280 F.R.D. 632
D. Utah2012Background
- Unified Container filed suit in Nevada state court; case removed to federal court in Nevada and transferred to the District of Utah.
- Plaintiffs allege a civil conspiracy between Mazuma Capital and Republic Bank related to PRR end-of-lease provisions in multiple leases.
- Mazuma assigned the leases to Republic Bank; plaintiffs claim end-of-term purchase options were never intended to be honored.
- Amended Complaint adds fraud and civil conspiracy claims based on representations by Mazuma prior to lease execution and subsequent assignment.
- Republic Bank moved to dismiss the civil conspiracy claim for failure to plead with particularity under Rule 9(b) and sought Rule 11 sanctions; discovery disputes followed.
- Court concludes the civil conspiracy claim is pleaded with sufficient particularity and denies the Rule 9(b) motion as well as the Rule 11 sanctions motion; orders further discovery under court supervision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the civil conspiracy claim is pleaded with Rule 9(b) particularity | Plaintiffs argue facts and dates allege specific fraud and a meeting of minds. | Republic Bank contends allegations are vague and fail Rule 9(b) specificity for conspiracy. | Denied; claim sufficiently pleads details of who, what, when, and how. |
| Whether Rule 11 sanctions are warranted | Sanctions unnecessary as conspiracy claim survived; motion frivolous. | Sanctions warranted for bringing frivolous conspiracy claim. | Denied; sanctions not warranted. |
Key Cases Cited
- Lochhead v. Alacano, 697 F.Supp. 406 (D. Utah 1988) (conspiracy may be inferred from business behavior; circumstantial evidence admissible)
- Lochhead v. Alacano, 662 F.Supp. 230 (D. Utah 1987) (courts may infer agreement from conduct and relations)
- Jensen v. America’s Wholesale Lender, 425 F. App’x 761 (10th Cir. 2011) (Rule 9(b) requires time, place, contents of misrepresentation and consequences)
- Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246 (10th Cir. 1997) (fraud must be pleaded with particularity; discovery allowances partially tolerate broad claims)
- Coroles v. Sabey, 79 P.3d 974 (Utah Ct. App. 2003) (fraud-based civil conspiracy requires particular pleading of fraud)
- Pohl, Inc. v. Webelhuth, 201 P.3d 944 (Utah 2008) (civil conspiracy framework; elements and damages requirement)