Stuckey v. Leath et al, No. 2:2018cv03213 - Document 21 (D. Ariz. 2019)
Court Description: ORDER granting 11 Motion to Dismiss pursuant to Rule 12(b)(2) and 13 Motion to Dismiss pursuant to Rule 12(b)(2). Plaintiff's claims against Defendants are dismissed without prejudice (all other relief requested in the motions is denied as moot). The Clerk shall enter judgment accordingly and close this case. Signed by Senior Judge James A Teilborg on 4/9/19. (DXD)
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Stuckey v. Leath et al 1 Doc. 21 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Norman Stuckey, Plaintiff, 10 11 v. 12 Jennifer Leath, Maryam Boroujerdi-Rad, and Meadows & Fries LLP, 13 No. CV-18-03213-PHX-JAT ORDER Defendants. 14 15 Pending before the Court is Defendant Meadows & Fries, LLP’s (“M&F”) Motion 16 to Dismiss (Doc. 11) pursuant to Federal Rules of Civil Procedure (“Rules”) 12(b)(2) and 17 12(b)(3). Also pending before the Court is Defendants Jennifer Leath and Maryam 18 Boroujerdi-Rad’s (collectively, “Employees;” both M&F and Employees together, 19 “Defendants”) Motion to Dismiss (Doc. 13) pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), 20 and 12(b)(6). The Court now rules on the motions. 21 I. BACKGROUND 22 On November 19, 2018, M&F filed its Motion to Dismiss (Doc. 11). Plaintiff 23 Norman Stuckey (“Plaintiff”) filed a Response (Doc. 15) on December 3, 2018, and M&F 24 filed a Reply (Doc 18) on December 17, 2018. On November 27, 2018, Employees likewise 25 filed their Motion to Dismiss (Doc. 13). Plaintiff filed a Response (Doc. 16) on December 26 11, 2018, and Employees filed a Reply (Doc. 17) on December 17, 2018. 27 A. 28 Plaintiff brings a direct action against Defendants for their respective actions as Complaint Dockets.Justia.com 1 employees of and a professional services firm retained by Stucky Psychological Services, 2 PC (“SPS”). (Doc. 10 (“Compl.”) ¶¶ 9–30). The eleven-count Complaint asserts the 3 following causes of action: (i) breach of contract; (ii) conversion; (iii) breach of fiduciary 4 duty; (iv) constructive fraud; (v) common law fraud; (vi) negligent misrepresentation; (vii) 5 tortious interference; (viii) financial elder abuse; (ix) fraudulent transfer; (x) unjust 6 enrichment; and (xi) complete accounting. (Id. ¶¶ 31–112). Plaintiff asserts all counts 7 against Employees, and also asserts counts (iii), (iv), (vi), and (xi) against M&F. (Id.). 8 B. 9 The following facts are either undisputed or recounted in the light most favorable to 10 the non-moving party. See Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 11 661 (9th Cir. 1998). Plaintiff, president and CEO of SPS, is a ten-year resident of Sun 12 Lakes, Arizona. (Compl. ¶ 9). Prior to his death, Plaintiff’s son, David Stuckey, was the 13 sole owner of SPS, a California corporation with its principal place of business in 14 California. (Id. ¶ 20; Doc. 15-1 at 13–16). At all relevant times, SPS employed Leath and 15 Boroujerdi-Rad, both citizens of Orange County, California. (Compl. ¶¶ 12–13). After 16 David Stuckey’s death in January 2014, Plaintiff entered into an oral contract with 17 Employees to provide operational loans to SPS. (Id. ¶ 22). In return for funding SPS, 18 Plaintiff was to become its owner, president, and CEO, and receive loan repayments and 19 profit disbursement. (Id.). Employees were to make periodic financial reports to Plaintiff 20 and “make a good faith offer to buy [SPS] within a reasonable time.” (Id.). Facts 21 In early 2014, M&F telephoned Plaintiff in Arizona to offer tax services to SPS. 22 (Doc. 15 at 2). M&F is a limited liability partnership organized in California. (Compl. ¶ 23 14). M&F’s principle place of business is in California, and both of its partners are 24 California citizens. (Id.). In October 2014, M&F mailed an engagement letter from 25 California to Plaintiff in Arizona, offering to prepare federal and California state income 26 tax returns for SPS. (Doc. 1-1 at 10–12). Plaintiff agreed to and signed the agreement “as 27 president of [SPS].” (Compl. ¶ 27 n.3). 28 Plaintiff alleges that Defendant committed the following unlawful acts during 2014– -2- 1 2018. First, Employees took unauthorized salary advances and improperly booked loan 2 funding. (Id. ¶ 2). Second, M&F failed to detect or disclose these unauthorized advances 3 and improper bookings. (Id. ¶ 3). Third, M&F provided legal representation to Employees 4 without first obtaining Plaintiff’s informed consent. (Id. ¶ 8). Fourth, Employees made 5 “bad faith” offers to buy SPS from Plaintiff. (Id. ¶ 25). Finally, Employees and M&F failed 6 to report accurate financial information to Plaintiff during this period. (Id. ¶¶ 26–27). In 7 response, Plaintiff commenced this action. 8 II. LEGAL STANDARD 9 M&F filed a Motion to Dismiss pursuant to 12(b)(2) and 12(b)(3), and Employees 10 filed a Motion to Dismiss pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6). (See 11 Doc. 11; Doc. 13). While the Court observes that Defendants make arguments under the 12 banner of standing—which ordinarily presents a “threshold question of justiciability”— 13 those arguments may also be characterized as addressing a “real party in interest” issue. 14 See In re Swintek, 906 F.3d 1100, 1102 (9th Cir. 2018). Because the Court finds it 15 dispositive, the Court begins by addressing whether it has personal jurisdiction over 16 Defendants. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 578 (1999) (“[T]here is no 17 unyielding jurisdictional hierarchy. Customarily, a federal court first resolves doubts about 18 its jurisdiction over the subject matter, but there are circumstances in which a district court 19 appropriately accords priority to a personal jurisdiction inquiry.”). 20 A. 21 Defendants lack sufficient contacts with Arizona to justify the exercise of personal 22 jurisdiction over them. Generally, federal courts have personal jurisdiction over non- 23 resident defendants to the extent allowed by the state in which the courts sit. See Fed. R. 24 Civ. P. 4(e), (k); Walden v. Fiore, 571 U.S. 277, 283 (2014). Arizona law provides for 25 personal jurisdiction to the extent allowed by the United States Constitution. See Ariz. R. 26 Civ. P. 4.2. “The Due Process Clause of the Fourteenth Amendment sets the outer 27 boundaries of a [] tribunal’s authority to proceed against a defendant.” Goodyear Dunlop 28 Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (citation omitted). Personal Jurisdiction -3- 1 Due process requires that a defendant “have certain minimum contacts with [the 2 forum state] such that the maintenance of the suit does not offend traditional notions of fair 3 play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 4 (internal quotation marks and citation omitted). This framework gives rise to two forms of 5 personal jurisdiction: “general” and “specific” jurisdiction. Bristol-Myers Squibb Co. v. 6 Superior Ct. of Cal., S.F. Cty., 137 S. Ct. 1773, 1779–80 (2017). The burden of establishing 7 personal jurisdiction rests on the plaintiff, but if the motion attacking jurisdiction “is based 8 on written materials rather than an evidentiary hearing, the plaintiff need only make a prima 9 facie showing of jurisdictional facts to withstand the motion to dismiss.” Mavrix Photo, 10 Inc. v. Brand Techs, Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). Courts must accept 11 uncontroverted statements in a complaint as true and resolve conflicts of facts contained in 12 affidavits in the plaintiff’s favor, but a “plaintiff cannot simply rest on the bare allegations 13 of its complaint.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 14 2004) (internal quotation marks and citation omitted). 15 1. General Jurisdiction 16 Under general jurisdiction, a court can hear any claim against a defendant who can 17 be “fairly regarded as at home” in the state. Goodyear, 564 U.S. at 919. Generally, an 18 individual is at home where domiciled, and an unincorporated entity—including an LLP— 19 is a citizen of each state in which any member is a citizen. See Daimler AG v. Bauman, 571 20 U.S. 117, 137 (2014); see also Americold Realty Tr. v. Conagra Foods, Inc., 136 S. Ct. 21 1012, 1013, (2016) (“For these unincorporated entities, we too have adhere[d] to our oft- 22 repeated rule that diversity jurisdiction in a suit by or against the entity depends on the 23 citizenship of all [its] members” (alterations in original; internal quotations marks and 24 citation omitted)). Both Employees and M&F, through its partners, are citizens of 25 California. (Compl. ¶¶ 12–14). Accordingly, the Court lacks general jurisdiction over 26 Defendants. 27 28 2. Specific Jurisdiction When relying on specific jurisdiction, a plaintiff must establish that jurisdiction is -4- 1 proper for each claim asserted against a defendant. See Picot v. Weston, 780 F.3d 1206, 2 1211 (9th Cir. 2015). If personal jurisdiction exists over one claim, the Court “may exercise 3 pendant jurisdiction over any remaining claims that arise out of the same common nucleus 4 of operative facts.” Id. (internal quotation marks and citation omitted). The specific 5 jurisdiction inquiry focuses on “the relationship among the defendant, the forum, and the 6 litigation.” Walden, 134 S. Ct. at 1121 (citation omitted). The Ninth Circuit applies a three- 7 part test to determine whether a defendant is subject to specific personal jurisdiction: 8 9 10 11 12 13 14 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 15 Picot, 780 F.3d at 1211 (citation omitted). The plaintiff must establish the first two factors. 16 See Schwarzenegger, 374 F.3d at 802. If the plaintiff does so, the burden then shifts to the 17 defendant to “present a compelling case” that the exercise of jurisdiction is not reasonable. 18 Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476–78 (1985)). 19 a. Purposeful Availment 20 A court has specific jurisdiction over claims sounding in contract when a defendant 21 purposely availed himself of the privilege of conducting activities within the forum state, 22 thereby invoking the benefit and protection of its laws. See Picot, 780 F.3d at 1212. 23 Purposeful availment requires “affirmative conduct which allows or promotes the 24 transaction of business within the forum state.” Id. The formation of “a contract alone” 25 with an out-of-state party does not amount to purposeful availment. Boschetto v. Hansing, 26 539 F.3d 1011, 1017 (9th Cir. 2008). 27 28 b. Purposeful Direction For claims sounding in tort, specific jurisdiction is proper when the defendant -5- 1 purposely directed his actions at the forum state, regardless of where the actions took place. 2 See Picot, 780 F.3d at 1212. “Purposeful direction” is satisfied under the “effects” test 3 when the defendant: “(1) committed an intentional act, (2) expressly aimed at the forum 4 state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” 5 Id. at 1214 (citing Calder v. Jones, 465 U.S. 783, 788–89 (1984)). In applying this test, 6 courts must “look[] to the defendant’s contacts with the forum [s]tate itself, not the 7 defendant’s contacts with persons who reside there.” Walden, 571 U.S. at 285 (citing Int’l 8 Shoe, 326 U.S. at 319). “[A]n injury is jurisdictionally relevant only insofar as it shows 9 that the defendant has formed a contact with the forum [s]tate.” Id. at 290. “[M]ere injury 10 to a forum resident is not a sufficient connection to the forum.” Id. Rather, “an injury is 11 jurisdictionally relevant only insofar as it shows that the defendant has formed a contact 12 with the forum State.” Id. “The proper question is not where the plaintiff experienced a 13 particular injury or effect but whether the defendant’s conduct connects him to the forum 14 in a meaningful way.” Id. 15 III. 16 17 ANALYSIS Although Defendants are similarly-situated in some respects, the Court will address whether it has personal jurisdiction over M&F and Employees separately. 18 A. 19 Because Plaintiff’s claims against M&F depend on the existence of the October 20 2014 fee agreement, the purposeful availment test applies for the first prong of the analysis. 21 See Stanford Ranch, Inc. v. Md. Cas. Co., 89 F.3d 618, 625 (9th Cir. 1996) (noting that 22 claims “dependent upon the existence of an underlying contract” sound in contract). In 23 early 2014, M&F telephoned Plaintiff to offer tax services to SPS. (Doc. 15 at 4). On 24 October 2, 2014, M&F mailed an engagement letter from California to Plaintiff in Arizona. 25 (Doc. 15-1 at 21; see also Doc. 1-1 at 10–12). The letter provided that M&F would: (1) 26 prepare SPS’s 2014 federal and California income tax returns, (2) work with SPS’s 27 representatives in California, and (3) send draft and final versions of returns to Plaintiff, as 28 president of SPS, in Arizona. (Doc. 1-1 at 10–12). During 2015–2017, M&F “reviewed M&F -6- 1 and ratified mailings, tax returns, and loan repayments,” and “periodically reported [SPS] 2 activity to [Plaintiff] in Arizona.” (Doc. 15 at 3). 3 Courts recognize that a contract can serve as a jurisdictional hook when it involves 4 a forum selection clause or work for a client in the forum state. See Burger King, 471 U.S. 5 at 479–480 (finding that a Florida forum selection clause weighed in favor of finding that 6 a Michigan defendant purposefully availed himself of Florida’s laws); T.M. Hylwa, M.D., 7 Inc. v. Palka, 823 F.2d 310, 314 (9th Cir. 1987) (reasoning that continuing to work for a 8 California client weighed in favor of finding that a Kansas defendant purposefully availed 9 himself of California law). Neither of these elements are present here. The engagement 10 letter does not mention—and neither does Plaintiff assert—a forum selection clause for 11 Arizona. (See generally Doc. 1-1 at 10–12). Neither does M&F perform work for an 12 Arizona client—SPS is incorporated and maintains its principal place of business in 13 California. To be sure, it is undisputed that M&F performed work solely in California. (See 14 Doc 15 at 1). Consequently, M&F’s initial contact with Plaintiff in Arizona alone is 15 insufficient to constitute purposeful availment, thus failing the first prong of the Ninth 16 Circuit test. 17 Under the second prong of the Ninth Circuit test, the claims must arise or result from 18 a defendant’s forum-related activities. See Picot, 780 F.3d at 1211. The Ninth Circuit 19 applies a “but for” test when examining this second prong. Grey & Co. v. Firstenberg 20 Mach. Co., 913 F.2d 758, 761 (9th Cir. 1990). Plaintiff’s claims arise out of M&F’s tax 21 services in California, provided to a California entity, whose principal place of business is 22 in California. (See Doc. 15 at 2–5). M&F did not visit Arizona or provide accounting 23 services under Arizona tax law. (See generally id.). Because Plaintiff’s contract claims 24 arise out of M&F’s California-related activities, not Arizona-related activities, the claims 25 fail the second prong of the Ninth Circuit test. Accordingly, M&F lacks sufficient 26 minimum contacts with Arizona for this Court to exercise personal jurisdiction over it.1 27 28 1 Because Plaintiff failed to establish the first two prongs of the Ninth Circuit test, the Court need not address the third prong regarding whether the exercise of jurisdiction -7- 1 B. Employees 2 Plaintiff brings claims against Employees that sound in tort and in contract; 3 therefore, both the purposeful availment and the purposeful direction tests apply. See Picot, 4 780 F.3d at 1212. Under either test, the exercise of personal jurisdiction is improper. 5 1. Purposeful Availment 6 Under the first prong of the Ninth Circuit test for claims sounding in contract, 7 Plaintiff must establish that the non-resident Employees purposefully availed themselves 8 of the privilege of conducting activities in Arizona. See Picot, 780 F.3d at 1212. Plaintiff 9 does not contest that Employees “haven’t physically been to Arizona,” but argues that 10 Employees established sufficient contacts with the forum through their dealings with 11 Plaintiff, a known Arizona resident. (Doc. 16 at 2–3). Specifically, Plaintiff asserts that 12 Employees acted in concert with M&F to solicit Plaintiff in Arizona and that Employees 13 entered into an oral contract with Plaintiff while Plaintiff was in Arizona. (See id.). As 14 reasoned above, M&F’s interactions with Plaintiff in Arizona are insufficient to 15 demonstrate purposeful availment because M&F sought only to perform accounting 16 services for a California entity in California. (See supra Part III(A)). 17 Likewise, the fact that Employees entered into an oral contract with Plaintiff while 18 Plaintiff resided in Arizona fails to demonstrate purposeful availment. See Boschetto, 539 19 F.3d at 1017 (formation of “a contract alone” with an out-of-state plaintiff does not amount 20 to purposeful availment of the plaintiff’s home forum). Assuming the truth of Plaintiff’s 21 allegations—at all relevant times during negotiation and non-performance of the 22 contract—Employees worked for SPS in California, mismanaged funds of the California 23 entity from revenue generated in California, made an unauthorized filing with the 24 California Secretary of State, and did so with the aid of SPS’s California-based accounting 25 firm. (See Compl. ¶¶ 22–23; see also Doc. 12 at 9). The fact that Plaintiff resided in Arizona 26 and received reports of Employees’ California-related activities in Arizona is merely 27 incidental to Employees’ alleged misconduct in California; thus, the Court finds that 28 would be reasonable. See Schwarzenegger, 374 F.3d at 807 n.1. -8- 1 Plaintiff cannot satisfy the first prong of the Ninth Circuit test with respect to Plaintiff’s 2 claims sounding in contract under the purposeful availment test. 3 2. Purposeful Direction 4 Under the first prong of the Ninth Circuit test for claims sounding in tort, Plaintiff 5 must establish that the non-resident Employees purposely directed their actions at Arizona, 6 even if the actions took place elsewhere. See Picot, 780 F.3d at 1212. In this case, Plaintiff 7 clearly establishes a prima facie case that Employees “committed an intentional act”—or 8 several acts by way of their alleged mismanagement of SPS funds—causing harm that 9 Defendants “know is likely to be suffered in the forum state.” See id. at 1214. Accordingly, 10 the Court will focus its purposeful direction inquiry on whether Employees’ alleged acts 11 were “expressly aimed at the forum state.” See id. 2 12 Based on the following, the Court finds that the case before it has much more in 13 common with Walden and Morrill—where courts found that there was no personal 14 jurisdiction over defendants—than Calder. See Morrill v. Scott Fin. Corp., 873 F.3d 1136, 15 1144–45 (9th Cir. 2017) (distinguishing Calder on the grounds that the connection with 16 the forum in Calder “was largely a function of the nature of the libel tort,” which was not 17 present there, nor here). Here, Plaintiff does not allege that Employees intentionally or 18 purposefully sought to conduct business in Arizona—as opposed to with Plaintiff 19 generally—in a meaningful way. (See generally Compl.); see also Walden, 571 U.S. at 290 20 At oral argument, Plaintiff argued for the first time that the Calder “effects” test gives the Court personal jurisdiction over Employees. In rebuttal, Counsel for Employees argued that Plaintiff did not raise that argument in his moving papers, and initially requested supplemental briefing on the issue before noting that he did not believe supplement briefing was necessary. 21 22 23 24 25 26 27 28 2 Although the Court observes that Plaintiff does not cite Calder or the “effects” test in his responsive filing to either pending motion, the Court acknowledges that both parties briefed the issue of personal jurisdiction extensively, so it will fully address Plaintiff’s “effects” arguments herein. (See generally Doc. 15; Doc. 16); but see United States v. Halling, 232 Fed. Appx. 692, 693 (9th Cir. 2007) (unpublished) (“We do not consider the additional arguments raised for the first time at oral argument” (citing Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 515 (9th Cir. 1992)). Moreover, the Court agrees with Counsel for Employees that supplemental briefing is not necessary to resolve this matter. -9- 1 (finding that a defendant does not purposefully direct conduct at the forum state when the 2 plaintiff was “the only link between defendant and the forum”); Picot, 780 F3d at 1215 3 (finding that when a Plaintiff’s injury travels with him outside the forum state, the 4 defendant’s alleged action was not purposefully directed at the forum state). Rather, “[t]he 5 allegedly tortious conduct here involved very limited communications and proceedings in 6 Arizona, all of which arose out of and were component parts” of Employees’ allegedly 7 improper business activities and financial mismanagement in California. See Morrill, 873 8 F.3d at 1144–45 (reasoning that a defendant’s appearance in an Arizona court was “solely 9 a by-product of Plaintiffs’ residence;” accordingly, there was no personal jurisdiction over 10 defendants when an Arizona-based attorney brought tort claims in the District of Arizona 11 for abuse of process and wrongful institution of civil proceedings against out-of-state 12 defendants, even though the defendants travelled to and appeared in Arizona Superior 13 Court as part of the underlying action that gave rise to the dispute). 14 Specifically, Plaintiff argues that Employees purposefully directed their actions at 15 Arizona because: “(a) [Defendants] all knew they were dealing with an Arizona funder of 16 the business over an extended period; (b) they sent money to Arizona for years to repay 17 [Plaintiff’s] personal loans to [SPS]; and (c) [Employees] routinely reported the company’s 18 financial data to the Arizona citizen-owner[.]” (Doc. 16 at 3). Stated another way, Plaintiff 19 contends that “[b]ecause Defendants knew that Plaintiff[] [was] from Arizona, it was 20 foreseeable that some injury to [him] could have been experienced there based on the 21 actions taken by Defendants in connection with [SPS].” Morrill, 873 F.3d at 1144 22 (rejecting the argument as an insufficient basis to establish purposeful direction). Although 23 “[h]arm suffered in the forum state is a necessary element in establishing purposeful 24 direction,” it is not alone sufficient. Id. 25 Additionally, “the potential foreseeability of some incidental harm to Plaintiff[] in 26 Arizona,” due to substantial activities hindering the California entity owned by Plaintiff, 27 “without more, does not show that Defendants expressly targeted the forum state.” Id. at 28 1145. “Such reasoning improperly attributes a plaintiff’s forum connections to the - 10 - 1 defendant and makes those connections decisive in the jurisdictional analysis.” Id. (internal 2 quotation marks and citation omitted). The fact that Defendants knew the owner and funder 3 of SPS was in Arizona, and sent money and information to Plaintiff in Arizona “obscures 4 the reality that none of [the] challenged conduct had anything to do with [the forum state] 5 itself.” Id. (quoting Walden, 571 U.S. at 289) (alterations in original). Rather, Employees’ 6 relevant alleged actions—taking unauthorized salary advances, improperly booking loan 7 funding, making an unauthorized filing with the California Secretary of State, making bad 8 faith offers to buy SPS, and preparing inaccurate financial reports—all occurred in 9 California, and were related to Plaintiff’s involvement with a California entity. (See Compl. 10 ¶¶ 2, 3, 8, 23–27). “Therefore, as in Walden, the forum state was only implicated by the 11 happenstance of Plaintiff[‘s] residence.” Morrill, 873 F.3d at 1146. Even if Employees 12 deprived Plaintiff of funds historically sent to him in Arizona, Plaintiff “would have 13 experienced this same lack of access [to the allegedly mismanaged funds] in [Arizona], 14 Mississippi, or wherever else” he might have resided and “found [himself] wanting more 15 money than [he] had.” Id. at 1143–44 (citing Walden, 571 U.S. at 290). 16 Accordingly, the Court finds that Plaintiff fails to establish that Employees 17 committed any act “expressly aimed at the forum state.” See Picot, 780 F.3d at 1214; see 18 also Morrill, 873 F.3d at 1148–49 (“Plaintiff[] [is] required to make a prima facie showing 19 that [Employees’] alleged actions were directed at Arizona, not just at individuals who 20 resided there. . . . Plaintiff[] failed to do so.”). Plaintiff thus fails to establish purposeful 21 direction and likewise fails the first prong of the Ninth Circuit Test. 22 3. Forum-Related Activities 23 Addressing the second prong of the Ninth Circuit test, the Court finds that none of 24 Plaintiff’s claims arise out of or relate to Employees’ limited Arizona-related activities. See 25 Picot, 780 F.3d at 1211. Again, Plaintiff alleges that employees mishandled SPS funds in 26 California and interfered with a contract for work in California, causing injury to Plaintiff 27 through the economic losses of the California entity owned by Plaintiff. See supra Part 28 III(B)(1)–(2). All of these alleged activities underscore Employees’ connection to - 11 - 1 California, without any activities connected to Arizona. (Id.). Consequently, Plaintiff fails 2 to establish the second prong of the Ninth Circuit test because Plaintiff’s claims do not 3 arise out of Employees’ Arizona-related activities. 4 Accordingly, Plaintiff fails to establish the first two prongs of the Ninth Circuit test 5 regarding his claims against Employees, regardless of whether the claims sound in tort or 6 contract. Thus, Employees lack sufficient minimum contacts with Arizona for this Court 7 to exercise personal jurisdiction over Employees.3 8 IV. 9 10 Miscellaneous Arguments Because the Court concludes that it lacks personal jurisdiction over Defendants, it need not address Defendants’ other arguments.4 11 A. 12 Plaintiff requests leave to amend if the Court grants either of Defendants’ respective 13 motions to dismiss. (See Docs. 15 at 6; Doc. 16 at 8). A plaintiff may, under certain 14 circumstances, be entitled to leave to amend to attempt to cure defects in a complaint 15 through allegation of other facts if the complaint is dismissed under Rule 12(b)(6). See, 16 e.g., Schreiber Distributing Co. v. ServWell Furniture Co., Inc., 806 F.2d 1393, 1401 (9th 17 Cir. 1986). However, lack of personal jurisdiction, pursuant to Rule 12(b)(2), “is not 18 curable by amendment.” Wild W. Guns, LLC v. Superior Ammunition, Inc., No. 3:18-CV- 19 00043 JWS, 2019 WL 885915, at *1 (D. Alaska Feb. 23, 2019). Nonetheless, the Court Amendment 20 3 21 Again, the Court need not address the third prong. See supra note 1. 4 22 23 24 25 26 27 28 Defendants raised additional arguments regarding standing, statutes of limitation, venue, and forum non conveniens. (See Doc. 11; Doc. 13). While Defendants could potentially prevail on several grounds, the issue of personal jurisdiction is dispositive, so the Court limits its analysis accordingly. For instance, in addition to Plaintiff’s contract-related claims, Plaintiff alleges financial elder abuse of a vulnerable adult (count viii) against Employees. (Compl. ¶¶ 76– 85). In Arizona, a “vulnerable adult” is “an individual who is eighteen years of age or older and who is unable to protect himself from abuse, neglect or exploitation by others because of a physical or mental impairment.” A.R.S. § 46-451 (emphasis added). Here, as an alternative basis to dismiss the claim, Plaintiff does not plead any “physical or mental impairment” that could qualify him as a vulnerable adult. (See Compl. ¶¶ 76–85). - 12 - 1 dismisses the action without prejudice. 2 V. CONCLUSION 3 Based on the foregoing, 4 IT IS ORDERED that Defendant Meadow & Fries, LLP’s Motion to Dismiss (Doc. 5 6 7 11) is GRANTED pursuant to Rule 12(b)(2). IT IS FURTHER ORDERED that Defendants Jennifer Leath and Maryam Boroujerdi-Rad’s Motion to Dismiss (Doc. 13) is GRANTED pursuant to Rule 12(b)(2). 8 IT IS FURTHER ORDERED that Plaintiff’s claims against Defendants are 9 dismissed without prejudice (all other relief requested in the motions is denied as moot). 10 11 The Clerk of Court shall enter judgment accordingly and close this case. Dated this 9th day of April, 2019. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 13 -
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