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Newton A. Phillips and Ninfa Elizondo-Campos Phillips v. Edmundo Dominguez Hernandez et al

October 18, 2012


The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge


Currently pending before the Court is Defendants Edmundo Dominguez Hernandez, Jose Carballo Yepiz, Beatriz Dominguez Suarez, Bernardo Dominguez Suarez, and Mercedes Suarez Dominguez's (collectively "Defendants") Motion to Dismiss Plaintiffs' Complaint for Lack of Personal Jurisdiction and Improper Venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(5). [Doc. No. 5.] Plaintiffs opposed the motion [Doc. No. 14], and Defendants filed a reply [Doc. No. 15]. On September 5, 2012, the Court took the matter under submission on the papers pursuant to Local Civil Rule 7.1. [Doc. No. 6.] For the reasons set forth below, the Court GRANTS Defendants' motion and DISMISSES Plaintiffs' complaint.


Plaintiffs Newton Phillips ("Newton") and Ninfa Elizondo-Campos Phillips are residents of Yuma County, Arizona. [Compl. ¶ 1.] Defendants are all residents of Rosarito Beach, Mexico.

[Id. ¶¶ 2-6.]In October 2003, Plaintiffs traveled to Rosarito, Mexico to visit Newton's longtime friend, Defendant Jose Carballo Yepiz ("Jose"). [Id. ¶ 10.] Over breakfast, Plaintiffs and Jose discussed the idea of investing money in real property located along the coastline in Baja California, Mexico. [Id. ¶ 11.] Jose mentioned that his cousin, Defendant Edmundo Dominguez Hernandez ("Edmundo"), was looking to sell vacant land owned by Edmundo in Bahia Concepcion, Mexico. [Id. ¶¶11-12.] Edmundo needed a good business partner to help develop the property. [Id. ¶ 12.]

Two weeks later, Plaintiffs, Jose, and Edmundo met in Rosarito to discuss Edmundo's investment opportunity. [Id. ¶ 12-13.] Edmundo expressed that he was looking for business partners to invest capital in real property that he owned outside Loreto, Baja California, Mexico. [Id. ¶ 14.] He planned to develop the land into various residential and temporary dwelling structures. [Id. ¶ 18.] Edmundo stated he held perfected title to the land free and clear of all encumbrances. [Id. ¶ 15.]

After a few more meetings, Plaintiffs and Edmundo drove to Bahia Concepcion to see the property. [Id. ¶ 17.] Upon viewing the property, Plaintiffs articulated concern that the property was far away from any populated city, and lacked the necessary infrastructure to maintain the type of development contemplated by Edmundo. [Id.] Edmundo eased Plaintiffs' concerns by informing them that Mexican billionaire Carlos Slim planned to develop land in the region. [Id. ¶ 18.] The same day, Newton gave Edmundo $7,000.00 to "get[] the paperwork on [the] property in order," in exchange for two hectares of land. [Id. ¶ 19.]

Thereafter, Newton and Edmundo agreed to form a joint venture, wherein Edmundo would front the property and Newton would supply the money to develop the property. Specifically, Edmundo would sell a 50% ownership stake in the profits of the real estate development in exchange for a total investment from Newton of $80,000.00. [Id. ¶ 20.] The parties' agreement also stated that if Newton found over ten people interested in purchasing property, then the price per lot would be $25,000 rather than $30,000, with an immediate $5,000 paid up front per lot. [Id. ¶ 23.] Newton later found five willing investors, each of whom made the $5,000 up front payment to Edmundo. [Id. ¶ 23.] Newton was ultimately responsible for repaying these investors. [Id.]

Subsequently, between December 2005 to late 2006, Newton transferred approximately $38,500 to Edmundo, as well as a Dodge Ram truck worth $5,000. [Id. ¶¶ 24-25.] Newton learned Edmundo never used the truck for the purposes discussed, but instead gave it to his son, Defendant Bernardo Dominguez Suarez. [Id. ¶ 25.]

In May 2006, Newton hired a Mexican attorney to inspect the chain of title on the property. [Id. ¶ 26.] The attorney discovered that Edmundo did not own the land, and had not recorded the land contract between Newton and Edmundo. Following this, Newton sought assurances from Edmundo that he did, in fact, own the land; Edmundo said the problems were easily remedied. [Id. ¶ 27.] In 2009, Plaintiffs found that others had recorded competing instruments in reference to the subject property. [Id. ¶ 28.] Two years passed until Plaintiffs next met with Edmundo, again in Rosarito. There, Edmundo told Plaintiffs that he would settle all accounts related to the matter within two months. [Id. ¶ 31.] He has not contacted them since. [Id. ¶ 32.]

As a result, Plaintiffs initiated the present action, alleging claims of breach of contract, unconscionability, undue influence, fraud, and misrepresentation. [Id. at pp. 6-8.] Plaintiffs allege each Defendant had full knowledge that Defendant Edmundo did not have legal ownership of the property in question. [Id. ¶ 30.] Plaintiffs further assert that Defendants participated in a general scheme to defraud Plaintiffs and other United States citizens. [Pl.s' Opp. 3-4.]


1. Legal Standard

Federal Rule of Civil Procedure 12(b)(2) allows a district court to dismiss an action for lack of personal jurisdiction. "Where defendants move to dismiss a complaint for lack of personal jurisdiction, plaintiffs bear the burden of demonstrating that jurisdiction is appropriate." Dole Food Co. Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). "The court may consider evidence presented in affidavits to assist in its determination and may order discovery on the jurisdictional issues." Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2011) (citing Data Disc, Inc. v. Sys. Tech. Ass'n, Inc., 557 F.2d 1280, 1285 (9th Cir. 1977)). "When a district court acts on the defendant's motion to dismiss without holding an evidentiary hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand a motion to dismiss." Id. (citing Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995)). "Unless directly contravened, [Plaintiffs'] . . . facts [are] taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in [Plaintiffs'] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists." Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (citations omitted). However, the court may not assume the truth of such allegations if they are contradicted by affidavit. Data Disc, 557 F.2d at 1284.

There are two independent limitations on a court's power to exercise personal jurisdiction over a non-resident defendant: the applicable state personal jurisdiction statute and constitutional principles of due process. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). California's jurisdictional statute, however, is coextensive with federal due process requirements; therefore, "the jurisdictional analyses under state law and federal due process are the same." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004).

The exercise of jurisdiction over a non-resident defendant violates the due process clause unless the defendant has "minimum contacts" with the forum state so that the exercise of jurisdiction "does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Due process is satisfied if the court has "either general jurisdiction or ...

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