Frontline Processing Corp. v. Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP

FILED
NOT FOR PUBLICATION APR 28 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FRONTLINE PROCESSING No. 12-35906
CORPORATION; CHRIS KITTLER,
D.C. No. 2:11-cv-00061-SEH
Plaintiffs - Appellants,
v. MEMORANDUM*
BARACK FERRAZZANO
KIRSCHBAUM PERLMAN &
NAGELBERG LLP; WENDI E.
SLOANE; MARTIN ROWE; ROWE
FAMILY CONTROL GROUP; BURT H.
ROWE, JR. MARITAL TRUST; ANNE
ROWE FAMILY TRUST; FIRST
ELDORADO BANCSHARES, INC.;
LEGENCE BANK; FIRST STATE BANK
OF ELDORADO,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Montana
Sam E. Haddon, District Judge, Presiding
Argued and Submitted April 9, 2014
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: HAWKINS, RAWLINSON, and BEA, Circuit Judges.
Appellants Frontline Processing Corp. (Frontline) and Chris Kittler (Kittler)
appeal the district court’s order dismissing their malicious prosecution and abuse
of process claims against Appellees First State Bank of Eldorado (FSB), Barack
Ferrazzano Kirschbaum & Nagelberg (BFKN), Wendi E. Sloane, Martin Rowe,
Rowe Family Control Group, Burt H. Rowe, Jr. Marital Trust, Anne Rowe Family
Trust, First Eldorado Bancshares, Inc. and Legence Bank.
1. The district court erred in holding that it lacked jurisdiction based on
insufficient allegations of diversity jurisdiction in the complaint. The notice of
removal alleged sufficient facts—which Appellants have never challenged— to
establish the requisite diversity jurisdiction because Frontline was a citizen of
Nevada and Montana and all of the defendants were Illinois citizens. See Strotek
Corp. v. Air Transp. Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002)
(recognizing “the core principle of federal removal jurisdiction on the basis of
diversity—namely, that it is determined (and must exist) as of the time the
complaint is filed and removal is effected”) (citations omitted). The lack of a
cross-appeal of the district court’s erroneous ruling “does not act as an automatic
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jurisdictional bar” to our consideration of this issue. Evon v. Law Offices of Sidney
Mickell, 688 F.3d 1015, 1035 n.12 (9th Cir. 2012).
2. The district court erred in holding that Kittler’s malicious prosecution claim
did not relate back to Frontline’s original complaint because the claim “arise[s]
from the same conduct, transaction, or occurrence” as alleged in the original
complaint and Appellees were “provided adequate notice of the claims raised in the
amended pleading.” Williams v. Boeing Co., 517 F.3d 1120, 1133 n.9 (9th Cir.
2008) (citation omitted).
3. The district court erred in dismissing Frontline’s and Kittler’s malicious
prosecution claims. Frontline and Kittler sufficiently alleged plausible claims that
FSB and BFKN maliciously and without probable cause filed groundless
counterclaims and third-party complaints in the underlying federal litigation. See
O’Fallon v. Farmers Ins. Exch., 859 P.2d 1008, 1011-13 (Mont. 1993)
(recognizing that a malicious prosecution claim may be premised on the filing of
groundless counterclaims and third-party complaints). Frontline and Kittler also
sufficiently alleged that the prior proceedings were terminated in their favor. See
id. at 1012-13. Finally, Frontline’s and Kittler’s malicious prosecution claims are
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not “defamation claims in disguise” because falsity of FSB’s claims and
counterclaims, FSB’s knowledge of the claims’ falsity, and damage in the form of
harm to reputation allege the elements of a malicious prosecution claim.1
4. Frontline’s and Kittler’s abuse of process claims were properly dismissed as
untimely. Although Frontline and Kittler alleged that FSB and BFKN were liable
for abuse of process when FSB filed its counterclaims and third-party complaints
in July, 2004, Frontline did not file its abuse of process claim until April 7, 2009—
well beyond Montana’s three-year statute of limitations. See Mont. Code Ann. §
27-2-204(1).
5. As conceded by BFKN, the district court erred in holding that it lacked
personal jurisdiction over BFKN because “[f]or purposes of personal jurisdiction,
the actions of an agent are attributable to the principal.” Myers v. Bennett Law
Offices, 238 F.3d 1068, 1073 (9th Cir. 2001) (citation omitted); see also Baltrusch
1
Our prior decision in Frontline Processing Corp. v. First State Bank of
Eldorado, 389 F. App’x. 748 (9th Cir. July 30, 2010)(mem.) is inapposite because
we did not consider whether the proceedings were terminated in Frontline’s favor
under the standard applicable to a Montana malicious prosecution claim.
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v. Baltrusch, 83 P.3d 256, 262 (Mont. 2003) (holding that, under Montana law, a
partner is an agent of the partnership).
AFFIRMED in part; REVERSED and REMANDED in part. Costs are
awarded to Appellants.
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