The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
COMMUNITY HEALTH )
DEVELOPMENT PARTNERS LLC, et al., )
)
Plaintiffs, )
)
v. ) Case No. CIV-24-295-SLP
)
CHRIS E. OSBORNE, et al., )
)
Defendants. )
O R D E R
Before the Court is the Motion to Dismiss [Doc. No. 18] filed by Defendants Chris
E. Osborne, Taylor Horst, and Bill Nelson. Plaintiffs Community Health Development
Partners, LLC (“CHDP”), CHDP Lake Havasu, LLC, CHDP Pahrump, LLC, CHDP
Elko, LLC, Elko Community Health Center, LLC, Lake Havasu Community Health
Center, LLC, Pahrump Community Health Center, LLC, Jarrett Portz, David Lutz, and
Aristotle Investment Holdings, LLC filed a Response [Doc. No. 25]. Defendants did not
reply, and the time to do so has passed. The Motion is DENIED.
I. Factual Background1
The Plaintiffs in this action are all individuals and entities associated with the
construction of certain ambulatory surgery centers (“ASCs”) in the western United States.
Defendants are officers of BancCentral, the lender for a series of loans supporting the
1 The Court accepts all well-pleaded factual allegations in the Complaint as true and construes
them in the light most favorable to Plaintiff. See Farmer v. Kan. State Univ., 918 F.3d 1094,
1102 (10th Cir. 2019).
financing and construction of the ASCs. Four different loans are the subject of this
Complaint.2
The bank made the first loan at issue to Plaintiff CHDP Elko on December 30,
2020. The parties intended for CHDP Elko to use the proceeds of this loan “to fund a
‘leverage loan’ through a structure utilizing new market tax credits (‘NMTC’).” [Doc.
No. 1] ¶ 12. Indeed, “CHDP Elko and its affiliates realized the benefit of the NMTC
loans through Elko CHC receiving loans from a ‘community development entity’ lender
(‘CDE Lender’) to fund the construction of the Elko ASC.” Id. At the same time the
bank executed the promissory note, Plaintiffs CHDP, Portz, Lutz, and Aristotle (“the
Guarantor Plaintiffs”) executed a guaranty agreement related to the loan.
In October of the following year, the bank made the second loan to CHDP Lake
Havasu to partially finance another ASC. Like the first loan, the parties intended CHDP
Lake Havasu to use “the proceeds of [this] loan to fund a NMTC leverage loan.” Id.
¶ 14. And, like the Elko loan, “CHDP Lake Havasu and its affiliated realized the benefit
of the NMTC loans through LH CHC receiving loans from a CDR Lender to fund the
construction of the Lake Havasu ASC.” Id. The Guarantor Plaintiffs also executed a
guaranty agreement as to this loan.
The bank made the third loan on March 17, 2022, also to CHDP Lake Havasu, “to
further finance the construction of the Lake Havasu ASC.” Id. ¶ 19. The proceeds from
2 This dispute is part of a larger series of litigation between the parties and their associates. All
related litigation has been consolidated into Case No. CIV-24-368-SLP. Based on the denial of
the instant Motion, the Court will consolidate this action into Case No. CIV-24-368-SLP by
separate order.
this loan, like the previous loan, were intended “to fund a NMTC leverage loan,” and
“CHDP Lake Havasu and its affiliated realized the benefit of the NMTC loans through
LH CHC receiving loans from a CDE Lender to fund the construction of the Lake
Havasu ASC.” Id. As with the previous loans, the Guarantor Plaintiffs executed a
guaranty agreement related to this loan.
The next day, the bank made a loan to CHDP Pahrump “to partially finance the
construction of an ASC in Pahrump, Nevada.” Id. ¶ 21. CHDP Pahrump used “the
proceeds of [this] loan to fund a NMTC leverage loan,” and it “realized the benefit of the
NMTC loans through Pahrump CHC receiving loans from a CDE Lender to fund the
construction of the Pahrump ASC.” Id. Finally, the Guarantor Plaintiffs again executed
a guaranty agreement. Plaintiffs allege that “the Loans were at all times planned in their
respective totality,” and they “would not have entered into the Loans but for the
representations and understandings related to the NMTC leverage loan hierarchy.” Id.
¶ 23.
Broadly speaking, Plaintiffs allege Defendants interfered with their ability to use
the proceeds of the loans for their intended purpose. The documents supporting the loans
established that “the CDE Lenders retained sole control over and had the sole security
interest in the accounts held at the Bank,” and, conversely, “the Bank had no security
interest in or other rights to the funds held in the Bank accounts.” Id. ¶ 30. The bank
also agreed “to follow the instructions of the CDE Lenders and the disbursement agent.”
Id. Nevertheless, “Defendants began a pattern of refusing to follow the instructions of
the CDE Lenders and alleging the Bank has a security interest in, or other rights to, the
funds held in the Bank accounts.” Id. ¶ 31.
About a month after the closing of the first loan, BancCentral—“acting at the
direction of Osborne, a Director of the Bank . . . and others”—“circulated a draft Cash
Deposit and Security Agreement” for Plaintiffs’ review. Id. ¶ 28. BancCentral reported
that the agreement would “ease the concerns of regulators regarding” the first loan.3 Id.
¶ 28. Although Plaintiffs were assured the agreement “would not impact the ability to
use the Loans’ proceeds,” Defendants later relied on the agreement to argue BancCentral
“could refuse the release of the proceeds.” Id. ¶¶ 28–29.
In May 2022, “the Board suggested that the Bank may be able to approve cash
releases if [Plaintiffs] agreed to a change in terms to the Loans,”4 including significantly
shorter terms and different interest rates. Id. ¶ 33. About four months later, Plaintiffs
were required to refinance the first loan. See id. ¶ 32. “Plaintiffs were forced to
refinance [this] Loan in order to get the Board to release funds for the Lake Havasu and
Pahrump ASCs” after “Defendants represented to certain of the Plaintiffs that the Bank
would not release the Loans’ proceeds . . . unless Plaintiffs decreased [their] liabilities
3 As set forth in the Complaint, BancCentral entered into a consent order with the Comptroller of
the Currency in November 2021—shortly after the second loan. That order recognized the
bank’s “unsafe or unsound practices regarding management and board supervision, strategic and
capital planning, risk ratings and loan review, credit administration, and the allowance for loan
and lease losses.” [Doc. No. 1] ¶ 16. The consent order required the bank to achieve a certain
leverage ratio by March 31, 2022. Id. ¶ 17. Nevertheless BancCentral has continued to have
“liquidity and capitalization issues” such that it “is presently in violation of the Consent Order.”
Id. ¶ 18.
4 As set forth in the Complaint, “the Board” refers to Defendants Horst, Osborne, “and others.”
Id. ¶ 28.
with the Bank.” Id. Plaintiffs allege this forced refinancing caused more than $1,400,000
in damages. Id.
In March 2023, Plaintiff “Portz met with the Board and discussed the challenges
of getting funds released.” Id. ¶ 34. After this meeting, the Board twice assured Plaintiff
Portz that BancCentral “would honor [its] agreements and release funds.” Id. The Board
“also attempted to convince Portz to make a substantial investment in the Bank.” Id. But
by August of that year:
Defendants had (i) refused to release funds for construction; (ii) attempted
to renegotiate terms on economically performing loans that were not in
default; (iii) attempted to extract additional collateral from unrelated
projects for no consideration; and (iv) suggested that the Bank would only
uphold and fulfill its legal obligations if Portz paid down completely
unrelated debt.
Id. ¶ 35. In response, some of the Plaintiffs sent a demand letter to BancCentral on
August 28, 2023. Id. ¶ 36. With the support of the CDE Lenders, they “request[ed] the
immediate release of all funds held for the Lake Havasu and Pahrump ASC projects.” Id.
Plaintiffs Portz and Lutz met with Defendants Horst and Osborne, who “approved
the withdrawal of the funds pursuant to approved wire transfer forms executed by the
Bank and certain of the Plaintiffs” on August 28, 2023. Id. ¶ 37. The following day,
Defendant Osborne emailed Plaintiffs Portz and Lutz, stating:
I had no idea that these relationships were being mismanaged structure wise
and ‘event’ wise on our end.
This didn’t happen overnight and its very obvious to me that we didn’t’
have senior management nor board members that stayed on top of making
this work effectively for both of you.
I am truly gut wrenched and deeply sorry for what this has done to [David],
Jarrett and all of the successful business enterprises that each of you are a
part of.
Id. ¶ 38 (punctuation and alteration in original).
Despite these reassurances, BancCentral, “through counsel acting at the direction
of Defendants, sent notices of default (the “Default Notices”) to Plaintiffs” roughly two
months later. Id. ¶ 39. These notices claimed Plaintiffs CHDP Lake Havasu and CHDP
Pahrump “failed to maintain certain balances in the[ir] accounts,” in violation of the cash
deposit agreement. Id. ¶ 40. The notices further stated that “an event of default under the
Cash Deposit Agreement constitutes an event of default under the Loan.” Id.
Plaintiffs sent a letter rebutting the claim that they were in default, quoting the
more complete provision in the cash deposit agreement: “Borrower shall at all times
maintain a balance in the Account… unless Lender (i) approves of a reduction in the
amount required to be maintained in the Account or (i) approves withdraw[al]s from the
Account pursuant to a request from Borrower…” Id. ¶ 42 (ellipses in original). Plaintiffs
claimed that because Defendants “Horst and Osborne had approved of the withdrawals
and had wired out the funds,” there was no breach of the agreement. Id.
Nevertheless, “the Bank, through counsel acting at the direction of Defendants,
sent a follow up letter again threatening default and acceleration of” certain loans based
“solely to an alleged failure to maintain the Cash Deposit Agreements.” Id. ¶ 43. As a
result of this purported breach, BancCentral, “acting at the direction of Defendants,”
accelerated certain loans and “declared default of the Guaranty Agreement.” Id. ¶¶ 49–
53. BancCentral also filed a pair of lawsuits related to the disagreement,5 both of which
were verified by Defendant Nelson as “Chief Credit Officer and Executive Vice President
of the Bank.” Id. ¶ 47.
Finally, Plaintiffs allege “Defendants communicated to prospective buyers of the
Loans intentionally defamatory statements about certain of the Plaintiffs,” causing
reputational harm. Id. ¶ 54. Specifically, the statements referenced Plaintiffs Portz and
Lutz “screw[ing] over” and “dup[ing]” BancCentral. Id. The bank also, “acting through
counsel at the direction of Defendants,” sent notices of default to Plaintiffs and their
affiliates regarding loans which are not the subject of this litigation. See id. ¶¶ 55–58.
The basis for those notices is related to the alleged breaches of the agreements described
above.
Plaintiffs filed this lawsuit on March 22, 2024. The Complaint includes six causes
of action: (1) aiding and abetting breach of the implied covenant of good faith and fair
dealing/tortious breach; (2) fraud/fraud in the inducement/constructive fraud; (3) tortious
interference with contract/business relations; (4) tortious interference with a prospective
contract; (5) negligence; and (6) slander.
II. Legal Standard
Defendants move for dismissal pursuant to Federal Rule of Civil Procedure
12(b)(6). To withstand a motion to dismiss under Rule 12(b)(6), “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
5 BancCentral voluntarily dismissed both lawsuits. See BancCentral v. CHDP Lake Havasu
LLC, 24-212-SLP (W.D. Okla. Sept. 20, 2024); BancCentral v. CHDP Pahrump LLC, 24-219-
SLP (W.D. Okla. Sept. 20, 2024).
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). A facially plausible complaint contains “factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” S.E.C. v. Shields, 744 F.3d 633, 640 (10th Cir. 2014)
(quoting Iqbal, 556 U.S. at 678). While the complaint need not contain “detailed factual
allegations,” it must include “more than labels and conclusions” or a “formulaic
recitation of the elements of a cause of action” to avoid dismissal. Twombly, 550 U.S. at
555. In evaluating a 12(b)(6) motion, the Court accepts all well-pleaded allegations as
true, views those allegations in the light most favorable to the non-moving party, and
draws all reasonable inferences in the non-moving party’s favor. Brown v. City of Tulsa,
124 F.4th 1251, 1263 (10th Cir. 2025).
III. Analysis
Defendants raise three grounds for dismissal under Rule 12(b)(6). First, they
argue that the Complaint is devoid of “any conduct of the named Defendants that could
conceivably be actionable.” [Doc. No. 18] at 2. Second, they contend that the claims are
“barred as premature under 12 O.S. § 682(b)” because “Defendants were acting within
the scope of their roles with the Bank.” Id. Finally, Defendants claim that the claims
should “fail because the Bank and Defendants did not owe any duties to Plaintiffs under 6
O.S. § 425.” Id. The Court takes each argument in turn.
A. Sufficiency of the Allegations
First, Defendants argue Plaintiffs have “engage[d] in improper group pleading” by
“refer[ring] to ‘Defendants’ and ‘the Bank’ as a collective whole rather than making
particularized allegations as to each of the named Defendants.” [Doc. No. 18] at 3. To
be sure, the Complaint often makes collective references to Defendants and discusses the
conduct of the bank, which is not a party to this lawsuit. But, as detailed above, the
Complaint also includes sufficient allegations about the individual conduct of each
Defendant, and allegations that Defendants often acted in concert. Accordingly, the
Court declines to dismiss the Complaint on this ground.
Relatedly, Defendants contend the Complaint has failed to allege fraud with
particularity.6 Federal Rule of Civil Procedure 9(b) requires a party “alleging fraud or
mistake” to “state with particularity the circumstances constituting fraud or mistake.”
Claims 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.”
Toone v. Wells Fargo Bank, N.A., 716 F.3d 516, 522 (10th Cir. 2013) (quoting Koch v.
Koch Indus., Inc., 203 F.3d 1202, 1236 (10th Cir. 2000)). But “Rule 9(b) does not
require omniscience; rather the Rule requires that the circumstances of the fraud be pled
with enough specificity to put defendants on notice as to the nature of the claim.” United
States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 745 (10th Cir. 2018) (quoting
Williams v. Duke Energy Int’l, Inc., 681 F.3d 788, 803 (6th Cir. 2012)).
6 This argument applies to Plaintiff’s second claim for “fraud/fraud in the inducement/
constructive fraud.” [Doc. No. 1] at 18.
The Court agrees with Plaintiffs that the factual allegations are sufficient to satisfy
the heightened pleading standard set forth in Rule 9(b).7 For example, the Complaint
alleges the Board caused a new cash deposit agreement to be circulated on February 2,
2021 to “ease the concerns of regulators regarding the Elko loan.” [Doc. No. 1] ¶ 28. On
August 28, 2023, Defendants Horst and Osborne expressly approved withdrawal of the
funds, and Defendant Osborne apologized for the mismanagement of the relationship the
following day. Nevertheless, Defendants directed notices of default—premised on a
violation of the cash deposit agreement—to be sent to Plaintiffs on October 18, 2023. Id.
¶ 39. Defendants took the position “that the Bank could refuse to release the proceeds
pursuant to the Cash Deposit Agreements,” despite representations “that the Cash Deposit
Agreement would not impact the ability to use the Loans’ proceeds.” Id. ¶¶ 28–29.
Plaintiffs allege the failure to release proceeds negatively impacted them because it
impeded their ability “to fund the construction of the ASCs” in accordance with the
planned leverage loan structure. Id. ¶ 29. Finally, Plaintiffs allege “Defendants made
false promises and misrepresentations . . . to induce Plaintiffs” enter into the loans. Id.
¶ 67. These allegations sufficiently “set forth the time, place, and contents of the false
representation, the identity of the party making the false statements and the consequences
thereof.” Toone, 716 F.3d at 522.
7 Plaintiffs alternatively argue that Rule 9(b) doesn’t apply because they have pled constructive
rather than actual fraud. Because the Court finds the Complaint satisfies the heightened pleading
standard, it need not address this alternative argument.
B. Section 682(b)
Next, Defendants argue any claims against them “in their individual capacity are
barred as premature” under Okla. Stat. tit. 12, § 682(B).8 [Doc. No. 18] at 7. That statute
reads, in relevant part:
No suit or claim of any nature shall be brought against any officer, director
or shareholder for the debt or liability of a corporation of which he or she is
an officer, director or shareholder, until judgment is obtained therefor
against the corporation and execution thereon returned unsatisfied. This
provision includes, but is not limited to, claims based on vicarious liability
and alter ego. Provided, nothing herein prohibits a suit or claim against an
officer, director or shareholder for their own conduct, act or contractual
obligation, not within the scope of their role as an officer, director or
shareholder, arising out of or in connection with their direct involvement in
the same or related transaction or occurrence.
Okla. Stat. tit. 12, § 682(B) (emphasis added).
According to Defendants, the Complaint’s allegations pertain only to actions
Defendants took within the scope of their roles at BancCentral. They urge the Court to
dismiss the claims against them as premature under § 682(B). Plaintiffs contend they
have pled facts demonstrating Defendants were individually involved in the events giving
rise to their claims, and that “it is improper to make a determination regarding
Defendants’ status at the pleading stage.” [Doc. No. 25] at 6.
While this case presents a closer call than some of those cited by Plaintiffs’
counsel, the Court ultimately agrees that the Complaint sets forth minimal facts to avoid
dismissal at the pleading stage. For example, Plaintiffs have alleged that Defendants
8 Both parties rely on Oklahoma law and presume that § 682(B) applies to the Defendants as the
bank’s officers. Accordingly, the Court does the same. See Union Standard Ins. Co. v. Hobbs
Rental Co., 566 F.3d 950, 952 (10th Cir. 2009).
Horst and Osborne falsely “assured Portz that they would honor the Bank’s agreements
and release funds” on multiple occasions. [Doc. No. 1] ¶ 34. Plaintiffs also allege that
Defendant Nelson falsely verified additional lawsuits, and that those lawsuits were used
as a basis for default. Id. ¶¶ 45–46, 55. Accepting these facts as true and viewing them
in the light most favorable to Plaintiffs, the Court finds dismissal pursuant to § 682(B) is
not warranted at the pleading stage.
C. Section 425
Finally, Defendants argue neither they nor the bank owe a legal duty to Plaintiffs,
citing Okla. Stat. tit. 6, § 425. That statute reads, in relevant part:
Unless a state or national bank shall have expressly agreed in writing to
assume special or fiduciary duties or obligations, no such duties or
obligations will be imposed on the bank with respect to a depositor of the
bank or a borrower, guarantor or surety, and no special or fiduciary
relationship shall be deemed to exist.
Id. Defendants argue that because the Complaint lacks any allegation of an express,
written assumption of such duties, Claims I (breach of an implied duty of good faith and
fair dealing, and) and Claim V (negligence) must fail.9
Plaintiffs push back on this assertion and point out that “Defendants offer no
authority” for this interpretation of § 425. They further contend that the relevant claims
do not stem from “[a] special or fiduciary duty,” but instead involve only the “implied
duty of good faith and fair dealing” contained in “[e]very contract in Oklahoma.” [Doc.
No. 25] at 11 (alteration in original) (quoting Wathor v. Mut. Assur. Adm’rs, Inc., 87 P.3d
559, 561 (Okla. 2004)).
9 These are the only claims implicated by Defendants’ § 425 argument. See [Doc. No. 18] at 9.
The Complaint’s allegations support Plaintiff's position. See, e.g., [Doc. No. 1] at
16 (alleging claim of “aiding and abetting breach of the implied covenant of good faith
and fair dealing/tortious breach”) (emphasis added); id. at 21, | 85 (“Defendants had a
duty to act in good faith and with ordinary care and diligence when conducting the
Bank’s affairs.”). Because nothing in Claims I or V appears to implicate a special or
fiduciary duty, § 425 is inapplicable. Accordingly, Defendants’ motion to dismiss the
claims on this ground is DENIED.
IV. Conclusion
IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss [Doc. No.
18] is DENIED.
IT IS SO ORDERED this 14 day of May, 2025.
SCOTT L. PALK
UNITED STATES DISTRICT JUDGE
13