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Boulton v. American Transfer Services, Inc.

United States District Court, S.D. California

August 5, 2014

KERRY BOULTON, Plaintiff,
v.
AMERICAN TRANSFER SERVICES, INC., U.S. TAX LIEN ASSOCIATION, STEVE CLEMENTS, TONY MARTINEZ, SAEN HIGGINS, SPIKE HUMER, RICHARD MEDINA, JR., ANA GUERRA DURAN, RUBEN SANCHEZ, Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT [Dkt. Nos. 26, 29.]

GONZALO P. CURIEL, District Judge.

INTRODUCTION

Before the Court is Plaintiff Kerry Boulton's ("Plaintiff") Motion for Leave to File a Second Amended Complaint pursuant to Federal of Civil Procedure ("Rule") 15(a). (Dkt. No. 26.) Plaintiff seeks to add a civil RICO cause of action and to add additional Plaintiffs. (Dkt. No. 26.) Defendants Ruben Sanchez and American Transfer Services, Inc. ("ATS") also filed a motion to dismiss the first amended complaint. (Dkt. No. 29.) The motion is submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1). Based on the reasoning below, the Court GRANTS in part and DENIES in part Plaintiff's motion for leave to file a second amended complaint. Additionally, the Court DENIES Defendants Sanchez and ATS's Motion to Dismiss for Failure to State a Claim as moot.

FACTUAL BACKGROUND

Plaintiff is a resident of Melbourne, Australia. (Dkt. No. 17, FAC ¶ 7.) In the first amended complaint Plaintiff alleges Defendants ATS and Sanchez, as an employee of ATS, fraudulently induced Plaintiff to purchase tax liens and/or tax deeds in the United States. (Id. ¶ __.) Defendant ATS purports to be a company "that will open up a business for foreign citizens to acquire interests in real estate related to tax liens and/or tax deeds for profit" by providing Sole Proprietorship Registration, U.S. Employer Identification number, U.S. Banking Facilitation and a U.S. mailing address. (Id. ¶¶ 12, 13.) Defendants receive funds from foreigners to "open and (sic) account" and then takes controls of the funds. (Id. ¶ 15.) Defendants claim they will arrange for transfers between appropriate bank accounts to pay ATS its fees and for Plaintiff to have funds available to make investments in U.S. tax liens and tax deeds. (Id.) ATS asks for money to be wired to an ATS account and then ATS will set up sub-accounts for the clients to transfer money into in order to make the investments. (Id. ¶ 16.)

These representations were made to Plaintiff. (Id. ¶ 14.) Plaintiff provided the total of $156, 000 to Defendants in two installments of $1, 000 and $155, 000. (Id. ¶ 19.) Defendants assumed control of the funds and never transferred them to the purported "sub account" which would have been made available to her to exercise the proper control. (Id. ¶ 20.) She has made numerous demands for the return of her funds which have failed. (Id. ¶ 21.) Plaintiff alleges causes of action for breach of contract, conversion and money had and received.

PROCEDURAL BACKGROUND

On January 24, 2014, Plaintiff filed a complaint against Defendants ATS, Steve Clements, Ana Guerra Duran, Saen Higgins, Spike Humer, Tony Martinez, Richard Medina, Jr., Ruben Sanchez, and U.S. Tax Lien Association for (1) money had and received, (2) conspiracy through conversion, (3) breach of contract, (4) fraud, and (5) fraud-promise without intent to perform. (Dkt. No. 1.) On March 4, 2014, Defendant Richard Medina, Jr. filed a Motion to Dismiss for Failure to State a Claim. (Dkt. No. 14.) On the same date, Defendants Ana Guerra Duran and Ruben Sanchez filed a Motion to Dismiss for Failure to State a Claim.

On March 25, 2014, Plaintiff filed a first amended complaint ("FAC") against Defendants ATS and Ruben Sanchez. (Dkt. NO. 17.) On April 28, 2014, the Court denied Defendants Ruben Sanchez and Anna Guerra Duran's motion to dismiss the original complaint as moot. (Dkt. No. 23.) On May 2, 2014, Plaintiff filed a Notice of Voluntary Dismissal as to Defendant Ana Guerra Duran. (Dkt. No. 24.)

On June 10, 2014, Plaintiff filed a Motion for Leave to File Amended Complaint to Add a Claim for Civil RICO and Additional Plaintiffs. (Dkt. No. 26.) On June 27, 2014, Defendants Ruben Sanchez and ATS filed an opposition. (Dkt. No. 28.) On July 11, 2014, Plaintiff filed a Reply. (Dkt. No. 31.)

On July 1, 2014, Defendants Ruben Sanchez and ATS filed a Motion to Dismiss for Failure to State a Claim. (Dkt. No. 29.) On July 15, 2014, Plaintiff filed an opposition. (Dkt. No. 32.) On July 22, 2014, Defendant filed a reply. (Dkt. No. 33.)

DISCUSSION

I. Federal Rule of Civil Procedure 7(b)

As an initial argument, Defendants argue that the Court should deny Plaintiff's motion for leave to file a second amended complaint by failing to meet the particularity requirements of Rule 7(b) because Plaintiff failed to attach the proposed amended complaint to her motion. Plaintiff opposes contending that neither the Federal Rules nor the Local Civil ...


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