, the claims are property of the bankruptcy estate. (BANA's Mot. at 5-8.) As a consequence, BANA maintains that Plaintiff does not have standing to pursue these claims. (Id. at 5-6.) BANA presents an alternative argument that Plaintiff's contract claims are barred by the statute of limitations. (BANA's Mot. at 8-9.) Plaintiff disagrees with BANA's positions. Federal Rule of Civil Procedure 17(a)(1) requires that "[a]n action must be prosecuted in the name of the real party in interest." Fed. R. Civ. P. 17(a)(1). Once a party files for bankruptcy, all "legal or equitable interests," including a debtor's potential causes of action, become the property of the bankruptcy estate, and the bankruptcy trustee, not the party, becomes the real party in interest with respect to the claims. 11 U.S.C. § 541(a); see also Smith v. Rockett, 522 F.3d 1080, 1084 (10th Cir. 2008); see also Barger v. City of Cartersville, 348 F.3d 1289, 1291 (11th Cir. 2003) ("[P]roperty of the bankruptcy estate includes all potential causes of action that exist at the time petitioner files for bankruptcy"); Chartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116, 122 (2d Cir. 2008) ("Every conceivable interest of the debtor, future, nonpossessory, contingent, speculative, and derivative, is within the reach of § 541."). As a consequence, "[t]he bankruptcy code imposes a duty upon a debtor to disclose all assets, including contingent and unliquidated claims." Eastman v. Union Pac. R.R. Co., 493 F.3d 1151, 1159 (10th Cir. 2007) (citing 11 U.S.C. § 521(1)). "That duty encompasses disclosure of all legal [*15] claims and causes of action, pending or potential, which a debtor might have." Id. (citing In re Coastal Plains, Inc., 179 F.3d 197, 208 (5th Cir. 1999)). When a bankruptcy action is closed, "'properly scheduled' assets not otherwise administered revert 'to the debtor through abandonment under 11 U.S.C. § 554(c).'" Clark v. Trailiner Corp., No. 00-5020, 2000 U.S. App. LEXIS 29006, 2000 WL 1694299, at *1 (10th Cir. Nov. 13, 2000) (quoting Hutchins v. IRS, 67 F.3d 40, 43 (3d Cir. 1995)). In response to BANA's Motion to Dismiss, Plaintiff submitted the Petition he filed to initiate his bankruptcy proceeding. (Doc. No. 101-2.) The Petition reveals that Plaintiff did include a claim against BANA in his list of scheduled assets. (Doc. No. 101-2 at 2.) Specifically, Plaintiff described the asset as a "[c]laim against Bank of America, N.A., 1st mortgage holder, to invalidate its lien on residence of Debtor and damages for violations of RESPA." (Id.) The description raises the question of whether it is sufficient to encompass Plaintiff's contract claims against BANA. However, it is not necessary to answer this question because, as discussed infra, the court finds that regardless of whether the claim should be considered a part of Plaintiff's bankruptcy estate or abandoned by the bankruptcy trustee, the claim is untimely. Incidentally, even if Plaintiff's contract claims are considered part of the bankruptcy estate, they only remain so to [*16] the extent he is seeking monetary damages. A plaintiff ordinarily will remain the real party in interest with respect to claims for injunctive relief, which Plaintiff has requested herein. Wilkerson v. Schirmer Eng'g Corp., 04-cv-00258-WDM-MEH, 2009 U.S. Dist. LEXIS 77234, 2009 WL 2766716, at *1 (D. Colo. Aug 26, 2009); see also Parker v. Wendy's Int'l, Inc., 365 F.3d 1268, 1273 n.4 (11th Cir. 2004) (noting that a debtor would remain a plaintiff for a cause of action seeking injunctive relief); EEOC v. Outback Steak House, Inc., 06-cv-1935-EWN-KLM, 2008 U.S. Dist. LEXIS 63744, 2008 WL 3992171, at *3 (D. Colo. Aug. 20, 2008) (clarifying that an order granting the defendant's motion to dismiss because the bankruptcy trustee was the real party in interest only applied to monetary claims and did not dismiss the injunctive claims). Because "[t]he trustee and creditors are interested [only] in the debtor's property that can add anything of value to the estate," the important and necessary reasons for requiring that the trustee bring unscheduled claims for monetary relief do not apply to claims for injunctive relief. Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1289 (11th Cir. 2002). (ii) Statute of Limitations In its alternative argument, BANA argues that Plaintiff's claims, whether pursued by the bankruptcy trustee or Plaintiff himself, are barred by the applicable statute of limitations. (BANA's Mot. at 8-9.) "At the motion-to- dismiss stage, a complaint may be dismissed on the 2016 U.S. Dist. LEXIS 31656, *13 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 6 of 12 Page 6 of 11 basis of a statute-of-limitations [*17] defense only if it appears beyond a doubt that Plaintiff[ ] can prove no set of facts that toll the statute." Matthews v. Wiley, 744 F. Supp. 2d 1159, 2010 WL 3703357, at *5 (D. Colo. 2010) (citing Tello v. Dean Witter Reynolds, Inc., 410 F.3d 1275, 1288 n.13 (11th Cir. 2005)); see also Bullington v. United Air Lines, Inc., 186 F.3d 1301, 1310 n.3 (10th Cir. 1999) (noting "that Rule 12(b)(6) is a proper vehicle for dismissing a complaint that, on its face, indicates the existence of an affirmative defense such as noncompliance with the limitations period"); Aldrich v. McCulloch Props., Inc., 627 F.2d 1036, 1041 n.4 (10th Cir. 1980) ("While the statute of limitations is an affirmative defense, when the dates given in the complaint make clear that the right sued upon has been extinguished, the plaintiff has the burden of establishing a factual basis for tolling the statute."). Pursuant to Colo. Rev. Stat. § 13-80-101(1)(a), a breach of contract claim, including personal contracts and actions arising under the Uniform Commercial Code, is subject to a three year statute of limitations. See Grillo v. JP Morgan Chase & Co., No. 13-cv-03233-RBJ-KLM, 2014 U.S. Dist. LEXIS 124992, 2014 WL 4470439, at *2 n.2 (D. Colo. Sept. 8, 2014) (noting that the three year statute of limitations on contract actions controls the plaintiff's claims regarding the defendant's alleged breach of mortgage note, including claims for breach of contract and breach of the implied duty of good faith and fair dealing) (citing Clementson v. Countrywide Fin. Corp., 464 F. App'x 706, 712-13 (10th Cir. 2012) (affirming the district court's application of the three year statute to the plaintiff's breach of [*18] contract claim arising from the mortgage note)). In his Amended Complaint, Plaintiff acknowledges that he was aware in September and October 2009 that BANA had allegedly misapplied mortgage payments during that year. (Am. Comp. at 2.) Further, in March 2011, he based his purported Notice of Right to Cancel on BANA's alleged failure to apply his payments properly, "improper accelerations, faulty accounting possible embezzlement of my funds and for not answering specific questions on tendered qualified written responses." (Am. Comp. at 4; see also Doc. 1 at 29-31.) These allegations encompass the various bases for Plaintiff's contract claims against BANA and therefore, evidence Plaintiff was aware of the same by, at the very latest, March 2011. Plaintiff did not initiate this action until June 4, 2014, more than three years after the claims accrued. Further, even if the claims were properly before the bankruptcy estate, they would still be untimely. When claims are subject to the control of the bankruptcy trustee, the statute of limitations calculus is slightly modified. A bankruptcy court has the power to reopen the bankruptcy to administer previously unadministered assets and the bankruptcy trustee retains capacity [*19] to bring suit." 11 U.S.C. §§ 323(b), 350(b). Section 108(a) of the Bankruptcy Code provides, in pertinent part: (a) If applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an agreement fixes a period within which the debtor may commence an action, and such period has not expired before the date of the filing of the petition, the trustee may commence such action only before the later of- (1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or (2) two years after the order for relief. 11 U.S.C. § 108(a). In a typical voluntary bankruptcy proceeding under Chapter 7, the voluntary petition itself constitutes an order for relief. 11 U.S.C. § 301(b); see also Tenn. Student Assistance Corp. v. Hood, 541 U.S. 440, 447, 124 S. Ct. 1905, 158 L. Ed. 2d 764 (2004) (citing 11 U.S.C. § 301). Accordingly, where claims belong to the bankruptcy estate, the bankruptcy trustee must bring such claims before the later of (1) the end of the applicable limitations period, or (2) two years after the Chapter 7 bankruptcy petition was filed. See 11 U.S.C. § 108(a). Plaintiff filed his voluntary Chapter 7 bankruptcy petition on May 26, 2011. (Doc. No. 101-2.) Because the bankruptcy petition constitutes the order for relief, the bankruptcy trustee had until the later of May 26, 2013 or the actual limitations period, which in this case would be the [*20] later date, to file any claims otherwise barred by the applicable statute of limitations. Thus, the claims would be barred by the statute of limitations regardless of whether they were considered abandoned by the bankruptcy trustee or remained part of the bankruptcy estate. Finally, Plaintiff appears to argue that the "continuing violation" doctrine should save his claims. (Doc. No. 99 at 11.) More specifically, Plaintiff argues that the misapplication of his 2009 payments is a "continued damage" with regard to the breach of contract that "has continued through the bankruptcy proceeding." (Id.) However, Colorado law limits the application of the 2016 U.S. Dist. LEXIS 31656, *16 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 7 of 12 Page 7 of 11 "continuing violation" doctrine to employment discrimination cases. Polk v. Hergert Land & Cattle Co., 5 P.3d 402, 405 (Colo. App. 2000). Therefore, because Plaintiff's allegations regarding lack of disclosures, misapplication of payments and an improper acceleration occurred in 2009 and 2010 and he was aware of the same in March 2011, at the very latest, any reverberating damages that occurred later do not save his claims from being time-barred. 2. Third Claim for Relief - Wrongful Foreclosure Plaintiff's "wrongful foreclosure" claim is similar to his breach of contract claim to the extent it is partially based [*21] on his contention that he voided the Note in March 2011 through his Notice of Right to Cancel. (Am. Comp. at 14-17.) Specifically, Plaintiff complains that BANA could not be a holder in due course of the Note, as required to initiate foreclosure proceedings, because it breached the Note and also, he voided it prior to the transfer to Green Tree. (Am. Comp. at 14.) With regard to Green Tree, Plaintiff argues that (1) Green Tree purchased nothing more than a voided Note from BANA; (2) Green Tree did not provide consideration or value for the Note; and, (3) Green Tree has not shown that it possesses the original Note. (Am. Comp. at 15- 16.) As an initial matter, the court notes that Colorado does not recognize a claim for damages based on wrongful foreclosure. Schwartz v. Bank of Am., N.A., No. 10-cv- 1225-WYD-MJW, 2011 U.S. Dist. LEXIS 37076, 2011 WL 1135001, at *4 (D. Colo. March 28, 2011) (citing Commercial Equity Corp. v. Majestic Sav. & Loan Ass'n, 620 P.2d 56, 58 (Colo. App. 1980)). Further, even if Colorado did recognize such a claim, it would be barred by the economic loss rule. "The economic loss rule serves to maintain a distinction between a tort obligation and a contract obligation." Micale v. Bank One N.A. (Chicago), 382 F.Supp.2d 1207, 1220 (D. Colo. 2005). Under the economic loss rule, "a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law." Grynberg v. Agritech, 10 P.3d 1267, 1269 (Colo. 2000). "The key to determining the availability [*22] of a contract or tort action lies in determining the source of the duty that forms the basis of the action." Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1262 (Colo. 2000). In this case, the wrongful actions Plaintiff alleges each arise from the Note, a contract between the parties. Plaintiff does not point to a separate duty imposed by tort law that Defendants breached. To the extent Plaintiff intends to argue that the parties lack standing to initiate foreclosure proceedings, his claim fails as a matter of law. Based on the record, it does not appear BANA ever initiated a foreclosure action against Plaintiff. Further, the court has already established, supra, that Plaintiff's Notice of Right to Cancel has no legal significance. With regard to Plaintiff's argument that Green Tree did not pay sufficient consideration or value for the Note, Green Tree argues that because Plaintiff was not a party to that transaction, he is barred from attacking it collaterally. (GT's Mot. at 10.) The court agrees. There is ample case law holding that a borrower-plaintiff lacks standing to challenge the validity of assignments of a promissory note because the plaintiff is not a party to those assignments. Roe v. Aegis Wholesale Corp., No. 13-cv-03040-KMT, 2014 U.S. Dist. LEXIS 134478 , 2014 WL 4746721, at *7 (D. Colo. Sept. 24, 2014) (citing Mbaku [*23] v. Bank of Am., Nat'l Ass'n, No. 12- cv-00190-PAB-KLM, 2012 U.S. Dist. LEXIS 185609, 2012 WL 5464592, at *5 (D. Colo. Aug. 20, 2012) (citing Cingolani v. BAC Home Loans Servicing, L.P., Case No. 11-1519, 2012 U.S. Dist. LEXIS 103491, 2012 WL 3029829, at *3 (E.D. Mich. July 25, 2012)); see also Livonia Props. Holdings, LLC v. 12840-12976 Farmington Rd. Holdings, LLC, 399 F. App'x 97, 102 (6th Cir. 2010). Here, it is clear that, regardless of its validity, Plaintiff was not a party to the transaction assigning or indorsing the Note. As such, Plaintiff lacks standing to challenge the validity of the same. Further, contrary to Plaintiff's contention, Colorado law does not require production of the original promissory note to initiate or complete a non-judicial foreclosure proceedings. Under Colorado law, a party seeking to initiate a public trustee foreclosure sale must be the "holder of an evidence of debt." Colo. Rev. Stat. § 38- 38-101(1). An evidence of debt means a "writing that evidences a promise to pay or a right to the payment of a monetary obligation, such as a promissory note, bond, negotiable instrument, a loan, credit, or similar agreement, or a monetary judgment entered by a court of competent jurisdiction." Colo. Rev. Stat. § 38-38- 100.3(8). A "holder of an evidence of debt" is a person in "actual possession of" or "entitled to enforce an evidence of debt." Colo. Rev. Stat. § 38-38-100.3(10). Although Colorado statutes define a holder of an evidence of debt as a person with actual possession of or entitled to enforce an evidence of debt, a party initiating a public [*24] trustee foreclosure sale is not required to produce the 2016 U.S. Dist. LEXIS 31656, *20 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 8 of 12 Page 8 of 11 original evidence of debt. Colo. Rev. Stat. § 38-38- 101(1); In re Miller, 666 F.3d at 1264. Instead, a party moving for a public trustee foreclosure sale may establish its standing to foreclose by filing with the public trustee (1) a copy of the evidence of debt and a certification signed by the holder or the holder's attorney stating that the copy is true and correct and (2) a copy of the deed of trust and a certification by the holder or the holder's attorney stating that the copy is true and correct. Colo. Rev. Stat. §§ 38-38-101(2)(a), 38-38-101(1)(b)(II). May v. U.S. Bank, N.A., No. 13-cv-01621-PAB-MJW, 2013 U.S. Dist. LEXIS 118073, 2013 WL 4462033, at *7 (D. Colo. 2013). Plaintiff's Amended Complaint contains no allegation that Green Tree failed to produce a certified copy of the promissory note or that the proper procedure for initiating foreclosure proceedings was otherwise not followed. See Sneed v. PNC Bank, Nat'l Ass'n, No. 10- cv-03016-REB-MJW, 2011 U.S. Dist. LEXIS 153619, 2011 WL 7429423, at *4 (D. Colo. Sept. 7, 2011) (finding no merit to the plaintiff's argument on similar facts). Accordingly, the court finds that Plaintiff's claim for wrongful foreclosure and/or that Green Tree lacks standing to bring foreclosure proceedings is without merit. 3. Fourth Claim for Relief - Constitutional Challenge to Colorado's Foreclosure Procedure Plaintiff seeks declaratory judgment that Colorado's foreclosure [*25] procedure is unconstitutional based on a lack of due process. (Am. Comp. at 17-20.) Defendant Green Tree is correct in its contention that the constitutionality of Colorado's foreclosure procedures has already been fully considered and upheld by this court, as well as the Tenth Circuit Court of Appeals. See Mbaku v. Bank of Am., No. 12-cv-00190, 2014 U.S. Dist. LEXIS 115813, 2014 WL 4099313, at *3-9 (D. Colo. Aug. 20, 2014) (denying declaratory judgment to the plaintiff on question of whether Colorado's foreclosure procedure was unconstitutional under the due process clause of the Fourteenth Amendment), aff'd by Mbaku v. Bank of Am., F. App'x. , 628 Fed. Appx. 968, 2015 U.S. App. LEXIS 10022, 2015 WL 3651596, at *2-4 (10th Cir. 2015). 4. Fifth Claim for Relief - Intentional Infliction of Emotional Distress The court also finds Plaintiff's claim for intentional infliction of emotional distress fails to state a claim for relief. To state a claim for intentional infliction of emotional distress, a plaintiff must show that "(1) the defendant engaged in extreme and outrageous conduct, (2) recklessly or with the intent of causing the plaintiff severe emotional distress; (3) causing the plaintiff to suffer emotional distress." McCarty v. Kaiser-Hill Co., LLC, 15 P.3d 1122, 1126 (Colo. App. 2000). As to the first element, [T]he level of outrageousness required to create liability for intentional infliction of emotional distress is extremely high: "Liability has been found [*26] only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Coors Brewing Co. v. Floyd, 978 P.2d 663, 665-66 (Colo. 1999) (quoting Rugg v. McCarty, 173 Colo. 170, 476 P.2d 753, 756 (Colo. 1970)). Plaintiff's Amended Complaint fails to allege any facts that would sustain a claim for intentional infliction of emotional distress. The court agrees with Northern Natural Gas Company v. L.D. Drilling, No. 08-1405- WEB-DWB, 2010 U.S. Dist. LEXIS 103387, 2010 WL 3892227 (D. Kan. 2010), which found that a defendant is "never liable ... 'where he has done no more than insist upon his legal rights in a permissible way, even though he is well aware that such insistence is certain to cause emotional distress.'" 2010 U.S. Dist. LEXIS 103387, [WL] at *4 (quoting Restatement (Second) of Torts § 46 cmt. g (Am. Law Inst. 1975)). While this court does not discount the stress associated with involuntary foreclosure proceedings, Plaintiff's allegations that the underlying events related to the foreclosure actions have caused him emotional distress are insufficient to state a claim for intentional infliction of emotional distress. See Ramos v. Countrywide Bank, FSB, 2:09-CV-449 TS, 2009 U.S. Dist. LEXIS 99909, 2009 WL 3584327, at *5 (D. Utah 2009) ("Plaintiff's conclusory allegations, unsupported by any factual averments, do not meet the standard set [*27] forth above. While the foreclosure process is certainly stressful, Plaintiff has not sufficiently alleged the kind of outrageous conduct needed to support a claim of intentional infliction of emotional distress."). 5. Claims Regarding Consent Orders 2016 U.S. Dist. LEXIS 31656, *24 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 9 of 12 Page 9 of 11 Throughout his Complaint and his Responses to Defendants' Motions to Dismiss, Plaintiff attempts to rely on consent orders entered in other courts between Defendants and third parties, generally federal agencies/entities, as support for various allegations. (Doc. No. 1 (Ex. 4) at 14-15; Doc. No. 99-1, 99-2; Doc. No. 101-1.) However, there is no legal basis for Plaintiff to rely upon or seek relief in this matter based upon consent orders entered in other courts and to which Plaintiff is not a party. For purposes of enforcement, the Supreme Court has held that consent decrees must be construed basically as contracts. United States v. ITT Cont'l Baking Co., 420 U.S. 223, 238, 95 S. Ct. 926, 43 L. Ed. 2d 148 (1975). Consequently, a non-party to a consent decree may not enforce the decree by seeking damages for breach of the decree. "[A] well-settled line of authority from this Court establishes that a consent decree is not enforceable directly or in collateral proceedings by those who are not parties to it even though they were intended [*28] to be benefitted by it." Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750, 95 S. Ct. 1917, 44 L. Ed. 2d 539 (1975) (citing United States v. Armour & Co., 402 U.S. 673, 91 S. Ct. 1752, 29 L. Ed. 2d 256 (1971); Buckeye Coal & R. Co. v. Hocking Valley R. Co., 269 U.S. 42, 46 S. Ct. 61, 70 L. Ed. 155 (1925)). Plaintiff relies upon and has submitted to this court the Consent Judgment entered in the matter of United States v. Bank of America Corp., et. al., No. 12-0361, 2012 U.S. Dist. LEXIS 188892 (D. D.C. April 4, 2012). (Doc. Nos. 99-1, 99-2) Other courts considering this same Consent Judgment have held, and this court agrees, that "by its terms, this Consent Judgment is not enforceable by individual third-party beneficiaries" because it "specifically states that enforcement actions may be brought by a 'Party to this Consent Judgment or the Monitoring Committee.'" Conant v. Wells Fargo Bank, N.A., 24 F. Supp. 3d 1, 16 (D.D.C. 2014) (quoting United States v. Bank of Am. Corp., et al., No. 12-0361, 2012 U.S. Dist. LEXIS 188892 (D.D.C. Apr. 4, 2012), Consent Judgment). In response to similar actions individual homeowners have filed seeking to enforce the terms of the same Consent Judgment, courts have uniformly concluded that individual borrowers, such as Plaintiff, are neither parties to the Consent Judgment nor members of the Monitoring Committee, and therefore are not in a position to enforce any obligation imposed on the parties to that judgment. See, e.g., Andre v. Bank of Am., N.A., No. 5:14-cv-02888-PSG, 2014 U.S. Dist. LEXIS 168978, 2014 WL 6895240, at *4 (N.D. Cal. Dec. 5, 2014); Fontaine v. JP Morgan Chase Bank, N.A., 42 F. Supp. 3d 102, 110-11 (D. D.C. 2014); McCain v. Bank of America, 13 F. Supp. 3d 45, 55-56 (D.D.C. Jan. 30, 2014); Winders v. CitiMortgage, Inc., No. 3:13-CV- 56 (CDL), 2013 U.S. Dist. LEXIS 110924, 2013 WL 4039399, at *1-2 (M.D. Ga. August 7, 2013); Ghaffari v. Wells Fargo Bank, N.A., 6 F. Supp. 3d 24, 30 (D.D.C. 2013); Glaviano v. JP Morgan Chase Bank, N.A., No. 13-20149 (RMC), 2013 U.S. Dist. LEXIS 180582, 2013 WL 6823122, at *1 n.1 (D.D.C. December 27, 2013). Similarly, Plaintiff [*29] also submitted to this court a Stipulated Order entered in the matter of Fed'l Trade Comm'n v. Green Tree Servicing, LLC, No. 15-cv-02064 (SRN-JSM). (Doc. No. 101-1.) Plaintiff contends that it provides to him a right to seek damages against Green Tree as a third-party beneficiary of the Stipulated Order. (Doc. No. 101 at 2, 12.) However, similar to the Consent Judgment to which Bank of America was a party, the Stipulated Order does not provide any cause of action or similar right to Plaintiff. (Doc. No. 101-1 at 7 (reserving right of enforcement to governmental agency, entity or representative.)) Neither of these orders hold legal significance to the present case. As repeatedly argued by Defendants, they do not provide Plaintiff with causes of actions or a third- party right to enforce. Nor do they in any way undermine arguments presented in Defendants' Motions, which are based on matters of law rather than factual assertions. 6. Motion for Leave to Amend Plaintiff seeks leave to amend his Amended Complaint in order to assert additional breach of contract claims, claims based upon the above-referenced Consent Orders, and additional claims arising from his contention that he voided the [*30] Note in March 2011. (See generally Doc. No. 109-1.) Under Rule 15(a), a court should allow a party to amend its pleadings "when justice so requires." Fed. R. Civ. P. 15(a). The grant or denial of an opportunity to amend is within the discretion of the court, but "outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules." Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962). "Refusing leave to amend is generally only justified upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment." Frank v. U.S. West, Inc., 3 F.3d 1357, 2016 U.S. Dist. LEXIS 31656, *27 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 10 of 12 Page 10 of 11 1366 (10th Cir. 1993). Proposed amendments are futile when the amended complaint "would be subject to dismissal for any reason . . . ." Watson ex rel. Watson v. Beckel, 242 F.3d 1237, 1240-41 (10th Cir. 2001). "The futility question is functionally equivalent to the question whether a complaint may be dismissed for failure to state a claim." Gohier v. Enright, 186 F.3d 1216, 1218 (10th Cir. 1999) (citations omitted). In his proposed Amended Complaint, the factual bases for Plaintiff's additional contract claims have primarily remained the same but he now sets the claims out as "total" and "material" breach of contract, breach of implied duties [*31] and breach of performed duties. (Doc. 109-1 at 12-23.) Permitting Plaintiff to amend his Complaint in order to add these claims would be futile as, for the reasons set forth above, the contract claims are barred by the statute of limitations. Additionally, Plaintiff partially bases his "breach of performed duties," as well as two more proposed claims, on his purported ability to enforce the Consent Orders. (Doc. 109-1 at 24.) The court has already established, supra, that the Consent Orders do not provide Plaintiff with a cause of action or other enforceable right. Similarly, Plaintiff proposes to assert additional causes of action, including fraud, "enforcing a cancelled note," "deed of trust has been released by trustee" and "RESPA, FTC, FDIC, TILA, disclosure violations," based on his contention that he unilaterally voided the Note by submitting the Notice of Right to Cancel to BANA. (Doc. No. 109-1 at 32-34, 36-38.) As discussed, Plaintiff's belief that he unilaterally cancelled his mortgage is simply inaccurate. Therefore, any cause of action based on this contention is not viable. Plaintiff also seeks to add a cause of action entitled "statute of limitations," in which he contends [*32] that Green Tree's foreclosure action should be barred by the statute of limitations. However, a statute of limitations is limited to being an affirmative defense rather than a cause of action in its own right. See Fed. R. Civ. P. 8(c)(1); see also Rosette, Inc. v. U.S., 141 F.3d 1394, 1396 (10th Cir. 1998) (noting the "well-settled maxim that limitations do not normally run against a defense, or, in other words, that a statute of limitations may be used only as a shield, not as a sword." (citing Northern Pac. Ry. v. United States, 277 F.2d 615, 623-24 (10th Cir. 1960)); Outlaw v. Garner, 139 N.C. 190, 51 S.E. 925, 925 (1905) ("statute of limitations . . . is a shield, never a sword."). The court finds Plaintiff's proposed claims are futile insofar as they fail to state a claim upon which relief could be granted. 7. Motion for Temporary Restraining Order Finally, Plaintiff has requested a temporary restraining order pursuant to Fed. R. Civ. P. 65(b) seeking to enjoin Green Tree's foreclosure proceedings. Where the opposing party has notice, as they do in this case, the procedure and standards for issuance of a temporary restraining order mirror those for a preliminary injunction. Emmis Communs. Corp. v. Media Strategies, Inc., Civ.A. 00-WY-2507CB, 2001 U.S. Dist. LEXIS 1459, 2001 WL 111229, *2 (D. Colo. Jan. 23, 2001). A party seeking preliminary injunction must meet the following four conditions: (1) the movant will suffer irreparable harm unless the injunction issues; (2) there is [*33] a substantial likelihood the movant ultimately will prevail on the merits; (3) the threatened injury to the movant outweighs any harm the proposed injunction may cause the opposing party; and (4) the injunction would not be contrary to the public interest. ACLU v. Johnson, 194 F.3d 1149, 1155 (10th Cir. 1999). Ultimately, because "a preliminary injunction is an extraordinary remedy," the moving party must establish that his "right to relief [is] clear and unequivocal." Schrier v. Univ. of Colo., 427 F.3d 1253, 1258 (10th Cir. 2005). This court has recommended that Defendants' motions to dismiss be granted and his amendments be denied. Therefore, there is not a substantial likelihood Plaintiff ultimately will prevail on the merits, one of the requirements for preliminary injunction. ACLU, 194 F.3d at 1155. Accordingly, Plaintiff's request for a temporary restraining order should be denied. WHEREFORE, for the foregoing reasons, this court respectfully RECOMMENDS that "Defendant's Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(6)" (Doc. No. 83) be GRANTED; RECOMMENDS that Defendant Bank of America, N.A.'s "Motion to Dismiss Plaintiff's Amended Complaint" (Doc. No. 92) be GRANTED; RECOMMENDS that Plaintiff's "Motion for Leave to file Third Amended Complaint" (Doc. No. 109) be DENIED; 2016 U.S. Dist. LEXIS 31656, *30 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 11 of 12 Page 11 of 11 RECOMMENDS that Plaintiff's "Forthwith [*34] Motion for TRO/Permanent Injunction Against Green Tree Servicing, LLC to Resurrect a Foreclosure Order to Avoid the Six Year Statute of Limitations of the Rule 120 Case 2013CV30922 (F.R.C.P. 65(b)" be DENIED. ADVISEMENT TO THE PARTIES Within fourteen days after service of a copy of the Recommendation, any party may serve and file written objections to the Magistrate Judge's proposed findings and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir. 1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. "[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review." United States v. One Parcel of Real Prop. Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir. 1999) (stating [*35] that a district court's decision to review a magistrate judge's recommendation de novo despite the lack of an objection does not preclude application of the "firm waiver rule"); One Parcel of Real Prop., 73 F.3d at 1059-60 (stating that a party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Ref. Sys., Inc., 52 F.3d 901, 904 (10th Cir. 1995) (holding that cross-claimant had waived its right to appeal those portions of the ruling by failing to object to certain portions of the magistrate judge's order); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (holding that plaintiffs waived their right to appeal the magistrate judge's ruling by their failure to file objections). But see Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (stating that firm waiver rule does not apply when the interests of justice require review). Dated this 1st day of February, 2016. BY THE COURT: /s/ Kathleen M. Tafoya Kathleen M. Tafoya United States Magistrate Judge End of Document 2016 U.S. Dist. LEXIS 31656, *33 Case 1:16-cv-01935-MSK-MEH Document 66-2 Filed 04/21/17 USDC Colorado Page 12 of 12