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Kozlowski v. Stroomberg

United States District Court, E.D. California

March 28, 2014

MARCO KOZLOWSKI, BRAD WAKEMAN, and KADRI A. EGBEYEMI, the KOZLOWSKI/WAKEMAN/EGBEYEMI PARTNERSHIP and LUXURY HOME SOLUTIONS, INC., Plaintiffs,
v.
HUIB STROOMBERG, TRACI SOUTHWELL, STROOMWELL INVESTMENT GROUP, INC., GEORGE STROOMBERG, ANGELIC STROOMBERG, DICK STROOMBERG, RIEMKE KOOLEN, MIHAI ALGIU, and DOES 1-100, Defendants.

ORDER DENYING PLAINTIFFS' MOTION TO ALTER OR AMEND THE JUDGMENT

JOHN A. MENDEZ, District Judge.

This matter is before the Court on Plaintiffs Marco Kozlowski, Brad Wakeman, Kadri Egbeyemi, the Kozlowski/Wakeman/Egbeyemi Partnership and Luxury Home Solutions, Inc.'s (collectively "Plaintiffs") Motion to Alter or Amend (Doc. #60) the Court's December 30, 2013 Order (Doc. #59) granting, without leave to amend, Defendant Traci Southwell's ("Defendant Southwell") Motion to Dismiss (Doc. #53) Plaintiffs' First Amended Complaint ("FAC") (Doc. #47). Defendant Southwell opposes Plaintiffs' motion (Doc. #61).[1]

I. FACTUAL AND PROCEDURAL BACKGROUND

The factual background of this case is described thoroughly in the Court's initial Order (Doc. #59). Nevertheless, for ease of reference, a brief summary is included here.

This action arises out of Plaintiffs' allegations that co-defendant Stroomwell Investment Group, Inc. ("Stroomwell, Inc."), acting through its agent and additional co-defendant Mihai Algiu ("Algiu"), committed fraud when selling Plaintiffs a piece of property located in Cerbere, France (the "Cerbere Property"). Plaintiffs allege that Algiu misrepresented the condition of the property in making the sale. Plaintiffs filed the present lawsuit on February 15, 2013.

Plaintiffs' original complaint against Defendant Southwell was dismissed with leave to amend because it failed to allege any individual action by Defendant Southwell, and Defendant Southwell's position as CEO and Secretary of Stroomwell, Inc. did not support any theories of vicarious liability (Doc. #46). In the FAC, Plaintiffs allege that Defendant Southwell "participated" in the following three ways: First, on February 21, 2008, Defendant Southwell, along with Defendant Huib Stroomberg and on behalf of Stroomwell, Inc., "placed onto the Internet a personal invitation and advertisement... directed to current and potential investors to attend the company's Second Annual Presentation on Investment Opportunities.'" FAC ¶¶ 31-35. Second, on March 8, 2009, Defendant Southwell was quoted in a newspaper article with regard to a separate case against Defendants by different Plaintiffs. FAC ¶¶ 38-41. Third, Defendant Southwell was copied on emails from Algiu to Plaintiffs regarding the Cerbere Property. FAC ¶¶ 43-52.

The FAC includes the following causes of action against Defendant Southwell: 1) Civil Racketeer Influenced and Corrupt Organizations ("RICO"), 18 U.S.C. § 1962(c); 2) Fraud; 3) Unlawful, Deceptive and Unfair Business Practices, Cal. Bus. & Prof. Code § 17200; and 4) Unfair, Deceptive and Misleading Advertising, Cal. Bus. & Prof. Code § 17500.

II. OPINION

A. Legal Standard

Although Rule 59(e) of the Federal Rules of Civil Procedure ("FRCP") "permits a district court to reconsider and amend a previous order, the rule offers an extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources.'" Kona Enterprises, Inc. v. Estate of Bishop , 229 F.3d 877, 890 (9th Cir. 2000) (quoting 12 James Wm. Moore et al., Moore's Federal Practice § 59.30[4] (3d ed. 2000)). Indeed, a motion for reconsideration should not be granted, absent highly unusual circumstances, unless "the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc. , 5 F.3d 1255, 1263 (9th Cir. 1993). A Rule 59(e) motion "may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Kona , 229 F.3d at 890 (emphasis in original).

B. Discussion

1. Fraud

a. California Business Professions Code

Plaintiffs argue that the Court misinterpreted the California Business and Professions Code ("B&P"), erroneously creating a "private seller" exception to the law. Mot. at 4. In its original Order, the Court found that "the licensing requirement of B&P section 10139 does not apply to Defendant, " because "Defendant appears to be a ...


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