(PS) Liam Meyer Irrevocable Trust v. Chan ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 LIAM MEYER IRREVOCABLE TRUST, No. 2:23-cv-1472 KJM DB PS LIAM MEYER, 12 13 Plaintiff, ORDER 14 v. 15 SIMON CHAN, et al., 16 Defendants, 17 18 Plaintiff Liam Meyer is proceeding in this action pro se. This matter was referred to the 19 undersigned in accordance with Local Rule 302(c)(21) and 28 U.S.C. § 636(b)(1). Pending 20 before the undersigned are defendants’ Attorneys Real Estate Group (“ARG”), Roberto Cruz, and 21 Ruby Bitzer’s motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil 22 Procedure, as well as plaintiff’s motions to dismiss and for default judgment. (ECF Nos. 4, 6, 9 23 & 10.) For the reasons stated below, defendants’ motion to dismiss will be granted, plaintiff’s 24 motions will be denied, and plaintiff will be granted leave to amend. 25 //// 26 //// 27 //// 28 //// 1 BACKGROUND 2 Plaintiff, proceeding pro se, commenced this action on May 10, 2023, by filing a 3 complaint in the Sacramento County Superior Court. (ECF No. 1 at 8.1) Therein, plaintiff alleges 4 that this action “centers on the sale of a real property” located in Sacramento, California, on 5 September 11, 2019. (Compl. (ECF No. 1) at 9.) “This is essentially a ‘Failure to Disclose,” 6 Negligence and Fraud Case,” however, “the Defendants are violating Plaintiff’s Civil Rights, and 7 . . . working as an enterprise and using criminal fraud[.]” (Id.) Therefore, “it is a Civil Rico 8 action as well.” (Id.) 9 On July 21, 2023, defendants removed the matter to this court pursuant to federal question 10 jurisdiction. (ECF No. 1 at 1.) On July 28, 2023, defendants filed a motion to dismiss but 11 erroneously noticed it for hearing before the assigned District Judge. (ECF Nos. 4 & 5.) On 12 August 15, 2023, defendants re-noticed their motion for hearing before the undersigned. (ECF 13 No. 15.) 14 Plaintiff failed to file a statement of opposition or non-opposition to defendants’ motion. 15 Accordingly on October 20, 2023, the undersigned issued plaintiff an order to show cause. (ECF 16 No. 8.) On November 14, 2023, plaintiff filed a motion to dismiss. (ECF No. 9.) On November 17 16, 2023, plaintiff filed a motion for default judgment.2 (ECF No. 10.) On November 27, 2023, 18 defendants’ motion was taken under submission. (ECF No. 11.) 19 STANDARDS 20 I. Legal Standards Applicable to Motions to Dismiss Pursuant to Rule 12(b)(6) 21 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 22 sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 23 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 24 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 25 1 Page number citations such as this one are to the page number reflected on the court’s CM/ECF 26 system and not to page numbers assigned by the parties. 27 2 Neither motion filed by plaintiff was noticed for hearing. Pursuant to Local Rule 230(b) “all 28 motions shall be noticed on the motion calendar of the assigned Judge or Magistrate Judge.” 1 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to 2 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A 3 claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw 4 the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 5 Iqbal, 556 U.S. 662, 678 (2009). 6 In determining whether a complaint states a claim on which relief may be granted, the 7 court accepts as true the allegations in the complaint and construes the allegations in the light 8 most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. 9 United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less 10 stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 11 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the 12 form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th 13 Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than 14 an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A 15 pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the 16 elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 676 17 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 18 statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove 19 facts which it has not alleged or that the defendants have violated the . . . laws in ways that have 20 not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 21 459 U.S. 519, 526 (1983). 22 In ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), the court is permitted 23 to consider material which is properly submitted as part of the complaint, documents that are not 24 physically attached to the complaint if their authenticity is not contested and the plaintiff’s 25 complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 26 250 F.3d 668, 688-89 (9th Cir. 2001). 27 //// 28 //// 1 ANALYSIS 2 I. Defendants’ Motion to Dismiss 3 Review of plaintiff’s complaint finds that defendant’s motion to dismiss should be 4 granted. In this regard, the complaint fails to contain sufficient factual allegations related to the 5 conduct of the named defendants. While the complaint names six unique defendants, the 6 complaint frequently and vaguely refers simply to the conduct of the “defendants” without 7 identifying which named defendant engaged in what specific wrongful conduct. (Compl. (ECF 8 No. 1) at 9-12. 23-24.) 9 For example, the complaint alleges that “all Defendants are responsible in some manner 10 for the events described” in the complaint. (Id. at 11.) That the “Defendants . . . did all the 11 alleged damage and are the true responsible parties.” (Id. at 12.) That the “Defendants did not 12 disclose” relevant information to the plaintiff. (Id. at 12-13.) 13 Although the Federal Rules of Civil Procedure adopt a flexible pleading policy, a 14 complaint must give the defendant fair notice of the plaintiff’s claims and must allege facts that 15 state the elements of each claim plainly and succinctly. Fed. R. Civ. P. 8(a)(2); Jones v. 16 Community Redev. Agency, 733 F.2d 646, 649 (9th Cir. 1984). “A pleading that offers ‘labels 17 and conclusions’ or ‘a formulaic recitation of the elements of cause of action will not do.’ Nor 18 does a complaint suffice if it tenders ‘naked assertions’ devoid of ‘further factual 19 enhancements.’” Ashcroft v. Iqbal, 556 U.S.662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 20 557). A plaintiff must allege with at least some degree of particularity overt acts which the 21 defendants engaged in that support the plaintiff’s claims. Jones, 733 F.2d at 649. 22 Moreover, the complaint is attempting to allege claims of fraud and RICO. Rule 9(b) 23 requires that “[i]n alleging fraud or mistake, a party must state with particularity the 24 circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a 25 person’s mind may be alleged generally.” Fed. R. Civ. P 9(b). “Rule 9(b) serves not only to give 26 notice to defendants of the specific fraudulent conduct against which they must defend, but also 27 ‘to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect 28 [defendants] from the harm that comes from being subject to fraud charges, and to prohibit 1 plaintiffs from unilaterally imposing upon the court, the parties and society enormous social and 2 economic costs absent some factual basis.’” Bly–Magee v. California, 236 F.3d 1014, 1018 (9th 3 Cir. 2001) (quoting In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). 4 Circumstances that must be stated with particularity pursuant to Rule 9(b) include the 5 “time, place, and specific content of the false representations as well as the identities of the 6 parties to the misrepresentations.” Sanford v. Memberworks, Inc., 625 F.3d 550, 558 (9th Cir. 7 2010) (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)). Likewise, 8 “[u]nder California law, the ‘indispensable elements of a fraud claim include a false 9 representation, knowledge of its falsity, intent to defraud, justifiable reliance, and damages.’” 10 Vess v. Ciba—Geigy Corp. USA, 317 F.3d 1097, 1105 (9th Cir. 2003) (quoting Moore v. 11 Brewster, 96 F.3d 1240, 1245 (9th Cir. 1996)). 12 To state a RICO claim, a plaintiff must allege: (1) conduct, (2) of an enterprise, (3) 13 through a pattern, (4) of racketeering activity (known as “predicate acts”), (5) causing injury to 14 plaintiff’s business or property. Sanford v. Memberworks, Inc., 625 F.3d 550, 557 (9th Cir. 15 2010); Walter v. Drayson, 538 F.3d 1244, 1247 (9th Cir. 2008); Grimmett v. Brown, 75 F.3d 506, 16 510 (9th Cir. 1996). The alleged enterprise must exist “separate and apart from that inherent in 17 the perpetration of the alleged [activity].” Chang v. Chen, 80 F.3d 1293, 1300-01 (9th Cir.1996). 18 A “pattern of racketeering activity” means at least two criminal acts enumerated by 19 statute. 18 U.S.C. § 1961(1), (5) (including, among many others, mail fraud, wire fraud, and 20 financial institution fraud). These so-called “predicate acts” under RICO must be alleged with 21 specificity in compliance with Rule 9(b) of the Federal Rules of Civil Procedure. Schreiber 22 Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400-01 (9th Cir. 2004); see also 23 Lancaster Community Hospital v. Antelope Valley Hospital Dist., 940 F.2d 397, 405 (9th Cir. 24 1991) (holding with respect to the predicate act of mail fraud that a plaintiff must allege with 25 “particularity the time, place, and manner of each act of fraud, plus the role of each defendant in 26 each scheme”); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392-93 (9th Cir. 27 1988); Pineda v. Saxon Mortgage Services, No. SacV 08-1187 JVS, 2008 WL 5187813, at *4 28 (C.D. Cal. Dec. 10, 2008) (“It is not enough for [plaintiff] to rely on mere labels and conclusions” 1 to establish a RICO claim but rather, plaintiff must give each defendant notice of the particular 2 predicate act it participated in and must allege each predicate act with specificity). 3 Here, the complaint fails to contain sufficient factual allegations to satisfy either Rule 8 or 4 Rule 9(b). Defendants’ motion to dismiss, therefore, should be granted.3 5 II. Leave to Amend 6 For the reasons stated above, plaintiff’s complaint must be dismissed.4 The undersigned 7 has carefully considered whether plaintiff may amend the complaint to state a claim upon which 8 relief can be granted. “Valid reasons for denying leave to amend include undue delay, bad faith, 9 prejudice, and futility.” California Architectural Bldg. Prod. v. Franciscan Ceramics, 818 F.2d 10 1466, 1472 (9th Cir. 1988); see also Klamath-Lake Pharm. Ass’n v. Klamath Med. Serv. Bureau, 11 701 F.2d 1276, 1293 (9th Cir. 1983) (holding that while leave to amend shall be freely given, the 12 court does not have to allow futile amendments). 13 However, when evaluating the failure to state a claim, the complaint of a pro se plaintiff 14 may be dismissed “only where ‘it appears beyond doubt that the plaintiff can prove no set of facts 15 in support of his claim which would entitle him to relief.’” Franklin v. Murphy, 745 F.2d 1221, 16 1228 (9th Cir. 1984) (quoting Haines v. Kerner, 404 U.S. 519, 521 (1972)); see also Weilburg v. 17 Shapiro, 488 F.3d 1202, 1205 (9th Cir. 2007) (“Dismissal of a pro se complaint without leave to 18 19 3 Defendants’ motion to dismiss also argues that some of plaintiff’s claims are barred by the Noerr-Pennington doctrine. (Defs.’ MTD (ECF No. 6-1) at 10.) “Under the Noerr-Pennington 20 doctrine, those who petition any department of the government for redress are generally immune from statutory liability for their petitioning conduct.” Sosa v. DIRECTV, Inc., 437 F.3d 923, 929 21 (9th Cir. 2006). Because plaintiff’s complaint must be dismissed due to the vague and conclusory allegations, the undersigned will not reach that argument at this time. 22 23 4 While less then all defendants have moved to dismiss the complaint a district court may sua sponte dismiss claims asserted against a non-moving defendant where the non-moving defendant 24 is in a similar position to that of a moving defendant. See Abagninin v. AMVAC Chemical Corp., 545 F.3d 733, 742 (9th Cir. 2008) (“As a legal matter, we have upheld dismissal with 25 prejudice in favor of a party which had not appeared, on the basis of facts presented by other defendants which had appeared.”); Silverton v. Department of Treasury of U. S. of America, 644 26 F.2d 1341, 1345 (9th Cir. 1981) (“A District Court may properly on its own motion dismiss an 27 action as to defendants who have not moved to dismiss where such defendants are in a position similar to that of moving defendants or where claims against such defendants are integrally 28 related.”). Here, the non-moving defendants are in a similar position to the moving defendants. 1 amend is proper only if it is absolutely clear that the deficiencies of the complaint could not be 2 cured by amendment.”) (quoting Schucker v. Rockwood, 846 F.2d 1202, 1203-04 (9th Cir. 3 1988)). 4 Here, given the vague and conclusory nature of the complaint’s allegations the 5 undersigned cannot yet say that it appears beyond doubt that leave to amend would be futile. 6 Plaintiff’s complaint will therefore be dismissed, and plaintiff will be granted leave to file an 7 amended complaint. Plaintiff is cautioned, however, that if plaintiff elects to file an amended 8 complaint “the tenet that a court must accept as true all of the allegations contained in a complaint 9 is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, 10 supported by mere conclusory statements, do not suffice.” Ashcroft, 556 U.S. at 678. “While 11 legal conclusions can provide the complaint’s framework, they must be supported by factual 12 allegations.” Id. at 679. Those facts must be sufficient to push the claims “across the line from 13 conceivable to plausible[.]” Id. at 680 (quoting Twombly, 550 U.S. at 557). Plaintiff is cautioned 14 that if the amended complaint does not give the defendants fair notice of plaintiff’s claims and/or 15 fails to allege facts that state the elements of a claim plainly and succinctly the undersigned may 16 recommend that plaintiff’s complaint be dismissed without further leave to amend. 17 Plaintiff is also reminded that the court cannot refer to a prior pleading in order to make an 18 amended complaint complete. Local Rule 220 requires that any amended complaint be complete 19 in itself without reference to prior pleadings. The amended complaint will supersede the original 20 complaint. See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967). Thus, in an amended complaint, 21 just as if it were the initial complaint filed in the case, each defendant must be listed in the caption 22 and identified in the body of the complaint, and each claim and the involvement of each 23 defendant must be sufficiently alleged. Any amended complaint which plaintiff may elect to file 24 must also include concise but complete factual allegations describing the conduct and events 25 which underlie plaintiff’s claims. 26 III. Plaintiff’s Motion to Dismiss 27 On November 14, 2023, plaintiff filed a motion to dismiss. (ECF No. 9.) Therein, 28 plaintiff asks that defendants Cruz, Bitzer, and ARG be dismissed without prejudice. (Id. at 2.) 1 Because plaintiff’s complaint is being dismissed with leave to amend, plaintiff may dismiss any 2 defendant by simply not naming them as a defendant in the amended complaint. Plaintiff’s 3 motion to dismiss, therefore, will be denied without prejudice to renewal as having been rendered 4 moot. 5 Plaintiff’s motion to dismiss also requests that this matter be remanded back to the 6 Sacramento Superior Court. (Id.) Such a request must be made in a formal motion noticed for 7 hearing in compliance with Local Rule 230. Moreover, evaluating the merits of such a motion 8 would rely heavily on the nature of the claims found in the amended complaint. 9 In this regard, 28 U.S.C. § 1441(a) allows a defendant to remove a state court action to 10 federal court if the federal court would have original subject matter jurisdiction over the action. 11 The basic federal jurisdiction statutes are 28 U.S.C. §§ 1331 and 1332, which confer “federal 12 question” and “diversity” jurisdiction, respectively. Federal jurisdiction may also be conferred by 13 federal statutes regulating specific subject matter. “[T]he existence of federal jurisdiction 14 depends solely on the plaintiff’s claims for relief and not on anticipated defenses to those claims.” 15 ARCO Envtl. Remediation, LLC v. Dep’t of Health & Envtl. Quality, 213 F.3d 1108, 1113 (9th 16 Cir. 2000). 17 District courts have diversity jurisdiction only over “all civil actions where the matter in 18 controversy exceeds the sum or value of $75,000, exclusive of interest and costs,” and the action 19 is between: “(1) citizens of different States; (2) citizens of a State and citizens or subjects of a 20 foreign state; (3) citizens of different States and in which citizens or subjects of a foreign state are 21 additional parties; and (4) a foreign state . . . as plaintiff and citizens of a State or of different 22 States.” 28 U.S.C. § 1332. “To demonstrate citizenship for diversity purposes a party must (a) be 23 a citizen of the United States, and (b) be domiciled in a state of the United States.” Lew v. Moss, 24 797 F.2d 747, 749 (9th Cir. 1986). “Diversity jurisdiction requires complete diversity between 25 the parties-each defendant must be a citizen of a different state from each plaintiff.” In re 26 Digimarc Corp. Derivative Litigation, 549 F.3d 1223, 1234 (9th Cir. 2008). 27 //// 28 //// 1 IV. Plaintiff’s Motion for Default Judgment 2 On November 16, 2023, plaintiff filed a motion for default as to defendants Peggy 3 Pickyoke Yee, Sui Cheong Chan, and Simon Chan. “Rule 55 provides a two-step process, first, a 4 party must obtain a clerk’s entry of default under Rule 55(a); second, the party must obtain a 5 default judgment under Rule 55(b).” Douglas v. Kalanta, Case No. 1:21-cv-1535 JLT EPG, 2022 6 WL 815746, at *1 (E.D. Cal. Mar. 17, 2022). 7 Here, plaintiff’s complaint is being dismissed with leave to amend. The filing of an 8 amended complaint would render any default on the original complaint void. See Rhodes v. 9 Robinson, 621 F.3d 1002, 1005 (9th Cir. 2010) (“As a general rule, when a plaintiff files an 10 amended complaint, the amended complaint supercedes the original, the latter being treated 11 thereafter as non-existent.”). In this regard, “after amendment the original pleading no longer 12 performs any function[.]” Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992); see also 13 Massey v. Helman, 196 F.3d 727, 735 (7th Cir. 1999) (“a plaintiff’s new complaint wipes away 14 prior pleadings”). Plaintiff’s motion, therefore, will be denied without prejudice to renewal as 15 having been rendered moot. See Nelson v. Nationwide Mortg. Corp., 659 F. Supp. 611, 615 (D. 16 D.C. 1987) (“In light of Nelson’s filing of an amended complaint, her motions for entry of 17 default judgments against Nationwide, Tillette, and Butler must be denied as moot.”). 18 CONCLUSION 19 Accordingly, IT IS HEREBY ORDERED that: 20 1. Defendants’ July 28, 2023 motion to dismiss (ECF No. 4), re-noticed for hearing on 21 August 15, 2023 (ECF No. 6) is granted; 22 2. The complaint filed May 10, 2023 (ECF No. 1) is dismissed with leave to amend; 23 3. Within twenty-eight days from the date of this order, an amended complaint shall be 24 filed that cures the defects noted in this order and complies with the Federal Rules of Civil 25 Procedure and the Local Rules of Practice.5 The amended complaint must bear the case number 26 assigned to this action and must be titled “Amended Complaint”; 27 5 Alternatively, if plaintiff no longer wishes to pursue this action plaintiff may file a notice of 28 voluntary dismissal of this action pursuant to Rule 41 of the Federal Rules of Civil Procedure. 1 4. Plaintiff's November 14, 2023, motion to dismiss (ECF No. 9) is denied without 2 | prejudice as having been rendered moot; 3 5. Plaintiff's November 16, 2023 motion for default judgment (ECF No. 10) is denied 4 | without prejudice as having been rendered moot; and 5 6. Plaintiff is cautioned that the failure to comply with this order in a timely manner may 6 | result in a recommendation that this action be dismissed. 7 | Dated: February 12, 2024 8 9 10 ORAH BARNES UNITED STATES MAGISTRATE JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 | DLB:6 38 DB/orders/orders.pro se/meyer1472.mtd.ord 10