Salameh et al v. Tarsadia Hotel et al

MOTION to Dismiss First Amended Complaint for Alleged Violation of Federal and State Securities Laws

S.D. Cal.May 27, 2010

787472 1 CASE NO. 09cv2739-DMS (CAB) NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS 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 B r ya n C a v e L L P 1 2 0 B r o a d w a y, S u it e 3 0 0 S a n t a M o n ic a , C a l if o r n ia 9 0 4 0 1 -2 3 8 6 BRYAN CAVE LLP Robert E. Boone, California Bar No. 132780 Email: reboone@bryancave.com Edward M. Rosenfeld, California Bar No. 49943 Email: emrosenfeld@bryancave.com Timothy L. Hayes, California Bar No. 175958 Email: tlhayes@bryancave.com 120 Broadway, Suite 300 Santa Monica, CA 90401 Telephone: (310) 576-2100 Facsimile: (310) 576-2200 Attorneys for Defendant BANK OF AMERICA, N.A., erroneously sued as “BANK OF AMERICA, a Delaware Corporation” UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA TAMER SALAMEH, an individual; REAL ESTATE 4 HOSPITALITY, LLC, a California limited liability company; ALEKSEY KATS; DIANA KATS, MITCHELL J. PEREIRA; GARY A. TORRETTA; ROBERT ALVARENGA; ALEXIS COSIO; CESAR MOTA; DENIS B. ROTHE JR; CHARLENE SCHRUFER; DAVID R. BUSHY; DALE CURTIS; ZONDRA SCHMIDT; DOLORES GREEN; CHRISTY JESKE; TAZIA REYNA; MARY L. WEE SONG; KERRY L. STEIGERWALT; BETH STEIGERWALT; STUART M. WOLMAN, JEFFREY E. LUBIN AND BARBARA L. LUBIN, INDIVIDUALLY AND AS CO-TRUSTEES OF THE LUBIN FAMILY TRUST DATED MARCH 26, 2002; MIKAEL HAVLUCIYAN AND THERESE HAVLUCIYAN INDIVIDUALLY AND AS CO-TRUSTEES OF THE HAVLUCIYAN FAMILY TRUST, SADOUX KIM; individually and on behalf of a Class of others similarly situated, Plaintiffs, v. TARSADIA HOTEL, a California Corporation; TUSHAR PATEL, an individual; B.U. PATEL, an individual; GREGORY CASSERLY, an individual; 5th ROCK LLC, a Delaware limited liability company; MPK ONE, LLC, a California limited liability company; GASLAMP HOLDINGS, LLC, a CASE NO. 09cv2739-DMS (CAB) BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS Date: June 25, 2010 Time: 1:30 p.m. Place: Courtroom of the Honorable Dana M. Sabraw, United States District Judge Case 3:09-cv-02739-DMS -CAB Document 45 Filed 05/27/10 Page 1 of 5 787472 2 CASE NO. 09cv2739-DMS (CAB) NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS 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 B r ya n C a v e L L P 1 2 0 B r o a d w a y, S u it e 3 0 0 S a n t a M o n ic a , C a l if o r n ia 9 0 4 0 1 -2 3 8 6 California limited liability company; PLAYGROUND DESTINATION PROPERTIES, a corporation; EAST WEST BANK, a California corporation; BANK OF AMERICA, a Delaware Corporation; JP MORGAN CHASE; PROFESSIONAL MORTGAGE PARTNERS, INC.; XBR FINANCIAL SERVICES, LLC, a California limited liability company; ERSKINE CORP., a California Corporation; and DOES 1 to 100, inclusive, Defendants. Case 3:09-cv-02739-DMS -CAB Document 45 Filed 05/27/10 Page 2 of 5 787472 3 CASE NO. 09cv2739-DMS (CAB) NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS 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 B r ya n C a v e L L P 1 2 0 B r o a d w a y, S u it e 3 0 0 S a n t a M o n ic a , C a l if o r n ia 9 0 4 0 1 -2 3 8 6 PLEASE TAKE NOTICE THAT on June 25, 2010, at 1:30 p.m., in the Courtroom of United States District Judge Dana M. Sabraw, located at the Edward J. Schwartz Courthouse, 940 Front Street, San Diego, California, or as soon thereafter as counsel may be heard, Bank of America, N.A. (“BANA”), improperly sued herein as “Bank of America, a Delaware corporation,” shall move the Court to dismiss the First Amended Complaint (“FAC”) against “Bank of America” pursuant to Federal Rule of Civil Procedure 12(b)(6) because the FAC fails to state a claim upon which relief can be granted against BANA. This Motion to Dismiss is made on the ground that the FAC does not, as required by Federal Rules of Civil Procedure 8(a)(2), set forth a “a short and plain statement of the claim showing that the pleader is entitled to relief” against BANA under the three statutory claims for relief asserted against BANA: (1) 15 U.S.C.§77l(a)(2) (otherwise known as Section 12(a)(2) of the 1933 Securities Act); (2) California Corporations Code § 25503; and (3) California Corporations Code §25501. These statutes impose liability only on persons who “offer or sell” securities [Section 12(a)(2)] or on persons from whom securities are “acquired” [25501, 25503]. However, Plaintiffs do not and cannot allege that BANA “offered or sold” any of the purported securities (interests in condominiums at the Hard Rock Hotel San Diego) or that Plaintiffs “acquired” any such purported securities from Defendant BANA. Instead, without supporting facts, the FAC alleges the conclusion that BANA was one of the “promoters” that offered and sold the alleged “security” at issue (condominium interests). This Motion to Dismiss is made on the additional ground that the FAC does not, as required by Federal Rules of Civil Procedure 9(b), when “alleging fraud,” “state with particularity the circumstances constituting fraud.” Federal Rules of Civil Procedure 9(b) applies here in that the FAC sounds in fraud while alleging a unified course of fraudulent conduct. This Motion to Dismiss is made on the additional ground that the FAC alleges a conspiracy Case 3:09-cv-02739-DMS -CAB Document 45 Filed 05/27/10 Page 3 of 5 787472 4 CASE NO. 09cv2739-DMS (CAB) NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS 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 B r ya n C a v e L L P 1 2 0 B r o a d w a y, S u it e 3 0 0 S a n t a M o n ic a , C a l if o r n ia 9 0 4 0 1 -2 3 8 6 among all of the defendants but does not, as required by Federal Rules of Civil Procedure 9(b), identify the alleged role of each defendant in the alleged fraudulent scheme. This Motion is made on the additional ground that the First and Second Claims for Relief alleged against BANA are barred by the statute of limitations, as set forth in the accompanying Memorandum Of Points And Authorities. This Motion is made on the additional ground that, to the extent that Plaintiffs are claiming BANA is liable under its Second and Third Claims for Relief pursuant to California Corporations Code § 25504.1 as one who “materially assisted” in a violation of state securities laws, Plaintiffs have failed to state a claim upon which relief can be granted because they have failed to allege any of the required elements of this claim including but not limited to intent to defraud. This Motion to Dismiss is based upon this Notice of Motion, BANA’s Memorandum of Points and Authorities filed concurrently herewith, BANA’s Request for Judicial Notice filed concurrently herewith, all pleadings and records on file in this action, and upon such other written and oral evidence and argument as may be submitted beforehand or at the hearing on this Motion. DATED: May 27, 2010 BRYAN CAVE LLP By: s/ Edward M. Rosenfeld Attorneys for Defendant BANK OF AMERICA, N.A., erroneously sued as “BANK OF AMERICA, a Delaware Corporation” Case 3:09-cv-02739-DMS -CAB Document 45 Filed 05/27/10 Page 4 of 5 787472 5 CASE NO. 09cv2739-DMS (CAB) NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS 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 B r ya n C a v e L L P 1 2 0 B r o a d w a y, S u it e 3 0 0 S a n t a M o n ic a , C a l if o r n ia 9 0 4 0 1 -2 3 8 6 CERTIFICATE OF SERVICE I, the undersigned, declare under penalty of perjury that I am over the age of eighteen years and not a party to this action; and that I served the individuals on the service list attached hereto the following documents: Original of: BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR ALLEGED VIOLATION OF FEDERAL AND STATE SECURITIES LAWS Filed May 27, 2010 on the ECF system and served pursuant to General Order No. 550, with: ● Michael J. Aguirre maguirre@amslawyers.com ● Lynn T. Galuppo lgaluppo@coxcastle.com ● Bryan D. Sampson bsampson@samsonlaw.net ● Maria C. Severson mseverson@amslawyers.com ● Spyglass Partners, Inc. bsampson@sampsonlaw.net ● Sung-Min Christopher Loo cyoo@adorno.com ● John Nadolenco jnadolenco@mayerbrown.com ● Jennifer A Needs jennifer.needs@sgsattorneys.com s/ Edward M. Rosenfeld Edward M. Rosenfeld E-mail: emrosenfeld@bryancave.com Case 3:09-cv-02739-DMS -CAB Document 45 Filed 05/27/10 Page 5 of 5