RJC Funding, LLC v. Macaluso et al

Filing 39

ORDER denying defendants' 33 Motion to Dismiss, and ORDER to Show Cause.The Court orders RJC Funding to file a memorandum on or before April 14, 2017, explaining why the Court shouldn't dismiss the remaining claims for failure to comply with Court's order. Signed by Judge Larry Alan Burns on 4/5/17. (All non-registered users served via U.S. Mail Service)(kas)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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RJC FUNDING LLC, a Nevada limited
liability company,

CASE NO. 15cv2659-LAB (BLM)

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ORDER DENYING MOTION TO
DISMISS AND ORDER TO SHOW
CAUSE

Plaintiff,
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vs.
TODD MACALUSO, etc., et al.,

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Defendants.

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Former attorney Todd Macaluso pled guilty to wire fraud over a year ago. Macaluso

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defrauded lenders, including RJC Funding, by forging client signatures in return for advances

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on litigation loans. Judge Benitez sentenced Macaluso to five months in prison, three years

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of supervised release, and ordered him to pay fines and restitution totaling $250,000.1

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Around the same time, RJC Funding filed a civil suit against Macaluso. Last April, the

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Court granted partial judgment against Macaluso and his business entities for about $2.4

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million.2 RJC Funding also named Macaluso’s wife, Tonya Macaluso, and his sister, Stacey

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Macaluso, as defendants who conspired with him to defraud clients and hide assets. Tonya

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and Stacey moved to dismiss the claims against them. RJC Funding opposed.

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The motion to dismiss is only five pages, but it’s difficult to understand, doesn’t cite

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a single case, and appears to have missed that the Court’s already granted partial judgment.

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See USA v. Macaluso, 15-cr-948-BEN.

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Dkt. 26.
-1-

15cv2659

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First, venue is proper since a substantial part of the events giving rise to the claim

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occurred in this district, and, both Stacey and Tonya are domiciled in San Diego County. 28

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U.S.C. § 1391. The defendants don’t dispute those facts. Instead, they argue that a

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settlement agreement RJC Funding entered with Macaluso three years ago contains a

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mandatory arbitration clause that requires resolution in New York. The Court disagrees. RJC

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Funding and Macaluso waived any arbitration provision by litigating in this court for the past

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two years. And the defendants haven’t explained why they have a right to enforce this

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agreement when they also claim they weren't parties to it. Even if the defendants could

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enforce the arbitration clause, the agreement provides that RJC Funding "may, at its option,

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demand arbitration, as stated above, or may institute any legal or equitable action to collect

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the amount due." Venue is proper.

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Second, Tonya and Stacey essentially say they didn’t do anything wrong. But at the

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motion to dismiss stage, the Court must “accept as true all facts pleaded in [the] complaint.”

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Fry v. Napoleon Cmty. Sch., 137 S. Ct. 743, 751 (2017). RJC Funding has sufficiently pled

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causes of action against both defendants for conspiracy, unjust enrichment, and fraudulent

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conveyances. If the defendants believe there’s no evidence to support those claims, then

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the proper tool is a motion for summary judgment. Defendants’ motion to dismiss is DENIED.

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When the Court granted partial judgment last April, it warned that it would not “leave

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this case perpetually open” and ordered RJC Funding “to submit a status report within six

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months” or face dismissal.3 RJC Funding didn’t file a status report. The Court orders RJC

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Funding to file a memorandum on or before April 14, 2017, explaining why the Court

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shouldn’t dismiss the remaining claims for failure to comply with Court’s order.

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IT IS SO ORDERED.
DATED: April 5, 2017

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HONORABLE LARRY ALAN BURNS
United States District Judge

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Dkt. 26.
-2-

15cv2659