United States District Court, D. Arizona
Douglas L. Rayes, United States District Judge.
the Court is Defendant Litwin's motion to dismiss
pursuant to Rule 12(b)(6). (Doc. 66.) The motion is fully
briefed. (Docs. 72, 76.) For reasons stated below, the motion
commenced this action by filing a pro se complaint on behalf
of ARTBE Enterprises LLC. ARTBE was formed five years ago by
Chabrowski and Litwin as a high-end car rental and leasing
business. The articles of organization for ARTBE listed
Chabrowski as the sole member and Litwin as manager.
Chabrowski claims to have served as primary financial
investor and holder of legal interest in the vehicles, most
of which were supplied by Litwin when ARTBE was established.
Chabrowski alleges that Litwin falsely claimed to be the true
owner of some of the vehicles while others were either never
located in the United States or smuggled out of the country
to Europe. (Doc. 1.)
status conference on December 9, 2016, Chabrowski was advised
that he cannot proceed in this matter representing ARTBE
because only licensed attorneys may represent a limited
liability company in federal court. (Doc. 11.) Chabrowski
thereafter sought leave to file an amended complaint
asserting claims of fraud and swindling, embezzlement, and
civil conspiracy. (Docs. 15, 16.) The Court denied leave to
amend because the proposed complaint impermissibly sought to
bring claims on behalf ARTBE, asserted claims under criminal
statutes, and otherwise failed to meet the pleading
requirements of Rule 8. (Doc. 19.)
thereafter moved for leave to file a second amended
complaint. (Doc. 23.) The Court granted the motion under Rule
15(b)(2), finding in part that the proposed amended pleading
did not appear to be futile. (Doc. 27.) Litwin has now moved
to dismiss the complaint pursuant to Rule 12(b)(6) for
failure to state a claim for relief. (Doc. 66.)
successful Rule 12(b)(6) motion must show that the complaint
lacks a cognizable legal theory or fails to allege facts
sufficient to support such a theory. See Balistreri v.
Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.
1988). A complaint that sets forth a cognizable legal theory
will survive a motion to dismiss where it contains
"sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). "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. (citing
Twombly, 550 U.S. at 556).
amended complaint asserts claims under A.R.S. § 29-858
for civil liability and equitable remedies for false filings
with the Arizona Corporation Commission (ACC). (Doc. 28
¶¶ 79-95). Chabrowski alleges that in September and
October 2015, Litwin made unauthorized filings with the ACC
including articles of termination falsely declaring that
company assets had been properly collected and distributed to
members. (¶¶ 23, 27.) Chabrowski claims that
company assets, including the vehicles identified in the
complaint, were never collected and distributed as Litwin
declared and he therefore has violated § 29-858 by
knowingly filing a materially false document with the ACC.
29-858 was enacted in 2016 as part of the "Arizona
business entities competitive omnibus act." 2016 Ariz.
Sess. Laws, ch. 354, § 27 (S.B. 1356 at 32). Section
29-858(A) creates a civil right of action, which did not
previously exist, "that the corporation or LLC, its
creditors, and shareholders or members, may exercise against
any person that authorizes or signs a document delivered for
filing with the [ACC] that the person knows contains false or
misleading information." Section 29-858(A) provides, in
[A]ny person that authorizes or signs a report, certificate,
notice or other document with respect to [an LLC] that is
delivered for filing with the [ACC] pursuant to this chapter
and that has knowledge at the time of delivery . . . that the
information contained in that . . . document is materially
false or misleading is liable to the [LLC] and its creditors
and members for all damages resulting.
addition to a request for damages, the plaintiff may,
pursuant to § 29-858(E), seek an "award of
equitable remedies, if appropriate."
complaint alleges that on October 14, 2015, Litwin filed
articles of termination with the ACC falsely declaring, under
penalty of perjury, that company assets had been properly
collected and distributed to members and all priority liens
discharged. (Doc. 28 ¶ 27; see Doc. 25 at 26;
visited Aug. 29, 2017)). The cause of action for false
filings alleges that company assets, including the vehicles
identified in the complaint, were never collected and
distributed as Litwin declared and he therefore has violated
§ 29-858(A) by knowingly ...