United States District Court, D. South Carolina, Charleston Division
OLDFIELD CLUB, for itself and on behalf of its members, Plaintiff,
TI OLDFIELD DEVELOPMENT, LLC, and TI OLDFIELD OPERATIONS, LLC, by and through their respective board of directors, John Doe 1-10, individually and as directors between the time period 2010-2015 pre-turnover; OLDFIELD HOLDINGS GA, LLC; PHILLIP GALBREATH; JAMIE D. SELBY, Individually and as managing member of Elliot Group Holdings, LLC; and ELLIOT GROUP HOLDINGS, LLC, Defendants.
C. NORTON UNITED STATES DISTRICT JUDGE.
matter is before the court on defendant Jamie D. Selby
(“Selby”) and Elliot Group Holdings, LLC's
(“EGH, ” together with Selby, the “Selby
Defendants”) motion to dismiss. ECF No. 17. For the
reasons set forth below, the court denies the motion.
action is one of a series of actions arising out of the
management and turnover of the Oldfield Community, a
development located in Bluffton, South Carolina
(“Oldfield”). Am. Compl. ¶ 10. Oldfield Club
operates the recreational and social facilities at Oldfield.
Id. ¶ 11. TI Oldfield Development, LLC and TI
Oldfield Operations, LLC (the “TI Defendants”)
are successors to the original holder of declarant rights to
Oldfield. Id. ¶¶ 2, 12. Oldfield Club and
TI Defendants entered into a “Transfer Agreement,
” which required the TI Defendants to turn over
“a first-class golf and country club” to Oldfield
Club. Id. ¶ 16, 17. This turnover occurred in
December of 2015, but Oldfield Club contends that the
turnover was deficient in a number of ways. Id.
¶ 17, 21. Specifically, Oldfield Club argues that the
transferred facilities were in need of immediate repair or
replacement. Id. ¶ 21. It also takes issue with
a number of pre-turnover operational decisions that
purportedly delayed the turnover, depleted Oldfield
Club's funds, and failed to develop a strong membership
base for the club, resulting in significantly lower revenues
than contemplated by the Transfer Agreement. Id.
Most significantly, Oldfield Club alleges that the turnover
should have included the transfer of a parcel known as the
Greeters Store. Id. ¶ 21.B. Oldfield Club
further alleges that Selby, while serving as Oldfield
Club's general manager, secretly conspired with the TI
Defendants and a member of Oldfield Club's board of
directors, Phillip Galbreath (“Galbreath”), to
purchase the Greeters Store through EGH. Id. ¶
21.G. Oldfield Club terminated Selby in October, 2017. ECF
No. 8-1, OCA Action Compl. ¶ 43.
November 16, 2017, Selby filed an action against Oldfield
Club in the Court of Common Pleas for Beaufort County, South
Carolina (the “Selby Action”), bringing claims
for breach of contract and defamation. ECF No. 8-2, Selby
Action Compl. ¶ 4-25. Oldfield Club's answer in the
Selby Action included counterclaims against the Selby
Defendants for (1) breach of fiduciary duty, (2) civil
conspiracy, (3) fraud, (4) interference with contractual
relations, (5) breach of contract, (6) negligence, and (7)
unjust enrichment. ECF No. 8-3, Selby Action Answer
¶¶ 94- 138.
January 23, 2017, Oldfield Club filed the instant action in
the Court of Common Pleas for Beaufort County, South Carolina
against the TI Defendants, Galbreath, Oldfield Holdings, GA,
LLC, and ten John Doe defendants (the “Original
Defendants”). The action was removed to this court on
February 15, 2017. ECF No. 1. On March 2, 2017, Oldfield Club
filed an amended complaint, adding the Selby Defendants as
parties. ECF No. 6. The amended complaint brings the
following claims against the Selby Defendants: (1) negligence
and negligent misrepresentation, (2) civil conspiracy and
request for declaratory relief, (3) quantum meruit, and (4)
declaratory judgment. Am. Compl. ¶¶ 31-34, 47-61.
March 24, 2017, the Selby Defendants filed a motion to
dismiss, ECF No. 17, and Oldfield Club filed a response on
April 6, 2017, ECF No. 24. The court held a hearing on this
motion on June 6, 2017. ECF No. 53. For the reasons set forth
below, the court denies the Selby Defendants' motion to
Federal Rule of Civil Procedure 12(b)(6), a party may move to
dismiss for “failure to state a claim upon which relief
can be granted.” When considering a Rule 12(b)(6)
motion to dismiss, the court must accept the plaintiff's
factual allegations as true and draw all reasonable
inferences in the plaintiff's favor. See E.I. du Pont
de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440
(4th Cir. 2011). But “the tenet that a court must
accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a
motion to dismiss, the court's task is limited to
determining whether the complaint states a “plausible
claim for relief.” Id. at 679. Although Rule
8(a)(2) requires only a “short and plain statement of
the claim showing that the pleader is entitled to relief,
” “a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The “complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 570). “Facts pled that
are ‘merely consistent with' liability are not
sufficient.” A Soc'y Without a Name v.
Virginia, 655 F.3d 342, 346 (4th Cir. 2011) (quoting
Iqbal, 556 U.S. at 678).
Selby Defendants argue that the claims against them should be
dismissed under the abstention doctrine articulated in
Colorado River Water Conservation Dist. v. United
States, 424 U.S. 800, 817 (1976). Selby Def.'s Mot.
Oldfield Club agrees that the court should abstain from
adjudicating the claims against the Selby Defendants. Oldf.
Club's Resp. 2. More specifically, however, Oldfield Club
asks the court to abstain from exercising its jurisdiction
over all of its claims against all of the
defendants. Id. Despite its interest in
having the case heard in state court, Oldfield Club objects
to the motion to dismiss only the claims against the Selby
Defendants, arguing that it would be improper for the court
to abstain from hearing only part of this action while
retaining jurisdiction over the claims against the remaining
defendants. Id. at 2, 8-9. The Original Defendants
did not file a response to the Selby Defendants'
Colorado River, the Supreme Court recognized that
“[g]enerally, as between state and federal courts, the
rule is that ‘the pendency of an action in the state
court is no bar to proceedings concerning the same matter in
the Federal court having jurisdiction . . . .'” 424
U.S. at 817 (quoting McClellan v. Carland, 217 U.S.
268, 282 (1910)). Nevertheless, the Court recognized that:
[T]here are principles unrelated to considerations of proper
constitutional adjudication and regard for federal-state
relations which govern in situations involving the
contemporaneous exercise of concurrent jurisdictions, either
by federal courts or by state and federal courts. These
principles rest on considerations of “(w)ise judicial
administration, giving regard to conservation of judicial
resources and comprehensive disposition of litigation.”
Id. (quoting Kerotest Mfg. Co. v. C-O-Two Fire
Equip. Co., 342 U.S. 180, 182 (1952)). Because federal
courts owe a “virtually unflagging obligation  to
exercise the jurisdiction given them, ” Colorado
River abstention applies only in ...