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Club Gravity Inc. v. Moghaddam

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


November 7, 2008

CLUB GRAVITY INC., DBA PLANET ROCK; RICHARD TRINH; AND AMPHOUVANHNA CHANTHALAMGSY, PLAINTIFFS,
v.
MOHAMMED JACK MOGHADDAM; MJM TRUST; NORTH STATE TITLE, INC.; CITY OF MARYSVILLE; MARYSVILLE POLICE DEPARTMENT; SGT. JOHN OSBORNE; GARY PRICE; AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.

The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER

Defendants City of Marysville, Marysville Police Department, John Osborne ("Osbourn"), and Gary Price ("Price") (collectively, "Marysville Defendants") filed a motion to dismiss on August 5, 2008, and Defendant Mohammed Jack Moghaddam ("Moghaddam") filed a motion to dismiss on August 8, 2008. The movants argue this action (Club Gravity II) should be dismissed because it is duplicative of action No. 2:07-cv-00488-GEB-EFB (Club Gravity I), which is also filed in this Court. Oral argument on the dismissal motions was held on September 8, 2008.

Plaintiffs filed Club Gravity I on March 13, 2007, and a First Amended Complaint ("FAC") in that action on April 12, 2007. Club Gravity II was filed after Plaintiffs' May 8, 2008 motion for leave to file a Second Amended Complaint in Club Gravity I was denied; the denial was because of Plaintiffs' failure to demonstrate good cause justified the amendment.

The allegations in both actions concern Plaintiffs' purchase from Moghaddam a commercial property known as "Club Gravity"; a subsequent investigation of Club Gravity by the Marysville Police Department and the Alcoholic Beverage Control on July 1, 2006; a further investigation by City of Marysville officials that resulted in the revocation of Plaintiffs' use permit which authorized them to operate Club Gravity; Moghaddam's taking possession of Club Gravity after Plaintiffs failed to timely pay mortgage payments; and, the City of Marysville's actions that assisted Moghaddam demolish Club Gravity.

Club Gravity II adds two Defendants who were not parties in Club Gravity I: MJM Trust and North State Title, Inc. ("North State Title"). Only state claims are alleged against these new defendants. Plaintiffs allege in Club Gravity II "Moghaddam is the beneficiary and trustee of MJM Trust, which is the alter ego of [] Moghaddam." (FAC ¶ 5.) Therefore, MJM Trust is in privity with or can be said to be "virtually represented" in Club Gravity I by Defendant Moghaddam. Adams v. Cal. Dep't of Health Servs., 487 F.3d 684, 691 (9th Cir. 2007). Plaintiffs' allegations against North State Title concern an allegation that North State Title told Moghaddam he could take possession of Club Gravity.

It is clear that the actions concern "the same set of facts" and that Club Gravity II is duplicative of Club Gravity I. Id. at 689. Club Gravity II is dismissed since Plaintiffs have no right to file a duplicative action in response to their rejected amendment in Club Gravity I.

For the stated reasons, Defendants' motions are granted, and the Clerk of the Court shall close this action.

IT IS SO ORDERED.

20081107

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