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United Motors International Inc. v. Hartwick

United States District Court, C.D. California

March 6, 2017

UNITED MOTORS INTERNATIONAL, INC. ET AL
v.
PETER HARTWICK ET AL

          Present: The Honorable BEVERLY REDD O'CONNELL, United States District Judge.

          CIVIL MINUTES - GENERAL

         Proceedings: (IN CHAMBERS)

         ORDER RE PLAINTIFFS' MOTION TO REMAND AND DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT [10, 9]

         I. INTRODUCTION

         Pending before the Court is Plaintiffs United Motors International, Inc. ("United Motors"), EASO Industry, LLC ("EASO"), and Lay M. Ea's (collectively, "Plaintiffs") Motion to Remand, (see Dkt. No. 10 (hereinafter, "Remand Mot.")), and Defendants City of Downey and Fernando Vasquez's (collectively, the "Government Defendants") Motion to Dismiss, (see Dkt. No. 9 (hereinafter, "Mot." or "Motion")). After considering the papers filed in support of and in opposition to the instant motions, the Court deems these matters appropriate for resolution without oral argument of counsel. See Fed. R. Civ. P. 78; CD. Cal. L.R. 7-15. For the following reasons, the Court DENIES Plaintiffs' Motion to Remand and GRANTS in part Government Defendants' Motion to Dismiss.

         H. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Background

         Plaintiff United Motors is a California corporation qualified to do business in Downey, California. (See Dkt. No. 1-2 (hereinafter, "FAC") ¶ 1.) Lay M. Ea ("Ea"), a resident of California, is the principal of United Motors. (See Id. ¶ 2.) EASO is "a limited liability company" qualified to do business in California and owns real property in Downey, California, located at 11921 Woodruff Avenue (the "Property"). (See Id. ¶¶ 2-A.) On the Property, United Motors "operates an automobile export business." (Id. ¶ 4.) Defendants Fernando Vasquez ("Vasquez"), Peter Hartwick and Andrea Hartwick reside in California.[1] (See Id. ¶¶ 7-9.)

         On or about August 3, 2015, EASO purchased the Property from the City. (See Id. ¶ 13.) In the written purchase and sale agreement, the City agreed to allow Plaintiffs to run their auto export business on the Property, promising to issue the requisite conditional and business permits. (See Id. ¶¶ 13, 34.) Plaintiffs allege the City never intended to honor this agreement; rather, the City's intent was to "take Plaintiffs' money, " "dispossess Plaintiffs of the property and the business" following property improvements; and, "sell the improved property to Defendant Vasquez." (See Id. ¶ 15.)

         Plaintiffs claim Defendants purposefully harassed them by: (1) "conducting dozens of surprise inspections;" (2) "making false and defamatory statements regarding Plaintiffs' business" in public settings; (3) "[h]olding City Council meetings to discuss revocation of Ea's conditional use permit" when Plaintiff lacked notice; (4) "[r]efusing to issue Plaintiffs a business license" when they satisfied all requisite conditions; and, (5) "[i]ssuing building permits for improvements" on the Property, then unjustly issuing "stop work" notices. (Id. ¶ 16.)

         Additionally, Plaintiffs allege that the Hartwick Defendants and/or Vazquez threatened, intimidated, and harassed them in August 2015. (See Id. ¶ 17.) The alleged conduct included: (1) removing the barrier fence bordering the Property; (2) instructing pit bull dogs to attack both Ea and his employees; (3) shooting Ea with an air gun; (4) vandalizing and trespassing on the Property; (5) Defendants making false statements and passing out defamatory flyers about the Property; and, (6) producing false reports that accused Plaintiffs of polluting the City's water supply with hazardous materials. (See Id. ¶ 18.) Plaintiffs contend that the Hartwick Defendants' and Vazquez's seek to force Plaintiffs to sell the Property "to the named and other Doe Defendants." (Id. ¶ 20.)

         B. Procedural History

         Plaintiffs filed this action on April 28, 2016, in the Superior Court of California, County of Los Angeles ("Los Angeles Superior Court"). (See Dkt. No. 1-1 (hereinafter, "Compl.").) On December 1, 2016, Plaintiffs filed a First Amendment Complaint ("FAC") in Los Angeles Superior Court. (See FAC at 2.) Plaintiffs allege the following eleven state law causes of action: (1) breach of contract, against the City; (2) fraud, against the Government Defendants and Doe Defendants 1 through 10; (3) specific performance, against the City; (4) assault, against the Hartwick Defendants, Vazquez, and Doe Defendants 1 through 10; (5) trespass, against the Hartwick Defendants, Vasquez, and Doe Defendants 1 through 10; (6) defamation, against the Hartwick Defendants, Vasquez, and Doe Defendants 1 through 10; (7) intentional interference with prospective economic advantage, against the Hartwick Defendants, Vasquez, and Doe Defendants 1 through 10; (8) unfair business practices in violation of Business & Professions Code Section 17200, against all Defendants; (9) nuisance, against the Hartwick Defendants, and Does 1 through 10; (10) extortion, against all Defendants; and, (11) civil stalking in violation of Civil Code Section 1708.7, against Defendant Peter Hartwick. (See FAC ¶¶ 21-95.)

         In addition. Plaintiffs allege three federal causes of action: (1) violation of the Racketeering & Corrupt Organizations Act ("RICO"), against all Defendants; (2) discrimination in violation of 42 U.S.C. Sections 1983, etseq., against the Government Defendants and Doe Defendants; and, (3) a violation of Title VI of the Civil Rights Act of 1964, against the Government Defendants and Doe Defendants. (See FAC ¶¶ 85-90, 96-110.)

         Defendants removed the action on January 11, 2017. (See Dkt. Nos. 3-4.) Plaintiffs filed the instant Motion to Remand on January 18, 2017. (See Remand Motion.) On February 6, 2017, the Hartwick Defendants filed a Notice of Consent to Removal. (See Dkt. No. 15.) The Government Defendants filed their opposition to Plaintiffs' Motion to Remand on February 13, 2017. (See Dkt. No. 17 (hereinafter, "Remand Opp'n").)

         Government Defendants moved to dismiss Plaintiffs' First Amended Complaint ("FAC") on January 18, 2018. (See Mot.) Plaintiff Ea opposed the Government Defendants' Motion to Dismiss on February 13, 2017. (See Dkt. No. 19 (hereinafter, "Opp'n").) Government Defendants replied in support of their Motion on February 17, 2017. (See Dkt. No. 20 (hereinafter, "Reply").) Additionally, the Government Defendants filed a Request for Judicial Notice on January 19, 2017, (see Dkt. No. 22 (hereinafter, "RJN")), and a Supplemental Request for Judicial Notice on February 17, 2017, (see Dkt. No. 22 (hereinafter, "Supp. RJN")).

         III. JUDICIAL NOTICE

         When considering a motion to dismiss, a court typically does not look beyond the complaint in order to avoid converting a motion to dismiss into a motion for summary judgment. See Mack v. S Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986), overruled on other grounds by Astoria Fed. Sav. & Loan Ass 'n Solimino, 501 U.S. 104 (1991). Notwithstanding this precept, a court may properly take judicial notice of: (1) material which is included as part of the complaint or relied upon by the complaint; and, (2) matters in the public record. See Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006); Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001); see also Yumul v. Smart Balance, Inc., 733 F.Supp.2d 1134, 1137 (CD. Cal. 2010) (holding that a court may "consider documents that are incorporated by reference but not physically attached to the complaint if they are central to the plaintiffs claim and no party questions their authenticity"). A court "must take judicial notice if a party requests it and the court is supplied with the necessary information." See Fed. R. Evid. 201(c)(2); In re Icenhower, 755 F.3d 1130, 1142 (9th Cir. 2014). Plaintiffs do not oppose any of Defendants' Requests.

         Government Defendants request the Court take judicial notice of three sections of the City of Downey Municipal Code ("DMC"): (1) Section 6301, (see RJN at 2); (2) Section 6301, (see RJN at 2); and, (3) Section 6200.2, (see Supp. RJN at 2). The Court finds city ordinances to be judicially noticeable, thus the Government Defendants' Request is GRANTED. See Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, n.2 (9th Cir. 2006); see also Lamle v. City of Santa Monica, No. CV 04-6355-GHK (SH), 2010 WL 3734868, *2 (CD. Cal. July 23, 2010) ("City ordinances are proper subjects for judicial notice.").

         IV. LEGAL STANDARD

         A. Motion to Remand

         Federal courts are of limited jurisdiction and possess only that jurisdiction which is authorized by either the Constitution or federal statute. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Pursuant to § 1332(a)(1), a federal district court has jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, " and the dispute is between citizens of different states. 28 U.S.C. § 1332(a)(1). The Supreme Court has interpreted § 1332 to require "complete diversity of citizenship, " meaning each plaintiff must be diverse from each defendant. Caterpillar Inc. v. Lewis, 519 U.S. 61, 67-68 (1996).

         Under § 1441(a), a civil action may be removed to the district court only if the district court has original jurisdiction over the issues alleged in the state court complaint. See 28 U.S.C. § 1441(a). When a civil action is removed solely under § 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A).

         "Where fewer than all the defendants have joined in a removal action, the removing party has the burden under section 1446(a) to explain affirmatively the absence of any co-defendants in the notice for removal." Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1266 (9th Cir. 1999), superseded by statute on other grounds as recognized in Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006); see United Computer Sys., Inc. v. AT & T Corp., 298 F.3d 756, 762 (9th Cir. 2002) (finding that "the usual rule is that all defendants in an action in a state court must join in a petition for removal").

         In determining whether removal in a given case is proper, a court should "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. The removing party therefore bears a heavy burden to rebut the presumption against removal. See id.

         B. Motion to Dismiss

         Under Rule 8(a), a complaint must contain a "short and plain statement of the claim showing that the [plaintiff] is entitled to relief." Fed.R.Civ.P. 8(a)(2). If a complaint fails to do this, the defendant may move to dismiss it under Rule 12(b)(6). Fed.R.Civ.P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim that is plausible on its face."' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Ail. Corp. v. Twombfy, 550 U.S. 544, 555 (2007). Thus, there must be "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility'" that the plaintiff is entitled to relief. Id. (quoting Twombly, 550U.S. at 557).

         In ruling on a motion to dismiss for failure to state a claim, a court should follow a two-pronged approach: first, the court must discount conclusory statements, which are not presumed to be true; and then, assuming any factual allegations are true, the court shall determine "whether they plausibly give rise to entitlement to relief." See Id. at 679; accord Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012). A court should consider the contents of the complaint and its attached exhibits, documents incorporated into the complaint by reference, and matters properly subject to judicial notice. See Tellabs, Inc. v. Makor Issues <& Rights, Ltd., 551 U.S. 308, 322-23 (2007); see also Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

         Where a district court grants a motion to dismiss, it should provide leave to amend unless it is clear that the complaint could not be saved by any amendment. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008) ("Dismissal without leave to amend is improper unless it is clear, upon de novo review, that the complaint could not be saved by any amendment.").

         V. DISCUSSION

         A. Motion to Remand

         1. Procedural Defect

         ''[A] procedural defect existing at the time of removal but cured prior to entry of judgment does not warrant reversal and remand of the matter to state court." Parrino v. FHP, Inc., 146 F.3d 699, 703 (9th Cir. 1998); seeDestfino v. Reiswig, 630 F.3d 952, 957 (9th Cir. 2011) ("[W]hen the notice of removal is filed, the district court may allow the removing defendants to cure the defect by obtaining joinder of all defendants prior to the entry of judgment."). Plaintiffs argue that the Hartwick Defendants failed to consent to this action's removal from state to federal court; therefore, the removal is defective. (See Remand Mot. at 5.) Defendants claim the subsequent filing of a Notice of Consent to Removal by the Hartwick Defendants remedied any defect in the removal process. (See Remand Opp'n at 3.)

         The Government Defendants removed this action on January 11, 2017. (See Removal.) On January 18, 2017, Plaintiffs filed their Remand Motion, raising the procedural defects noted above. (See Remand Mot.) On February 6, 2017, the Hartwick Defendants filed a Notice of Consent to Removal with the Court, signed by their attorney pursuant to this Court's Local Rules. (See Dkt. No. 15.) Government Defendants proffer this document as an adequate cure to the defective petition for removal filed with this Court. (See Remand Opp'n at 3.) In light of the aforementioned Ninth Circuit precedent, this Court finds Government Defendants' subsequent submission illustrating the Hartwick Defendants' consent to be a sufficient cure to satisfy the requirements of § 1446(b)(2)(A). See Soliman v. Philip Morris Inc., 311 F.3d 966, 970 (9th Cir. 2002) (finding "that the original removal notice was defective because it wasn't signed by all defendants, " but the district court permitted "defendants to cure this defective by amending the notice").

         "A party, generally the defendant, may waive the right to remove to federal court where, after it is apparent that the case is removable, the defendant takes actions in state court that manifest his or her intent to have the matter adjudicated there, and to abandon his or her right to a federal forum." Resolution Trust Corp. v. Bayside Developers, 43 F.3d 1230, 1240 (9th Cir. 1994). "Where, as here, a party takes necessary defensive action to avoid a judgment being entered automatically against him, such action does not manifest an intent to litigate in state court, and accordingly, does not waive the right to remove. Resolution Trust Corp., 43 F.3d at 1240.

         Plaintiffs argue that, "by filing a demur [sic] in State Court, [Defendants] ] waived their right to consent to removal." (Remand Mot. at 5.) Defendants contend that filing a demurrer in state court does not constitute a waiver of the ability to consent to removal. (See Remand Opp'n at 4.) Because Defendants were taking "necessary defensive action[s] to avoid a judgment being entered automatically, " the Court finds that Defendants' demur in state court "does not manifest an intent to litigate in state court, and accordingly does not waive the right to remove." Resolution Trust Corp., 43 F.3d at 1240; seeAcosta v. Direct Merchants Bank, 207 F.Supp.2d 1129, 1131 (S.D. Cal. 2002) ("It is well-settled that merely filing a responsive pleading does not invoke the state court's jurisdiction so as to constitute a waiver of the right to remove."). For the foregoing reasons, the Court finds that Plaintiffs have failed to establish grounds for remand in this case.

         2. Federal Question Jurisdiction

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under 28 U.S.C. &sect; 1441(a), a civil action may be removed to federal court only if the action could have been brought there originally. This means that removal is proper only if the district court has original jurisdiction over the issues alleged in the state court complaint. The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). If a district court finds, at any time, that it lacks original jurisdiction, the court must remand the action. See 28 U.S.C. &sect; 1447(c). Moreover, "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus, 980 F.2d at 566 (citing Libhart v. Santa Monica Daily Co.,592 F.2d 1062, 1064 (9th Cir. 1988)). This presumption against removal "means that the defendant always has the burden of establishing that removal is ...


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