Arimilli v. Rezendes

• Court: District Court, D. Arizona
• Decided: March 31, 2023
• Docket: 2:21-cv-00345
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Nirmala Arimilli, No. CV-21-00345-PHX-GMS

10 Plaintiff, ORDER

11 v.

12 Keith Rezendes,

13 Defendant. 14 15 16 Before the Court is Keith Rezendes’s (“Defendant”) Motion to Dismiss Fourth 17 Amended Complaint (Doc. 29). Also pending is Nirmala Arimilli’s (“Plaintiff”) Motion 18 for Joinder of Additional Parties (Doc. 24). For the following reasons, the motion to 19 dismiss is granted in part and denied in part, and the motion for joinder is denied. 20 BACKGROUND 21 Plaintiff formed a relationship with Defendant between 1999 and 2000. In March 22 2017, Plaintiff visited Defendant, and was introduced to his purported wife, Ms. Rosen. 23 During the visit, Defendant allegedly asked Plaintiff to invest in his company, Avidbrain 24 Inc., claiming that she was eligible to invest in his company due to a change in the 25 investment laws. Defendant also offered Plaintiff a job, which she accepted. By April 26 2017, Plaintiff had allegedly invested $125,000 in Defendant’s company. 27 While employed by Defendant, Plaintiff noticed “discrepancies in relation to [the] 28 overall success of the company.” (Doc. 23 at 3.) Plaintiff alleges that, due to her “years 1 long trust in [Defendant],” she believed Defendant when he denied any wrongdoing. (Doc. 2 23 at 4.) After receiving further information that “affirmed [her] doubts and concerns about 3 the company,” Plaintiff confronted Defendant and was subjected to a “torrent of vitriol and 4 verbal abuse.” (Doc. 23 at 4.) Plaintiff’s last communication with Defendant was in 5 November 2017. 6 Plaintiff filed suit in Maricopa County Superior Court in October 2020. She 7 amended her complaint twice in state court. Defendant then removed the case to this Court 8 in February 2021, and subsequently moved to dismiss the complaint pursuant to Federal 9 Rule of Civil Procedure 12(b)(6). The Court granted in part and denied in part Defendant’s 10 motion, giving Plaintiff leave to amend her complaint. (Doc. 14.) Plaintiff amended her 11 complaint, and Defendant moved to dismiss the Third Amended Complaint, which the 12 Court, again, granted in part and denied in part, giving Plaintiff leave to amend. (Doc. 22.) 13 Plaintiff then filed her Fourth Amended Complaint (“FAC”), which Defendant’s instant 14 motion moves to dismiss under Rule 12(b)(6). 15 DISCUSSION 16 I. Motion to Dismiss 17 A. Legal Standard 18 1. Notice Pleading Requirements 19 Federal Rule of Civil Procedure 8(a) requires a complaint to contain “a short and 20 plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 21 8(a), so that the defendant receives “fair notice of what the . . . claim is and the grounds 22 upon which it rests,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive 23 dismissal for failure to state a claim, a plaintiff’s factual allegations in the complaint 24 “must . . . suggest that the claim has at least a plausible chance of success.” Levitt v. Yelp! 25 Inc., 765 F.3d 1123, 1135 (9th Cir. 2014). Factual allegations in the complaint are accepted 26 as true, and the pleading is construed “in the light most favorable to the nonmoving party.” 27 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But 28 “allegations in a complaint . . . may not simply recite the elements of a cause of action 1 [and] must contain sufficient allegations of underlying facts to give fair notice and enable 2 the opposing party to defend itself effectively.” Levitt, 765 F.3d at 1135. Further, legal 3 conclusions couched as factual allegations are not given a presumption of truthfulness, and 4 “conclusory allegations of law and unwarranted inferences are not sufficient to defeat 5 motion to dismiss.” Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). 6 Allegations in a pro se complaint are held to “less stringent standards than formal 7 pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). Pro se 8 complaints must be liberally construed and afforded the benefit of any doubt. Hebbe v. 9 Pliler, 627 F.3d 338, 342 (9th Cir. 2010). 10 2. Fraud Pleading Requirements 11 Federal Rule of Civil Procedure 9(b) requires that “[i]n alleging fraud or mistake, a 12 party must state with particularity the circumstances constituting fraud or mistake.” Fed. 13 R. Civ. P. 9(b). “To satisfy the particularity of circumstances, statements of time, place, 14 and nature of the alleged fraudulent activities are sufficient, while mere conclusory 15 allegations of fraud are not.” Arnold & Assocs., Inc. v. Misys Healthcare Sys., 275 F. Supp. 16 2d 1013, 1028 (D. Ariz. 2003). In addition to setting out the “who, what, when, where, 17 and how” of the misconduct, Cooper v. Picket, 137 F.3d 616, 627 (9th Cir. 1997), a plaintiff 18 must “set forth what is false or misleading” about a particular statement, “and why it is 19 false.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting 20 Decker v. GlenFed, Inc. (In re GlenFed, Inc. Sec Litig.), 42 F.3d 1541, 1548 (9th Cir. 21 1994), superseded by statute on other grounds as recognized in Avakian v. Wells Fargo 22 Bank, N.A., 827 F. App’x 765, 766 (9th Cir. 2020)). 23 B. Analysis 24 1. Fraudulent Misrepresentation (Count 1), Fraudulent Inducement 25 (Count 3), and Fraudulent Concealment (Count 5) 26 The Court previously preserved Plaintiff’s claims for fraudulent misrepresentation, 27 fraudulent inducement, and fraudulent concealment to the extent the claims were based on 28 Defendant’s representation that “all company filings were accurate.” (Doc. 14 at 7.) These 1 fraud claims are governed by Federal Rule of Civil Procedure 9, requiring a heightened 2 pleading standard. Fed. R. Civ. P. 9(b). To prevail on a common law fraud claim, Plaintiff 3 must show: 4 (1) a representation; (2) its falsity; (3) its materiality; (4) the 5 speaker’s knowledge of its falsity or ignorance of its truth; (5) 6 his intent that it should be acted upon by and in the manner 7 reasonably contemplated; (6) the hearer’s ignorance of its 8 falsity; (7) his reliance on the truth; (8) his right to rely thereon; 9 and (9) his consequent and proximate injury. 10 Peery v. Hansen, 585 P.2d 574, 577 (Ariz. Ct. App. 1978). 11 In Plaintiff’s FAC, she reiterates her fraud claims, adding several new alleged 12 fraudulent statements. While Plaintiff states that she believes all of the additional 13 statements to be false, she fails to plead the requisite elements for fraud. For example, for 14 all of the newly added allegations, she fails to plead that she relied on the representations 15 to her detriment and how the reliance on each statement was justified. Instead, she alleges, 16 as with previous versions of the complaint, “Plaintiff justifiably relied on Defendant’s 17 representations with respect to good-standing nature of the company, and himself along 18 with the promise to refund all funds provided upon the request.” (Doc. 23 at 10.) This 19 statement addresses her previously preserved fraud claims based on Defendant’s 20 representations that the company’s filings were accurate. It does not, however, address 21 new claims such as the alleged misrepresentation as to Defendant’s marital status or his 22 educational background. Plaintiff has not met the pleading standard for the new grounds 23 she raises for the fraud claims; they are therefore only preserved to the extent that the 24 Court’s previous orders have preserved them. (See Doc. 14 at 7; Doc. 22 at 9-10.) 25 2. Gross Negligence (Count 2) 26 The Court previously dismissed Plaintiff’s claim for gross negligence because 27 Plaintiff did “not allege that Defendant knew or had reason to know that his conduct would 28 create an unreasonable risk of bodily harm.” (Doc. 14 at 8.) It also clarified that financial 1 harm, rather than “an unreasonable risk of bodily harm,” is insufficient to support a gross 2 negligence claim. Walls v. Ariz. Dep’t of Pub. Safety, 826 P.2d 1217, 1221 (Ariz. Ct. App. 3 1991); (Doc. 22 at 5). Additionally, the Court previously held that “[e]ven though 4 emotional distress may cause bodily harm, emotional distress itself is not a form of bodily 5 harm under Arizona law.” (Id.) 6 In Plaintiff’s FAC, she explains that she suffered “emotional distress that has 7 manifested itself physically (extreme weight gain, graying of hair, health issues, etc.).” 8 (Doc. 23 at 12.) Even accepting these statements as true, they do not show that Defendant’s 9 conduct created an “unreasonable risk of bodily harm to others . . . [and] a high probability 10 that substantial harm will result.” Walls, 826 P.2d at 1221. The negligent acts that Plaintiff 11 alleges Defendant committed are “fail[ing] to issue a complete investor contract along with 12 other documentation,” knowingly falsifying revenue, misrepresenting his ability to procure 13 and maintain relationships with investors, failing to disclose bankruptcy, and covering up 14 the aforementioned actions. (Doc. 23 at 11.) None of these actions are sufficient to create 15 an unreasonable risk of bodily harm to others and a high probability that substantial harm 16 will result. A gross negligence claim requires more wanton conduct that gives rise to more 17 substantial harm than the harms alleged here. As the Plaintiff has been afforded multiple 18 opportunities to plead additional facts relating to this claim, it appears amendment would 19 be futile. As such, the claim is dismissed with prejudice. 20 3. Breach of Fiduciary Duty (Count 6) 21 Plaintiff’s breach of fiduciary duty claim is dismissed because she does not properly 22 allege the existence of a fiduciary duty. In her FAC, Plaintiff added that a fiduciary duty 23 existed because of “the newly established employer-employee and investment 24 holder/manager-investor relationship with the Plaintiff.” (Doc. 23 at 20.) In Arizona, an 25 employee owes her employer a fiduciary duty. McCallister Co. v. Kastella, 825 P.2d 980, 26 982 (Ariz. Ct. App. 1992). An employer, however, does not owe his employee such a 27 fiduciary duty. Plaintiff’s claim cannot be brought on these grounds. 28 1 As for the investment holder/manager-investor relationship, it is unclear that such a 2 relationship existed or established a fiduciary duty. “In Arizona a director of a corporation 3 owes a fiduciary duty to the corporation and its stockholders.” Atkinson v. Marquart, 541 4 P.2d 556, 558 (Ariz. 1975). Plaintiff does not establish that such a legal relationship existed 5 in this case. In fact, earlier in the FAC, Plaintiff alleges that she believed she was not a 6 qualified investor when she gave Defendant the money. (Doc. 23 at 3.) The nature of the 7 relationship thus remains unclear, and Plaintiff has not pleaded sufficient facts to show that 8 a fiduciary duty existed. As such, this claim is dismissed with leave to amend. 9 4. Conversion (Count 7) 10 The Plaintiff’s conversion claim is dismissed because she does not establish that the 11 funds can be “identified or segregated” and has not shown “an obligation to treat [them] in 12 a specific manner.” Autoville, Inc. v. Friedman, 510 P.2d 400, 402 (1973). In the FAC, 13 Plaintiff specifically identifies four payments she made to Defendant that she alleges were 14 converted. Generally, money is not subject to being converted unless it “can be described, 15 identified or segregated, and an obligation to treat it in a specific manner is established.” 16 Autoville, 510 P.2d at 402. These transfers of funds cannot support a conversion action 17 because funds in a bank account are “no longer segregable.” Bradley v. Martin, No. 1 CA- 18 CV 07-0025, 2007 WL 5463560, at *4 (Ariz. Ct. App. Nov. 13, 2007). Additionally, once 19 the funds are deposited in a bank, “the right to immediate possession belong[s] to the bank 20 holding the funds.” Id. Thus, “when the alleged conversion took place, the party with 21 immediate right of possession of the funds was neither Plaintiff nor Defendant.” Id. “This 22 is so because the chattel in question consisted exclusively of unsegregated money that was 23 deposited into a bank account.” Id. Here, when Plaintiff completed the wire transfers to 24 Defendant’s bank account, the bank had the immediate right of possession to the funds. 25 Because Plaintiff alleges that the conversion took place sometime thereafter in the form of 26 misuse of the funds, Plaintiff was not the party with the immediate right of possession. 27 Therefore, she may only recover these funds as damages for other causes of action. As it 28 appears amendment to this claim would be futile, it is dismissed with prejudice. 1 5. Misappropriation and Embezzlement (Count 8), Security and Stock 2 Fraud (Count 11), Identity Theft (Count 14), and Wage Theft (Count 3 15) 4 The Court previously dismissed Plaintiff’s claims for Misappropriation and 5 Embezzlement, Security and Stock Fraud, Identity Theft, and Wage Theft because she did 6 not establish a legal basis for bringing the claims. In her FAC, Plaintiff attempts to clarify 7 the legal basis for each claim. 8 Misappropriation and Embezzlement (Count 8): Plaintiff fails to establish a legal 9 basis for this claim. As Plaintiff has amended her complaint, it appears she equates 10 “misappropriation” with “embezzlement.” Under Arizona law, however, embezzlement is 11 not an independent criminal offense; it is merged with the crime of theft. State v. Tramble, 12 695 P.2d 737, 741 (Ariz. 1985). As noted in the Court’s most recent order, theft is not a 13 civil cause of action. See Ariz. Rev. Stat. § 13-1802; (Doc. 22 at 14). Plaintiff cannot 14 plead any set of facts that would establish civil liability for embezzlement. The claim is 15 thus dismissed with prejudice. 16 Security and Stock Fraud (Count 11): Plaintiff asserts a claim under the Securities 17 Act of 1933. The Act imposes civil liability in two circumstances. First, § 12(a)(1) 18 imposes liability on any person who offers or sells a non-exempt security without 19 registering it. 15 U.S.C. § 771; 15 U.S.C. § 77e. Second, § 12(a)(2) imposes liability on 20 a person who offers or sells a security “by means of a prospectus or oral communication, 21 which includes an untrue statement of a material fact or omits to state a material fact 22 necessary.” 15 U.S.C. § 77l(a)(2). It is not clear under which provision Plaintiff brings 23 her claim. Nevertheless, at least some of the claim sounds in fraud. When a § 12(a)(2) 24 claim is “grounded in fraud rather than negligence, Rule 9(b) applies.” 25 First, it is not clear what “security” was purchased, offered, or sold under the Act. 26 Plaintiff refers generally to her “investment” in the company and alleges that Defendant 27 promised her “common stock options.” (Doc. 23 at 27.) Even if the alleged common stock 28 options were sufficient to demonstrate that Defendant offered a security under § 12(a)(2), 1 however, Plaintiff fails to meet the heightened pleading standard for fraud. She asserts that 2 Defendant “stated that securities laws had changed allowing unaccredited investors to 3 invest.” (Doc. 23 at 26.) She does not, however explain “what is false or misleading about 4 [the] statement, and why it is false.” Vess, 317 F.3d at 1106. To rely on this statement 5 under “Rule 9(b), a plaintiff must allege the manner in which a defendant knowingly 6 departed from the truth.” Shapiro v. UJB Financial Corp., 964 F.2d 272, 289 (3d Cir. 7 1992). As pleaded, it is unclear whether Defendant’s alleged statement about the “change 8 in law” is the basis for the Securities Act claim, whether the statement was untrue, and if 9 so, why it was untrue. 10 If Plaintiff seeks to bring her claim exclusively under § 12(a)(1) it similarly fails 11 because she does not plead facts that allege (1) Defendant sold a security, and (2) there was 12 no registration statement in effect as to the security. See 15 U.S.C. § 77e(a)(1). Plaintiff’s 13 statement that “Defendant was in violation of the Securities Act of 1933, having not 14 qualified nor filed an exemption,” does not sufficiently plead the requisite elements. As 15 such, the claim is dismissed with leave to amend. 16 Identity Theft (Count 14): Plaintiff alleges the Identity Theft claim arises under the 17 Identity Theft and Assumption Deterrence Act. This Act does not set forth a private civil 18 cause of action. See 18 U.S.C. § 1028. Because the legal authority on which Plaintiff bases 19 her claim does not provide a private civil right of action, this claim is dismissed with 20 prejudice. 21 Wage Theft (Count 15): Plaintiff’s “wage theft” claim was previously dismissed 22 because she did not provide a proper legal basis on which to bring the claim. Plaintiff has 23 not amended her wage theft claim. To the extent Plaintiff seeks to bring a claim resembling 24 a criminal theft claim, she is precluded from doing so because it is not a civil cause of 25 action. Because there are no grounds for such a claim, the wage theft claim is dismissed 26 with prejudice. 27 6. Constructive Fraud (Count 9) 28 Plaintiff’s claim for constructive fraud was dismissed in both of the Court’s previous 1 orders because it was based on misrepresentations that are not sufficiently particular. (Doc. 2 14 at 7; Doc. 22 at 6.) Plaintiff’s amendments to her constructive fraud claim still fail to 3 meet the heightened pleading standard for fraud claims under Rule 9. Plaintiff adds several 4 new alleged fraudulent statements, but the increase in quantity of statements does not 5 overcome the deficiency in quality. In other words, she does not establish the “who, what, 6 when, where, and how” of the fraudulent statements. Cooper, 137 F.3d at 627 (9th Cir. 7 1997). Identifying that many fraudulent statements may have been made to unknown 8 individuals at unknown dates falls short of the heightened pleading standard for fraud. She 9 also does not demonstrate how the statements are false or how she justifiably relied on 10 them. As such, the claim is dismissed with leave to amend. 11 7. Alter Ego (Count 10) 12 Plaintiff’s alter ego claim is dismissed because it fails to state a claim for which 13 relief can be granted. Under Arizona law, an alter ego claim “is not itself a cause of action,” 14 but rather a tool by which to ascribe liability to an individual or entity for the actions of a 15 separate corporate entity. Specialty Cos. Grp., LLC v. Meritage Homes of Ariz., Inc., 492 16 P.3d 308, 210 (Ariz. 2021); Airbus DS Optronics GmbH v. Nivisys LLC, 183 F. Supp. 3d 17 986, 990 (D. Ariz. 2016) (“Arizona does not recognize piercing the corporate veil or alter 18 ego as an independent cause of action.”). Plaintiff has not asserted claims against any 19 corporate entities; her FAC names only an individual defendant, Keith Rezendes. Thus, 20 she cannot adequately meet the elements of an alter ego claim and the claim is dismissed 21 with leave to amend.1 22 8. Theft (Count 18) and Breach of Implied Covenant of Good Faith and 23 Fair Dealing (Count 23) 24 Plaintiff’s claims for theft and breach of implied covenant of good faith and fair 25 dealing were previously dismissed with prejudice, so she is unable to raise these claims in 26 her FAC. (Doc. 22 at 8, 14.) Defendant’s motion to dismiss is granted as to these claims.

27 1 Plaintiff filed her Motion for Joinder of Additional Parties (Doc. 24) immediately after her FAC. She presumably seeks to add certain defendants to her complaint so that she may 28 bring this claim. That motion is addressed in greater detail below. 1 9. Defamation (Count 21) 2 To state a claim for defamation under Arizona law, a plaintiff must show that the 3 defendant (1) made a false statement, (2) published it to a third party, and (3) either knew 4 the statement was false, or acted negligently or recklessly in disregard of the truth. Peagler 5 v. Phoenix Newspapers, Inc., 560 P.2d 1216, 1222 (1977); Donahoe v. Arpaio, 869 F. 6 Supp. 2d 1020, 1061 (D. Ariz. 2012). Under the Federal Rules of Civil Procedure, a 7 “plaintiff cannot plead a defamation claim by simply alleging that defamatory or libelous 8 statements were made.” Stoyanof v. Crocodiles Not Waterlilies, L.L.C., No. 11-00384 9 HWG, 2011 WL 13232088, at *5 (D. Ariz. June 23, 2011). The statement must also “bring 10 the defamed person into disrepute, contempt, or ridicule, or must impeach the plaintiff’s 11 honesty, integrity, virtue, or reputation.” Turner v. Devlin, 848 P.2d 286, 288-89 (1993). 12 “The court determines as a matter of law whether a communication is capable of bearing a 13 particular meaning and, if so, whether that meaning is defamatory.” Reynolds v. Reynolds, 14 294 P.3d 151, 155 (Ariz. Ct. App. 2013). While defamatory statements need not be set 15 forth verbatim in the complaint, they must be “specifically identified, such that the 16 defendant may adequately defend itself.” Ultimate Creations, Inc. v. McMahon, No. CV- 17 06-0535, 2007 WL 9735048, at *2 (D. Ariz. Feb. 5, 2007) (internal quotations omitted). 18 Plaintiff’s FAC fails to adequately state a claim for defamation. The Court 19 previously dismissed this claim because Plaintiff made only “generalized allegations 20 regarding [Defendant’s] alleged defamatory statements.” Stoyanof, 2011 WL 13232088, 21 at *5. In the amended complaint, Plaintiff identifies statements that Defendant made about 22 Plaintiff on various occasions. She alleges that Defendant (1) told a staff member that 23 Plaintiff was working on personal projects and wasting company funds; (2) told a 24 contractor that Plaintiff was not an employee of the company; (3) told future employees 25 that Plaintiff left the company on good terms when she did not; (4) told an employee that 26 Plaintiff had no grounds to terminate that employee when Defendant in fact instructed her 27 to do so; and (5) told a potential employee that Plaintiff was mentally unstable. 28 1 At least some of the allegedly false statements are likely capable of bearing a 2 defamatory meaning, including statements regarding the termination of an employee, 3 Plaintiff’s mental stability, and Plaintiff’s wasting company funds because they bear on 4 Plaintiff’s integrity or reputation. However, Plaintiff still fails to demonstrate with the 5 requisite specificity when these statements were made and to whom. She uses general 6 identifiers such as “future employees,” “an employee,” or “a potential employee.” 7 (Doc. 23 at 35-36.) These identifiers do not “specifically identify” the defamatory 8 statements such that the Defendant “may adequately defend itself.” Ultimate Creations, 9 2007 WL 9735048, at *2. Instead, they leave open the possibility that the alleged 10 statements could have been made to any number of people on any number of occasions. 11 Thus, she fails to meet the basic pleading requirement for defamation claims. The claim is 12 dismissed with leave to amend. 13 10. Intrusion Upon Seclusion (Count 22) 14 Arizona follows the Restatement (Second) of Torts for claims of intrusion upon 15 seclusion. Hart v. Seven Resorts, Inc., 947 P.2d 846, 853 (Ariz. Ct. App. 1997). According 16 to the Restatement, “[o]ne who intentionally intrudes, physically or otherwise, upon the 17 solitude or seclusion of another or his private affairs or concerns, is subject to liability to 18 the other for invasion of his privacy, if the intrusion would be highly offensive to a 19 reasonable person.” Restatement (Second) of Torts § 652B. Plaintiff bases this claim on 20 the allegation that “Defendant and an employee . . . intentionally hacked into the Plaintiff’s 21 personal email accounts and possibly the Plaintiff’s cloud account.” (Doc. 23 at 36.) The 22 Court previously dismissed Plaintiff’s intrusion upon seclusion claim because it offered no 23 detail about “when this intrusion took place, how Plaintiff became aware of it, or why she 24 believes an intrusion happened in the first place.” (Doc. 22 at 15.) 25 In amending her complaint, Plaintiff explains that she believed her email was 26 hacked because she noticed “oddities in engagements in her email accounts.” (Doc. 23 at 27 36.) She further alleges “Defendant acknowledged that Mr. Holdiman was in fact hacking 28 her emails and stated that it was a negligible offense and would not be taking action on it.” 1 (Doc. 23 at 36.) Although Plaintiff states she has further factual details regarding this claim 2 she refrains “from disclosing it at this time for the sake of the integrity of the case, along 3 with the privacy of private individuals, public figures and government officials.” (Doc. 23 4 at 37.) 5 The additional factual allegations in the FAC are still insufficient. The intrusion 6 upon seclusion claim requires that a person intentionally intrude upon the seclusion of 7 another. At most, Plaintiff’s factual allegations establish that Defendant was aware that 8 another employee hacked her emails. She offers no facts to support the allegation that 9 Defendant himself hacked the emails. To the extent she seeks to hold Defendant liable for 10 the acts of Mr. Holdiman, she does not establish the elements for vicarious liability. As 11 such, this claim is dismissed with leave to amend. 12 11. Civil Conspiracy (Count 24) 13 To state a claim for civil conspiracy in Arizona, a plaintiff must allege that (1) two 14 or more persons, (2) agreed to accomplish either (3) an unlawful purpose, or (4) a lawful 15 objective by unlawful means. Rowland v. Union Hills Country Club, 757 P.2d 105, 110 16 (Ariz. Ct. App. 1998). Civil conspiracy is a derivative tort that requires underlying tortious 17 conduct for liability to attach. Id.; see also Tovrea Land & Cattle Co. v. Linsenmeyer, 412 18 P.2d 47, 63 (Ariz. 1966). However, “not all members of a conspiracy need to be named 19 defendants for one member to be found liable.” Rowland, 757 P.2d at 110. 20 In this case, Plaintiff alleges that Defendant conspired with Ms. Rosen to defraud 21 Plaintiff by obtaining an investment from her under false pretenses. (Doc. 23 at 38.) To 22 the extent Plaintiff bases the conspiracy claim on Defendant’s alleged misrepresentations 23 about him and Ms. Rosen’s marriage, as discussed above, these allegations are insufficient 24 to state a claim for fraud under Rule 9(b). Plaintiff also alleges that Ms. Rosen “was the 25 individual who connected [Defendant] to primarily wealthy individuals . . . to acquire 26 investors.” (Doc. 23 at 38.) However, she has not properly alleged fraud on these facts 27 either. Thus, because she has not alleged an underlying claim for the civil conspiracy 28 claim, the claim is dismissed with leave to amend. 1 C. Leave to Amend 2 When a court grants a Rule 12(b)(6) motion to dismiss, but a defective complaint 3 can be cured, a plaintiff is ordinarily entitled to amend the complaint before the action is 4 dismissed. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000); see also Fed. R. Civ. P. 5 15(a) (“The court should freely give leave [to amend] when justice so requires.”). Rule 6 15’s policy favoring amendment “should be applied with extreme liberality,” DCD 7 Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987), especially when a plaintiff 8 is pro se. Lopez, 203 F.3d at 1130-31. Leave to amend should be withheld, however, if 9 “amendment: (1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an 10 undue delay in litigation; or (4) is futile.” AmerisourceBergen Corp. v. Dialysist W., Inc., 11 465 F.3d 946, 951 (9th Cir. 2006). Because amendment would be futile as to Plaintiff’s 12 claims for gross negligence, conversion, misappropriation and embezzlement, identity 13 theft, wage theft, theft, and breach of implied covenant of good faith and fair dealing, those 14 claims are dismissed with prejudice. As to the remaining dismissed claims, Plaintiff is 15 granted leave to amend her complaint in a manner consistent with this Order. The Court 16 has repeatedly outlined the factual deficiencies in Plaintiff’s complaint for these claims. 17 To the extent Plaintiff does not have any supplemental facts to cure these deficiencies, even 18 on claims for which the Court has granted leave to amend, Plaintiff should not include the 19 claims in her Fifth Amended Complaint. Lastly, because allowing amendments beyond a 20 Fifth Amended Complaint will create an undue delay in litigation, it will be the last 21 amended complaint that the Court will grant Plaintiff leave to file. 22 D. Attorneys’ Fees 23 Defendant’s request for attorneys’ fees is denied because it is not clear that the 24 previously dismissed claims were filed unreasonably and vexatiously or with the purpose 25 of harassment. If a party “unreasonably and vexatiously” multiplies proceedings in a case, 26 he or she may be required to personally satisfy excess costs or attorneys’ fees. 28 U.S.C. 27 § 1927. Defendant requests attorneys’ fees and costs associated with responding to two 28 claims that the Court dismissed with prejudice. (Doc. 29 at 3.) Plaintiff’s inclusion of 1 either of these claims does not appear to have either unreasonably or vexatiously multiplied 2 the proceedings in the case. Although the inclusion of the previously dismissed claims was 3 futile, the Court “cannot say that [P]laintiff filed the [claims] in bad faith.” Brown v. Adidas 4 Int., 938 F. Supp. 628, 636 (S.D. Cal. 1996) (declining to award attorney’s fees even though 5 pro se Plaintiff’s complaint “suffer[ed] . . . multiple infirmities” and failed to set forth any 6 allegations supporting any causes of actions pleaded). At this time, the Court declines to 7 award fees pursuant to § 1927. “However, the Court reminds both parties that [§] 1927, as 8 well as Rule 11 of the Federal Rules, applies to all pleadings which may be filed in this 9 case.” Brown, 938 F. Supp. at 636. To dismiss a claim with prejudice means that the Court 10 has issued its final ruling on that claim, and that the claim cannot be re-asserted. Should 11 Plaintiff continue to re-assert claims that were dismissed with prejudice, fees or costs 12 pursuant to § 1927 may become appropriate. 13 II. Motion for Joinder (Doc. 24) 14 After filing her FAC, Plaintiff filed a motion for joinder, asking the Court to add 15 several Defendants to the action. The Court itself will not and cannot add Defendants to 16 this action because the proper means to add a party is through amendment under Rule 15. 17 However, pursuant to the motion to dismiss, the Court gives Plaintiff leave to amend in 18 which she might seek to add additional defendants to the extent she can do so consistent 19 with applicable law. The amended claims against any new Defendants must also comply 20 with this Order and the Court’s previous orders. The Motion for Joinder is denied as moot. 21 CONCLUSION 22 Accordingly, 23 IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss (Doc. 29) 24 is GRANTED in part and DENIED in part, as follows: 25 Counts 2, 7, 8, 14, 15, 18, and 23 are dismissed with prejudice. Plaintiff may not 26 raise these claims in a future complaint. 27 Counts 6, 11, 9, 10, 21, 22, and 24 are dismissed with leave to amend. 28 Counts 1, 3, and 5 remain as limited by this order. 1 Counts 4, 12, 13, 16, 17, 19, 20, and 25 remain as pled. 2 IT IS FURTHER ORDERED granting Plaintiff leave to amend her complaint in 3 || amanner consistent with this Order. Plaintiff will have twenty-one days from the date of this order to file a Fifth Amended Complaint. Plaintiff will not be permitted to file further || amendments. 6 IT IS FURTHER ORDERED that Plaintiff's Motion for Joinder of Additional 7|| Parties (Doc. 24) is DENIED. 8 Dated this 31st day of March, 2023. □□ ) 10 A Whacrsay Sooo) 11 Chief United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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