Mahai Dutciuc v. Meritage Homes of Arizona Inc et al, No. 2:2009cv00866 - Document 63 (D. Ariz. 2009)
Court Description: ORDER granting Defendants to Motion Request to Transform its Motion to Dismiss into a Motion for Judgement on the Pleadings. (Dkt. #61).IT IS FURTHER ORDERED granting Defendants Motion for Judgement on the Pleadings (formerly its Motion to Dismiss) without prejudice. (Dkt. #58).IT IS FURTHER ORDERED granting Plaintiff leave to file his third amended complaint. IT IS FURTHER ORDERED directing Plaintiff to file his third amended complaint by December 30, 2009. IT IS FURTHER ORDERED denying as Moot Plaintiffs Motion to Compel Arbitration. (Dkt. #58).Signed by Judge Mary H Murguia on 12/9/09.(KSP)
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Mahai Dutciuc v. Meritage Homes of Arizona Inc et al 1 Doc. 63 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 ) ) ) Plaintiff, ) ) vs. ) ) Meritage Homes of Arizona, Inc., an) Arizona corporation; MTH Mortgage,) LLC, an Arizona limited liability) ) company; and Does 1-10, ) ) Defendants. ) ) Mahai Dutciuc, No. CV-09-866-PHX-MHM ORDER 17 Currently before the Court is Defendant Meritage Homes of Arizona’s Motion to 18 Dismiss, or In the Alternative, to Compel Arbitration, (Dkt. #58) and Motion to Request to 19 Transform its Motion to Dismiss into a Motion for Judgement on the Pleadings (Dkt. #61). 20 After reviewing the pleadings, and determining that oral argument is unnecessary, the Court 21 issues the following Order. 22 I: PROCEDURAL HISTORY 23 The instant case was originally filed in the Central District of California on September 24 22, 2008. (Dkt.# 52-1). On January 12, 2009, Plaintiff filed his First Amended Complaint, 25 (Dkt. #24), and on February 23, 2009, Plaintiff amended his complaint a second time. (Dkt. 26 #33). Defendant Meritage Arizona and MTH Mortgage, LLC, each filed a Motion to 27 Dismiss Second Amended Complaint on March 12, 2009, (Dkt. #52-1), which Plaintiff 28 Dockets.Justia.com 1 Responded to on April 2, 2009. (Id.). On April 13, 2009, seven days after both Defendants 2 Replied to Plaintiff’s Response, the Honorable James V. Selna held a hearing concerning 3 Defendants’ Motions to Dismiss. (Id.). On April 15, 2009, Judge Selna issued a Minute 4 Order granting Defendant Meritage Home’s Motions to Transfer—filed as part of its Motion 5 to Dismiss—pursuant to 28 U.S.C. § 1404(a) and noted that “[t]he request to compel 6 arbitration and the request to dismiss the fraud claim against MTH [Defendant] are questions 7 for the transferee court.” (Id.); (Dkt. #51). 8 The Central District of California Court officially transferred this case to the District 9 of Arizona on April 24, 2009, and the case was assigned to the Honorable Judge Neil V. 10 Wake. Defendant Meritage Homes of Arizona, Inc. filed the instant Motion to Dismiss, or 11 in the Alternative, to Compel Arbitration, (Dkt. #58), on August 11, 2009, and Plaintiff filed 12 his Response on August 21, 2009. (Dkt. #59). On August 31, 2009, Defendant filed its 13 Answer to Plaintiff’s Second Amended Complaint, (Dkt. #60), as well as its Reply in Support 14 of its Motion to Dismiss, or in the Alternative, to Compel Arbitration. (Dkt. #61). As part 15 of its Reply, Defendant also moved to Transform its Motion to Dismiss into a Motion for 16 Judgement on the Pleadings. (Id.). Prior to deciding these Motions, on October 5, 2009, 17 Judge Wake recused himself, issuing an Order Reassigning Case. (Dkt. #62). As a result, 18 the District of Arizona, by random lot, reassigned the case to this Court. (Id.). 19 20 II: DEFENDANT’S MOTION TO REQUEST TO TRANSFORM ITS MOTION TO DISMISS INTO A MOTION FOR JUDGEMENT ON THE PLEADINGS 21 In their Reply in Support of their Motion to Dismiss, Defendant requests that this 22 Court transform its Motion to Dismiss into a Motion for Judgement on the Pleadings. (Dkt. 23 #61). The purpose of Defendant’s motion is to address procedural defects raised by Plaintiff 24 in his Response brief; namely, Plaintiff’s argument that Defendant’s instant Motion to 25 Dismiss is untimely. (Dkt. #59, p.4–6). A motion to dismiss for failure to state a claim may 26 be denied as untimely or may be treated as a motion for judgment on the pleadings if the 27 motion is filed after the filing of an answer. Beery v. Hitachi Home Electronics, Inc., 157 28 F.R.D. 477, 479 (C.D. Cal. 1993) (citing Aetna Life Ins. Co. v. Alla Medical Services, Inc., -2- 1 855 F.2d 1470, 1474(9th Cir. 1988); Aldabe v. Aldabe, 616 F.2d 1089, 1093 (9th Cir. 1980). 2 Here, Defendant filed its Answer to Plaintiff’s Second Amended Complaint on August 31, 3 2009, (Dkt.#60), and filed its instant Motion to Request to Transform its Motion to Dismiss 4 Into A Motion for Judgement on the Pleadings that same day. (Dkt. #61). Plaintiff has not 5 filed a response to Defendant’s motion, timely or otherwise, and, as a result, this Court will 6 treat it as unopposed. As such, the Court will convert Defendant's Motion to Dismiss into 7 a Motion for Judgment on the pleadings pursuant to Rule 12(c)of the Federal Rules of Civil 8 Procedure. 9 Taking this step both addresses Plaintiff’s procedural concerns and allows this Court 10 to consider the substance of Defendant’s Motion to Dismiss, as “[t]he principal difference 11 between motions filed pursuant to Rule 12(b) and Rule 12(c) is the time of filing.” Dworkin 12 v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Rule 12(c) of the Federal 13 Rules of Civil Procedure provides that “[a]fter the pleadings are closed but within such time 14 as not to delay the trial, any party may move for judgment on the pleadings. "Judgment on 15 the pleadings is proper, when, taking all of the allegations in the pleadings as true, the 16 moving party is entitled to judgment as a matter of law." Honey v. Distelrath, 195 F.3d 531, 17 532–33 (9th Cir. 1999). “[A] court may dismiss a complaint only if it is clear that no relief 18 could be granted under any set of facts that could be proved consistent with the allegation.” 19 Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (internal quotation marks omitted). 20 Functionally speaking, a motion for judgement on the pleadings is no different than a 21 12(b)(6) motion to dismiss, and “[b]ecause the Motions are functionally identical, the same 22 standard of review applicable to a 12(b) motion applies to its Rule 12(c) analog.” Dworkin, 23 867 F.2d at 1192 (noting, also, that “the Hustler defendants' Rule 12(c) motion was 24 equivalent to a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief 25 could be granted”). 26 /// 27 28 -3- 1 III: DEFENDANT’S MOTION FOR JUDGEMENT ON THE PLEADINGS: 2 A. Rule 9(b) 3 Defendant has challenged the sufficiency of Plaintiff’s pleadings concerning fraud. 4 Rule 9(b) of the Federal Rules of Civil Procedure mandates that “[i]n alleging fraud or 5 mistake, a party must state with particularity the circumstances constituting fraud or 6 mistake.” This means that the pleadings must be “be specific enough to give defendants 7 notice of the particular misconduct ... so that they can defend against the charge and not just 8 deny that they have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 9 (9th Cir. 2009) (quoting Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir.2001) 10 (internal quotations omitted)). Accordingly, “[a]verments of fraud must be accompanied by 11 ‘the who, what, when, where, and how’ of the misconduct charged.” Vess v. Ciba-Geigy 12 Corp. USA, 317 F.3d 1097, 1102 (9th Cir.2003). 13 As will be discussed infra, in Section (III)(B) of this Order, the Court is not prepared 14 at this time to determine if the Second Amended Complaint (SAC) alleges all the necessary 15 state-law elements of fraud, as the Parties dispute what law should be applied—Arizona or 16 California—and neither identified or argued their position based on the proper choice-of-law 17 analysis. This circumstance, however, does not prevent this Court from finding that Plaintiff 18 has not met his Rule 9(b) burden. 19 determine whether the elements of fraud have been pled sufficiently to state a cause of 20 action, the Rule 9(b) requirement that the circumstances of the fraud must be stated with 21 particularity is a federally imposed rule.” Vess, 317 F.3d at 1103 (internal quotations 22 omitted). Accordingly, regardless of the Court’s ultimate choice-of-law determination, its 23 consideration of particularity is based on federal, not state concerns. Accordingly, under “[W]hile a federal court will examine state law to 24 25 26 27 28 -4- 1 either Arizona or California’s law1, the Court finds that Plaintiff’s pleadings do not satisfy 2 Rule 9(b). 3 After carefully examining the SAC, it appears to this Court that Plaintiff is attempting 4 to allege not one, but two counts of fraud. Specifically, Plaintiff’s fraud claim appears to be 5 predicated on two wholly separate incidents: (1) representations made to him by a Meritage 6 employee in 2006 which allegedly caused him to enter into a purchase agreement for real 7 property labeled Lot #409; and (2) representations made to him by Meritage Vice President 8 of Sales, Scot Able, which allegedly caused him to enter into a purchase agreement for a 9 different property, Lot #40. (See Dkt. #33, p.9–11). Because, however, these two separate 10 allegations are included under the umbrella of one claim, Plaintiff’s pleading proves 11 confusing and does not “provide [D]efendant[] with adequate notice to allow [it] to defend 12 the charge.” 13 three purposes that Rule 9(b) serves). Indeed, it is not at all together clear which allegations 14 are meant to support which fraud claim, or, even if Plaintiff means to plead two counts of 15 fraud at all. This lack of particularity is unacceptable and will undoubtedly cause confusion 16 should the Court allow this case to move forward. Accordingly, the Court will grant 17 Defendant’s Motion for Judgement on the Pleadings, but without prejudice and with leave 18 to re-file, so Plaintiff can rectify the lack of particularity that plagues the SAC’s allegation 19 of fraud. 20 /// In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir.1996) (setting forth 21 22 23 24 25 26 27 28 1 Under Arizona law, a showing of fraud requires “(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) the right to rely on it; (9) his consequent and proximate injury.” Nielson v. Flashberg, 101 Ariz. 335, 419 P.2d 514 (1966). In California, to prove fraud a plaintiff must show “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Small v. Fritz Companies, Inc., 30 Cal.4th 167, 174 (2003). -5- 1 B. Choice of Law 2 In his response brief, Plaintiff argues that this Court must apply California law to all 3 of the claims in this case. (Dkt. #59, p.8–9). Defendant disagrees, arguing for the 4 application of Arizona law. Because choice-of-law will undoubtedly be an issue in any 5 future filings in this case, the Court will make a few comments regarding the subject. It is 6 well established that when a case has been transferred pursuant to §1404(a), the transferee 7 court is “obligated to apply the state law that would have been applied if there had been no 8 change of venue.” Van Dusen v. Barrack, 376 U.S. 612, 639 (1964) (“A change of venue 9 under §1404(a) generally should be, with respect to state law, but a change of courtrooms.”) 10 This does not mean, however, that a court must always apply the substantive law of the 11 transferor state. Instead, “the transferee court must follow the choice-of-law rules of the 12 transferor court.” Muldoon v. Tropitone Furniture Co., 1 F.3d 964, 966 (9th Cir. 1993) 13 (citing Van Dusen). Accordingly, this Court must apply the same law that would have been 14 applied by Judge Selna in the Central District of California had this case remained under that 15 Court’s jurisdiction. 16 With respect to the fraud claim, in particular, Plaintiff did not cite any authority to 17 support his contention that this Court must apply California law. Defendants, on the other 18 hand, cite to the Restatement (Second) of Choice of Laws §148 (“Fraud and 19 Misrepresentation”) in arguing that Arizona law should be applied. While the Court 20 appreciates Defendants’ effort to identify the applicable law, their position appears to be 21 incorrect. In cases arising out of a tort, “[q]uestions of choice of law are determined in 22 California ... by the governmental interest analysis.” Offshore Rental Co. v. Continental Oil 23 Co., 22 Cal.3d 157, 161 (1978). This test requires that the forum court “search to find the 24 proper law to apply based upon the interests of the litigants and the involved states.” Reich 25 v. Purcell, 67 Cal.2d 551, 553 (1967). “The first step of the analysis is to examine the laws 26 of the states involved.” Denham v. Farmers Ins. Co., 213 Cal.App.3d 1061, 1065 (1989). 27 “The fact that two states are involved does not itself indicate that there is a “conflict of laws” 28 or “choice of law” problem. Hurtado v.Super. Ct., 11 Cal.3d 574, 580 (1974). “There is -6- 1 obviously no problem where the laws of the two states are identical.” Id. If, however, the 2 laws are not identical, the Court must then consider whether or not a “true conflict” exists. 3 “A ‘true conflict’ arises only if both states have an interest in having their law applied.” 4 Denham, 213 Cal.App. at 1065. If a true conflict is identified, the Court must then engage 5 in a “comparative impairment” analysis, which “is used to determine which state's interest 6 would be more impaired if its policy were subordinated to the policy of the other state.” Id. 7 at 1066. 8 Unfortunately, because neither party identified or applied the appropriate choice-of- 9 law standard, they have failed to make any meaningful arguments concerning the elements 10 of the governmental interest analysis test, including whether or not fraud in Arizona is, in 11 fact, identical to California. This failure to properly brief the applicable choice-of-law test 12 may have posed an issue had this Court not found, supra, that Plaintiff’s fraud claims do not 13 satisfy Rule 9(b). The Court will not look favorably upon any future filing that merely 14 assumes a particular state’s law controls without first explaining, based on the applicable test, 15 the reason for such a belief. Any future Motion to Dismiss, therefore, must include briefing 16 on all three prongs of California’s governmental interest analysis, citing to the relevant 17 authority. 18 IV. OUTSTANDING ARGUMENTS AND MOTIONS 19 Because this Court will grant Defendant’s Motion for Judgement on the Pleadings, 20 Defendant’s argument concerning subject matter jurisdiction and its Motion to Compel 21 Arbitration are moot. 22 Accordingly, 23 IT IS HEREBY ORDERED granting Defendant’s to Motion Request to Transform 24 25 26 27 28 its Motion to Dismiss into a Motion for Judgement on the Pleadings. (Dkt. #61). IT IS FURTHER ORDERED granting Defendant’s Motion for Judgement on the Pleadings (formerly its Motion to Dismiss) without prejudice. (Dkt. #58). IT IS FURTHER ORDERED granting Plaintiff leave to file his third amended complaint. -7- 1 2 3 4 5 IT IS FURTHER ORDERED directing Plaintiff to file his third amended complaint by December 30, 2009. IT IS FURTHER ORDERED denying as Moot Plaintiff’s Motion to Compel Arbitration. (Dkt. #58). DATED this 9th day of December, 2009. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8-
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