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Wolf v. Langemeier

August 24, 2010

LAURIE WOLF; DOLORES BERMAN; I-SHUN CHOW KIMCHI CHOW; GRASSHILL LAND, INC.; BRADY HEATH; THERESA HEATH; STEVEN A. NEWELL; MARILYN CADREAU NEWELL; TAMSCO PROPERTIES, LLC; JKR LASER INVESTMENT, LLC; SURFER BEACH, LLC; AND TO BE DETERMINED, LLC, PLAINTIFFS,
v.
LORAL LANGEMEIER AND LIVE OUT LOUD, INC., DEFENDANTS.



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

ORDER DENYING DEFENDANTS' MOTION TO DISMISS AND GRANTING DEFENDANTS' MOTION TO STAY PROCEEDINGS PENDING ARBITRATION

Defendants Loral Langemeier ("Langemeier") and Live Out Loud, Inc. ("LOL") (collectively, "Defendants") filed two pending motions: a motion to dismiss Plaintiffs' complaint under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6) and a motion to stay this action pending arbitration under 9 U.S.C. § 3. For the following reasons, the motion to dismiss is denied and the motion to stay is granted.

I. PLAINTIFFS' ALLEGATIONS AND CLAIMS

Plaintiffs are eight individuals, one corporation, and four limited liability companies that attended various "investment education" events, known as "Big Table programs," at the Embassy Suites Hotel in South Lake Tahoe, California in April, May, August, and September 2006, and in January 2007. (Compl. ¶¶ 5-15.)

Defendants marketed these programs, at which they encouraged Plaintiffs to "invest in various real estate ventures and other investment opportunities." (Id. ¶¶ 18-19.) Plaintiffs allege Defendants made several "misrepresentations" when they promoted these "high risk and not safe" investments "in pursuit of their own pecuniary interests." (Id. ¶¶ 20, 23.) Each Plaintiff alleges a lost of tens or hundreds of thousands of dollars as a result of the investments they made following the Big Table programs. (Id. ¶¶ 29, 49, 77, 105, 123.)

Plaintiffs allege the following claims in their complaint: (1) fraud and deceit; (2) aiding and abetting fraud; (3) breach of California Civil Code § 3373; (4) breach of fiduciary duty; (5) violation of 15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5; (6) violation of California Corporation Code § 25401; (7) assisting in the violation of California Corporation Code § 25401; (8) violation of California Corporation Code § 25110; (9) assisting in the violation of California Corporation Code § 25110; and (10) violation of California Business and Professions Code §§ 17200, et seq. (Compl. ¶¶ 21-302.)

II. LEGAL STANDARD

A. Motion to Dismiss

A Rule 12(b)(6) motion "challenges a complaint's compliance with . . . pleading requirements." Champlaie v. BAC Home Loans Servicing, LP, 2009 WL 3429622, at *1 (E.D. Cal. 2009). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests . . . ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To avoid dismissal, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. When the court evaluates a dismissal motion under Rule 12(b)(6), it "accept[s] as true all facts alleged in the complaint, and draw[s] all reasonable inferences in favor of the plaintiff." Al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009).

B. Motion to Stay

Defendants motion to stay this action concerns Section 3 of the Federal Arbitration Act which prescribes:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3. "In deciding a motion to stay a proceeding pending arbitration, a court must determine '(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.'" McLeod v. Ford Motor Co., 2005 WL 3763354, at *2 (C.D. Cal.) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000), and citing Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1048-49 (9th Cir. 1996)).

III. DISCUSSION

A. Motion to ...


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