The opinion of the court was delivered by: Rudi Brewster, Senior District Judge
ORDER DENYING DEFENDANT JONATHAN WEISZ'S
MOTION TO DISMISS
I. Statement of the Case
This is a motion by Defendant Jonathan Weisz for dismissal of the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). A hearing on the motion took place on Monday, July 21, 2003. Michael R. Heimbold, Esq. represented the Plaintiff, and James R. Ballard, Esq. appeared for Defendant Jonathan Weisz. For the reasons enumerated below, the Court denies the Defendant's motion in its entirety.
Defendant Jonathan Weisz, a citizen of California, was the president and majority shareholder of Defendant New Media Telecommunications, Inc. ("New Media"). Between October, 1998 and October, 1999, New Media purchased more than $4 million in [ Page 2]
telecommunications services from Plaintiff Qwest Communications Corp. ("Qwest"), a Delaware corporation. New Media defaulted on its payment obligation and Qwest sued in the Circuit Court of Virginia. On October 28, 1999, Qwest obtained a judgment against New Media for $4,328,238.00.
In November, 1999, New Media ceased doing business and filed an assignment for the benefit of creditors pursuant to California state law. Qwest alleges that it never received notice of this assignment. In March, 2000, Qwest entered the Virginia judgment against New Media in San Diego Superior Court. Qwest recorded the judgment with the California Secretary of State in April, 2000, thereby creating a personal property judgment lien against New Media's assets.
In Spring 2000, shortly after learning of New Media's assignment of assets, Qwest requested payment of its judgment from the trustee. The trustee informed Qwest that the entirety of New Media's assets consisted of two computers. Thereafter, Qwest hired a computer expert to examine the computers' hard drives in an effort to recover New Media's accounting records. Qwest's expert allegedly discovered that the drives were intentionally "wiped" by overwriting all existing information with substitute characters.
Qwest managed to recover a portion of New Media's accounts payable ledger. The ledger allegedly indicates that in the months preceding its shutdown, New Media transferred over $1 million to Defendant Robert Weisz, Jonathan Weisz's father. Qwest contends that Jonanthan and Robert Weisz conspired to transfer New Media's funds to Robert Weisz in an attempt to defraud Qwest.
The Complaint prays for the Court to: (1) set aside the allegedly fraudulent conveyances; (2) enjoin Jonathan and Robert Weisz, and/or their agents, from transferring or otherwise disposing of the funds; (3) require Jonathan and Robert Weisz to account to Qwest for all profits and proceeds earned or taken in exchange for the funds; and (4) impose a constructive trust over the funds in favor of Qwest. [ Page 3]
Defendant Jonathan Weisz now moves the Court to dismiss him from the Complaint on the ground that he is not a proper party to this action. Jonathan Weisz contends that: (1) the Uniform Fraudulent Transfer Act (codified at Cal. Civ. Code §§ 3439.01-3439.12) ("UFTA") does not permit Qwest to recover against him directly because he was neither the debtor nor the transferee of the funds at issue; and (2) Qwest cannot state a claim against him for conspiracy to violate the UFTA.
A. Motion to Dismiss — FRCP 12(b)(6)
A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims in the Complaint. The court must accept as true all material allegations in the Complaint, as well as reasonable inferences to be drawn from them, and must construe the Complaint in the light most favorable to the plaintiff. NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986); Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). The court looks not at whether the plaintiff will "ultimately prevail but whether the claimant is ...