Bluestone Care Management LLC v. Stidham

• Court: District Court, D. Arizona
• Decided: September 15, 2025
• Docket: 2:25-cv-02444
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Bluestone Care Management LLC, No. CV-25-02444-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 Savannah Stidham, et al.,

13 Defendants. 14 15 Before the Court is Defendants’ Savannah Stidham and Caring Presence In Home, 16 Care LLC (“Caring Presence HC”) (collectively “Defendants”) Motion to Dismiss (Doc. 17 16) Plaintiff Bluestone Care Management LLC’s (“Bluestone”) Complaint under Federal 18 Rules of Civil Procedure (“Rule”) 12(b)(3) and (6). Having reviewed the briefing and the 19 relevant case law, the Court denies the motion. 20 I. BACKGROUND 21 Bluestone is a New York limited liability company with its principal place of 22 business in New York. (Id. at 1.) Bluestone owns home care agencies that provide 23 unskilled, in-home personal care. (Id. at 2.) Caring Presence HC operates home care 24 agencies in Arizona and Idaho. (Id. at 3.) On February 20, 2025, Bluestone and Stidham 25 signed a Membership Interest Purchase Agreement (“MIPA”) where Stidham agreed to sell 26 her 100% membership interest in Caring Presence HC to Bluestone. (Id. at 4.) Bluestone 27 agreed to pay $4 million in total for the acquisition, of which $500,000 was paid upon 28 signing the MIPA. (Id.) 1 On March 21, 2025, Bluestone and Stidham, on behalf of Caring Presence HC, 2 signed the Managing Agreement (the “MA”). (Id. at 11.) The MA provides that Bluestone 3 would act as the “sole exclusive manager” of Caring Presence HC “and its day-to-day 4 operations” in “a professional and commercially reasonable manner . . . on behalf of 5 [Stidham]” from March 21, 2025 forward. (Doc. 1-1 at 29, 33.) After signing the MA, 6 Bluestone paid an additional $1 million towards the total purchase price for Caring 7 Presence HC. (Id. at 11.) Therefore, at this point, Bluestone paid Stidham $1.5 million of 8 the $4 million agreement. (Id. at 13.) 9 Bluestone then sued Defendants, bringing two breach of contract claims. (Doc. 1 10 at 31–36.) The first alleges violations under the MIPA. (Id. at 31–34.) The second alleges 11 violations under the MA. (Id. at 34–36.) 12 A. Breach of the MIPA 13 The MIPA contains three pertinent provisions: Seller’s Representations and 14 Warranties, Restrictive Covenants, and Conduct of Business Prior to the Closing. (Doc. 15 1-1 3, 11, 13.) Bluestone alleges Stidham violated all three. 16 In the Seller’s Representations and Warranties provision, Bluestone alleges Stidham 17 agreed that Caring Presence HC, as of the date of signing the MIPA, complied with all 18 operation and licensing laws, had or will fully pay all previous tax liabilities, and complied 19 with all labor related laws. (Doc. 1-1 at 4, 6–7.) Bluestone contends Stidham violated this 20 provision by: “failing to provide its full-time employees with adequate health insurance 21 coverage under the [Affordable Care Act];” “failing to foreign register Caring Presence 22 HC in Idaho to pay payroll taxes;” “failing to ever pay the appropriate amount of payroll 23 taxes in the state of Idaho;” “failing to perform criminal background checks on employees 24 in Idaho;” “hiring employees that failed criminal background checks in Idaho;” and “failing 25 to have unemployment registry and unemployment insurance in Idaho.” (Doc. 1 at 26.) 26 In the Restrictive Covenants provision, Bluestone alleges Stidham agreed to neither 27 induce any employee or patient to cease providing services or business with Caring 28 Presence HC nor engage in a home care agency within the State of Arizona for a five-year 1 period following the closing date. (Doc. 1-1 at 12.) Bluestone contends Stidham violated 2 this provision by starting and operating a home care agency called Caring Presence in 3 Homehealth LLC dba Arizona Angels (“Arizona Angels”) and soliciting both Caring 4 Presence HC employees and patients to the new agency. (Doc. 1 at 8, 33–34.) 5 Additionally, Bluestone alleges Stidham is in violation of the First Addendum to the MIPA, 6 where she agreed to not operate Arizona Angels during the restricted period and 7 acknowledged that doing so could violate the MIPA’s Restrictive Covenants. (Id. at 34; 8 Doc. 1-1 at 27–28.) 9 In the Conduct of Business Prior to the Closing provision, Bluestone alleges 10 Stidham agreed to preserve and maintain all Caring Presence HC permits from the date of 11 signing the MIPA until the closing date. (Doc. 1-1 at 13.) Bluestone contends Stidham 12 violated this provision by failing to “maintain Caring Presence HC’s state and county 13 payment program participation approvals with the Idaho Medicaid program.” (Doc. 1 14 at 33.) On May 29, 2025, Molina Medicaid of Idaho terminated its services with Caring 15 Presence HC. (Id. at 20.) Bluestone argues “that Defendants’ failure to conduct 16 background checks was the cause for the Molina Medicaid contract termination.” (Id.) 17 B. Breach of the MA 18 Bluestone’s second breach of contract claim pertains to the MA. (Id. at 34–36.) 19 Bluestone alleges Stidham agreed to compensate Bluestone for these services and provide 20 “complete access” to Caring Presence HC’s “records, offices and personal, in order that it 21 may carry out its obligations” under the MA. (Id. at 35.) Bluestone contends that Stidham 22 violated the MA by: failing to provide any compensation for its managing services; 23 rescinding its access to the Caring Presence HC Wells Fargo bank account; rescinding its 24 power of attorney for a state audit; rescinding its access to business mail at Caring Presence 25 HC’s Phoenix office; and rescinding its access to the United Health payor portal. (Doc. 1 26 at 35.) 27 C. Procedural History 28 After filing its complaint, Bluestone moved for a temporary restraining order 1 (“TRO”) and preliminary injunction. (Id. at 2.) The Court granted the TRO in part. (Id. 2 at 10.) At a show of cause hearing on the TRO order, the parties stipulated to its entry until 3 the preliminary injunction hearing, which is consolidated with the upcoming trial. (Id. 4 at 20.) 5 After Bluestone moved for the TRO, Defendants filed their Motion to Dismiss 6 pursuant to Rule 12(b)(3) and (6). (Doc. 16.) Defendants argue that venue is improper 7 because of a forum-selection clause in the MA. (Id. at 2.) Additionally, Defendants argue 8 that Bluestone’s first contract claim is unripe. (Id. at 3.) 9 II. LEGAL STANDARD 10 A. Forum-Selection Clauses 11 Federal law governs the enforceability and interpretation of forum-selection clauses. 12 Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 513 (9th Cir. 1988). Such clauses 13 are presumptively valid. Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009). “When 14 the parties have agreed to a valid forum-selection clause, a district court should ordinarily 15 transfer the case to the forum specified in that clause.” Atl. Marine Constr. Co. v. U.S. 16 Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 62 (2013). “[T]he party seeking to avoid a forum 17 selection clause bears a ‘heavy burden’ to establish a ground upon which we will conclude 18 the clause is unenforceable.” Doe 1, 552 F.3d at 1083 (quoting M/S Bremen v. Zapata 19 Off-Shore Co., 407 U.S. 1, 17 (1972)). 20 B. Forum–Selection Clauses and Rule 12(b)(3) 21 Under Federal Rule of Civil Procedure 12(b)(3), a party may move to dismiss an 22 action that has been brought in an improper venue. “When venue is challenged, the court 23 must determine whether the case falls within one of the three categories set out in [28 24 U.S.C.] § 1391(b).” Atl. Marine, 571 U.S. at 56. “Whether the parties entered into a 25 contract containing a forum-selection clause has no bearing on whether a case falls into 26 one of the categories of cases listed in § 1391(b). As a result, a case filed in a district that 27 falls within § 1391 may not be dismissed under . . . Rule 12(b)(3).” Id.; see also Petersen 28 v. Boeing Co., 108 F. Supp. 3d 726, 730 n.5 (D. Ariz. 2015) (“The Court held Rule 12(b)(3) 1 was not a proper mechanism for enforcing a forum selection clause because such clauses 2 do not render venue improper.” (citing Atl. Marine, 571 U.S. at 60)). 3 If the contracted forum is within the federal court system, a forum-selection clause 4 “may be enforced through a motion to transfer under [28 U.S.C.] § 1404(a).” Atl. Marine, 5 571 U.S. at 59; see also Craig v. Worldwide Mixed Martial Arts Sports Inc., No. 6 CV-14-00183-PHX-DGC, 2014 WL 13110667, at *2 (D. Ariz. July 8, 2014) (“[A] 7 forum-selection clause cannot be enforced by moving to dismiss under Rule 12(b); it must 8 be enforced by moving to transfer under § 1404(a).”). If the contracted forum is a state or 9 foreign forum, “the appropriate way to enforce a forum-selection clause . . . is through the 10 doctrine of forum non conveniens.” Atl. Marine, 571 U.S. at 60. “A defendant bears the 11 burden of justifying dismissal based on forum non conveniens . . . .” Usme v. CMI Leisure 12 Mgmt., Inc., 106 F.4th 1079, 1085 (11th Cir. 2024). 13 C. Rule 12(b)(6) 14 To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet 15 the requirements of Rule 8(a)(2). Rule 8(a)(2) requires a “short and plain statement of the 16 claim showing that the pleader is entitled to relief,” so that the defendant has “fair notice 17 of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 18 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 19 47 (1957)). This notice exists if the pleader sets forth “factual content that allows the court 20 to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 21 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a 22 cause of action, supported by mere conclusory statements, do not suffice.” Id. 23 Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory 24 or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. 25 Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). A complaint that sets forth a 26 cognizable legal theory will survive a motion to dismiss if it contains sufficient factual 27 matter, which, if accepted as true, states a claim to relief that is “plausible on its face.” 28 Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Plausibility does not equal 1 “probability,” but requires “more than a sheer possibility that a defendant has acted 2 unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent with’ a 3 defendant’s liability, it ‘stops short of the line between possibility and plausibility . . . .’” 4 Id. (quoting Twombly, 550 U.S. at 557). 5 In ruling on a Rule 12(b)(6) motion to dismiss, the well-pled factual allegations are 6 taken as true and construed in the light most favorable to the nonmoving party. Cousins v. 7 Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). However, legal conclusions couched as 8 factual allegations are not given a presumption of truthfulness, and “conclusory allegations 9 of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto 10 v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). A court ordinarily may not consider evidence 11 outside the pleadings when ruling on a Rule 12(b)(6) motion to dismiss. See United States 12 v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). “A court may, however, consider 13 materials—documents attached to the complaint, documents incorporated by reference in 14 the complaint, or matters of judicial notice—without converting the motion to dismiss into 15 a motion for summary judgment.” Id. at 908. 16 III. DISCUSSION 17 Defendants argue the Court should dismiss Bluestone’s Complaint in its entirety 18 because “it was filed in the improper venue” and the “first claim is unripe.” (Doc. 16 at 4.) 19 The Court disagrees for the following reasons. 20 A. Improper Venue 21 Defendants ask the Court to “dismiss Bluestone’s Complaint in its entirety pursuant 22 to Rule 12(b)(3)” because the MA contains the following forum-selection clause: 23 Each Party to this Agreement hereby agrees and consents that any legal 24 action or proceeding with respect to this Agreement shall only be brought in the Supreme Court of the State of Arizona located in Yavapai County. By 25 execution and delivery of this Agreement, each such Party hereby (i) accepts 26 the jurisdiction of the aforesaid courts, (ii) waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the 27 venue set forth above and (iii) further waives any claim that any such action 28 or proceeding brought in any such court has been brought in an inconvenient forum. 1 (Doc. 1-1 at 37.) 2 Bluestone correctly responds that Rule 12(b)(3) is the improper mechanism to 3 enforce a forum-selection clause. (Doc. 22 at 11–12.) In their reply, Defendants 4 acknowledge this error but still contend that “the forum selection clause is nonetheless 5 enforceable under the doctrine of forum non conveniens pursuant to the facts alleged and 6 arguments raised in the Motion to Dismiss.” (Doc. 24 at 5.) However, in their Motion to 7 Dismiss, Defendants did not move to dismiss Bluestone’s complaint under forum non 8 conveniens. See Mueller v. Apple Leisure Corp., 880 F.3d 890, 894 (7th Cir. 2018) 9 (“[W]hen a forum-selection clause requires suit in a specific nonfederal forum, the doctrine 10 of forum non conveniens is the proper vehicle to enforce the clause.” (emphasis in 11 original)). 12 In Atlantic Marine, the Supreme Court rejected the idea that a forum-selection 13 clause “may be enforced by a motion to dismiss under . . . Rule 12(b)(3).” 571 U.S. at 52. 14 Here, Defendants moved to enforce the MA’s forum-selection clause under Rule 12(b)(3). 15 Therefore, the Court must deny Defendants’ Rule 12(b)(3) motion as improper. See In re 16 Union Elec. Co., 787 F.3d 903, 907 (8th Cir. 2015) (noting that the Supreme Court “clearly 17 eliminated the possibility of using Rule 12(b)(3) as a means to enforce a forum-selection 18 clause”).1 19 B. Unripe Contract Claims 20 “To prevail on a claim for breach of contract, the plaintiff must prove the existence 21 of a contract between the plaintiff and defendant, a breach of the contract by the defendant, 22 and resulting damage to the plaintiff.” Frank Lloyd Wright Found. v. Kroeter, 697 F. Supp. 23 2d 1118, 1125 (D. Ariz. 2010). Defendants argue that Bluestone’s first breach of contract 24 claim under the MIPA is not ripe because the parties “have not closed under the MIPA.” 25 (Doc. 16 at 2.) First, Defendants contend that Bluestone’s allegation that Stidham breached 26 1 The Court notes that there is no “Supreme Court” in Yavapai County. The parties agree. 27 (Doc. 16 at 2 n.1; Doc. 22 at 8–9.) Therefore, the Court is skeptical the forum-selection clause is even enforceable. See McNeil v. Attaway, 348 P.2d 301, 305 (Ariz. 1959) (“In a 28 suit to reform a written instrument a clear and convincing showing of the real agreement of the parties thereto is a requisite.”). 1 the MIPA’s Restrictive Covenants is “impossible” because the restrictive period is only 2 binding five years following the closing date, which “has undisputedly not yet occurred.” 3 (Id. at 3.) Second, Defendants argue that Bluestone’s damages are unripe “because 4 Bluestone has not yet paid Stidham even half of the purchase price under the MIPA.” (Id.) 5 In other words, “Bluestone has still not suffered any damages yet” because “Bluestone has 6 not yet fully paid for the Arizona assets, much less the Idaho assets.” (Id. at 4.) 7 1. Restrictive Covenants 8 In response to Defendants’ first contention, Bluestone argues that “the closing date” 9 defines “the end of the Restricted Period.” (Doc. 22 at 6 (emphasis in original).) Strangely, 10 Bluestone states, “[i]f the parties had wanted to delay the start of the Restricted Period until 11 closing, they would have explicitly done so with language such as ‘commencing on the 12 closing date.’ No such language appears.” (Id.) The Court disagrees. 13 The MIPA defines the relevant restricted period as: “Seller agrees as follows for a 14 period equal to five (5) years following the Closing Date.” (Doc. 1-1 at 12.) The language 15 is clear; the restricted period begins “following” the closing date. See Cravens v. Montano, 16 567 P.3d 745, 749 (Ariz. 2025) (stating that Arizona courts interpret contracts according 17 to “their plain and ordinary meaning” (quoting Fid. Nat. Title Ins. Co. v. Osborn III 18 Partners LLC, 524 P.3d 820, 823 (Ariz. 2023))). As the Defendants correctly point out, if 19 the five-year period began before the closing date, then the restricted period following the 20 closing date would not be equal to five years. (Doc. 24 at 5–6.) Thus, the Court refuses to 21 reach such a strained construction. 22 For these reasons, Bluestone’s allegations that Defendants violated the Restrictive 23 Covenants do not appear ripe. However, Bluestone’s allegations that Defendants violated 24 the MIPA’s Seller’s Representations and Warranties and the Conduct of Business Prior to 25 the Closing provisions are ripe. In both provisions, Stidham’s agreed responsibilities were 26 applicable from the date of signing the MIPA. (Doc. 1-1 at 3, 13.) Therefore, Bluestone’s 27 allegations are not premature. Accordingly, Bluestone has alleged timely breaches of the 28 MIPA in its first claim for relief. 1 2. Damages 2 The Court now turns to Defendants’ second contention that Bluestone’s alleged 3 contract damages are unripe because Bluestone has not fully paid for Caring Presence HC. 4 (Doc. 16 at 4.) Bluestone responded that Arizona law permits a party to sue for damages 5 before completing performance. (Doc. 22 at 3); see Thomas v. Montelucia Villas, LLC, 6 302 P.3d 617, 620 (Ariz. 2013) (“An anticipatory repudiation is a breach of contract giving 7 rise to a claim for damages and also excusing the necessity for the non-breaching party to 8 tender performance.” (quoting United Cal. Bank v. Prudential Ins. Co. of Am., 681 P.2d 9 390, 435 (Ariz. 1983))). Defendants then agreed with Bluestone’s response in their reply: 10 “Bluestone correctly pointed out that both the MIPA and Arizona law allows a seller to file 11 claims for breach of contract prior to closing.” (Doc. 24 at 7.) But Defendants respond 12 with a new argument—Bluestone has not suffered any damages because it “has possession 13 and control” over Caring Presence HC. (Id.) Markedly absent from this new argument is 14 any citation to a supporting case. The Court is unsure why Bluestone’s mutually agreed 15 upon arrangement to manage Caring Presence HC would nullify any damages suffered by 16 Bluestone as a result of Defendants’ alleged breaches. 17 Bluestone has sufficiently alleged damages. In its Complaint, Bluestone contends 18 Defendants’ failure to follow labor compliance laws—in purported violation of the MIPA’s 19 Seller’s Representations and Warranties provision—diminished Bluestone’s agreed upon 20 interest to purchase Caring Presence HC in full because the violations opened the company 21 to “tens of thousands of dollars of potential liability and attorneys’ fees.” (Doc. 1 at 27.) 22 Bluestone also argues that Defendants’ failure to maintain Caring Presence HC’s Idaho 23 Medicaid license—in purported violation of the MIPA’s Conduct of Business Prior to the 24 Closing provision—diminished Bluestone’s interest in Caring Presence HC because it can 25 no longer service hundreds of Medicaid patients. (Id. at 28.) And Bluestone claims 26 Defendants’ continued operation of Arizona Angels—in purported violation of the First 27 Addendum to the MIPA—diminishes Caring Presence HC’s value through consumer 28 confusion. (Id. at 30.) Bluestone states that Caring Presence HC “received several phone calls from prospective employees” inquiring about job opportunities posted by Arizona Angels. Ud.) Caring Presence HC was not hiring for those positions at that time. (/d.) 3 For these reasons, the Court finds that Bluestone has sufficiently pled its first breach 4|| of contract claim because it alleged timely violations that harm its agreed upon contractual 5|| interests. See City of Chandler v. Roosevelt Water Conservation Dist., 559 P.3d 184, 193 6|| (Ariz. Ct. App. 2024) (“A breach of contract claim requires: (1) the existence of a contract; 7\| (2) breach; and (3) resulting damages.”). Therefore, the Court denies Defendants’ Rule 8 || 12(b)(6) motion. IV. CONCLUSION 10 Accordingly, 11 IT IS ORDERED denying Defendants’ Motion to Dismiss (Doc. 16). 12 Dated this 15th day of September, 2025. 13 Se . ~P 14 SO I soarapig Susan 6 Brpoyich 16 17 18 19 20 21 22 23 24 25 26 27 28

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