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WO NOT FOR PUBLICATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Bridgepoint Construction Services

Incorporated, et al., 

Plaintiffs, 

v. 

James Lassetter, 

Defendant.

No. CV-16-00078-PHX-JJT

ORDER 

 At issue is Defendant James Lassetter’s Motion to Dismiss First Amended 

Complaint (Doc. 26, MTD), to which Plaintiffs Bridgepoint Construction Services, Inc. 

and Norm Salter filed a Response (Doc. 29, Resp.), Defendant filed a Reply (Doc. 35, 

Reply), and Plaintiffs filed a Surreply with leave of Court (Doc. 38, Surreply). The Court 

finds this matter appropriate for resolution without oral argument. See LRCiv 7.2(f). 

On July 19, 2016, the Court dismissed Plaintiffs’ Complaint with leave to amend. 

(Doc. 19, Order.) Plaintiffs filed the First Amended Complaint (FAC) on July 19, 2016 

(Doc. 20, FAC), and Defendant now moves to dismiss the FAC under Federal Rule of 

Civil Procedure 12(b)(6). In its prior Order, the Court recited the allegations forming the 

basis of Plaintiffs’ claims and, because Plaintiffs have not changed their basal allegations, 

the Court adopts its prior recitation here. (Order at 1-3.) Plaintiffs bring two claims 

against Defendant in the FAC: Fraudulent Transfer (Count I), and Money Had and 

Received (Count II). (Compl. ¶¶ 45-69.) 

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I. LEGAL STANDARD 

Rule 12(b)(6) is designed to “test[] the legal sufficiency of a claim.” Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive dismissal for failure to state a claim 

pursuant to Rule 12(b)(6), a complaint must contain more than “labels and conclusions” 

or a “formulaic recitation of the elements of a cause of action”; it must contain factual 

allegations sufficient to “raise a right to relief above the speculative level.” Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 555 (2007). While “a complaint need not contain 

detailed factual allegations . . . it must plead ‘enough facts to state a claim to relief that is 

plausible on its face.’” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 

2008) (quoting Twombly, 550 U.S. at 570). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (citing Twombly, 550 U.S. at 556). The plausibility standard “asks for more than a 

sheer possibility that a defendant has acted unlawfully.” Id.

 When analyzing a complaint for failure to state a claim for relief under Federal 

Rule of Civil Procedure 12(b)(6), the well-pled factual allegations are taken as true and 

construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 

F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not 

entitled to the assumption of truth, Iqbal, 556 U.S. at 680, and therefore are insufficient to 

defeat a motion to dismiss for failure to state a claim. In re Cutera Sec. Litig., 610 F.3d 

1103, 1108 (9th Cir. 2010). 

 In ruling upon a motion to dismiss, the court may consider only the complaint, any 

exhibits properly included in the complaint, and matters that may be judicially noticed 

pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 

646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. Supp. 

2d 1035, 1042 (C.D. Cal. 1998). The court may take judicial notice of facts “not subject 

to reasonable dispute” because they are either: “(1) generally known within the territorial 

jurisdiction of the trial court or (2) capable of accurate and ready determination by resort 

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to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201; see also 

Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (noting that the court may 

take judicial notice of undisputed “matters of public record”).

II. ANALYSIS 

 A. Fraudulent Transfer (Count I) 

 In its prior Order, the Court found that Plaintiffs’ Fraudulent Transfer claim was 

defective because the Complaint did not contain any allegation that Defendant acted other 

than through his entity, Tenacious Adventures LLC. (Order at 6.) In the FAC, Plaintiffs 

bring their Fraudulent Transfer claim again (Count I) and add allegations that Defendant, 

acting on his own behalf but with the benefit of his control over Vista Oceano La Mesa 

Venture LLC, “directed Vista Oceano to transfer about $6.9 million to [himself] which 

essentially depleted Vista Oceano’s bank account,” that he transferred the funds to 

himself “to render Vista Oceano insolvent and unable to respond to judgment in favor of 

plaintiffs,” that he diverted some of the funds to Tenacious but at all times “personally 

obtained these funds for his personal use and has exercised dominion and control over all 

these funds,” that Tenacious “was a mere shell and sham used to shield defendant 

Lassetter [from] personal liability,” that “adherence to the fiction of the separate 

existence of these entities would, under the particular circumstances, sanction a fraud or 

promote injustice,” and that Defendant “treated the assets of Tenacious as his own” and 

“commingled funds of Tenacious with other assets.” (FAC ¶¶ 46-62.) 

 Defendant argues that Plaintiffs’ claim is still defective because evidence from a 

separate lawsuit in California shows some of Plaintiffs’ allegations are not true, 

essentially asking the Court to take judicial notice of a wealth of outside evidence. (MTD 

at 4-5.) Most of this evidence, however, is not the type of outside material courts may 

properly take judicial notice of at this stage of the litigation. Because the new evidence 

proffered by Defendant is either already in dispute or subject to dispute between the 

parties, the Court declines to consider this outside evidence in resolving Defendant’s 

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Motion to Dismiss. The Court thus restricts its analysis to Plaintiffs’ allegations in the 

FAC. 

 The parties appear to agree that Defendant’s LLC, Tenacious, is an Oregon LLC—

a fact not alleged in the FAC—and that Oregon law thus applies in examining whether 

Defendant was the alter ego of Tenacious.1

 (MTD at 6-7; Reply at 6.) To make an alter 

ego claim under Oregon law, a claimant must allege that the corporate shareholder had 

actual control of the corporation and that the claimant’s inability to collect from the 

corporation results from improper conduct on the part of the shareholder. Amfac Foods, 

Inc. v. Int’l Sys. & Controls Corp., 654 P.2d 1092, 1101 (Or. 1982). Here, Plaintiffs’ 

allegations that Defendant controlled Tenacious and, in turn, Vista Oceano, and that 

Defendant engaged in improper conduct by transferring $6.9 million from Vista Oceano 

to other accounts, including his own, to render Vista Oceano judgment-proof, are 

sufficient to state an alter ego claim under Oregon law. The Court will therefore deny 

Defendant’s Motion to Dismiss with respect to Count I. 

B. Money Had and Received (Count II) 

 In Count II of the FAC, Plaintiffs bring a claim for Money Had and Received. In 

examining whether Plaintiffs stated such a claim in the Complaint, the Court found that 

Plaintiffs had failed to allege sufficient facts leading the Court to the plausible inference 

that Defendant, not his entities, received money meant for Plaintiffs. (Order at 7.) The 

Court also found that Plaintiffs had not pled the claim with the particularity required by 

Federal Rule of Civil Procedure 9(b). (Order at 7.) In the FAC, Plaintiffs add the alter ego 

 

1

 As the Court noted in its prior Order, when a federal court sits in diversity, as here, it must look to the forum state’s choice of law rules to determine the controlling substantive law. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 

(1941). Arizona’s choice-of-law test looks for the state with the most significant relationship to the claim. Bobbitt v. Milberg LLP, 801 F.3d 1066, 1071 (9th Cir. 2015). 

Generally, in cases where a plaintiff attempts to pierce the corporate veil of a corporation to hold an individual defendant liable, the law of the state of incorporation determines when the corporate form will be disregarded. See, e.g., Kalb, Voorhis & Co. v. Am. Fin. 

Corp., 8 F.3d 130, 132 (2d Cir. 1993). However, as the Court already noted in its prior Order, citing Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996), the Court 

does not apply state law pleading requirements, as again advocated by Defendant. (See 

MTD at 7.) 

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allegations noted above as well as allegations that Defendant, through his entities, 

received around $2 million in payments of money through April 2015 that belonged to 

Plaintiffs as a result of Plaintiffs’ partial financing of the construction project and 

pursuant to the terms of the underlying agreements. (FAC ¶¶ 36, 38-40, 63-69.) These 

allegations are adequate to state a claim for Defendant’s individual liability for Money 

Had and Received under California law. See Avidor v. Sutter’s Place, Inc., 151 Cal. Rptr. 

3d 804, 816 (Ct. App. 2013). Therefore, the Court will also deny Defendant’s Motion to 

Dismiss with regard to Count II. 

C. Other Issues 

In their Response (Resp. at 1), Plaintiffs contend that Defendant’s Motion to 

Dismiss was both untimely and filed without first conferring with Plaintiffs as required 

by the Court’s Order. (See Docs. 13, 31.) Because the Court is denying Defendant’s 

Motion to Dismiss on the merits, it need not address these alternate grounds for denial. 

 In his Reply, Defendant requests in passing that the Court impose sanctions on 

Plaintiffs under Federal Rule of Civil Procedure 11 for bringing the action “without 

substantial justification and solely for the purposes of harassing [Defendant].” (Reply at 

2, 11.) Defendant’s request is neither properly brought before the Court under Rule 11 

nor properly supported, and in any event the Court is denying Defendant’s Motion to 

Dismiss. 

III. CONCLUSION 

 Rule 12(b)(6), under which Defendant brings his Motion to Dismiss, is designed to 

test the sufficiency of the allegations in a complaint, not the evidence that may or may 

not support the claims. See Navarro, 250 F.3d at 732. In the FAC, Plaintiffs have alleged 

sufficient facts to state claims against Defendant for Fraudulent Transfer and Money Had 

and Received.

IT IS THEREFORE ORDERED denying Defendant’s Motion to Dismiss 

(Doc. 26). 

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IT IS FURTHER ORDERED that Defendant shall file an Answer to Plaintiffs’ 

First Amended Complaint as required by Federal Rule of Civil Procedure 12(a)(4). 

 Dated this 25th day of January, 2017. 

Honorable John J. Tuchi

United States District Judge 

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