Albertazzi et al v. Albertazzi et al

Filing 27

ORDER that Plaintiffs/Counter-Defendants' Motion to Dismiss (ECF No. 20 ) is granted; Defendants/Counter-Plaintiffs' counterclaims are dismissed without prejudice. Signed by Judge Miranda M. Du on 8/24/2018. (Copies have been distributed pursuant to the NEF - LH)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ROBERT ALBERTAZZI AND NOELLA
ALBERTAZZI, AS TRUSTEES OF THE
ALBERTAZZI FAMILY TRUST,

Case No. 3:17-cv-00703-MMD-WGC
ORDER

Plaintiffs/Counter-Defendants,

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v.
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TERI A. ALBERTAZZI; JOHN D.
GRIESINGER; and DOES I-X, inclusive,
Defendants/Counter-Plaintiffs.

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I.

SUMMARY

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Before the Court is Plaintiffs/Counter-Defendants Robert and Noella Albertazzi’s

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(collectively, “Plaintiffs”) motion to dismiss counterclaims (“Motion”) (ECF No. 20). The

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Court has reviewed Defendants/Counter-Plaintiffs Teri A. Albertazzi and John D.

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Griesinger’s (collectively, “Defendants”) response (ECF No. 21) and Plaintiffs’ reply (ECF

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No. 23). For the following reasons, the Court will grant Plaintiffs’ Motion.

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II.

RELEVANT BACKGROUND

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The Court incorporates herein the facts as described in the Court’s prior order (ECF

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No. 15 at 1-3). Plaintiffs assert claims for breach of contract, money had and received,

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unjust enrichment, and fraudulent concealment. (ECF No. 1-3 at 3-11.)

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Defendants asserted four counterclaims: (1) petition to assume jurisdiction over

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irrevocable trust; to compel accounting; to compel distributions required by the trust; and

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to remove, surcharge, and replace trustee (“Trust Petition”); (2) abuse of process; (3) libel

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and slander per se; and (4) invasion of privacy. (ECF No. 19 at 20-25.)

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In support of their first counterclaim (the Trust Petition), Defendants allege the

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following facts. Defendant Teri’s1 grandparents established an irrevocable trust (“Teri

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Trust”) naming Defendant Teri as the “primary beneficiary” in December 1996. (Id. at 16.)

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The Teri Trust established a schedule for certain distributions of its assets: Teri was

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supposed to receive the trust’s accumulated income free of trust at age 21; Teri would

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then receive twenty percent of the principal at ages 30, 35, 40, and 45. (Id.) Teri is 45 but

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has never received any of these distributions. (Id. at 17.)

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The initial co-trustees of the Teri Trust were William T. Eckhoff and Thomas H.

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Knopf. (Id. at 16.) However, Plaintiff Noella was appointed as co-trustee of the Teri Trust

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when Mr. Eckhoff resigned in March 2014. (Id. at 17.) Plaintiff Noella became the sole

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trustee when Mr. Knopf resigned in November 2016. (Id.)

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Teri requested a complete accounting for the Teri Trust on multiple occasions but

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never received one. (Id.) Teri also requested information from Plaintiffs regarding the

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terms of the Teri Trust in 2010, 2012, 2013, 2015, and 2016 but “was rebuffed with angry

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responses.” (Id. at 18.) Although Teri has never received a complete accounting, she

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discovered that one of the accounts within the Teri Trust contained about $310,000 in

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December 2005 but only about $84,000 by December 2009. (Id. at 17.) Noella eventually

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provided Teri’s counsel with a copy of the trust agreement for the Teri Trust, but Teri has

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still never received a copy of Schedule A, which lists the assets initially conveyed to the

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Trust. (Id. at 19.)

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The Teri Trust contains a choice-of-law provision requiring the application of
California law. (Id. at 16.)

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In support of their second counterclaim (abuse of process), Defendants allege that

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the promissory note and addendum forming the basis of Plaintiffs’ claims contain

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Court will refer to the Albertazzi parties by their given names to avoid

ambiguity.
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inauthentic signatures and that Plaintiffs filed their Complaint “for an improper ulterior

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motive, including the motive of discouraging Teri from seeking an accounting with respect

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to [the Teri Trust] and the motive of vexing [Defendants].” (Id. at 22-23.)

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In support of their third and fourth counterclaims (libel and slander per se and

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invasion of privacy), Defendants allege that Plaintiff Robert accessed South Lake Tahoe

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Police Department files and caused notations to be made in the files that Defendant Mr.

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Griesinger had been stopped by the South Lake Tahoe Police Department on two

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occasions when in fact Mr. Griesinger was in Tucson, Arizona. (Id. at 23.) Robert’s conduct

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“flagged Mr. Griesinger’s Top Secret / Special Access Program security clearance that

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was in good standing and caused a review to begin.” (Id. at 24.) As a result of the

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investigation, Mr. Griesinger lost his security clearance, could not complete his active duty

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orders, and reverted to a drill status guardsman. (Id.) Mr. Griesinger was unable to retain

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his GS-15 civil service employee position. (Id.)
Plaintiffs now move to dismiss all of Defendants’ counterclaims.

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III.

LEGAL STANDARD

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A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which

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relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide “a

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short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.

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R. Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does

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not require detailed factual allegations, it demands more than “labels and conclusions” or

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a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S.

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662, 678 (2009) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Factual allegations

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must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to

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survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a

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claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (internal citation omitted).

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In Iqbal, the Supreme Court clarified the two-step approach district courts are to

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apply when considering motions to dismiss. First, a district court must accept as true all

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well-pled factual allegations in the complaint; however, legal conclusions are not entitled

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to the assumption of truth. Iqbal, 556 U.S. at 679. Mere recitals of the elements of a cause

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of action, supported only by conclusory statements, do not suffice. Id. at 678. Second, a

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district court must consider whether the factual allegations in the complaint allege a

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plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff’s

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complaint alleges facts that allow a court to draw a reasonable inference that the

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defendant is liable for the alleged misconduct. Id. at 678. Where the complaint does not

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permit the court to infer more than the mere possibility of misconduct, the complaint has

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alleged—but not shown—that the pleader is entitled to relief. Id. at 679. When the claims

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in a complaint have not crossed the line from conceivable to plausible, the complaint must

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be dismissed. Twombly, 550 U.S. at 570.

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A complaint must contain either direct or inferential allegations concerning “all the

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material elements necessary to sustain recovery under some viable legal theory.”

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Twombly, 550 U.S. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101,

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1106 (7th Cir. 1989)).

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IV.

DISCUSSION

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A.

SUBJECT MATTER JURISDICTION

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Plaintiffs first argue that the Court should dismiss Defendants’ counterclaims

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because the Court lacks subject matter jurisdiction to hear them. (ECF No. 20 at 5.)

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Defendants argue that the Court has supplemental jurisdiction over the counterclaims

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under 28 U.S.C. § 1367 as well as independent diversity jurisdiction over the

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counterclaims under 28 U.S.C. § 1332. (ECF No. 21 at 8.)

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“All counterclaims are either compulsory or permissive.” Painter v. Atwood, No.

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2:12-CV-1215-JCM-RJJ, 2013 WL 2355507, at *2 (D. Nev. May 29, 2013). A compulsory

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counterclaim “arises out of the transaction or occurrence that is the subject matter of the

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opposing party’s claim; and does not require adding another party over whom the court

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cannot acquire jurisdiction.” Fed. R. Civ. P. 13(a). The “logical relationship test” dictates

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whether a counterclaim is compulsory:

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A logical relationship exists when the counterclaim arises from the same
aggregate set of operative facts as the initial claim, in that the same
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operative facts serve as the basis of both claims or the aggregate core of
facts upon which the claim rests activates additional legal rights otherwise
dormant in the defendant.

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In re Pegasus Gold Corp., 394 F.3d 1189, 1196 (9th Cir. 2005) (quoting In re Pinkstaff,

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974 F.2d 113, 115 (9th Cir. 1992)); Sparrow v. Mazda Am. Credit, 385 F. Supp. 2d 1063,

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1066 (E.D. Cal. 2005) (“Under this test, the court analyzes whether the essential facts of

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the various claims are so logically connected that considerations of judicial economy and

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fairness dictate that all issues be resolved in one suit.”) (internal citations, quotations, and

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alterations omitted).

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“All claims that are not compulsory are permissive.” Painter, 2013 WL 2355507, at

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*2. “A pleading may state as a counterclaim against an opposing party any claim that is

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not compulsory.” Fed. R. Civ. P. 13(b). In addition, the advisory committee notes to the

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2007 amendment of Rule 13 require “[b]oth as a matter of intended meaning and current

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practice, a party may state as a permissive counterclaim a claim that does grow out of the

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same transaction or occurrence as an opposing party’s claim even though one of the

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exceptions in Rule 13(a) means the claim is not a compulsory counterclaim.”

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28 U.S.C. § 1367(a) permits federal district courts to exercise supplemental

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jurisdiction over state law claims when (1) the federal district court has original jurisdiction

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over the action and (2) the other claims are so related to claims in the action within original

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jurisdiction that they form part of the same case or controversy under Article III.

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Regarding the first counterclaim, Defendants argue that their Trust Petition arises

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out of the same transaction or occurrence as Plaintiffs’ claims because the allegedly

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fabricated promissory note was part of a scheme designed to discourage Defendant Teri

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from seeking an accounting of the Teri Trust. (ECF No. 21 at 9.) In addition, Defendants

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allege that the money Plaintiffs seek through their claims is actually money taken from the

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Teri Trust. (Id.) Plaintiffs argue that the sequence of events in this case contradicts

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Defendants’ theory—Plaintiffs presented a revised promissory note to Defendants “many

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months” before Defendants ever asked for an accounting. (See ECF No. 23 at 2-3.)

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The Court finds that the parties’ alleged sequence of events taken alone does not

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demonstrate a logical relationship between Defendants’ first counterclaim and Plaintiffs’

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claims. Defendants argue that the Court may infer Plaintiffs’ intent to deter Defendant Teri

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from the following sequence of events. Defendant Teri asked Plaintiffs for information

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“regarding the terms of the Teri Trust” in 2010, 2012, and 2013 but was “rebuffed with

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angry responses.” (ECF No. 21 at 9; see also ECF No. 19 at 18.) Plaintiff Robert then

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asked Defendants Teri and Mr. Griesinger to sign a promissory note in October 2013.

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(ECF No. 21 at 9; see also ECF No. 19 at 18.) Defendant Teri again asked Plaintiffs for

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information regarding the terms of the Teri Trust in 2015 and 2016, and Plaintiff Robert

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again asked Defendants Teri and Mr. Griesinger to sign promissory notes in January 2017.

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(ECF No. 19 at 18.) Defendant Teri then made a written demand on Plaintiff Noella for an

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accounting in April 2017, shortly after which Plaintiffs sent demands for payment on the

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allegedly fabricated promissory note to Defendant Teri. (Id.)

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Defendants’ theory is difficult to accept for several reasons. First, it is not clear that

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Defendant Teri specifically sought an accounting in 2010, 2012, or 2013. Defendants only

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allege that Defendant Teri sought information “regarding the terms of the Teri Trust.” It is

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difficult to understand Plaintiff Robert’s 2013 promissory note request as an effort to deter

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Defendant Teri from seeking an accounting if Defendant Teri had never actually sought

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an accounting. Second, years elapsed between the parties’ respective requests. The span

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of time separating each of the events alleged suggests that they are unrelated. Third, the

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repetitive nature of the parties’ respective requests suggests that they are unrelated—

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neither parties’ requests seemed to have any effect on the other. While the force of the

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parties’ respective requests seemingly escalated in tandem, parallel conduct does not

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necessarily imply a causal relationship. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554

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(2007). Finally, while Defendants allege—on information and belief—that the money at

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issue in this case may have come from the Teri Trust, this allegation (to the extent that it

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constitutes an allegation) is insufficient to establish a logical relationship. For these

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reasons, the Court finds that Defendants’ first counterclaim is not logically related to

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Plaintiffs’ claims and therefore does not constitute a compulsory counterclaim.

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As such, Defendants’ first counterclaim must be dismissed unless the Court has an

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independent jurisdictional basis to hear it. See, e.g., Taylor v. Bryant, Inc., 275 F. Supp.

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2d 1305, 1306 (D. Nev. 2003). Defendants argue that the first counterclaim lies within the

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Court’s diversity jurisdiction because the amount in controversy exceeds $75,000. 2 (ECF

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No. 21 at 11.) Plaintiffs argue that the amount in controversy does not exceed $75,000

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because Plaintiffs’ allegations regarding lost trust assets predate Plaintiff Noella’s

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appointment as administrator of the trust. (ECF No. 23 at 3.) The Court agrees with

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Plaintiffs. Defendants allege changes in the value of certain trust accounts between 2005

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and 2009, but Plaintiff Noella was not appointed as administrator until 2014. (ECF No. 19

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at 17-18.) Given that a trustee cannot be liable for the breach of trust of a previous trustee,

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Plaintiffs have not shown that the amount in controversy with respect to claims against

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Noella more likely than not exceed $75,000. See Restatement (Second) of Trusts § 223

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(“A trustee is not liable to the beneficiary for a breach of trust committed by a predecessor

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trustee.”).

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Accordingly, the Court finds that it lacks an independent jurisdictional basis to hear
Defendants’ first counterclaim.

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Regarding the second counterclaim (abuse of process), Plaintiffs do not dispute

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that it is a compulsory counterclaim. (See ECF No. 20 at 6 (“Defendants’ first, third, and

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fourth counterclaims are not compulsory.”) Given that the claim obviously arises out of the

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same occurrence that forms the basis of Plaintiffs’ lawsuit—Defendants’ alleged failure to

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make payment on the allegedly fabricated promissory note—the Court will exercise

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supplemental jurisdiction over this claim.

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Regarding the third and fourth counterclaims (libel per se and invasion of privacy),

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Defendants argue that these claims are related to Plaintiffs’ claims in that both sets of

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claims involve Robert’s use of fraudulent devices for improper purposes. (ECF No. 21 at

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parties do not dispute that complete diversity exists.
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10.) Plaintiffs seem to have misunderstood Defendants’ argument, as they state

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“Defendants do not attempt to argue that their third and fourth counterclaims arise out of

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the same transaction or occurrence as Plaintiffs’ claims.” (ECF No. 23 at 3.) Nevertheless,

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the Court finds that there is no logical relationship between Defendants’ third and fourth

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counterclaims and Plaintiffs’ claims. Plaintiffs’ claims are based on Defendants’ purported

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failure to make payment on a promissory note, while Defendants’ third and fourth

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counterclaims are based on Plaintiff Robert’s alleged doctoring of police records. While

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both claims may involve deception, the Court declines to find a logical relationship

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between the claims based on such an abstract similarity. Accordingly, the Court will not

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exercise supplemental jurisdiction over Defendants’ third and fourth counterclaims.

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Nevertheless, the Court may exercise independent jurisdiction over the third and

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fourth counterclaims if a basis for such jurisdiction exists. Defendants argue that the Court

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may exercise diversity jurisdiction to hear the third and fourth counterclaims. (ECF No. 21

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at 11.) Defendants argue that Mr. Griesinger’s damages in connection with the third and

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fourth counterclaims exceed $11 million in lost income. (Id.) Plaintiffs argue that

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Defendants have not provided an explanation for this figure. (ECF No. 23 at 4.) The Court

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agrees that Defendants’ allegation regarding $11 million in lost income is unsupported.

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Accordingly, the Court does not find by a preponderance of the evidence that Defendants

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have satisfied the amount in controversy requirement on their third and fourth

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counterclaims. Accordingly, the Court will dismiss these counterclaims without prejudice.

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B.

ADEQUACY OF PLEADING

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The Court will consider only whether Defendants have adequately pleaded their

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second counterclaim—for abuse of process—because the Court will dismiss the first, third,

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and fourth counterclaims for lack of jurisdiction as discussed supra.

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“To support an abuse of process claim, a claimant must show (1) an ulterior

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purpose by the [party abusing the process] other than resolving a legal dispute, and (2) a

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willful act in the use of the legal process not proper in the regular conduct of the

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proceeding.” Land Baron Inv. v. Bonnie Springs Family LP, 356 P.3d 511, 519 (Nev. 2015)

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(internal quotation marks omitted, alterations in original). In support of this counterclaim,

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Defendants allege that Plaintiffs had the ulterior purpose of deterring Teri from seeking an

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accounting and vexing her and her husband. (ECF No. 19 at 22-23.) As discussed above,

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Defendants have not adequately pleaded facts to support their conclusory allegation that

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Plaintiffs intended to deter Defendant Teri from seeking an accounting. Accordingly, the

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Court will dismiss Defendants’ second counterclaim.

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V.

CONCLUSION

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The Court notes that the parties made several arguments and cited to several cases

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not discussed above. The Court has reviewed these arguments and cases and determines

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that they do not warrant discussion as they do not affect the outcome of the motion before

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the Court.

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It is therefore ordered that Plaintiffs/Counter-Defendants’ Motion to Dismiss (ECF

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No. 20) is granted. Defendants/Counter-Plaintiffs’ counterclaims are dismissed without

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prejudice.

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DATED THIS 24th day of August 2018.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

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