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Tai v. JC Funding-5, LLC

United States District Court, D. Nevada

May 10, 2018

GARY TAI, SHUIKEE COMPANY LIMITED, AND GOLDEN ESSENCE GLOBAL LIMITED, Plaintiffs,
v.
JC FUNDING-5, LLC, a Missouri limited liability company; JEFF N. CROSSLAND, D-DESIGN LNO INC., a Nevada company; LESLIE DOTSON, an individual; and DOES 1-X, and DOES CORPORATION 1-X, Defendants.

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         Before the Court is pro se Defendant Jeff N. Crossland's (“Crossland”) motion to dismiss (“Motion”), seeking dismissal of Plaintiffs Gary Tai (“Tai”), ShuiKee Company Limited (“ShuiKee”) and Golden Essence Global Limited's (“Golden Essence”) (collectively, “Plaintiffs”) Verified Complaint (ECF No. 1), as asserted against him for lack of personal jurisdiction.[1] (ECF No. 12.) Plaintiffs filed an opposition (ECF No. 14), and Crossland filed a reply (ECF No. 21). For the reasons set forth below, the Motion is granted.

         II. BACKGROUND

         This case arises from a business transaction that apparently went awry. The following facts are taken from the Complaint and associated exhibits. (ECF Nos. 1, 1-1, 1-2, 1-3.)

         Defendant D-Design LNO Inc. (“D-Design”) is a Nevada Corporation. Defendant JC Funding-5, LLC (“JC Funding-5”) is a Missouri limited liability company, located in Santa Monica, California. Crossland is “a member and manager of JC Funding[-5] and a California citizen.” (ECF No. 1 at 5.) The other parties involved are citizens of other countries or states.[2]

         In September 2013 Dotson approached Tai regarding an investment opportunity through which a new entity, D-Design, would be formed. D-Design was to acquire (1) a controlling interest in GoLink (China) Limited (“GoLink”), a Hong Kong corporation that Tai owned, and (2) the existing business of Fabrique Ltd. (“Fabrique”), [3] a Connecticut corporation (“the Transaction”). Dotson was the orchestrator of the Transaction.

         Pursuant to the Transaction, in October 2013, Dotson and Crossland represented to Tai that Dotson would create D-Design to acquire GoLink and Fabrique, and Crossland, through JC Funding-5, would be the loan lender for the Transaction. In order to effectuate the Transaction, Dotson and Crossland asked Tai to deposit monies to facilitate the loan funding. It appears ShuiKee paid “Tai's contribution, ” into a designated Bank of America escrow account. ShuiKee ultimately deposited one million dollars, in the designated escrow account, to facilitate the loan, pursuant to a Custodian Agreement between ShuiKee and JC Funding-5.

         In furtherance of the Transaction, D-Design, GoLink, Golden Essence, and Tai entered into a Stock Purchase Agreement on April 30, 2014, along with two subsequent amendments, (collectively, “the SPA”). Neither Crossland nor JC Funding-5 were parties to the SPA. The SPA required D-Design to pay the purchase price in phases to Plaintiffs, and discusses conversion and the consequences for failure to pay the purchase price. The parties to the SPA agreed it would be governed by Nevada law.

         D-Design and JC Funding-5 entered a Project Funding Agreement (“the Funding Agreement”), and a Promissory Note.[4] D-Design and JC Funding-5 agreed that the Funding Agreement was to be governed by Nevada law, with D-Design consenting to “the personal jurisdiction of the state and federal courts located in [Nevada], or any other court having personal jurisdiction over D-Design or the collateral in connection with any controversy related to this Agreement.” (ECF No. 1-2 at 20.) Under this agreement, D-Design borrowed $11, 050, 000 from JC Funding-5 (“Loan”). The Loan was to, inter alia, finance the acquisition of Fabrique and a controlling interest in GoLink and refinance existing debt.

         In October 2014, D-Design executed the Promissory Note “in the amount of $11, 050, 000 in favor of JC Funding.” (Id. at 8.) However, JC Funding-5 allegedly never funded the Loan and retained $800, 000 of ShuiKee's escrow deposit. Ultimately, D-Design failed to purchase GoLink stock from Golden Essence, or purchase Fabrique. D-Design returned monies to ShuiKee on September 15, 2014, [5] and May 28, 2015, respectively.

         The Complaint asserts six (6) tort claims against Crossland. Crossland moves for dismissal, asserting a lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), and improper venue, pursuant to 28 U.S.C. § 1406(a). Because the Court finds that Plaintiffs fail to demonstrate that the Court has personal jurisdiction over Crossland, the Court declines to address the remaining ground.

         III. LEGAL STANDARD

         In opposing a defendant's motion to dismiss for lack of personal jurisdiction, a plaintiff bears the burden of establishing that jurisdiction is proper. Boschetto v. Hansin, 539 F.3d 1011, 1015 (9th Cir. 2008). Where a defendant's motion to dismiss is based on written materials rather than an evidentiary hearing, “the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Brayton Purcell LLP v. Recordon & Recordon,606 F.3d 1124, 1127 (9th Cir. 2010) (internal quotation marks omitted). The plaintiff cannot “simply rest on the bare allegations of its complaint, ” but uncontroverted allegations in the complaint must be taken as true. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)). The court “may not assume the truth of allegations in a pleading which are ...


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