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Lloyd v. Lakritz

United States District Court, D. Arizona

May 17, 2016

Mari Dawn Lloyd, Plaintiff,
v.
Gloria Roberta Lakritz, Defendant.

          ORDER

          Douglas L. Rayes United States District Judge.

         Defendant Gloria Lakritz has filed a motion to transfer venue, (Doc. 24), and a motion to dismiss and/or motion for more definite statement, (Doc. 22). Plaintiff Mari Lloyd has filed a motion to dismiss three of Lakritz’s counterclaims. (Doc. 31.) The Court heard oral argument on the motion to transfer on May 3, 2015. Neither party requested oral argument on the motions to dismiss. For the reasons stated below, Lakritz’s motion to transfer is denied, Lakritz’s motion to dismiss is granted, and Lloyd’s motion to dismiss is granted.

         BACKGROUND

         In July 2013, Plaintiff Mari Lloyd, a citizen of Arizona, and Defendant Gloria Lakritz, a citizen of Florida, formed Lakritz & Lloyd Wealth Management, LLC (“L&L”), an Arizona limited liability company with its principal place of business in Maricopa County, Arizona. (Doc. 21, ¶¶ 1, 2, 8, 9.) The parties allegedly formed L&L to operate as the Arizona office for ENG Financial Corporation (“ENG”), a Florida corporation formed by Lakritz in 2007. (Id., ¶¶ 6, 7.) Allegedly, the parties understood that, within one to two years, L&L would merge with ENG so that Lakritz could move to Arizona and the parties could service their clients in Arizona. (Id., ¶ 11.) However, the partnership was never memorialized in writing.[1]

         Prior to the formation of L&L, Lloyd represented to Lakritz that she would not “go into business with [her] unless the new company paid back part of an advance she owed to Merrill Lynch, her former employer.” (Id., ¶ 12.) Therefore, “Lloyd and Lakritz borrowed $70, 000 from J.W. Cole Financial, Inc. (“JW Cole”) and executed a Loan Agreement and Promissory Note (the “Note”) in their personal capacities.” (Id.)

         Throughout 2014, L&L and ENG operated as separate entities, and the parties’ commissions were deposited into separate accounts in Arizona and Florida. (Id., ¶ 14.) Around that same time, Lloyd entered into a lease agreement with 4D Limited Partnership on behalf of L&L, which was personally guaranteed by both Lloyd and Lakritz. (Id., ¶ 16.) In January 2015, the companies began merging and the bank accounts were combined; Lloyd contributed $22, 754.99 in capital and Lakritz contributed $21, 754.99. (Id., ¶ 17.) “Lakritz repeatedly assured Lloyd that Lloyd was a 50% owner of ENG, ” and that Lloyd would inherit all of the business of the companies once Lakritz retired. (Id., ¶ 19.)

         The companies never completely merged, however, and in August 2015 the parties decided to end their business relationship. (Id., ¶¶ 25, 27.) Lloyd withdrew $27, 656 from the L&L account. (Id., ¶ 28.) Later, Lakritz withdrew approximately $28, 000 from the L&L account to pay for expenses allegedly unrelated to L&L, which resulted in insufficient funds to cover the lease payment. (Id., ¶¶ 29, 30.)

         On February 24, 2016, Lloyd filed an amended complaint against Lakritz seeking a declaration that she is a 50% owner of ENG, claiming that her ownership stake is worth approximately $250, 000. (Id., ¶¶ 33-41.) Lloyd seeks judicial dissolution and supervision of L&L pursuant to A.R.S. § 29-785(A). (Id., ¶¶ 42-68.) She also alleges claims for defamation and false light. (Id., ¶¶ 69-81.)

         On March 8, 2016, Lakritz filed counterclaims for misappropriation of funds, breach of fiduciary duty, intentional interference with business relations, and conversion. (Doc. 25.) Lakritz alleges Lloyd used L&L funds for her law degree expenses, bar preparation course, and personal meals. (Id., ¶ 9.) She further alleges Lloyd refused to participate in weekly telephone conferences, used $1, 794 of L&L funds for her license plates, and paid her husband’s $400 debt to the Arizona Department of Revenue. (Id., ¶¶ 11-12.) Lloyd also allegedly disbursed two checks for $4, 375 to herself in March and June of 2015. (Id., ¶ 13.) Lakritz asserts Lloyd began using L&L staff to complete tasks related to Lloyd’s law practice, as well as withdrawing an additional $27, 656.66 from the L&L bank account in August 2015 for her personal benefit. (Id., ¶¶ 16, 18.) Lloyd allegedly removed two computers and furniture from L&L’s office and has threatened legal action against JW Cole. (Id., ¶¶ 20-24.)

         LAKRITZ’S MOTION TO TRANSFER

         Lakritz argues this case should be transferred to the Middle District of Florida because ENG is incorporated in Florida, several anticipated witnesses reside in Florida, the alleged torts were committed in Florida, and the case has a limited connection with Arizona. Lloyd asserts several key documents were negotiated and executed in Arizona, and that it would not be inconvenient for Lakritz to travel to Arizona because she maintains two residential properties in Arizona. She also claims several key witnesses reside in Arizona.

         I. Legal Standard

         “For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought[.]” 28 U.S.C. § 1404(a). “The decision of whether to transfer a case is within the broad discretion of the district court, ” Berry v. Potter, No. CIV 04-2922 PHX RCB, 2006 WL 335841, at *3 (D. Ariz. Feb. 10, 2006) (citing Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000)), and requires “an individualized, case-by-case consideration of convenience and fairness.” Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (internal quotation marks omitted). The court must “weigh multiple factors in its determination whether transfer is appropriate in a particular case.” Jones, 211 F.3d at 498. Such factors include: (1) the location where the relevant agreements were negotiated and executed, (2) the state most familiar with governing law, (3) the plaintiff’s choice of forum, (4) the parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action, (6) differences in cost to litigate in each forum, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. Id. The moving party bears the burden of demonstrating transfer is appropriate, and therefore “must make a strong showing of inconvenience to warrant upsetting the plaintiff’s choice of forum.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).

         II. Analysis

         It is undisputed that Lloyd could have brought this action in the Middle District of Florida. (Doc. 26 at 5.) Thus, the Court turns to the aforementioned factors in analyzing whether transfer is appropriate in this case, while also acknowledging that “great weight is generally accorded plaintiff’s choice of forum[.]” Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987).

         A. Location Where the Relevant Agreements were Negotiated and Executed

         The parties agree that the L&L lease with 4D Limited Partnership was executed in Arizona. (Doc. 26-1, ¶ 9.) At the hearing, counsel for both parties agreed that no partnership document exists, but were unable to agree on where the alleged oral agreement was negotiated. Counsel agreed that the JW Cole promissory note was made and negotiated in Florida, signed in Arizona, and is currently held in Florida. Accordingly, because the locale of the execution of the relevant documents appears to be split, this factor neither favors nor disfavors transfer.

         B. State Most Familiar with Governing Law

         Lloyd seeks to establish her ownership stake in ENG, dissolve L&L, and claims Lakritz made defamatory statements about her on social media. ENG is a Florida corporation, and thus Florida has more familiarity with the governing law and also has a great interest in adjudicating the rights and obligations of one of its corporations. However, L&L is an Arizona limited liability company, and thus this Court has more familiarity with the law governing dissolution of the company, as well as an interest in adjudicating the rights and obligations of L&L. With respect to the tort claims, Lloyd claims Arizona law applies because she originally filed in Maricopa County Superior Court. But Lloyd does not specify where Lakritz made the defamatory statements or where they were published. There are no allegations regarding to whom such statements were made, nor does Lloyd allege that she suffered damage in Arizona, as opposed ...


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