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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PATRICK BERTRAND, Plaintiff, 8 9 10 United States District Court Northern District of California 11 Case No.17-cv-06820-JSC SCREENING ORDER v. JUSTIN GIARLA, Defendant. 12 13 Plaintiff Patrick Bertrand brings this action against Defendant Justin Giarla alleging 14 violations of state law arising out of the sale of a piece of artwork Plaintiff had given to Defendant 15 on consignment. (Dkt. No. 1.) The Court previously granted Plaintiff’s application to proceed in 16 forma pauperis and reserved to a later time evaluation of the Complaint under 28 U.S.C. § 1915. 17 (Dkt. No. 9.) Having reviewed the Complaint, the Court orders Plaintiff to show cause as to this 18 Court’s subject matter jurisdiction over this action. 19 BACKGROUND 20 Plaintiff is a resident of California who purchased a painting from Defendant, now a 21 resident of Oregon, for $18,000 on March 15, 2011. (Complaint ¶¶ 11, 15.) Two years later, 22 Defendant contacted Plaintiff indicating that he knew of a collector interested in acquiring the 23 painting. (Id. ¶ 16.) Defendant indicated that he would sell the painting to this interested buyer 24 for $30,000. (Id.) A few weeks later, Plaintiff agreed to place the painting on consignment with 25 Defendant. (Id. ¶ 17.) A year later, Defendant sold the painting to a third-party without Plaintiff’s 26 knowledge. (Id. ¶ 18.) Plaintiff did not learn about the sale until August 2016—two years later. 27 (Id. ¶ 19.) Plaintiff then attempted to contact Defendant but he did not return Plaintiff’s calls or 28 emails and Plaintiff also discovered that Defendant’s three art galleries in San Francisco had 1 closed. (Id. ¶ 20.) Plaintiff then learned that several other individuals were owed consignment 2 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 3 4 claims for relief under California law including: (1) breach of contract; (2) violation of fiduciary 5 duty; (3) failure to use reasonable care; (4) violation of the duty of loyalty; (5) common counts; (6) 6 trespass to chattels; (7) conversion; (8) intentional misrepresentation; (9) negligence; (10) 7 negligent misrepresentation; and (11) unfair commercial practices.1 (Dkt. No. 1.) LEGAL STANDARD 8 Under 28 U.S.C. § 1915, the Court has a continuing duty to dismiss any case in which a 9 party is proceeding in forma pauperis if the Court determines that the action is (1) frivolous or 11 United States District Court Northern District of California 10 malicious; (2) fails to state a claim on which relief may be granted; or (3) seeks monetary relief 12 against a defendant who is immune from such relief. A complaint is frivolous for Section 1915 13 purposes where there is no subject matter jurisdiction. See Castillo v. Marshall, 207 F.3d 15, 15 14 (9th Cir. 1997) (citation omitted); see also Pratt v. Sumner, 807 F.2d 817, 819 (9th Cir. 1987) 15 (recognizing the general proposition that a complaint should be dismissed as frivolous on Section 16 1915 review where subject matter jurisdiction is lacking). Upon dismissal, pro se plaintiffs 17 proceeding in forma pauperis must be given leave to “amend their complaint unless it is absolutely 18 clear that the deficiencies of the complaint could not be cured by amendment.” Franklin v. 19 Murphy, 745 F.2d 1221, 1235 n.9 (9th Cir. 1984) (internal citations and quotation marks omitted); 20 Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000). DISCUSSION 21 “Federal courts are courts of limited jurisdiction. They possess only that power authorized 22 23 by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 24 (1994). Further, as courts of limited jurisdiction, “federal courts have an independent obligation to 25 ensure that they do not exceed the scope of their jurisdiction.” Henderson ex rel. Henderson v. 26 Shinseki, 562 U.S. 428, 434 (2011). 27 1 28 The Complaint pleads these claims against “all defendants,” but there only appears to be one Defendant—Justin Giarla. 2 1 In most cases, original federal subject matter jurisdiction may be premised on two grounds: 2 (1) diversity jurisdiction, or (2) federal question jurisdiction. Here, Plaintiff pleads diversity 3 jurisdiction. (Complaint ¶ 3.) To properly allege diversity jurisdiction, a plaintiff must claim 4 damages in excess of $75,000. 28 U.S.C. § 1332(a). In addition, “diversity jurisdiction requires 5 complete diversity between the parties—each defendant must be a citizen of a different state from 6 each plaintiff.” Diaz v. Davis (In re Digimarc Corp. Derivative Litig.), 549 F.3d 1223, 1234 (9th 7 Cir. 2008); 28 U.S.C. § 1331. Although Plaintiff has alleged diversity between the parties—he 8 being a resident of California and Defendant a resident of Oregon—Plaintiff has not adequately 9 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 11 United States District Court Northern District of California 10 Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000). Here, Plaintiff alleges that 12 “the amount in controversy, exclusive of interest and costs, exceeds the jurisdictional minimum.” 13 (Complaint ¶ 4.) It is unclear, however, how this is the case. Plaintiff purchased the at-issue 14 painting from Defendant for $18,000. (Id. at ¶ 15.) Defendant later agreed that he would sell the 15 painting on Plaintiff’s behalf for $30,000. (Id. at ¶ 16.) Sometime thereafter Defendant in fact 16 sold the painting for an unspecified sum, but which is not alleged to exceed $30,000. Plaintiff 17 seeks to recover his loss of the painting plus interest and his costs in pursuing relief, but he does 18 not assign a dollar value to these damages. (Id. at ¶ 25.) While Plaintiff also seeks punitive 19 damages under Business and Professions Code section 17200, courts “scrutinize [a] claim closely” 20 where “a claim for punitive damages makes up the bulk of the amount in controversy” as it may 21 here. Cason v. Cal. Check Cashin Stores, No. No. 13-cv-03388-JCS, 2013 WL 5609329, at *3 22 (N.D. Cal. Oct. 11, 2013) (citations omitted). Because Plaintiff’s complaint does not allege an 23 amount in controversy, it is not apparent that the matter in controversy exceeds the sum or value of 24 $75,000, exclusive of interest or costs. The complaint therefore fails to allege diversity 25 jurisdiction. See, e.g., White v. Lemendola, No. CIV S-10-3303, 2011 WL 2414420, at *2 (E.D. 26 Cal. June 8, 2011). 27 28 CONCLUSION Accordingly, Plaintiff is ORDERED TO SHOW CAUSE as to how the Court has subject 3 1 matter jurisdiction over this action. Plaintiff shall show cause in writing on or before February 2 1, 2018. To the extent that Plaintiff alleges diversity jurisdiction, his response to the Order to 3 Show Cause must provide specific factual allegations as to the amount in controversy. 4 5 IT IS SO ORDERED. Dated: January 11, 2018 6 7 JACQUELINE SCOTT CORLEY United States Magistrate Judge 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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