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Galder v. Clark

United States District Court, S.D. California

February 27, 2018

JENNIFER VAN GALDER, an individual, Plaintiff,
ROGER CLARK, an individual, MELISSA SCOTT CLARK, an individual, SOUR WINE FARMS, LLC, a Delaware limited liability company, and DOES 1-10 INCLUSIVE, Defendants.


          Anthony J. Battaglia United States District Judge

         Presently before the Court are two motions: Defendants Melissa Scott Clark (“Melissa”) and Sour Wine Farms, LLC's motion to dismiss filed on October 4, 2017, (Doc. No. 18), and Defendant Roger Clark's (“Roger”) motion to dismiss filed on October 5, 2017, (Doc. No. 24). On October 18 and 19, 2017, Plaintiff Jennifer Van Galder (“Plaintiff”) filed oppositions to both motions. (Doc. Nos. 29, 30.) Having reviewed the parties' arguments and controlling legal authority and pursuant to Civil Local Rule 7.1.d.1, the Court finds the matters suitable for decision on the papers and without oral argument. For the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART both motions to dismiss. (Doc. Nos. 18, 24.)


         The following facts are taken from Plaintiff's first amended complaint (“FAC”) and construed as true for the limited purpose of resolving the instant motion. See Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247 (9th Cir. 2013).

         On July 9, 2015, Roger alerted Plaintiff that he had made a deal with a bankruptcy trustee with respect to the filing of a Chapter 7 case to force the division of their marital assets if she did not give him $250, 000.00. (Doc. No. 16 ¶ 1.) On July 16, 2015, Roger filed for bankruptcy. (Id. ¶ 2.) While not listed as a creditor in the bankruptcy case or even provided formal notice, Plaintiff claims to be a creditor of Roger. (Id.) Thereafter, on October 13, 2015, Plaintiff filed an adversary proceeding against Roger in his bankruptcy case. (Id. ¶ 4.)

         In sum, Plaintiff asserts that Defendants conspired to defraud the bankruptcy court and the creditors of Roger, including Plaintiff. (Id. ¶ 14.) In alleging this deception, Plaintiff advances allegations against Roger alone, Melissa alone, and Roger and Melissa together.[1](See generally Doc. No. 16.)

         Specifically, Plaintiff argues that both Roger and Melissa: (1) concealed income to pass the “means test”; (2) falsified a post-nuptial agreement; (3) altered documents to hide Roger's interest in real property; and (4) hid funds in undisclosed bank and corporate accounts to conceal documentation about their income from the bankruptcy trustee. (Id. ¶¶ 15-17, 19-20.) As to Roger individually, Plaintiff contends that he: (1) gave false testimony on multiple occasions; (2) falsely claimed that he owed debts to family, friends, and Sour Wine; and (3) waived his right to discharge. (Id. ¶¶ 18, 21-22, 29.) In regards to Melissa, the complaint alleges that she filed false declarations under penalty of perjury with the bankruptcy court to facilitate the fraud and filed false proofs of claim so that she and Roger would be paid out of the proceeds from the sale of the estate assets. (Id. ¶¶ 23-24.)

         Plaintiff attests that not only was she damaged as a result of the Defendants' fraud by being forced to purchase the bankruptcy estate's interest in her home in La Jolla, which was a payment of $561, 000, but also that Defendants were unjustly enriched through the fraud by their ability to retain all of their assets and collect $70, 420.38 from Roger's estate. (Id. ¶¶ 25-28.)

         Plaintiff filed her original complaint on August 11, 2017. (Doc. No. 1.) Shortly thereafter, Defendants Melissa and Sour Wine filed separate motions to dismiss on August 29, 2017. (Doc. Nos. 7, 8.) Defendant Roger then filed a motion to dismiss on September 6, 2017. (Doc. No. 10.)

         After the Court set briefing schedules on the motions, Plaintiff filed her FAC on September 20, 2017. (Doc. No. 16.) Plaintiff's FAC alleges causes of action for: (1) Violation of The Racketeer Influenced and Corrupt Organizations Act (“RICO”)-18 U.S.C. §§ 1962 (a), (d); (2) Fraud as to all Defendants; (3) Conspiracy to Commit Fraud; and (4) Fraudulent Conveyance as to Defendants Roger and Melissa. (See generally id.) Due to this filing, the Court found the three motions to dismiss filed by Defendants in August and September of 2017 moot. (Doc. Nos. 19-21.) Subsequently, Defendants filed the instant motions, their motions to dismiss. (Doc. Nos. 18, 24.)


         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a plaintiff's complaint. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “[A] court may dismiss a complaint as a matter of law for (1) lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation and internal quotation marks omitted). However, a complaint will survive a motion to dismiss if it contains “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). In making this determination, a court reviews the contents of the complaint, accepting all factual allegations as true and drawing all reasonable inferences in favor of the non-moving party. See Cedars-Sinai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007).

         Notwithstanding this deference, the reviewing court need not accept legal conclusions as true. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is also improper for a court to assume “the [plaintiff] can prove facts that [he or she] has not alleged . . . .” Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). However, “[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.


         Presently, both motions to dismiss argue that Plaintiff's FAC should be dismissed in its entirety.[2] (See generally Doc. Nos. 18, 24.) Plaintiff challenges each of Defendants' contentions. (Doc. Nos. 29, 30.) The Court will first turn to Defendants Melissa and Sour Wine's request for judicial notice. (Doc. No. 18-1.)

         A. Judicial Notice of the Requested Documents is Justified

         Pursuant to Federal Rule of Evidence 201, Defendants Melissa and Sour Wine request judicial notice of the Chapter 7 Trustee's final account and distribution report, certifications that the estate has been fully ...

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