Bennett v. Kinney et al

Northern District of California, cand-4:2015-cv-02200

ORDER GRANTING MOTION TO DISMISS AND ADDRESSING COUNTERCLAIMS; VACATING CASE MANAGEMENT CONFERENCE. Signed by Judge JEFFREY S. WHITE on 11/9/15.

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 PETER BENNETT, 7 Case No. 15-cv-02200-JSW Plaintiff, 8 ORDER GRANTING MOTION TO v. DISMISS AND ADDRESSING 9 COUNTERCLAIMS; AND VACATING ANSEL D. KINNEY, et al., CASE MANAGEMENT CONFERENCE 10 Defendants, Re: Docket Nos. 33, 49, 50 11 12 Northern District of California United States District Court 13 Now before the Court for consideration is the motion to dismiss, filed by Defendants Ansel 14 D. Kinney and the Law Offices of Ansel D. Kinney (collectively "the Kinney Defendants"). The 15 Court has considered the parties' papers, relevant legal authority, and the record in this case, and it 16 HEREBY GRANTS the Kinney Defendants' motion to dismiss Plaintiff's Second Amended 17 Complaint ("SAC") in its entirety. 18 In light of this ruling, the Court: (1) dismisses, without prejudice, the counter and cross- 19 claims filed on November 5, 2015 by Defendant Cynthia Voss ("Voss"); (2) denies as moot, and 20 without prejudice, the motion to dismiss filed by Karl Signaporia, and VACATES the hearing 21 scheduled for December 11, 2015; (3) denies as moot, and without prejudice, the motion to 22 dismiss filed by Plaintiff, Peter Bennett ("Bennett"), and VACATES the hearing scheduled for 23 December 18, 2015; and (4) VACATES the case management conference scheduled for December 24 18, 2015. The Court will reschedule the case management conference once it is clear that it has 25 jurisdiction over this action and the case is fully at issue.1 26 1 27 The Kinney Defendants argue that the Court should impose sanctions under Federal Rule of Civil Procedure 11. That request is DENIED. If Bennett files an amended complaint and the 28 Kinney Defendants believe it violates Rule 11, they may renew their request by way of a properly noticed motion, which shows they complied with Rule 11(c)(2). 1 BACKGROUND 2 On May 15, 2015, Bennett filed his original complaint against the Kinney Defendants, 3 Interstate Deposition Subpoena Service, Inc. ("Interstate"), Attorney Service of San Francisco 4 ("ASSF"), and Tony Klein ("Klein"). (Docket No. 1.) Bennett asserted a claim under the Fair 5 Debt Collection Practices Act ("FDCPA"), which provided the Court with jurisdiction over the 6 action. Bennett also alleged that he was an individual currently residing in London, United 7 Kingdom. (Compl. ¶ 1.) 8 On June 18, 2015, Bennett filed an Amended Complaint, in which he added Cynthia Voss 9 ("Voss) as a defendant. (Docket No. 10, Amended Complaint ("AC").) Bennett re-asserted the 10 FDCPA claim, and he continued to allege that he was an individual residing in London. (See AC 11 ¶¶ 1, 7.) 12 On August 5, 2015, the Court granted, in part, the Kinney Defendants' motion to dismiss Northern District of California United States District Court 13 the FDCPA claim. (Docket No. 24, Order Granting, in Part, Motion to Dismiss ("Order 14 Dismissing AC").) In that Order, the Court reserved ruling on the state law claims, because it was 15 not clear that diversity jurisdiction existed. (Order Dismissing AC at 2:22-4:3.). 16 On August 29, 2015, Bennett filed his Second Amended Complaint ("SAC"). Bennett 17 now asserts state law claims against the Kinney Defendants and Voss for breach of fiduciary duty, 18 breach of contract, aiding and abetting a breach of fiduciary duty, third party legal malpractice, 19 and abuse of process.2 (SAC ¶¶ 54-87.) In brief, these claims arise out of alleged legal advice that 20 the Kinney Defendants provided to Voss and out of their efforts to collect a judgment that Voss 21 obtained against Bennett. (Id. ¶¶ 14-52.) 22 Because Bennett dropped the FDCPA Claim, he contends that the Court has diversity 23 jurisdiction. (Id. ¶ 7.) To support that contention, he alleges that he "is an individual currently 24 residing in London, United Kingdom. He is a dual citizen of the United States and the United 25 Kingdom. He holds a Utah driver's license, and his wife owns a house in Utah." (Id. ¶ 1.) 26 Bennett also alleges that "on information and belief, Defendant Kinney resides in this District," 27 2 28 Bennett voluntarily dismissed his claims against Interstate, ASSF, and Klein on September 23, 2015. (Docket No. 43.) 2 1 that the Law Offices of Ansel D. Kinney is a "law firm whose principal place of business is in this 2 District," and that Voss "resides in this District." (Id. ¶¶ 2-3, 12.) It is undisputed that the amount 3 in controversy exceeds $75,000. 4 The Court shall address additional facts as necessary in the remainder of this Order. 5 ANALYSIS 6 A. Applicable Legal Standards. 7 The Kinney Defendants move to dismiss, in part, on the basis that the Court lacks subject 8 matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). A motion to dismiss for lack of subject matter 9 jurisdiction under Rule 12(b)(1) may be "facial or factual." Safe Air for Everyone v. Meyer, 373 10 F.3d 1035, 1039 (9th Cir. 2004). When a defendant raises a facial challenge to subject matter 11 jurisdiction, a court "must accept as true all material allegations in the complaint, and must 12 construe the complaint in" a plaintiffs' favor. Chandler v. State Farm Mut. Auto Ins. Co., 598 Northern District of California United States District Court 13 F.3d 1115, 1121-22 (9th Cir. 2010). 14 However, where, as here, a defendant raises "factual attack," the moving party questions 15 the veracity of the plaintiff's allegations that "would otherwise invoke federal jurisdiction." Safe 16 Air for Everyone, 373 F.3d at 1039. The plaintiff's allegations are questioned by "introducing 17 evidence outside the pleadings." Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). "When 18 the defendant raises a factual attack, the plaintiff must support … jurisdictional allegations with 19 'competent proof,' under the same evidentiary standard that governs in the summary judgment 20 context." Id. (quoting Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010)). While the plaintiff 21 typically has the burden of proof to establish subject matter jurisdiction, "if the existence of 22 jurisdiction turns on disputed factual issues, the district court may resolve those factual disputes 23 itself." Id. at 1121-22 (citing Safe Air for Everyone, 373 F.3d at 1039-40). 24 B. Bennett Has Not Met His Burden to Show Complete Diversity Exists. 25 The Kinney Defendants argue that Bennett cannot establish complete diversity, because he 26 has not shown, and cannot show, that he is a citizen of Utah. In order to "demonstrate citizenship 27 for diversity purposes a party must be a citizen of the United States, and (b) be domiciled in a state 28 of the United States." Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986) (emphasis added); see also 3 1 Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989) (emphasis in original); Turan 2 Petroleum, Inc. v. Lentin, 482 F. Supp. 2d 1170, 1171 (C.D. Cal. 2007) ("[I]t has been held 3 consistently that a diversity suit may not be maintained under 28 U.S.C. § 1332(a)(1) by or against 4 a United States citizen who is domiciled in a foreign country, for a resident of a foreign country is 5 not necessarily a citizen thereof.") (quoting inter alia, Coury v. Prot, 85 F.3d 244, 249-50 (5th Cir. 6 1996)). Thus, citizenship is determined by domicile, not residence. Kanter v. Warner-Lambert 7 Co., 265 F.3d 853, 857 (9th Cir. 2001).3 8 "A person's domicile is [his] permanent home, where [he] resides with the intention to 9 remain or to which [he] intends to return." Kanter, 265 F.3d at 857 (citing Lew, 797 F.2d 747, 749 10 (9th Cir. 1986)). Courts may consider a variety of factors to determine domicile, including: 11 current residence, voting registration and voting practices, location of personal and real property, location of brokerage and bank 12 accounts, location of spouse and family, membership in unions and Northern District of California United States District Court other organizations, place of employment or business, driver's 13 license and automobile registration, and payment of taxes. 14 Lew, 797 F.2d at 750 (and noting that no one factor controls determination). 15 In support of their motion, the Kinney Defendants submit an Income and Expense 16 Declaration that Bennett filed in the Superior Court of the State of California for the City and 17 County of San Francisco ("San Francisco Superior Court"). (Mot., Ex. A.)4 That declaration 18 shows that Bennett has paid taxes in the United Kingdom, where Bennett admits he currently 19 resides and works. Those facts, coupled with Bennett's allegations of residence, support an 20 inference that Bennett was domiciled in London at the time he filed this suit and at the time he 21 filed the SAC. 22 Bennett has not put forth any evidence regarding domicile to rebut the Kinney Defendants' 23 factual showing. Instead, he relies on the allegations in the SAC that he holds a Utah driver's 24 25 3 Although the Kinney Defendants have not disputed that they are citizens of California, the 26 Court notes that there are no allegations in the SAC that demonstrate where Voss is domiciled. That omission also is "fatal to [Bennett's] assertion of diversity jurisdiction." Kanter, 265 F.3d at 27 858. Accordingly, if Bennett files the amended complaint permitted by this Order, he must allege facts that show he is domiciled in a state different from all other named defendants. 28 4 Bennett has not objected to any of the exhibits attached to the Kinney Defendants' motion. 4 1 license and his wife owns a home there. He also relies on arguments that are unsupported by 2 evidence. The Court concludes that Bennett has not met his burden to show, by a preponderance 3 of the evidence, that he is domiciled in Utah. Leite, 749 F.3d at 1121. 4 Bennett also argues that he is a dual citizen of the United States and the United Kingdom. 5 He thus argues that this allegation would provide the Court with jurisdiction pursuant to 28 U.S.C. 6 section 1332(a)(2). Bennett's allegation that he is a dual citizen does not establish diversity 7 jurisdiction. Cf., Brady v. Brown, 51 F.3d 810, 815 (9th Cir. 1995); Mutuelles Unies v. Kroll & 8 Linstrom, 957 F.2d 707, 711 (9th Cir. 1992) ("only the American nationality of the dual citizen 9 should be recognized" for purposes of Section 1332(a)(2)) (quoting Sadat v. Mertes, 615 F.2d 10 1176, 1187 (7th Cir. 1980)). 11 Accordingly, the Court GRANTS, IN PART, the Kinney Defendants' motion to dismiss. 12 Because the Court cannot say it would be futile to grant Bennett leave to amend to cure the defects Northern District of California United States District Court 13 identified by this Order, it will permit him one final opportunity to amend. See Carolina Casualty 14 Ins. Co. v. Team Equipment, Inc., 741 F.3d 1082, 1086-88 (9th Cir. 2014). If Bennett can, in good 15 faith and in compliance with his obligations under Rule 11, amend to cure these defects, he may 16 file a third amended complaint by no later than December 11, 2015.5 The Court advises the 17 parties that if the Kinney Defendants move to dismiss on the basis that the Court lacks jurisdiction 18 and they believe that jurisdictional discovery would be appropriate, the Court will look favorably 19 on such a request. 20 C. Instructions Regarding Ms. Voss' Counter and Cross-Claims. 21 At the time the Kinney Defendants filed their motion, Voss had not yet appeared. 22 However, on November 5, 2015, Voss, acting pro se, filed an answer and counterclaims and, as 23 set forth above, Karl Signaporia and Bennett have moved to dismiss the claims she asserts against 24 them. It still is not clear whether all parties are diverse. Accordingly, the Court shall dismiss the 25 SAC in its entirety. If Bennett chooses to amend his complaint, he must include allegations 26 5 27 The Court notes that, on June 25, 2014, Bennett filed a lawsuit against Voss in San Francisco Superior Court and alleged he was an individual residing in the County of Marin. (See 28 Docket No. 13-1, Declaration of Ansel D. Kinney, ¶ 3, Ex. A (Complaint ¶ 2).) 5 1 sho owing that he is diverse from all nam med defendaants. 2 Because it is not cleear whether the Court haas subject m matter jurisdicction over thhe action, 3 and d because the Court has dismissed th he SAC in itss entirety, thhe Court dism misses Voss' 4 cou unterclaims without w prejudice, and denies d Mr. Siignaporia's and Bennettt's motions to dismiss as 5 mo oot and witho out prejudicee. 6 The Co ourt HEREBY Y ADVISES S Voss that a Handbook for Pro Se L Litigants, whhich contains 7 hellpful informaation about proceeding p without w an atttorney, is avvailable throough the Couurt's websitee 8 or in i the Clerk's office. Th he Court also o advises Vooss that she aalso may wish to seek asssistance 9 from the Legall Help Centeer. Voss may y obtain a freee appointm ment with an attorney whho may be 10 ablle to providee basic legal help, but no ot legal repreesentation, byy calling thee Legal Helpp Center at 11 5-782-8982, or by signin 415 ng up for an appointmennt at: (1) Rooom 2796, Unnited States D District 12 Court for the Northern N District of Califfornia, 450 G Golden Gatee Avenue, 155th Floor, Saan Francisco, Northern District of California United States District Court 13 California; or (2) (Room 47 70-S, United States Distrrict Court forr the Northeern District oof California, 14 130 01 Clay Streeet, 4th Floorr, Oakland, California. C 15 CONCLU USION 16 For the foregoing reeasons, the Court C GRAN NTS the Kinnney Defendaant's motionn to dismiss, 17 DIS SMISSES, WITHOUT W PREJUDICE P E, Voss' couunter and crooss-claims, D DENIES, AS S MOOT, 18 AN ND WITHOU UT PREJUD DICE, Signap poria's and B Bennett's m motions to dissmiss, and V VACATES 19 thee case manag gement confe ference. 20 IT IS SO S ORDER RED. 21 Daated: Novemb ber 9, 2015 22 ___________________________ JE EFFREY S. W WHITE 23 Unnited States D District Judgge 24 25 26 27 28 6