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LLC v. Hurwitz

United States District Court, S.D. California

March 10, 2014

9826 LFRCA, LLC, Plaintiff,
v.
ROBERT A. HURWITZ, individually and dba HURWITZ JAMES COMPANY; HURWITZ JAMES COMPANY, Defendants. ROBERT A. HURWITZ, individually and dba HURWITZ JAMES COMPANY, Third Party Plaintiff,
v.
DONALD A. BURNS, et al., Third Party Defendants.

ORDER DENYING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [doc. #16]

M. JAMES LORENZ, District Judge.

Third party defendant Donald A. Burns moves for dismissal of the Third Party Complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). This Motion has been fully briefed and is considered without oral argument.

I. BACKGROUND

This action arises out of the purchase of a real property ("Property") featuring a house custom-designed by Wallace Cunnigham, which is recognized as architecturally significant. The Property is located directly above or abuts Black's Beach in LaJolla, California. The owner of the estate filed a bankruptcy petition. Thereafter, the Chapter 7 bankruptcy trustee, Leslie T. Gladstone, arranged for the sale of the Property for the benefit of the bankruptcy estate. Defendants Robert A. Hurwitz, individually and dba Hurwitz James Company, and Hurwitz James Company (collectively "Hurwitz") acted as the real estate listing broker for the Chapter 7 trustee, who was the actual seller of the Property.

Donald A. Burns ("Burns") entered into a Purchase Agreement for the Property for $14, 097, 000.00 with the understanding, based upon defendant's marketing materials and the MLS listing, that the Property featured private access to Black's Beach.

Just prior to the close of escrow, Burns assigned all of his rights, title and interest in the property to 9826 LFRCA, LLC. Burns is a trustee of the Donald Alan Burns Revocable Trust and the Trust is the sole member of 9826 LFRCA. Upon the close of escrow, legal title to the Property vested in 9826 LFRCA, not Burns.

9826 LFRCA filed a complaint against defendants alleging four causes of action: intentional misrepresentation, negligent misrepresentation, fraudulent concealment, and negligence against Hurwitz. In the complaint, 9826 LFRCA alleges that the private access to Black's Beach was not a "legal, perpetual, private access appurtenant to the Property as stated in defendants' marketing materials." Rather the access is a "fully revocable license given by the University of California, San Diego that the University can unilaterally revoke at any time, the access is not private and exclusive to the Property, and there is no access, private or otherwise, directly from the Property to Black's Beach." (Comp. at ¶ 10.)

Hurwitz then filed a third party complaint against Donald A. Burns, Coldwell Banker Residential Brokerage Company, and Laleh Monshizadeh ("third party defendants") seeking equitable indemnity, contribution, apportionment of fault and declaratory relief. Coldwell Banker and agent Monshizadeh had represented Burns as the purchaser of the Property. As noted above, Hurwitz was the listing agent for the Property for the seller, the bankruptcy trustee.

Third party plaintiff Hurwitz alleges that Burns failed to properly conduct his due diligence on the Property prior to making the decision to purchase it and failed to investigate, research and otherwise discover the facts he now claims have caused the Property to be worth $1, 000, 000.00 less than the agreed upon price. (TPC at ¶ 15.) Hurwitz also alleges that Coldwell Banker and Monshizadeh failed to properly advise Burns and failed to investigate the facts concerning the Property, including the inspection of records and permits concerning title to the use of the Property.

In response to the third party complaint, third party defendant Burns seeks dismissal based on the Court's lack of personal jurisdiction over him.

II. LEGAL STANDARD

Under Rule 12(b)(2), a court may dismiss a suit for "lack of jurisdiction over the person." FED. R. CIV. P. 12(b)(2). When the parties dispute whether personal jurisdiction over a foreign defendant is proper, "the plaintiff bears the burden of establishing that jurisdiction exists." Rios Props. Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). In ruling on a motion brought under 12(b)(2), 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. 2001). Where the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make "a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Bryton Purcell LLP v. Recordon & Recordon, 575 F.3d 981, 985 (9th Cir. 2009). A prima facie showing means that "the plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant." Unocal, 248 F.3d at 922. "In determining whether the plaintiff has met this burden, the Court must take the allegations in the plaintiff's complaint as true and resolve the disputed jurisdictional facts in the plaintiff's favor." Nissan Motor Co., Ltd. v. Nissan Computer Corp., 89 F.Supp.2d 1154, 1158 (C.D. Cal. 2000) (citing Ziegler v. Indian River Cnty., 64 F.3d 470, 473 (9th Cir. 1995)).

III. DISCUSSION

Burns contends that this Court does not have either general or specific personal jurisdiction over him in this matter, arguing that Hurwitz has not met his burden of proof, or alternatively, that Burns has overcome the presumption that jurisdiction is reasonable. Plaintiff opposes, arguing that this Court can exercise specific jurisdiction over Burns. Because plaintiff is not suggesting general jurisdiction is applicable ...


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