ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT, IN PART, AND DISMISSING PLAINTIFF HASMUKHBHAI K. PATEL'S DERIVATIVE CLAIMS IN THIS ADVERSARY PROCEEDING

ROBERT H. JACOBVITZ, Bankruptcy Judge.

THIS MATTER is before the Court on the Motion of Dipakkumar Vanmalibhai Patel and Padmaben Dipakkumar Patel for Partial Summary Judgment against Hasmukhbhai K. Patel as a Party ("Motion for Partial Summary Judgment"), filed by and through their attorneys of record, Moore, Berkson & Gandarilla, P.C. (George M. Moore and Arin E. Berkson). See Docket No. 20. Defendants also filed a Memorandum in Support of Defendants' Motion for Partial Summary Judgment (Docket No. 20-1). Plaintiffs filed a response with supporting affidavit, and Defendants filed a reply with supporting affidavit. See Docket No. 23 and Docket No. 24.1

Plaintiffs filed this action for a determination of non-dischargeability of debt under 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(5), naming Roshan Hospitality, LLC as a Plaintiff, and also "as a nominal defendant solely in a derivative capacity." See Complaint to Determine Dischargeability of Debt ("Complaint"), ¶ 12 — Docket No. 1. Defendants seek dismissal of all claims made by Plaintiff Hasmukhbhai K. Patel (hereinafter, H.K. Patel) on grounds that he lacks standing to bring this action in his individual capacity or as a derivative action on behalf of Roshan Hospitality, LLC (the "Company") because he was not a member of the Company at any time relevant to the alleged wrongful acts described in the Complaint. In response to the Motion, H.K. Patel counters that 1) he is a creditor of the Company and of the Defendants individually; 2) he has been involved in the business affairs of the Company since its inception; 3) he has a community property interest in his wife's formal ownership interest in the Company sufficient to confer standing; and 4) his interactions with the parties and with the Company make him a de facto member of the Company. See Response to Defendants['] Motion for Summary Judgment ("Response") — Docket No. 23.

After consideration of the Motion for Partial Summary Judgment, the supporting memorandum and affidavit, Defendants' Response, and Plaintiffs' reply with supporting affidavit, and being otherwise sufficiently informed, the Court finds that the facts not subject to genuine dispute establish, as a matter of law, that H.K. Patel does not hold an interest in the Company sufficient to confer standing to assert a derivative action. However, because the Motion for Partial Summary Judgment seeking dismissal of H.K. Patel, individually, relies solely on the fact that H.K. Patel does not hold a membership interest in the Company, it is not appropriate to dismiss H.K. Patel from this adversary proceeding in his individual capacity.2 The Court will, therefore, grant the Motion for Partial Summary Judgment, in part, and dismiss Plaintiff H.K. Patel in his capacity as member of the Company seeking a derivative claims against Defendants.

SUMMARY JUDGMENT STANDARDS

Summary Judgment, governed by Rule 56, Fed.R.Civ.P., made applicable to adversary proceedings by Rule 7056, Fed.R.Bankr.P., will be granted when the movant demonstrates that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. Rule 56(a), Fed.R.Civ.P. In order to defeat a motion for summary judgment, the opposing party must "go beyond the pleadings and by [his] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal citations omitted). When evaluating a motion for summary judgment, the Court must view the facts in the light most favorable to the party opposing summary judgment. Harris v. Beneficial Oklahoma, Inc., (In re Harris), 209 B.R. 990, 995 (10th Cir. BAP 1997) ("When applying this standard, we are instructed to `examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment."') (quoting Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir. 1995) (quoting Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990) (additional internal quotation marks omitted)).

FACTS

Defendants identify the following facts as not subject to genuine dispute: 1) Defendant H. K. Patel is not a member of the Company; 2) Ushaben H. Patel ("Usha Patel") owns a minority interest in the Company; and 3) the only parties to this adversary proceeding who are members of the Company are Usha Patel and Dipakkumar Vanmalibhai Patel ("Danny Patel"). Defendant H.K. Patel's Response denies that he is not a member of the Company, but his affidavit does not assert that he holds a formal membership interest in the Company. And though Defendants' Response denies that Usha Patel holds a minority interest in the Company, H.K. Patel's Affidavit contains an affirmative statement that Usha Patel is a minority member of the Company. See Affidavit of Hasmukhbhai Patel, ¶ 6 — Docket No. 23-1. Plaintiffs' Response is not supported by any evidence to the contrary.

DISCUSSION

Defendants assert that because H.K. Patel does not hold a membership interest in the Company, he lacks standing to assert a derivative action on behalf of the Company. H.K. Patel counters that he holds a beneficial ownership interest in his wife's membership interest in the Company sufficient to confer derivative standing. The Court concludes that H.K. Patel does not have standing to assert a derivative action because he is not a member of the Company.

To assert a derivative action, a plaintiff must satisfy the procedural requirements of Rule 23.1, Fed.R.Civ.P., and any other requirements of applicable law. See Wallner v. Liebl (In re Liebl), 434 B.R. 529, 537 n.3 (Bankr.N.D.Ill. 2010) (stating that "the Rule 23.1 requirements are procedural pleading requirements, not substantive requirements[,]" and that "[t]he circumstances under which a plaintiff has the right to bring a derivative action is determined by other law.") (citing Moore's Federal Practice — Civil §§ 21.1.03 and 21.1.04)).3 Rule 23.1, Fed.R.Civ.P., made applicable to adversary proceedings by Rule 7023.1, Fed.R.Bankr.P., provides, in relevant part:

Rule 23.1(a), Fed.R.Civ.P.

Rule 23.1(a), Fed.R.Civ.P., permits a shareholder of a corporation, or a member of an unincorporated association, in appropriate circumstances, to assert a derivative action to enforce a right of the corporation or unincorporated association. Assuming that Rule 23.1(a), Fed.R.Civ.P. applies to derivative suits initiated by a member of a limited liability company to enforce a right of the limited liability company, H.K. Patel fails to satisfy the Rule's procedural requirements.

There is a presumption under New Mexico law that all property acquired during marriage is community property of the spouses. N.M.S.A. 1978 § 40-3-12(A) (Repl. Pamp. 2006) ("Property acquired during marriage by either husband or wife, or both, is presumed to be community property.").4 Pursuant to N.M.S.A. 1978 § 40-3-14, either spouse has full power to manage, control, dispose of, or encumber community personal property with certain exceptions. N.M.S.A. 1978 § 40-3-14 (Repl. Pamp. 2006). One exception to this general rule applies when only one spouse is named in the document evidencing ownership of community personal property. N.M.S.A. 1978 § 40-3-14(A) and (B)(1) (Repl. Pamp. 2006).5 Thus, where only one spouse is named in a document evidencing ownership of community personal property, only that spouse has the power to manage, control, dispose of or encumber that property. Id.6

The facts not subject to genuine dispute establish that Usha Patel holds a membership interest in the Company, but H.K. Patel does not. The Affidavit of H.K. Patel states that he contributed funds that were used to purchase Usha Patel's membership interest, but does not contradict the implied fact that only Usha Patel is the record owner of the membership interest held by Usha Patel. Because only Usha Patel, and not H.K. Patel, is named in the document evidencing ownership of the membership interest, H.K. Patel has no right, under New Mexico law, to manage or to exercise any control over his wife's membership interest in the Company on account of his community property interest in the membership interest. Asserting a derivative action to enforce rights of the Company constitutes an exercise of management and control over the membership interest. Accordingly, the Court concludes as a matter of law that under New Mexico's community property statutes H.K. Patel's community property interest in his wife's membership interest in the Company is not of a nature that would give him the right to assert a derivative action to enforce rights of the Company under Rule 23.1, Fed.R.Civ.P.

In addition, other New Mexico law does not confer upon H.K. Patel an interest in his wife's membership interest in the Company sufficient to confer upon him standing to assert a derivative action to enforce the rights of the Company. There is no express provision in the New Mexico Limited Liability Company Act for member derivative actions,7 though the New Mexico Liability Act includes a directive that "the principles of law and equity supplement that act, including such principles applicable to corporations and their owners." N.M.S.A. 1978 § 531-9-65 (Repl. Pamp. 2001). The New Mexico Business Corporation Act provides for derivative suits brought by shareholders of a corporation against the corporation. N.M.S.A. 1978 § 53-114-7 (Repl.Pamp. 2001). Section 53-11-47 provides, in relevant part:

N.M.S.A. 1978 § 53-11-47(A) (1) (Repl. Pamp. 2001).

The New Mexico Supreme Court has extended the scope of corporate derivative suits to partnerships, but the New Mexico Court of Appeals has declined to decide whether derivative suits can be brought in other, similar settings.8 Even if the general directive contained in the New Mexico Limited Liability Company Act were sufficient grounds to apply the provisions of the New Mexico Business Corporation Act governing shareholder derivative suits to limited liability companies and their members, N.M.S.A. 1978 § 53-11-47 does not confer standing upon H.K. Patel.

The New Mexico Business Corporation Act extends standing to assert a derivative action to a "beneficial owner of shares held by a nominee."9 N.M.S.A. 1978 § 53-11-47 (Repl. Pamp. 2001). Such language is not broad enough to include a generalized beneficial ownership interest such as a community property interest under state law. See White on Behalf of Banes Co. Derivative Action v. Banes Co, 116 N.M. 611, 613 and 614, 866 P.2d 339, 341 and 342 (1993) (stating that "[f]or a shareholder to bring an action . . . he or she must be, `a shareholder of record or the beneficial owner of shares held by a nominee or the holder of voting trust certificates at the time of the transaction of which he complains . . . .'" (quoting NMSA 1978 § 53-11-47(A)) and observing, further that, "[t]hus, `[s]tanding is justified only by [the] proprietary interest created by the stockholder relationship and the possible indirect benefits the nominal plaintiff may acquire qua stockholder of the corporation which is the real party in interest.'") (quoting Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 735-36 (3rd Cir. 1970)).10 Therefore, even if provisions of the Business Corporation Act governing derivative suits were extended to limited liability companies, H.K. Patel's community property interest in his wife's membership interest in the Company is insufficient under the statute to confer standing.

Finally, H.K. Patel's assertion that he is a de facto member of the Company is insufficient to confer standing upon him to assert a derivative action. H.K. Patel has cited no case law in support of this proposition. H.K. Patel may have taken such an active role in the day-to-day business activities, financial decisions, and management of the Company that he has become a de facto manager of the Company,11 but such activity is not sufficient to create an ownership interest in the Company that confers upon him the rights of a member.

Defendants' Motion for Partial Summary Judgment includes a request for an award of attorneys' fees but fails to cite any statute or contract between the parties that would establish a right to recovery of attorneys' fees. The Court will, therefore, deny Defendants' request for an award of fees.

Based on the foregoing, IT IS HEREBY ORDERED that the Motion for Partial Summary Judgment is GRANTED, in part, and DENIED, in part. The claims of H.K. Patel filed derivatively on behalf of the Company are DISMISSED. H.K. Patel's claims filed in his individual capacity remain pending.

SO ORDERED.