United States District Court, D. Arizona
A. Teilborg Senior United States District Judge.
before the Court is Defendant Meadows & Fries, LLP's
(“M&F”) Motion to Dismiss (Doc. 11) pursuant
to Federal Rules of Civil Procedure (“Rules”)
12(b)(2) and 12(b)(3). Also pending before the Court is
Defendants Jennifer Leath and Maryam Boroujerdi-Rad's
(collectively, “Employees;” both M&F and
Employees together, “Defendants”) Motion to
Dismiss (Doc. 13) pursuant to Rules 12(b)(1), 12(b)(2),
12(b)(3), and 12(b)(6). The Court now rules on the motions.
November 19, 2018, M&F filed its Motion to Dismiss (Doc.
11). Plaintiff Norman Stuckey (“Plaintiff”) filed
a Response (Doc. 15) on December 3, 2018, and M&F filed a
Reply (Doc 18) on December 17, 2018. On November 27, 2018,
Employees likewise filed their Motion to Dismiss (Doc. 13).
Plaintiff filed a Response (Doc. 16) on December II, 2018,
and Employees filed a Reply (Doc. 17) on December 17, 2018.
brings a direct action against Defendants for their
respective actions as employees of and a professional
services firm retained by Stucky Psychological Services, PC
(“SPS”). (Doc. 10 (“Compl.”)
¶¶ 9-30). The eleven-count Complaint asserts the
following causes of action: (i) breach of contract; (ii)
conversion; (iii) breach of fiduciary duty; (iv) constructive
fraud; (v) common law fraud; (vi) negligent
misrepresentation; (vii) tortious interference; (viii)
financial elder abuse; (ix) fraudulent transfer; (x) unjust
enrichment; and (xi) complete accounting. (Id.
¶¶ 31-112). Plaintiff asserts all counts against
Employees, and also asserts counts (iii), (iv), (vi), and
(xi) against M&F. (Id.).
following facts are either undisputed or recounted in the
light most favorable to the non-moving party. See Wyler
Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d
658, 661 (9th Cir. 1998). Plaintiff, president and CEO of
SPS, is a ten-year resident of Sun Lakes, Arizona. (Compl.
¶ 9). Prior to his death, Plaintiff's son, David
Stuckey, was the sole owner of SPS, a California corporation
with its principal place of business in California.
(Id. ¶ 20; Doc. 15-1 at 13-16). At all relevant
times, SPS employed Leath and Boroujerdi-Rad, both citizens
of Orange County, California. (Compl. ¶¶ 12-13).
After David Stuckey's death in January 2014, Plaintiff
entered into an oral contract with Employees to provide
operational loans to SPS. (Id. ¶ 22). In return
for funding SPS, Plaintiff was to become its owner,
president, and CEO, and receive loan repayments and profit
disbursement. (Id.). Employees were to make periodic
financial reports to Plaintiff and “make a good faith
offer to buy [SPS] within a reasonable time.”
early 2014, M&F telephoned Plaintiff in Arizona to offer
tax services to SPS. (Doc. 15 at 2). M&F is a limited
liability partnership organized in California. (Compl. ¶
14). M&F's principle place of business is in
California, and both of its partners are California citizens.
(Id.). In October 2014, M&F mailed an engagement
letter from California to Plaintiff in Arizona, offering to
prepare federal and California state income tax returns for
SPS. (Doc. 1-1 at 10-12). Plaintiff agreed to and signed the
agreement “as president of [SPS].” (Compl. ¶
alleges that Defendant committed the following unlawful acts
during 2014- 2018. First, Employees took unauthorized salary
advances and improperly booked loan funding. (Id.
¶ 2). Second, M&F failed to detect or disclose these
unauthorized advances and improper bookings. (Id.
¶ 3). Third, M&F provided legal representation to
Employees without first obtaining Plaintiff's informed
consent. (Id. ¶ 8). Fourth, Employees made
“bad faith” offers to buy SPS from Plaintiff.
(Id. ¶ 25). Finally, Employees and M&F
failed to report accurate financial information to Plaintiff
during this period. (Id. ¶¶ 26-27). In
response, Plaintiff commenced this action.
filed a Motion to Dismiss pursuant to 12(b)(2) and 12(b)(3),
and Employees filed a Motion to Dismiss pursuant to Rules
12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6). (See
Doc. 11; Doc. 13). While the Court observes that Defendants
make arguments under the banner of standing-which ordinarily
presents a “threshold question of
justiciability”- those arguments may also be
characterized as addressing a “real party in
interest” issue. See In re Swintek, 906 F.3d
1100, 1102 (9th Cir. 2018). Because the Court finds it
dispositive, the Court begins by addressing whether it has
personal jurisdiction over Defendants. Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 578 (1999)
(“[T]here is no unyielding jurisdictional hierarchy.
Customarily, a federal court first resolves doubts about its
jurisdiction over the subject matter, but there are
circumstances in which a district court appropriately accords
priority to a personal jurisdiction inquiry.”).
lack sufficient contacts with Arizona to justify the exercise
of personal jurisdiction over them. Generally, federal courts
have personal jurisdiction over nonresident defendants to the
extent allowed by the state in which the courts sit.
See Fed. R. Civ. P. 4(e), (k); Walden v.
Fiore, 571 U.S. 277, 283 (2014). Arizona law provides
for personal jurisdiction to the extent allowed by the United
States Constitution. See Ariz. R. Civ. P. 4.2.
“The Due Process Clause of the Fourteenth Amendment
sets the outer boundaries of a  tribunal's authority to
proceed against a defendant.” Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011)
process requires that a defendant “have certain minimum
contacts with [the forum state] such that the maintenance of
the suit does not offend traditional notions of fair play and
substantial justice.” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (internal quotation
marks and citation omitted). This framework gives rise to two
forms of personal jurisdiction: “general” and
“specific” jurisdiction. Bristol-Myers Squibb
Co. v. Superior Ct. of Cal., S.F. Cty., 137 S.Ct. 1773,
1779-80 (2017). The burden of establishing personal
jurisdiction rests on the plaintiff, but if the motion
attacking jurisdiction “is based on written materials
rather than an evidentiary hearing, the plaintiff need only
make a prima facie showing of jurisdictional facts to
withstand the motion to dismiss.” Mavrix Photo,
Inc. v. Brand Techs, Inc., 647 F.3d 1218, 1223 (9th Cir.
2011). Courts must accept uncontroverted statements in a
complaint as true and resolve conflicts of facts contained in
affidavits in the plaintiff's favor, but a
“plaintiff cannot simply rest on the bare allegations
of its complaint.” Schwarzenegger v. Fred Martin
Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal
quotation marks and citation omitted).
general jurisdiction, a court can hear any claim against a
defendant who can be “fairly regarded as at home”
in the state. Goodyear, 564 U.S. at 919. Generally,
an individual is at home where domiciled, and an
unincorporated entity-including an LLP- is a citizen of each
state in which any member is a citizen. See Daimler AG v.
Bauman, 571 U.S. 117, 137 (2014); see also Americold
Realty Tr. v. Conagra Foods, Inc., 136 S.Ct. 1012, 1013,
(2016) (“For these unincorporated entities, we too have
adhere[d] to our oft-repeated rule that diversity
jurisdiction in a suit by or against the entity depends on
the citizenship of all [its] members” (alterations in
original; internal quotations marks and citation omitted)).
Both Employees and M&F, through its partners, are
citizens of California. (Compl. ¶¶ 12-14).
Accordingly, the Court lacks general jurisdiction over
relying on specific jurisdiction, a plaintiff must establish
that jurisdiction is proper for each claim asserted against a
defendant. See Picot v. Weston, 780 F.3d 1206, 1211
(9th Cir. 2015). If personal jurisdiction exists over one
claim, the Court “may exercise pendant jurisdiction
over any remaining claims that arise out of the same common
nucleus of operative facts.” Id. (internal
quotation marks and citation omitted). The specific
jurisdiction inquiry focuses on “the relationship among
the defendant, the forum, and the litigation.”