Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-02805/USCOURTS-azd-2_10-cv-02805-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

CML-AZ GM, LLC, a Florida limited

liability company, 

Plaintiff, 

vs.

Greenfield & Main, LLC, a Nevada

limited liability company; Greenstreet

Properties, LLC, a Nevada limited liability

company; Keith K. Lyon, an individual;

Stacy Rush and Adrienne Rush, husband

and wife; Stanley Wasserkrug and Susan

Wasserkrug, husband and wife, 

Defendants. 

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No. CV-10-2805-PHX-GMS

ORDER

Pending before the Court is Defendants’ Motion to Dismiss Count Three of Plaintiff’s

Complaint (Doc. 10) pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons

set forth herein, the Court grants Defendants’ motion.

BACKGROUND

This case arises from a construction loan made to Defendant Greenfield & Main

(“Greenfield”) in July 2007. (Doc. 1, Ex. 1). Plaintiff alleges the other Defendants are

guarantors. (Id.). Plaintiff alleges that it is the assignee of the Note, the Deed of Trust, and

the leases and rents due upon the property. (Id.). Plaintiff further alleges that Greenfield

defaulted on the loan by failing to repay in full by February 8, 2009, and therefore, Plaintiff

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asserts its rights pertaining to the loan. (Id.). 

Defendants removed to this Court on the basis of diversity of citizenship. (Doc. 1).

On January 10, 2011, Defendants filed a Motion to Dismiss Count Three of Plaintiff’s

Complaint, arguing that Plaintiff’s request for appointment of a receiver fails to meet the

federal standard. (Doc. 10). Plaintiff has not filed a response to Defendants’ motion.

DISCUSSION

The Local Rules provide the framework within which parties to a suit must operate

when filing and responding to motions before the Court. Local Rule 7.2(c) states that “[t]he

opposing party shall . . . have fourteen (14) days after service . . . within which to serve and

file a responsive memorandum.” Local Rule 7.2(i) provides that an opposing party’s failure

to respond to a motion “may be deemed a consent to the denial or granting of the motion, and

the court may dispose of the motion summarily.” LOCAL R. CIV. P. 7.2(i); see also Ghazali

v. Moran, 46 F.3d 52, 54 (9th Cir. 1995) (holding that a district court did not err in

summarily granting a motion to dismiss pursuant to a local rule where plaintiff had time to

respond but failed to do so); United States v. $22,474 in U.S. Currency, 55 F. Supp. 2d 1007,

1011 (D. Ariz. 1999) (citing former Rule 1.10(i) and stating that failure to comply with Local

Rules “would be grounds upon which to summarily grant the Government’s motion to

dismiss”). Because Plaintiff has not responded to Defendants’ Motion, the Court deems

Plaintiff’s lack of response a consent to the granting of Defendants’ Motion. The Court thus

grants Defendants’ Motion to Dismiss on this basis.

In addition, based upon the allegations of the Complaint, Defendants’ Motion to

Dismiss has merit. When bringing a complaint, Plaintiff must plead sufficient facts “to state

a claim for relief that is plausible on its face.” Bell Atlantic v. Twombly, 550 U.S. 544, 570

(2007) (holding that mere “labels and conclusions” or a “formulaic recitation of the

elements” of a claim is insufficient). Count three of Plaintiff’s Complaint fails in this

respect. 

The crux of Plaintiff’s request for appointment of a receiver is that Greenfield has no

incentive or financial ability to protect the property, and that leaving the property in

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Greenfield’s possession would expose it to some unspecified jeopardy. Count three of the

Complaint merely asserts Plaintiff’s interest in the property, and notes that the property

requires “proper attention and supervision” to preserve its value. (Doc. 1, Ex. 1). Plaintiff

argues further, that a receiver could protect and preserve the property. (Id.).

Plaintiff’s bare assertion that Greenfield has no incentive or ability to protect

Plaintiff’s interests, does not meet the federal standard for receivership. The simple fact that

a receiver may be able to preserve and protect Plaintiff’s interest in the property from some

assumed harm, does not entitle Plaintiff to the appointment of such. Appointment of a

receiver may be a serious imposition on a defendant’s property rights, and as such, it is

“considered to be an extraordinary remedy that should be employed with the utmost caution

and granted only in cases of clear necessity to protect plaintiff's interests in the property.”

Solis v. Matheson, 563 F.3d 425, 437 (9th Cir. 2009). Federal courts consider a number of

factors in determining whether receivership is appropriate, including: “whether the defendant

engaged in fraudulent conduct, whether an imminent danger of loss of property exists, the

inadequacy of available legal remedies, and harm to the plaintiff if the request for a

receivership is denied.” Id. at 438.

Plaintiff fails to plead facts that would allow the Court to draw the reasonable

inference that the appointment of a receiver is appropriate in this case. Plaintiff offers only

the conclusory statement that Greenfield has no incentive or ability to protect the property,

without providing any facts to support those allegations. The Court has no basis upon which

to infer that an imminent danger of loss of property exists, or that Plaintiff will experience

any substantive harm if receivership is denied. In order to justify the extraordinary remedy

of receivership, Plaintiff must demonstrate to the Court the necessity of the remedy. This

Plaintiff has not done. 

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IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss Count Three

of Plaintiff’s Complaint is GRANTED.

DATED this 3rd day of March, 2011.

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