Singh v. Pooni et al

Filing 42

ORDER signed by Judge John A. Mendez on 7/27/15 ORDERING the Court DENIES Defendants' motion to dismiss. Defendants shall file their Answer to the FAC within twenty days of this Order. (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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BUTA SINGH,

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2:14-cv-02146 JAM DAD

Plaintiff,

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No.

v.

ORDER DENYING DEFENDANTS’ MOTION
TO DISMISS

HARMINDER S. POONI, RAVINDER
KAUR, and PAN-AM TRANSPORT,
INC., a Kansas corporation,

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Defendants.

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This matter is before the Court on Defendants Harminder

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Pooni, Ravinder Kaur, and Pan-Am Transport, Inc.’s

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(“Defendants”) motion to dismiss (Doc. #30) Plaintiff Buta

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Singh’s (“Plaintiff”) first amended complaint (“FAC”) (Doc.

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#29).

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Defendants filed a reply (Doc. #32).

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Defendants’ motion is denied. 1

Plaintiff opposes Defendants’ motion (Doc. #31) and
For the following reasons,

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for June 17, 2015.
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I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

In 2012, Plaintiff purchased a 2005 Hummer H2.

FAC ¶ 4.

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Over the next two years, he made a number of modifications to the

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vehicle, including the installation of a $10,000 sound system and

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a conversion to right-hand drive.

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that “the purpose of these upgrades was to increase its market

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value in the European and Indian markets.”

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FAC ¶ 4.

Plaintiff alleges

FAC ¶ 4.

In June 2014, Plaintiff and Defendant Pooni “agreed that
Pooni would broker the sale of the vehicle on behalf of

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[Plaintiff.]”

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Pooni “represented himself as an authorized agent of the

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corporation [Pan-Am Transport, Inc.] with authority to act on its

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behalf and bind the corporation to contracts, including shipping

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and transport agreements with respect to the purchase and sale of

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vehicles.”

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Plaintiff would pay Defendant Pooni a commission of approximately

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$35,000 for a successful sale.

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“Pooni would cause the transport of the vehicle to its new owner

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to occur through Pan-Am Transport, Inc., and that the transport

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of the vehicle by the corporate entity would be part of the

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commission paid to Pooni.”

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Defendant Pooni possession of the vehicle and partially complete

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the bill of sale, to facilitate the eventual sale of the Hummer.

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FAC ¶ 5.

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repeated false representations that he was actively engaged in

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attempting to locate a buyer for the vehicle.”

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FAC ¶ 5.

FAC ¶ 5.

In speaking with Plaintiff, Defendant

Plaintiff and Defendant Pooni agreed that

FAC ¶ 5.

FAC ¶ 5.

They also agreed that

Plaintiff agreed to give

Over the next few months, Defendant Pooni “made

FAC ¶ 6.

Plaintiff alleges that Defendant Pooni and his daughter,
Defendant Kaur, “illicitly transferred title into their own name
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in the State of Kansas.”

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Defendant Pooni and Defendant Kaur “fraudulently and illicitly

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completed the bill of sale document . . . to indicate they

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themselves were the buyers, and that the purchase price was

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seventeen thousand dollars in cash,” despite the fact that “no

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cash ever changed hands.”

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“told Kansas vehicle registration authorities that she had

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purchased the vehicle, that she had paid cash, and that she was

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the rightful and lawful titled owner of the vehicle.”

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FAC ¶ 6.

FAC ¶ 7.

He further alleges that

For her part, Defendant Kaur

FAC ¶ 7.

On September 15, 2014, Plaintiff filed the complaint in this

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Court.

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application for a writ of possession of the Hummer, which was

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granted by the Court.

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part, Defendants’ motion to dismiss Plaintiff’s original

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complaint, but allowed Plaintiff leave to amend the complaint.

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On March 26, 2015, Plaintiff filed the FAC, which includes the

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following causes of action: (1) unlawful conversion; (2) theft by

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false pretenses; (3) breach of contract; (4) unfair business

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practices in violation of the California Unfair Competition Law

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(“UCL”); and (5) claim and delivery.

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ordered Plaintiff to show cause (Doc. #34) as to why the matter

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should not be dismissed for lack of subject matter jurisdiction,

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as the FAC did not specifically allege the state of incorporation

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and principal place of business of Defendant Pan-Am.

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2015, Plaintiff responded to this order (Doc. ##39, 40), and the

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issue of subject matter jurisdiction is discussed below.

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///

The following day, Plaintiff filed an ex parte

On March 6, 2015, the Court granted, in

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On July 6, 2015, the Court

On July 13,

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II.

OPINION

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A.

Judicial Notice

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Defendants request that the Court take judicial notice (Doc.

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#30-2) of a document that is already part of the record in this

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case: namely, the Declaration of Ravinder Kalirai (identified in

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the FAC as Ravinder Kaur), submitted in support of Defendants’

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previous motion to dismiss.

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take judicial notice of the existence of this document, not the

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facts contained therein.

The Court notes that it can only

Regardless, this document is already on

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the docket in this case, and Defendants’ request is DENIED as

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unnecessary.

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Plaintiff also requests that the Court take judicial notice

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of three documents (Doc. #39), which he submitted in support of

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his response to the Court’s order to show cause with regard to

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subject matter jurisdiction.

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that the Court take judicial notice of the following three

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documents: (1) a “Business Entity Search” from the Kansas

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Secretary of State website; (2) the “2013 For-Profit Corporation

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Annual Report” for Pan-Am Transport, Inc.; and (3) the “For-

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Profit Articles of Incorporation” for Pan-Am Transport, Inc.

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a general rule, the Court “may not consider any material beyond

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the pleadings in ruling on a Rule 12(b)(6) motion.”

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of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

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Court may take judicial notice of “matters of public record,”

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provided that they are not subject to reasonable dispute.

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689.

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available on the Kansas Secretary of State’s website, Plaintiff’s

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request for judicial notice is GRANTED.

Specifically, Plaintiff requests

As

Lee v. City
However, the

Id. at

As the documents submitted by Plaintiff are publicly

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B.

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Discussion
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Personal Jurisdiction

Defendants argue that the Court does not have personal

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jurisdiction over Defendant Kaur or Defendant Pan-Am.

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Specifically, Defendants argue that neither Kaur nor Pan-Am

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purposely availed themselves of the benefits of the laws of

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California, such that personal jurisdiction over them does not

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exist.

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argues that the Court has already rejected Defendants’ argument

Mot. at 6-7.

Mot. at 3.

With regard to Defendant Kaur, Plaintiff

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as to the lack of personal jurisdiction in its March 6, 2015

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Order.

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argues that his amended complaint establishes that Pan-Am,

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through its authorized agent (Pooni), availed itself of the forum

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of California.

Opp. at 5.

With regard to Defendant Pan-Am, Plaintiff

Opp. at 6.

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A federal district court has personal jurisdiction over a

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nonresident defendant in a diversity of citizenship case where

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(1) a state statute of the forum confers personal jurisdiction

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over the nonresident defendant and (2) the exercise of

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jurisdiction accords with federal constitutional principles of

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due process.

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(9th Cir. 1984).

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410.10 of the California Code of Civil Procedure permits the

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exercise of jurisdiction to the extent authorized by the

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Constitution of the United States.

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the second, constitutional requirement, the “basic federal rule

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is that the defendant must have certain minimum contacts with the

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forum such that the maintenance of the suit does not offend

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traditional notions of fair play and substantial justice.”

Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1392
With regard to the first requirement, section

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Id. at 1392.

With regard to

Id.

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at 1392.

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determining whether specific personal jurisdiction exists over a

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defendant:

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The Ninth Circuit has adopted the following approach in

(1) The nonresident defendant must do some act or
consummate some transaction with the forum or perform
some act by which he purposefully avails himself of the
privilege of conducting activities in the forum,
thereby invoking the benefits and protections of its
laws. (2) The claim must be one which arises out of or
results from the defendant's forum-related activities.
(3) Exercise of jurisdiction must be reasonable.

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Id. at 1393.
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Accordingly, Plaintiff must demonstrate that both Defendant Kaur

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and Defendant Pan-Am purposely availed themselves of the

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privilege of conducting activities in California, and that this

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matter arises out of that California-related activity.

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Plaintiff, as the party seeking to invoke federal jurisdiction,

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has the burden of establishing that personal jurisdiction over

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Defendants exists.

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only a prima facie showing of jurisdictional facts through the

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submitted materials in order to avoid a defendant's motion to

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dismiss.”

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F.2d 1280, 1285 (9th Cir. 1977).

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Id at 1392.

However, Plaintiff “must make

Data Disc, Inc. v. Sys. Tech. Associates, Inc., 557

As for Defendants’ argument that the Court lacks personal

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jurisdiction over Defendant Kaur, the Court resolved this issue

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in its March 6, 2015 Order.

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follows: “Despite the fact that Defendant Kaur did not speak with

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Plaintiff and did not travel to California, her status as a joint

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buyer of a California vehicle from a California seller – in a

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transfer that was initiated in California – constitutes a

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purposeful availment of the forum of California.”

In that Order, the Court found as

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Order at 6.

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The allegations relied upon by the Court in its prior ruling

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remain unchanged in the FAC, and the Court has no reason to

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reconsider its ruling.

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Accordingly, Defendants’ motion to dismiss Plaintiff’s claims

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against Defendant Kaur for lack of personal jurisdiction is

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DENIED.

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See Order at 5; FAC ¶¶ 6, 7.

With regard to Defendant Pan-Am, the Court previously

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granted Defendants’ motion to dismiss, noting that “Plaintiff

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fail[ed] to allege that Defendant Pan-Am, through an authorized

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agent, played any role in the transfer of the vehicle.”

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communicating with Singh, “represented himself as an authorized

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agent of the corporation [Defendant Pan-Am] with authority to act

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on its behalf and bind the corporation to contracts, including

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shipping and transport agreements with respect to the purchase

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and sale of vehicles.”

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Singh and Pooni agreed that “Pooni would cause the transport of

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the vehicle to its new owner to occur through Pan-Am[.]”

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¶ 5.

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Court (discussed below), Plaintiff has adequately alleged that

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Pan-Am – through its authorized agent, Pooni – purposely availed

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itself of the benefits of doing business in California.

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Order at

In the FAC, Plaintiff now alleges that Pooni, in

FAC ¶ 5.

Plaintiff further alleges that

FAC

Provided that these allegations are properly before the

Defendants argue that the Court must disregard these new

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allegations, as they are “critical contradictions, not additions

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of new facts, which go to the heart of the Court’s ruling on the

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prior motion to dismiss.”

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undermined by the Ninth Circuit’s ruling in PAE Government

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Services, Inc. v. MPRI, Inc., 514 F.3d 856 (9th Cir. 2007).

Mot. at 5.

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Defendants’ argument is

(To

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their credit, Defendants do bring this case to the Court’s

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attention.

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Circuit held that the district court had erred by striking “sham”

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allegations in an amended complaint, when the new allegations

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“contradicted . . . earlier allegations [the plaintiff] made in

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its original complaint.”

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The Ninth Circuit noted that, at the time a complaint is filed,

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“parties are often uncertain about the facts and the law; and

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yet, prompt filing is encouraged and often required[.]”

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858.

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Mot. at 4.)

In PAE Government Services, the Ninth

PAE Gov’t Services, 514 F.3d at 858.

Id. at

Ultimately, the Ninth Circuit concluded as follows:

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The short of it is that there is nothing in the Federal
Rules of Civil Procedure to prevent a party from filing
successive pleadings that make inconsistent or even
contradictory allegations. Unless there is a showing
that the party acted in bad faith—a showing that can
only be made after the party is given an opportunity to
respond under the procedures of Rule 11—inconsistent
allegations are simply not a basis for striking the
pleading.

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Id. at 860.

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Accordingly, the Court need not determine whether the allegations

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in the FAC contradict those in the original complaint.

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motion brought under Rule 11, the Court cannot strike Plaintiff’s

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allegedly inconsistent allegations.

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authority which predates 2007 is unavailing in light of the Ninth

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Circuit’s clear guidance in PAE Government Services.

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4.

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as true, and these allegations cure the defect as to the Court’s

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personal jurisdiction over Defendant Pan-Am.

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Absent a

Defendants’ reliance on

See Mot. at

The Court can – and must – take Plaintiff’s new allegations

Briefly, the Court notes that Defendants’ argument with

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regard to the alter ego doctrine is misplaced.

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maintain that “no facts exist to support a finding that . . . the
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Defendants

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corporate form should be disregarded.”

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entirely clear, Defendants’ argument appears to be as follows:

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Plaintiff failed to allege that Pooni “disregarded the corporate

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form” by undercapitalizing Pan-Am or mixing personal and

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corporate funds, and, therefore, Plaintiff cannot rely on the

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“alter ego doctrine” to establish jurisdiction over Defendant

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Pan-Am.

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doctrine.

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to hold an individual shareholder personally liable on behalf of

Mot. at 8.

Mot. at 7.

Although not

This argument misunderstands the alter ego

Generally speaking, the alter ego doctrine is invoked

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a corporation.

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Circuit has held that, where the alter ego doctrine applies,

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personal jurisdiction over a corporation may also confer personal

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jurisdiction over an individual shareholder of that corporation.

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See Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1393 (9th Cir.

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1984) (noting that “where a corporation is the alter ego of the

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stockholders so as to justify disregard of the corporate entity,

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jurisdiction over the corporation will support jurisdiction over

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the stockholders”).

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not arguing that jurisdiction over the corporation (Pan-Am)

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confers jurisdiction over the individual shareholder (Pooni),

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which would not otherwise exist.

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jurisdiction over Defendant Pooni is not in dispute (following

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the Court’s previous Order), and Defendants challenge the Court’s

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personal jurisdiction over Pan-Am, the corporate defendant.

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other words, Defendants have it backwards.

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foregoing analysis, and the fact that Plaintiff has plainly

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alleged Defendant Pan-Am’s direct involvement in the fraudulent

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sale of the Hummer, the alter ego doctrine is not relevant to the

However, in the jurisdictional context, the Ninth

Of course, in the present case, Plaintiff is

Rather, the Court’s personal

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In

In light of the

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Court’s personal jurisdiction inquiry.

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For all of the above reasons, Defendants’ motion to dismiss

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Plaintiff’s claims against Defendant Pan-Am, for lack of personal

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jurisdiction, is DENIED.

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2.

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Subject Matter Jurisdiction

Defendants next argue that the Court lacks subject matter

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jurisdiction over this action because Plaintiff failed to

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specifically allege the state of incorporation and principal

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place of business of Defendant Pan-Am. 2

As noted, in the Court’s

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July 6, 2015 minute order, the Ninth Circuit has held that “a

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complaint must include allegations of both the state of

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incorporation and the principal place of business of corporate

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parties.”

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(9th Cir. 2012)).

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Doc. #34 (citing Harris v. Rand, 682 F.3d 846, 850

In response to the Court’s order to show cause, Plaintiff

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submitted three documents, purporting to show that Defendant Pan-

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Am’s state of incorporation and principal place of business is

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Kansas.

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(1) a “Business Entity Search” from the Kansas Secretary of State

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website, noting that Pan-Am Transport, Inc. was incorporated in

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Kansas and listing a Kansas mailing address; (2) the “2013 For-

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Profit Corporation Annual Report” for Pan-Am Transport, Inc.,

The documents submitted by Plaintiff are as follows:

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In the introduction of their brief in support of the motion to
dismiss, Defendants also indicate that they will argue that
“[d]ismissal is appropriate because the Court lacks jurisdiction
over the subject matter of the dispute, a vehicle whose fair
market value is far less than $75,000[.]” Mot. at 2. However,
Defendants do not further argue this point in their opening or
reply brief. Regardless, the Court previously rejected this
argument in its March 6, 2015 Order. Order at 7-9.
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listing a Kansas address for the “principal office address;” and

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(3) the “For-Profit Articles of Incorporation” for Pan-Am

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Transport, Inc., listing a Kansas address for the “registered

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office.”

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allegations in the FAC that Pan-Am is “a Kansas corporation” with

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“Shawnee headquarters” - the Court finds that Plaintiff has

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satisfied his burden of showing, by a preponderance of the

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evidence, that Kansas is both the state of incorporation and home

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of the principal place of business of Defendant Pan-Am.

Doc. #40.

Based on these documents – as well as

FAC

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¶¶ 1, 8; Bashir v. Boeing Co., 245 F. App'x 574, 575 (9th Cir.

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2007).

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remaining individual Defendants are citizens of Kansas, complete

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diversity among the parties exists and the Court has jurisdiction

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under 28 U.S.C. §1332(a).

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Plaintiff’s claims for lack of subject matter jurisdiction is

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DENIED.

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As Plaintiff is a citizen of California, and the

3.

Defendant’s motion to dismiss

Failure to State a Claim

Defendants argue that Plaintiff’s fourth cause of action for

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violation of the UCL must be dismissed for failure to state a

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claim.

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the UCL claim is based in fraud, it must meet the heightened

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pleading standard of Rule 9(b).

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that Plaintiff’s FAC does not meet this heightened pleading

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standard with regard to both Defendant Pooni and Defendant Kaur.

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Plaintiff responds that the Court has already rejected this

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argument with regard to Defendant Pooni, and argues that its

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amended pleading alleges the particulars of Defendant Kaur’s role

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in the fraud.

Mot. at 9.

Specifically, Defendants argue that, because

Mot. at 10.

Opp. at 8.
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Defendants contend

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Rule 9(b) of the Federal Rules of Civil Procedure requires

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that allegations of fraud set forth the “who, what, when, where,

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and how” of the alleged misconduct.

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USA, 317 F.3d 1097, 1106 (9th Cir. 2003).

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pleading standard does not only apply to claims for which fraud

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is an essential element.

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“allege[s] a unified course of fraudulent conduct,” that claim

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“is said to be grounded in fraud or to sound in fraud, and the

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pleading of that claim as a whole must satisfy the particularity

Vess v. Ciba-Geigy Corp.

Id. at 1103.

This heightened

Rather, when a plaintiff

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requirement of Rule 9(b).”

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complaint that attributes misrepresentations to all defendants,

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lumped together for pleading purposes . . . is insufficient.”

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Sears v. Likens, 912 F.2d 889, 893 (7th Cir. 1990).

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Id. at 1103-04.

Generally, “a

As the Court concluded in its March 6, 2015 Order,

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Plaintiff’s fourth cause of action “sounds in fraud.”

Vess, 317

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F.3d at 1106.

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in the FAC, is that “Defendants, and each of them, engaged in the

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unfair and deceptive business practice of holding themselves out

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as brokers of luxury and exotic vehicles, when in reality their

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intention was to co[n]vert the vehicles to their own uses.

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actions are at the same time unlawful, unfair, and deceptive.”

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FAC ¶ 22.

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fraudulent conduct,” the heightened pleading standard of Rule

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9(b) applies and Plaintiff must sufficiently allege the “who,

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what, when, where, and how” for each Defendant.

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at 1106.

The essential allegation, which remains unchanged

These

As Plaintiff has alleged a “unified course of

Vess, 317 F.3d

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In its prior Order, the Court rejected Defendants’ argument

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that Plaintiff had failed to allege Defendant Pooni’s fraudulent
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conduct with adequate specificity.

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allegations of Defendant Pooni’s fraudulent conduct have remained

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substantially the same, the Court has no reason to reconsider its

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previous ruling.

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amended allegations that Defendant Pooni “represented himself as

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an authorized agent” of Defendant Pan-Am, and used “words to the

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effect that he was ‘President of Pan-Am,’” his allegedly

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fraudulent conduct can also be attributed to Defendant Pan-Am.

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FAC ¶¶ 5, 8.

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FAC ¶¶ 5-6.

Order at 10-11.

As the

Moreover, in light of Plaintiff’s

Accordingly, Plaintiff has alleged with sufficient

particularity the fraudulent conduct of Defendant Pan-Am.

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In its prior Order, the Court dismissed Plaintiff’s UCL

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claim against Defendant Kaur, concluding that, “[i]n the absence

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of specific allegations as to the fraudulent statements or

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misrepresentations made by Defendant Kaur, and the circumstances

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surrounding those statements, Plaintiff has failed to adequately

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allege his UCL claim against this defendant.”

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However, the Court granted Plaintiff leave to amend his

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complaint, which he has done.

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alleges with adequate specificity the fraudulent conduct of

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Defendant Kaur.

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vehicle registration authorities that she had purchased the

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vehicle, that she had paid cash, and that she was the rightful

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and lawful titled owner of the vehicle,” despite the fact that

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“no cash ever changed hands.”

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alleges that these misrepresentations were “made on or about the

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days following when Pooni took possession of the vehicle from

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Singh, and made to Kansas vehicle registration authorities in the

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State of Kansas.”

Order at 11-12.

As amended, Plaintiff’s FAC

Plaintiff now alleges that “Kaur told Kansas

FAC ¶ 7.

FAC ¶ 7.

Plaintiff further

These allegations describe the “who”
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(Defendant Kaur), the “what” (that she had lawfully purchased the

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vehicle), the “when” (June 2014, when Defendant Pooni took

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possession of the vehicle), and the “where” (in Kansas).

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For all of these reasons, Defendants’ motion to dismiss

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Plaintiff’s fourth cause of action is DENIED, as Plaintiff has

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alleged with sufficient particularity his UCL claim against each

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defendant.

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III.

ORDER

For the reasons set forth above, the Court DENIES

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Defendants’ motion to dismiss. Defendants shall file their Answer

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to the FAC within twenty days of this Order.

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IT IS SO ORDERED.
Dated: July 27, 2015

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