Paul Viriyapanthu et al v. Bank of America, N.A. et al

Filing 111

MINUTES (IN CHAMBERS): ORDER by Judge David O. Carter: granting 105 Plaintiffs' Motion to Dismiss without prejudice. ( MD JS-6. Case Terminated ). (twdb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

O

CIVIL MINUTES - GENERAL
Case No. SA CV 12-1285-DOC(ANx)

Date: June 21, 2013

Title: PAUL VIRIYAPANTHU, ET AL v. BANK OF AMERICA, N.A., ET AL

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Julie Barrera
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS:
NONE PRESENT

NONE PRESENT

PROCEEDING (IN CHAMBERS): ORDER GRANTING PLAINTIFFS’ MOTION TO DISMISS
Before the Court is Plaintiffs’ Motion to Dismiss (Dkt. 105). The Court finds this matter
appropriate for decision without oral argument. Fed.R.Civ. P. 78; Local Rule 7-15. After considering
both parties’ briefs on the matter, the Court GRANTS Plaintiffs’ motion and DISMISSES the case
without prejudice.
I. Background
The facts of this case are well known to the parties and have been summarized by this Court in
previous orders. See, e.g., March 26, 2013, Minute Order. Plaintiffs allege that defendant Marisela
Dangcil, Paul Viriyapanthu’s former office manager, stole checks made payable to plaintiff
Immigration West Law, Viriyapanthu’s law firm, and deposited them into her own Bank of America
accounts, and that Bank of America allowed the checks to be deposited without proper verification.
See Compl. (Dkt. 1 Ex. A).
In relevant part: Plaintiffs Paul Viriyapanthu, Immigration West Law P.C., Benjaporn
Ellingson, Dylvia Spada, Sarosha Agatat, Rochelle Abandor, Alberto Jimenez, Ruth Siriyanon, and
Debra B. (Plaintiffs) first filed suit in Orange County Superior Court on July 2, 2010. See Paul
Viriyapanthu, et al., v. Victor Chavez, et al., Case No. 30-2010-00387021 (The 2010 Case); Mot. to
Consolidate (Dkt. 9) at 5. Based on allegations that defendant Marisela Dangcil, Viriyapanthu’s former
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office manager, stole checks made payable to Immigration West Law and deposited them into her own
Bank of America accounts, Plaintiffs brought multiple state law claims against Dangcil, as well as the
other individual named defendants as either co-conspirators in Dangcil’s plan or beneficiaries, and
against Bank of America for allowing the checks to be deposited. Id.; Def’s Opp’n to Consolidation at
1-2. Since 2010, the 2010 Case has proceeded in the state court.
The 2010 Case is not before this Court. Rather, defendant Bank of America (“BofA”) has
removed a second case (the Present Action), featuring the same parties and concerning the same set of
operative facts, which Plaintiffs filed in Orange County Superior Court on April 2, 2012, alleging six
additional claims, two of which are based on the federal Racketeering Influenced Corrupt Organization
Act, 18 U.S.C. § 1962(C) et seq., and 18 U.S.C. § 1962(D)(4). See Notice of Removal (Dkt. 1), Ex. A;
Def’s Opp’n to Consolidation at 2. Plaintiffs allege that the second case was filed separately in order to
avoid statute of limitations issues with some of the new claims, and because the amendment of the
original action was impossible because that case was stayed due to the death of an attorney for certain
defendants. Mot. at 7. Plaintiffs also allege that they were in the process of attempting to consolidate
the two cases in state court when BofA removed this action. Id. After removal, Plaintiffs moved for
remand (Dkt. 12), but, because the case was properly removed by Defendant Bank of America, remand
is inappropriate.
Plaintiffs now move for, among other things, a dismissal of all claims, against all Defendants,
without prejudice,1 pursuant to Federal Rule of Civil Procedure 41(a)(2). Pl’s Mot. at 16-17. BofA
opposes. See Opp’n (Dkt. 107).
II. Legal Standard
Rule 41(a)(2) allows a plaintiff, with the approval of the court, to dismiss an action without
prejudice at any time. The rule states:
Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff’s request
only by court order, on terms that the court considers proper.
Fed. R. Civ.P. 41(a)(2). A motion for voluntary dismissal under Rule 41(a)(2) “is addressed to the
district court's sound discretion and the court's order will not be disturbed unless the court has abused
its discretion.” Stevedoring Servs. of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir. 1989) (citing
Sams v. Beech Aircraft Corp., 625 F.2d 273, 277 (9th Cir.1980)). Dismissal without prejudice is
proper “so long as the defendant will not be prejudiced . . . or unfairly affected by dismissal.” Id.
(internal citations omitted)
III. Discussion
1

In the alternative, Plaintiffs move for a dismissal of only Plaintiffs’ federal claims, and a remand of the remaining state
law claims, or an opportunity to amend its Complaint to allege additional causes of action. See Pl’s Mot. at 13-18.
Because the Court finds dismissal of the entire case appropriate, it does not address Plaintiffs’ alternative requests.

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While the decision to grant a motion for voluntary dismissal is left to the Court’s discretion,
when ruling on such a motion, a district court must consider “whether the defendant will suffer some
plain legal prejudice as a result of the dismissal.” Hamilton v. Firestone Tire & Rubber Co., Inc., 679
F.2d 143, 145 (9th Cir. 1982) (citing Hoffmann v. Alside, Inc., 596 F.2d 822, 823 (8th Cir. 1979);
Durham v. Florida East Coast Railway Co., 385 F.2d 366, 368 (5th Cir. 1967)).
BofA first argues that Plaintiffs’ motion is untimely. Undue delay on a plaintiff’s part may be
one factor that weighs in favor of the denial of a motion to dismiss. See Westlands Water Dist. v. U.S.,
100 F.3d 94, 97 (9th Cir. 1996). In Westlands, however, the case cited by BofA in its Opposition, the
circuit court reversed a district court’s denial of a motion for voluntary dismissal in part because it
found that undue delay had not occurred. See id. Indeed, even though the district court in that case had
noted that the parties had already been though “a preliminary injunction hearing at which extensive
evidence and legal briefing was submitted,” and the case was “ripe for judicial determination,”
Westlands Water Dist. v. Patterson (“Westlands III”), 900 F. Supp. 1304, 1312 (E.D. Cal. 1995), the
circuit court found that plaintiffs “were not dilatory,” in part because the motion was filed “before the
defendants filed their motions for summary judgment.” Westlands, 100 F.3d at 97. While the plaintiffs
“could have sought dismissal sooner than they did,” their motion was not untimely. Id.
Here, the Court finds that Plaintiffs were not dilatory in pursuing this motion. Within weeks of
the removal of this action to federal court, Plaintiffs sought remand to state court in order to
consolidate all claims in one action. See Pl’s Mot. to Consolidate (Dkt. 9); Pl’s Mot. to Remand (Dkt.
12). That motion was ultimately unsuccessful, and Plaintiffs subsequently filed the present motion for
dismissal before any dispositive motion had been filed on either side, and before any motion to dismiss
had been filed by any defendant. Indeed, to date no motion has been filed by any defendant on any
substantive issue. Whereas the parties in Westlands had already completed a preliminary injunction
hearing “at which extensive evidence and legal briefing was submitted” and the case was “ripe for
judicial determination, Westlands III, 900 F. Supp at 1312, here no such proceeding has yet taken place
the case is not anywhere near as procedurally advanced.
Second, BofA argues that it would suffer legal prejudice because it would “lose [f]ederal
jurisdiction as a result of Plaintiffs’ blatant forum shopping.” Opp’n at 5. While it is true that “in
determining what will amount to legal prejudice, courts have examined whether a dismissal without
prejudice would result in the loss of a federal forum,” Westlands, 100 F.3d at 97, the analysis is not as
straightforward as BofA argues. First, it is firmly established that legal prejudice “does not result
simply when defendant faces the prospect of a second lawsuit or when plaintiff merely gains some
tactical advantage.” Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982)
(citing Durham, 385 F.2d at 368)). Similarly, “the threat of future litigation which causes uncertainty is
insufficient to establish plain legal prejudice.” Westlands, 100 F.3d at 96 (emphasis added). In support
of this rule, the court in Westlands cited American National Bank & Trust Company of Sapulpa v. Bic
Corporation, which, in examining this issue, held that the “possibility that plaintiffs may gain a tactical
advantage by refiling in state court is insufficient to deny a voluntary motion to dismiss without
prejudice,” and that “there is no legal prejudice to defendant even if a trial is held in state court.” 931
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F.2d 1411, 1412 (10th Cir. 1991) (citing Grivas v. Parmelee Transp. Co., 207 F.2d 334, 338 (7th
Cir.1953), cert. denied, 347 U.S. 913 (1954) (“Dismissal and the subsequent litigation in the state court
will of necessity preclude the defendant from a trial here, but without a showing that it has acquired
some right or that it seeks or has become entitled to affirmative relief, the denial of which would work
actual prejudice to it, no valid objection will lie.”)).
Here, the Court finds that BofA has not shown that it would suffer legal prejudice if this case
were to be dismissed without prejudice. While BofA may face an ongoing state court lawsuit that
could be slightly altered by the addition of new claims, such a prospect is even less prejudicial than the
“second lawsuit” contemplated by Hamilton and determined to be insufficient to establish legal
prejudice. See Hamilton, 679 F.2d at 143; see also Westlands, 100 F.3d at 96 (finding “the threat of
future litigation which causes uncertainty” similarly insufficient to establish plain legal prejudice);
Grivas v. Parmelee Transp. Co., 207 F.2d at 338, cert. denied, 347 U.S. 913 (1954) (finding that
“without a showing that it has acquired some right or that it seeks or has become entitled to affirmative
relief, the denial of which would work actual prejudice to it, no valid objection will lie” regarding
subsequent litigation in state court). BofA has not acquired any right or become entitled to any
affirmative relief in this case; indeed, it has not even brought any motions for substantive relief before
this Court.
The two cases that BofA cites in support of its argument are inapposite. In Central Montana
Rail v. BNSF Railway Company, a district court’s denial of a motion for voluntary dismissal was
upheld when “[t]he district court noted that, if it had dismissed the action without prejudice, BNSF
could face litigation in state court of a claim that had reached the summary judgment stage in federal
court, after almost four years of litigation.” 422 Fed.Appx. 636, 638 (9th Cir. 2011). This case is in a
completely different procedural posture, with no substantive motions brought or decided and a parallel
state case already ongoing that preceded the one before this Court.
In Kern Oil & Refining Company v. Tenneco Oil Company, BofA’s other citation, the Ninth
Circuit affirmed a district court’s denial of a motion for voluntary dismissal based, in part, on
“impermissible forum shopping.” 792 F.2d 1380, 1389 (9th Cir. 1986). However, in that case, the
court suggested that one permissible motivation for seeking a voluntary dismissal would be to
consolidate related cases before a single court, while the impermissible aspect of the plaintiff’s “forum
shopping” involved attempting to bar the litigation of issues raised by a counterclaim. Id. (“Tennoco
asserts that its sole motivation in seeking a voluntary dismissal was to consolidate all of the ‘supply’
cases. The flaw in Tenneco's argument is that Count IV was a compulsory counterclaim in the ‘price’
case before Judges Marshall and Real. . . . If Judge Marshall had dismissed Count IV without
prejudice, the final judgment entered by Judge Real would have barred the litigation of the issues raised
in Count IV.”). Here, to the extent that Plaintiffs are involved in any forum shopping, they truly are
attempting to consolidate all claims before a single judge. Moreover, considering the relative resources
available to Plaintiffs as compared to Defendant Bank of America, it is not unreasonable to conclude
that a single action would be in the interests of justice.

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IV. Disposition
For the foregoing reasons, the Court hereby GRANTS IN PART Plaintiffs’ motion and
DISMISSES the entire matter without prejudice.
The Clerk shall serve a copy of this Minute Order on all parties.

.

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