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United States v. Ronca

United States District Court, C.D. California

October 25, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
STEPHEN C. RONCA, CYNTHIA RONCA, and JOSEPH RONCA, Defendants.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS [35]

          OTIS D. WRIGHT, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         The United States of America (the “Government”) brings two claims against Defendants Stephen Ronca (“Stephen”), Cynthia Ronca (“Cynthia”), and Joseph Ronca (“Joseph”) (collectively, “Defendants”) under the Federal Debt Collection Procedures Act, 28 U.S.C. § 3001, et seq. The Government files this civil action to recover proceeds from the sale of real property on October 26, 2017 to satisfy a restitution debt. (Compl. ¶ 1.)

         Defendant Cynthia moves to dismiss on the grounds that the Government failed to: (1) serve Cynthia in a timely manner; (2) state a claim; and (3) join the escrow company under Rule 19. (See generally Mot. to Dismiss Compl. (“Mot.”), ECF No. 35.)[1]

         For the reasons that follow, the Court DENIES Defendant's Motion to Dismiss.

         II. BACKGROUND

         This is an action to recover proceeds of a real property sale to satisfy restitution owed by Stephen Ronca for embezzling money. (Compl. ¶ 9.) Stephen, Cynthia, and Joseph are siblings. (Compl. ¶¶ 5-7.) Stephen is a licensed attorney. (Compl. ¶ 9.) On May 30, 2017, the Government filed an indictment against Stephen for embezzling money from his client.[2] (Compl. ¶ 9.)

         The real property in issue is located at 625 Al-Hil Drive, San Luis Obispo, CA 93405 (“Al-Hil Property”). (Compl. ¶ 10.) In February 2008, Stephen became the sole owner of the Al-Hil Property through two grant deeds. (Compl. ¶ 11.) In the first grant deed, John Ronca, father of the Defendants, transferred half of the interest to Stephen and half to his revocable trust. (Compl. Ex. A, ECF No. 1-1.) Three weeks later, John Ronca transferred the half interest in his trust to Stephen through a second deed. (Compl. Ex. B, ECF No. 1-1.)

         On October 26, 2017, Stephen sold the Al-Hil Property to “Trustees of the Shotts Living Trust dated August 22, 2000” for a net proceed of $394, 560.97, which was deposited in Cynthia's account. (Compl. ¶¶ 12-14.) The following day, Cynthia withdrew three cashier's checks in the amount of $100, 000, $111, 500, and $150, 700. (Compl. ¶ 15.) Cynthia deposited the checks in the amount of $100, 000 and $111, 500 in two separate bank accounts under her name. (Compl. ¶ 16.) She then immediately withdrew $100, 000 from the account in which she had deposited the $100, 000 check. (Compl. ¶ 16.) Cynthia gave Joseph the third check in the amount of $150, 700. (Compl. ¶ 17.)

         On November 3, 2017, the Government brought suit against Defendants alleging fraudulent transfers of funds pursuant to 28 U.S.C. §§ 3304(b)(1)(A) & (b)(1)(B). (See Compl.) From December 13, 2017 to January 16, 2019, this civil action was stayed pending resolution of the criminal matter. (See Order Regarding Deposit of Funds into the Ct.'s Registry, ECF No. 12; Order Lifting Stay, ECF No. 21.) On May 7, 2019, Defendant Cynthia filed a motion to dismiss. (See Mot.)

         III. LEGAL STANDARD

         A. 12(b)(5)

         Under Federal Rule of Civil Procedure (“Rule”) 12(b)(5), a party may seek dismissal of a complaint for insufficient service of process. Fed.R.Civ.P. 12(b)(5). “Once service is challenged, [the] plaintiff[] bear[s] the burden of establishing that service was valid under Rule 4.” Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004).

         B. 12(b)(6)

         A court 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. 1988). 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 complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).

         The determination of whether a complaint satisfies the plausibility standard is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. A court is generally limited to the pleadings and must construe all “factual allegations set forth in the complaint . . . as true and . . . in the light most favorable” to the plaintiff. Lee v. City of Los Angeles,250 F.3d 668, 679 (9th Cir. 2001). But a court need not blindly accept conclusory ...


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