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Landmark Infrastructure Holding Co. LLC v. R.E.D. Investments, LLC

United States District Court, W.D. Missouri, Central Division

August 20, 2019

LANDMARK INFRASTRUCTURE HOLDING COMPANY, LLC, Plaintiff,
v.
R.E.D. INVESTMENTS, LLC, et al., Defendants.

          ORDER

          NANETTE K. LAUGHREY UNITED STATES DISTRICT JUDGE.

         Defendant Mark Randolph moves pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) to dismiss the complaint against him by plaintiff Landmark Infrastructure Holding Company, LLC for failure to state a claim and for failure to plead with sufficient particularity. For the reasons discussed below, the motion to dismiss is denied.

         I. Procedural Background

         On April 2, 2015, Landmark filed suit against R.E.D. Investments, LLC and Bobby Van Stavern for misrepresentations made in connection with the sale of a billboard lease and easement. Landmark Infrastructure Holding Company, LLC v. R.E.D. Investments, LLC and Bobby Van Stavern (“R.E.D. I”), No. 2:15-cv-04064-NKL. On January 19, 2018, following a jury trial, the Court entered judgment in Landmark's favor in the amount of $537, 234.11 R.E.D. I, Doc. 194. The Court subsequently awarded Landmark attorneys' fees and costs in the amount of $207, 704.74. R.E.D. I, Doc. 210. The Eighth Circuit recently affirmed the judgment. R.E.D. I, Doc. 268.

         II. Alleged Facts

         The $744, 938.85 judgment against R.E.D. and Van Stavern remains unsatisfied. Doc. 1 (Complaint), ¶¶ 15-16.

         On or about August 10, 2016, while the R.E.D. I suit was pending, the three members of R.E.D. formed Davis Hills Farms, LLC. Doc. 1, ¶ 17. The three members of R.E.D. are the sole members of Davis Hills. Id. On or about May 12, 2017, R.E.D. transferred two pieces of real property, including one referred to as the “Waterman Building, ” to Davis Hills. Id., ¶ 18. The 2014 tax return for R.E.D.-purportedly the most recent tax return available-shows the Waterman Property as having a cost basis of $250, 000. Id., ¶ 21. Yet, the Warranty Deed states only that Davis Hills paid “TEN DOLLARS AND OTHER VALUABLE CONSIDERATIONS” in exchange for the property. Id., ¶ 19.

         On or about January 7, 2018, nine days before trial in the R.E.D. I suit, Davis Hills granted Randolph, a cousin of the three members of R.E.D. and Davis Hills (id., ¶ 23), a Deed of Trust on the Waterman Property, allegedly to secure a debt of $400, 000. Id., ¶ 22. Landmark alleges that Randolph paid no consideration in return for the Deed of Trust. Id., ¶ 24. On January 14, 2019, at Plaintiff's request post-judgment, the Court issued to Davis Hills Farms a Writ of Execution, including a set of Interrogatories to Garnishee asking Davis Hills Farms to identify any property belonging to R.E.D. Id., ¶ 25. Just three days later, the three members of R.E.D. and Davis Hills signed a “Warranty Deed by Limited Liability Company” transferring a portion of the Waterman Property from Davis Hills to defendants Derrick and Carrie Sien, who allegedly are either relatives or business associates of the R.E.D. and Davis Hills members. Id., ¶ 26. The Warranty Deed given to the Siens states that the transfer was made “in consideration of other good and valuable consideration and Ten Dollars.” Id., ¶ 27. In conjunction with Davis Hills's purported transfer of a portion of the Waterman Property to the Siens, Randolph executed a “Partial Deed of Release” dated January 16, 2019, which purported to release his lien on the portion of the Waterman Property that was transferred, but did not purport to release his lien on the portion of the Waterman Property that Davis Hills did not transfer. Id., ¶ 29. Landmark alleges that Randolph received no consideration in exchange for agreeing to release the portion of his Deed of Trust covering the portion of the Waterman Property that Davis Hills transferred to the Siens. Id., ¶ 30.

         Landmark has asserted three claims against Randolph: fraudulent transfer, constructive fraudulent transfer, and conspiracy.

         III. Standard on Motion to Dismiss

         Federal Rule of Civil Procedure 12(b)(6) requires the dismissal of a complaint that fails to plead facts sufficient to state a plausible claim upon which relief may be granted. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In determining whether a complaint alleges sufficient facts to state a plausible claim to relief, the Court accepts all factual allegations as true. See Great Plains Trust Co. v. Union Pac. R.R. Co., 492 F.3d 986, 995 (8th Cir. 2007). If the facts alleged in the complaint are sufficient for the court to draw a reasonable inference that the defendant is liable for the alleged misconduct, the claim has facial plausibility and will not be dismissed. See Iqbal, 556 U.S. at 678.

         In addition, “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake, ” although “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b).

         IV. Discussion

         Randolph moves to dismiss all claims against him-for actual and constructive fraudulent transfers of the Waterman Property and for civil conspiracy-for failure to state a claim ...


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