Bertrand v. Giarla

Filing 10

SCREENING ORDER. Signed by Magistrate Judge Jacqueline Scott Corley on 1/11/2018. (ahm, COURT STAFF) (Filed on 1/11/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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PATRICK BERTRAND,
Plaintiff,

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United States District Court
Northern District of California

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Case No.17-cv-06820-JSC
SCREENING ORDER

v.
JUSTIN GIARLA,
Defendant.

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Plaintiff Patrick Bertrand brings this action against Defendant Justin Giarla alleging

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violations of state law arising out of the sale of a piece of artwork Plaintiff had given to Defendant

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on consignment. (Dkt. No. 1.) The Court previously granted Plaintiff’s application to proceed in

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forma pauperis and reserved to a later time evaluation of the Complaint under 28 U.S.C. § 1915.

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(Dkt. No. 9.) Having reviewed the Complaint, the Court orders Plaintiff to show cause as to this

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Court’s subject matter jurisdiction over this action.

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BACKGROUND

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Plaintiff is a resident of California who purchased a painting from Defendant, now a

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resident of Oregon, for $18,000 on March 15, 2011. (Complaint ¶¶ 11, 15.) Two years later,

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Defendant contacted Plaintiff indicating that he knew of a collector interested in acquiring the

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painting. (Id. ¶ 16.) Defendant indicated that he would sell the painting to this interested buyer

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for $30,000. (Id.) A few weeks later, Plaintiff agreed to place the painting on consignment with

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Defendant. (Id. ¶ 17.) A year later, Defendant sold the painting to a third-party without Plaintiff’s

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knowledge. (Id. ¶ 18.) Plaintiff did not learn about the sale until August 2016—two years later.

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(Id. ¶ 19.) Plaintiff then attempted to contact Defendant but he did not return Plaintiff’s calls or

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emails and Plaintiff also discovered that Defendant’s three art galleries in San Francisco had

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closed. (Id. ¶ 20.) Plaintiff then learned that several other individuals were owed consignment

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funds from Defendant who has apparently relocated to Portland, Oregon. (Id. ¶ 21.)
A little over a year later, Plaintiff filed the underlying action against Defendant alleging 11

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claims for relief under California law including: (1) breach of contract; (2) violation of fiduciary

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duty; (3) failure to use reasonable care; (4) violation of the duty of loyalty; (5) common counts; (6)

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trespass to chattels; (7) conversion; (8) intentional misrepresentation; (9) negligence; (10)

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negligent misrepresentation; and (11) unfair commercial practices.1 (Dkt. No. 1.)
LEGAL STANDARD

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Under 28 U.S.C. § 1915, the Court has a continuing duty to dismiss any case in which a

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party is proceeding in forma pauperis if the Court determines that the action is (1) frivolous or

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United States District Court
Northern District of California

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malicious; (2) fails to state a claim on which relief may be granted; or (3) seeks monetary relief

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against a defendant who is immune from such relief. A complaint is frivolous for Section 1915

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purposes where there is no subject matter jurisdiction. See Castillo v. Marshall, 207 F.3d 15, 15

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(9th Cir. 1997) (citation omitted); see also Pratt v. Sumner, 807 F.2d 817, 819 (9th Cir. 1987)

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(recognizing the general proposition that a complaint should be dismissed as frivolous on Section

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1915 review where subject matter jurisdiction is lacking). Upon dismissal, pro se plaintiffs

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proceeding in forma pauperis must be given leave to “amend their complaint unless it is absolutely

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clear that the deficiencies of the complaint could not be cured by amendment.” Franklin v.

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Murphy, 745 F.2d 1221, 1235 n.9 (9th Cir. 1984) (internal citations and quotation marks omitted);

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Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000).
DISCUSSION

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“Federal courts are courts of limited jurisdiction. They possess only that power authorized

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by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377

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(1994). Further, as courts of limited jurisdiction, “federal courts have an independent obligation to

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ensure that they do not exceed the scope of their jurisdiction.” Henderson ex rel. Henderson v.

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Shinseki, 562 U.S. 428, 434 (2011).

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The Complaint pleads these claims against “all defendants,” but there only appears to be one
Defendant—Justin Giarla.
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In most cases, original federal subject matter jurisdiction may be premised on two grounds:

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(1) diversity jurisdiction, or (2) federal question jurisdiction. Here, Plaintiff pleads diversity

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jurisdiction. (Complaint ¶ 3.) To properly allege diversity jurisdiction, a plaintiff must claim

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damages in excess of $75,000. 28 U.S.C. § 1332(a). In addition, “diversity jurisdiction requires

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complete diversity between the parties—each defendant must be a citizen of a different state from

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each plaintiff.” Diaz v. Davis (In re Digimarc Corp. Derivative Litig.), 549 F.3d 1223, 1234 (9th

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Cir. 2008); 28 U.S.C. § 1331. Although Plaintiff has alleged diversity between the parties—he

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being a resident of California and Defendant a resident of Oregon—Plaintiff has not adequately

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alleged that the claims here satisfy the amount in controversy requirement.
“Generally, the amount in controversy is determined from the face of the pleadings.” See

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United States District Court
Northern District of California

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Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000). Here, Plaintiff alleges that

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“the amount in controversy, exclusive of interest and costs, exceeds the jurisdictional minimum.”

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(Complaint ¶ 4.) It is unclear, however, how this is the case. Plaintiff purchased the at-issue

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painting from Defendant for $18,000. (Id. at ¶ 15.) Defendant later agreed that he would sell the

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painting on Plaintiff’s behalf for $30,000. (Id. at ¶ 16.) Sometime thereafter Defendant in fact

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sold the painting for an unspecified sum, but which is not alleged to exceed $30,000. Plaintiff

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seeks to recover his loss of the painting plus interest and his costs in pursuing relief, but he does

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not assign a dollar value to these damages. (Id. at ¶ 25.) While Plaintiff also seeks punitive

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damages under Business and Professions Code section 17200, courts “scrutinize [a] claim closely”

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where “a claim for punitive damages makes up the bulk of the amount in controversy” as it may

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here. Cason v. Cal. Check Cashin Stores, No. No. 13-cv-03388-JCS, 2013 WL 5609329, at *3

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(N.D. Cal. Oct. 11, 2013) (citations omitted). Because Plaintiff’s complaint does not allege an

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amount in controversy, it is not apparent that the matter in controversy exceeds the sum or value of

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$75,000, exclusive of interest or costs. The complaint therefore fails to allege diversity

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jurisdiction. See, e.g., White v. Lemendola, No. CIV S-10-3303, 2011 WL 2414420, at *2 (E.D.

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Cal. June 8, 2011).

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CONCLUSION
Accordingly, Plaintiff is ORDERED TO SHOW CAUSE as to how the Court has subject
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matter jurisdiction over this action. Plaintiff shall show cause in writing on or before February

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1, 2018. To the extent that Plaintiff alleges diversity jurisdiction, his response to the Order to

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Show Cause must provide specific factual allegations as to the amount in controversy.

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IT IS SO ORDERED.
Dated: January 11, 2018

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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United States District Court
Northern District of California

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