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Rose v. Abraham

August 12, 2008


The opinion of the court was delivered by: Sandra M. Snyder United States Magistrate Judge


Plaintiff is proceeding with a civil action in this Court. The matter has been referred to the Magistrate Judge pursuant to 28 U.S.C. § 636(b) and Local Rules 72-302(c)(1) and 72-303. Pending before the Court are the ex parte applications of Plaintiff, filed on July 31, 2008, for 1) expedited discovery to occur before the conference pursuant to Fed. R. Civ. P 26(f) with respect to Defendants Steven Duce and Bella Robles Corporation, filed on July 31, 2008; and 2) an order requiring that the Marshal serve the summons and complaint on Defendant Samuel J. Abraham pursuant to Fed. R. Civ. P. 4(c)(3). Plaintiff also filed a declaration of Leonard C. Herr, Plaintiff's counsel, in support of the application for the service order.

I. Background

In the complaint filed on May 1, 2008, Plaintiff alleges a RICO claim pursuant to 18 U.S.C. § 1961 et seq. against Defendants Abraham, Bella Robles Corporation, Duce, and Wynn; pendent state claims of intentional and negligent misrepresentation as to all defendants; and breach of contract as to Defendant Abraham. (Cmplt. pp. 1-8.) Claims of breach of fiduciary duty and negligence as to Defendant Bank of Sierra are also stated, but the action was dismissed against the bank without prejudice on June 25, 2008.

It is alleged that Plaintiff and Defendant Abraham entered into a contract whereby Abraham promised to set up a credit facility of $100,000,000.00 to be transferred by wire in return for Plaintiff's paying $2,150,000.00 for thirteen months to Abraham, by way of depositing the sums with Defendants Bella Robles Corporation and Duce Abraham, who were to transfer the money to Abraham after the wire transfer of the $100,000,000.00. Defendant Wynn was to help Defendant Abraham secure the credit facility. After Plaintiff transferred $1,500,000.00 to an account with Bank of Sierra, Plaintiff learned that Abraham had been convicted of wire fraud and/or transactions concerning criminally derived property involving similar representations to people that in exchange for a fee deposited in an escrow account that did not exist, he would transfer large amounts of money to the victim. (Cmplt. pp. 4-5.) Plaintiff seeks damages and fees.

On May 21, 2008, District Judge Anthony W. Ishii granted Plaintiff's motion for an ex parte temporary protective order (TPO) and attachment of $400,000.00 that remained in a Bank of Sierra account. (Doc. 15.) Judge Ishii found that the TPO was appropriate pursuant to California law because Plaintiff's claim was one for which attachment may issue (an express contract for professional services with Abraham); Plaintiff had demonstrated that it is more likely than not that he will prevail against Bella and Duce, to whom Plaintiff paid $1,500,000.00 in January 2008, and who distributed most of the funds to Abraham at Abraham's direction; and the $100,000,000.00 was never obtained by Abraham. (Order p. 6.) Too, Judge Ishii found that Plaintiff had established irreparable injury, namely, that there was a danger that if the TPO did not issue, the approximately $400,000.00 remaining in the escrow account might be dispersed or otherwise made unavailable because Abraham had been successful in directing Bella and Duce to distribute the funds improperly, Abraham's guilty plea to similar criminal charges had required millions of dollars in restitution, Abraham was a gambler and had drug addictions, Abraham violated the conditions of his release from criminal custody, and Abraham could not be found. (Id.)

Defendant Duce answered the complaint on June 9, 2008.

A right to attach order and an order for issuance of a writ of attachment after hearing issued on June 18, 2008. (Doc. 27.

II. Expedited Discovery

Plaintiff seeks to depose Defendants Duce and Bella Robles Corporation, Inc., regarding the distribution of funds from the Bank of Sierra account that is subject of the writ of attachment, which included Plaintiff's $1,500,000.00 and the funds of others that once amounted to a total of $2,150,000.00. Plaintiff seeks to discover the identities of the persons to whom distributions were made, the amounts of the deposits, and the deposit accounts into which they were transferred in order to ascertain the scope of the pending preliminary injunction and also to determine whether further temporary protective orders and/or preliminary injunctions are necessary to preserve the status quo. Plaintiff also seeks Defendants' knowledge and production of any and all documents regarding any and all withdrawals, transfers, deposits, check draws, and any other activity regarding the account, whether successfully carried out or not.

In support of the motion, Plaintiff relies on information set forth in Plaintiff's supplemental declaration in support of the application for the injunction (Doc. 14, filed May 20, 2008). The only apparent change, other than the passage of time, is that Defendant Abraham is understood to now be in custody serving his sentence. Plaintiff alleges on information and belief, based on the terms of the contract and information from Defendant Duce,*fn1 that distributions from the account were made to Abraham and others at Abraham's direction. (Decl. of Herr in supp. of app. for service order.) The Court further notes the findings of Judge Ishii with respect to the attachment application, which have previously been set forth.

Fed. R. Civ. P 26(d) provides that a party may not seek discovery from any source before the parties have conferred as required by Rule 26(f) except in exempt proceedings or when authorized by the rules, a stipulation, or by court order.

In general, a court will authorize expedited discovery where the applicant demonstrates good cause. Semitool, Inc. v. Tokyo Electron America, Inc., 208 F.R.D. 273, 275-76 (N.D.Cal. 2002). Good cause is demonstrated where the need for expedited discovery, in consideration of the administration of justice, outweighs the prejudice to the responding party.

With respect to expedited depositions, Fed. R. Civ. P. 30(a)(2)(iii) provides that a party must obtain leave of court, and the Court must grant leave to the extent consistent with Rule 26(b)(2) if the party seeks to take the deposition before the time specified in Rule 26(d) unless the party certifies that the deponent is expected to leave the United States and be unavailable for exam in the this country after that time. Further, Rule 30(a)(2)(B) provides ...

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