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Jennifer Cory Trost, A Resident of the State of California v. Leilani P. Embernate

December 6, 2011

JENNIFER CORY TROST, A RESIDENT OF THE STATE OF CALIFORNIA, PLAINTIFF,
v.
LEILANI P. EMBERNATE, A RESIDENT )
OF THE STATE OF HAWAII, FORMERLY DOING ) BUSINESS AS TYPICALLY TROPICAL PROPERTIES, LLC AND PACIFIC STAR MORTGAGE, INC.; TYPICALLY TROPICAL PROPERTIES, LLC, A HAWAII LIMITED ) LIABILITY COMPANY NOW KNOWN AS RAINBOW REAL ESTATE GROUP, LLC; AND PACIFIC STAR MORTGAGE, INC., A DISSOLVED HAWAII CORPORATION. DEFENDANTS.



The opinion of the court was delivered by: J. Michael Seabright United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS TYPICALLY TROPICAL PROPERTIES, LLC'S AND RAINBOW REAL ESTATE GROUP LLC'SMOTION TO DISMISS

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS TYPICALLY TROPICAL PROPERTIES, LLC'S AND RAINBOW REAL ESTATE GROUP, LLC'S MOTION TO DISMISS

I. INTRODUCTION

Defendants Typically Tropical Properties, LLC, and Rainbow Real Estate Group (collectively "Typically Tropical")*fn1 move to dismiss Plaintiff Jennifer Cory Trost's Complaint filed on July 25, 2011. Co-Defendant Leilani P. Embernate ("Embernate"), proceeding pro se, has filed an Answer and Counterclaim, but has not filed any position as to Typically Tropical's Motion.*fn2

The Motion primarily argues that the Complaint is barred by applicable statutes of limitations. The court heard the Motion on December 5, 2011, and orally ruled that (1) Counts One (fraud), Two (breach of fiduciary duty), and Three (breach of contract) are not time-barred, but that (2) Count Four (negligent and intentional infliction of emotional distress) is barred by a two-year statute of limitations. This Order provides an explanation of the oral rulings and addresses certain matters that were not discussed at the hearing.

II. BACKGROUND

The court need not repeat the allegations of the Complaint, which the court assumes as true for purposes of this Motion. See, e.g., Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.1 (9th Cir. 2003). Essentially, the Complaint alleges a continuing "scheme to defraud" Plaintiff that began in October 2002 and ran to November 2006. It alleges a series of eleven real-estate related investment transactions whereby Plaintiff's real estate agent/mortgage broker/investment counselor also borrowed and loaned money from Plaintiff, commingled funds, and committed various acts of fraud or self-dealing without disclosure and without providing accountings. It alleges fraud, breach of fiduciary duty, breach of contract, infliction of emotional distress, and other counts seeking equitable remedies. It alleges that the activities were concealed from Plaintiff until November 2006. Doc. No. 1, Compl. ¶ 10.

The Complaint was filed on July 25, 2011. Because many of the transactions occurred before July 25, 2005 (six years prior to the filing of the Complaint), Typically Tropical moves to dismiss, primarily on statute of limitations grounds.*fn3

III. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a claim for "failure to state a claim upon which relief can be granted[.]"

"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, ___, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Weber v. Dep't of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008). This tenet -- that the court must accept as true all of the allegations contained in the complaint -- "is inapplicable to legal conclusions." Id. Accordingly, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S.at 555). Rather, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (citing Twombly, 550 U.S.at 556). Factual allegations that only permit the court to infer "the mere possibility of misconduct" do not show that the pleader is entitled to relief as required by Rule 8. Id.

A claim may be dismissed under Rule 12 as "barred by the applicable statute of limitations only when 'the running of the statute is apparent on the face of the complaint.'" Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010) (quoting Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006)). Such motion should be granted "only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled." Morales v. City of Los Angeles, 214 F.3d 1151, 1153 (9th Cir. 2000) (citation omitted).

IV. DISCUSSION

A. Count One -- "Fraud, Misrepresentation, ...


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