Barden v. Goodsell

1

JOHN BARDEN d/b/a FAST LANE AUTO, Plaintiff, v. PAUL GOODSELL & XANTHE GOODSELL d/b/a P&X AUTO TRANSPORT; GREGORY SCHENK SR.; GREGORY SCHENK JR.; and SHEILA SHENK, Defendants.

No. 4:21-cv-00089-DCN

United States District Court, D. Idaho

December 15, 2021

MEMORANDUM DECISION AND ORDER

David C, Nye, Chief U.S. District Court Judge.

I. INTRODUCTION

Pending before the Court are Defendants Gregory Schenk Senior Gregory Schenk Junior, and Sheila Schenk's (collectively the “Schenk Defendants”) Motion to Dismiss (Dkt 7) and Defendants Paul and Xanthe Goodsell, d/b/a P&X Auto's (collectively the “Goodsell Defendants”) Motion to Dismiss (Dkt. 8). The Court heard oral argument on the motions on October 27, 2021, and took the matter under advisement.

Upon review, and for the reasons set forth below, the Court GRANTS in PART and DENIES in PART the Schenk Defendants' Motion to Dismiss (Dkt. 7) and GRANTS in PART and DENIES in PART the Goodsell Defendants' Motion to Dismiss (Dkt. 8).

II. BACKGROUND

A. Factual History^[1]

Plaintiff John Barden sells cars through his New York business, “Fast Lane Auto.” Beginning in 2012, Barden engaged “P&X Auto Transport, ” a business belonging to Defendant Paul Goodsell (hereinafter “Goodsell”) and his wife, Xanthe Goodsell, to transport vehicles Barden bought at auctions in Idaho and other western states and deliver them to Fast Lane Auto in New York. In 2014, Goodsell offered to sell Barden a Peterbilt semi-truck bearing Vehicle Identification Number (“VIN”) 1NP5LNB9X3YD522661 (“Peterbilt”) and accompanying Delavan trailer bearing VIN 1D9AD4523YW371167 (“Delavan”) for transporting vehicles. Barden and Goodsell orally agreed to a purchase price of $30, 000.00, subject to Barden's ability to obtain financing.

Barden was unable to obtain financing because the Peterbilt and Delavan were titled in the name of “Cherry Creek Transport Inc., ” rather than under Goodsell's or P&X Auto's name. Cherry Creek Transport Inc. is a dissolved Utah corporation registered in the name of Defendant Greg Schenk, Senior (“Schenk Senior”). When Barden was unable to obtain third-party financing, he and Goodsell agreed that Barden would instead make periodic wire transfers to Goodsell to purchase the Peterbilt and Delavan. Barden ultimately wired a total of $6, 000.00 to Goodsell.

On April 23, 2014, Barden purchased a 2002 Dodge 2500 pickup bearing VIN 3B7KF23C22M274292 (“2002 Dodge”) from a vehicle auction in Nampa, Idaho. On July 7, 2014, Barden purchased a 1991 Dodge D250 pickup truck bearing VIN 1B7KM2687MS245765 (“1991 Dodge”) located in Logan, Utah. Barden retained Goodsell and P&X Auto Transport to collect the 2002 Dodge and 1991 Dodge and transport them to Fast Lane Auto.

In June 2014, Barden and Goodsell agreed to a trade in lieu of a straight cash transaction for Barden's purchase of the Peterbilt and Delavan. Under the terms of this new deal, Barden would trade the 2002 Dodge and $20, 000.00 for the Peterbilt and Delavan. On July 25, 2014, Barden mailed the unsigned Idaho title to the 2002 Dodge to Goodsell as collateral, with the express understanding that Barden would sign the title over to Goodsell once Goodsell delivered the Peterbilt, Delavan, and 1991 Dodge to Fast Lane Auto. However, Barden and Goodsell continued to negotiate the details of their arrangement until February of 2015.

In January 2015, Barden sent an unexecuted document memorializing the terms of what he believed was the final agreement for his purchase of the Peterbilt and Delavan. Goodsell did not execute this document or propose any modifications to it. By April 2015, it became clear to Barden that Goodsell would not consummate the agreement. Thus, on April 1, 2015, Barden, through his attorney, demanded the return of his $6, 000.00 in wire transfer payments, as well as the return of the 2002 Dodge and 1991 Dodge. On or about April 10, 2015, Barden obtained an Idaho duplicate title to the 2002 Dodge, making the unsigned copy of the title held by Goodsell invalid.

On April 29, 2015, Barden's attorney sent another demand for the return of Barden's funds and both trucks. Goodsell ignored the demands and, on or about May 12, 2015, sold the Peterbilt to Laramie Goodsell-a third party. On June 2, 2016, Barden brought a civil suit against Goodsell in the Sixth Judicial District of Idaho, Franklin County, captioned John Barden v. Paul Goodsell, Docket No. CV-2016-194 (“State Court Action”). Barden asserted claims for breach of contract, unjust enrichment, conversion of the two Dodge trucks and his funds, and fraud in connection with the wire transfers. On June 26, 2017, the Honorable Mitchell Brown dismissed Barden's claims when Barden failed to appear for trial.

Following the dismissal of the State Court Action, Paul and Xanthe Goodsell (collectively the “Goodsell Defendants”) did not return Barden's funds or Dodge trucks, and instead altered an earlier draft contract between Barden and Goodsell and forged Barden's signature on it. This “sham contract” purported to be a trade between Barden and Xanthe Goodsell, in which Barden supposedly traded the 2002 Dodge and $20, 000.00 in exchange for the Peterbilt (which the Goodsell Defendants had already sold to Laramie Goodsell) and the Delavan. The Goodsell Defendants also fraudulently altered the unsigned (and invalid) title to the 2002 Dodge that Barden had mailed to Goodsell in 2015, to make it appear as though the title to the 2002 Dodge had been transferred to them.

The Goodsell Defendants then presented the sham contract and altered title to the 2002 Dodge to Defendants Sheila Schenk and Greg Schenk, Jr. (“JR and Sheila Schenk”), and sold them the 2002 Dodge.^[2] On February 23, 2018, JR and Sheila Schenk brought the sham contract and altered title to the Utah State Division of Motor Vehicles, and obtained a Utah title to the 2002 Dodge in their names.

Barden alleges that he discovered the Goodsell Defendants' fraud in December 2020, after running a public records search on the 2002 Dodge. Barden subsequently filed the instant suit, and seeks the return of the 1991 Dodge, the 2002 Dodge, his $6, 000.00 in wire payments, and compensatory and punitive damages.

B. Procedural History

Barden filed the instant lawsuit on February 23, 2021. Dkt. 1. Against the Goodsell Defendants, Barden brings claims for civil fraud, violation of the Federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1961(1), conversion and detinue, and replevin and conversion.^[3] Barden also alleges a civil RICO claim against Schenk Senior, and a claim for replevin and conversion against JR and Sheila Schenk.

This case was initially assigned to District of Idaho Magistrate Judge Ronald E. Bush, but was reassigned to District of Idaho Magistrate Judge Raymond E. Patricco, Jr. on June 11, 2021, upon Judge Bush's retirement. Dkt. 10; Dkt. 11. On May 27, 2021, the Schenk Defendants filed a Motion to Dismiss Barden's claims. Dkt. 7. The Goodsell Defendants followed with their own Motion to Dismiss on June 2, 2021. Dkt. 8. After Judge Patricco granted the parties several extensions, both Motions to Dismiss became ripe on July 22, 2021. Dkt. 22; Dkt. 23.

The case was later transferred to the undersigned due to a lack of consent to proceed before a magistrate judge. The Court held a hearing on both Motions to Dismiss on October 27, 2021. Dkt. 35. During oral argument, Barden's counsel raised some allegations, and presented certain documents, that are outside of the pleadings. Although such information may be relevant upon amendment, or on summary judgment, the Court has not considered them for purposes of the instant Motions. See, e.g., Nampa Classical Academy v. Goesling, 714 F.Supp.2d 1079, 1089 (D. Idaho 2010) (“Generally, the Court may not consider any material beyond the pleadings in ruling on a motion to dismiss under Rule 12(b)(6)”).

III. LEGAL STANDARDS

A. Rule 12(B)(6) Standard

A motion to dismiss for failure to state a claim under Rule 12(b)(6) challenges the legal sufficiency of the claims stated in the complaint. Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011). To sufficiently state a claim to relief and survive a 12(b)(6) motion, the pleading “does not need detailed factual allegations, ” however, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Mere “labels and conclusions [or] a formulaic recitation of the elements of a cause of action will not do.” Id. Rather, there must be “enough facts to state a claim to relief that is plausible on its face.” Id. 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. Id. at 556. The plausibility standard is not akin to a “probability requirement, ” but does require more than a sheer possibility that a defendant acted unlawfully. Id.

In Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), the Supreme Court identified two “working principles” that underlie Twombly. First, although a court must accept as true all factual allegations in a complaint when ruling on a motion to dismiss, the court need not accept unreasonable inferences or legal conclusions as true. Id. “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. Second, only a complaint that states a plausible claim for relief will survive a motion to dismiss. Id. at 679.

In light of Twombly and Iqbal, the Ninth Circuit has summarized the...