United States District Court, D. Arizona
ORDER
Douglas L. Rayes, United States District Judge
Before
the Court is Defendant Gooding & Company's
(“Gooding”) amended motion to dismiss for failure
to state a claim (Doc. 70), and Plaintiff Peter Piper's
motion for preliminary injunction (Doc. 74). The motions are
fully briefed. On July 17, 2018, the Court held an
evidentiary hearing on the preliminary injunction motion. For
the reasons discussed below, Gooding's motion to dismiss
is granted in part and denied in part, and Piper's
preliminary injunction motion is granted.
MOTION
TO DISMISS
I.
Background
This
case involves a dispute over the ownership of a rare 1954
Ferrari (“the Ferrari”). Piper's father,
James, purchased the Ferrari in 1962, had it restored in
1982, and won Most Elegant Sports car at the Pebble Beach
Concours d'Elégance in August 1989. (Doc. 69
¶¶ 13-15.) Following the Concours
d'Elégance, a potential buyer offered James $1.7
million for the Ferrari. (¶ 16.) He declined to sell it.
Also in
1989, James moved to Mexico and became romantically involved
with Maria Socorro De Rodriguez La Pine
(“Socorro”). (¶ 17.) On September 19, 1989,
James died, purportedly from heart complications.
(¶¶ 18, 79-80.) Because James' body was
immediately cremated, further investigation into his cause of
death was impossible. At the time of James' death he
still owned the Ferrari. (¶ 75.)
Soon
after James' death, Socorro advised Piper that she was
taking steps to protect James' assets for distribution to
the family. (¶ 20.) Socorro represented to Piper that
James had hired an attorney to transfer title of his
Ferraris, including the 1954 Ferrari, into a holding entity
for the benefit of Piper and his siblings. (¶ 87.) Piper
met with James' attorney and orally authorized the
transfer of the Ferraris to the holding entity.[1](¶¶
88-89.) Piper, however, never received documentation
confirming the transfer. (¶¶ 89-90.)
Unbeknownst
to Piper, Socorro was suspected of murdering several prior
love interests and dispossessing the decedents of their
assets. (¶¶ 19-20.) Despite being unaware of this
fact, Piper began to suspect that Socorro was involved in his
father's death and confronted her. (¶ 90.) After
being confronted by Piper, Socorro vanished. Piper was left
with no information concerning the whereabouts of the
Ferrari, as James and Socorro, the two people possessing that
information, suddenly were gone. (¶ 91.)
In
fact, the Ferrari was being stored in an empty shop next to
Francorchamps of America, Inc. (“FAI”), the same
company that restored the Ferrari in 1982. (¶¶
102-04.) The Ferrari remained in FAI's empty shop until
1991, at which time Socorro sold the vehicle to Robert
Butler. (¶¶ 106-07.) Butler purchased the Ferrari
for $300, 000.00, less than twenty percent of the market
value just two years prior. (¶ 107.) Rod Drew, the owner
of FAI, was unaware of the allegations against Socorro until
after she sold the Ferrari. (¶ 109.) In 1995, Butler
listed the Ferrari for sale, mislabeling it a 1955. (¶
117.) Butler then sold the Ferrari for $150, 000.00 to Todd
Morici. (¶ 118.) Morici, in turn, sold the Ferrari to
Defendant Falcon Woods LLC (“Falcon Woods”).
(¶ 119.)
Piper
intermittently searched for the Ferrari, including discussing
with the FBI the possibility that his father was murdered and
the vehicle stolen. (¶ 22.) It was not until December
2017 that Piper discovered information advertising the
vehicle for sale at auction. (Id.) Gooding, on
behalf of Falcon Woods, planned to auction the Ferrari in
Scottsdale, Arizona on January 20, 2018, for an estimated
price between $1.6 million and $2 million. (¶¶ 140,
155.) Gooding's provenance for the Ferrari contained
multiple errors, including that James sold the vehicle in
1991, two years after his death, and that he initially
acquired it in 1982. (¶¶ 141, 143.)
On
January 18, 2018, Piper visited Gooding's auction, viewed
the Ferrari, and confirmed that it was his father's.
(¶¶ 159-60.) That same day, Piper presented
Gooding's in-house counsel with notice of his claim to
the Ferrari. (¶ 161.) On January 19, 2018, Gooding
placed a notice on the vehicle, informing potential
purchasers that it was processing a new title. (¶¶
126, 162.) On January 20, 2018, the Ferrari was withdrawn
from auction. (¶ 169.) On January 23, 2018, Piper filed
his verified complaint and application for temporary
restraining order application. (¶ 171.) Piper's
complaint alleges seven claims, including: (1) conversion;
(2) trespass to chattels; (3) unjust enrichment; (4) civil
conspiracy; (5) violations of the Racketeer Influence and
Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1961 et seq.; (6) violations of Arizona's
RICO statute, A.R.S. § 13-2314; and (7) replevin of the
Ferrari. Gooding moves to dismiss all of Piper's
claims.[2]
II.
Legal Standard
When
analyzing a complaint for failure to state a claim to relief
under Rule 12(b)(6), the well-pled factual allegations are
taken as true and construed in the light most favorable to
the nonmoving party. Cousins v. Lockyer, 568 F.3d
1063, 1067 (9th Cir. 2009). Legal conclusions couched as
factual allegations are not entitled to the assumption of
truth, Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009),
and therefore are insufficient to defeat a motion to dismiss
for failure to state a claim, In re Cutera Sec.
Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid
dismissal, the complaint must plead sufficient facts to state
a claim to relief that is plausible on its face. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This
plausibility standard “is not akin to a
‘probability requirement,' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 556).
III.
Discussion
Gooding
argues that each of Piper's tort claims (conversion,
trespass to chattels, unjust enrichment, and civil
conspiracy) fail because Falcon Woods has superior title as a
result of Socorro conveying good title to the Ferrari.
Gooding also argues that Piper's federal and state RICO
claims should be dismissed for failure to properly allege a
pattern of racketeering activity or the requisite level of
continuity.
A.
Tort Claims
Assuming,
as Piper alleges, that Socorro wrongfully acquired the
Ferrari, Gooding argues that Falcon Woods nonetheless has
superior title for three independent reasons. (Doc. 70 at
11.)
First,
Gooding asserts that Socorro conveyed good title under
California's innocent purchaser defense.[3] As a general
rule, “[t]he possessor of stolen goods has void rather
than voidable title, and therefore cannot convey good title .
. . regardless of how innocently the goods were acquired by
him.” Suburban Motors, Inc. v. State Farm Mut.
Auto. Ins. Co., 268 Cal.Rptr. 16, 19 (Cal.Ct.App. 1990).
But under California's innocent purchaser defense, Cal.
Com. Code § 2403(1), an innocent purchaser for value,
without actual or constructive notice that his vendor has
secured the vehicle by a fraudulent purchase, may take good
title. Id. The law distinguishes between a purchaser
whose vendor obtained title by fraud and a purchaser whose
vendor obtained title by theft. See Cal. Com. Code
§ 2403(1); State Farm Mut. Auto. Ins. Co. v.
Dep't of Motor Vehicles,62 Cal.Rptr.2d 178, 181
(Cal.Ct.App. 1997). Gooding ...