Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ponomarenko v. Shapiro

United States District Court, N.D. California, San Jose Division

May 3, 2017

PAUL PONOMARENKO, Plaintiff,
v.
NATHAN SHAPIRO, et al., Defendants.

          ORDER DENYING DEFENDANT'S MOTION TO QUASH SERVICE OF PROCESS; GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; AND VACATING HEARING [RE: ECF 27]

          BETH LAB SON FREEMAN, United States District Judge

         Plaintiff Paul Ponomarenko brings this suit against Defendants Project Vegas Mansion (“PVM”) and Nathan Shapiro (collectively, “Defendants”), alleging that Defendants engaged in fraudulent conduct that induced him to enter into two separate contracts for personal coaching with them, and that Defendants subsequently breached those contracts. See generally Compl., ECF 1. Shapiro moves to quash service of process for failure to serve in accordance with the Federal Rules of Civil Procedure, and moves to dismiss the complaint for lack of personal jurisdiction over him.[1] See generally Mot., ECF 27. Pursuant to Civ. L.R. 7-1(b), the Court finds Shapiro's motion suitable for submission without oral argument and hereby VACATES the hearing scheduled for June 22, 2017. For the reasons set forth below, the Court DENIES Defendant's motion to quash service of process and GRANTS Defendant's motion to dismiss for lack of personal jurisdiction WITH LEAVE TO AMEND.

         I. BACKGROUND

         Plaintiff alleges the following facts: Ponomarenko was invited to attend and did attend Defendants' personal coaching seminar in San Francisco on February 15-18, 2013, where he was introduced to Defendants, including Shapiro. Compl. ¶¶ 12-14. Ponomarenko paid $349 to attend the event. Id. ¶ 13. Plaintiff later attended an “in-field” coaching session, where Defendants took him and several other individuals on “training sessions.” Id. ¶ 14. After this session, Defendants invited Ponomarenko to join them at a third event for further demonstration of their personal coaching methods. Id. ¶ 15. At some point thereafter, Defendants induced Ponomarenko to consider a long-term business relationship with them for personal coaching. Id. ¶ 16.

         At a subsequent meeting in California, Defendants represented that as a part of any agreement, Ponomarenko would receive structured personal coaching with substantial, regular, and organized feedback. Id. ¶ 17. The services were to be provided in both California and Nevada, and by PVM through Shapiro and/or another individual who represented himself to be working on behalf of PBCM and to be a business partner of Shapiro. Id. After this meeting, Ponomarenko flew to Las Vegas, Nevada to finalize the agreement. Id. ¶ 18.

         While in Las Vegas, Ponomarenko and Defendants executed an agreement (“First Agreement”) for PVM to provide a specific number of hours and sessions of personal communication and presentation coaching. Id. ¶ 19. The First Agreement obligated Ponomarenko to make an initial down payment of $25, 000. Id. ¶ 20. Ponomarenko paid Shapiro $5, 000 while he was in Las Vegas, and paid an additional $15, 000 a few days later. Id. Ponomarenko also paid $5, 000 to another individual who was represented to be one of PVM's agents and Shapiro's business partner. Id. Pursuant to the First Agreement, Ponomarenko was to make the remainder of the payments in regular intervals during the course of the training period. Id.

         From the time he executed the First Agreement through January 2014, Ponomarenko repeatedly and regularly traveled between California and Nevada to attend the coaching sessions. Id. ¶ 22. Occasionally, training sessions were held in other cities, such as New York and Chicago. Id. Ponomoarenko claims that the personal coaching sessions lacked the promised structure and many were conducted “in a party like setting, ” at his expense. Id. ¶ 23. Growing frustrated with this, Ponomarenko reached out to PVM's agent, who reassured him that they would address the issues. Id. ¶ 24.

         In January 2014, PVM's agent proposed a second agreement, whereby the agent would move to San Francisco so that Ponomarenko did not have to regularly travel to attend the training sessions. Id. ¶ 25. Thereafter, Ponomarenko and PVM's agent entered into second agreement (“Second Agreement”), whereby Ponomarenko agreed to pay $99, 000 to enroll in an advanced personal coaching program. Id. In addition to the enrollment cost, Ponomarenko was to cover all of the agent's travel expenses for the duration of the Second Agreement and a short-term lease on an apartment for PVM's agent in San Francisco. Id. Shapiro was not involved in the Second Agreement. Id.

         On February 20, 2014, Ponomarenko paid PVM's agent $40, 000, consisting of a $23, 500 payment on the First Agreement and a $16, 500 down payment for the Second Agreement. Id. ¶ 27. PVM's agent never delivered on the promise to provide advanced coaching services. Id. ¶ 28. Plaintiff believes that these payments were used to “fund a San Francisco/Vegas lifestyle” for PVM's agent. Id. Nevertheless, in January 2016, Shapiro contacted Ponomarenko and claimed that Ponomarenko had not paid the $23, 500 due on the First Agreement. Id. ¶ 27.

         Ultimately, Ponomarenko terminated the Second Agreement in November 2014. Id. ¶ 29. Upon termination, PVM's agent demanded that Ponomarenko pay the full amount of the coaching fee, as well as additional expenses before PVM's agent agreed to leave the San Francisco apartment Ponomarenko was paying for. Id. Ponomarenko also paid expenses to terminate the lease once PVM's agent left the premises. Id. In all, Ponomarenko expended over $125, 000.

         Ponomarenko filed this suit in May 2016. See generally Compl. He asserts six claims against Defendants: (1) breach of contract; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) false promise; (5) breach of the covenant of good faith and fair dealing; and (6) violation of the California Business and Professions Code § 17200 (“UCL”). See generally Id. Shapiro moves to quash service of process for failure to serve in accordance with the Federal Rules of Civil Procedure, and moves to dismiss the Complaint for lack of personal jurisdiction over him. See generally Mot.

         II. MOTION TO QUASH SERVICE OF PROCESS

         A. Legal Standard

         The Court lacks jurisdiction over defendants who have not been properly served. SEC v. Ross, 504 F.3d 1130, 1138-39 (9th Cir. 2007). Accordingly, Federal Rules of Civil Procedure 12(b)(4) and 12(b)(5) permit a court to dismiss an action for insufficiency of service of process. Fed.R.Civ.P. 12(b)(4)-(5). Rule 12(b)(4) enables the defendant to challenge the substance and form of the summons, and 12(b)(5) allows the defendant to attack the manner in which service was, or was not, attempted. When the validity of service is contested, the burden is on the plaintiff to prove that service was valid under Rule 4. Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). If the plaintiff is unable to satisfy this burden, the Court has the discretion to either dismiss the action or retain the action and quash the service of process. Lowenthal v. Quicklegal, Inc., No. 16-cv-3237, 2016 WL 5462499, at *14 (N.D. Cal. Sept. 28, 2016). “Dismissals for defects in the form of summons are generally disfavored.” U.S.A. Nutrasource, Inc. v. CNA Ins. Co., 140 F.Supp.2d 1049, 1052 (N.D. Cal. 2001).

         B. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.