United States District Court, N.D. Oklahoma
OPINION AND ORDER
TERENCE C. KERN UNITED STATES DISTRICT JUDGE
the Court is Defendant Prosperity Bank's Motion to
Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)
(“Rule 12(b)(6)”) (Doc. 10). For the reasons
discussed below, the Motion is DENIED.
case arises out of a mortgage dispute between Defendant
Prosperity Bank (“Prosperity”) and Plaintiffs JTG
Ventures (“JTG”), Jeffrey Wolf and Jean Wolf
(collectively “Silver Sands Parties”). On or
about May 9, 2011, JTG executed a promissory note with
Prosperity. (Doc. 2-1 ¶ 9.) The Note was secured by a
mortgage against the approximately eighty-seven (87)
condominium units that JTG owned in the Silver Sands
Apartments. (Doc. 2-1 ¶ 7, 9.) The Mortgage contained an
assignment of rents provision. On February 10, 2015,
Prosperity filed a Petition in Tulsa County District Court
(“state court”) to foreclose its mortgage lien
upon certain real property, alleging that the Silver Sands
Parties had defaulted (the “foreclosure suit”).
(Doc. 10, pg. 2.)
August 5, 2015, Prosperity notified the lessees of JTG's
condominium units that all rent due thereafter was to be paid
not to JTG, but instead to Prosperity. (Doc. 2-1 ¶ 21.)
Silver Sands Parties' agent countermanded this
instruction. (Doc. 10, pg. 3). On November 3, 2015,
Prosperity filed a Motion for Entry of Order Enforcing
Assignment of Rents, which the state court granted.
Prosperity later filed a Motion to Enforce the initial
enforcement order on January 19, 2016, which the state court
granted on February 29, 2016. After this Enforcement Order,
Prosperity notified all lessees twice more that rent must be
paid to Prosperity. (Doc. 2-1 ¶ 22-23.) After this, all
lessees vacated their residences. (Doc. 2-1 ¶ 24.).
Prosperity filed a Motion for Contempt and Application for
Citation of Indirect Contempt against the Silver Sands
Parties for interfering with the enforcement of the state
court Orders to Enforce the Assignment of Rents provision on
March 22, 2016.
the state court denied the Silver Sands Parties permission to
file a counterclaim in the foreclosure suit, the Silver Sands
Parties filed the instant action in Tulsa County District
Court on August 4, 2017, alleging (1) Breach of Contract due
to Prosperity's premature enforcement of the assignment
of rents provision in the mortgage; (2) Constructive Eviction
due to Prosperity's letters and other communications to
Silver Sands Parties' lessees; (3) Interference with
Contractual or Business Relationships due to Prosperity's
letters and other communications to Silver Sands Parties'
lessees; and (4) Intentional Infliction of Emotional Distress
based on Prosperity's letters and other communications to
Silver Sands Parties' lessees and Prosperity's Motion
for Contempt. (Doc. 2-1.) Prosperity removed the case to this
court on August 15, 2017. (Doc. 2.) On August 31, 2018,
pursuant to an earlier jury verdict, the state court entered
judgment in the foreclosure suit for Silver Sands Parties as
to all of Prosperity's claims arising under its Business
Loan Agreement, Promissory Note, Mortgage, and Guaranty.
(Doc. 22, pg. 2; Doc. 22-1.)
Prosperity's Motion to Dismiss
considering a motion to dismiss under Rule 12(b)(6), a court
must determine whether the plaintiff has stated a claim upon
which relief may be granted. “To survive a motion to
dismiss, a complaint must contain 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)).
“[T]he mere metaphysical possibility that some
plaintiff could prove some set of facts in support
of the pleaded claims is insufficient; the complaint must
give the court reason to believe that this plaintiff
has a reasonable likelihood of mustering factual support for
these claims.” Ridge at Red Hawk, LLC v.
Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007).
Similarly, a complaint may be dismissed under Rule 12(b)(6)
when an affirmative defense appears on its face. Jones v.
Bock, 549 U.S. 199, 215 (2007). Litigation privilege is
one of such affirmative defense. See Berman v. Lab. Corp.
of Am., 268 P.3d 68, 69 (Okla. 2011).
Tenth Circuit has interpreted “plausibility, ”
the term used by the Supreme Court in Twombly, to
“refer to the scope of the allegations in a
complaint” rather than to mean “likely to be
true.” Robbins, 519 F.3d at 1247. Thus,
“if [allegations] are so general that they encompass a
wide swath of conduct, much of it innocent, then the
plaintiffs have not nudged their claims across the line from
conceivable to plausible.” Id. (internal
quotations omitted). “The allegations must be enough
that, if assumed to be true, the plaintiff plausibly (not
just speculatively) has a claim for relief.”
Id. “This requirement of plausibility serves
not only to weed out claims that do not (in the absence of
additional allegations) have a reasonable prospect of
success, but also to inform the defendants of the actual
grounds of the claim against them.” Id. at
recognizes “litigation privilege” which
“accords attorneys, parties, jurors and witnesses
immunity for comments or writings made during the course of
or preliminary to judicial or quasi-judicial
proceedings.” See Samson Inv. Co. v.
Chevaillier, 1999 OK 19, 988 P.2d 327 (Okla. 1999).
Litigation privilege applies only when the communication is
(1) relevant or has some relation to a proposed proceeding
and (2) the circumstances surrounding the communications have
some relation to the proposed proceeding. Id. at
330. Oklahoma courts have limited this privilege to documents
and statements made and circulated in anticipation of, or
preparation for litigation, or statements made before the
Court during litigation. See, e.g., Stricklen v.
O.I.P.M., L.L.C., 2017 OK CIV APP 3, 394 P.3d 290,
292-93 (Okla.Civ.App. 2017) (attorneys and their clients not
liable for potentially false affidavit, filed as proof of
service, stating that a party was served); Springer v.
Richardson Law Firm, 2010 OK CIV APP 72, 239 P.3d 473,
475 (Okla.Civ.App. 2010) (attorneys and their clients immune
from defamation liability based on a petition filed in state
court); State ex rel. Okla. Bar. Ass'n v. Dobbs,
2004 OK 46, 94 P.3d 31, 45-47 (Okla. 2004) (attorneys and
witnesses are not subject to an independent suit for perjury
but are subject to professional discipline); Samson,
988 P.2d at 330-31 (attorneys immune from defamation
liability for circulating a draft petition to a potential
client); Patel v. OMH Med. Ctr., Inc., 987 P.2d
1185, 1203 (Okla. 1999) (neither attorneys nor parties
subject to separate suit for failure to fully respond in the
course of discovery or for oral misrepresentations at trial);
Cooper v. Parker-Hughey, 894 P.2d 1096, 1101 (Okla.
1995) (witnesses in civil cases are not liable for perjury
based on that testimony); Kirschstein v. Haynes,
1990 OK 8, 788 P.2d 941, 954 (Okla. 1990) (attorney, witness,
and party immune from defamation liability for publishing an
allegedly false affidavit, and for an intentional infliction
of emotional distress claim based on the same factual
underpinnings as the defamation claim).
privilege is concerned with the integrity and rigor of the
proceedings before the Court. Id. Granting attorneys
and their clients immunity from suit for their communications
or statements prior to litigation or before the Court ensures
that parties can bring the full extent of their legal
grievances before the Court, with appropriate representation,
without fear of being subject to lawsuits as reprisal.
Similarly, granting witnesses immunity ensures that parties
have full access to witness testimony without fears of
contends that the Silver Sands Parties' claims should be
dismissed for failure to state a claim, as the claims are all
based on conduct protected by litigation privilege. The
Silver Sands Parties, however, contend that litigation