Free Order on Motion to Dismiss - District Court of California - California

Case 3:07-cv-04946-JSW

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1 2 3 4 5 6 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 10 MEI-FANG LISA ZHANG, et al. Plaintiffs, v. WEI-MAN RAYMOND TSE, et al. Defendants. / 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In her opposition, Zhou asks that the Court dismiss the claims against her. Zhou has not filed a proper motion to dismiss and has filed an Answer. Therefore, her request to dismiss the claims against her is denied. That ruling is without prejudice to Zhou filing dispositive motions in the future.
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IN THE UNITED STATES DISTRICT COURT

No. 07-04946 JSW ORDER GRANTING MOTION TO DISMISS COUNTERCLAIMS

United States District Court

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For the Northern District of California

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INTRODUCTION This matter comes before the Court upon consideration of the Motion to Dismiss Counterclaims filed by Plaintiffs Mei-Fang Lisa Zhang, Bay Area Affordable Housing, LLC, Xue-Huan Gao, Yuan-Chun Zhang, Carol Jian Deng, and Hao Liang (collectively "Plaintiffs"). Having considered the parties' papers, the relevant legal authority, and the record in this case, the Court finds the matter suitable for disposition without oral argument. See N.D. Civ. L.R. 71(b).1 The Court HEREBY VACATES the hearing set for August 29, 2008, and GRANTS Plaintiffs' motion. BACKGROUND On September 24, 2007, Plaintiffs filed their Complaint alleging that the Defendants, including Defendant Run Ping Zhou (a/k/a Flora Zhou) ("Zhou"), have engaged in a fraudulent

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scheme involving trading of foreign currencies.2 On May 27, 2008, Zhou, proceeding pro se, filed an Answer and asserted a number of counterclaims against all of the Plaintiffs. In both her Answer and her Counterclaims, Zhou denies she engaged in any wrongdoing and asserts that the Plaintiffs have no basis to assert claims against her. (See generally Answer and Counterclaims.) Liberally construed, the counterclaims appear to assert claims of malicious prosecution. ANALYSIS A motion to dismiss is proper under Rule 12(b)(6) where the pleadings fail to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In ruling on a Rule 12(b)(6) motion, the complaint is construed in the light most favorable to the non-moving party and all material allegations in the complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The court, however, is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). As noted above, construing Zhou's allegations liberally, she appears to assert counterclaims for malicious prosecution. Under California law, the elements of such a claim are that the prior action: "(1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff's, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations]." Sheldon Appel Co. v. Albert & Oliker, 47 Cal. 3d 863, 871 (1989) (quoting Bertero v. National General Corp., 3 Cal. 3d 43, 50 (1974)). Because this action has not terminated in Zhou's favor, even when the Court accepts the allegations in the Counterclaims as true, Zhou cannot, at this time, state a claim for malicious prosecution. Accordingly, Plaintiffs' motion is GRANTED. When a complaint is dismissed for failure to state a claim, "leave to amend should be granted unless the court determines that the allegation of other facts consistent with the

United States District Court

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For the Northern District of California

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Plaintiffs' allegations are summarized in detail in the Complaint and shall not be repeated here, because they are not necessary to resolution of this motion.
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challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. ServWell Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see also Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995) (a district court need not permit a plaintiff to amend his or her complaint if it determines that the defects in the pleadings "could not possibly be cured by the allegation of other facts"). Because Zhou cannot state a cause of action for malicious prosecution against Plaintiffs unless and until this case is terminated in her favor, leave to amend her counterclaims would be futile. Accordingly, the Counterclaims are dismissed without leave to amend. CONCLUSION For the foregoing reasons, Plaintiffs' motion to dismiss Zhou's counterclaims is GRANTED. The parties are FURTHER ORDERED to appear for a case management conference on Friday, September 12, 2008 at 1:30 p.m. The parties' case management statements shall be due on or before Friday, September 5, 2008. IT IS SO ORDERED.

United States District Court

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For the Northern District of California

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Dated: August 7, 2008 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE

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1 2 3 4 5 6 MEI-FANG LISA ZHANG et al, 7 Plaintiff, 8 v. 9 WEI-MAN RAYMOND TSE et al, 10 Defendant. Case Number: CV07-04946 JSW CERTIFICATE OF SERVICE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

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For the Northern District of California

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I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Northern District of California. That on August 7, 2008, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office.

Molly Lau Department of the Army A FSC, 70th BSB UNIT #15096 Camp Casey, APO AP 96224 Run Ping Zhou South China Investment Inc. 3567 Kimberly Road Cameron Park, CA 95682

Dated: August 7, 2008 Richard W. Wieking, Clerk By: Jennifer Ottolini, Deputy Clerk