United States District Court, D. Oregon
For June Hawkins-Kimmel, an Incapacitated Person, by and through C. Scott Howard, as Conservator of the Estate of June Hawkins-Kimmel, Richard Hawkins-Kimmel, Plaintiffs: Kevin Charles Brague, LEAD ATTORNEY, Kivel and Howard, LLP, Portland, OR; Michael G. Hanlon, Law Offices of Michael G. Hanlon, Portland, OR.
For Andrew R. Hawkins-Kimmel, M& A Wealth Management, Inc., a Colorado corporation, Defendant: Timothy S. DeJong, LEAD ATTORNEY, Stoll Stoll Berne Lokting & Shlachter, PC, Portland, OR.
FINDINGS AND RECOMMENDATION
Honorable Paul Papak, United States Magistrate Judge.
Plaintiffs June Hawkins-Kimmel and Richard Hawkins-Kimmel (" Plaintiffs") filed this action against defendants Andrew Hawkins-Kimmel and M& A Wealth Management, Inc. (" Defendants") alleging breach of fiduciary duty, accounting, and conversion claims under 15 U.S.C. § 80b and Oregon common law; elder abuse under ORS 124.100; and breach of Oregon Securities Law under ORS 59.115, 59.135, and 59.137. This court has jurisdiction over this action pursuant to 28 U.S.C. § § 1331, 1332(a).
Before the court is defendants' Motion to Dismiss (#16) pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). I have considered the parties' motions and all of the pleadings on file. For the reasons that follow, defendants' motion to dismiss should be denied in part and granted in part.
In ruling on a Rule 12(b)(6) motion to dismiss, a court must take the complaint's allegations of material fact as true and construe them in the light most favorable to the nonmoving party. Keams v. Tempe Tech. Inst., Inc., 39 F.3d 222, 224 (9th Cir. 1994). As a preliminary matter, I note that this background is drawn from plaintiffs' well-plead allegations.
Plaintiffs are 75 and 80 years old and are the parents of defendant Andrew Hawkins-Kimmel. Am. Complaint, #9,
¶ 5. Plaintiffs are retired and, in 2002, had assets amounting to approximately $2 million. This amount was distributed among various IRA, bank, and brokerage accounts. Id. at ¶ 6. Defendant Andrew Hawkins-Kimmel became plaintiffs' investment advisor in 2002. Id. at ¶ 4. In 2004, a sale of real property added an additional $1.6 million to plaintiffs' collective assets. Id. at ¶ 7.
Between June 2010 and April 2013, defendant Andrew Hawkins-Kimmel transferred $955, 000 of plaintiffs' funds to accounts over which he exercised control. Defendants then invested $463, 100 of plaintiffs' funds, in seven separate transactions, into a company titled H-K Resources, which defendant Andrew Hawkins-Kimmel operates and controls. Id. at ¶ 11. Additionally, defendants invested in at least four other companies controlled or operated by defendant, including Sanitas Enterprises LLC, Shavano Enterprises LLC, Sylvathwaite LLC, and Vanilla Sky Enterprises LLC.
Plaintiffs have requested from defendants' records relating to the sale or transfer of their assets. Similarly, plaintiffs have sought information relating to investment account balances and financial records of the entities into which defendants invested plaintiffs' assets. Id. at If 12. These requests have proven fruitless, and the alleged misappropriation of plaintiffs' assets has left them " virtually destitute." Pl.'s Opp., #19, 2. Plaintiffs bring this action alleging that defendants' fraudulent concealment, omissions, misrepresentations, and acts entitle plaintiffs to economic damages.
Plaintiffs filed a complaint against defendant Andrew Hawkins-Kimmel in the Clackamas County Circuit Court of Oregon on February 13, 2014. Complaint, #1-1, 2. In the complaint, plaintiffs sought recovery of funds, punitive damages, and resulting fees. Defendant Andrew Hawkins-Kimmel, a citizen of Colorado, thereafter removed to this court on April 1, 2014, invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). An administrative correction later added M& A Wealth Management, Inc. (" M& A"), a Colorado corporation and registered investment adviser firm, as a named defendant. Am. Complaint, #9, ¶ 3. M& A is owned and controlled by defendant Andrew Hawkins-Kimmel.
On September 22, 2014, defendants filed a motion to dismiss (#16). Then, on October 9, 2014, plaintiffs filed their resistance (#19), to which defendants replied (# 20) on October 27, 2014. On November 4, 2014, the court heard oral argument on defendants' motion. The matter is fully submitted and ready for decision.
I. Motion to Dismiss