Lake v. Hatanaka ( 2021 )

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 12 JAMES LAKE, No. 2:18-cv-02013 JAM-CKD 13 Plaintiff, 14 v. ORDER GRANTING MOTION TO DISMISS 15 TERRY HATANAKA, ET AL., 16 Defendants. 17 18 Pending before this Court is Defendants’ Motion to Dismiss 19 Plaintiff’s Second Amended Complaint (“SAC”). ECF No. 57.1 The 20 SAC contains three claims alleging violations of federal statutes 21 and twenty four state law claims. ECF No. 55. Plaintiff alleges 22 that this Court has federal question and diversity jurisdiction 23 over these claims. See SAC. Plaintiff also requests that the 24 Court exercise supplemental jurisdiction over the state law 25 claims. See SAC. The parties were ordered to file supplemental 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for May 4, 2021. 1 briefs on the issue of diversity jurisdiction. ECF No. 64. The 2 Court has received, read and considered these briefs, ECF Nos. 77 3 and 78, along with the briefs in support of and in opposition to 4 Defendants’ Motion to Dismiss. ECF Nos. 57, 61 and 62. The 5 Court grants Defendants’ Motion to Dismiss for the reasons set 6 forth below. 7 8 I. FEDERAL QUESTION CLAIMS 9 First, as to Plaintiff’s IRS and federal fraud claims 10 (Counts 2 and 3 of the SAC), the Court finds as shown in 11 Defendants’ moving papers, there is no IRS Code Section 1706 and 12 the law is clear that there is no private right of action under 13 any of the other three code sections. See Motion to Dismiss 14 (“MTD”) ECF No. 57 at 10. Plaintiff does not dispute this and 15 instead attempts to argue he can bring a new claim against 16 Defendants under 26 U.S.C. Section 7434. This Section does not 17 give rise to a private right of action for either Plaintiff’s 18 claim that Forms 1099 were fraudulently filed or his claim that 19 Defendants failed to file required Forms W-2. Oliver v. Ocwen 20 Loan Servicing, LLC, 2019 WL 4391122 at *1 (C.D. Cal., July 18, 21 2019, No. CV 19-4756-MWF(ASX)). See generally MTD Reply Brief, 22 ECF No. 62 at 3. 23 Second, as to Plaintiff’s claim under the Fair Labor 24 Standards Act (“FLSA”) (Count 1 of the SAC), this claim fails for 25 lack of plausible factual allegations and is also deficient for 26 failing to allege sufficient facts concerning such matters as the 27 identify of Plaintiff’s alleged employer and hours worked. See 28 MTD, ECF No. 57 at 7-9. Plaintiff’s threadbare, generalized 1 allegations are not sufficient to state a claim under the FLSA. 2 Id. 3 The Court finds that any further amendment of Counts 1, 2 4 and 3 of the SAC would be futile and dismisses these three claims 5 with prejudice. 6 7 II. DIVERSITY CLAIMS 8 Plaintiff contends he is a citizen of Florida and complete 9 diversity exists between the parties such that the Court has 10 jurisdiction over the remaining 24 state law counts of the SAC. 11 See generally ECF No. 78. The parties do not dispute that the 12 amount in controversy exceeds $75,000. Defendants argue that the 13 facts relevant to Plaintiff’s domicile demonstrate overwhelmingly 14 that Plaintiff was domiciled in California for many years prior 15 to filing this lawsuit and confirmed to be domiciled in 16 California for a substantial period of time after the filing of 17 his original complaint in this case. Defendants ask this Court 18 to find there is no diversity of citizenship.2 See generally ECF 19 No. 77. 20 The undisputed facts reveal that Plaintiff moved to 21 California in 1997. Prior to that, he was employed as a Delta 22 Airlines pilot and lived in Florida. In 1997, he sustained an in 23 flight injury and at the end of 1997 or in early 1998 he was 24 transferred by Delta to a California base. From 1997 to 2006 he 25 26 2 Defendants objected to and moved to strike evidence submitted by Plaintiff in addition to his memorandum of points and 27 authorities on the issue of diversity jurisdiction. Plaintiff opposed this motion to strike. ECF Nos. 79, 80. The Court 28 overrules Defendants’ objections and denies the motion to strike. 1 lived in rental apartments in Newport Beach, California while 2 undergoing treatment for his injury. He retired from Delta in 3 2006 and began an on line law school course that allowed him to 4 sit for the California bar exam. In 2010 Plaintiff graduated 5 from law school. He stayed in California from 2006-2010 and made 6 one or two annual trips to Florida, staying with friends or 7 family members. He used a friend’s address in Boca Raton, 8 Florida on government documents but did not own any property in 9 Florida. See ECF No. 77 at 2-5; ECF No. 77-2. 10 In 2010, Plaintiff moved to St. Louis, Missouri. In 2013 he 11 was diagnosed with cancer and it was suggested that he move back 12 to California so he could get treatment at the Long Beach VA. 13 Plaintiff did not seek out any specialists or opportunities to be 14 treated in Florida. Instead, in 2014 he moved back to Southern 15 California and rented an apartment in Long Beach. He was also 16 sworn in as a member of the California Bar later in 2014. 17 Plaintiff maintained a P.O. Box and continued to use his friend’s 18 address in Boca Raton, Florida for governmental documents and 19 filing his federal income tax returns. He stayed in Southern 20 California until March 2017 when he moved into Defendant 21 Hatanaka’s residence in Woodland, California. He maintained an 22 apartment in Newport Beach and stayed there for medical 23 appointments. Plaintiff testified that he ”had no idea” how long 24 he would stay when he moved to Woodland because “there was no 25 definite time frame at the time.” Id. All the alleged acts and 26 failures to act that gave rise to the claims in this lawsuit 27 occurred in California in or around 2017-2018. When Plaintiff 28 and Defendants’ relationship soured, Plaintiff moved to Oregon 1 and remains in Oregon to this day. Defendant was living in 2 California when he filed his original Complaint on July 23, 2018. 3 Id. 4 “[A] person is ‘domiciled’ in a location where he or she has 5 established a “fixed habitation or abode in a particular place 6 and [intends] to remain there permanently or indefinitely.” Lew 7 v. Moss, 797 F.2d 747, 749-750 (9th Cir. 1986). While the 8 intention to remain permanently or indefinitely must exist, that 9 intention is determined by objective facts. Id. at 750. When 10 statements of intent conflict with the objective facts, those 11 statements are “entitled to little weight.” Id. Furthermore, 12 “if a plaintiff’s allegations of jurisdictional facts 13 [establishing diversity of citizenship] are challenged by the 14 defendant, the plaintiff bears the burden of supporting the 15 allegations by competent proof.” Thomson v. Gaskill, 315 U.S. 16 442, 446 (1942). 17 The objective facts in this case demonstrate that Plaintiff 18 changed his domicile from Florida to California no later than 19 2007. These same facts do not support Plaintiff’s argument that 20 he is a citizen of Florida for purposes of determining if 21 diversity jurisdiction exists in this case. In 2007, once he 22 finished medical treatments, Plaintiff established a physical 23 presence in California and his actions evidenced an intention of 24 remaining for the indefinite future. While he moved to Missouri 25 for four years (2010-2014), he definitely did not become 26 domiciled in Florida at any time prior to filing this lawsuit. 27 When he left Missouri, he could have moved to Florida. There is 28 no evidence that Plaintiff could find the medical specialist he 1 needed only in California. He chose to return to his former 2 residence and thereafter demonstrated an intention to reside in 3 California for an indefinite period. As noted above, from 2014- 4 2018, Plaintiff obtained a license to practice law in California, 5 remained physically present in California, moved to Woodland, 6 California and admitted in his deposition that he understood his 7 engagement with Defendant Terry Hatanaka was on a long term 8 basis. While his work for Defendants ended in October 2017, he 9 continued to reside in Woodland and entered into a year long 10 lease. Finally, as noted above, he was physically present and 11 domiciled in California on July 23, 2018 when he filed this 12 lawsuit. 13 The Court notes that Plaintiff has maintained an official 14 paper trail over the decades to support his claim that he is a 15 citizen of Florida. However, his statements that he always 16 planned to return to Florida are not supported by the objective 17 facts in this case. His own self-serving declaration and the 18 declarations of Jeffrey Graham, David Lake and Leopold Neumann in 19 support of Plaintiff’s diversity claim do not persuade the Court 20 that he is a Florida citizen. ECF Nos. 78-2, 78-3, 78-4 and 78-5. 21 At best, Plaintiff had no definite plan to return to Florida, but 22 rather “a mere ‘floating intention to return at some future 23 period.’” This “floating intention” did not prevent Plaintiff’s 24 change of domicile from Florida to California. See ECF No. 77 at 25 9-10. 26 In sum, Plaintiff has failed to meet his burden to show his 27 claim of diversity jurisdiction is proper. The Court finds there 28 is no diversity of citizenship between the parties in this case nee en ne enn en nnn nn en ne on no nnn ne nn nn OE EN 1 and therefore it does not have jurisdiction over the state law 2 claims alleged in Counts 4 through 27 of the SAC. The Court also 3 declines to exercise supplemental jurisdiction over these state 4 law claims. 5 6 TII. ORDER 7 For the reasons set forth above, the court GRANTS 8 Defendants’ Motion to Dismiss this action in its entirety. 9 Counts 1, 2 and 3 are dismissed WITH PREJUDICE. Counts 4 through 10 27 are DISMISSED WITHOUT PREJUDICE to be re-filed in state court 11 if Plaintiff so desires. 12 IT IS SO ORDERED. 13 Dated: August 20, 2021 14 kA 18 teiren staves odermacr 7008 16 17 18 19 20 21 22 23 24 25 26 27 28