Buttacavoli v. Worth Ross Management Company Incorporated

• Court: District Court, D. Arizona
• Decided: August 25, 2021
• Docket: 2:21-cv-00979
• Status: Unknown

Opinion

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

9 Ronald Buttacavoli, No. CV-21-00979-PHX-JZB

10 Plaintiff, ORDER

11 v.

12 Worth Ross Management Company Incorporated, et al., 13 Defendants. 14 15 Defendants Candlewyck Condominium Association (“Candlewyck”) and Worth 16 Ross Management Company (“Worth Ross”) have moved for dismissal of Plaintiff’s 17 Complaint (doc. 1). (Docs. 6, 11.) The Court grants both motions. The Complaint is 18 dismissed with prejudice as to Candlewyck, and without prejudice and with leave to amend 19 as to Worth Ross. 20 I. Background. 21 Plaintiff is an Arizona resident and former owner of a condo located in Denver, 22 Colorado in a community governed by Candlewyck, a Colorado homeowners’ association 23 (“HOA”), and managed by Worth Ross, a Texas corporation. (Doc. 1 ¶¶ 1, 5–9, 18–19.) 24 Plaintiff purchased the condo on May 3, 2018. (Id. ¶ 10.) On April 11, 2019, Plaintiff 25 contracted to sell the condo. (Id. ¶ 34.) Plaintiff alleges that Defendants caused him to lose 26 the sale by “failing to timely release and provide indispensable financial statements” 27 necessary for closing. (Id. ¶¶ 12, 24–25, 33.) Further, Plaintiff alleges that Defendants 28 continued to withhold this information from May to August 2019, causing him to lose “a 1 total of 18 sale opportunities.” 1 (Id. ¶¶ 35, 38–39.) 2 Based on the foregoing, Plaintiff alleges that Defendants are liable for Negligence 3 (Count 1), Breach of Contract (Count 2), and Breach of Covenant of Good Faith and Fair 4 Dealing (Count 3). (Id. ¶¶ 41–52.) Plaintiff claims $50,000 in damages, consisting of 5 “actual damages” as well as “consequential and punitive damages.” (Id. at 11.) Among 6 these damages are costs Plaintiff incurred in maintaining the condo while it was for sale, 7 including mortgage payments, home insurance premiums, taxes, and HOA fees. (Id. ¶¶ 13, 8 25, 40.) Plaintiff also claims “pre[-] and post[-]judgment interest, court costs[,] and 9 reasonable attorney fees.” (Id. at 11–14.) 10 Plaintiff alleges that this Court has jurisdiction pursuant to 28 U.S.C. § 1332.2 (Id. 11 ¶ 3.) Candlewyck and Worth Ross both move for dismissal under Fed. R. Civ. P. 12(b)(1) 12 for lack of subject-matter jurisdiction. (Docs. 6, 11.) Additionally, Candlewyck moves for 13 dismissal under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction and under Fed. R. 14 Civ. P. 12(b)(3) for improper venue. (Doc. 6.) Plaintiff filed a response to both motions 15 (doc. 26), and Defendants filed a joint reply (doc. 27). 16 II. Legal Standards. 17 A. Subject-Matter Jurisdiction. 18 “[F]ederal courts are courts of limited jurisdiction” and “may not exercise 19 jurisdiction absent a statutory basis.” Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 20 1746 (2019). In general, a federal court has original jurisdiction over actions involving a 21 federal question, 28 U.S.C. § 1331, and actions between citizens of different states 22 involving an amount in controversy greater than $75,000, 28 U.S.C. § 1332(a). A party 23 asserting that a federal court has jurisdiction over an action bears the burden of establishing 24 1 Despite the absence of a specific allegation indicating such, the Court presumes that 25 Plaintiff eventually sold the condo given his reference to himself as its “former owner.” 26 (Doc. 1 ¶ 5.) It is therefore not entirely clear what Plaintiff means by alleging that “the sale [is] now in controversy” (id.), particularly where Plaintiff makes no allegation that there is 27 any challenge to the sale. 28 2 Plaintiff also alleged that the Court has jurisdiction pursuant to 28 U.S.C. § 1391. (Doc. 1 ¶ 3.) However, 28 U.S.C. § 1391 regards proper venue, not jurisdiction. 1 it. Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010). 2 B. Personal Jurisdiction. 3 A plaintiff must show that a court has personal jurisdiction over an out-of-state 4 defendant. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015). “Federal courts ordinarily 5 follow state law in determining the bounds of their jurisdiction over persons.” Daimler AG 6 v. Bauman, 571 U.S. 117, 125 (2014). Arizona law permits the exercise of “personal 7 jurisdiction over a person, whether found within or outside Arizona, to the maximum extent 8 permitted by the Arizona Constitution and the United States Constitution.” Ariz. R. Civ. P. 9 4.2(a). “Due process requires that [a] defendant ‘have certain minimum contacts’ with the 10 forum state ‘such that the maintenance of the suit does not offend traditional notions of fair 11 play and substantial justice.’” Picot, 780 F.3d at 1211 (quoting Int’l Shoe Co. v. Wash., 326 12 U.S. 310, 316 (1945)). At a minimum: 13 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform 14 some act by which he purposefully avails himself of the privilege of 15 conducting activities in the forum, thereby invoking the benefits and protections of its laws; 16 (2) the claim must be one which arises out of or relates to the defendant's 17 forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial 18 justice, i.e. it must be reasonable. 19 Id. (internal citations and quotations omitted). 20 C. Venue. 21 Venue is proper in a judicial district “in which any defendant resides, if all 22 defendants are residents of the State in which the district is located,” or where “a substantial 23 part of the events or missions giving rise to the claim occurred, or a substantial part of 24 property that is the subject of the action is situated.” 28 U.S.C. § 1391(b)(1)–(2). 25 III. Discussion. 26 A. Candlewyck’s Motion to Dismiss. 27 Candlewyck moves to dismiss the action under Fed. R. Civ. P. 12(b)(1)–(3) for lack 28 of subject-matter jurisdiction, lack of personal jurisdiction, and improper venue. (Doc. 6.) 1 1. Lack of Subject Matter Jurisdiction. 2 Candlewyck moves for dismissal under Fed. R. Civ. P. 12(b)(1) on the grounds that 3 Plaintiff has not established subject-matter jurisdiction under 28 U.S.C. § 1332(a) because 4 he only claimed $50,000 in damages in his Complaint, which falls short of 28 U.S.C. 5 § 1332(a)’s requirement that the amount in controversy “exceed[] the sum or value of 6 $75,000.” (Doc. 6 at 2, citing Doc. 1 at 11.) 7 “[T]he amount in controversy is determined from the face of the pleadings,” Crum 8 v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000), and is accepted if “made in 9 good faith,” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 87 (2014); 10 see Budget Rent-A-Car, Inc. v. Higashiguchi, 109 F.3d 1471, 1473 (9th Cir. 1997). It is 11 “the amount at stake in the underlying litigation” and comprises “any result of the litigation, 12 excluding interests and costs, that entails a payment by the defendant,” including “damages 13 (compensatory, punitive, or otherwise).” Fritsch v. Swift Transp. Co. of Arizona, LLC, 899 14 F.3d 785, 793 (9th Cir. 2018) (internal citations and quotation marks omitted); Rasidescu 15 v. Midland Credit Mgmt., 435 F. Supp. 2d 1090, 1097 (S.D. Cal. 2006) (“In determining 16 whether diversity jurisdiction exists, a court is obligated to consider claims for both actual 17 and punitive damages in determining the jurisdictional amount.”). 18 In his Complaint, Plaintiff claimed “actual damages in excess of $25,000.00” and 19 sought a money judgment “in the amount of $50,000.00 [] in actual damages, with 20 consequential and punitive damages in an amount to be determined by a jury at trial.” (Doc. 21 1 at 11.) Plaintiff also requested pre- and post-judgment interest, court costs, and 22 reasonable attorney fees.3 (Id. at 11–14.) In his response, Plaintiff maintains that his 23 $50,000 claim was “a typo” and that he actually meant to claim $75,000. (Doc. 26 at 2, ¶ 24 3.) He states that all of his damages combined (actual, consequential, and punitive) satisfy 25 the amount-in-controversy requirement.4 (Id. ¶ 5) 26 Given Plaintiff’s statements in his response, the Court concludes that the $50,000

27 3 As of the date of this Order, Plaintiff is proceeding pro se. 28 4 Plaintiff incorrectly cites 28 U.S.C. § 1331, rather than 28 U.S.C. § 1332(a). (Doc. 26 at 2, ¶ 5.) 1 claim in the Complaint represents the “amount in controversy” embracing all of Plaintiff’s 2 claimed damages, including actual, consequential, and punitive damages. As such, the 3 Complaint is subject to dismissal under Fed. R. Civ. P. 12(b)(1) for failing to satisfy the 4 amount-in-controversy requirement of 28 U.S.C. § 1332(a). 5 2. Lack of Personal Jurisdiction. 6 Candlewyck also moves for dismissal under Fed. R. Civ. P. 12(b)(2) on the grounds 7 that Plaintiff has not established that the Court has personal jurisdiction over it. (Doc. 6 at 8 2–5.) Candlewyck states that it is not incorporated in Arizona; has no “business, offices, 9 agents, or representatives in Arizona”; and “conducts no activities within Arizona let alone 10 continuous and system[atic] activities.” (Id. at 4.) Candlewyck also notes that the alleged 11 harm relating to the sale of Plaintiff’s Colorado condo occurred in Colorado, not in 12 Arizona. (Id.) 13 In his Complaint, Plaintiff merely alleged that Candlewyck is an entity formed under 14 the laws of Colorado and is responsible for the management and operation of the HOA in 15 which the condo is a part of. (Doc. 1 ¶ 7.) Plaintiff alleges no facts establishing that 16 Candlewyck has any connection with or to the State of Arizona, let alone any connection 17 that is sufficient for the Court to have personal jurisdiction over it. Plaintiff does not address 18 this argument in his response. He merely responds to the subject-matter jurisdiction 19 arguments and then argues that “all remaining arguments challenging either subject matter 20 jurisdiction or venue are frivolous and without merit.” (Doc. 26 at 3.) 21 Given the absence of any allegation of fact establishing that Candlewyck has any 22 ties to the forum state of Arizona, the Court concludes that it does not have personal 23 jurisdiction over Candlewyck. As such, the Complaint is subject to dismissal under Fed. 24 R. Civ. P. 12(b)(2). 25 3. Improper Venue. 26 Lastly, Candlewyck moves for dismissal under Fed. R. Civ. P. 12(b)(3) on the 27 grounds that the District of Arizona is not the proper venue for this action. (Doc. 6 at 5–6.) 28 Candlewyck reiterates the above arguments, noting that it has no ties to Arizona and the 1 events giving rise to the action did not occur in Arizona. (Id.) The subject property, the 2 condo formerly owned by Plaintiff, is also outside of the District of Arizona. Candlewyck 3 has therefore established that the District of Arizona is not a proper venue for this action. 4 As such, the Complaint is subject to dismissal under Fed. R. Civ. P. 12(b)(3). 5 4. Conclusion. 6 Candlewyck’s motion to dismiss is granted. Accordingly, the action against 7 Candlewyck is dismissed with prejudice under Fed. R. Civ. P. 12(b)(1)–(3) and without 8 leave to amend. Although the “rule favoring liberality in amendments to pleadings is 9 particularly important for the pro se litigant,” Lopez v. Smith, 203 F.3d 1122, 1131 (9th 10 Cir. 2000), the Court will not grant leave to amend here because doing so would prove 11 futile. See Mueller v. Auker, 700 F.3d 1180, 1191 (9th Cir. 2012) (holding that a district 12 court did not err in dismissing a complaint without leave to amend where “it was clear that 13 amendment would be futile”); AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 14 946, 951 (9th Cir. 2006) (“[A] district court need not grant leave to amend where the 15 amendment . . . is futile.”). Amendment would be futile given that it is clear that the Court 16 does not have personal jurisdiction over Candlewyck given its absence of ties to Arizona 17 and that the alleged harm did not occur in Arizona. 18 B. Worth Ross’ Motion to Dismiss. 19 Worth Ross moves to dismiss the action under Fed. R. Civ. P. 12(b)(1) on the 20 grounds that the Court lacks “federal question jurisdiction” for Plaintiff’s failure to “allege 21 any claim, right of action or question involving federal law.”5 (Doc. 11 at 1–2.) 22 The Court will grant Worth Ross’ motion, but not for the reasons it proffers. See 23 Gonzalez v. Thaler, 565 U.S. 134, 141 (2012) (“Whenever, a requirement goes to subject- 24 matter jurisdiction, courts are obligated to consider sua sponte issues that the parties have 25 disclaimed or have not presented.”); see also Fed. R. Civ. P. 12(h)(3) (“If the court 26 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the

27 5 Worth Ross has waived any additional defenses available under Fed. R. Civ. P. 28 12(b)(2)–(5) by failing to raise them in the instant motion, including lack of personal jurisdiction and improper venue. See Fed. R. Civ. P. 12(h)(1). 1 action.”). 2 Worth Ross’ motion maintains that the Complaint should be dismissed simply 3 because Plaintiff failed to allege any federal claim. (Doc. 11.) Worth Ross, however, omits 4 any consideration of 28 U.S.C. § 1332(a), which does not require a federal claim for 5 jurisdiction so long as the action is between citizens of different states and involves an 6 amount in controversy exceeding $75,000. See 28 U.S.C. § 1332(a). As discussed in 7 Section III(A)(1), Plaintiff’s Complaint is subject to dismissal under Fed. R. Civ. P. 8 12(b)(1) for his failure to satisfy the amount-in-controversy requirement of 28 U.S.C. 9 § 1332(a), not for his failure to allege any federal claim. 10 Accordingly, Worth Ross’ motion is granted under Fed. R. Civ. P. 12(b)(1) for the 11 reasons stated in Section III(A)(1), supra. The dismissal as to Worth Ross, however, is 12 without prejudice and with leave to amend because, at this time, the Court cannot conclude 13 with any legal certainty6 that Plaintiff is not able to meet the jurisdictional requirements of 14 28 U.S.C. § 1332(a). See also Fed. R. Civ. P. 15(a)(2); Lopez, 203 F.3d 1122, 1131. Any 15 allegation regarding the amount in controversy in an amended complaint must have a good 16 faith basis. See Owens, 574 U.S. at 87; see also Crum, 231 F.3d at 1131.7 17 IT IS THEREFORE ORDERED: 18 (1) Defendants’ motions to dismiss (docs. 6, 11) are granted. 19 (2) The Complaint (doc. 1) is dismissed with prejudice as to Defendant 20 21 6 “[T]he district court must accept the amount in controversy claimed by the plaintiff unless it can declare to a legal certainty that the case is worth less.” Naffe v. Frey, 789 F.3d 22 1030, 1040 (9th Cir. 2015). “[T]hree situations clearly meet the legal certainty standard: 1) 23 when the terms of a contract limit the plaintiff’s possible recovery; 2) when a specific rule of law or measure of damages limits the amount of damages recoverable; and 3) when 24 independent facts show that the amount of damages was claimed merely to obtain federal court jurisdiction.” Id. (citing Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 25 362, 364 (9th Cir. 1986)). 26 7 In Crum, the Court of Appeals found that a district court “reasonably concluded that, absent a change in circumstances, amendment of [the amount in controversy] after a 27 district court finding of a jurisdictional defect would provide evidence that the claim was 28 inflated solely to exceed the jurisdictional threshold.” Crum, 231 F.3d at 1131 (citing LeBlanc v. Spector, 378 F. Supp. 301, 307–08 (D. Conn. 1973)). Candlewyck Condominium Association. 2 (3) |The Complaint (doc. 1) is dismissed without prejudice as to Defendant || Worth Ross Management Company Incorporated. 4 (4) Plaintiff is granted leave to file an Amended Complaint against Defendant || Worth Ross. Plaintiff shall file an Amended Complaint within thirty (30) days of this 6|| Order. If Plaintiff fails to do so, the Clerk of Court shall terminate this action without further order from the Court. 8 Dated this 24th day of August, 2021. 9 10 leo □ 1 United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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