Free Reply in Support of Motion - District Court of Arizona - Arizona

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The Phoenix Plaza 21 st Floor 2929 North Central Avenue Phoenix, Arizona 85012-2793 P.O. Box 36379 Phoenix, Arizona 85067-6379 Telephone Facsimile 602.640.9000 602.640.9050

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Debra A. Hill, 012186 Ronda R. Fisk, 022100 OSBORN MALEDON, P.A. 2929 N. Central Avenue, Suite 2100 Phoenix, Arizona 85012-2793 Attorneys for Defendants Global Missions, El Shaddai Ministries, Second Chance Ministries, and Michael Cambra

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

ESTATE OF JOSEPH J. STUDNEK, by and through its PERSONAL REPRESENTATIVE, JOSEPH M. STUDNEK, Plaintiff/Counterdefendant v. AMBASSADOR OF GLOBAL MISSIONS UN LIMITED HIS SUCCESSORS, A CORPORATION SOLE, a Nevada corporation sole; EL SHADDAI MINISTRIES AND HIS SUCCESSORS, A CORPORATION SOLE, a Nevada Corporation; SECOND CHANCE CHRISTIAN EVANGELISTIC MINISTRIES, a California corporation; BISHOP OF FAITH VISION NOBLE HOUSE AND HIS SUCCESSORS, A CORPORATION SOLE, a California corporation; JOSEPH L. WILLIAMS and MONICA C. CISNEROS, as husband and wife; WILLIAM JOE LITTLE, MICHAEL CAMBRA and GLORIA CAMBRA, as husband and wife; JOEL DAVID and CINDY DAVID, as husband and wife; KEITH AARON VANN and TRISHA VANN, as husband and wife,

No. CIV-04-595-PHX-MHM

DEFENDANTS EL SHADDAI, SECOND CHANCE, AND MIKE CAMBRA'S SUPPLEMENTAL REPLY IN SUPPORT OF MOTIONS TO DISMISS

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Despite receiving permission from the Court to conduct limited jurisdictional discovery, Plaintiff has failed to meet his burden of demonstrating "with facts, by affidavit or otherwise," that the Court has personal jurisdiction over Defendants Pastor Michael Cambra, El Shaddai, and Global Missions (hereafter "Defendants"). Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). Nor has Plaintiff established that his Complaint asserts claims against these Defendants upon which relief may be granted. Instead, Plaintiff has offered the Court a random assortment of documents pieced together with a number conclusory allegations, unwarranted deductions of fact, and unreasonable inferences to support his assertion that Defendants are "an alter ego of Global and Williams and did participate in a common fraud scheme." (See Dkt. 103 & 106.) Plaintiff's theories of jurisdiction and liability do not withstand scrutiny. I. Plaintiff's "Evidence" Does Not Establish a Prima Facie Case Showing That The Court has Personal Jurisdiction Over Pastor Cambra, Second Chance, or El Shaddai When examined carefully and considered against the appropriate legal standards, Plaintiff's so-called "facts" do not satisfy his burden of presenting a prima facie showing of personal jurisdiction. Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299, 300 (9th Cir. 1986). In an apparent concession that the Court does not have general jurisdiction over Defendants, Plaintiff bases his argument for personal jurisdiction solely on specific jurisdiction. (See Dkt. 103, 106 & 137.) As spelled out in Defendant's Motions to Dismiss, the Ninth Circuit applies a three-part test to determine whether specific jurisdiction exists: (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (citation omitted). The first prong, commonly referred to as the "purposeful
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In a tort case such as this, a court inquires "whether a defendant `purposefully direct[s] his activities' at the forum state, applying an `effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum. Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006) (citing Calder v. Jones, 465 U.S. 783, 789-90 (1984) and Schwarzenegger, 374 F.3d at 803). Under the "effects test," "the defendant allegedly [must] have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Schwarzenegger, 374 F.3d at 803).1 Plaintiff does not allege that Pastor Cambra, El Shaddai or Second Chance actually engaged in any intentional acts expressly aimed at Arizona. Indeed, it is uncontroverted that Defendants have had no personal contacts whatsoever with Arizona. (See Dkt. 97, Ex. A thereto ¶¶ 1-15; Dkt. 136, Ex. A thereto ¶¶ 1-14). Instead, Plaintiff bases his case for personal jurisdiction on conclusory allegations that Defendants (i) are alter egos of Global Missions and Williams and (ii) participated "common fraud scheme." Plaintiff's theories of personal jurisdiction fail as a matter of law. A. Plaintiff's "Evidence" Does Not Support His Alter Ego Theory Yahoo!, 433 F.3d at 1206 (quoting

Plaintiff's Complaint acknowledges that the only three named defendants that may have had any contacts with Arizona were Joseph Williams, Global Missions, and William Joe Little, Jr. (See Dkt. 69 ¶ 13.) Without any explanation, Plaintiff alleges that the corporate Defendants (Global Missions, El Shaddai, Second Chance) are the
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Defendants note that in their motions to dismiss, they cited to a slightly different formulation of this test found in Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000). In Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, the Ninth Circuit clarified that for the third requirement, "the `brunt' of the harm need not be suffered in the forum state." 433 F.3d 1199, 1207 (9th Cir. 2006). This recent change in Ninth Circuit Law does not affect the analysis of Defendants' claims.
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"alter egos" of individual Defendants (including but not limited to Mr. Williams and Pastor Cambra). Plaintiff's Complaint does not sufficiently allege an alter ego theory against Pastor Cambra, El Shaddai, or Second Chance. The law does not lightly disregard the corporate status of a defendant. See Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586 (9th Cir. 1996). Indeed, as a general matter, a plaintiff asserting an alter-ego theory must allege "(1) that there is such unity of interest and ownership that the separate personalities of the corporation and the individuals no longer exist and (2) that failure to disregard the corporation would result in fraud or injustice." Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1393 (9th Cir. 1984) (citation omitted); see also Gatecliff v. Great Republic Life Ins. Co., 170 Ariz. 34, 37, 821 P.2d 725, 728 (1991). To defeat Defendants' pending motions, Plaintiff is obligated to present facts demonstrating a such a unity of interest and ownership that the personalities of the corporate defendants (Global Missions, El Shaddai, or Second Chance) no longer exist apart from the individual defendants (including but not limited to Pastor Cambra and Mr. Williams). Scott, 792 F.2d at 927. Despite his overreaching interpretation of his so-called "evidence," Plaintiff fails to meet this obligation. Plaintiff's evidence does not demonstrate that the interests of Pastor Cambra and Global Missions were at all relevant times one in the same. The uncontroverted affidavits establish that Global Missions does not and has not employed or otherwise provided any compensation to Pastor Cambra and that Pastor Cambra does not have joint ownership of any property with Global Missions. (See Dkt. 136, Ex. A thereto, ¶ 25.) Indeed, the only evidence tying Pastor Cambra to Global Missions is the fact that for a limited period of time he was a signatory on two Global Missions bank accounts. (See Supplemental Affidavit of Michael Cambra, attached hereto as Exhibit A, ¶ 10.) This single fact does not satisfy the requisite "unity of interest" necessary to assert a viable alter ego theory.

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Moreover, Plaintiff's evidence does not demonstrate that the interests of Mr. Williams and El Shaddai or Second Chance were at all relevant times one in the same. Again, the uncontroverted affidavits establish that Mr. Williams principal relationship with these corporations is as a congregant. (See Dkt. 136, Ex. A thereto, ¶ 15; Dkt. 97, Ex. A thereto, ¶ 16.) Although Mr. Williams regularly participates in worship services and ministry programs at the church, supports the church through monetary tithes, has on occasion been reimbursed for items he purchased for the church, and receives his mail at the church's post office box, he has no control over the ultimate decision making of either El Shaddai or Second Chance. (See Dkt. 136, Ex. A thereto, ¶ 15; Dkt. 97, Ex. A thereto, ¶¶ 17-18; see also Ex. A hereto ¶ 11; Affidavit of Joseph L. Williams dated September 7, 2006, attached hereto as Exhibit B, ¶ 10.) Mr. Williams is not an officer, director, or employee of either corporation, nor does he have joint ownership of any property with them. (See Dkt. 136, Ex. A thereto, ¶ 15; Dkt. 97, Ex. A thereto, ¶ 17-18.) On a few occasions Mr. Williams, acting under an agreement with Pastor Cambra, sold some donated personal property on behalf of El Shaddai and paid the proceeds to the church. (See Ex. A hereto ¶¶ 2-9 and Ex. B hereto ¶¶ 2-8.) Additionally, Mr. Williams was a signatory on a single El Shaddai bank account, but there is no evidence that he wrote any checks or transferred any funds on behalf of the church. (See Dkt. 137, Ex. K thereto.) These facts, even when considered in the light most favorable to Plaintiff, do not suggest a complete "unity of interest" between Mr. Williams and either El Shaddai or Second Chance sufficient to establish personal jurisdiction over either of the corporations. Finally, Plaintiff's evidence does not demonstrate that the interests of any of the corporate defendants were one in the same. To the contrary, Plaintiff's evidence merely demonstrates that on a six occasions, payments were made from Global Missions to El Shaddai. (See Dkt 137, Exs. A ­ I thereto.)2 This evidence of limited
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Plaintiff's Supplemental Response mischaracterizes the attached exhibits. For example, Exhibit C shows only that Mr. Williams withdrew $130,000 from a Global Missions account on January 3, 2004. In fact, Plaintiff has knowledge that this 1361113 -5Document 144 Filed 09/08/2006 Page 5 of 10

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interaction supports Defendants' uncontroverted contention that Global Missions is a separate entity from either El Shaddai or Second Chance and has no control over either of them. Global Missions and these two corporate defendants do not have any common staff, officers, or directors; they do not share the same physical facility; and there have been no donations between the entities. (See Dkt. 136, Ex. A thereto, ¶ 16; Dkt. 97, Ex. A thereto, ¶¶ 19-20.) The sole connection between Global Missions and El Shaddai is the few times Mr. Williams sold some donated property on behalf of El Shaddai and paid the proceeds to El Shaddai through a Global Missions account.3

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withdrawal was given to Charles Hall pursuant to an agreement entered with Mr. Hall on January 3, 2004. (See Dkt. 103, Ex. E thereto ¶ 10.) And although Plaintiff claims Exhibits D and E show transactions between Global Missions and El Shaddai, the transactions are in fact transfers between El Shaddai's Wells Fargo accounts 7935656665 and 328-6303783. (See Exhibit C hereto, statements showing these accounts belong to Wells Fargo.) Plaintiff's Supplemental Response further makes the unsubstantiated allegations that "the majority of Global's outgoing money is to El Shaddai. Likewise, the majority of El Shaddai's incoming money is from Global. The two are clearly financially intertwined." (Dkt. 137 at 5.) Plaintiff is obligated to support his facts supporting personal jurisdiction "by affidavit or otherwise," not conclusory assertions. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). Plaintiff's recounting of six transactions over a three year period does not support his overreaching assertions. 3 Plaintiff attempts to impugn the veracity of the affidavits Mr. Cambra signed on behalf of himself, El Shaddai, and Second Chance with overreaching and unsubstantiated allegations that "Defendants have been blatantly untruthful to this Court and are not to be believed" and that Plaintiff's evidence "openly directly contradicts boldface statements made by the Defendants under oath." (Dkt. 137 at 6.) First, Plaintiff misquotes Mr. Cambra's affidavits, suggesting that Mr. Cambra averred that El Shaddai "has no connection with Global Missions and that it never received any money from Global." (Dkt. 137 at 4.) In fact, Mr. Cambra stated that Mr. Williams, the sole member of Global Missions was an active congregant at El Shaddai Ministries and that Global Missions had not made any "donations" to El Shaddai Ministries. (See Dkt. 136, Ex. A thereto, ¶¶ 16-20.) Black's Law Dictionary defines a "donation" as "a gift." Black's Law Dictionary 526 (8th ed. 2004). All monies transferred from Global Missions to El Shaddai resulted from business transactions between the entities and were not gifts. (See Exs. A and B hereto.) Second, Plaintiff fails to identify a single "untruthful" statement in Mr. Cambra's affidavits. Although Pastor Cambra realized erroneously stated that he was not a signatory on any accounts held by Global Missions, upon reviewing the 1361113 -6Document 144 Filed 09/08/2006 Page 6 of 10

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Again, these facts, do not suggest a the requisite "unity of interest" between the corporate defendants to establish that they are the alter egos of one another. B. Plaintiff's Conclusory Allegations of a "Common Fraud Scheme" Fail to Establish Personal Jurisdiction

Notwithstanding well established law to the contrary, Plaintiff attempts to aggregate the forum contacts of all named defendants to establish personal jurisdiction over Pastor Cambra, El Shaddai, and Second Chance by alleging that these Defendants engaged in a common fraud scheme with Global Missions and Mr. Williams. But Plaintiff's mere allegations of a common fraud scheme do not confer personal jurisdiction over the Defendants. "[P]ersonal jurisdiction over any nonresident individual must be premised upon forum-related acts personally committed by the individual. Imputed conduct is a connection too tenuous to warrant the

exercise of personal jurisdiction." Kipperman v. McCone, 422 F.Supp. 860, 873 n.14 (N.D. Cal. 1976) (emphasis added). As the Supreme Court held in Calder v. Jones, "[e]ach defendant's contacts with the forum State must be assessed individually." 465 U.S. at 790 (emphasis added) (citation omitted). Plaintiff's Complaint contains only conclusory and over-generalized

allegations of an alleged "fraudulent s cheme," and makes "no reference to specific or individualized allegations of participation in the [scheme] on the part of these defendants." In re Dynamic Random Access Memory (Dram), No. C02-1486-PJH, 2005 WL 2988715, *8-9 (N.D. Cal. Nov. 7, 2005) (first and second emphasis added) (granting motion to dismiss for lack of personal jurisdiction and noting that "[t]he conspiracy theory doctrine is not a generally accepted theory" of personal jurisdiction); see also Skydive Ariz., Inc. v. Quattrochi, No. CV05-2656-PHX-MHM, 2006 WL 2460595, *6 (D. Ariz. Aug. 22, 2006) (same).

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documents and realizing this error he immediately corrected it by filing his Corrected Affidavit dated August 22, 2006. (Dkt. 136, Ex. A thereto.) Plaintiff's allegations of "material misrepresentations" are unsubstantiated, untrue and his request for sanctions is unwarranted. 1361113 -7Document 144 Filed 09/08/2006 Page 7 of 10

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Moreover, Plaintiff's Responses (Dkts. 103, 106) and Supplemental Response (Dkt. 137) give no further support to his theory of a common fraud scheme. Plaintiff relies on six business transactions between Defendants El Shaddai and Global Missions to establish a so-called scheme, but fails to present any facts showing how these transactions (which all occurred in California) are related in any way "forumrelated acts." (Dkt. 137 at 4.) Despite Plaintiff's attempts to exaggerate the

importance of these few business transactions, he has failed to allege or offer facts showing the connection between them and the alleged fraudulent scheme. Despite Plaintiff's gross mischaracterizations of the evidence, he has failed to establish that Pastor Michael Cambra, El Shaddai, and Second Chance have the requisite minimum contacts with Arizona to vest this Court with personal jurisdiction over them. Plaintiff's attempts to force Defendants to litigate in Arizona over a contract dispute in which Defendants are not involved offends traditional notions of fair play and substantial justice. jurisdiction. II. Plaintiff's "Evidence" Fails To Establish Claims Upon Which Relief May Be Granted Neither Plaintiff's Response nor his Supplemental Response address the fact that his Complaint fails to establish claims against Pastor Cambra, El Shaddai, or Second Chance upon which relief may be granted. In determining whether a Plaintiff's claim should be dismiss for lack of

complaint states a claim, all allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). The court, however, is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citation omitted). The reasoning supporting Defendants' Rule 12(b)(6) motions to dismiss is much the same as the reasoning outlined above:
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Complaint assert potential claims against the Defendants based only upon theories of "alter ego" and a "common fraud scheme." Other than conclusory statements in the Complaint, Plaintiff offers no basis to suggest the existence of an alter ego relationship between any of the Defendants. The failure to properly assert an alter ego relationship warrants dismissal. See Hokama v. E.F. Hutton & Co., 566 F. Supp. 636, 647 (C.D. Cal. 1983) (finding that plaintiff failed to state a claim against individual defendant where complaint contained only conclusory allegations of alter ego status without alleging elements of the doctrine). Moreover, while Plaintiff

alleges a "common fraud scheme," he provides no explanation as to Pastor Cambra, El Shaddai, or Second Chance's role or participation in the alleged scheme. Neither theory is sufficiently alleged or supported to state a claim. Therefore Counts I-VIII should be dismiss pursuant to Rule 12(b)(6). Additionally, Plaintiff's Count VII, a claim for Replevin, fails to state a claim because replevin applies only to personal property, not real property or proceeds from a sale of real property. See, e.g., Black's Law Dictionary 1325 (8th ed. 2004)

(defining "replevin" as "a writ obtained from a court authorizing the retaking of personal property wrongfully taken or detained" and noting that "[t]o support the action it is necessary: (a) That the property shall be personal") (emphasis added); 66 Am. Jur. 2d Replevin § 9 (2001) ("Money is not subject to replevin unless it is marked or designated in some manner so as to become specific, as it regards the power of identification, such as being in a bag or package."). CONCLUSION For all of the reasons outlined above, Defendants respectfully request that the Court dismiss Plaintiff's claims against them for lack of personal jurisdiction pursuant to Rule 12(b)(2). Alternatively Defendants request that the Court dismiss Plaintiff's claim for failure to state a claim upon which relieve may be granted pursuant to Rule 12(b)(6).

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DATED this 8th day of September, 2006. OSBORN MALEDON, P.A.

s/ Ronda R. Fisk Debra A. Hill Ronda R. Fisk 2929 N. Central Avenue, Suite 2100 Phoenix, Arizona 85012-2793 Attorneys for Defendants Global Missions, El Shaddai Ministries, Second Chance Ministries, and Michael Cambra I hereby certify that on September 8, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Bradley D. Weech Jeremy S. Geigle Jackson White 40 N. Center Street, Suite 200 Mesa, AZ 85201 Attorneys for Plaintiff/Counterdefendant [email protected] [email protected] I hereby certify that on September 8, 2006, I served the attached document by first-class mail on the following, who are not registered participants of the CM/ECF System: Joseph L. Williams 15934 Hesperian Blvd. P.M.B. 311 San Lorenzo, CA 94580

s/ Lindsay B. Jensen

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