Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-01654/USCOURTS-azd-2_10-cv-01654-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Peter De Lamos, 

Plaintiff, 

vs.

Dennis Mastro, et al.

Defendants. 

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No. CV-10-1654-PHX-FJM

ORDER

We have before us defendant’s motion to dismiss (doc. 6), plaintiff’s response (doc.

7), and defendant’s reply (doc. 8). We also have defendant’s “Request for Oral Argument

and Ruling on Motion to Dismiss” (doc. 17). This matter came before us after the United

States District Court for the District of New Jersey granted defendant’s motion to transfer,

pursuant to 28 U.S.C. § 1404 (doc. 12). We now address defendant’s unresolved motions

to dismiss the fraud-based claims and to strike parts of plaintiff’s complaint. 

Plaintiff asserts claims for breach of fiduciary duty, accounting, conversion, unjust

enrichment, theft, embezzlement, fraud, and civil conspiracy to commit fraud. Plaintiff’s

claims arise out of the parties’ purchase and sale of Scott Park and Golf Center in Scottsdale,

Arizona. According to plaintiff, when the parties bought the property, they agreed that

plaintiff would own a 25% interest, defendant a 50% interest, and a third party, Oscar

Goodman, a 25% interest. Plaintiff also claims he loaned defendant several hundred

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thousand dollars to develop the property. In 1999, the City of Scottsdale acquired Scott Park

through eminent domain. Plaintiff alleges that defendant told plaintiff the proceeds of the

sale were $600,000, when they were actually $1,261,008.35, and that he hid the difference

by lying and altering documents. Plaintiff further alleges that defendant used the proceeds

from the property sale to buy other properties in Arizona and California, and that plaintiff is

entitled to an interest in these properties. Additionally, plaintiff claims defendant still owes

him repayment of the loans for the property development. 

I

We first address plaintiff’s inclusion of fictitious parties, which is not favored in

federal court. The naming of “John Doe” and “X and Y Corporations” defendants is

inconsistent with Rule 10(a), Fed. R. Civ. P., requiring that a complaint name all parties, and

also could ultimately violate Rule 4(m), Fed. R. Civ. P., mandating service of a complaint

within 120 days of filing. Generally, we may give plaintiffs an opportunity through

discovery to identify unknown defendants, “unless it is clear that discovery would not

uncover the identities, or that the complaint would be dismissed on other grounds.”

Wakefield v. Thompson, 177 F.3d 1160, 1163 (9th Cir. 1999) (citation omitted).

Plaintiff gives no explanation as to how discovery will lead to the identification of the

unnamed parties. In his complaint, plaintiff states only that he believes that the unnamed

defendants “are responsible in some manner for the events and occurrences stated herein and

proximately caused damages to plaintiff as alleged in this complaint.” Complaint, 2. In his

response, plaintiff adds that the “defendant have [sic] information and belief as to the

participation of member [sic] of the Mastro family participation in the allegations of the

complaint,” and that fictitious individuals and corporations are named to preserve causes of

action. Response, 10. These generalized allegations shed no light on the basis for plaintiff’s

belief about the involvement of other parties in the underlying dispute, nor provide any

insight into what role they might have played.

Additionally, plaintiff faces a heightened pleading requirement for his fraud claims

under Rule 9(b), Fed. R. Civ. P. “In the context of a fraud suit involving multiple defendants,

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a plaintiff must, at a minimum, identify the role of each defendant in the alleged fraudulent

scheme.” Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007). The role that the John

Doe and X and Y Corporations defendants allegedly played is entirely unclear, and plaintiff

gives no reason to believe discovery will provide any further clarification. Therefore, we

dismiss all claims against the fictitious defendants John Doe 1-12 and Corporations X and

Y. 

II

Defendant contends that plaintiff’s claims for fraud and civil conspiracy to commit

fraud should be dismissed for failure to satisfy Rule 9(b), Fed. R. Civ. P. The rule requires

that for “all averments of fraud or mistake, the circumstances constituting fraud or mistake

shall be stated with particularity.” Fed. R. Civ. P. 9(b). Conclusory claims are insufficient;

rather, “allegations of fraud must be specific enough to give defendants notice of the

particular misconduct which is alleged to constitute the fraud charged so that they can defend

against the charge and not just deny that they have done anything wrong.” Bly-Magee v.

California, 236 F.3d 1014, 1019 (9th Cir. 2001). “Averments of fraud must be accompanied

by the who, what, when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy

Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). The averments must set forth not just the

facts of the transaction, but also explain “what is false or misleading about a statement, and

why it is false.” Id.

Here, plaintiff’s allegations provide sufficient notice of defendant’s “particular

misconduct which is alleged to constitute the fraud.” Bly-Magee, 236 F.3d at 1019.

Although parts of the complaint are difficult to comprehend, plaintiff has identified the who,

what, when, where, and how of defendant’s alleged misconduct. See Vess, 317 F.3d at 1106.

Defendant Mastro is plainly the “who.” The “what” concerns defendant’s alleged misleading

plaintiff about the revenues from the sale of the Scott Park, as well as the refusal to repay

loans made to develop the property. The “when” and “where” are also clear: the sale

occurred in 1999, and the property is located in Scottsdale, Arizona. Prior to discovery, we

do not require plaintiff to know exactly how defendant executed the alleged fraud. But,

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plaintiff does give some substance to his claims through the following allegations about

defendant’s conduct: (1) placement of the business entities’ assets in the names of others in

order to facilitate transactions and perpetuate frauds, Complaint, 3, ¶ 9; (2) fraudulent

concealment of the amount of the proceeds from the sale of the golf complex through

fraudulently obtained and notarized documents, Complaint, 6, ¶ 19; (3) fraudulent

inducement of plaintiff to convey his shares of the property by misrepresenting the proceeds

of the sale, Complaint, 6, ¶ 20; (4) fraudulent concealment of the amount from the sale of the

complex, Complaint, 7, ¶ 22; (5) fraudulent retention of $135,000 owed to plaintiff from the

sale of the golf complex; Complaint, 15, ¶ 37; and (6) fraudulent execution of refinancing

agreements in connection with the restaurant business, Complaint, 16, ¶ 41.

We conclude that plaintiff’s allegations sufficiently identify “the circumstances

constituting fraud so that the defendant can prepare an adequate answer from the

allegations.” Odom v. Microsoft Corp., 486 F.3d 541, 553 (9th Cir. 2007). We therefore

deny defendant’s motion to dismiss plaintiff’s fraud claims. 

III

Defendant also moves to strike certain allegations as immaterial, impertinent, and

scandalous, pursuant to Rule 12(f)(2), Fed. R. Civ. P. Matter is immaterial if it has no

essential or important relationship to the claim for relief. Fantasy, Inc. v. Fogerty, 984 F.2d

1524, 1527 (9th Cir. 1993), rev’d on other grounds, 510 U.S. 517, 114 S.Ct. 1023 (1994).

Statements are impertinent if they “do not pertain, and are not necessary, to the issues in

question.” Id. “Allegations may be stricken as scandalous if the matter bears no possible

relation to the controversy or may cause the objecting party prejudice.” Talbot v. Robert

Matthews Distributing Co., 961 F.2d 654, 664 (7th Cir. 1992). “Superfluous historical

allegations are a proper subject of a motion to strike.” Fantasy, 984 F.2d at 1527.

Defendant claims that plaintiff’s allegations regarding the parties’ prior convictions

and prisons terms, and regarding one of defendant’s prior business deals, should be stricken.

See Complaint, ¶¶ 27, 29, 30, 31, and 50. He contends that the allegations about the parties’

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convictions, and resulting imprisonment, which date to the early 1980s, have nothing to do

with the disputed property transaction, which happened at least 15 years later. Defendant

also argues that allegations about his mobster connections are gratuitous, graphic,

prejudicial, and are “ancient history.” Similarly, defendant claims that plaintiff’s allegation

about a bond offering for which defendant failed to disclose his convictions is irrelevant, as

the offering was not made to plaintiff. Plaintiff counters that the criminal history, which

involves both plaintiff and defendant, is pertinent to understanding the close business

relationship between them, and helps explain the trust that underscored their informal

arrangements. Plaintiff characterizes the allegations as factual material that explains how the

disputed transaction arose. 

We conclude that the allegations about one of the parties’ prior business deals and

criminal history are impertinent and immaterial to the transaction currently in dispute.

Pursuant to Rule 8(a), Fed. R. Civ. P., plaintiff’s complaint must contain a “short and plain

statement of the claim showing that the pleader is entitled to relief.” The historical

allegations about past business and criminal convictions go well beyond this, without

explaining “the essential or important relationship” to plaintiff’s claims. Fantasy, 984 F.2d

at 1527. These allegations are apparently connected to the instant dispute only insofar as

they involve the same individuals. They do not provide any meaningful insight into how the

alleged fraud might have occurred, and are therefore not necessary to support the claims. 

We therefore grant in part defendant’s motion to strike references to previous business

transactions and criminal activity.

IV

IT IS ORDERED DISMISSING all claims against fictitious defendants John Doe

1-12 and Corporations X and Y. 

IT IS FURTHER ORDERED DENYING defendant’s motion to dismiss plaintiff’s

fraud claims (doc. 6).

IT IS FURTHER ORDERED STRIKING from plaintiff’s complaint ¶ 27, insofar

as it references criminal indictment and convictions; ¶ 29; the first sentence of ¶ 30 and the

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first clause of the second sentence of ¶ 30 (“During the course of Mastro’s prison sentence,”);

the first clause of the first sentence of ¶ 31 (“In 1983 after both Peter de Lamos and Mastro

were out of incarceration,”); and ¶ 50 (doc. 1). 

Having ruled on the remaining claims in defendant’s motion to dismiss, defendant’s

request for oral argument and additional briefing is moot. Therefore, IT IS ORDERED

DENYING defendant’s “Request for Oral Argument” and GRANTING defendant’s request

for a “Ruling on Motion to Dismiss” (doc. 17).

DATED this 17th day of September, 2010.

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