Moulton v. Eugene Burger Management Corporation et al, No. 3:2008cv00176 - Document 118 (D. Nev. 2009)

Court Description: ORDER GRANTING D Kevin Berg's 114 Motion to Dismiss Plaintiff's Complaint. Signed by Judge Brian E. Sandoval on 7/9/2009. (Copies have been distributed pursuant to the NEF - DRM)
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: ' F .I LE ()8ED E! N! 6C ?I 0t EE 1'DSID S IN C()I JNTFL.F' 18 îT!Es()Ff iE7;l ?) 1 2 ! ' kltL -9 2: -(5 l 3 C;LE)q:q')El:?1T!?l. . jj.. a r JC( 2t vy. ; 4 J'ù:.(:t ' ,.v;Ffj' u.' iA. )A . 1 7ï. . . -D?L?I JTt = =' 5 6 UNITED STATES DISTRICT CO URT 7 DISTRICT O F NEVADA 8 SHERYL MOULTON,iqdividjallyand on ) behalfofaIlotherssim llarlysltuated, ) 9 ) Plaintiffs, ) 10 ) v. ) 11 ) EUGENE BURGER MANAGEMENT ) 12 CORPORATIO N,a California Corporation' ,) EUGENE J,BURGER' ,KEVIN BERG' , ) 13 KAREN BRIGG;PHIL FRINK & ) ASSOCIATES,INC.;PHILLIP EUFRINK' , ) 14 GAYLE A.KERN,LTD' ,GAYLE AuKERN' , ) ULLA CHRISTENSEN,both ps individual ) 15 and Lakeside Plaz: Boyrd Dlrector' ,DANIEL ) JOSEPH,b0th asIndivldualand Lakeside ) 16 Plaza B?ard Director' ,FM NK A.PERAU, ) bgth as Individualand Lakeside Plai! Board ) 17 Dlrector;RICH SVIHLA,both as indlvldual ) and Lakeside Plaza Board Directow r' ) 18 LAKESIDE PLAZA CONDOMINIUM ) ASSOCIATION' ,and DOES 1-500, ) 19 ) Defendants. ) 20 ) Moulton v. Eugene Burger Management Corporation et al 21 3:08-cv-O017& BES-VPC ORDER Doc. 118 Currently before the Courtis Defendant Kevin Berg's (i'Berg'') Motion to Dismiss 22 Plaintiff'sComplaint(#114)filed onJanuary28,2009.Plainti ffSherylMoulton t'iplaintiT'ldid 23 notfile a response.OnApril10,2009,the Coud entered an Order(#117)giving Plainti ffuntil 24 M onday,April20,2009,to file a response to Berg's m otion. In its Order,the Courtnoted that 25 Plaintiff'sfailuretocomplymayresul tindismissalofthe actionwith prejudice.Plainti f'fdid not 26 file a response by the designated date and no response has been filed to date. 27 28 BACKG RO UND This case involves severalciaim s broughtby Piainti ffbased on an alleged ''iliegal'' assessmentimposed atthe Lakeside Piaza Condominium Complex. (Complaint(#1)case Dockets.Justia.com 1 5:07-cv-5861at5).As a resul tofthe alleged illegalassessment,Plaintif filed suitin 2 federalcoud againstvarious defendants including Berg.l According to Plaintiffshe brought 3 the case '' to com pelDefendants to com ply with the CC&Rs,and subm itthe Special 4 Assessm entto a hom eownervote.''Ld-. . 5 6 ANALYSIS Bergfiled a Motionto Dismiss(#114)onJanuaw 28,2009.Asnoted,Moultondid not 7 file any response. 8 LocalRule 7-2 provides that the l'failure of an opposing party to file points and 9 authorities in response to any m otion shallconstitute a consentto the granting ofthe m otion.'' 10 LR 7-2.The ''ltqailure to follow adistrictcoud'slocalrulesisa propergroundsfordismissal.'' 11 Ghazaliv.Moran,46 F.3d 52,53 (9thCir.1995).Beforedismissingacaseforfailingtofollow 12 Iocalrules,the districtcourtmustweigh five factors:61(1)the public's interestin expeditious 13 resolutionoflitigation' ,(2)thecourt'sneedto manage itsdocket' ,(3)the riskofprejudicetothe 14 defendants' ,(4)the public policy favoring disposition ofcases on theirmerits,and (5)the 15 availabilityoflessdrastic sanctions.'' Henderson v.Duncan,779 F.2d 1421,1423 (9th Cir. 16 1986).Inthismatter,thebalance offactorsweighinfavorofdism issalbecauseBerghasfiled 17 a m eritorious m otion to dism iss on the claim s asserled againsthim . 18 The purpose ofa motionto dism issunderRule 12(b)(6)is to testthe Iegalsuficiency 19 ofthe complaint.Navarro v.Block,250 F.3d 729,732 (9th Cir.2001).DismissalunderRule 20 12(b)(6)isproperonlywhenacomplaintexhibitseithera ulackofa cognizable Iegaltheoryor 21 the absence ofsufficientfacts alleged undera cognizable Iegaltheory.'Balistreriv.Pacifica 22 Police Deo't,9O1 F.2d 696,699 (9th Cir.1990).The Courtmustacceptastrue aIImaterial 23 allegations in the com plaintaswellas allreasonable inferencesthatm ay be drawnfrom such 24 allegations. LSO.Ltd.v.Stroh,205 F.3d 1146,115O (9th Cir.2000).The Coud mustalso 25 construe the allegations ofthe com plaintin the lightm ostfavorable to the nonm oving party. 26 Shwarz v.United States,234 F.3d 428,435 (9th Cir.2000). The Courtmay only granta 27 motiontodismissunderRuie 12(b)(6)i fitiscedainthatthe plaintiffwillnotbeentitledto relief 28 . l According to Plaintiff'sC'onp laint(#1).Berg was a propem manageTforEugene Burger M anagem entCorporation althe Lal keslde Plaza Condom inium A ssociation. . 2 . 1 underany setoffacts thatcould be proven underthe allegations ofthe com plaint. Cahillv. 2 Libertv M ut.lns.Co.,80 F.3d 336,338 (9th Cir.1996). 3 Although a court's review on a 12(b)(6)motion to dismiss is generally ''Iimited to the 4 contents ofthe com plaint,'the coud m ay also considerdocum ents attached to the com plaint, 5 documents incorporated by reference in the complaint,ormatters ofjudicialnotice without 6 convertingthemotionintoamotionforsumm aryjudgment.See Durninnv.FirstBostonCorn., 7 815 F.2d 1265,1267 (9th Cir.1987). 8 Berg filed a m otion to dism iss on the basis thatPlaintifrs Com plaintfailed to state a 9 claim upon which relief can be granted. Specifically,Berg alleges that Plaintif'ffailed to 10 properly plead herfederalcauses ofaction,and thatshe failed to exhaustadm inistrative l1 rem edies as to herstate Iaw claim s.z 12 A. Racketeering Influenced and CorruptO rganization Act 13 Berg seeks dism issalofPlaintiff's Racketeerlnfluenced and CorruptO rganizations A ct 14 ('RICO'')claims on the basis thatPlaintiffhas failed to properly plead a claim underthat 15 statute. Specifically,Berg states thatPlaintiffcannotallege a RICO claim because she ' lhas 16 broughtthe instantcivilIi tigation based on civilcauses ofactiorh,and then has included the 17 criminalracketeeringclaim aspartofthiscivilmatter.'(MotiontoDismissPlaintiff'sComplaint l8 (#114)at10). According to Berg,i'Title 18 ofthe Uni ted States Code involves crimes and 19 criminalprocedure,notcivilcausesofaction.''Ld=.Inthealternative,BergstatesthatPlaintiff's 20 RICO claim should be dism issed because she failed to plead with specificity each and every 21 elementofherRICO claim as required by Rule 9(b).Ld-. 22 18 U.S.C.j 1964(c)providesforcivilRICO claim s.Accordingtothatprovision,d'laqny 23 person injured inhisbusinessorpropertybyreasonofviolationofsection1962ofthischapter 24 m aysue thereforin any appropriate United Statesdistrictcoud and shallrecoverthreefold the 25 dam ages he sustains and the costofthe suit.'' As a result,Berg's argumentthat Plaintif'f 26 2 Berg also argued thatthisCourtlackedjurisdiction overthiscasebecausetheamountin 27 controversl'was lessthan $75-000. (Motion to Dismiss (#114) at5. However.t he amount in controversl'requirem enlonll'agpliestocasesbrouyhtin tederalcourtbasedon diversit),otcitizenship. 28 See28U.S.C.j 1332.Plaintift.ontheotherhand.lnvokedikderalquestionjurisdictiongursuantto28 L.S.C.j133l.28U.S.C.j1331proA'idesthat ytjhedistriclcourtsshal!haveoriginalJurisdictionol - - . . .. allciR'ilactionsarising underthe Constitution-lanr s.ortreaties od-the U nited States.-- ' 3 - 1 cannotbring a civilRICO claim iswithoutm erit.3 Plaintif is entitled to bring a civilRICO claim 2 pursuantto 18U.S.C.j 1964(c)forviolationsofanyprohibited activities Iisted in 18 U.S.C.j 3 1962.However,although Plainti ffm ay bring a civilRICO claim ,she m ustproperly plead such 4 a cause ofaction in hercom plaint. 5 The Ninth Circui thas recognized thatthe heightened pleading standards applicable to 6 fraud claims under Rule 9(b) apply to a RICO action alleging predicate acts of fraud. 7 Lancastercmtv.Hoso.v.AntelooevallevHosn.Dist.,94O F.2d397,405(9thCir.1991).Rule 8 9(b)requiresthatthe circumstancesconstitutingfraud be statedwithpadicularity.Schreiber 9 Distrib.Co.v.Serv-W ellFurniture Co..lnc.,8O6 F.2d 1393,1399 (9th Cir.1986)(internaI 10 quotationsom i tted).ddRuie 9(b)drequiresthe identification ofthe circumstances constituting 11 fraud so thatthe defendant can prepare an adequate answer from the allegations.'' Ld=. 12 (quoting Bossev.CrowellCollier& MacMillian,565F.2d 602,611(9th Cir.1977)).According 13 tothe NinthCircuit,pursuantto Rule 9(b)''the pleadermuststatethetime,place,and specific 14 content of the false representations as well as the identities of the parties to the 15 misrepresentation.' Ld=. 16 PlaintifrsComplaintIiststhree claimsforreliefbased on RICO. (Complaint(#1)case 17 5:07-cv-5861at20-21). Although the allegations ofherRICO claims state thatBerg was a 18 'person' 'within the m eaning ofRICO ,Plaintiffdoes notassed any specific RICO allegations 19 againstBerg. Rather,Plainti ffasseds thatlDefendants used United States PostalService 20 mail(mailfraud)ande-mail(wirefraud)to attempttoextod SpecialAssessmentmoniesfrom 21 Plainti# and otherhomeowners.''Ld=. ln addition,Plaintiffstates that''Defendants used the 22 interstate wires to obtain plaintiff's propedy by m eans of false or fraudulent pretenses, 23 representationsorpromiselsl.''Ld= 24 Inthiscase,the Courtfinds thatPlaintiffhas failed to satisfy Rule 9(b)'s padicularity 25 requirem entin relation to herRICO claim s. Plaintiffstates thatthe defendants used ''fajse or 26 fraudulentpretenses,representations orprom ises''to obtain herpropedy. However,Plaintiff 27 does notidentifythe alleged fraudulentrepresentations with any specificity. In particular,she 28 3 Thi sargumentwasaddressed and determ ined bytheCourtin Order(#111)filed on Januar) 26.2009. 4 l does notidentify the tim e,place,orspecific contentofthe alleged false representation orthe 2 padies to the false representation.Asa result,the fraud allegations ofPlaintiff's RICO claim s 3 are notpledwithpadicularityas required by Rule 9(b).Because theseclaims have notbeen 4 padicularly plead,dism issalis appropriate onthis claim in IightofPlainti ff'sfailure to respond 5 to Berg's m otion to dism iss. 6 B. FairDebtCollection Practices Act 7 The Fair Debt Collection Practices Act CFDCPA'') is a federalstatute providing 8 consum erprotection againstabuses by third party debtcollectors orotherspecified entities. 9 15 U.S.C.j 1692 etseq. The FDCPA imposes civilliability on any person orenti ty that 10 violatesitsprovisions. 15 U.S.C.j 1692*, Itestablishesgeneralstandardsofdebtcollector 11 conduct,defines abuse,and provides forspecific consum errights. 15 U.S.C.1692. 12 Here,Plaintiffasseds thathercause ofaction forviolation ofthe FDCPA is againstalI 13 defendants, Howeveq Plaintif' fdoes notidentify Berg in any allegations ofthis claim .Rather, 14 Plainti ffidentifies onlyfourofthe named defendantsinthisallegation.M oreover,Plaintifdoes 15 notallege thatBerg is a 'third party debtcollector''as required by the statute. As a result, 16 Plainti ffhasfailed to state a claim forreliefunderthe FDCPA againstBerg because the claim 17 Iacks suficientfacts to establish a cognizable Iegaltheory. Because Plaintiffhas failed to 18 state a claim againstBerg,the claim should be dism issed. 19 C. Exhaustion ofState Rem edies 20 Berg'sMotionto Dismiss(#114)also includesa motionto dism issthestate Iaw claims 21 asseded in Plainti ff's Com plaintforfailing to exhaustadm inistrative rem edies. 22 NRS 38.310 provides that no civil action based upon a claim relating to the 23 'interpretation, application or enforcem ent of any covenants, conditions or restrictions 24 applicable to residentialproperty,''or''Itlhe procedures used forincreasing,decreasing or 25 im posing additionalassessments upon residentialproperty,m ay be com m enced in any court 26 inthisstateunlesstheactionhasbeensubmittedtomediationorarbitration.''NRS 38.310(1). 17 Thatstatutefudherprovidesthatiilajcourtshalldismissanycivilactionwhich iscommenced 28 invioiationofthe provision''requiring mediation orarbitration.NRS 38.310(2).lninterpreting NRS 38.310,the Nevada Supreme Courthas heldthat''lulnderthatstatute,the districtcourt 5 I 1 m ust dism iss any dispute arising from the interpretation,application, or enforcem ent of 2 homeowners'associations'covenants,conditions,and restrictions(CC&Rs)ifthe partiesdid 3 notfirstsubm itthe dispute to m ediation orarbitration.'' Ham m v.Arrowcreek Hom eowners' 4 Ass'n,183 P.3d 895,898,124 Nev.28 (Nev.2008). In Hamm ,the Nevada Supreme Coud 5 strictly applied the reguirem ents of NRS 38.310 and stated that ''NRS 38.310 expresses 6 Nevada's public policy favoring arbitration of disputes involving the interpretation and 7 enforcementofCC&Rs.''Ld-.at902. 8 A plaintil isgenerally required to exhaustaIIadm inistrative remedies before a coud will 9 assume jurisdiction. W .Radio Serv.Co.,Inc.v.Esov,79 F.3d 896,899 (9th Cir.1996)' ,see 10 alsoNishimotov.Federman-Bachrach&Assoc.,903F.2d709,716(9thCir.lggoltstatingthat 1l the failure to exhauststate adm inistrative rem edies llm eans that no coud w ould have had 12 jurisdiction''to decide the claim).W ith regard to rightsarising understate Iaw,federalcourts 13 lookto the intentofthe Iegislature as evidenced by the textand structure ofa particularstate 14 statute in deciding whether exhaustion of adm inistrative remedies is a jurisdictional 15 prerequisite.Jonesv.GrinnellCoro.,235F.3d 972,974 (5thCir.zoolltholdingthatthedistrict 16 courtdid nothave subjectmatterjurisdiction overa state Iaw claim because the Iitiganthad 17 notexhausted aI1state administrative remedies). 18 In this matter,the Coud m ustdism iss Plaintifrs state law claim s because they arise 19 from the ddinterpretation,application,orenforcem entofhom eow ners'associations'covenants, 20 conditions and restrictions.''See Ham m ,124 Nev.at28,183 P.3d at898.Nevada Iaw is clear 21 that in orderto bring an action based on the CC&RS of a hom eowners'association,the 22 aggrieved person m ustexhaustthe adm inistrative rem edies provided by law - in this case, 23 subm ission to m ediation orarbitration underNRS 38.310. Thus,Plaintiff's state Iaw claim s 24 are dismissed pursuanttothe mandate ofNRS 38.310(2). 25 Based on the foregoing,the five factorsthe districtcourtm ustweigh before dism issing 26 a case forfailing to follow the Iocalrules weigh in favorofdism issal. Because Berg has filed 27 a m eritorious m otion to dism iss,dism issalin this instance favors the public's interestin the 28 expedi tiousresolution oflitigation,avoidsariskofprejudicetothedefendants,andpromotes the public policyfavoring disposition ofcases ontheirm erits.ln addition,because the m otion 6 1 to dism isshasm erit,there isno Iess drastic sanction available because Plaintif failedto state 2 a claim upon which reliefcan be granted againstBerg. 7 CONCLUSIO N . 4 Forthe foregoing reasons,IT IS HEREBY O RDERED thatDefendant Kevin Berg's 5 Moti ontoDi smi ss1Pl ai nti ff' scompl ai nt(#114)i sGRANTED. 6 *7! Dated this day ofJuly,2oo9. Z .. '':15 , . yœ . ' ,/ 8 UM e States DistrictJudge 9 10 12 13 14 15 16 17 18 19 20 21 22 23 25