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Thompson v. Massarweh

United States District Court, N.D. California

November 22, 2017

RICHARD THOMPSON, Plaintiff,
v.
WILLIAM A. MASSARWEH, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS RE: DKT. NOS. 6, 10

          SUSAN ILLSTON UNITED STATES DISTRICT JUDGE

         On November 17, 2017, the Court heard argument on defendants' motion to dismiss under Rule 12(b)(6) (Dkt. Nos. 6, 10). For the reasons set forth below, the Court GRANTS defendants' motion to dismiss with prejudice.

         BACKGROUND

         Defendants William A. Massarweh and The Law Offices of William A. Massarweh have moved to dismiss plaintiff Richard Thompson's complaint alleging professional malpractice, breach of contract, breach of fiduciary duty, and negligence. MTD (Dkt. No. 10).

         The following facts are drawn from the complaint, which the Court treats as true for the purposes of this motion. On March 29, 2002, plaintiff executed a premarital agreement with his then-fiancée, identifying plaintiff's premarital assets as separate property. Compl. ¶ 7 (Dkt. No. 1-1). After getting married in 2005, the couple hired defendants to prepare an estate plan. Id. ¶¶ 8-9. Plaintiff alleges that the estate plan, executed August 19, 2005, eliminated his separate property rights protected in the 2002 premarital agreement, and that defendant failed to (1) adequately inform the plaintiff of this result or (2) advise plaintiff to seek independent counsel. Id. ¶¶ 16-18. Plaintiff asserts that he would never have executed the 2005 documents had he known that they would extinguish separate property rights in his premarital assets. Id. ¶ 24. The estate plan documents included: “Revocation of Premarital Agreement, ” which “explicitly revoked the 2002 Premarital Agreement” and eliminated separate property rights in all premarital assets; “Property Agreement, ” which converted all of the couple's property to community property without recognizing separate premarital property rights; “Assignment of Personal Property, ” which converted all of the couple's personal property to a living trust without recognizing separate premarital property rights; “Revocation of Joint Venture Agreement, ” which converted all of the couple's property to community property without recognizing separate premarital property rights[1]; and the “Thompson-Grace Living Trust, ” which transferred all of the couple's property into a living trust. Id. ¶¶ 11-15.

         In 2008, the couple again met with the defendants to restate and amend the living trust. Id. ¶ 18. Plaintiff alleges that at this 2008 meeting, defendants again did not advise plaintiff to seek independent legal advice regarding the effect of the 2005 estate plan on his 2002 premarital agreement. Id.

         Plaintiff's now ex-wife filed a Petition for Dissolution of Marriage in Contra Costa County in February 2015. Id. ¶ 19; Req. Jud. Not., Ex. 1 (Dkt. No. 17).[2] On October 8, 2015, the Contra Costa County Superior Court found that the Revocation of Premarital Agreement was a valid transmutation to community property of the separate property covered by the 2002 premarital agreement. Compl. ¶ 21. On April 11, 2016, after additional trial proceedings, the Superior Court entered an order affirming the binding validity of the revocation document on separate premarital assets. See Id. ¶ 22. On June 2, 2016, [3] the Superior Court ruled that the 2005 documents did not preserve any right of reimbursement for the plaintiff for his premarital property. Opp'n at 1-2 (Dkt. No. 14). The final judgment for dissolution of marriage was filed November 23, 2016; plaintiff filed an appeal of the order on reimbursement on November 29, 2016. Req. Jud. Not., Ex. 1. The state court appeal remains pending. See id.; Opp'n at 5.

         Plaintiff initially filed this suit alleging professional malpractice on September 6, 2016, in Contra Costa County Superior Court. On September 13, 2017, defendants removed the case to federal court on the basis of diversity jurisdiction. Not. of Removal (Dkt. No. 1). Defendants' motion to dismiss came on for hearing on November 17, 2017. For the reasons set forth below, the Court GRANTS defendants' motion with prejudice.

         LEGAL STANDARD

         1. Rule 12(b)(6)

         Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While courts do not require “heightened fact pleading of specifics, ” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570.

         In deciding whether the plaintiff has stated a claim upon which relief can be granted, the Court must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the plaintiff's favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the Court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). As a general rule, the Court may not consider any materials beyond the pleadings when ruling on a Rule 12(b)(6) motion. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). However, pursuant to Federal Rule of Evidence 201, the Court may take judicial notice of “matters of public record, ” such as prior court proceedings, without thereby transforming the motion into a motion for summary judgment. Id. at 688-89.

         If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal quotation marks omitted). Dismissal of a complaint without leave to amend is proper only if it is “absolutely clear that the deficiencies of the complaint could not be cured by amendment.” Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987) (quoting Broughton v. Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980)); see also Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012).

         II. Cal. Civ. Proc. ...


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