Smokiam RV Resort LLC v. William Jordan Capital Inc
2:17-cv-00885
W.D. Wash.Dec 27, 2017Background
- Plaintiff Smokiam RV Resort LLC sued loan servicers (William Jordan Capital, Inc., et al.) alleging violations of the Washington Consumer Protection Act (WCPA) based on how Defendants serviced a short‑term loan that impaired Plaintiff’s ability to obtain permanent financing.
- The Court previously dismissed most claims with prejudice but allowed amendment on the WCPA claim; Plaintiff filed a First Amended Complaint and proposed a Second Amended Complaint.
- Defendants moved to dismiss under Federal Rules 12(b)(1) and 12(b)(6), asserting lack of diversity jurisdiction (LLC citizenship not pleaded; amount in controversy not met), that LLCs lack WCPA standing, and that Plaintiff failed to plead injury or causation.
- Plaintiff submitted a proposed Second Amended Complaint identifying its sole member’s citizenship and declarations supporting alleged damages (including claimed additional financing costs exceeding $660,000).
- The Court allowed Plaintiff leave to amend to cure the citizenship pleading, held the amount in controversy was plausibly satisfied, and found Plaintiff adequately pleaded WCPA standing, injury, and causation on the face of the complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has diversity jurisdiction given LLC citizenship pleading | LLC will identify sole member (Washington citizen) in proposed Second Amended Complaint | Complaint failed to allege members’ citizenship so diversity jurisdiction lacking | Court granted leave to amend; facial defect cured by proposed Second Amended Complaint (diversity jurisdiction satisfied) |
| Whether amount in controversy meets $75,000 | Alleged financing-related damages (including >$660,000) supported by declarations | Only plausibly $15,000; amount in controversy not met | Court found it not legally certain claim is <$75,000; amount in controversy sufficiently alleged |
| Whether an LLC has standing under the WCPA | LLC is a person under RCW and RCW 1.16.080 includes LLCs within “person” | WCPA lists “person” without expressly mentioning LLCs, so LLC lacks standing | Court held LLCs have standing under WCPA because RCW 1.16.080 treats LLCs as “person” for the Code |
| Whether Plaintiff pleaded WCPA injury and causation sufficiently | Alleged inability to obtain permanent financing caused lost down payments and rental revenue; facts pleaded | Defendants urged Plaintiff’s own actions, failure to mitigate, and intervening third‑party acts negate causation/injury | Court held allegations sufficient at pleading stage; Defendants’ factual defenses inappropriate for 12(b)(6) dismissal |
Key Cases Cited
- White v. Lee, 227 F.3d 1214 (9th Cir.) (distinguishes facial vs factual 12(b)(1) attacks)
- Thornhill Publishing Co. v. General Tel. & Elec., 594 F.2d 730 (9th Cir.) (in facial jurisdictional attacks court assumes complaint allegations true)
- Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir.) (burden in factual jurisdictional attacks falls on plaintiff to show jurisdiction)
- Crum v. Circus Circus Enterprises, 231 F.3d 1129 (9th Cir.) (plaintiff’s good‑faith claim controls amount‑in‑controversy unless legal certainty to contrary)
- McCarthy v. United States, 850 F.2d 558 (9th Cir.) (court may consider materials beyond complaint in factual jurisdictional attacks)
- Vasquez v. Los Angeles County, 487 F.3d 1246 (9th Cir.) (pleading standards on Rule 12(b)(6) and acceptance of well‑pleaded facts)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (plausibility and dismissal of conclusory allegations)
- Hangman Ridge Training Stables v. Safeco Title Ins. Co., 719 P.2d 531 (Wash.) (elements required for a WCPA claim)
- State v. Jeffries, 709 P.2d 819 (Wash. Ct. App.) (RCW 1.16.080’s definitional scope of “person” in the Code)