Jiao v. Blumenthal et al

Filing 34

ORDER granting in part Plaintiff's 18 Motion to Amend. Plaintiff is DIRECTED to docket the proposed revised First Amended Complaint (Dkt. No. 30 at 4-18) within ten (10) days of this order. Signed by U.S. District Judge John C Coughenour. (TH)

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THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 JIE JIAO, CASE NO. C17-1355-JCC 10 Plaintiff, 11 12 ORDER v. CONNIE BLUMENTHAL, et al., 13 Defendants. 14 15 This matter comes before the Court on Plaintiff Jie Jiao’s motion to amend her complaint 16 (Dkt. No. 18). Having thoroughly considered the parties’ briefing and the relevant record, the 17 Court GRANTS in part the motion for the reasons explained herein. 18 Plaintiff Jiao seeks to amend her complaint to assert additional federal and state causes of 19 action and to add Maoqi Zhang and Wei Fan as additional plaintiffs. (Dkt. No. 20.) Jiao, as a 20 married woman with separate property, and Zhang and Fan, as married persons with marital 21 property (collectively “Plaintiffs”), allege Defendants represented them in purchasing parcels of 22 residential real estate in King County from the same seller. (Id. at 6–7.) Plaintiffs further allege 23 Defendants failed to disclose a relationship between themselves and the seller, resulting in a 24 conflict of interest. (Id. at 10–11.) According to Plaintiffs, this led to Defendants’ breach of their 25 common law and statutory duties, breach of their agency agreement with Plaintiffs, and 26 violations of federal and state law. (Id. at 15–18.) ORDER C17-1355-JCC PAGE - 1 1 Leave to amend shall be freely given when justice so requires. See Fed. R. Civ. P. 2 15(a)(2). This policy should be “applied with extreme liberality.” Owens v. Kaiser Found. 3 Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2011). In considering motions to amend, this 4 Court considers four factors: “bad faith, undue delay, prejudice to the opposing party, and/or 5 futility.” Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). “Generally, this 6 determination should be performed with all inferences in favor of granting the motion.” Id. Here, 7 Defendants only challenge amendment on the basis of futility. (See Dkt. Nos. 24, 26.) 8 Defendant Realogics Brokerage, LLC asserts futility because Plaintiff Jiao fails to join a 9 necessary party: her fiancé at the time of purchase, Ke Song. (Dkt. No. 24 at 4.) 1 Under Federal 10 Rule of Civil Procedure 19(a), a person must be joined if his or her absence would prevent a 11 court from providing complete relief to the existing parties or leave an existing party subject to 12 inconsistent obligations. See Dawavendewa v. Salt River Project Agr. Imp. and Power Dist., 276 13 F.3d 1150, 1155 (9th Cir. 2002). Realogics asserts that Song is a necessary party because he has 14 an interest in Jiao’s suit against Defendants—namely, in the funds Jiao used to purchase the 15 residence and/or an interest in the marital estate. (Dkt. No. 24 at 4, 7.) Jiao confirms Song 16 provided her the funds to purchase the residence, but claims he did so as a pre-marital gift. (Dkt. 17 Nos. 31 at 1, 32 at 1.) Such a gift would remain Jiao’s separate property, absent “direct positive 18 evidence to the contrary.” In re Marriage of Skarbek, 997 P.2d 447, 450 (Wash. App. 2000); see 19 Scott v. Currie, 109 P.2d 526, 529 (Wash. 1941). Realogics provides no such evidence. (See 20 generally Dkt. No. 24.) Therefore, amendment is not made futile by a failure to join Song. 21 Plaintiffs’ proposed First Amended Complaint brings a cause of action described as “wire 22 fraud,” alleging Defendants defrauded Plaintiffs though use of “interstate wire communications.” 23 (Dkt. No. 20 at 17.) Defendant Blumenthal argues this claim is futile because the Court cannot 24 afford relief on it. (Dkt. No. 26 at 3.) The Court agrees. Wire fraud is a criminal offense. See 18 25 U.S.C. §§ 1341 and 1343 (providing criminal penalties for “frauds and swindles” committed by 26 1 Jiao and Song have since married. (Dkt. No. 31 at 4.) ORDER C17-1355-JCC PAGE - 2 1 “wire, radio, television.”). However, Plaintiffs move to withdraw their wire fraud cause of action 2 and fold the underlying allegations into their claim brought pursuant to the Racketeer Influenced 3 and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964(c). The Court GRANTS Plaintiff leave 4 to do so, thereby mooting Blumenthal’s argument. 5 For the foregoing reasons, the motion to amend (Dkt. No. 18) is GRANTED in part. 6 Plaintiff is DIRECTED to docket the proposed revised First Amended Complaint (Dkt. No. 30 at 7 4–18) within ten (10) days of this order. 8 DATED this 27th day of December 2017. A 9 10 11 John C. Coughenour UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER C17-1355-JCC PAGE - 3

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