United States District Court, D. Nebraska
SENIOR HOUSING MANAGERS, LLC, an Oregon limited liability company, Plaintiff and Counterclaim Defendant,
HIGHWAY 2 DEVELOPMENT, LLC, d/b/a Pemberly Place, a Nebraska limited liability company, Defendant and Counterclaimant.
MEMORANDUM AND ORDER
M. GERRARD CHIEF UNITED STATES DISTRICT JUDGE
dispute involves the construction and management of an
assisted living center in Lincoln, Nebraska. The defendant,
Highway 2 Development, LLC, contracted with the plaintiff,
Senior Housing Managers, LLC, to provide certain management
and oversight services during the construction, opening, and
operation of Pemberly Place, a new assisted living facility
owned and operated by Highway 2.
Housing sued Highway 2 alleging breach of contract, violation
of the Nebraska Uniform Deceptive Trade Practices Act
(UDTPA), and unjust enrichment after Highway 2 terminated the
parties' Management Agreement (filing
1-1). Highway 2 counterclaimed alleging contract,
tort, and statutory claims related to actions taken by Senior
Housing during the construction and opening of Pemberly
matter is before the Court on Senior Housing's motion to
dismiss Highway 2's amended counterclaim (filing
19) pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons
set forth below, the Court will grant Senior Housing's
motion with respect to Highway 2's negligence and UDTPA
claims and deny the remainder of the motion.
Housing is an Oregon limited liability company specializing
in the development, operation, management and marketing of
senior living facilities. See generally
filing 13; see also
filing 1-3 at 5. Christian Mason is the
President and CEO of Senior Housing. Filing 13 at 6.
It appears that Senior Housing and Highway 2 began working
together sometime in 2015. See filing 13 at
7. However, the only written agreement between the
parties is the Management Agreement executed on October 21,
2016. Filing 1-1; see also
filing 1 at 2; filing 13 at 6.
Management Agreement outlined the mutual obligations of the
parties regarding management and operation of Pemberly Place.
Id. It was effective beginning January 1, 2017 and
had a term of five years. Filing 1-1 at 1, 7. Under
the Management Agreement, Senior Housing had sweeping
authority over personnel, regulatory compliance, operation
and admissions policies, financial management, selection of
legal counsel, facility maintenance, and marketing.
Id. at 2-5. In exchange for Senior Housing's
services, Highway 2 agreed to pay Senior Housing a management
fee. Id. at 9.
to Highway 2, in addition to responsibilities explicitly
listed in the Management Agreement, Senior Housing "took
on additional duties and responsibilities for the
project" subject to Sections 2.1.20 and 2.1.17 of the
Management Agreement. Filing 25 at 7-8,
10-11. Section 2.1.20 of the Management Agreement
Advisory Support. [Senior Housing] shall provide
timely assistance without additional compensation with
respect to special requests for graphs, charts, and
information assimilation, market analysis, business plans,
program planning and analysis relating to [Pemberly Place]
and reasonably requested by [Highway 2].
Filing 1-1 at 5. Highway 2 asserts that the
plain language of the agreement and, indeed, the
understanding of the parties was that Senior Housing would
act as an advisor to Highway 2 throughout the term of the
agreement without additional compensation. Filing 25
2 also relies on Section 2.1.17:
Ancillary Services. Consistent with budgets approved
by [Highway 2], [Senior Housing] will arrange for the
provision of ancillary services not covered by this Agreement
to [Pemberly Place] as needed, including without limitation
marketing and promotion, training, construction, and
care-related consultants, which may include nurse
consultants, dietary consultants, occupational health nurses,
physician/medical director and activities, social services
and religious consultants.
Filing 1-1 at 4. Highway 2 describes this provision
as a "catch-all" provision, which by its plain
language obligated Senior Housing to provide services
regarding "marketing and promotion" and
"construction." See filing 25 at
2 points to conduct by Senior Housing that supports its
reading of Sections 2.1.20 and 2.1.17. Highway 2 alleges that
Mason first prepared a Project Overview in November 2015 with
"design considerations extending to exterior appearance
and parking, market demand trends and analysis, financial
considerations and projections, and marketing projections and
goals setting forth timetables so 'we can hit the ground
running Day 1'" Filing 13 at 7.
Furthermore, Highway 2 alleges that throughout 2016 and 2017
Senior Housing was integral in the planning, design and
construction of Pemberly Place. Id. at 7-9. For
example, Senior Housing recommended that Highway 2
"purchase more real property for the [p]roject, "
helped select an architect and general contractor and
regularly communicated with both, and "participated in
various walk-throughs during  construction."
Id. at 8-9.
2 claims that it began to discover problems with the project
in December 2016. Id. at 8. And at some point, the
relationship between the two parties broke down completely.
In a succinct letter dated April 26, 2018 (filing
1-2) Highway 2 terminated the Management Agreement
"pursuant to Section 6.1.6 of the
Agreement." In a subsequent letter dated May 16, 2018
(filing 1-3) Highway 2 also asserted that Senior
Housing was guilty of gross mismanagement and therefore it
was terminating the agreement under Section
part, Senior Housing contends that it performed all its
obligations under the Management Agreement, which contains
"the only obligations owed by [Senior Housing] to
[Highway 2]." Filing 20 at 1; see also
filing 1 at 2.Furthermore, Senior Housing alleges that
the April and May letters were the only times it was notified
about any problems with its performance. Filing 1
at 2-3. Senior Housing also suggests that
if Highway 2 did in fact terminate the contract due to
mismanagement,  then Senior Housing was entitled to notice
and an opportunity to cure under Section 6.1.2 of the
Management Agreement. Filing 20 at 4.
before the Court is Senior Housing's motion to dismiss
Highway 2's amended counterclaims for failure to state a
claim upon which relief can be granted. Specifically, Highway
2 asserts six theories of recovery: (1) breach of contract,
(2) negligence, (3) breach of the implied covenant of good
faith and fair dealing, (4) negligent misrepresentation, (5)
violations of the Nebraska UDTPA, and (6) unjust enrichment.
The Court will deny Senior Housing's motion in part, and
grant it in part, as set forth below.
STANDARD OF REVIEW
complaint must set forth a short and plain statement of the
claim showing that the pleader is entitled to relief.
Fed. R. Civ. P. 8(a)(2). This standard does not
require detailed factual allegations, but it demands more
than an unadorned accusation. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). The complaint need not contain
detailed factual allegations, but must provide more than
labels and conclusions; and a formulaic recitation of the
elements of a cause of action will not suffice. Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). For
the purposes of a motion to dismiss a court must take all of
the factual allegations in the complaint as true, but is not
bound to accept as true a legal conclusion couched as a
factual allegation. Id.
survive a motion to dismiss under Fed. R. Civ. P.
12(b)(6), a complaint must also contain sufficient
factual matter, accepted as true, to state a claim for relief
that is plausible on its face. Iqbal, 556 U.S. at
678. 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. Where the well-pleaded facts
do not permit the Court to infer more than the mere
possibility of misconduct, the complaint has alleged-but has
not shown-that the pleader is entitled to relief.
Id. at 679.
whether a complaint states a plausible claim for relief will
require the reviewing court to draw on its judicial
experience and common sense. Id. The facts alleged
must raise a reasonable expectation that discovery will
reveal evidence to substantiate the necessary elements of the
plaintiff's claim. See Twombly, 550
U.S. at 545. The Court must assume the truth of the
plaintiff's factual allegations, and a well-pleaded
complaint may proceed, even if it strikes a savvy judge that
actual proof of those facts is improbable, and that recovery
is very remote and unlikely. Id. at 556.
deciding a motion to dismiss under Rule 12(b)(6), the Court
is normally limited to considering the facts alleged in the
complaint. If the Court considers matters outside the
pleadings, the motion to dismiss must be converted to one for
summary judgment. Fed.R.Civ.P. 12(d). However, the Court may
consider exhibits attached to the complaint and materials
that are necessarily embraced by the pleadings without
converting the motion.Mattes v. ABC Plastics,
Inc.,323 F.3d 695, 697 n.4(8th Cir. 2003).
Documents necessarily embraced by the pleadings include those
whose contents are alleged in a complaint and ...