Full opinion text
MEMORANDUM OPINION AND ORDER JAMES 0. BROWNING, District Judge. THIS MATTER comes before the Court on: (i) Tan-O-On Marketing Inc.’s Motion to Amend Third Party Complaint for Fraud and Theft of Trade Secrets and Unjust Enrichment, filed February 2, 2012 (Doc. 105) (“Motion to Amend”); and (ii) Defendants Hi-Land Potato Company, Inc.’s and Carl Worley’s Motion to Dismiss Fraud and Fraud-Related Claims in Third Party Complaint and to Dismiss Claims Filed by Gerald and Julie Anderson in Their Individual Capacities, filed February 7, 2012 (Doc. 109) (“Feb. 7, 2012 MTD”). The Court held a hearing on April 13, 2012. The primary issues are: (i) whether there are sufficient allegations in Defendant Tan-O-On Marketing, Inc.’s Third Party Complaint for Fraud and Theft of Trade Secrets and Unjust Enrichment at 2-10, filed October 14, 2011 (Doc. 72) (“Amended Third-Party Complaint”), to satisfy rule 9(b) of the Federal Rules of Civil Procedure’s heightened pleading standards with regards to a common-law fraud claim; (ii) whether Tan-O-On Marketing has adequately pled a common-law fraudulent-conveyance claim in its Amended Third-Party Complaint; (iii) whether Tan-O-On Marketing has adequately pled a fraudulent-transfer claim in its Amended Third Party claim; (iv) whether the Court should grant Tan-O-On Marketing leave to amend to present additional allegations and claims against Third-Party Defendants RPE, Inc. and Russell Wysocki (the “RPE, Inc. Parties”); and (v) whether the Court should grant Tan-O-On Marketing leave to amend to present additional allegations and claims against Defendants Hi-Land Potato Company and Carl Worley (the “Hi-Land Potato Parties”). The Court will grant in part and deny in part the Feb. 7, 2012 MTD. There are not sufficient allegations in the Amended Third-Party Complaint to satisfy rule 9(b)’s heightened pleading standards with regards to a common-law fraud claim. There are sufficient allegations in the Amended Third-Party Complaint for a fraudulent-conveyance claim to satisfy rule 12(b)(6)’s standards and rule 9(b)’s heightened pleading standards. There are sufficient allegations in the Amended Third-Party Complaint regarding the claim under the New Mexico Uniform Fraudulent Transfer Act, N.M.S.A. 1978, §§ 56-10-14 to -25 (“UFTA”), that Tan-O-On Marketing asserts against the Hi-Land Potato Parties to survive dismissal under rule 12(b)(6) and rule 9(b). The Court will grant in part and deny in part the Motion to Amend. Consistent with the agreement between Tan-O-On Marketing and the RPE, Inc. Parties at the hearing on April 13, 2012, the Court will grant Tan-O-On Marketing leave to amend its claims for unjust enrichment and theft of trade secrets asserted against the RPE, Inc. Parties, but will deny leave to amend the remaining claims it seeks to assert against the RPE, Inc. Parties. The Court will also deny Tan-O-On Marketing leave to amend regarding its common-law fraud and claims under the New Mexico Unfair Practices Act, N.M.S.A. 1978, §§ 57-12-1 to - 26 (“UPA”), that Tan-O-On Marketing seeks to assert against the Hi-Land Potato Parties, because permitting leave to amend would be futile and unfairly prejudicial to the Hi-Land Potato Parties. The Court will grant leave to amend regarding the fraudulent-conveyance claims which Tan-O-On Marketing seeks to assert against Hi-Land Potato, given that the additional allegations primarily flesh out allegations which were already in Tan-O-On Marketing’s prior pleadings. The Court will grant leave to amend the claims for unjust enrichment and theft of trade secrets asserted against the Hi-Land Potato Parties in light of the agreement the parties reached at the hearing on April 13, 2012. FACTUAL BACKGROUND In the current pleading, the Tan-O-On Parties assert claims for fraud, unjust enrichment, and theft of trade secrets against the Hi-Land Potato Parties and the RPE, Inc. Parties. See Amended Third-Party Complaint at 2-10. Tan-O-On Marketing engaged in interstate commerce regarding the sale of produce with Skyline Potato and the Intervening Plaintiffs. See Amended Third-Party Complaint ¶¶ 12-13, at 3. “On June 15, 2010, the Secretary of Agriculture of the United States Department of Agriculture issued a reparation order and award which provided that Tan-O-On Marketing is indebted to Skyline Potato in the amount of $81,282.39____” Amended Third-Party Complaint ¶ 14, at 3. In February 2006, Shannon Casey and Shawna Casey purchased Tan-O-On Marketing from Defendants Gerald Anderson and Julie Anderson through a stock purchase agreement. See Amended Third-Party Complaint at ¶¶ 15-16, at 4. Before the Caseys’ purchase of Tan-O-On Marketing, the company “had a long standing reputation in the industry for prompt payments to all growers of potatoes immediately upon receipt of payments for potatoes delivered by Tan-O-On Marketing.” Amended Third-Party Complaint ¶ 17, at 4. In late 2009, Shannon Casey resigned from and closed Tan-O-On Marketing. See Amended Third-Party Complaint ¶¶ 18, 20, at 5. After closing Tan-O-On Marketing, the Caseys relocated to Monte Vista, Colorado, where Hi-Land Potato locates its business. See Amended Third-Party Complaint ¶ 20, at 5. Although the Caseys represented that they had abandoned their positions with Tan-O-On Marketing, they later established a new bank account for the company in Monte Vista. See Amended Third-Party Complaint ¶ 21, at 5-6. The Caseys deposited approximately $1.8 million of Tan-O-On Marketing’s receivables into the new account and then paid those proceeds to Hi-Land Potato instead of paying Tan-O-On Marketing’s Perishable Agricultural Commodities Act, 7 U.S.C. §§ 499a-499t (“PACA”), trust creditors, such as Skyline Potato and the Intervening Plaintiffs. See Amended Third-Party Complaint ¶ 21, at 6. At the time this transfer of funds occurred, the Hi-Land Potato Parties were aware of Tan-O-On Marketing’s “insolvency, and the Casey’s plan to strip the company of its assets.” Amended Third-Party Complaint ¶ 21, at 6. “This [conduct] was [all] part of a scheme to defraud [Tan-O-On Marketing] and Gerald R. Anderson and Julie Anderson and was intentional and known____” Amended Third-Party Complaint ¶ 24, at 7. Before January 2010, Hi-Land Potato did not broker sales of potatoes, because it relied on Tan-O-On Marketing to sell its product. See Amended Third-Party Complaint ¶ 22, at 6. At the time Shannon Casey shut down Tan-O-On Marketing, the company was the largest potato supplier in the country to The Kroger Co., a national grocery chain. See Amended Third-Party Complaint ¶ 18, at 5. Kroger Co. does not transact business with a potato broker unless the broker has a Kroger Co. vendor number. See Amended Third-Party Complaint ¶ 18, at 5. Hi-Land Potato transferred customer relationships, monthly orders from Kroger Co., and other proprietary information, without authority, permission, or compensation to RPE, Inc. See Amended Third-Party Complaint ¶ 25, at 7. After the transfer of Tan-O-On Marketing assets to RPE, Inc., RPE, Inc. announced the opening of a Monte Vista sales division and hired Shannon Casey as the operation’s director. See Amended Third-Party Complaint ¶ 26, at 7. RPE, Inc. now handles the sales of potatoes from Hi-Land Potato, including the sales relationship with Kroger Co. See Amended Third-Party Complaint ¶27, at 7-8. When Shannon Casey shut down Tan-O-On Marketing, neither Hi-Land Potato nor RPE, Inc. had a vendor number with Kroger Co. See Amended Third-Party Complaint ¶ 18, at 5. The transfer of Tan-O-On Marketing assets from Tan-O-On Marketing to Hi-Land Potato to RPE, Inc. constitutes a breach of the PACA trust and a fraudulent transfer, because Skyline Potato and the Intervening Plaintiffs remain uncompensated for their transactions with Tan-O-On Marketing. See Amended Third-Party Complaint ¶¶ 28, 34, at 8-9. Fraudulent transfers “were made to or for the benefit of Hi-Land Potato Company Inc., Carl Worley and RPE, Inc. and Russell Wysocki insiders of TMI on antecedent debts, and were made without consideration.” Amended Third-Party Complaint ¶ 40, at 10. PROCEDURAL BACKGROUND On July 23, 2010, Skyline Potato filed its Petition for Enforcement of USDA PACA Order and Award of Damages; Complaint for Violation of Federal Unfair Trade Practices Provision in PACA (7 U.S.C. § 499b), Breach of Contract, Breach of Covenant of Good Faith and Fair Dealing, Fraud, Money Owed on Open Account, and Prayer for Declaratory Relief and Piercing of the Corporate Veil against Defendants Tan-O-On Marketing, Inc., Hi-Land Potato, G. Anderson, J. Anderson, Mark Lounsbury, Bill Metz, and Carl Worley. See Doc. 2 (“Original Complaint”). On March 1, 2011, the parties filed their Joint Status Report and Provisional Discovery Plan. See Doc. 29 (“JSR”). The JSR states that “Third Party Claimants should be allowed until June 30, 2011 to move to amend the pleadings and until June 30, 2011 to join additional parties in compliance with the requirements of Fed. R.Civ.P. 15(a).” JSR at 3. On March 9, 2011, the Court issued its Order Adopting Joint Status Report and Provisional Diseovery Plan. See Doc. 36 (“Order Adopting JSR”). In its Order Adopting JSR, the Court adopted the parties’ JSR. See Order Adopting JSR at 1. On July 8, 2011, the Intervening Plaintiffs filed their Complaint in Intervention against Tan-O-On Marketing and Hi-Land Potato. See Doc. 60. Against Tan-0-On Marketing, the Intervening Plaintiffs assert the following claims: (i) Count 1 — Declaratory Relief Validating PACA Trust Claim (7 U.S.C. § 499e(c)(3) and (4)); (ii) Count II — Enforcement of Payment from PACA Trust Assets (7 U.S.C. § 499e(c)(5)); (iii) Count III — Violation of PACA: Failure to Maintain PACA Trust Assets and Creation of Common Fund (7 U.S.C. § 499e(c)); (iv) Count IV — Violation of the PACA: Failure to Pay Promptly (7 U.S.C. § 499b(4)); and (v) Count V— Breach of Contract. See Complaint in Intervention at 4-9. Against Hi-Land Potato, the Intervening Plaintiffs assert the following claims: (i) Count VI — Conversion and Unlawful Retention of PACA Trust Assets; (ii) Count VII — Fraudulent Transfer; (iii) Count VIII — Constructive Trust; and (iv) Count IX — Unjust Enrichment. See Complaint in Intervention at 10-13. On October 14, 2011, the Tan-O-On Parties filed their Amended Third-Party Complaint. See Doc. 72. The Tan-O-On Parties assert the following claims: (i) Fraud; (ii) Unjust Enrichment; and (iii) Theft or Conversion of Trade Secrets and Corporate and Personal Assets. See Amended Third-Party Complaint at 3-10. On October 21, 2011, Skyline Potato filed its First Amended Complaint. See Doc. 73. Skyline Potato asserts the following counts against the Defendants: (i) Count I — Enforcement of Order and Collection under the PACA Trust (7 U.S.C. § 499e); (ii) Count II — Violation of PACA Unfair Business Conduct Provision (7 U.S.C. § 499b); (iii) Count III — Breach of Written Contract; (iv) Count IV — Breach of Implied Covenants of Good Faith and Fair Dealing; (v) Count V — Quantum Meruit; (vi) Count VI — Conversion and Unlawful Retention of Plaintiffs Property and PACA Trust Assets; (vii) Count VII— Fraud; (viii) Count VIII — Money Owed on Open Account; (ix) Count IX — Violation of PACA: Failure to Maintain PACA Trust Assets and Creation of a Common Fund (7 U.S.C. § 499e(e)); (x) Count X — Fraudulent Transfer; (xi) Count XI — Constructive Trust; and (xii) Count XII — Prayer for the Remedy of “Piercing of the Corporate Veil.” First Amended Complaint at 7-19. On January 9, 2012, the RPE, Inc. Parties filed their Third-Party Defendants RPE, Inc. and Russell Wysocki’s Motion to Dismiss Third-Party Plaintiffs Fraud-Related Claims. See Doc. 90 (“Jan. 9, 2012 MTD”). The RPE, Inc. Parties assert that the Tan-O-On Parties “articulate no discrete causes of action, and instead appear to generally contend that Movants are liable to them under theories of (a) theft of trade secrets, (b) unjust enrichment, and (c) fraud.” Jan. 9, 2012 MTD at 2. The RPE, Inc. Parties alleged that the Tan-O-On Parties cannot plead fraud with sufficient specificity to satisfy rule 9(b)’s heightened pleading standards. See Jan. 9, 2012 MTD at 2-6. On January 23, 2012, the RPE, Inc. Parties filed their Third-Party Defendants RPE, Inc. and Russell Wysocki’s Motion to Dismiss Claims Filed by Gerald and Julie Anderson. See Doc. 94 (“Jan. 23, 2012 MTD”). The RPE, Inc. Parties seek dismissal of the claims which the Andersons have asserted against them on the basis that the Andersons cannot bring claims for injuries Tan-O-On Marketing suffered. See Jan. 23, 2012 MTD at 1-4. On February 2, 2012, the Tan-O-On Parties filed their Motion to Amend. See Doc. 105. In this filing, the Andersons acknowledge that they have voluntarily dismissed their individual claims against the Hi-Land Potato Parties and the RPE, Inc. Parties, and that Tan-O-On Marketing is the only one of the Tan-O-On Parties still asserting claims. See Motion to Amend at 2. The Andersons concede that the RPE, Inc. Parties are correct in their Motion to Dismiss, “therefore all claims for damages in favor of the Andersons individually are hereby stipulated to be dismissed by the [C]ourt including non-movants, [the] Hi-Land Potato [Parties].” Motion to Amend at 2. Tan-O-On Marketing argues that its Second Amended Third Party Complaint for Fraud and Theft of Trade Secrets and Unjust Enrichment and Unfair Trade Practices, filed February 2, 2012 (Doc. 105-1) (“Second Amended Third-Party Complaint”), contains sufficient allegations to plead with particularity fraud against the Hi-Land Potato Parties and the RPE, Inc. Parties. Motion to Amend at 3. Against the Hi-Land Potato Parties, Tan-O-On Marketing represents that it asserts claims for “a fraudulent conveyance in favor of Hi Land Potato Company and Carl Worley, individually, unjust enrichment, fraudulent theft of trade secrets, proprietary information, and unfair trade practices.” Motion to Amend at 3. Against the RPE, Inc. Parties, Tan-O-On Marketing represents that it alleges a claim of fraud based on “unjust enrichment and theft of trade secrets and proprietary information.” Motion to Amend at 3. Tan-O-On Marketing asserts “that a party should be granted leave to amend if there has been no undue delay, bad faith or dilatory tactics, undue prejudice to opposing parties, or repeated failure to cure deficiencies by amendments previously allowed.” Motion to Amend at 3 (citing Youell v. Russell, No. 04-1396, 2007 WL 709041, at *1-2 (D.N.M. Feb. 14, 2007) (Browning, J.)). Tan-O-On Marketing contends that “the purpose of Rule 15(a) is to provide maximum opportunity for each claim to be decided on its merits rather than procedural niceties.” Motion to Amend at 3. Tan-O-On Marketing argues that it meets theses standards, because it became aware of new information regarding RPE, Inc.’s financial dealings which was not available until December 20, 2011, a date after it had filed its previous pleadings. See Motion to Amend at 4. On February 7, 2012, the Hi-Land Potato Parties filed their Feb. 7, 2012 MTD. See Doc. 109. The Hi-Land Potato Parties seek dismissal of all the claims that the Tan-O-On Parties assert against them. See Feb. 7, 2012 MTD at 2. The Hi-Land Potato Parties note that the Tan-O-On Parties have “conceded that they have failed to plead a claim for fraudulent conveyance,” but that “[i]t is unclear whether this concession is limited to the fraudulent conveyance claims against RPE and Wysocki, or whether it extends to all third party defendants.” Feb. 7, 2012 MTD at 3. The Hi-Land Potato Parties assert that Tan-O-Marketing fails “to set forth any of the factual predicates that would allow it to properly state a claim for common law fraud.” Feb. 7, 2012 MTD at 3. Regarding a claim for fraudulent conveyance, the Hi-Land Potato Parties contend that Tan-O-Marketing must, to satisfy rule 9(b), plead facts regarding: (i) the property subject to the transfer; (ii) the timing and, if applicable, frequency of the transfer; and (iii) the consideration paid. See Feb. 7, 2012 MTD at 6. The Hi-Land Potato Parties assert that Tan-O-On Marketing has not stated a fraudulent-transfer claim under UFTA that can survive dismissal under rule 12(b)(6), given that Tan-O-On Marketing has not alleged that it is a creditor within the meaning of the UFTA and given that Tan-O-On Marketing “is the debtor in connection with the PACA assets at issue.” Feb. 7, 2012 MTD at 8-10 (emphasis in original). Alternatively, the Hi-Land Potato Parties contend that the allegations for fraudulent transfer do not satisfy rule 9(b). See Feb. 7, 2012 MTD at 10-11. On February 17, 2012, the RPE, Inc. Parties filed their Third Party Defendants RPE, Inc. and Russell Wysoeki’s Response in Opposition to Third Party Plaintiff Tan-O-On Marketing Inc.’s Motion to Amend Third Party Complaint. See Doc. 112 (“RPE, Inc. Parties’ Response to Motion to Amend”). The RPE, Inc. Parties ask the Court to deny the Motion to Amend, because the amendments are “futile, untimely, and unfairly prejudicial to [the RPE, Inc. Parties].” RPE, Inc. Parties’ Response to Motion to Amend at 2. The RPE, Inc. Parties argue that Tan-O-On Marketing’s fraud allegations are futile, because they would be subject to dismissal and because Tan-O-On Marketing does not allege that it relied on the purportedly false statements that RPE, Inc. made. See RPE, Inc. Parties’ Response to Motion to Amend at 3. The RPE, Inc. Parties assert that Tan-O-On Marketing’s UPA claim is defective, because Tan-O-On Marketing “does not allege that it was a purchaser of goods or services” as required to obtain relief under the UPA. RPE, Inc. Parties’ Response to Motion to Amend at 4. They argue that the proposed amendment is untimely, because the deadline to amend pleadings passed seven months before Tan-O-On Marketing filed the Motion to Amend and because Tan-O-On Marketing has no adequate explanation for the delay. See RPE, Inc. Parties’ Response to Motion to Amend at 4. The RPE, Inc. Parties contend that the information upon which Tan-O-On Marketing relies to assert that the Motion to Amend is timely “rings hollow,” because the information it received does not consist of facts relevant to the claims Tan-O-On Marketing asserts. RPE, Inc. Parties’ Response to Motion to Amend at 5. They also argue that Tan-O-On Marketing waited an additional five weeks after receipt of this information to file the Motion to Amend. See RPE, Inc. Parties’ Response to Motion to Amend at 5. They contest the proposed amendments based on unfair prejudice, because the “proposed amended pleading is plainly a ‘moving target,’ in that it seeks to propose new theories of relief.” RPE, Inc. Parties’ Response to Motion to Amend at 5. Finally, the RPE, Inc. Parties argue that, if Tan-O-Marketing is permitted to amend its complaint, the Court would have to alter the schedule of proceedings and that they would require additional discovery. See RPE, Inc. Parties’ Response to Motion to Amend at 6. They assert that granting the motion would result in unfair prejudice that is “both significant and self-evident.” RPE, Inc. Parties’ Response to Motion to Amend at 6. On February 21, 2012, the Hi-Land Potato Parties filed their Response to Tan-O-On’s Motion to Amend Third Party Complaint for Fraud and Theft of Trade Secrets and Unjust Enrichment. See Doc. 113 (“Hi-Land Potato Parties’ Response to Motion to Amend”). The Hi-Land Potato Parties argue that the Court should deny the Motion to Amend, because the request for amendment is untimely and because the proposed amendments would be futile. See Hi-Land Potato Parties’ Response to Motion to Amend at 1. The Hi-Land Potato Parties contend that this motion is more untimely than in comparable cases, because Tan-O-On Marketing filed it: (i) close to the conclusion of discovery; (ii) after expert witness disclosures have occurred; and (iii) at a time when the trial date is approaching. See Hi-Land Potato Parties’ Response to Motion to Amend at 1. The Hi-Land Potato Parties also argue that the information on which Tan-O-On Marketing relies to assert that its motion was timely “appears to have nothing to do with allegations against [the] Hi-Land [Potato Parties].” Hi-Land Potato Parties’ Response to Motion to Amend at 3. They contend that “the proposed complaint does not correct the defects that led [Tan-O-On Marketing] to agree to the dismissal of the fraud-based claims alleged in its first amended complaint.” Hi-Land Potato Parties’ Response to Motion to Amend at 3. The Hi-Land Potato Parties’ argue that Tan-O-On Marketing’s new UPA claim will not survive a motion to dismiss. See Hi-Land Potato Parties’ Response to Motion to Amend at 4. They assert that the UPA claim is subject to dismissal, because “Tan-O-On [Marketing] has not alleged any misrepresentation or UPA-proscribed act at all.” Hi-Land Potato Parties’ Response to Motion to Amend at 4. The Hi-Land Potato Parties contend that the Court should deny the Motion to Amend, because they would suffer “great prejudice” if Tan-O-On Marketing is “given a third bite at the apple, especially at this late stage in the litigation.” Hi-Land Potato Parties’ Response to Motion to Amend at 5. Tan-O-On Marketing did not file a written reply brief to the RPE, Inc. Parties’ Response to Motion to Amend nor to the Hi-Land Potato Parties’ Response to Motion to Amend. On February 21, 2012, Tan-O-On Marketing filed its Response to Hi-Land Potato Company, Inc. and Carl Worley’s Motion to Dismiss Fraud Claims and Dismissal of Individual Claims by Andersons. See Doc. 114 (“Response to Feb. 7, 2012 MTD”). Tan-O-On Marketing asserts that the Hi-Land Potato Parties are “correct that allegations of fraud were not plead with specificity as required by Federal rule 9(b) and therefore Tan-O-On Marketing, Inc. hereby requests the Court allow” it “to file a Second Amended Complaint to properly plead allegations that specify the fraudulent acts against Hi-Land and Carl Worley.” Response to Feb. 7, 2012 MTD at 3. Tan-O-On Marketing states that reformation of its Complaint to state separate Counts against each Defendant is possible now that evidence has been produced by Kroger, Inc. and Hi-Land Potato Company, Inc. which details with precision the unjust enrichment and the theft of trade secrets and business opportunity from Tan-O-On Marketing, Inc., conversion of PACA trust funds, and fraud by Hi-Land Potato Company, Inc. and Carl Worley individually. Response to Feb. 7, 2012 MTD at 3. Tan-O-On Marketing then proceeds to set out some of the evidence that supports its claims. See Response to Feb. 7, 2012 MTD at 4-15. Tan-O-On Marketing contends that “Hi-Land Potato Company, Inc. effectively cut out the middle man [Tan-O-On Marketing] by Invoicing for potato sales made by its employee Shannon Casey while he was receiving a [Tan-O-On Marketing] paycheck.” Response to Feb. 7, 2012 MTD at 16. Tan-O-On Marketing asserts that the property which was the subject of a fraudulent conveyance was the “loads of potatoes sold by Shannon Casey evidenced by Hi-Land Invoices 1414 through 1782 which were first seen by TMI representatives this month.” Response to Feb. 7, 2012 MTD at 16. Tan-O-On Marketing relates that “[t]he timing began as late as October 21, 2009 and included daily sales of PACA commodities and continued until December 2, 2009 and evidently thereafter.” Response to Feb. 7, 2012 MTD at 16. Tan-O-On Marketing asserts that “[e]ach Invoice carried the PACA notice for immediate payment, however the billing was directed to Hi-Land and the money was diverted to Sunflower Bank, eventually paid by check to Hi-Land.” Response to Feb. 7, 2012 MTD at 16. Tan-O-On Marketing notes that “[t]here was a lot of secrecy employed to attempt to hide the fraudulent conveyance from the USDA, the PACA industry, Tan-O-On Marketing, Inc., Terry Wright a TMI contractor, and the Andersons.” Response to Feb. 7, 2012 MTD at 17. “Tan-O-On Marketing, Inc. admits vague and undirected allegations in its first Amended Complaint because this scheme was elaborate and secretive and remained unrevealed until February 2010.” Response to Feb. 7, 2012 MTD at 18. Tan-O-On Marketing represents that, to establish its common-law fraud claim: 1) The misrepresentation of fact is the continuing statements by Carl Worley that he was continuing to do business with TMI and everything was fine and he didn’t know anything about what Shannon Casey was doing since he wasn’t his employee anyways. This positive Worley professed to Gerald Anderson, Terry Wright and the PACA industry. At the same time Mr. Worley was issuing Invoices from Hi-Land Potato Company to sell potatoes and receive 1.6 million dollars that belonged to TMI. 2) Carl Worley knew when he deposited check from Sunflower Bank that TMI was unable to pay other producers so that every check he cashed guaranteed another PACA producer would go unpaid. 3) The entire scheme was designed by Worley to deceive TMI until the assets of the company were totally defalcated and dissipated. 4) The Andersons and Terry Wright didn’t take legal action until they were both ruined and TMI was insolvent. Response to Feb. 7, 2012 MTD at 18. Regarding a claim for unjust enrichment and theft of trade secrets, Tan-O-On Marketing states “that its Kroger number 048970 was appropriated by Hi-Land Potato Company, Inc. for use by the Caseys and Mr. Worley from December 2, 2009 until July 1, 2010 to steal Tan-O-On Marketing, Inc.’s business opportunities for a total gross sales proceeds of $2.992 million dollars.” Response to Feb. 7, 2012 MTD at 19. On February 23, 2012, the Court filed its Stipulated Order Dismissing Fraud Claims Filed by Tan-O-On Marketing, Inc., Against RPE, Inc. and Russell Wysocki. See Doc. 116 (“Feb. 23, 2012 Order # 1”). The Feb. 23, 2012 Order # 1 relates that Tan-O-On Marketing and the RPE, Inc. Parties agree that the Court should grant the Jan. 9, 2012 MTD. See Feb. 23, 2012 Order # 1, at 1. The Feb. 23, 2012 Order # 1 states that “[tjhis dismissal should not be deemed to constitute a decision by the Court on Tan-O-On Marketing, Inc.’s motion for leave to file a second amended third-party complaint against RPE, Inc., and Russell Wysocki (Doc. 105), which is contested and remains pending.” Feb. 23, 2012 Order # 1, at 1-2. The Feb. 23, 2012 Order # 1 provides: “This dismissal should not be deemed to impact Tan-O-On Marketing, Ine.’s claim against RPE, Inc. and Russell Wysocki for unjust enrichment, which remains pending.” Feb. 23, 2012 Order # 1, at 2. On February 23, 2012, the Court filed its Stipulated Order Dismissing Claims Filed by Third-Party Plaintiffs Gerald and Julie Anderson in Their Individual Capacities. See Doc. 117 (“Feb. 23, 2012 Stipulated Order # 2”). The Feb. 23, 2012 Stipulated Order # 2 states that the Tan-O-On Parties, the Hi-Land Potato Parties, and the RPE, Inc. Parties agree: (i) that the January 23, 2012 MTD the RPE, Inc. Parties have filed “should be granted”; and (ii) the Feb. 7, 2012 MTD “should be granted to the extent it seeks dismissal of claims filed by Gerald and Julie Anderson in their individual capacities, but should otherwise remain pending.” The Feb. 23, 2012 Stipulated Order # 2, at 1. On March 7, 2012, the Hi-Land Potato Parties filed their Hi-Land Potato Company, Inc.’s Reply in Support of Its Motion to Dismiss Fraud and Fraud-Related Claims in Third Party Complaint and to Dismiss Claims Filed by Gerald and Julie Anderson in Their Individual Capacities. See Doc. 125 (“Reply to Response to Feb. 7, 2012 MTD”). The Hi-Land Parties state that “Tan-O-On’s response to the motion appears to concede that its ‘allegations of fraud were not plead (sic) with specificity as required by Federal Rule 9(b).’ ” Reply to Response to Feb. 7, 2012 MTD at 1 (alteration in original) (quoting Response to Feb. 7, 2012 MTD at 3). The Hi-Land Potato Parties assert that permitting amendment would be futile, and that both Tan-O-On Marketing’s live pleading and proposed pleading are inadequate. See Reply to Response to Feb. 7, 2012 MTD at 2. At the hearing on April 13, 2012, Tan-O-On Marketing asserted that new information has become available to it recently regarding improper payments from Hi-Land Potato to Shannon Casey as well as improper use of Tan-O-On Marketing’s Kroger Co. vendor number. See Transcript of Hearing at 8:6-17:23 (taken April 13, 2012) (Robinson) (“Tr.”). Tan-O-On Marketing asserted that this information illustrates the questionable conduct that occurred during the transition of ownership for Tan-O-On Marketing. See Tr. at 11:24-12:18 (Robinson). It stated that this information revealed that Shannon Casey opened a bank account in Monte Vista in 2009, which constitutes fraud given that he represented that he was Tan-O-On Marketing’s sole owner. See Tr. at 12:19-25 (Robinson). Tan-O-On Marketing argued that, after opening that bank account, Shannon Casey fraudulently conveyed funds in the account to Hi-Land Potato despite debts Tan-O-On Marketing owed to potato producers. See Tr. at 13:1-10 (Robinson). According to Tan-O-On Marketing, the information it has received confirms that fraud occurred, because the deposits in the older bank account for Tan-O-On Marketing began to drop significantly in September 2009. See Tr. at 15:23-16:14 (Robinson). The Hi-Land Potato Parties pointed out that, in the Tan-O-On Parties Amended Third-Party Complaint filed on October 14, 2011, the Tan-O-On Parties alleged causes of action for unjust enrichment, and theft of trade secrets, as well as allegations relating to fraud and fraudulent transfer. See Tr. at 22:7-13 (Bohnhoff). The Hi-Land Potato Parties argued that the Motion to Amend was untimely, because the parties had agreed in the JSR to June 30, 2011, as the deadline for amendments. See Tr. at 24:22-25:2 (Bohnhoff). The Hi-Land Potato Parties asserted that the allegations in Tan-O-On Marketing’s proposed Second Amended Third-Party Complaint are not the result of recent discovery. See Tr. at 25:7-9 (Bohnhoff). It noted that Tan-O-On Marketing stated in its response that it uncovered this allegedly fraudulent conduct in February, 2010. See Tr. at 25:7-13 (Bohnhoff) (citing Response to Feb. 7, 2012 MTD at 17). The Hi-Land Potato Parties contended that Tan-O-On Marketing had previously asserted many allegations relating to the same underlying conduct throughout this lawsuit. See Tr. at 25:14-25 (Bohnhoff). They argued that the information upon which Tan-O-On Marketing relies only quantifies damages rather than provides additional information needed to plead fraud allegations with specificity. See Tr. at 26:9-12 (Bohnhoff). The Hi-Land Potato Parties also asserted that amendment of the common-law fraud, , fraudulent-conveyance, and UPA claims Tan-O-On Marketing has asserted is futile, because Tan-O-On Marketing makes no allegations that the Hi-Land Potato Parties made misrepresentations or that Tan-O-On Marketing relied on any misrepresentations. See Tr. at 27:18-25 (Bohnhoff). The Hi-Land Potato Parties emphasized that Tan-O-On Marketing did not plead the necessary elements to assert a fraudulent-conveyance claim given that Tan-O-On Marketing has not pled that it is • a creditor. See Tr. at 28:3-19, 29:2 (Bohnhoff). The Hi-Land Potato Parties elaborated: (i) that Shannon Casey, at the time he was working for Tan-O-On Marketing, had full knowledge of what was occurring such that Tan-O-On Marketing likely had knowledge of what was occurring; and (ii) that this knowledge undercuts reliance. See Tr. at 52:7-25. The Hi-Land Potato Parties asserted that, if Tan-O-On Marketing seeks to assert claims for unjust enrichment and theft of trade secrets, they would not oppose those claims through a motion to dismiss, but would instead use summary judgment or disprove those claims at trial. See Tr. at 29:11-17 (Bohnhoff). The Hi-Land Potato Parties argued that Tan-O-On Marketing’s allegations regarding a UPA violation are futile, because Tan-O-On Marketing has not pled, as required under the UPA, that the Hi-Land Potato Parties made a false or misleading statement. See Tr. at 30:19-24 (Bohnhoff). The Hi-Land Potato Parties asserted that the proposed Second Amended Third-Party Complaint contains the same defects. See Tr. at 29:25-30:3 (Bohnhoff). The Hi-Land Potato Parties requested that the Court deny the Motion to Amend as untimely, or, alternatively, limit the amendments to only the unjust enrichment and theft-of-trade-secrets claims. See Tr. 31:4-16 (Bohnhoff). The Court then sought to clarify the timeliness issue and the prejudice that the Hi-Land Potato Parties would face from amendment. See Tr. at 33:19-34:17 (Court, Bohnhoff). The Hi-Land Potato Parties argued that the timeliness issue was pressing, because: (i) the discovery deadline is June 4, 2012; (ii) four Hi-Land Potato witnesses and a Kroger employee must still be deposed; and (iii) G. Anderson and Shannon Casey are scheduled to be deposed again. See Tr. at 34:13-35:11 (Bohnhoff). With regards to the issue of prejudice, the Court pointed out that, in each of the Tan-O-On Parties’ pleadings, including the proposed Second Amended Third-Party Complaint, there has been some fraud claim. See Tr. at 35:13-16 (Court). The Hi-Land Potato Parties argued that the prejudice they face is based on what they referred to as the moving target created by new, different fraud allegations that appear each time that the Tan-O-On Parties file a pleading. See Tr. at 35:18-22 (Bohnhoff). The Hi-Land Potato Parties then stated that they would be receptive to the Court denying the Motion to Amend with regards to the common-law fraud, fraudulent-conveyance, and UPA claims while granting leave with regards to claims for unjust enrichment and theft of trade secrets, because those causes of action appear in the Tan-O-On Parties’ earlier pleadings. See Tr. at 36:25-37:9 (Court, Bohnhoff). The Court then heard argument in opposition to the Motion to Amend from the RPE, Inc. Parties. See Tr. at 37:15-16 (Court). The RPE, Inc. Parties argued that the Court should deny the Motion to Amend, because permitting amendment would be' futile. See Tr. at 40:8-10 (Feuchter). The RPE, Inc. Parties emphasized that Tan-O-On Marketing’s fraud claims are futile, because the proposed Second Amended Third-Party Complaint does not plead the elements necessary to establish a cause of action based on fraud. See Tr. at 40:8-15 (Feuchter). They elaborated that Tan-O-On Marketing does not allege in its proposed pleading that it relied on misrepresentations that RPE, Inc. made. See Tr. at 40:21-41:9 (Feuchter). The RPE, Inc. Parties also argued that the UPA claim was futile, because the theory of relief sought does not fit the facts of the case, given that the UPA applies to the sale of goods and services for buyers seeking to sue sellers. See Tr. at 41:17-19 (Feuchter). The RPE, Inc. Parties contended that they would suffer unfair prejudice if the Court permitted Tan-O-On Marketing to add in a fraud claim, because the original fraud claims had been dismissed, for a period of approximately three months, and because they did not conduct discovery regarding allegations of fraud. See Tr. at 42:3-43:5 (Feuchter, Coürt). The RPE, Inc. Parties requested that the Court deny the Motion to Amend, and leave only claims for unjust enrichment and theft of trade secrets in Tan-O-On Marketing’s pleadings. See Tr. at 43:22-44:3 (Feuchter, Court). The Court inquired whether the RPE, Inc. Parties would oppose the Court permitting amendment on the unjust enrichment and theft-of-trade-secrets claims, but deny amendment regarding the common-law fraud, fraudulent-conveyance, and UPA claims for untimeliness. See Tr. at 44:9-17 (Court, Feuchter). The RPE, Inc. Parties agreed with the Court’s proposal on the- basis that the proposed amendments regarding the unjust enrichment and theft-of-trade-secrets claims were primarily factual in nature. See Tr. at 44:9-19 (Court, Feuchter). Skyline Potato and the Intervening Plaintiffs stated that they had no response to the Motion to Amend. See Tr. at 44:23-45:2 (Court, Esquivel, Jaramillo). Tan-O-On Marketing agreed that proceeding against the RPE, Inc. Parties on only the unjust enrichment and theft-of-secrets claims was appropriate, because it did not detrimentally rely on statements RPE, Inc. made, and could not establish either a fraud claim or a UPA claim. See Tr. at 46:15-24 (Robinson, Court). Tan-O-Marketing argued that the Court should permit it to pursue fraud claims against the Hi-Land Potato Parties based on the information it received in December, 2011, and because it had asserted those claims in all of its pleadings. See Tr. at 47:4-16 (Robinson, Court). The Court then indicated that, because there is no opposition to granting the Motion to Amend on unjust enrichment and theft-of-trade-secrets claims, it would permit those amendments, but would not permit amendments regarding the common-law fraud, fraudulent-conveyance, and UPA claims. See Tr. at 48:23-49:2 (Court). Tan-O-On Marketing agreed to this resolution concerning the RPE, Inc. Parties but maintained that the Court should permit the claims for common-law fraud, fraudulent conveyance, and UPA violations against the Hi-Land Potato Parties. See Tr. at 49:4-24 (Robinson, Court, Bohnhoff). Tan-O-On Marketing asserted that it could show reliance on invoices it received, because it thought Shannon Casey and Worley were accurately providing information to it regarding Tan-O-On Marketing’s sale. See Tr. at 51:20-52:2 (Robinson). The Hi-Land Potato Parties asserted that, if Tan-O-On Marketing’s former president Shannon Casey had full knowledge of the circumstances, there was no misrepresentation or misunderstanding. See Tr. at 52:7-20 (Bohnhoff). The Court indicated that it would need to decide whether the fraud claims were adequately pled in the Amended Third-Party Complaint or the Second Amended Third-Party Complaint. See Tr. at 53:16-23 (Court). RELEVANT LAW REGARDING AMENDMENT OF PLEADINGS Rule 15(a)(2) provides: “In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). Under rule 15(a), the court should freely grant leave to amend a pleading where justice so requires. See In re Thornburg Mortg., Inc. Sec. Litig., 265 F.R.D. 571, 579-80 (D.N.M. 2010) (Browning, J.); Youell v. Russell, No. 04-1396, 2007 WL 709041, at *1-2 (D.N.M. Feb. 14, 2007) (Browning, J.); Burleson v. ENMR-Plateau Tele. Coop., No. 05-0073, 2005 WL 3664299, at *1-2 (D.N.M. Sept. 23, 2005) (Browning, J.). The Supreme Court of the United States has stated that, in the absence of an apparent reason such as “undue delay, bad faith or dilatory motive ... repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.,” leave to amend should be freely given. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Furthermore, the United States Court of Appeals for the Tenth Circuit has held that district courts should grant a plaintiff leave to amend when doing so would yield a meritorious claim. See Curley v. Perry, 246 F.3d 1278, 1284 (10th Cir.2001). See also In re Thornburg Mortg., Inc. Sec. Litig., 265 F.R.D. at 579-80. A court should deny leave to amend under rule 15(a), however, where the proposed “amendment would be futile.” Jefferson Cnty. Sch. Dist. v. Moody’s Investor’s Serv., 175 F.3d 848, 859 (10th Cir.1999). See In re Thornburg Mortg., Inc. Sec. Litig., 265 F.R.D. at 579-80. An amendment is “futile” if the pleading “as amended, would be subject to dismissal.” In re Thornburg Mortg., Inc. Sec. Litig., 265 F.R.D. at 579-80 (citing TV Commc’ns Network, Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1028 (10th Cir.1992)). A court may also deny leave to amend “upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, [or] failure to cure deficiencies by amendments previously allowed.” In re Thornburg Mortg., Inc. Sec. Litig., 265 F.R.D. at 579 (quoting Frank v. U.S. W., Inc., 3 F.3d 1357, 1365-66 (10th Cir.1993)). The Tenth Circuit has also noted: It is well settled in this circuit that untimeliness alone is a sufficient reason to deny leave to amend, see Woolsey v. Marion Laboratories, Inc., 934 F.2d 1452, 1462 (10th Cir.1991); Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185 (10th Cir. 1990); First City Bank v. Air Capitol Aircraft Sales, 820 F.2d 1127, 1133 (10th Cir.1987), especially when the party filing the motion has no adequate explanation for the delay, Woolsey, 934 F.2d at 1462. Furthermore, “[w]here the party seeking amendment knows or should have known of the facts upon which the proposed amendment is based but fails to include them in the original complaint, the motion to amend is subject to denial.” Las Vegas Ice, 893 F.2d at 1185. Frank v. U.S. W., Inc., 3 F.3d at 1365-66. “The ... Tenth Circuit has emphasized that ‘[t]he purpose of [rule 15(a) ] is to provide litigants the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties.’ ” B.T. ex rel. G.T. v. Santa Fe Pub. Schs., No. 05-1165, 2007 WL 1306814, at *2 (D.N.M. Mar. 12, 2007) (Browning, J.) (quoting Minter v. Prime Equip. Co., 451 F.3d 1196,1204 (10th Cir.2006)). The Tenth Circuit has recognized that there is an open issue as to rule 16 of the Federal Rules of Civil Procedure’s application to amendments to pleadings once the time for seeking leave for pleading amendments has passed under a scheduling order. See Bylin v. Billings, 568 F.3d 1224, 1232 n. 10 (10th Cir.2009) (“Because we decline to consider the Bylins’ Rule 16 argument, we leave for another day the question of whether this circuit should apply Rule 16 when a party seeks to amend a pleading after a court-imposed deadline.”). “Rule 16 only allows such amendments for ‘good cause,’ an arguably more stringent standard than the standards for amending a pleading under Rule 15.” Bylin v. Billings, 568 F.3d at 1230 (quoting Fed. R.Civ.P. 16(b)(4)). Rule 16(b)(4) states: “A schedule may be modified only for good cause and with the judge’s consent.” Fed. R.Civ.P. 16(b)(4). The rule “focuses on the diligence of the party seeking leave to modify the scheduling order to permit the proposed amendment.” Advanced Optics Elecs., Inc. v. Robins, 769 F.Supp.2d 1285, 1313 (D.N.M.2010) (Browning, J.). “Properly construed, ‘good cause’ means that scheduling deadlines cannot be met despite a party’s diligent efforts.” Advanced Optics Elecs., Inc. v. Robins, 769 F.Supp.2d at 1313. See Gerald v. Locksley, 849 F.Supp.2d 1190, 1209-11 (D.N.M.2011) (Browning, J.) (same). The Tenth Circuit has noted that there is a “ ‘rough similarity’ between the ‘undue delay’ standard of Rule 15 and the ‘good cause’ standard of Rule 16.” Bylin v. Billings, 568 F.3d at 1231. Thus, the Tenth Circuit has indicated that the application of the rule 16 standard will often lead to the same outcome as applying the rule 15 standard. See Bylin v. Billings, 568 F.3d at 1231-32. This Court has previously stated that its rule 16(b) good-cause inquiry focuses on the diligence of the party seeking to amend the scheduling order. See Walker v. THI of N.M. at Hobbs Ctr., 262 F.R.D. 599, 602-03 (D.N.M.2009) (Browning, J.); Guidance Endodontics, LLC v. Dentsply Int’l, Inc., No. 08-1101, 2009 WL 3672505, at *2-3 (D.N.M. Sept. 29, 2009) (Browning, J.); Trujillo v. Bd. of Educ. of the Albuquerque Pub. Schs., Nos. 02-1146 and 03-1185, 2007 WL 2296955, at *3 (D.N.M. June 5, 2007) (Browning, J.). The United States District Court for the District of South Carolina has stated: Rule 16(b)’s “good cause” standard is much different than the more lenient standard contained in Rule 15(a). Rule 16(b) does not focus on the bad faith of the movant, or the prejudice to the opposing party. Rather, it focuses on the diligence of the party seeking leave to modify the scheduling order to permit the proposed amendment. Properly construed, “good cause” means that scheduling deadlines cannot be met despite a party’s diligent efforts. In other words, this court may “modify the schedule on a showing of good cause if [the deadline] cannot be met despite the diligence of the party seeking the extension.” Carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief. Dilmar Oil Co., Inc. v. Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C.1997) (citations omitted), aff'd on other grounds, 129 F.3d 116 (4th Cir.1997). See Denmon v. Runyon, 151 F.R.D. 404, 407 (D.Kan. 1993) (affirming an order denying the plaintiffs motion to amend after the dead: line which the scheduling order established had passed and stating that, “[t]o establish ‘good cause,’ the party seeking to extend the deadline must establish that the scheduling order’s deadline could not have been met with diligence”). Cf. SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1518-19 (10th Cir.1990) (affirming, under rule 16(b), denial of a motion to amend an answer to include a compulsory counterclaim filed three months after the scheduling order deadline). In In re Kirkland, 86 F.3d 172 (10th Cir.1996), the Tenth Circuit dealt with the definition of “good cause” in the context of rule 4(j). The Tenth Circuit noted: [W]ithout attempting a rigid or all-encompassing definition of “good cause,” it would appear to require at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules usually does not suffice, and some showing of “good faith on the part of the party seeking the enlargement and some reasonable basis for noncompliance within the time specified” is normally required. 86 F.3d at 175 (emphasis omitted) (internal quotation marks omitted) (quoting Putnam v. Morris, 833 F.2d 903, 905 (10th Cir.1987)). The Tenth Circuit explained that Putnam v. Morris “thus recognized that the two standards, although interrelated, are not identical and that ‘good cause’ requires a greater showing than ‘excusable neglect.’ ” In re Kirkland, 86 F.3d at 175. Other courts within the Tenth Circuit have held that “the ‘good cause’ standard primarily considers the diligence of the party ... [.] The party seeking an extension must show that despite due diligence it could not have reasonably met the scheduled deadlines. Carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief.” Pulsecard, Inc. v. Discover Card Servs. Inc., 168 F.R.D. 295, 301 (D.Kan.1996) (alterations in original) (internal quotation marks omitted). In the United States District Court for the District of Utah, the Honorable Dale A. Kimball, United States District Judge, found “good cause” existed to amend the court’s scheduling order when the court decided to permit the plaintiffs counsel to withdraw as counsel. Kee v. Fifth Third Bank, No. 2:06-cv-00602-DAK-PMW, 2008 WL 183384, at *1 (D.Utah Jan. 17, 2008). Judge Kimball reasoned: “[I]n light of the court’s decision to permit [counsel] to withdraw ... the court has determined that good cause exists for amending the existing scheduling order.” Kee v. Fifth Third Bank, 2008 WL 183384, at *1. STANDARD FOR A MOTION TO DISMISS UNDER RULE 12(b)(6) Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir.1994). The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiffs favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Hous. Auth. of Kaw Tribe v. City of Ponca, 952 F.2d 1183, 1187 (10th Cir.1991). A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiffs burden to set forth the grounds of his or her entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 546, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (stating that a plaintiffs complaint must set forth more than a threadbare recital “of the elements of a cause of action, supported by mere conclusory statements”). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 545, 127 S.Ct. 1955 (citation omitted). To survive a motion to dismiss, a plaintiffs complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570, 127 S.Ct. 1955; Mink v. Knox, 613 F.3d 995 (10th Cir.2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. “Thus, the 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). The Tenth Circuit has stated: “[Plausibility” in this context must refer to the scope of the allegations in a complaint: if they 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.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief. Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.2008) (citations omitted). RELEVANT LAW REGARDING PLEADING ALLEGATIONS OF FRAUD A plaintiff must plead “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Fraud claims, however, must meet more stringent standards. See Fed. R.Civ.P. 9(b). “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed.R.Civ.P. 9(b). “The requirements of Rule 9(b) must be read in conjunction with the principles of Rule 8, which calls for pleadings to be ‘simple, concise, and direct, ... and to be construed as to do substantial justice.’” Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir.1997). “With respect to rule 9(b)’s scope, a court should require parties to plead a cause of action with particularity when that cause of action contains allegations grounded in fraud.” Two Old Hippies, LLC v. Catch the Bus, LLC, 784 F.Supp.2d 1200, 1207 (D.N.M.2011) (Browning, J.) (citing 2 J. Moore, J. Parness & J. Smith, Moore’s Federal Practice § 9.03(1)(d), at 9-20 (3d ed. 2008)). On the other hand, a plaintiff may plead claims based on negligent or innocent misrepresentations, to the extent those claims do not require proof of fraud, in accordance with the more relaxed standards of rule 8(a). See Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir.2007) (recognizing that rule 9(b)’s heightened pleading standard does not apply to negligent-misrepresentation claim); Gen. Elec. Capital Corp. v. Posey, 415 F.3d 391, 395-96 (5th Cir.2005) (concluding that negligent-misrepresentation claim needs only to satisfy rule 8(a)’s notice pleading standard); Vess v. Cibar-Geigy Corp. USA, 317 F.3d 1097, 1104-05 (9th Cir.2003) (“Allegations of non-fraudulent conduct need satisfy only the ordinary notice pleading standards of Rule 8(a).”); Carl Kelley Const. LLC v. Danco Techs., 656 F.Supp.2d 1323, 1346 (D.N.M.2009) (Browning, J.) (citing City of Raton v. Ark. River Power Auth., 600 F.Supp.2d 1130, 1142-44, 1153 (D.N.M.2008) (“[Ujnlike with fraudulent misrepresentation, rule 8’s notice pleading standard governs [negligent misrepresentations].”)). “The primary motives that animate rule 9(b) help illuminate the reason for limiting the rule’s reach to claims grounded in fraud.” S2 Automation LLC v. Micron Tech., 281 F.R.D. 487, 494 (D.N.M.2012) (Browning, J.). First, the requirement of pleading with particularity protects defendants’ reputations from the harm attendant to accusations of fraud or dishonest conduct. See United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908, 921 (4th Cir.2003) (“Rule 9(b) protects defendants from harm to their goodwill and reputation.” (internal quotation marks omitted)); Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir.1992) (“[The particularity requirement] stems from the obvious concerns that general, unsubstantiated charges of fraud can do damage to a defendant’s reputation.”). Second, the requirement to plead with particularity puts defendants on notice of the allegedly fraudulent conduct so that they can formulate a defense. See United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d at 921. A related goal of rule 9(b) is to prevent plaintiffs from tagging on specious fraud claims to their pleadings in an attempt “to induce advantageous settlements or for other ulterior purposes.” Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 683 (7th Cir.1992). The Tenth Circuit has fleshed out the components necessary to a successful rule 9(b) pleading. In Sheldon v. Vermonty, 246 F.3d 682, 2000 WL 1774038 (10th Cir. 2000) (unpublished table decision), the Tenth Circuit held that the plaintiff had alleged with sufficient particularity a violation of the Securities Exchange Act of 1934. See 2000 WL 1774038, at *4. The Tenth Circuit concluded that the complaint adequately met Rule 9(b) requirements. First, as the district court acknowledged, the Complaint alleged misrepresentations with background information as to date, speaker, and the medium of communication.... Second, certain of the alleged misrepresentations involved profitable expectations arising from an unowned and inoperable meat-packing plant, a nonexistent lumber company, and fabricated contracts. Accepting Sheldon’s allegations as true, these are patently false statements of present fact. The district court erred in determining they were mere conclusory allegations of falsity and in characterizing them as fraud by hindsight.... Third, the allegations of scienter were sufficient. In securities fraud cases, although speculation and conclusory allegations will not suffice, great specificity is not required if the plaintiff alleges enough facts to support a strong inference of fraudulent intent. 2000 WL 1774038, at *5 (citations omitted) (internal quotation marks omitted). “At a minimum, Rule 9(b) requires that a plaintiff set forth the who, what, when, where and how of the alleged fraud.” United States ex rel. Schwartz v. Coastal Healthcare Grp., Inc., 232 F.3d 902, 2000 WL 1595976, at *3 (10th Cir.2000) (unpublished table decision). “To survive a motion to dismiss, an allegation of fraud must ‘set forth the time, place, and contents of the false representation, the identity of the party making the false statements and the consequences thereof.’ ” Midgley v. Rayrock Mines, Inc., 374 F.Supp.2d 1039, 1047 (D.N.M.2005) (Browning, J.) (quoting Schwartz v. Celestial Seasonings, Inc., 124 F.3d at 1252). “On the other hand, rule 9(b) does not require specific knowledge regarding the defendant’s state of mind.” Midgley v. Rayrock Mines, Inc., 374 F.Supp.2d at 1047. RELEVANT LAW REGARDING FRAUD The elements of fraudulent misrepresentation are: “(i) a misrepresentation of fact, (ii) either knowledge of the falsity of the representation or recklessness on the part of the party making the misrepresentation, (iii) intent to deceive and to induce reliance on the misrepresentation, and (iv) detrimental reliance on the misrepresentation.” Pedroza v. Lomas Auto Mall, Inc., 600 F.Supp.2d 1162, 1167 (D.N.M.2009) (Browning, J.) (quoting Cain v. Champion Window Co. of Albuquerque, 142 N.M. 209, 216, 164 P.3d 90, 97 (Ct.App.2007)) (internal quotation marks omitted). Fraudulent “[ijntent may be inferred from the circumstances surrounding the dealings.... ” Maxey v. Quintana, 84 N.M. 38, 42, 499 P.2d 356, 360 (Ct.App.1972). While New Mexico courts have not discussed third-party liability for fraud, the general rule is: The maker of a fraudulent misrepresentation is subject to liability for pecuniary loss to another who acts in justifiable reliance upon it if the misrepresentation, although not made directly to the other, is made to a third person and the maker intends or has reason to expect that its terms will be repeated or its substance communicated to the other, and that it will influence his conduct in the transaction or type of transaction involved. Pedroza v. Lomas Auto Mall, Inc., 600 F.Supp.2d 1162, 1167 (D.N.M.2009) (citing Restatement (Second) of Torts § 533 (2009)). RELEVANT LAW REGARDING NEW MEXICO’S UFTA N.M.S.A. § 56-10-18 provides: A. A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1)with actual intent to hinder, delay or defraud any creditor of the debt- or; or (2)without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debt- or: (a) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (b) intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due. B. In determining actual intent under Paragraph (1) of Subsection A of this section, consideration may be given, among other factors, to whether: (1) the transfer or obligation was to an insider; (2) the debtor retained possession or control of the property transferred after the transfer; (3) the transfer or obligation was disclosed or concealed; (4) before the transfer was made or obligation was incurred, the debtor has been sued or threatened with suit; (5) the transfer was of substantially all the debtor’s assets; (6) the debtor absconded; (7) the debtor removed or concealed assets; (8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; (10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and (11) the debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor. N.M.S.A. 1978, § 56-10-