Professional Documents
Culture Documents
Helix Gordon
Helix Gordon
1 Chad Anderson
PO Box 63333
2 Phoenix, AZ 85082
3 AZ Bar 020771
[email protected]
4 Ph. 602-904-5485
Attorney for named Defendants
5
6
IN THE UNITED STATES DISTRICT COURT
7 FOR THE DISTRICT OF ARIZONA
8
9 Ryan Gordon, an unmarried man; )
Plaintiff, )
10 ) Case No. 2:19-cv-04770-SPL
v. )
11 ) MOTION TO DISMISS
13 Red Media Ltd., a Nevada LLC, d/b/a ) 12(b)(1) AND 12(b)(6)
12 Helix Studios; Keith Miller, an unmarried )
Man, Individually and as Member/Manager of )
13 13Red Media Ltd.; Chad Anderson, an ) ORAL ARGUMENT
14 unmarried Man; John Does I-X and Jane Does ) REQUESTED
I-X; Black Corporations I-X and )
15 White Limited Partnerships I-X )
Defendants )
16 ______________________________________________________________________
17
18 COMES NOW Defendants 13 Red Media Ltd, Keith Miller, and Chad Anderson, who
19 move to dismiss the Complaint (Doc.1) for Lack of Subject Matter Jurisdiction and failure to
20 state a claim pursuant to Fed. R. Civ. P. 12(b)(6). The Defendants certify that, pursuant to D.C.
21
Ariz. L. Civ. R. 7.1(A),2 Defendant Counsel conferred with Plaintiff’s counsel by email,
22
providing Plaintiff’s counsel the detailed grounds for this motion and the relief requested on 9
23
24 August 2019, with a response date of 16 August. Plaintiff’s lead counsel has substituted himself
25 as local counsel on 21 August (Doc. 12) but has otherwise failed to amend the Complaint or
26 respond in any way.
27
28
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 2 of 42
1 TABLE OF CONTENTS
2 I. TABLE OF CONTENTS 2
3 II. PRELIMINARY STATMENT 4
4
III. STATEMENT OF ISSUES PRESENTED 5
5
IV. STATEMENT OF FACTS 5
6
7 V. CASE SUMMARY 8
2
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 3 of 42
17 XXV. CONCLUSION 35
18 XXVI. TABLE OF EXHIBITS 37
19
XXVII. TABLE OF CASES 37
20
21 XXVIII. TABLE OF AUTHORITIES 41
22
23
24
25
26
27
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 4 of 42
1 PRELIMINARY STATEMENT
2 Plaintiff Ryan Gordon alleges that the Court has subject matter jurisdiction over this case
3 pursuant to 28 U.S.C. § 1332 (a), which vests an Article III federal court with jurisdiction over
4
state-law claims when there is complete diversity of citizenship and the amount in controversy
5
exceeds $75,000. Plaintiff has no claims based in federal law, relying entirely on diversity of
6
7 citizenship and amount in controversy for subject matter jurisdiction, but fails to plead the amount
14 requirement. 28 U.S.C. §§ 1332(a)(1). Chad Anderson is a citizen and domiciled in Arizona, a fact
15 easily discovered by simply viewing directories of either Nevada or Arizona State Bar, both of
16
which Anderson is a member and both list an Arizona address. The referenced but unnamed
17
defendant Starmaker Media Productions, an Arizona LLC, intentionally or unintentionally not
18
19 included as a Defendant, is also problematic to complete diversity. The suspected reasons
20 Plaintiff’s counsel failed to name the Arizona entity created for the purpose of hiring Plaintiff as
21 an independent contractor but did name the Arizona citizen General Counsel of Defendant 13 Red
22
Media in his individual capacity then allege Anderson’s residence in Nevada so as to not defeat
23
diversity do not place Plaintiff’s counsel in good light.
24
25 Plaintiff Gordon and Defendant Anderson are not citizens of different states, they are both
26 citizens of Arizona; thus, there is not complete diversity of citizenship. Because Plaintiff and
27 Anderson are both citizens of Arizona, this Court lacks subject matter jurisdiction. Because the
28
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 5 of 42
1 complaint fails to meet minimum pleading standards for amount in controversy, this Court again
2 lacks subject matter jurisdiction. Thus, Defendant’s motion to dismiss for lack of subject matter
3 jurisdiction should be granted.
4
Furthermore, independent of Plaintiff’s failure to meet diversity and amount in controversy
5
requirements, Plaintiff’s complaint fails to meet minimum pleading requirements and is without
6
7 basis in law or fact, as discussed below. Plaintiff has no contract, he has no registered copyright
8 or registered trademark, he can show no false statements, there are no trade secrets in the making
9 of adult video, he has no legal claim to any brand, and Plaintiff simply has no case in any court.
10
STATEMENT OF ISSUES PRESENTED
11
1. Has Plaintiff’s complaint failed to meet the diversity requirement that no Plaintiff be
12
13 the same citizenship as any Defendant, requiring dismissal?
14 2. Has Plaintiff’s complaint failed to adequately plead the statutory requirement for
15 damages in excess of $75,000, requiring dismissal?
16
3. Has Plaintiff failed to state a claim upon which relief can be granted, requiring
17
dismissal?
18
19 4. Has Plaintiff’s counsel filed a frivolous suit in an Article III Court?
20 5. Is Plaintiff and/or Plaintiff’s counsel subject to sanctions and/or referral to the State
21 Bar of Arizona for ethics violations?
22
STATEMENT OF FACTS
23
1. Defendant 13 Red Media Ltd. is a Limited Liability Company organized under the laws
24
25 of Nevada, with its principal place of business in Las Vegas, Nevada. Keith Miller is
26 the sole owner and manager. 13 Red Media operates under the trade name Helix
27 Studios. (Complaint ¶¶12-13)
28
5
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 6 of 42
1 2. Defendant Keith Miller is and was at all times relevant, a resident of Las Vegas and a
6
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 7 of 42
1 via email to Defendant 13 Red Media which consisted of 5 pages of stock images. The
2 Look Book did not contain any business plan, proof of concept, or any “demonstration
3 of viability.” The November 7 Look Book contained no details whatsoever, and was
4
curiously not included in Plaintiff’s Complaint. (Complaint ¶ 39) (Exhibit C).
5
9. In November 2018, Defendant 13 Red Media and Plaintiff Gordon signed a
6
7 Memorandum of Understanding that provided payment to Gordon in the amounts of
8 $6,000 during the month of November and $10,000 for the month of December, during
9 such time the parties would negotiate terms of an employment agreement. The MOU
10
clearly stated Gordon would be classified as an independent contractor, without any
11
promise of extended employment and that a detailed agreement would be prepared and
12
13 supersede the MOU at a later date. This MOU was referenced by the Complaint but
26 camera that had not yet been released for sale by the manufacturer. The camera Plaintiff
27 insisted on was a Canon XF705 HD, an advanced video camera that was initially
28
7
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 8 of 42
1 scheduled to be released for retail sale on 5 December 2018. The release was delayed
14 18. There are no trade secrets in the production of adult videos for online membership
15 websites.
16
19. Neither 13 Red nor Starmaker Media Productions, nor Ryan Gordon developed,
17
marketed, or offered any goods or services under the name “Rugged Male.”
18
19 20. Nobody owns a brand called “Rugged Male” and neither party has marketed goods or
8
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 9 of 42
1 several hours of nature scenes and took some nature photos during the months of November and
2 December that were not used by Defendants. In December, Plaintiff refused to provide names and
3 contact information for models he claimed to have recruited and stated he could not explain model
4
releases to potential models. During this evaluation period, no terms of a contract were agreed
5
upon, and no contract drafted. Plaintiff’s services as an independent contractor were terminated
6
7 at the end of December, 2018.
14 contract and breach of the implied covenant of good faith and fair dealing without having a contract
15 and without pleading the elements of a contract; claiming negligent misrepresentation without any
16
contract and without any false statements; claiming misappropriation of trade secrets without
17
having any trade secrets to misappropriate; claiming conversion of a non-existent brand that
18
19 neither he nor anyone else owns and without any registered trademark, copyright, or having ever
20 marketed any good or service under the purported brand and without pleading the elements of
21 conversion; claiming intentional infliction of emotional distress without pleading any facts;
22
claiming defamation without pleading any false and defamatory statement; claiming unjust
23
enrichment in a Cause of Action that has nothing to do with the instant matter and which appears
24
25 to be Plaintiff’s counsel not proofreading his filing; claiming tortious interference with business
26 expectancy (as an independent contractor) without pleading the elements of tortious interference;
27 claiming aiding and abetting tortious interference against Defendant’s General Counsel in his
28
9
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 10 of 42
1 individual capacity without pleading elements to pierce the corporate veil or any attempt to show
2 how an attorney’s advice to a corporate client leads to personal liability; and for his last Cause of
3 Action, also the second Eleventh Cause of Action, oddly styled “Injunctive Relief” as a Cause of
4
Action, claims Defendants are proclaiming the Plaintiff still works for them without any evidence.
5
Plaintiff’s contract and contract-derived claims fail because Plaintiff was an independent
6
7 contractor and had no contract. Plaintiff’s contract and contract-derived claims further fail because
8 Plaintiff’s own “Statement of Fact” claims he had a contract with an unspecified Defendant
9 (assumed to be 13 Red or Starmaker Media Productions) that would pay him 50% of profits after
10
the 1st year, which if true, would be a contract that could not be completed in 1 year and therefore
11
must be in writing, signed by both parties, and produced as evidence in order to state a claim.
12
13 (Complaint ¶ 46, Statute of Frauds A.R.S. §44-101(5)). Plaintiff’s Misappropriation of Trade
14 secrets claims fail because Plaintiff has no trade secrets, and there are no trade secrets in the
15 production of adult videos. Plaintiff’s claims based on use of “Rugged Male” fail because Plaintiff
16
has no ownership of the mark, no registered copyright or trademark, and because Plaintiff never
17
developed or marketed Rugged Male. Plaintiff’s claims based on Defendants’ non-use of “Rugged
18
19 Male” further fail because 13 Red and Starmaker Media never marketed anything under the name
20 “Rugged Male” so there never were revenues of any kind. Plaintiff’s claims of unjust enrichment
21 fail because the 9th Cause of Action is unrelated to anything between Plaintiff and Defendant, as
22
Plaintiff never paid Defendant anything nor were any of the parties involved in collection of
23
signatures. It is surprising to see a foolish error like this make it into a filed complaint in an Article
24
25 III Court, and particularly astonishing because Plaintiff’s counsel was notified by Defendant
26 Attorney Anderson, with a copy to Plaintiff’s paralegal, of the same erroneous Cause of Action in
27 his draft complaint. Plaintiff’s claims against Chad Anderson in his individual capacity fail
28
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 11 of 42
1 because Plaintiff fails to plead elements to assisting a tort that never occurred, fails to plead facts
2 necessary to pierce the corporate veil, fails to plead facts or good cause for naming an attorney,
3 known to be in-house counsel of Defendant acting in his role as Counsel, in the attorney’s
4
individual capacity, and Plaintiff fails because Anderson is a citizen of Arizona, and no Defendant
5
can be of the same citizenship as the plaintiff in a diversity based suit.
6
7 Plaintiff’s Counsel, in his zeal to impose costs on Defendant 13 Red Media by naming
14 to name the Arizona company mentioned in the Parties’ Memorandum of Understanding, which
15 would be a necessary party but would also destroy complete diversity.
16
If Plaintiff were allowed to amend to cure the diversity problem, Plaintiff still fails to meet
17
even the most lenient pleading requirements for establishing damages in excess of $75,000, failing
18
19 to plead ANY dollar amount of damages. Plaintiff was never more than an independent contractor,
20 being paid $10k per month, nothing more, and there is not a scintilla of evidence that indicates
21 otherwise. Even viewed in the light most favorable to Plaintiff, there is no plausible way to reach
22
the $75,000 threshold required to sustain a complaint in federal court based on diversity
23
jurisdiction.
24
25 The lack of support and substantiation in the complaint is breathtaking and this scrivener
26 intends to initiate an ethics charge against both Counsels for Plaintiff on the grounds of filing a
27 frivolous complaint. Plaintiff’s complaint is an unsupported, conclusory assertion of entitlement
28
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 12 of 42
1 with no basis in law or fact; so vague as to wrinkle the brow of the most learned legal interpreter.
2 Defendants first raise the issue of Subject Matter Jurisdiction; Plaintiff has the burden of
3 proving existence of jurisdiction by a preponderance of the evidence McNutt v General Motors
4
Acceptance Corp. of Indiana, 298 U.S. 178, 56 S. Ct. 780, 80 L. Ed. 1135 (1936).
5
Should the court decline to dismiss the complaint, Defendants respectfully request the
6
7 Court order Plaintiff to provide a more definite statement of claims pursuant to Federal Rule of
8 Civil Procedure 12(e) so the Defendants can more fully and properly respond.
9 DIVERSITY MUST BE PLEAD AS FACT AND BURDEN IS ON PLAINTIFF
10
Absent unusual circumstances, a party seeking to invoke diversity jurisdiction should be
11
able to allege affirmatively the actual citizenship of the relevant parties. See Whitmire v. Victus
12
13 Ltd. T/A Master Design Furniture, 212 F.3d 885, 887 (5th Cir. 2000) ("[I]n a diversity action, the
14 plaintiff must state all parties' citizenships such that the existence of complete diversity can be
15 confirmed.") (quoting Chemical Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210,
16
222 n.13 (3d Cir. 1999)); see also 5 C.A. Wright & A. Miller, Federal Practice and Procedure §§
17
1208 at 101 (2d ed. 1990).
18
19 The diversity jurisdiction statute, 28 U.S.C. §§ 1332, turns on citizenship, not residency,
20 and requires that all Plaintiffs be diverse from all Defendants, so that no Plaintiff can be of the
21 same state citizenship as any Defendant, or complete diversity will not exist. “To be a citizen of a
22
state, a natural person must first be a citizen of the United States. Newman-Green, Inc. v. Alfonzo-
23
Larrain, 490 U.S. 827, 828 (1989). The natural person's state citizenship is then determined by her
24
25 state of domicile, not her state of residence. A person's domicile is her permanent home, where she
26 resides with the intention to remain or to which she intends to return. See Lew v. Moss, 797 F.2d
27 747, 749 (9th Cir. 1986). A person residing in a given state is not necessarily domiciled there, and
28
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 13 of 42
1 thus is not necessarily a citizen of that state. See, e.g., Weible v. United States, 244 F.2d 158, 163
2 (9th Cir. 1957) ("Residence is physical, whereas domicile is generally a compound of physical
3 presence plus an intention to make a certain definite place one's permanent abode, though, to be
4
sure, domicile often hangs on the slender thread of intent alone, as for instance where one is a
5
wanderer over the earth. Residence is not an immutable condition of domicile.")” Kanter v. Warner
6
7 Lambert Co., 265 F.3d 853, 857 (9th Cir., 2001)
8 Here, Plaintiff Gordon and Defendant Anderson are both citizens of Arizona, and complete
9 diversity is destroyed. (Exhibit A, Affidavit of Chad Anderson) The Court must dismiss for lack
10
of subject matter jurisdiction.
11
DAMAGES CALCULATIONS CANNOT BE SPECULATIVE
12
13 In order to sustain a diversity action, if all Plaintiffs are diverse from all Defendants,
14 Plaintiff must plead damages in excess of $75,000.00. 28 U.S.C. § 1332(a). Plaintiff fails to plead
15 any dollar value of damages and therefore cannot meet the amount in controversy requirement to
16
maintain a diversity case in this Article III Court.
17
Plaintiff must show that the matter in controversy exceeds $75,000, exclusive of interest
18
19 and costs. Plaintiff’s complaint fails to seek any amount. The only sums requested are damages
20 “in an amount to be determined at trial,” and “all income and profits realized”; the complaint does
21 not attach any dollar figure to Plaintiff's remaining prayers for relief. (Complaint Page 24, Lines
22
8-22)
23
Further, there is no way Plaintiff’s complaint can be read to find it makes sufficient
24
25 pleadings. “Plaintiff must prove, by preponderance of the evidence, that the amount in controversy
26 meets the jurisdictional threshold. …. Conclusory allegations as to the amount in controversy are
27 insufficient.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir., 2003);
28
13
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 14 of 42
1 see also Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04 (9th Cir.1996). Plaintiff has
2 failed to allege any damage with any specificity, much less failed to allege any dollar amounts of
3 damage. Plaintiff’s only efforts at calculating damages were three unsupported sentences in its
4
"Statement of Facts” that Gordon would be entitled to half of profits after the first year, and the
5
uncredited and unsubstantiated "It was estimated that Mr. Gordon’s product would yield as much
6
7 as ten million dollars ($10,000,000.00)" (Complaint, ¶45-46) This is clearly insufficient evidence
8 of anything. ‘“[I]nformation and belief” hardly constitutes proof "by a preponderance of the
9 evidence." See Matheson, 319 F.3d at 1090-91 ("Conclusory allegations as to the amount in
10
controversy are insufficient."). To discharge its burden, [Plaintiff must] "provide evidence
11
establishing that it is `more likely than not' that the amount in controversy exceeds that amount."
12
13 Sanchez, 102 F.3d at 404; see also Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir.1992) (per
14 curiam) (holding that a conclusory allegation "neither overcomes the `strong presumption' against
15 removal jurisdiction, nor satisfies [the defendant]'s burden of setting forth, in the removal petition
16
itself, the underlying facts supporting its assertion that the amount in controversy exceeds" the
17
applicable dollar value).”” (emphasis in the original). Valdez v. Allstate Ins. Co., 372 F.3d 1115,
18
19 1117 (9th Cir., 2004)
20 Plaintiff has completely failed to adequately plead the statutorily required amount in
21 controversy, and therefore the Complaint must be dismissed for lack of Subject Matter Jurisdiction.
22
If the Plaintiffs were allowed to amend their complaint to somehow address both the
23
amount in controversy and diversity failures, Plaintiff’s Complaint would still have to be dismissed
24
25 for failure to state a claim.
14
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 15 of 42
1 facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S.
2 544, 564, 127 S. Ct. 1955, 1974 (2007) "A claim has facial plausibility when the plaintiff pleads
3 factual content that allows the court to draw the reasonable inference that the defendant is liable
4
for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009).
5
Dismissal under Rule 12(b)(6) may be "based on the lack of a cognizable legal theory or the
6
7 absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police
14 possibility and plausibility of entitlement to relief.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550
15 U.S. 544, 557 (2007)). Courts construe the facts alleged in the complaint in the light most favorable
16
to the plaintiff and accepts all well-pleaded factual allegations as true. See Shwarz v. United States,
17
234 F.3d 428, 435 (9th Cir. 2000). However, courts do not accept as true legal conclusions couched
18
19 as factual allegations. Iqbal, 556 U.S. at 680. A plaintiff’s allegations must rise above and beyond
20 the “speculative,” conceivable” or “possible” and instead must “state a claim to relief that is
21 plausible on its face.” Id. at 555-70. Determining whether the allegations in a complaint are
22
“plausible” is “a context-specific task that requires the reviewing court to draw on its judicial
23
experience and common sense.” Iqbal, 556 U.S. at 679. If the “well-pleaded facts do not permit
24
25 the court to infer more than the mere possibility of misconduct,” the complaint should be
26 dismissed for failing to “show[ ] that the pleader is entitled to relief” as required by Rule 8(a)(2).
27 Id. A plaintiff’s obligation to provide the “grounds” of entitlement to relief “requires more than
28
15
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 16 of 42
1 labels and conclusions [and] a formulaic recitation of the elements of a cause of action will not
2 do.” Id. at 555. The pleading standard first enunciated in Twombly is the pleading standard for all
3 civil actions. Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009). When reviewing a motion to dismiss,
4
the Court will “consider only allegations contained in the pleadings, exhibits attached to the
5
complaint, and matters properly subject to judicial notice.” Swartz v. KPMG LLP, 476 F.3d 756,
6
7 763 (9th Cir.2007) (per curiam).
8 “[A] court considering a motion to dismiss can choose to begin by identifying pleadings
9 that, because they are no more than conclusions, are not entitled to the assumption of truth. While
10
legal conclusions can provide the framework of a complaint, they must be supported by factual
11
allegations. When there are well-pleaded factual allegations, a court should assume their veracity
12
13 and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal 556 U.S. at
14 679.
15 For a Motion to Dismiss "review is limited to the complaint." Cervantes v. City of San
16
Diego, 5 F.3d 1273, 1274 (9th Cir. 1993) Although as a general rule "a district court may not
17
consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion…. we hold that
18
19 documents whose contents are alleged in a complaint and whose authenticity no party questions,
20 but which are not physically attached to the pleading, may be considered in ruling on a Rule
21 12(b)(6) motion to dismiss. Such consideration does "not convert the motion to dismiss into a
22
motion for summary judgment." quoting Romani v. Shearson Lehman Hutton, 929 F.2d 875, 879
23
n. 3 (1st Cir.1991). " Branch v Tunnell, 14 F.3d 449, 453 (9th Cir.1994). A court may consider
24
25 "material which is properly submitted as part of the complaint" on a motion to dismiss without
26 converting the motion to dismiss into a motion for summary judgment. Branch, 14 F.3d at 453
27 (citation omitted). If the documents are not physically attached to the complaint, they may be
28
16
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1 considered if the documents' "authenticity . . . is not contested" and "the plaintiff's complaint
2 necessarily relies" on them. Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998). Further,
3 under Fed. R. Evid. 201, a court may take judicial notice of "matters of public record." Mack v.
4
South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Lee v. City of Los Angeles, 250 F.3d
5
668, 688 (9th Cir., 2000)
6
7 “A court may, however, consider certain materials–documents attached to the complaint,
14 are not physically attached to the [plaintiff’s] pleading.’” In re Silicon Graphics Inc. Sec. Litig.,
15 183 F.3d 970, 986 (9th Cir. 1999) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994),
16
overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119, 1121 (9th Cir.
17
2002)). A document may be considered incorporated by reference in a complaint “if the plaintiff
18
19 refers extensively to the document or the document forms the basis of the plaintiff’s claim.”
20 Ritchie, 342 F.3d at 908 (citing Van Buskirk, 284 F.3d at 980).
21 Exhibit A, Affidavit and Declaration of Citizenship of Chad Anderson, may be considered
22
by the Court in a Motion to Dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) as
23
the Affidavit is presented as evidence of citizenship and is necessary to determine if the Court has
24
25 subject matter jurisdiction. Defendants attach Exhibit B, the Memorandum of Understanding that
26 is referenced in Plaintiff’s complaint, as the complaint “necessarily relies on” the MOU. Lee v.
27 City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). Defendants attach Exhibit C, the “Look Book”
28
17
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1 referenced by Plaintiff (Complaint ¶ 39) and Exhibit E, Receipt for Purchase of Canon XF705 HD
2 camera, referred to by Plaintiff in Paragraphs 55-57, and 101, as the complaint necessarily relies
3 on the document, or in the case of the receipt, absence of its existence. Id. Defendant attaches
4
Exhibit D, the public profile of Defendant’s Starmaker Media Productions LLC, an Arizona LLC,
5
under the exception for documents that are matters of public record. Defendants believe the Court
6
7 can decide the 12(b)(6) Motion to Dismiss without these Exhibits if the Court determines they do
14 the circumstances constituting fraud...." Fed.R.Civ.P. 9(b), Kearns v. Ford Motor Co., 567 F.3d
15 1120, 1124 (9th Cir. 2009)
16
“To prove a fraud claim in Arizona, nine elements must be established: "(1) a
17
representation, (2) its falsity, (3) its materiality, (4) the speaker's knowledge of its falsity or
18
19 ignorance of its truth, (5) the speaker's intent that the information should be acted upon by the
20 hearer and in a manner reasonably contemplated, (6) the hearer's ignorance of the information's
21 falsity, (7) the hearer's reliance on its truth, (8) the hearer's right to rely thereon, and (9) the hearer's
22
consequent and proximate injury." Taeger v. Catholic Family & Cmty. Serv., 995 P.2d 721, 730
23
(Ariz. App. 1999). "Mere conclusory allegations of fraud will not suffice; the complaint must
24
25 contain statements of the time, place, and nature of the alleged fraudulent activities." A.G. Edwards
26 & Sons, Inc. v. Smith, 736 F. Supp. 1030, 1033 (D. Ariz. 1989) (citing Bosse v. Crowell Collier &
27 MacMillan, 565 F. 2d 602, 611 (9th Cir. 1977); see also Lancaster Cmty. Hosp. v. Antelope Valley
28
18
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1 Hosp. Dist., 940 F.2d 397, 405 (9th Cir. 1991) ("Federal Rule of Civil Procedure 9(b) requires a
2 pleader of fraud to detail with particularity the time, place, and manner of each act of fraud, plus
3 the role of each defendant in each scheme.")
4
Each element must be supported by sufficient evidence. "Fraud may never be established
5
by doubtful, vague, speculative, or inconclusive evidence." In re McDonnell's Estate, 65 Ariz. 248,
6
7 253, 179 P.2d 238, 241 (1947); Fridenmaker v. Valley National Bank of Arizona, 23 Ariz.App.
8 565, 534 P.2d 1064 (1975). Echols v. Beauty Built Homes, Inc., 132 Ariz. 498, 647 P.2d 629 (Ariz.,
9 1982)
10
Plaintiff fails to identify the role of any defendant in the alleged fraud Swartz v. KPMG
11
LLP, 476 F.3d 756, 765 (9th Cir. 2007) and Plaintiff fails to identify the specific content of any
12
13 individual misrepresentation, where or when it was made, or which Defendant made the
14 misrepresentation. See Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)
15 “"In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall
16
be stated with particularity." Wilson v. Byrd, 79 Ariz. 302, 288 P.2d 1079 (1955). Although no
17
particular language is necessary in pleading fraud, the elements constituting fraud must be found
18
19 when considering the pleading as a whole. Parks v. Macro-Dynamics, Inc., 121 Ariz. 517, 591
20 P.2d 1005 (App.1979); Denbo v. Badger, 18 Ariz.App. 426, 503 P.2d 384 (1972). However, bare
21 allegations that a thing is "fraudulent" are insufficient to comply with the rule. In re Cassidy's
22
Estate, 77 Ariz. 288, 270 P.2d 1079 (1954).” Spudnuts, Inc. v. Lane, 131 Ariz. 424, 641 P.2d 912
23
(Ariz. App., 1982)
24
25 Plaintiff’s complaint attempts to plead a cause of action for fraud against all Defendants in
26 just 5 paragraphs, ¶¶ 83-87, alleging only that over a period of two months, “Defendants” made
27 representations, that the representations were false and material and that the Defendants knew
28
19
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 20 of 42
1 those representations were false. Plaintiff does not describe which Defendant made representation,
2 fails to describe anything with particularity and fails to provide any evidence, as if Plaintiff’s
3 counsel failed to conduct basic research. None of the elements of fraud have been plead with
4
particularity and therefore this Cause should be dismissed for failure to state a claim upon which
5
relief can be granted.
6
7 CORPORATE ACTORS ARE SHIELDED FROM INDIVIDUAL LIABILITY ABSENT
SHOWING GROSS NEGLIGENCE AND NAMING CORPORATE OFFICERS IN THEIR
8 INDIVIDUAL CAPACITY IS UNFOUNDED AND PREMATURE
9 Count I was filed against all Defendants. Plaintiff names Keith Miller and Chad Anderson,
10
13 Red Media Ltd. Founder/Member/Manager and General Counsel respectively, in their
11
individual capacities without pleading facts necessary to pierce the corporate veil. Both are
12
13 protected under the business judgement rule. Under Arizona law, where the business judgment
14 rule applies to the conduct of an officer or director, a showing of gross negligence is necessary to
15 strip the director of the rule's protection. F.D.I.C. v. Jackson, 133 F.3d 694, 700 (9th Cir., 1998).
16
The business judgment rule, stated generally, "precludes judicial inquiry into
17
actions taken by a director in good faith and in the exercise of honest judgment in the
18 legitimate and lawful furtherance of a corporate purpose." Shoen v. Shoen, 167 Ariz. 58,
19 65, 804 P.2d 787, 794 (1990); see Kadish v. Phx. Scotts. Sports Co., 11 Ariz.App. 575,
20 578, 466 P.2d 794, 797 (1970). The rule thus applies if directors act in furtherance of a
21 legitimate corporate purpose, in good faith, and after reasonably informing themselves.
22 See, e.g., Blumenthal v. Teets, 155 Ariz. 123, 128, 745 P.2d 181, 186 (1987) (quoting
Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984)) (applying Delaware law). Under the
23
case law, a rebuttable presumption exists that each of these elements are present. It is a
24
presumption that in making a business decision the directors of a corporation acted on an
25
informed basis, in good faith and in honest belief that the action taken was in the best
26
interest of the company.... The burden is on the party challenging the decision to establish
27 facts rebutting the presumption. Id.; see also Washington Bancorporation v. Said, 812
28 F.Supp. 1256, 1268 (D.D.C.1993); 3A Stephen M. Flanagan & Charles R.P. Keating,
20
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 21 of 42
4 even make an attempt. If for no other reason, the entire complaint should be dismissed as to
5
Defendants Keith Miller and Chad Anderson in their individual capacities for failure to state a
6
claim upon which relief can be granted due to protections of the corporate shield.
7
COUNT II – THE COMPLAINT FAILS TO STATE A CLAIM FOR BREACH OF
8
CONTRACT
9
“To state a breach of contract claim, a plaintiff must allege that (1) a contract existed, (2)
10
it was breached, and (3) the breach resulted in damages.” Steinberger v. McVey ex rel. Cty. of
11
12 Maricopa, 318 P.3d 419, 434 (Ariz. Ct. App. 2014) (citation omitted).
13 “The elements of a breach of contract claim are the existence of a contract, breach, and
14
resulting damages.” Thomas v. Montelucia Villas, LLC, 302 P.3d 617, 621 (Ariz. 2013).
15
Plaintiff pleads no evidence of the existence of a contract, how it was breached, or how
16
that breach resulted in damages. A Memorandum of Understanding is referred to by Plaintiff but
17
18 not attached to his Complaint; under the exceptions stated above, Defendants attach a copy to this
19 Motion. (Exhibit B) This failure to attach the MOU is believed to have been intentional as it does
20
not help Plaintiff’s case. The MOU demonstrates Plaintiff was an independent contractor without
21
a contract. Without a contract, Plaintiff cannot plead breach of contract.
22
Plaintiff makes an unsupported “Statement of Fact” that an agreement was made to pay
23
24 Plaintiff “$120,000 in the first year and fifty percent (50%) of the profits made from the new
25 product thereafter.” (emphasis added) (Comp. ¶46) Defendants deny the existence of any
26
agreement or contract and proclaim Plaintiff’s statement of “fact” to be false and imaginary, but it
27
is very important to focus on Plaintiff’s claim that an agreement exists providing him a certain sum
28
21
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 22 of 42
1 in the first year and a portion of profits in subsequent years. By Plaintiff’s own statement, the
2 agreement he refers to could not be completed in one (1) year. Plaintiff claims the agreement
3 entitles him to a portion of profits after the first year. Under the Arizona Statute of Frauds, any
4
agreement that cannot be completed in one year MUST be in writing and MUST be signed by the
5
party to be charged. Statute of Frauds, A.R.S. §44-101(5) By his own inclusion of this “Statement
6
7 of Fact,” Plaintiff has corned himself into requiring production of a writing that is signed by the
17 relationship or an actual contract between the parties. Wells Fargo Bank v. Arizona Laborers, 38
18 P.3d 12, 29 (Ariz. 2002). The implied covenant in a contract only protects a party’s “reasonably
19
expected benefit of the bargain.” Bike Fashion Corp. v Kramer, 46 P.3d 431, 435 (Ariz.App. 2002)
20
(emphasis added). To determine a party’s reasonable expectations, “the relevant inquiry always
21
22 will focus on the contract itself, to determine what the parties did agree to.” Kuehn v. Stanley, 91
23 P.3d 346, 354 (Ariz. Ct. App. 2004) (internal quotations omitted). In other words, the implied
24 covenant “cannot directly contradict an express contract term.” Id. (emphasis added). And it
25
cannot create a new contractual term. In re Banner Health Data Breach Litig., No. CV-16-02696-
26
PHX-SRB, 2017 WL 6763548, at *5 (D. Ariz. Dec. 20, 2017) (citing 11333 Inc. v. Certain
27
28 Underwriters at Lloyd’s, London, 261 F. Supp. 3d 1032, 2017 WL 2556755, at *14 (D. Ariz. June
22
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 23 of 42
1 13, 2017) (“The implied covenant of good faith and fair dealing is not a vehicle for creating
2 contractual terms that the parties did not otherwise agree to; it protects the existing terms from
3 subversion.”)). In In re Banner Health Data Breach, the court dismissed the implied covenants
4
claim because the plaintiffs did not adequately allege an enforceable promise to keep certain data
5
secure, and therefore could not allege that the defendant breached the implied covenant of good
6
7 faith and fair dealing by failing to do so. Id. at *5.
8 Plaintiff’s complaint pleads none of the elements necessary to support this Cause of Action,
9 and as Plaintiff fails to plead the elements of an underlying contract, there is no basis for this COA.
10
Plaintiff fails to state a claim upon which relief can be granted.
11
COUNT IV – THE COMPLAINT FAILS TO STATE A CLAIM FOR NEGLIGENT
12 MISREPRESENTATION
13
Arizona has adopted the Restatement (Second) of Tort's definition of negligent
14
misrepresentation: One who, in the course of his business, profession or employment, or in any
15
16 other transaction in which he has a pecuniary interest, supplies false information for the guidance
17 of others in their business transactions, is subject to liability for pecuniary loss caused to them by
18 their justifiable reliance upon the information, if he fails to exercise reasonable care or competence
19
in obtaining or communicating the information. Restatement (Second) of Torts § 552(1) (1977).
20
See also Kuehn v. Stanley, 208 Ariz. 124, 127-28, 91 P.3d 346, 349-50 (Ct. App. 2004) ("Arizona
21
22 courts follow the law of negligent misrepresentation set forth in Restatement § 552(1)."). The
23 Restatement further provides that liability under § 552(1) is limited "to loss suffered by the person
24 . . . for whose benefit and guidance [the defendant] intends to supply the information or knows that
25
the recipient intends to supply it." Restatement (Second) of Torts § 552(2) (emphasis added).
26
Plaintiff has made only bare allegations and fails to plead the elements, or any facts,
27
28 supporting a Cause of Action for Negligent Misrepresentation, and therefore, this COA must be
23
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 24 of 42
1 dismissed for failure to state a claim upon which relief can be granted.
2
3 COUNT V – THE COMPLAINT FAILS TO STATE A CLAIM FOR
4 MISAPPROPRIATION OF TRADE SECRETS
5 Under the Arizona Uniform Trade Secret Act, a plaintiff must prove two elements: (1) the
6 existence of a trade secret and (2) actual or threatened misappropriation. See Calisi v. Unified Fin.
7
Servs., LLC, 302 P.3d 628, 631-32 (Ariz. Ct. App. 2012); Miller v. Hehlen, 104 P.3d 193, 201
8
(Ariz. Ct. App. 2005). The subject matter of the information must be a secret and reasonable efforts
9
10 must have been taken to keep the information secret. Id. "[T]he most important factor in gaining
11 trade-secret protection is demonstrating that the owner has taken such precautions as are
12 reasonable under the circumstances to preserve the secrecy of the information." Enter. Leasing Co.
13
v. Ehmke, 3 P.3d 1064, 1070 (Ariz. Ct. App. 1999).
14
The term "trade secret" is a defined term under both Arizona and U.S. statutes. A.R.S. §
15
16 44-401(4); 18 U.S.C. § 1839(3). The definitions are broad and fairly similar. The federal statute,
24
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 25 of 42
1 (4) "Trade secret" means information, including a formula, pattern, compilation, program,
device, method, technique or process, that both:
2
(a) Derives independent economic value, actual or potential, from not being
3
generally known to, and not being readily ascertainable by proper means by, other persons
4
who can obtain economic value from its disclosure or use.
5
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its
6 secrecy.
7 The first question is whether Plaintiff pled sufficient facts to support the allegation
8
that information misappropriated qualifies as a trade secret. Plastronics Socket Partners Ltd. v.
9
Highrel Inc. No. CV-18-03201-PHX-SMB, Doc. 58 (D. Ariz., 2019). Plaintiff’s Complaint fails
10
to adequately pass even the first question, and even if he could allege a trade secret, he fails to
11
12 provide any basis for his claim said “trade secrets” were misappropriated.
13 The bare allegations contained in the Complaint fail to support Plaintiff’s claim, and fails
14
to show a trade secret exists upon which to base a claim. The standard he must meet is high, but
15
Plaintiff provides nothing more than a recital of elements of a cause of action and no facts to
16
establish a trade secret, explain how it derives independent economic value from not being
17
18 generally known, or how the trade secret was misappropriated by any Defendant. Further,
19 Defendant claims there are no trade secrets in the filming of adult videos, frustrating any claims
20
for misappropriation of trade secrets.
21
Plaintiff fails to adequately plead Misappropriation of Trade Secrets and fails to state a
22
claim upon which relief can be granted.
23
24 COUNT VI – COMPLAINT FAILS TO STATE A CLAIM FOR CONVERSION
25
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 26 of 42
1 (Complaint ¶ 123) but Plaintiff does not provide any evidence of the existence of a Rugged Male
2 “brand,” “logo,” or any identifying features. This is likely due to the fact no “Rugged Male” brand
3 exists. Nobody owns a brand called “Rugged Male” and Defendants never marketed or distributed
4
anything under the Rugged Male name, nor did Plaintiff. Nothing in the Complaint shows
5
otherwise. Plaintiff makes this Cause of Action without ownership of anything. Plaintiff cannot
6
7 plead conversion or exercising dominion or control over something the Plaintiff does not own.
8 "Conversion is the 'act of wrongful dominion or control over personal property in denial of
9 or inconsistent with the rights of another.' To maintain such an action, the plaintiff must have the
10
right to immediate possession of the property at the time of the conversion." Koss Corp. v. Am.
11
Exp. Co., 309 P.3d 898, 914 (Ariz. Ct. App. 2013) (quoting Case Corp. v. Gehrke, 91 P.3d 362,
12
13 365 (Ariz. Ct. App. 2004))
20 (2) the intent to assert a right inconsistent with that of the other party's right of control, (3) any
21 harm done to the chattel, (4) the extent and duration of the resulting interference, and (5)
22
inconvenience to the other party. Focal Point, Inc. v. U-Haul Co. of Arizona, Inc., 746 P.2d 488,
23
490 (Ariz. Ct. App. 1986) (citing Restatement (Second) of Torts § 222A (2)). "To maintain an
24
25 action for conversion, a plaintiff must have had the right to immediate possession of the personal
26 property at the time of the alleged conversion." Case Corp. v. Gehrke, 91 P.3d 362, 365 (Ariz. Ct.
27 App. 2004). The defendant must intend "to exercise a dominion or control over the goods which
28
26
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 27 of 42
1 is in fact inconsistent with the plaintiff's rights." Miller, 104 P.3d at 203 (internal quotations
2 omitted)” 4801 E. Wash. St. Holdings, LLC v. Breakwater Equity Partners LLC No. CV-13-01475-
3 PHX-DGC (D. Ariz., 2015)
4
Plaintiff fails to plead the elements of conversion because the PLAINTIFF DOES NOT
5
OWN ANYTHING. Plaintiff has no trademark nor does he even plead his own use of the
6
7 purported “brand” Rugged Male. Rugged Male is not a “brand” owned by anyone. Plaintiff
8 claims he came up with the name “Rugged Male,” but even if that were accepted as true, that
9 provides no ownership basis for his federal court complaint. Further, Defendants never marketed
10
“Rugged Male,” never offered anything for sale under that name and canceled the entire project
11
before it got off the ground. Plaintiff has been free to do whatever he pleases with the unowned
12
13 name Rugged Male since 31 December, 2018.
14 Plaintiff pleads Conversion for something he does not own, against a Defendant that never
15 marketed it.
16
Plaintiff fails to plead any details as to how Defendants exercised ownership and control
17
inconsistent with his rights to something Plaintiff does not own, fails to plead the elements of
18
19 conversion, and therefore fails to state a claim upon which relief can be granted.
23 allege (1) the defendant committed extreme and outrageous conduct, (2) the defendant intended to
24 cause emotional distress or recklessly disregarded the near certainty that his conduct would cause
25
distress, and (3) the plaintiff in fact suffered severe emotional distress as a result of the defendant's
26
conduct. Ford v. Revlon, Inc., 153 Ariz. 38, 43, 734 P.2d 580, 585 (1987)
27
28 Plaintiff fails to plead any details at all; again pleading bare allegations. Plaintiff fails to
27
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 28 of 42
1 plead any facts that describe Defendant conduct, or how that conduct was extreme or outrageous,
2 or how that conduct caused him to suffer severe emotional distress. Plaintiff fails to plead any facts
3 that describe how Defendants intended to cause emotional distress, or any facts that establish that
4
Plaintiff did in fact suffer severe emotional distress as the result of Defendants’ conduct.
5
13 Red and Starmaker Media Productions’ act of terminating an independent contractor for
6
7 not meeting expectations may have caused Plaintiff some distress, but terminating an independent
8 contractor is neither extreme nor outrageous. That is just business in Arizona. Plaintiff can provide
9 no evidence to support his claim that any Defendant engaged in conduct that was extreme or
10
outrageous, or ever intended to cause Plaintiff emotional distress. Plaintiff’s feelings were hurt,
11
but that does not make a federal case.
12
13 Plaintiff has failed to adequately plead the elements of intentional infliction of emotional
14 distress, and therefore fails to state a claim upon which relief may be granted.
15 COUNT VIII – COMPLAINT FAILS TO STATE A CLAIM FOR DEFAMATION
16
“`One who publishes a false and defamatory communication concerning a private person .
17
. . is subject to liability, if, but only if, he (a) knows that the statement is false and it defames the
18
19 other, (b) acts in reckless disregard of these matters, or (c) acts negligently in failing to ascertain
20 them.'" Rowland v. Union Hills Country Club, 157 Ariz. 301, 306, 757 P.2d 105, 110 (App.1988),
21 quoting Restatement (Second) of Torts § 580(B) (1977) (alteration in Rowland; emphasis in
22
Rowland omitted); see also Peagler v. Phoenix Newspapers, Inc., 114 Ariz. 309, 315, 560 P.2d
23
1216, 1222 (1977)” Dube v. Likins, 167 P.3d 93, 216 Ariz. 406 (Ariz. App., 2007)
24
25 Plaintiff fails to plead any statement that is false, or which Defendant made the statement.
26 Plaintiff fails to plead facts that demonstrate Defendant’s knowledge of falsity or acting recklessly
27 or negligently. Plaintiff includes in his “Statement of Facts” claims that Defendants issued a press
28
28
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 29 of 42
1 release with his real name, as opposed to his stage name. (Complaint ¶ 48-50) A press release with
2 accurate information is not defamation, nor is a blog post with accurate information. Again, it
3 appears Plaintiff’s counsel failed to conduct any research into his client’s assertions before signing
4
his name to a federal complaint.
5
Plaintiff’s Cause of Action consists of bare allegations without any factual support, and his
6
7 failure to adequately plead defamation results in his failure to state a claim upon which relief can
8 be granted.
9 COUNT IX – COMPLAINT FAILS TO STATE A CLAIM FOR UNJUST ENRICHMENT
10
This is an absolutely nonsensical cause of action that has no relation to the parties of this
11
case. Plaintiff never paid any money to Defendant for collection of qualified signatures, nor are
12
13 any of the parties involved in collection of qualified signatures. Despite being notified on 9 July
14 of this erroneous Cause of Action in Plaintiff’s draft complaint, and subsequently put on notice
15 August 9 in Defendants’ Rule 12(b)(6) letter setting out objections, Plaintiff’s counsel has refused
16
to address his error. This Cause of Action has nothing to do with the parties to this suit and appears
17
to be a left over from Plaintiff’s counsel copying and pasting to his Complaint. Even after being
18
19 notified of the error, Plaintiff’s counsel left this COA in the Complaint he filed. This COA is
26 by law." Freeman v. Sorchych, 245 P.3d 927, 936 (Ariz. Ct. App. 2011).
27 Plaintiff’s bare allegations satisfy none of these elements and this COA should be
28
29
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 30 of 42
1 dismissed for failure to state a claim upon which relief can be granted.
11 494 (App.1995).” Dube v. Likins, 167 P.3d 93, 216 Ariz. 406 (Ariz. App., 2007)
12 A claim for tortious interference with a business expectancy is insufficient unless the
13
plaintiff alleges facts showing the expectancy constitutes more than a mere "hope." Dube v. Likins,
14
167 P.3d 93, 216 Ariz. 406 (Ariz. App., 2007) citing Marmis v. Solot Co., 117 Ariz. 499, 502, 573
15
16 P.2d 899, 902 (App.1977) (plaintiff's expectancy of purchase "amounted only to a hope" because
17 conditioned upon absence of bidders and upon court approval). Finally, the intentional interference
18 must be a "[w]rongful interference [that] rests on improper conduct by the defendant . . . not on
19
whether a breach [or termination of the expectancy] followed." Bar J Bar Cattle Co. v. Pace, 158
20
Ariz. 481, 483, 763 P.2d 545, 547 (App.1988); see also Miller, 209 Ariz. 462, ¶ 32, 104 P.3d at
21
22 202 ("The interference must be `improper' before liability will attach."), quoting Id” Dube v.
23 Likins, 167 P.3d 93, 216 Ariz. 406 (Ariz. App., 2007)
24 “Although the tort of tortious interference with a business expectancy covers situations that
25
the tort of intentional interference with a contract does not, the former has only been available in
26
those situations where the plaintiff can identify the specific relationship with which the defendant
27
28 interfered. See Stewart Title Guar. Co. v. Am. Abstract & Title Co., 363 Ark. 530, 215 S.W.3d
30
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 31 of 42
1 596, 603 (2005) ("some precise business expectancy or contractual relationship must be
2 obstructed" to state tortious interference claim); Pac. Nw. Shooting Park Ass'n v. City of Sequim,
3 158 Wash.2d 342, 144 P.3d 276, ¶ 40 (2006) (plaintiff claiming tortious interference with business
4
expectancy must show "`a relationship between parties contemplating a contract'"), quoting
5
Scymanski v. Dufault, 80 Wash.2d 77, 491 P.2d 1050, 1055 (1971). "As a general rule, an action
6
7 for tortious interference with a business relationship requires a business relationship evidenced by
8 an actual and identifiable understanding or agreement which in all probability would have been
9 completed if the defendant had not interfered." Ethan Allen, Inc. v. Georgetown Manor, Inc., 647
10
So.2d 812, 815 (Fla.1994); see also Schuler v. Abbott Labs., 265 Ill.App.3d 991, 639 N.E.2d 144,
11
147 (1993) ("Plaintiff states a cause of action only if he alleges a business expectancy with a
12
13 specific third party."). "Although [the business relationship] need not be a contractual relationship,
14 an existing relationship is required." Roth v. Rhodes, 25 Cal.App.4th 530, 30 Cal.Rptr.2d 706, 715
15 (1994). To state a claim for tortious interference upon which relief may be granted, "`there must
16
be a colorable economic relationship between the plaintiff and a third party with the potential to
17
develop into a full contractual relationship.'" Hawaii Med. Ass'n v. Hawaii Med. Serv. Ass'n, 113
18
19 Hawai`i 77, 148 P.3d 1179, 1217-18 (2006), quoting Locricchio v. Legal Servs. Corp., 833 F.2d
20 1352, 1357 (9th Cir.1987) (emphasis in Hawaii Med. Ass'n omitted).” Dube v. Likins, 167 P.3d
21 93, 216 Ariz. 406 (Ariz. App., 2007)
22
Plaintiff fails to describe ANY valid business expectancy, other than claiming he has one,
23
which fails to meet the minimum pleading standards of Rule 8. Plaintiff fails to provide any
24
25 supporting evidence for his assertions or evidence of any Defendant interfering in Plaintiff’s 3rd
26 party expectations, or evidence that Defendant intentionally interfered, or evidence of any detail
27 whatsoever of Plaintiff’s damages that resulted from the intentional interference.
28
31
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 32 of 42
1 Plaintiff has failed to state a claim upon which relief can be granted, and this claim should
2 be dismissed.
3 COUNT XI – THE COMPLAINT FAILS TO STATE A CLAIM FOR AIDING AND
4 ABETTING TORTIOUS CONDUCT
5 “Claims of aiding and abetting tortious conduct require proof of three elements:
6 (1) the primary tortfeasor must commit a tort that causes injury to the plaintiff;
7 (2) the defendant must know that the primary tortfeasor's conduct constitutes a breach of
duty; and
8 (3) the defendant must substantially assist or encourage the primary tortfeasor in the
achievement of the breach.
9
10 Gomez v. Hensley, 145 Ariz. 176, 178, 700 P.2d 874, 876 (App.1984)(citing
RESTATEMENT (SECOND) OF TORTS § 876(b)).” Wells Fargo Bank v. Arizona Laborers, 201
11 Ariz. 474, 38 P.3d 12 (Ariz., 2002)
12
13 Plaintiff fails to provide any legal or factual basis for this Cause of Action, and it should
14 be dismissed for failure to state a claim. As noted above, Plaintiff has failed to provide any
15 justification for naming Anderson in his individual capacity or why the corporate shield should be
16
ignored. Further, Plaintiff fails to explain why knowingly naming a licensed, practicing attorney
17
in his individual capacity for providing advice to a corporate client should be sustained. (Complaint
18
19 ¶ 28). Finally, as Defendant Anderson is a citizen of Arizona, like Plaintiff, either Anderson must
20 be dismissed as a Defendant or the entire matter must be dismissed due to the requirement of
21 complete diversity.
22
CAUSES OF ACTION AGAINST OPPOSING COUNSEL ARE STRICTLY LIMITED
23
Plaintiff filed the above-captioned matter against a corporate defendant and named the
24
25 entity’s General Counsel as a Co-Defendant, without pleading any special circumstances that
32
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 33 of 42
1 limited to actions alleging malicious prosecution, also known as wrongful institution of civil
2 proceedings. Linder v. Brown & Herrick, 189 Ariz. 398, 943 P.2d 758, 766 (1997) (dismissing
3 claims of fraud and intentional infliction of emotional distress against opposing counsel for failure
4
to state a claim). An attorney's duty to a nonclient arises only if the nonclient is an "intended
5
beneficiary" of the attorney's services. Wetherill v. Basham, 197 Ariz. 198, 3 P.3d 1118, 1128
6
7 (2000). "An adverse party is not an intended beneficiary of the adverse counsel's client." Lewis v.
8 Swenson, 126 Ariz. 561, 617 P.2d 69, 72 (1980) (internal quotation omitted). Imposition of a duty
9 to an individual, other than an "intended beneficiary" would offend public policy by "plac[ing] an
10
attorney in a position where his own interests would conflict directly with his client's interests."
11
Id. Additionally, "as a matter of law and common sense, [Plaintiff] had no right to rely on
12
13 statements made by the attorneys opposing [her]." Linder, 943 P.2d at 765” Thompson v. Paul,
20 federal prosecutor's] function as an advocate." Dory v. Ryan, 25 F.3d 81, 83 (2d Cir. 1994). Federal
21 decisions addressing the immunity of government attorneys and prosecutors acting as officers of
22
the court in § 1983 actions are relevant to the common-law claims in this action because, as the
23
United States Supreme Court explained in Briscoe v. LaHue, 460 U.S. 325, 103 S. Ct. 1108, 75 L.
24
25 Ed. 2d 96 (1983), the litigation privilege at common law protected all participants in the court
26 system, and private attorneys were treated no differently from judges, government lawyers and
27 witnesses. See Id., 334-35. "[A]ll persons—governmental or otherwise—who were integral parts
28
33
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 34 of 42
1 of the judicial process" were afforded absolute immunity from liability because of the need to
2 ensure "that judges, advocates, and witnesses can perform their respective functions without
3 harassment or intimidation." (internal quotation marks omitted.) Id., 335, quoting Butz v.
4
Economou, 438 U.S. 478, 512, 98 S. Ct. 2894, 57 L. Ed. 2d 895 (1978). At common law, the
5
litigation privilege blanketed all participants in the court system; private attorneys were treated no
6
7 differently [from] judges, government lawyers, and witnesses." Simms v. Seaman 69 A.3d 880,
14 claim.
15 #2 COUNT XI – THERE ARE TWO 11th CAUSES OF ACTION – FAILS TO STATE A
16 CLAIM
17 This Cause of Action is nearly as confusing than Plaintiff’s 9th Cause of Action that appears
18 to be copied and pasted from an unrelated matter. This 2nd 11th Cause of Action does not state a
19
claim unless “Injunctive Relief” is now a cause of action in this District. This COA makes
20
assertions that Defendants continue to claim Plaintiff works for Defendants, without any evidence
21
22 and jumps to a conclusion that the imaginary representations are preventing Plaintiff from pursuing
23 gainful work and causing substantial harm, also without any supporting evidence. This rambling,
24 nonsensical set of sentences concludes a complaint that would have earned a failing grade in any
25
respectable law school and truly begs the question of whether or not Plaintiff’s counsel knew what
26
he was doing when writing this Complaint or if he conducted any research at all, and how such a
27
28 poorly drafted complaint could slip through his firm’s quality control.
34
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 35 of 42
1 This Cause of Action should also be dismissed for failure to state a claim upon which relief
2 can be granted.
3 DISMISSAL WITH PREJUDICE
4
Although a District Court should grant leave to amend liberally, the court may deny leave
5
if amendment would be futile. Gordon v. City of Oakland, 627 F.3d 1092, 1094 (9th Cir. 2012)
6
7 Plaintiff has no contract, no trademark, no false statements, and no claims based in law or fact, and
8 certainly no claims that can meet the threshold of an Article III court sitting in diversity. Further
9 amendment would be futile and is opposed by Defendants.
10
ATTORNEY FEES AND SANCTIONS
11
Defendants respectfully request the opportunity to present evidence and argue for an award
12
13 of attorney fees against Plaintiff and Plaintiff’s counsel. Defendants also request the opportunity
14 to present evidence and argue for sanctions against Plaintiff and Plaintiff’s counsel, and if
15 appropriate, referral by the Court to the State Bar of Arizona for misconduct on behalf of Plaintiff’s
16
counsel.
17
18
19 VI. CONCLUSION.
20 For the foregoing reasons, Defendants respectfully request that the Court dismiss the entire
21 Complaint, with prejudice, award Defendants their attorneys’ fees and costs, and impose
22
appropriate sanctions.
23
24
25 *****
26
27
28
35
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 36 of 42
1
2
3 Respectfully submitted this 26th day of August, 2019.
4
5
/s/ Chad Anderson
6
7 Chad Anderson
PO Box 63333
8 Phoenix, AZ 85082
AZ Bar 020771
9
[email protected]
10 Ph. 602-904-5485
Attorney for Defendants
11
12
13 CERTIFICATE OF SERVICE
14 I hereby certify that on the 26th day of August, 2019, I electronically filed
15
the foregoing document with the Clerk of Court using the CM/ECF system which
16
will send notification of such filing to the following:
17
18
19 CALLAGY LAW, P.C.
Sean R. Callagy, Esq. (Bar No. 034604)
20 Brian A. Williamson, Esq. (Bar No.030276)
21 1850 N Central Ave. Ste 1100
Phoenix, AZ 85004
22 Phone: (201) 261-1700
Fax: (201) 549-8408
23 Email: [email protected]
24
/s/ Chad Anderson
25
26
27
28
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Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 37 of 42
1
TABLE OF EXHIBITS
2
A. Affidavit and Declaration of Citizenship of Chad Anderson
3
4 B. Memorandum of Understanding (MOU) signed and dated 13 November 2018
18 Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (U.S. Supreme Court 2009)…………15, 16
19 Balistreri v. Pacifica Police Dep't, 901 F.2d 696 (9th Cir. 1990)…………………………..15
20
Bar J Bar Cattle Co. v. Pace, 158 Ariz. 481, 763 P.2d 545 (Ariz.Ct.App. 1988)…………..30
21
Barrett v. United States, 798 F.2d 571 (2nd Cir. 1986)…………………………………….33
22
23 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct 1955 (US Supreme Court 2007)..14, 15
37
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 38 of 42
1 Briscoe v. LaHue, 460 U.S. 325, 103 S.Ct. 1108, 75 L.Ed.2d 96 (US S. Court 1983)…33, 34
2 Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (US S. Court 1978)……34
3 Calisi v. Unified Fin. Servs., LLC, 302 P.3d 628, 631-32 (Ariz. Ct. App. 2012)………….24
4
Case Corp. v. Gehrke, 91 P.3d 362 (Ariz.Ct.App. 2004)…………………………………..26
5
Cervantes v. City of San Diego, 5 F.3d 1273 (9th Cir.1993)………………………………16
6
7 Chemical Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co, 177 F.3d 210, 222
(3rd Circuit Court of Appeals 1999)……………………………………………….12
8
Denbo v. Badger, 18 Ariz.App. 426, 503 P.2d 384 (Ariz.Ct.App. 1972)………………….19
9
10 Dory v. Ryan, 25 F.3d 81 (2nd Cir. 1994)………………………………………………….33
11 Dube v. Likins, 167 P.3d 93, 216 Ariz. 406 (Ariz.Ct.App. 2007)………………….28, 30, 31
12 Echols v. Beauty Built Homes, Inc, 132 Ariz. 498, 647 P.2d 629 (Ariz. 1982)……………19
13
Edwards v. Marin Park, Inc., 356 F.3d 1058 (9th Cir. 2004) ………………………………19
14
Enter. Leasing Co. v. Ehmke, 3 P.3d 1064 (Ariz.Ct.App. 1999)…………………………...24
15
16 Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812 (Florida 1994)……...………31
26 Gomez v. Hensley, 145 Ariz. 176, 700 P.2d 874 (Ariz.Ct.App. 1984)…………………….32
27 Gordon v. City of Oakland, 627 F.3d 1092 (9th Cir. 2012)………………………………..35
28
38
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 39 of 42
1 Hawaii Med. Ass'n v. Hawaii Med. Serv. Ass'n, 113 Hawaii 77, 148 P.3d 1179
(Hawaii 2006)…………………………………………………………………….31
2
In re Banner Health Data Breach Litig., CV-16-02696-PHX-SRB, 2017 WL 6763548
3
(D.Ariz. 2017)…………………………………………………………………22, 23
4
In re Cassidy's Estate, 77 Ariz. 288, 270 P.2d 1079 (Ariz. 1954)…………………..…….19
5
In re McDonnell's Estate, 65 Ariz. 248, 179 P.2d 238 (Ariz. 1947)……………….…..….19
6
7 In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999)………………..……17
8 Kadish v. Phx. Scotts. Sports Co., 11 Ariz.App. 575, 466 P.2d 794
9 (Ariz.Ct.App.1970)………………………………………………………….…….20
10 Kanter v. Warner Lambert Co.,, 265 F.3d 853, 857 (9th Cir. 2001)…………………..12, 13
11 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009)………………………………..18
12 Koss Corp. v. Am. Exp. Co, 309 P.3d 898 (Ariz.Ct.App. 2013)………………………….26
13
Kuehn v. Stanley, 91 P.3d 346 (Ariz.Ct.App. 2004). …………………………………22, 23
14
Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397 (9th Cir. 1991)…...18
15
16 Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2000)……………………………17, 18
23 Marmis v. Solot Co., 117 Ariz. 499, 573 P.2d 899 (Ariz.Ct.App.1977)…………………30
24 Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003)….13, 14
25
McNutt v General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 56 S. Ct. 780,
26
80 L. Ed. 1135 (US Supreme Court 1936)……………………………………….12
27 Miller v. Hehlen, 104 P.3d 193 (Ariz.Ct.App. 2005)…………………………….24, 26, 30
28
39
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 40 of 42
2 Pac. Nw. Shooting Park Ass'n v. City of Sequim, 158 Wash.2d 342, 144 P.3d 276
3 (Wash. 2006)……………………………………………………………………...31
4 Parks v. Macro-Dynamics, Inc., 121 Ariz. 517, 591 P.2d 1005 (Ariz. 1979)………........19
5
Parrino v. FHP, Inc, 146 F.3d 699 (9th Cir. 1998)…………………………………….....16
6
Peagler v. Phoenix Newspapers, Inc., 114 Ariz. 309, 560 P.2d 1216 (Ariz. 1977)……...28
7
Plastronics Socket Partners Ltd. v. Highrel Inc. No. CV-18-03201-PHX-SMB, Doc. 58
8
(D. Ariz., 2019)…………………………………………………………………...25
9
10 Resolution Trust Corp. v. Blasdell, 930 F.Supp. 417 (D.Ariz. 1994)……………………20
11 Romani v. Shearson Lehman Hutton, 929 F.2d 875 (1st Cir. 1991)……………………..16
12 Roth v. Rhodes, 25 Cal.App.th 530, 30 Cal.Rptr.2d 706 (Cal.Ct.App. 1994)…..……….31
13
Rowland v. Union Hills Country Club, 157 Ariz. 301, 757 P.2d 105
14
(Ariz.Ct.App. 1988)………………………………………………………………28
15
Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04 (9th Cir.1996)………..13, 14
16
Schuler v. Abbott Labs, 265 Ill.App.3d 991, 639 N.E.2d 144 (Ill.Ct.App. 1993)…….….31
17
18 Scymanski v. Dufault, 80 Wash.2d 77, 491 P.2d 1050 (Wash. 1971)……………………31
19 Shoen v. Shoen, 167 Ariz. 58, 804 P.2d 787 (Ariz. 1990)………………………………..20
20
Shwarz v. United States, 234 F.3d 428 (9th Cir. 2000)…………………………..15, 16, 19
21
Simms v. Seaman, 69 A.3d 880 (Conn. 2013)……………………………………………34
22
Spudnuts, Inc. v. Lane, 131 Ariz. 424, 641 P.2d 912 (Ariz.Ct.App. 1982)………………19
23
24 Steinberger v. McVey ex rel. Cty. of Maricopa, 318 P.3d 419 (Ariz.Ct.App. 2014)…….21
25 Stewart Title Guar. Co. v. Am. Abstract & Title Co., 363 Ark. 530,
26 215 S.W.3d 596 (Ark. 2005)……………………………………………………..30
27 Swartz v. KPMG LLP, 476 F.3d 756 (9th Circuit Court of Appeals 2007)…………..16, 19
28
40
Case 2:19-cv-04770-SPL Document 15 Filed 08/26/19 Page 41 of 42
1 Taeger v. Catholic Family & Cmty. Serv., 995 P.2d 721 (Ariz.Ct.App. 1999)…………..18
8 Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors, 184 Ariz. 419,
9 909 P.2d 486 (Ariz.Ct.App. 1995)………………………………………………..30
41
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