Vested Housing Group, LLC v. Principal Real Estate Investors, LLC

648 F. App'x 646
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 18, 2016
Docket14-15168
StatusUnpublished

This text of 648 F. App'x 646 (Vested Housing Group, LLC v. Principal Real Estate Investors, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vested Housing Group, LLC v. Principal Real Estate Investors, LLC, 648 F. App'x 646 (9th Cir. 2016).

Opinion

MEMORANDUM **

Plaintiffs-Appellants Vested Housing Group, LLC (“VHG”) and Henderson Lofts Devco, LLC (“HLD”) appeal the district court’s order granting Defendants-Appellees Principal Real Estate Investors, LLC (“PREI”), Henderson Apartment Venture, LLC (“HAV”), Principal Life Insurance Co. (“PLIC”), and Principal U.S. Property Separate Account’s (“PUSPSA”) motion to dismiss. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I.

In June 2007, VHG entered into a contract with HAV, pursuant to which HLD (VHG’s wholly owned subsidiary) would develop real property in Nevada. HAV agreed to purchase this property once development was complete. HAV also warranted in the agreement-that it was a valid Iowa corporation and that it was authorized to enter into the contract. PREI, with which HAV shared a parent company (PLIC), signed the agreement on behalf of HAV. HLD financed the transaction with a loan from Wachovia Bank. PLIC guaranteed the loan.

Contrary to Defendants’ representations, HAV was not actually incorporated until October 2008.- Unrelatedly, in November 2008, HLD defaulted on its loan payments to Wachovia Bank. PLIC then repurchased the loan from Wachovia and *648 assigned the property to HAV, which foreclosed on the property in August 2009.

In April 2013, Plaintiffs sued Defendants for their misrepresentations regarding the date of HAV’s incorporation. Defendants moved to dismiss under Federal Rules of Civil Procedure 9(b) and 12(b)(6). The district court granted their motion based on Plaintiffs’ failure to allege adequately that Defendants’ misrepresentation proximately caused their damages. The district court did not grant Plaintiffs leave to amend their complaint. Plaintiffs now appeal.

II.

We review a district court’s ruling on a motion to dismiss de novo, taking into consideration “only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice.” Autotel v. Nev. Bell Tel. Co., 697 F.3d 846, 850 (9th Cir.2012) (quoting W. Radio Servs. Co. v. Qwest Corp., 678 F.3d 970, 975-76 (9th Cir.2012)). The Court “accept[s] as true all well-pleaded factual allegations and construe[s] them in the light most favorable to the plaintiff.” Id. We may affirm “on any ground supported by the record.” ASARCO, LLC v. Union Pac. R.R. Co., 765 F.3d 999, 1004 (9th Cir.2014).

To survive a motion to dismiss under Rule 12(b)(6), a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A complaint need not contain detailed factual allegations to survive a motion to dismiss, but a plaintiff must provide “more than labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Further, “[fjactual allegations must be enough to raise a right to relief above the speculative level.” Id, A plaintiff must provide the court with “enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955.

III.

Plaintiffs asserted five causes of action under Nevada law in their complaint: (1) intentional misrepresentation or fraud, (2) negligent misrepresentation, (3) intentional interference with prospective economic advantage, (4) unjust enrichment, and (5) civil conspiracy. Plaintiffs have failed to state any plausible claim to relief.

To state a claim for intentional misrepresentation, negligent misrepresentation, or intentional interference with prospective economic advantage under Nevada law, Plaintiffs must allege that Defendants’ misrepresentation proximately caused their damages. See Nelson v. Heer, 123 Nev. 217, 163 P.3d 420, 426 (2007) (listing elements of intentional misrepresentation claim); Barmettler v. Reno Air, Inc., 114 Nev. 441, 956 P.2d 1382, 1387 (1998) (listing elements of negligent misrepresentation claim); Consol. Generator-Nev., Inc. v. Cummins Engine Co., 114 Nev. 1304, 971 P.2d 1251, 1255 (1998) (quoting Leavitt v. Leisure Sports Inc., 103 Nev. 81, 734 P.2d 1221, 1225 (1987)) (listing elements of intentional interference with prospective economic advantage claim).

Plaintiffs have not adequately alleged that Defendants’ misrepresentation — that HAV was a validly formed corporation when the contract was signed— proximately caused their damages. According to Plaintiffs, had they known HAV did not exist at the time, they would not have signed the contract. They allege that they would have instead sold the property to another party and would not have begun to develop the property. This is simply not plausible. Plaintiffs have not shown that the status of HAV — the sole pui-pose *649 of which was to purchase the property once it had been developed — when the parties entered into their development deal was material. Rather, the foregone business opportunities and development costs on which Plaintiffs rest their claims can be considered losses only because the deal ultimately failed when Plaintiffs defaulted on the Wachovia loan. Had Plaintiffs not defaulted, and instead finished developing the property, there is no allegation or indication that Defendants would not have made good on their promises and purchased the property.

Plaintiffs’ unjust enrichment claim also fails. Under Nevada law, a claim of unjust enrichment requires “a benefit conferred on the defendant by the plaintiff, appreciation by the defendant of such benefit, and acceptance and retention by the defendant of such benefit under circumstances such that it would be inequitable for him to retain the benefit without payment of the value thereof.” Leasepartners Corp. v. Robert L. Brooks Tr. Dated Nov. 12, 1975, 113 Nev. 747, 942 P.2d 182, 187 (1997) (quoting Unionamerica Mortg. & Equity Tr. v. McDonald, 97 Nev. 210, 626 P.2d 1272, 1273 (1981)).

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Bluebook (online)
648 F. App'x 646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vested-housing-group-llc-v-principal-real-estate-investors-llc-ca9-2016.