United States District Court, C.D. California
MATTHEW JOHNSON; NATHAN JOHNSON; GEMINI PARTNERS, INC.; and ALACRITY CAPITAL OFFSHORE FUND, LTD., Plaintiffs,
DAIVD MAZZA; PAUL M. WEST; ANTHONY ALLEN WOOD; JOSEPH D. SIMMS; CHRISTOHPER ALLEGRETTI; HILL BARTH & KING LLC; HA&W WEALTH MANAGEMENT LLC; HABIF, AROGETI & WYNNE, LLP; and DOES 1 through 50, inclusive, Defendants.
ORDER GRANTING PLAINTIFFS' MOTION TO DISMISS
, DENYING PLAINTIFFS' MOTION TO STRIKE, AND GRANTING
DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS
D. WRIGHT, II UNITED STATES DISTRICT JUDGE.
case involves claims and counterclaims directed toward
various plaintiffs and defendants individually and as groups.
For purposes of the motions discussed herein, all
Plaintiffs/Counterdefendants (Matthew Johnson, Nathan
Johnson, Gemini Partners, Inc. (“Gemini”), and
Alacrity Capital Offshore Fund, Ltd. (“Alacrity”)
(collectively, “Plaintiffs”)) bring motions and
defenses as a group. However, two distinct groups of
defendants have emerged for purposes of the motions discussed
in this Order: Defendants Christopher Allegretti and Hill,
Barth & King LLC (“HBK”), and Defendants
David Mazza, Paul M. West, and Anthony Allen Wood
September 20, 2016, the Court granted Allegretti and
HBK's first Motion for Judgment on the Pleadings, giving
Plaintiffs leave to amend their claims directed at Allegretti
and HBK involving fraud. (ECF No. 80.) On October 4, 2016,
the Court granted Plaintiffs' first Motion to Dismiss
Mazza's counterclaims. (ECF No. 81.) That Order dismissed
Mazza's counterclaims for intentional interference with a
contract, negligent interference with a contract, equitable
estoppel, fraud, and conspiracy. It granted leave to amend
for all causes of action except equitable estoppel.
those two orders, Plaintiffs filed a second amended Complaint
(ECF No. 83), Allegretti and HBK filed a new Answer (ECF No.
87), and Mazza filed a new Answer with associated
counterclaims (ECF No. 89.) Defendant HA&W Wealth
Management LLC also filed a separate answer. (ECF No. 88.)
Plaintiffs then filed a Motion to Dismiss and/or Strike
Mazza's counterclaims (ECF No. 90), and Allegretti and
HBK filed a Motion for Judgment on the Pleadings (ECF No.
95.) Those motions are fully briefed and ready for
decision. For the reasons discussed below, the Court
GRANTS Plaintiffs' Motion to Dismiss,
DENIES Plaintiffs' Motion to Strike, and
GRANTS Allegretti and HBK's Motion for
Judgment on the Pleadings.
and Nathan Johnson are brothers who together formed Gemini in
2001 and Alacrity in 2009. (Second Am. Compl.
(“SAC”) ¶ 25, ECF No. 83.) Gemini is an
investment bank that provides capital market services to
medium-sized businesses, and Alacrity is a fund that provides
secured loans to companies unable to obtain traditional
Johnson brothers met David Mazza in 2010 in the context of a
new business model Mazza was promoting under the name
Alethean. (Id. ¶ 27.) Mazza solicited business
from the Johnsons, offering Gemini an exclusive on investment
banking deals through CPA360, a web-based portal.
(Id. ¶¶ 31-32, 37.) CPA360 was allegedly
designed to match CPA clients in need of financial services
with financial services providers, such as Gemini.
(Id.) In turn, Alacrity would provide Alethean with
a $1 million loan. (Id. ¶ 37.) Mazza assured
Johnson that revenues generated as a result of the deal would
exceed $5 million and that two of the top-100 accounting
firms in the country-Defendants HBK and HA&W Wealth
Management LLC-were fully committed to Alethean.
(Id. ¶¶ 37, 48.) Moreover, Plaintiffs
allege that representatives of HBK and HA&W made
assurances to Plaintiffs about their respective firms being
fully committed to the Alethean model. (Id. ¶
44.) Plaintiffs claim to have “relied heavily” on
those assurances. (Id. ¶ 48.)
the parties entered into a formal agreement, years passed
without significant deal flow to Gemini and without the
required loan payments from Alethean to Alacrity.
(Id. ¶¶ 51-56.) The Johnson brothers made
a formal demand for payment, at which point Defendants Wood,
West, and Mazza, among others, took the position that they
were no longer involved with Alethean. (Id. ¶
55.) In 2013, Johnson filed suit against the Alethean
entities in California state court. (Id.
¶¶ 57.) The state court granted default judgment in
December 2013. (Id.) In early 2015, while trying to
collect on the default judgment, Johnson discovered a
bankruptcy and a number of lawsuits filed against several of
the Defendants named in this action. (Id.
¶¶ 58-59.) After reviewing the documents involved
in those lawsuits, Johnson discovered that Alethean was
neither unique nor proprietary and had never been fully
implemented or deployed. (Id. ¶¶ 59-61.)
also asserts counterclaims against Plaintiffs. Mazza's
position, alternatively, is that Johnson perpetrated a scheme
to defraud Mazza through the loan agreement and through the
court system. (See generally Answer with Countercl.)
Court begins by addressing Plaintiffs' Motion to Dismiss
and/or Strike and then addresses Allegretti and HBK's
Motion for Judgment on the Pleadings.
Plaintiffs' Motion to Dismiss and/or Strike
asserts five counterclaims against Plaintiffs: intentional
interference with a contract; Defendant West's separate
counterclaim for intentional interference with a contract;
intentional interference with a prospective economic
advantage; fraud; and conspiracy. (Answer with Countercl.) In
moving to strike and/or dismiss those causes of action,
Johnson argues that Mazza has failed to state a claim on
which relief can be granted. See Fed. R. of Civ. P.
12(b)(6); (Mot. to Dismiss or Strike.) Alternatively, as to
Mazza's counterclaims for fraud and conspiracy, Johnson
makes a special Motion to Strike under California's
Anti-SLAPP statute (Cal. Civ. Proc. Code § 425.16).
(Id.) The Court analyzes the relevant grounds for
dismissal in connection with each cause of action in turn.
may dismiss a complaint under Rule 12(b)(6) for lack of a
cognizable legal theory or insufficient facts pleaded to
support an otherwise cognizable legal theory. Balistreri
v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th
Cir. 1990). To survive a dismissal motion, a complaint need
only satisfy the minimal notice pleading requirements of Rule
8(a)(2)-a short and plain statement of the claim. Porter
v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual
“allegations must be enough to raise a right to relief
above the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). That is, the