Res-Az One Llc v. Mcadams et al

MOTION to Dismiss for Failure to State a Claim

D. Ariz.January 24, 2017

- 1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 Larry J. Crown (SBN 013133) Elan S. Mizrahi (SBN 017388) TITUS BRUECKNER & LEVINE PLC 8355 East Hartford Drive, Suite 200 Scottsdale, Arizona 85255 Telephone: 480-483-9600 Facsimile: 480-483-3215 Emails: lcrown@tbl-law.com elan@tbl-law.com Attorneys for Defendants Babak & Jane Doe Motamedi IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA RES-AZ ONE, LLC, a Florida limited liability company, Plaintiffs, vs. ANDREW J. MCADAMS, and CASSANDRA PARKER, husband and wife; DOUGLAS EPLEY and JANE DOE EPLEY, husband and wife; MARVIN JONES, Jr. and JANE DOE JONES, husband and wife; BABAK MOTAMEDI and JANE DOE MOTAMEDI, husband and wife; TUDOR CORA and JANE DOE CORA, husband and wife; ELIZABETH McADAMS and JOHN DOE McADAMS, husband and wife; VC DYNAMICS, INC.an Arizona corporation; VC SOLUTIONS, LLC, an Arizona limited liability company; CAP PARTNERS, LLC, an Arizona limited liability company; CONVERSION GENIE, INC., an Arizona corporation; AJM CAPITAL, LLC, an Arizona limited liability company; MARVQUIN, LLC, an Arizona limited liability company; AJM DEVELOPMENT, LLC, an Arizona limited liability company; PREFERRED MARKET HOLDINGS LIMITED, and entity of unknown domicile; ROSECREST GLOBAL, an entity of unknown domicile; ROSECREST INVESTMENTS LIMITED, an entity of Case No. 2:16-CV-02392-SPL MOTION TO DISMISS (Oral Argument Requested) Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 1 of 15 - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 unknown domicile; SET SAIL GLOBAL LIMITED, an entity of unknown domicile; US REFILOANS, LLC, an Arizona limited liability company; ENERGY REDUCTION CENTER, INC., an Arizona corporation; RANDOM SOFTWARE GROUP, LLC, a Delaware limited liability company; and RSG HOSTING, INC., an Arizona corporation, Defendants. Defendants Babak and Jane Doe Motamedi,1 by and through counsel undersigned, and pursuant to Rule 12(b)(6), Fed.R.Civ.P., hereby move this Court to issue its order dismissing the claims against them for failure to state a claim upon which relief may be granted. Dismissal is warranted because, despite the voluminous nature of the Verified Complaint, Plaintiff RES-AZ ONE, LLC (“Plaintiff”) fails to allege the factual predicate to support any claim against the Motamedis. This Motion is supported by the following Memorandum of Points and Authorities and this Court’s entire record. The Motamedis also join in Defendant Marvin Jones’ Motion to Dismiss [Doc. 15]. MEMORANDUM OF POINTS AND AUTHORITIES I. BACKGROUND According to the Verified Complaint, Defendant Andrew J. McAdams (“McAdams”) borrowed money from Plaintiff’s predecessor. McAdams defaulted on the loan, filed for bankruptcy, settled with Plaintiff for pennies on the dollar, and then defaulted on the settlement. Plaintiff then instituted this lawsuit against McAdams and a laundry list of people and businesses who had allegedly been involved with McAdams in one way or another over the years, including Motamedi. Motamedi is a local businessman who was acquainted with McAdams over the years and who was employed for a short time at VC Dynamics, Inc., a local lead source 1 Defendant Babak Motamedi is referred to herein as “Motamedi.” He and his fictitiously- named wife are collectively referred to herein as the “Motamedis.” Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 2 of 15 - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 generation company. Motamedi never heard of Plaintiff until this lawsuit; had no dealings with Plaintiff; and had no knowledge of any debt from McAdams to Plaintiff. Notwithstanding, Plaintiff, with no factual basis whatsoever, alleges Motamedi was a co- conspirator with McAdams and others for the purpose of defrauding Plaintiff. Plaintiff’s Verified Complaint is 69 pages long and was served with a banker’s box of exhibits, few of which even mention Motamedi and their relevance is unknown. It contains 323 allegations, plus a two-page preamble. It was verified by a man named Michael Strickland in the capacity of Vice President of an entity called Rialto Capital Advisors, LLC (“Rialto”). The Complaint does not mention Rialto and the relationship between Rialto and Plaintiff is not evident despite the Complaint’s breadth. When Plaintiff filed its Complaint, it contemporaneously sought to obtain a broad and sweeping ex parte injunction and receivership over all of the parties it sued. This Court, in its July 22, 2016 Order [Doc. 10], denied Plaintiff’s requests and succinctly summarized Plaintiff’s voluminous Complaint. Focal to this Motion are this Court’s findings on page 6 of its Order where this Court found Plaintiff is unlikely to succeed on the merits of at least some of its claims against non-McAdams Defendants like Motamedi and held as follows: Assuming arguendo that RES would prevail on the merits of this claim as to McAdams, RES cannot be said to have made such a showing against the remaining Defendants. Among other things, the remaining Defendants are not alleged to be debtors. Respondents passingly contends that “McAdams and the defendant co-conspirators have undertaken an elaborate scheme to conceal his assets . . . for the specific purpose of hiding and shielding such assets from collection by the Chapter 7 Trustee for the benefit of the creditors of McAdams including, but not limited to, RES-AZ.” (Doc. 3 at 9.) This conclusory argument is insufficient to show that RES is likely to succeed (or that there are serious questions going to) the merits of its claim for conspiracy to commit fraudulent transfer. RES does not clearly identify which allegations support its fraudulent transfer conspiracy theory, nor identifies the legal standard of proof for the conspiracy claim. Since serving process on Motamedi, Plaintiff has engaged in scorched-earth discovery (which is the subject of other motions currently pending before this Court) and, Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 3 of 15 - 4 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 relying upon the fact the parties have not yet engaged in an initial case management conference with this Court, has denied the opportunity for discovery against it to vet its claims. Moreover, the Motamedis have attempted to engage in good-faith discussions with Plaintiff regarding both the scope of its discovery requests and the defects in its Complaint, yet Plaintiff has refused to limit the scope of its discovery and has declined the opportunity to amend its Complaint. Indeed, Plaintiff is not interested in any defense position regarding the flaws in its pleading and instead wants this Court to expressly determine how it should amend its Complaint, if at all possible, which is not this Court’s responsibility. In summary, Plaintiff never had any relationship whatsoever with Motamedi, yet it is now suing Motamedi for 8 separate fraud claims. The specific allegations against Motamedi are conclusory in nature and are unsupported by any factual allegations to support any cognizable claims for relief. Plaintiff’s Complaint also repeatedly lumps all Defendants together in the same allegations, which: (1) makes it impossible to ascertain what specific allegations exist; (2) create the hypothetical scenario that every single Defendant was involved in every aspect of every allegation; and (3) the lack of specificity on predicate acts makes it difficult to ascertain the statute of limitations, although the Complaint appears to allege matters that occurred years ago. Moreover, the individual who verified the Complaint is subject to perjury. Plaintiff’s Complaint is defective by the rules of pleading, and these defects are even more glaring when weighed against the requirement to plead fraud claims with specificity. Discussed below in more detail are the pleading standards Plaintiff has not met and cannot meet, along with the elements of each of Plaintiff’s claims. II. ANALYSIS A. Failure to State a Claim In United Brotherhood of Carpenters and Joiners of America v. Building and Construction Trades Dept., et al., 911 F.Supp.2d 1118 (Ed.Wash. 2012), the court succinctly articulated the standard of review of a motion to dismiss in a civil RICO case as follows: Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 4 of 15 - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must set forth factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. (“Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Id. Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The pleading standard by Rule 8 of the Federal Rules of Civil Procedure “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the - defendant - unlawfully - harmed - me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Rule 8 marks a notable and generous departure from the hyper-technical, code- pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Id. at 678-79, 129 S.Ct. 1937. In assessing whether Rule 8(a)(2) is satisfied, the court first identifies the elements of the asserted claim based on statute or case law. Id. at 678, 129 S.Ct. 1937. The Ninth Circuit follows the methodological approach set forth in Iqbal for the assessment of a plaintiff’s complaint: “[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When 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.” Moss v. U.S. Secret Service, 572 F.3d 962, 970 (9th Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1950).2 2 This Court described the “plausibility” standard in Donahoe, infra, by citing Twombly, supra, as follows: “To show that the plaintiff is entitled to relief, the complaint must permit the Court to infer more than the mere possibility of misconduct. Id. (‘The plausibility standard’ is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.’) ‘A claim has facial plausibility 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.” Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 5 of 15 - 6 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 In United Brotherhood, the District Court dismissed a complaint like Plaintiff’s Complaint here - a voluminous but poorly pled complaint alleging RICO and other causes of action. In doing so, the court recognized the “generous” standard for granting leave to amend but stated: “Clearly, plaintiffs put forth their best effort at articulating their case. They have painstakingly detailed all of the facts alleged to be relevant to plaintiffs’ claims in a sprawling 246-page complaint. The court cannot conceive of any new facts that could possibly cure the pleading. Thus, the court finds that leave to amend would be futile under these circumstances and declines leave to amend the complaint.” This Court has cited the same cases and has relied upon the same principles in evaluating motions to dismiss. For example, in Gilmore v. DJO, Inc., et al., 663 F.Supp.2d 856 (D.Ariz. 2009), this Court, quoting Twombly, stated: “nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” In Gilmore, this Court noted that especially regarding fraud claims which must be pled with particularity under Rule 9(b), Fed.R.Civ.P., the rule “does not allow a complaint to merely lump multiple defendants together but ‘require[s] plaintiffs to differentiate their allegations when suing more than one defendant . . . and inform each defendant separately of the allegations surrounding his alleged participation in the fraud’.” As this Court has already determined in its July 22, 2016 Order [Doc. 10], Plaintiff’s Complaint is filled with conclusory arguments rather than allegations of fact. It cannot meet the notice pleading standard as set forth above, let alone the particularity of pleading standard necessary for fraud claims. Lastly, as addressed in Gilmore, Plaintiff’s Complaint improperly lumps all Defendants together making it impossible to determine the basis by which Plaintiff is suing the Motamedis. As a general matter of pleading, Plaintiff’s Complaint is defective and subject to dismissal. B. Federal Civil RICO The elements of a Federal Civil RICO claim are: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity (known as “predicate acts”); and (5) Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 6 of 15 - 7 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 causing injury to the plaintiffs’ business or property. Grimmett v. Brown, 75 F.3d 506 (9th Cir. 1996). A “pattern” requires at least two acts of racketeering activity. 18 U.S.C. § 1961(5). A “racketeering activity” requires activities that qualify as indictable offenses under certain enumerated federal criminal statutes. 18 U.S.C. § 1961(1)(B). Here, Plaintiff is suing the Motamedis under Civil RICO Statutes 18 U.S.C. §§1962(a)-(c). It attempts to make a claim for mail fraud against Motamedi and it cites his name in conjunction with a civil lawsuit involving VC Dynamics and iconic results. (See Complaint at page 44, lines 1-10.) However, it fails to identify how those court filings meet any element of a RICO claim, let alone a mail fraud claim.3 Specifically, Plaintiff fails to allege any: (1) conduct by Motamedi; (2) how Motamedi qualifies as an “enterprise”; (3) what is the “pattern” of activity; (4) and how such activity qualifies as “racketeering activity” - indictable criminal offenses. For example, in paragraph 198 of Plaintiff’s Complaint, Plaintiff contends: “Motamedi committed mail and/or wire fraud on at least April 29, 2014 when he caused his agents to electronically file the documents in the ICONIC LITIGATION indicating that McADAMS did not own or control VC DYNAMICS, INC. and/or CONVERSION GENIE, INC., as evidenced by that certain docket report from the Maricopa County Superior Court attached hereto as Exhibit 23.” However, Exhibit 23 does not whatsoever support the allegation in paragraph 198. Furthermore, the Complaint fails to articulate any facts to support the elements of a RICO claim. Every allegation in Plaintiff’s RICO Count regarding Motamedi is conclusory in nature. For example, paragraphs 184 and 185 conclude the Defendants, including Motamedi, “formed an associated-in-fact enterprise . . .” and “knowingly assisted and 3 Motamedi was an employee of VC Dynamics at the time it sued the Iconic Results Defendants. The lawsuit involved a group of managers and other employees of VC Dynamics who left VC Dynamics and started a competing company using VC Dynamics’ confidential information and other proprietary materials. The Iconic Results Defendants litigation settled before facing a preliminary injunction hearing to shut down their new business operations. Interestingly, whereas the Iconic Results Defendants in that lawsuit denied they took any materials from VC Dynamics, Plaintiff in this lawsuit alleges the Iconic Results Defendants provided them with “evidence, including archived website information” about VC Dynamics. (See Complaint at paragraph 109.) Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 7 of 15 - 8 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 received the proceeds of such enterprise.” These are conclusory allegations that strain to meet an essential element of a RICO claim but without any cognizable factual predicate. Plaintiff fails to state a claim for relief under Federal Civil RICO. C. Federal Civil RICO Conspiracy Plaintiff claims Motamedi engaged in a RICO conspiracy in violation of 18 U.S.C. § 1962(d). In order to prove such a claim, the claimant must not only prove the underlying RICO claim, it must also prove the defendant was “aware of the essential nature and scope of the enterprise and intended to participate in it.” Howard v. American Online, Inc., 208 F.3d 741 (9th Cir. 2000) the claimants must also establish “either an agreement that is a substantive violation of RICO or that the defendants agreed to commit, or participated in, a violation of two predicate offenses. Id. citing Baumer v. Pachl, 8 F.3d 1341, 1346 (9th Cir. 1993). In Howard, the Ninth Circuit affirmed the District Court’s dismissal of a RICO conspiracy claim because the claimants failed to adequately plead a substantive violation of RICO, let alone the defendant’s agreement to be part of an enterprise. Here, set forth above, Plaintiff fails to properly assert a RICO claim, which is a fatal flaw to its conspiracy claim. Moreover, Plaintiff fails to cite any basis that Motamedi even knew about Plaintiff, let alone that he knowingly and willingly participated in a conspiracy to defraud Plaintiff. Plaintiff fails to state a Federal Civil RICO conspiracy claim as a matter of law. D. State Civil Racketeering Plaintiff charges Motamedi with violating Arizona’s racketeering statute, A.R.S. § 13-2314.04. Arizona’s racketeering statute requires: (1) an act, (2) ‘that would be punishable by imprisonment for more than one year under the laws of this state . . . regardless of whether the act is charged or indicted,’ (3) ‘involv[ing]’ any one of a number of enumerated offenses, (4) ‘committed for financial gain’.” Donahoe v. Arpaio, 869 F.Supp.2d 1020 (D. Ariz. 2012) citing State ex rel. Horne v. Campos, 226 Ariz. 424, 250 P.3d 201 (App. 2001). By statute, the “pattern of racketeering activity” is defined as either: (a) at least two acts of racketeering as defined in Section 12-2301, subsection D, paragraph 4 (IV), subdivision (b), item (IV), (V), (VI), Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 8 of 15 - 9 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 (VII), (VIII), (IX), (X), (XIII), (XV), (XVI), (XVIII), (XVIX), (XX), (XXVI) that meet the following requirements: i. the last act of racketeering activity that is alleged as the basis of a claim occurred within five years of a prior act of racketeering. ii. the acts of racketeering that are alleged as the basis of the claim were related to each other or to a common organizing principle, including the affairs of an enterprise. Acts of racketeering are related if they have the same or similar purposes, results, participants, victims or methods of commission or are otherwise interrelated by distinguishing characteristics. iii. the acts of racketeering that are alleged as the basis of a claim or continuous or exhibited the threat of being continuous. Donahoe v. Arpaio, 869 F.Supp.2d 1020 (D.Ariz. 2012). Just as Plaintiff has failed to state a claim under Federal Civil RICO, it has also failed to assert a cognizable claim under Arizona’s racketeering statute. Plaintiff’s allegations in this claim are conclusory and lack any factual predicate. As such, Plaintiff fails to state a claim for state law racketeering. E. Civil Conspiracy There is no general tort of civil conspiracy under Arizona law. In re Hashim, 356 B.R. 728 (D.Ariz. 2007). There can, however, be a damages claim where two or more people agree to accomplish an unlawful purpose or to accomplish a lawful object by unlawful means, so where there is an agreement plus a wrongful act, there may be liability. Baker ex rel. Hall Brake Supply, Inc. v. Stewart Title & Trust of Phoenix, Inc., 197 Ariz. 535, 5 P.3d 249 (App. 2000). Here, Plaintiff offers the same kinds of general, conclusory allegations as the other counts and fails to offer any factual predicate tying Motamedi to any element of either a specific wrongful act or a conspiracy therewith. As such, Plaintiff’s civil conspiracy claim fails to state a claim upon which relief may be granted. F. Common Law Fraud Under Arizona law, actionable fraud requires clear and convincing evidence of nine elements pled with particularity: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 9 of 15 - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 be acted upon by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Wagner v. Casteel, 136 Ariz. 29, 663 P.2d 1020 (App. 1983). Here, Plaintiff’s Complaint contains no allegation that Motamedi knew or had any dealings with Plaintiff, let alone committed some act of fraud directed to Plaintiff. Plaintiff’s Complaint is devoid of any factual assertions to meet any of the nine elements of fraud by any standard, let alone the standard of particularity required by Rule 9(b), Fed.R.Civ.P. For example, in paragraph 256 of the Complaint, Plaintiff alleges: “. . . Motamedi intentionally withheld material information from the Arizona Corporation Commission from which RES-AZ could have established the true condition of MCADAMS.” However, this allegation is unspecific, conclusory, unsupported, and inexplicably had no nexus to any element of a fraud claim. Plaintiff’s claim for common law fraud must be dismissed. G. Aiding and Abetting and Conspiracy to Commit Fraud Plaintiff next alleges Motamedi aided and abetted the commission of fraud. To establish a claim for aiding and abetting a fraud, a claimant must prove the person knew the primary tortfeasor’s conduct constituted a tort, and that the person substantially assisted or encouraged the primary tortfeasor in accomplishing the tort. Dawson v. Withycombe, 216 Ariz. 84 (App. 2007). Here, since no fraud is articulated with particularity, there can be no claim for aiding and abetting. Moreover, there are no factual allegations directed to Motamedi’s knowledge of any matters existing between Plaintiff and McAdams, let alone a fraud. As such, Plaintiff’s aiding and abetting claim must be dismissed as a matter of law. H. Arizona Uniform Fraudulent Transfer Act Arizona’s Uniform Fraudulent Transfer Act is codified in A.R.S. § 44-1001, et seq. Under the Act, there are two kinds of fraudulent transfers - actually fraudulent transfers under A.R.S. § 44-1004(A)(1), and constructively fraudulent transfers under A.R.S. §§ 44- 1004(A)(2) and 44-1105. Here, Plaintiff’s claim does not distinguish between the two categories of fraudulent transfers. More importantly, it does not identify any particularly Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 10 of 15 - 11 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 conveyed asset to Motamedi in order to set aside such transfer as fraudulent. Plaintiff again suffers from the lack of any factual predicate to support such a claim. As such, Plaintiff’s fraudulent transfer claim must be dismissed. I. Conspiracy to Commit Fraudulent Transfer To establish a case for conspiracy to commit a fraudulent transfer, a claimant must prove: (a) a fraudulent transfer was made with the intent to hinder, delay, or defraud creditors; (b) an agreement between two or more persons to commit the fraudulent transfer; (c) damages resulting from the transfer that are traceable for the conspiracy; and (d) inadequate equitable remedies available under the Uniform Fraudulent Transfer Act. See, In re: Hashim, supra. Such claims must be proven by clear and convincing evidence. Id., see also, Dawson, supra. Here, Plaintiff provides no factual basis to support a claim that Motamedi was engaged in a conspiracy to commit a fraudulent transfer to Plaintiff’s detriment and damage. As such, Plaintiff’s claim for conspiracy to commit a fraudulent transfer must be dismissed. III. CONCLUSION Plaintiff’s allegations against the non-McAdams Defendants are replete with conclusory arguments and devoid of any factual predicate to sustain any viable claim. Plaintiff has had ample opportunities to amend its Complaint but has opted to stand on its pleading rather than to cure its defects. Presumably this is because Plaintiff cannot assert any actual facts to sustain any cause of action. And if it was unable to do so in the 69 pages of its Complaint served with a banker’s box of exhibits, it is unlikely to do so with leave to amend. Accordingly, the Motamedis respectfully request that this Court enter its order dismissing the Complaint against them. / / / / / / / / / / / / Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 11 of 15 - 12 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 DATED this 24th day of January, 2017. TITUS BRUECKNER & LEVINE PLC By: /s/ Elan S. Mizrahi Larry J. Crown Elan S. Mizrahi Attorneys for Babak & Jane Doe Motamedi RULE 12(b) CERTIFICATION OF COUNSEL I, Elan S. Mizrahi, Esq., as counsel for Defendants Babak Motamedi and Jane Doe Motamedi, husband and wife, pursuant to this Court’s preliminary Order of July 26, 2016 [Doc. 11] hereby certify as follows: 1. I met and conferred with counsel for Plaintiff RES-AZ ONE, LLC prior to filing this Motion to Dismiss to determine whether it can be avoided. 2. I conferred with Plaintiff’s counsel to determine whether an amendment could cure a deficient pleading. 3. Plaintiff’s counsel and I have been unable to agree that the pleading is curable by a permissible amendment. More specifically, on September 1, 2016, Larry J. Crown and I (for the Motamedis) met with Jacob L. Sherrard and Michael W. Sillyman (for Plaintiff) at the office of Plaintiff’s counsel and had an extensive discussion regarding the merits, or lack thereof, of Plaintiff’s Complaint and the deficiencies in pleading, along with discovery issues. Defendant Babak Motamedi was present and participated in the meeting. A portion of the meeting was conducted under Rule 408 insofar as the prospects of possible resolution were addressed. Since the meeting, counsel for the parties exchanged numerous letters and emails to address the subject matters of the sufficiency of Plaintiff’s Complaint and issues regarding discovery. The conclusion of that process was Plaintiff’s endeavor to stand on the sufficiency of its Complaint without amendment unless otherwise directed by the Court, Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 12 of 15 - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 and to not agree to modify the scope of any discovery. To the extent this Court requires further documentation in support of this certification, I am prepared to file a supplemental document attaching the letters and emails with Plaintiff’s counsel regarding the above. DATED this 24th day of January, 2017. TITUS BRUECKNER & LEVINE PLC By: /s/ Elan S. Mizrahi Larry J. Crown Elan S. Mizrahi Attorneys for Defendants Babak & Jane Doe Motamedi Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 13 of 15 - 14 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 CERTIFICATE OF SERVICE I hereby certify that on this 24th day of January, 2017, I electronically transmitted the foregoing Motion to Dismiss to the U.S. District Court Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Daniel Price Crane, Esq. Bryan Cave LLP - Phoenix, AZ 2 N Central Ave., Ste. 2200 Phoenix, AZ 85004-4406 602-364-7240 Fax: 602-364-7070 Email: dan.crane@bryancave.com Jacob Lewis Sherrard, Esq. Kutak Rock LLP - Scottsdale, AZ 8601 N Scottsdale Rd., Ste. 300 Scottsdale, AZ 85253-2742 480-429-5000 Fax: 480-429-5001 Email: jacob.sherrard@kutakrock.com Jay A. Zweig, Esq. Bryan Cave LLP 2 N Central Ave., Ste. 2200 Phoenix, AZ 85004-4406 602-364-7000 Fax: 602-716-8300 Email: jay.zweig@bryancave.com Michael W Sillyman, Esq. Kutak Rock LLP - Scottsdale, AZ 8601 N Scottsdale Rd., Ste. 300 Scottsdale, AZ 85253-2742 480-429-4893 Fax: 480-429-5001 Email: michael.sillyman@kutakrock.com Samuel L Blatnick Kutak Rock LLP - Kansas City, MO 2300 Main St., Ste. 800 Kansas City, MO 64108 816-960-0090 Email: samuel.blatnick@kutakrock.com Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 14 of 15 - 15 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T IT U S B R U E C K N E R & L E V IN E P L C 8 3 5 5 E as t H ar tf o rd D ri v e - S u it e 2 0 0 S co tt sd al e, A Z 8 5 2 5 5 4 8 0 -4 8 3 -9 6 0 0 Jason Jon DeJonker, Esq. Bryan Cave LLP - Chicago, IL 60601 161 N Clark St., Ste. 4300 Chicago, IL 60601 312-602-5000 Fax: 312-602-5050 Email: jason.dejonker@bryancave.com Attorneys for Plaintiff Marvin Jones, Jr. 1714 North McCadden Place Ste. 1408 Los Angeles, CA 90028 310-991-3688 Defendant Pro Per /s/ 5762-000 Case 2:16-cv-02392-SPL Document 87 Filed 01/24/17 Page 15 of 15