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Susan R. Goldman, Trustee of the Goldman Living Trust, U/A/D v. James R. Gagnard

April 25, 2013

SUSAN R. GOLDMAN, TRUSTEE OF THE GOLDMAN LIVING TRUST, U/A/D DECEMBER 19, 2000, PLAINTIFF/COUNTER-DEFENDANT,
v.
JAMES R. GAGNARD, DEFENDANT/COUNTER-PLAINTIFF, AND MICHELLE GAGNARD, DEFENDANT.



The opinion of the court was delivered by: John W. Darrah United States District Court Judge

Judge John W. Darrah

MEMORANDUM OPINION AND ORDER

Defendant/Counter-Plaintiff James R. Gagnard filed a Counter-Complaint against Plaintiff/Counter-Defendant Susan R. Goldman on January 4, 2013. Goldman moves to dismiss Gagnard's Counter-Complaint, pursuant to Fed. R. Civ. P. 12(b)(6), for failure to state a claim upon which relief may be granted. This motion has been fully briefed and is ripe for ruling. Based on the discussion below, Goldman's motion is granted.

BACKGROUND

Plaintiff, Susan R. Goldman, Trustee of the Goldman Living Trust, U/A/D December 19, 2000, commenced this supplemental action in the Northern District of Illinois on December 13, 2011, by registering in this District a judgment entered in the Northern District of California and causing the Clerk of this Court to issue citations to discover the assets of Defendants James R. Gagnard and Michelle Gagnard, in addition to other, third-party financial institutions. The dispute between these parties originated in California.

The underlying facts of this case were previously set out in a Memorandum Opinion and Order issued on June 21, 2012, and a review of those facts is useful here. Goldman and the Gagnards entered into a real estate purchase agreement in January 2004. A dispute arose over this transaction with regards to the house that was purchased and some purported construction defects. The parties participated in arbitration proceedings pursuant to the real estate contract terms. At the conclusion of arbitration, Goldman was awarded damages, attorney's fees, and costs. Following this award, the Gagnards filed an Application for Correction of Final Award, which was opposed by Goldman; the arbitrator denied the Gagnards' Application for Correction. The Gagnards believed they were entitled to a set-off or allocation on Goldman's arbitration award for recovery Goldman already received in a suit against the real estate contractors and subcontractors, and James Gagnard further asserts this argument in his Counter-Complaint.

Following entry of Goldman's final arbitration award, Goldman filed an Application for an Order Confirming the Arbitration Award and Entering Judgment in Conformity Therewith on June 20, 2011, in the Northern District of California. The Gagnards sought to stay this confirmation award action, pending the resolution of the set-off issue in California state court. However, on October 18, 2011, the California state court dismissed the Gagnards' action seeking to offset Goldman's arbitration award.

Thereafter, the Gagnards withdrew their motion to stay Goldman's action to confirm her arbitration award in the Northern District of California and, instead, filed untimely objections to Goldman's motion for confirmation of her award in the Northern District of California; in the objections, the Gagnards reasserted their position that they were entitled to a set-off and objected to an award of prejudgment interest. On November 29, 2011, the Northern District of California entered judgment in favor of Goldman in the amount of $1,331,992.48, which included an award of prejudgment interest. No appeal was filed by the Gagnards.

Following the entry of judgment in the Northern District of California, Goldman registered the Judgment here, in the Northern District of Illinois. After citations were issued to discover the Gagnards' assets, the Gagnards filed a motion in this Court to dismiss the citations; this motion was denied on March 2, 2012. The Gagnards moved for reconsideration of the Court's ruling pursuant to Fed. R. Civ. P. 59(e), in two separate motions, and both of these motions were denied on June 21, 2012. The March 2 and June 21 rulings are on appeal before the Seventh Circuit.

On October 12, 2012, the Gagnards voluntarily paid the Judgment Goldman had registered in this District. James Gagnard, individually, filed a Counter-Complaint on January 4, 2013. Gagnard's Counter-Complaint alleges three counts: (I) unjust enrichment on the part of Goldman in the amount of $15,000, plus prejudgment interest (the excess payment claim); (2) unjust enrichment by Goldman, by recovering damages from Gagnard and from subcontractors for the same property damage, in the amount of $611,875, plus prejudgment interest (the duplicative recovery claim); and (3) unjust enrichment in the amount of $126,353.00,*fn1 the amount awarded as prejudgment interest by the Northern District of California in addition to confirming the arbitration award (the post-arbitration award claim).*fn2 In the third count, Gagnard argues, yet again, that California did not have the jurisdiction to award prejudgment interest.

Goldman moves to dismiss Gagnard's Counter-Complaint. Goldman distinguishes herself as a judgment creditor who registered a judgment, rather than a plaintiff who filed a pleading or complaint. Goldman argues that, as a matter of procedure, Gagnard is unable to file a counterclaim because Goldman simply sought to register a judgment in this District and did not file a pleading under Fed. R. Civ. P. 7. Therefore, Goldman reasons, Gagnard is barred from filing a counterclaim under Fed. R. Civ. P. 13, because there is no pleading filed by an opposing party and a counterclaim is not permitted.

LEGAL STANDARD

To properly assert a claim in a complaint, the plaintiff must present "a short and plain statement of the claim showing that the pleader is entitled to relief and a demand for the relief sought." Fed. R. Civ. P. 8. Rule 8 "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (Iqbal) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (Twombly)). Fed. R. Civ. P. 7 provides an exclusive list of "pleadings," which includes: a complaint, an answer to a complaint, an answer to a counterclaim, an answer to a cross-claim, a third-party complaint, an answer to a third-party complaint, and, if ordered by the court, a reply to an answer.

A defendant may file a motion to dismiss a claim under Federal Rule 12(b)(6) for failure to state a claim upon which relief may be granted. To defeat a motion to dismiss under Rule 12(b)(6), a plaintiff must plead sufficient factual matter to state a claim for relief that is "plausible on its face." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court ...


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