Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-02399/USCOURTS-azd-2_14-cv-02399-1/pdf.json

Nature of Suit Code: 150
Nature of Suit: Overpayments &amp; Enforcement of Judgments
Cause of Action: 28:1441 Petition for Removal- Declaratory Judgement

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Airbus DS Optronics GmbH,

Plaintiff, 

v. 

Nivisys LLC, et al., 

Defendants.

No. CV-14-02399-PHX-JAT

ORDER 

Defendants Nivisys, LLC (“Nivisys”) and WWWT Enterprises, LLC (“WWWT”) 

present the question of whether this case should be litigated in the District of Arizona or 

out in the West Texas town of El Paso. In addition to this motion for a change of venue 

(Doc. 45), the parties have filed numerous other motions. The Court now rules on the 

pending motions. 

I. Background

 Plaintiff Airbus DS Optronics GmbH (“Airbus”) filed this lawsuit for declaratory 

relief against Defendants Nivisys, LLC (“Nivisys”) and WWWT Enterprises, LLC 

(“WWWT”), seeking a declaration that Nivisys and WWWT are liable to Airbus on a 

judgment against their alleged predecessor, Nivisys Industries, LLC (“Nivisys 

Industries”). 

II. Motion to Change Venue

 WWWT moves for a change of venue, asking the Court to transfer this case to the 

Western District of Texas, El Paso Division. (Doc. 45 at 2). Nivisys joins in WWWT’s 

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motion. (Doc. 46). 

A. Background1

Nivisys Industries is a now-defunct limited liability company organized under the 

laws of the state of Arizona. (Doc. 55 at 2). Its corporate history is somewhat complex, 

but the following facts suffice for purposes of deciding the pending motion. Airbus and 

Nivisys Industries entered into a contract, which the latter breached around October 2011. 

(Doc. 28 at 3). By this same time, Nivisys Industries had defaulted on a credit agreement 

with a third party and ceased business operations. (Doc. 41-1 at 3). In November 2011, 

First Texas Holdings Corporation (“First Texas”), a Delaware corporation with its 

principal place of business in El Paso County, Texas, (Doc. 55 at 2), lent money to 

Nivisys Industries to restart its operations, (Doc. 41-1 at 4). Following additional loans to 

Nivisys Industries, First Texas exercised an option to purchase Nivisys Industries’ prior 

credit agreement. (Doc. 41-1 at 4). First Texas then became the senior secured creditor of 

Nivisys Industries. (Id.) First Texas assigned its rights and security interests to Nivisys, 

who demanded that Nivisys Industries cure its default. (Id. at 5). Nivisys then filed a 

receivership action against Nivisys Industries in Maricopa County Superior Court, 

seeking damages and requesting appointment of a receiver. (Doc. 51-1 at 39). 

In March 2012, Nivisys assigned its rights and security interests to WWWT, who 

became Nivisys Industries’ senior secured creditor. (Id.) After Nivisys Industries 

threatened to file bankruptcy, it entered into a settlement agreement with WWWT in 

which Nivisys Holdings, LLC (“Nivisys Holdings”) (Nivisys Industries’ parent company) 

surrendered its ownership interests in Nivisys Industries to WWWT in exchange for a 

release from the credit agreement. (Id.) Nivisys Industries, however, still owed WWWT 

 

1

 “When reviewing a motion to transfer venue . . . a court may consider evidence outside of the pleadings but must draw all reasonable inferences and resolve factual 

conflicts in favor of the non-moving party.” Sleepy Lagoon, Ltd. v. Tower Grp., Inc., 809 

F. Supp. 2d 1300, 1306 (N.D. Okla. 2011). The Court has found the facts accordingly. 

Because the standard for considering the facts is different on a motion to transfer venue than it is for a motion to dismiss, the Court has separately stated the background sections for each motion at issue. 

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under the credit agreement and eventually agreed to surrender most of its assets to 

WWWT as partial satisfaction of its debt owed. (Id. at 6). Nivisys Industries also sold 

most of its personal property to Nivisys, except for certain government contracts. (Id.) 

After the government contracts were fulfilled, Nivisys Industries (then called N.I. 

Liquidation, LLC) was dissolved. (Id.) 

 After WWWT acquired its ownership interests in Nivisys Industries and Nivisys 

Industries sold most of its personal property to Nivisys, most of Nivisys’ operations 

moved to Texas.2

 (Id. at 7). All of Nivisys’ operations are currently in Texas, including 

manufacturing, engineering, and administration, with the exception of four employees 

who remain in Arizona. (Id.) 

 According to Defendants, many of the transactions involving Defendants took 

place in Texas. Defendants allege that the negotiations relating to the loan from First 

Texas occurred in Texas, Virginia, and Maryland. (Doc. 41-1 at 7). They also allege that 

the assignment from Nivisys to WWWT occurred in Texas, the surrender agreement 

between Nivisys Holdings and WWWT was negotiated and executed in Texas, and a bill 

of sale from WWWT to Nivisys was executed in Texas. (Id.) Airbus disputes some of 

these assertions, claiming that the signatories to some of these agreements were Arizona 

residents. (Doc. 60 at 6). Airbus points out that Joe Walsh, the President of Nivisys, is an 

Arizona resident. (Id.) Airbus also alleges that parties to the various agreements involving 

Nivisys, Nivisys Industries, WWWT, and First Texas were represented by Arizona 

counsel. (Id.) 

 Airbus first sued Nivisys Industries in a foreign court, and then obtained a 

judgment against Nivisys Industries in Maricopa County Superior Court. (Doc. 51-1 at 

21-22). Airbus seeks in the present action to collect on this judgment against Defendants. 

 

2

 The Court has reviewed Airbus’s contention that Nivisys continued to operate its business in Arizona until “at least July 31, 2014.” But Airbus’s citations do not support this contention; they merely show that in late 2012 there were Nivisys Industries operations in Arizona. See (Doc. 41-2; Doc. 51-2). For example, although Airbus cites Nivisys’ response to an interrogatory as evidence that Nivisys is currently being operated from Scottsdale, Arizona, most of the employees disclosed as having an Arizona residence last worked for Nivisys Industries in 2012. See (Doc. 60-1 at 23). 

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B. Legal Standard

 “For the convenience of parties and witnesses, in the interest of justice, a district 

court may transfer any civil action to any other district or division where it might have 

been brought. . . .” 28 U.S.C. § 1404(a). The purpose of the change of venue statute is to 

“prevent the waste of time, energy and money and to protect litigants, witnesses and the 

public against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 

612, 616 (1964) (citation and internal quotation marks omitted). 

 “When determining whether a transfer is proper, a court must employ a two-step 

analysis. A court must first consider the threshold question of whether the case could 

have been brought in the forum to which the moving party seeks to transfer the case.” 

Park v. Dole Fresh Vegetables, Inc., 964 F. Supp. 2d 1088, 1093 (N.D. Cal. 2013). “In 

order that the case ‘might have been brought’ in the proposed transferee district, the court 

there must have subject matter jurisdiction and proper venue, and the defendant must be 

amenable to service of process issued by that court.” Kachal, Inc. v. Menzie, 738 F. Supp. 

371, 372-73 (D. Nev. 1990). 

 Second, a court must consider whether the proposed transferee district is a more 

suitable choice of venue based upon the convenience of the parties and witnesses and the 

interests of justice. See Park, 964 F. Supp. 2d at 1093. The Ninth Circuit Court of 

Appeals has enumerated factors that a court may consider in making this determination: 

(1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar 

with the governing law, (3) the plaintiff's choice of forum, (4) 

the respective parties’ contacts with the forum, (5) the 

contacts relating to the plaintiff’s cause of action in the 

chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. 

Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). No single factor is 

dispositive. See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 (1988). 

 The party seeking a change of venue bears the burden of establishing that a 

transfer of the case is proper. Commodity Futures Trading Comm’n v. Savage, 611 F.2d 

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270, 279 (9th Cir. 1979). 

C. Analysis

Airbus does not challenge the motion to change venue on the basis that the 

Western District of Texas is not a proper venue for this lawsuit. Accordingly, the Court 

confines its analysis to the dispute at issue: whether the convenience of the parties and 

witnesses and the interests of justice justify a change of venue. 

Defendants argue that several factors cause the Western District of Texas to be the 

better venue for this case. The Court will address each factor in turn. 

1. Location Where the Relevant Agreements were Negotiated and 

Executed 

Defendants argue that a transfer of venue to the Western District of Texas is 

appropriate because the agreements relevant to Airbus’s claims were executed and 

negotiated outside of Arizona, mostly in Texas. (Doc. 45 at 5). They contend that the 

relevant agreements that are the subject of this lawsuit are those that allegedly give rise to 

Nivisys’ liability as the successor to Nivisys Industries. (Id.); see also (Doc. 29 at 4). 

Defendants assert that the negotiations concerning the purchase of the credit agreement, 

the assignment of rights, and the surrender agreement between WWWT and Nivisys 

Holdings, among other agreements, were all primarily negotiated in Texas. (Doc. 45 at 

5). 

Airbus argues that the agreements upon which its lawsuit is based are not the 

agreements between Nivisys Industries, WWWT, First Texas, and others, but rather the 

original contract and purchase order between Airbus and Nivisys Industries as well as the 

judgment that Airbus obtained against Nivisys Industries in an Arizona court. (Doc. 60 at 

5). Thus, Airbus contends, the relevant agreements were negotiated and executed in 

Arizona. The Court disagrees. Airbus’ First Amended Complaint purports to state a cause 

of action for successor liability based upon the dealings between Nivisys Industries, 

Nivisys, and WWWT. See (Doc. 29 at 4). Moreover, Airbus identifies itself as a creditor 

of Nivisys Industries. (Id. at 5). Once Airbus reduced its claim against Nivisys Industries 

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to a final judgment, the underlying cause of action giving rise to the judgment is 

irrelevant for purposes of collecting on that judgment. 

Airbus also alleges, however, that the agreements between Nivisys Industries, 

Nivisys, WWWT, and First Texas were not primarily negotiated in Texas. Airbus points 

out that out of six signatories to the settlement agreement between WWWT, Nivisys 

Industries, and Nivisys Holdings, all but four were and are residents of Arizona. (Doc. 60 

at 6). Thomas Walsh, the president of WWWT, resides in Texas. (Doc. 41-1 at 8). The 

remaining signatory resides in Virginia. (Doc. 45 at 7). The Court finds that the extent to 

which the various agreements at issue were negotiated by companies based in Texas, this 

does not overcome the Arizona connections such that this factor supports Texas venue. 

2. The State Most Familiar with the Governing Law

 Defendants argue that the governing law in this case is that of Texas, and as such 

Texas is most familiar with the governing law. (Id. at 5). Airbus contends that Arizona 

law applies. (Doc. 60 at 8). Because the Court has not yet determined which state’s law 

applies, this factor does not weigh in favor of either venue. 

 3. Plaintiff’s Choice of Forum

 Defendants argue that Airbus’s choice of forum is entitled to less deference than it 

would otherwise be afforded because Airbus does not reside in Arizona. (Doc. 45 at 6). 

Generally, a plaintiff’s choice of forum is entitled to substantial consideration; however, 

“the degree of deference is substantially diminished” when the chosen forum is not 

plaintiff’s residence, the conduct at issue occurred in a different forum, or plaintiff’s 

choice of forum was its second choice. Park, 964 F. Supp. 2d at 1094. Here, Airbus is 

entitled to some deference because although it does not reside in Arizona, some of the 

conduct at issue occurred in Arizona. Some of the signatories to the various transactions 

involving Nivisys Industries resided in Arizona, and Nivisys Industries continued to 

operate in Arizona for at least a short while after Defendants became involved as a lender 

(and later owner). Accordingly, this factor weighs slightly in favor of Arizona. 

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 4. The Respective Parties’ Contacts with the Forum

 Defendants contend that neither party has substantial contacts with Arizona. (Doc. 

45 at 6). They contend that virtually all of the witnesses and records are in Texas. (Id.) 

But as the Court has explained, most of the witnesses to the agreements allegedly giving 

rise to successor liability reside in Arizona. The convenience of witnesses “is often the 

most important factor in resolving a motion to transfer.” Park, 964 F. Supp. 2d at 1095 

(citation omitted). Airbus also correctly points out that Nivisys has substantial contacts 

with Arizona because it continued operations within the state and currently represents to 

the world that it operates in Scottsdale, Arizona. (Doc. 60 at 10). 

 Most significantly, Defendants initiated a receivership action in Maricopa County 

Superior Court against Nivisys Industries. Thus, Defendants have already had contacts 

with Arizona courts. 

Accordingly, this factor weighs in favor of Arizona. 

5. Contacts Relating to the Parties’ Cause of Action in the Chosen 

Forum

 Defendants argue that because most of the records and witnesses are in Texas, the 

contacts relevant to Airbus’s cause of action support venue in Texas. (Doc. 45 at 7). 

Airbus argues that because it contracted with Nivisys Industries within Arizona and a 

number of witnesses reside in Arizona, this factor favors Arizona. (Doc. 60 at 10-11). 

Although Defendants contend that the facts giving rise to this litigation occurred in 

Texas, because the assignments and settlement agreements involved both Texas and 

Arizona companies, this factor is neutral. 

 6. Differences in the Cost of Litigation in the Two Forums

 Defendants contend that the cost of litigation will be higher in Arizona rather than 

Texas, and therefore this favors transferring venue to Texas. (Doc. 45 at 8). But many 

witnesses are located in Arizona, and although many documents are located in Texas, 

there is no significant added expense to producing documents in Arizona instead of 

Texas. The fact that Defendants’ counsel is located in Texas, however, tips this factor in 

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favor of Texas. 

 7. The Availability of Compulsory Process 

Airbus argues that because most of the witnesses reside in Arizona, they will be 

outside the subpoena power of the Western District of Texas. (Doc. 60 at 13). Defendants 

argue that because most of the witnesses reside in Texas, they will be outside the 

subpoena power of the District of Arizona. (Doc. 45 at 8). Because most of the 

signatories to the settlement agreement and the other agreements were Arizona residents, 

the availability of compulsory process favors the District of Arizona. 

8. Ease of Access to Sources of Proof

Because this case involves both Arizona and Texas companies and witnesses, both 

the District of Arizona and the Western District of Texas have approximately equal 

access to sources of proof. As with the previous factor, the number of witnesses in each 

state favors Arizona, and because document production can occur in either state, this 

factor favors Arizona. 

9. Public Policy

The public policy of the forum state is a factor to be considered in analyzing a 

motion to change venue. Jones, 211 F.3d at 499. “Arizona has a basic public policy 

interest in regulating conduct within its borders.” Landi v. Arkules, 835 P.2d 458, 463 

(Ariz. Ct. App. 1992). Central to Airbus’s contentions for successor liability is that by 

continuing to operate within Arizona and representing that Nivisys continued to operate 

within Arizona, Defendants are successors of Nivisys Industries. Thus, the Arizona 

connections in this case are relevant to the issue of collection on Airbus’ judgment. On 

the other hand, Texas also has a public policy interest in adjudicating disputes that occur 

within its borders. But the present dispute spans both states, and considering that the basis 

for successor liability involves continuing Arizona operations, public policy favors 

Arizona. 

10. Conclusion 

Weighing the factors, the Court concludes that a change of venue to the Western 

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District of Texas is not warranted. Although the facts alleged in this case involve both 

Arizona and Texas witnesses and entities, the fact that Airbus obtained an Arizona 

judgment against Nivisys Industries and Defendants’ liability is based in part upon their 

continued operations of a company named Nivisys within Arizona both weigh in favor of 

Arizona as the best venue for this case. Moreover, Airbus is entitled to some deference in 

its choice of forum. For these reasons, the Court will deny Defendants’ request to change 

venue. 

III. Motion to Dismiss

 WWWT moves to dismiss Airbus’s First Amended Complaint on the grounds that 

it fails to state a claim upon which relief can be granted. (Doc. 41). 

A. Background

 Airbus alleges the following facts, which the Court assumes to be true for 

purposes of deciding the pending motion to dismiss: Nivisys Industries, LLC (“Nivisys 

Industries”) was a limited liability company organized under the laws of the State of 

Arizona, formed on or about January 26, 2003. (Doc. 28 ¶ 8). In March 2008, Nivisys 

Industries’ members sold their full interest in Nivisys Industries either to Relativity 

Holding, LLC (“Relativity Holding”), a Delaware limited liability company, or to one of 

Relativity Holding’s subsidiaries, Nivisys Holdings, LLC (“Nivisys Holdings”). (Id. ¶ 9). 

 In or about October 2011, Nivisys Industries breached a contract between itself 

and Airbus that had been executed approximately in or about September 2008. (Id. ¶ 10). 

Airbus obtained a judgment against Nivisys Industries in Stuttgart Regional Court, 

Germany. (Id. ¶ 11). Airbus later obtained a judgment against Nivisys Industries in 

Maricopa County Superior Court. (Id. ¶ 12). 

 On or about May 14, 2012, Relativity Holding or Nivisys Holdings transferred 

ownership of Nivisys Industries to WWWT. (Id. ¶ 13). WWWT is a wholly owned 

subsidiary of First Texas Holding Corporation (“First Texas”), a Delaware corporation 

owned by Thomas P. Walsh. (Id. ¶ 14). WWWT transferred Nivisys Industries’ assets to 

a newly-formed Delaware limited liability company, Nivisys, LLC (“Nivisys”). (Id. ¶ 

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15). Nivisys is a subsidiary of First Texas, and continued conducting the business of 

Nivisys Industries at the same place of business with “many of the same employees, 

customers, and suppliers.” (Id. ¶¶ 16-17). Nivisys continues to conduct the business of 

Nivisys Industries. (Id. ¶ 18). Airbus believes that all of Nivisys Industries’ assets have 

been transferred to Nivisys, rendering Nivisys Industries insolvent and unable to satisfy 

Airbus’s judgment. (Id. ¶ 19). 

B. Legal Standard

 A complaint may be dismissed under Federal Rule of Civil Procedure (“Rule”) 

12(b)(6) for failure to state a claim upon which relief can be granted if it fails to state a 

cognizable legal theory or fails to allege sufficient facts under a cognizable legal theory. 

Balistreri v. Pac. Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion to 

dismiss, a complaint need contain only “a short and plain statement of the claim showing 

that the pleader is entitled to relief” such that the defendant is given “fair notice of what 

the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41, 

47 (1957)). 

 But although a complaint “does not need detailed factual allegations,” a plaintiff 

must “raise a right to relief above the speculative level.” Id. This requires more than 

merely “a formulaic recitation of the elements of a cause of action.” Id. A complaint must 

“state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (quoting Twombly, 550 U.S. at 570). Facial plausibility requires the plaintiff to 

plead “factual content that allows the court to draw the reasonable inference that the 

defendant is liable for the misconduct alleged.” Id. “Where a complaint pleads facts that 

are ‘merely consistent with’ a defendant’s liability, it stops short of the line between 

possibility and plausibility of entitlement to relief.” Id. (quoting Twombly, 550 U.S. at 

557) (internal quotation marks omitted). 

 In reviewing a complaint for failure to state a claim, the Court must “accept as true 

all well-pleaded allegations of material fact, and construe them in the light most favorable 

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to the non-moving party.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 

2010). However, the Court does not have to accept as true “allegations that are merely 

conclusory, unwarranted deductions of fact, or unreasonable inferences.” Id.

C. Declaratory Judgment

 WWWT argues that Airbus fails to state a claim for a declaratory judgment that 

Nivisys is liable as a successor to Nivisys Industries for Nivisys Industries’ debts because 

Airbus was neither a party nor a third-party beneficiary to the transactions between 

WWWT, Nivisys, First Texas, and Nivisys Industries. (Doc. 41 at 5). WWWT cites 

several cases for the proposition that only a party to a contract or a third-party beneficiary 

has standing to bring a declaratory judgment action relating to rights and obligations 

under that contract. (Id.) 

 In this case, Airbus is not a party to the agreements between WWWT, Nivisys, 

First Texas, and Nivisys Industries. Nor is it a third-party beneficiary of those 

agreements. However, WWWT’s argument fails because Airbus is a judgment creditor. 

Although WWWT is correct that generally standing to bring a declaratory judgment 

action relating to a contract requires privity or a third-party beneficiary, this rule applies 

only to pre-judgment plaintiffs. See Anderson v. Everest Nat’l Ins. Co., 984 F. Supp. 2d 

974, 979 (D. Ariz. 2013). Judgment creditors have standing to bring garnishment actions 

against the judgment debtor, id., and this right to apply for a writ of garnishment creates 

the adverse legal interests necessary for standing to exist. WWWT’s reliance upon 

Mardian Equipment Company is misplaced, as the Court has previously explained in 

Anderson. See Anderson, 984 F. Supp. 2d at 978-79. Similarly, Tri-State Generation & 

Transmission Association, Inc. v. BNSF Railway Co., 2008 WL 2465407 (D. Ariz. June 

17, 2008) and GECCMC 2005-C1 Plummer Street Office Limited v. JPMorgan Chase 

Bank, 671 F.3d 1027 (9th Cir. 2012) did not involve a judgment creditor plaintiff. 

Therefore, for the same reasons as explained in Anderson, Airbus has standing to seek a 

declaratory judgment.3

 

3

 WWWT also points out that Airbus’ First Amended Complaint cites Arizona’s 

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D. Successor Liability and Fraudulent Transfer

 The parties dispute which law applies to Airbus’ claims for successor liability. 

WWWT contends that Texas law applies and that Airbus fails to state claims for 

fraudulent transfer and successor liability under Texas law. (Doc. 41 at 6). Airbus 

contends that Arizona law applies and argues it has stated claims under Arizona law, but 

even if Texas law applied, under Texas law as well. (Doc. 51 at 14-16). Because the 

Court concludes that Airbus has stated claims under both Arizona and Texas law, the 

Court need not conduct a choice-of-law analysis to determine which state’s law applies. 

 1. Successor Liability 

 a. Arizona Law 

 Under Arizona law, a “when a corporation sells or transfers its principal assets to a 

successor corporation, the latter will not be liable for the debts and liabilities of the 

former, unless (1) there is an express or implied agreement of assumption, (2) the 

transaction amounts to a consolidation or merger of the two corporations, (3) the 

purchasing corporation is a mere continuation [or reincarnation] of the seller, or (4) the 

transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for 

the seller’s debts.” A.R. Teeters & Assocs., Inc. v. Eastman Kodak Co., 836 P.2d 1034, 

1039 (Ariz. Ct. App. 1992). 

Airbus argues that WWWT and First Texas expressly assumed the liabilities of 

Nivisys Industries, and points to the settlement agreement transferring ownership of 

Nivisys Industries to WWWT as evidence. (Doc. 51 at 16). Although Airbus did not 

attach this settlement agreement to the First Amended Complaint, Airbus’ complaint 

necessarily relies upon this document, both parties cite to it, and its authenticity is not 

contested. Therefore, the Court may consider it in ruling on WWWT’s motion, without 

converting the motion into one for summary judgment.4 See Lee v. City of L.A., 250 F.3d 

 declaratory judgments statute. (Doc. 41 at 4-5). WWWT is correct that the applicable statute is the federal Declaratory Judgment Act. See Anderson, 984 F. Supp. 2d 977 n.1. 

4

 Other documents attached to WWWT’s motion to dismiss, such as the affidavit 

of Tom Walsh, do not fall into this category and the Court will not consider them in 

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668, 686 (9th Cir. 2001) (“If the documents are not physically attached to the complaint, 

they may be considered if the documents’ authenticity is not contested and the plaintiff’s 

complaint necessarily relies on them.”). 

 In the settlement agreement, Nivisys Holdings (owner of Nivisys Industries) 

explicitly represented and warrantied to WWWT and Nivisys that it had no outstanding 

liabilities other than those listed in the agreement. (Doc. 51-1 at 84). The agreement lists 

a claim for breach of contract by Airbus’ predecessor as an outstanding potential 

liability.5

 (Id. at 104). Accordingly, Airbus has alleged facts sufficient to render plausible 

its claim that WWWT and Nivisys expressly assumed Nivisys Industries’ liability to 

Airbus. 

 WWWT argues, however, that a valid claim for successor liability requires that the 

transaction alleged to result in successor liability be an asset purchase, and WWWT never 

purchased the assets of Nivisys Industries. (Doc. 41 at 9; Doc. 57 at 4-5). The Court has 

searched Arizona case law and has found no decision restricting the test for successor 

liability to only those instances in which the asset transfer was not to a creditor of the 

original corporation. To the contrary, the test set forth in A.R. Teeters expressly applies to 

circumstances not involving an asset purchase; the Arizona Court of Appeals stated that 

the test applies “when a corporation sells or transfers its principal assets to a successor 

corporation.” 836 P.2d at 1039. Thus, successor liability may arise under Arizona law 

when the assets of a corporation are transferred to a successor corporation without a sale.6

Accordingly, Airbus states a claim under Arizona law for successor liability. 

 ruling on the motion. 

5

 Although WWWT asserts that Airbus has not established that it is a valid 

successor to Carl Zeiss Optronics GmbH, the named entity in the settlement agreement, because in ruling on a Rule 12(b)(6) motion to dismiss the Court assumes the facts in the 

complaint to be true and Airbus alleges it obtained a judgment against Nivisys Industries based on this claim, WWWT’s assertion is without merit at this juncture. 

6

 WWWT cites A.R.S. § 47-9402 for the proposition that a secured creditor is not 

liable for the debtor’s acts. (Doc. 41 at 9-10). WWWT misapplies this statute, which holds only that being a secured creditor, “without more,” does not cause the creditor to be 

liable for the debtor’s acts or omissions. Here, the assets of Nivisys Industries were transferred to WWWT. 

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 b. Texas Law

 Under Texas law, the only viable theory of successor liability is express 

assumption. See E-Quest Mgmt., LLC v. Shaw, 433 S.W.3d 18, 25 (Tex. App. 2013). “[A] 

person acquiring property . . . may not be held responsible or liable for a liability or 

obligation of the transferring domestic entity that is not expressly assumed by the 

person.” Tex. Business Organizations Code Ann. § 10.254 (2015). Because, as the Court 

has discussed, Airbus alleges facts sufficient to render plausible its claim that WWWT 

and Nivisys expressly assumed Nivisys Industries’ liability to Airbus, Airbus also states a 

claim under Texas law for successor liability. 

 2. Fraudulent Transfer

 Because Airbus’ claim for fraudulent transfer references the Arizona Revised 

Statutes, the Court need only analyze that claim under Arizona law. Arizona has enacted 

the Uniform Fraudulent Transfer Act (“UFTA”). State ex rel. Indus. Comm’n of Ariz. v. 

Wright, 43 P.3d 203, 206 ¶ 14 (Ariz. Ct. App. 2002). The relevant UFTA statute 

provides: 

A transfer made or obligation incurred by a debtor is 

fraudulent as to a creditor whose claim arose before the 

transfer was made or the obligation was incurred if the debtor 

made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or 

obligation and the debtor was insolvent at that time or the 

debtor became insolvent as a result of the transfer or 

obligation. 

A.R.S. § 44-1005. 

 A claim for a constructively fraudulent transfer occurs when “an exchange lacks 

reasonably equivalent value and the debtor was insolvent at that time or the debtor 

became insolvent as a result of the transfer.” Hullett v. Cousin, 63 P.3d 1029, 1032 ¶ 13 

(Ariz. 2003) (internal quotation marks omitted). Airbus alleges that WWWT transferred 

all assets of Nivisys Industries to Nivisys, causing Nivisys Industries to be insolvent. 

(Doc. 28 ¶¶ 15, 19). This is sufficient to state a claim for a constructively fraudulent 

transfer. 

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 WWWT argues that Airbus fails to state a claim for fraudulent transfer because 

Airbus does not plead any of the remedies permitted under the UFTA. (Doc. 41 at 17). A 

prayer for relief is not part of a claim, and “failure to specify relief to which the plaintiff 

[is] entitled [does] not warrant dismissal under Rule 12(b)(6).” Bontkowski v. Smith, 305 

F.3d 757, 762 (7th Cir. 2002); see also Holt Civic Club v. City of Tuscaloosa, 439 U.S. 

60, 66 (1978); Summit Tech., Inc. v. High-Line Med. Instruments, Co., 933 F. Supp. 918, 

927-28 (C.D. Cal. 1996). Therefore, any failure to plead proper relief is not fatal to 

Airbus’ claim. 

 WWWT also argues that A.R.S. § 44-1008(E)(2) precludes liability for fraudulent 

transfers arising from the enforcement of a security interest. (Doc. 41 at 17). However, in 

ruling on a motion to dismiss under Rule 12(b)(6), the Court must assume the facts of the 

complaint to be true. Airbus does not allege that WWWT’s transactions with Nivisys 

Industries were merely the enforcement of a security interest, nor is it clear that they 

could only have arisen in the context of enforcing a security interest. Accordingly, this 

argument is not a basis for dismissal at this stage of the case. 

 Finally, WWWT contends that Airbus fails to plead its fraudulent transfer claim 

with the particularity required under Rule 9(b). (Doc. 41 at 16). Rule 9(b) requires a party 

alleging fraud to “state with particularity the circumstances constituting fraud or mistake. 

Malice, intent, knowledge, and other conditions of a person’s mind may be alleged 

generally.” Fed. R. Civ. P. 9(b). Most courts that have addressed the issue of whether 

Rule 9 applies to claims for a constructive fraudulent transfer have concluded that it does 

not, because a constructive fraudulent transfer claim “focuses entirely on the transaction 

at issue and does not include elements of knowledge, intent, or purpose.” Sunnyside Dev. 

Co. v. Cambridge Display Tech. Ltd., 2008 WL 4450328, at *9 (N.D. Cal. Sept. 29, 

2008). In applying Nevada’s constructive fraudulent transfer law, which is similar to that 

of Arizona, the District of Nevada has held: 

The weight of authority is that Rule 9 applies to claims of actual fraudulent transfer but not to claims of constructive 

fraudulent transfer. See In re Tronox Inc., 429 B.R. 73, 96 

(Bankr.S.D.N.Y. 2010) (collecting cases concluding Rule 

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9(b) does not apply to claims of constructive fraudulent 

conveyance); In re Air Cargo, Inc., 401 B.R. 178, 192 

(Bankr.D.Md.2008) (noting that while courts are divided on 

the question whether Rule 9(b) applies to constructive fraudulent conveyance claims, the majority have concluded it does not); Van–Am. Ins. Co. v. Schiappa, et al., 191 F.R.D. 

537, 542–43 (S.D.Ohio 2000) (applying Rule 9(b) to claims of actual fraudulent transfer but not to claims of constructive 

fraudulent transfer; Kelleher v. Kelleher, 2014 WL 94197, at 

*6 (N.D.Cal.2014); Hyosung (Am.), Inc. v. Hantle USA, Inc., 2011 WL 835781, at *4 (N.D.Cal. March 4, 2011); Sunnyside Dev. Co. LLC v. Cambridge Display Tech. Ltd., 2008 WL 

4450328, at *9 (N.D.Cal.2008). The court agrees with the reasoning of these courts and concludes that Rule 9 applies to a claim of actual fraudulent transfer under Nevada law but not 

to a claim of constructive fraudulent transfer. 

Takiguchi v. MRI Int’l, Inc., 2015 WL 1609828, at *2 (D. Nev. Apr. 10, 2015). The Court 

agrees with these authorities; Airbus was not required to state its constructive fraudulent 

transfer claim with the particularity required by Rule 9. 

IV. Motion for a More Definite Statement

 WWWT moves in the alternative for a more definite statement under Rule 12(e). 

(Doc. 41 at 17). Rule 12(e) permits a party to “move for a more definite statement of a 

pleading to which a responsive pleading is allowed but which is so vague or ambiguous 

that the party cannot reasonably prepare a response. The motion must be made before 

filing a responsive pleading and must point out the defects complained of and the details 

desired.” Thus, WWWT cannot file a motion for a more definite statement 

simultaneously with, or after, its motion to dismiss. Moreover, even if WWWT’s motion 

for a more definite statement were procedurally proper, it is unmeritorious. Rule 12(e) 

motions should be “granted only where the complaint is so indefinite that the defendants 

cannot ascertain the nature of the claims being asserted and ‘literally cannot frame a 

responsive pleading.’” Hubbs v. Cnty. of San Bernardino, CA, 538 F. Supp. 2d 1254, 

1262 (C.D. Cal. 2008); see also E.E.O.C. v. Alia Corp., 842 F. Supp. 2d 1243, 1250 (E.D. 

Cal. Feb. 6, 2012) (“The purpose of Rule 12(e) is to provide relief from a pleading that is 

unintelligible, not one that is merely lacking detail.”). Airbus’ First Amendment 

Complaint is not only intelligible, but states valid claims. WWWT’s motion for a more 

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definite statement is denied. 

V. Objections to Evidence

 WWWT filed a document titled “Defendant’s Objections to Evidence in Support 

of Plaintiff’s Opposition to Defendant WWWT Enterprises, LLC’s Motion to Dismiss” 

(Doc. 56) in which WWWT objects to evidence attached to Airbus’ response to 

WWWT’s motion to dismiss. WWWT’s filing was without effect because evidence 

attached to a responsive brief may not be considered in ruling on a Rule 12(b)(6) motion. 

More significantly, WWWT’s filing is procedurally improper. Local Rule of Civil 

Procedure (“Local Rule”) 7.2(m)(2) prohibits separate filings concerning “the 

admissibility of evidence offered in support of or opposition to a motion.” 

 Airbus has filed a motion to strike WWWT’s filing. (Doc. 70). Local Rule 7.2 

does permit a motion to strike “any part of a filing on the ground that it is prohibited (or 

not authorized) by a statute, rule, or court order.” LRCiv 7.2(m)(1). Because Local Rule 

7.2(m)(2) prohibits WWWT’s filing, Airbus’ motion to strike under Local Rule 7.2(m)(1) 

is proper and will be granted. 

 Both parties also engaged in the same behavior with respect to the motion for 

change of venue, with WWWT filing an improper “Objections to Evidence” (Doc. 65) 

and Airbus filing a motion to strike WWWT’s filing (Doc. 76). For the same reasons, 

Airbus’ motion to strike will be granted. To the extent the parties have raised any 

evidentiary objections in their response or reply concerning the motion for change of 

venue, the Court has considered these objections in determining the facts. 

VI. Motions to Quash Subpoenas

 Two motions to quash subpoenas have been filed in this case. First, attorney James 

P. O’Sullivan of the law firm of Tiffany & Bosco, PA has moved to quash a subpoena 

served on Mr. O’Sullivan. (Doc. 40). In response, Airbus asks the Court to compel Mr. 

O’Sullivan to comply with this subpoena. (Doc. 43). Second, First Texas has moved to 

quash a subpoena served on it, (Doc. 63), and Airbus has moved the Court to compel 

First Texas’ compliance with this subpoena. (Doc. 49). 

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A. Legal Standard

 Rule 45 requires a court to quash or modify a subpoena that “requires disclosure of 

privileged or other protected matter, if no exception or waiver applies; or . . . subjects a 

person to undue burden.” Fed. R. Civ. P. 45(d)(3)(A). The party moving to quash a 

subpoena bears the burden of persuasion, “but the party issuing the subpoena must 

demonstrate that the discovery sought is relevant.” Drummond Co. v. Collingsworth, 

2013 WL 6074157, at *9 (N.D. Cal. 2013). 

B. Subpoena Served on Mr. O’Sullivan

 Airbus served a subpoena on Mr. O’Sullivan, a non-party, asking him to produce 

all documents relating to WWWT, Nivisys, and First Texas, including documents relating 

to “the transfer, sale, purchase, acquisition, or surrender of any interest in Nivisys 

Holdings, LLC, Nivisys Industries IC-DISC, Inc., and/or Nivisys Industries, LLC, and/or 

any assets or liabilities of such entities.” (Doc. 40-1 at 6). Mr. O’Sullivan objects to the 

subpoena on the grounds that it requests material protected by the attorney-client 

privilege and work-product privilege, is overly broad, and is unduly burdensome.7

 (Doc. 

40 at 2). Airbus asserts that Mr. O’Sullivan possesses information relevant to the present 

case because he represented the former CEO and chairman of Nivisys Industries during 

negotiations with First Texas and the other parties involved in the settlement transactions. 

(Doc. 43 at 2). 

 Mr. O’Sullivan properly invokes Ethical Rule 1.6 of the Arizona Rules of 

Professional Conduct in refusing to disclose his client’s information unless the Court 

issues a final order directing him to disclose such information. (Doc. 40 at 5). The Court 

notes that if it ordered such disclosure, Mr. O’Sullivan would presumably produce a 

privilege log identifying why all of the requested information is subject to a privilege. See

Fed. R. Civ. P. 45(e)(2)(A). 

The subpoena is overly broad and therefore unduly burdensome upon Mr. 

 

7

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O’Sullivan. Airbus requests all documents relating to Mr. O’Sullivan’s clients, and 

although Airbus lists documents relating to the transactions involving Nivisys and 

Nivisys Industries as an example of responsive documents, it does not limit its demand 

for production to these documents.8

 Thus, the subpoena in essence asks Mr. O’Sullivan 

and Tiffany & Bosco to turn over all documents relating to certain entities, regardless of 

relevance to this case. This is an undue burden, and the Court will quash the subpoena. 

C. Subpoena Served on First Texas

 On January 26, 2015, Airbus served a subpoena duces tecum on non-party First 

Texas. Airbus has moved to compel compliance with the subpoena, and First Texas has 

moved to quash the subpoena. (Docs. 49 & 63). In correspondence, First Texas (who is 

represented by the same counsel as WWWT) admits awareness of the Court’s Rule 16 

Scheduling Order prohibiting the filing of discovery motions. (Doc. 52 at 19). 

Accordingly, the motions relating to this subpoena are denied without prejudice. The 

parties may raise the issue via the method prescribed in the Court’s Rule 16 Scheduling 

Order. 

VII. Conclusion

 For the foregoing reasons, 

IT IS ORDERED denying WWWT’s motion to transfer venue. (Doc. 45). 

IT IS FURTHER ORDERED denying WWWT’s motion to dismiss (Doc. 41). 

IT IS FURTHER ORDERED granting Airbus’ motion to strike (Doc. 70). 

IT IS FURTHER ORDERED striking Doc. 56. 

IT IS FURTHER ORDERED granting Airbus’ motion to strike (Doc. 76). 

IT IS FURTHER ORDERED striking Doc. 65. 

IT IS FURTHER ORDERED granting the Motion to Quash Subpoena Duces 

Tecum and Notice of Duces Tecum Deposition Served on Tiffany & Bosco and Attorney 

Jim O’Sullivan (Doc. 40). 

 

8

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IT IS FURTHER ORDERED quashing the subpoena attached as Exhibit A to 

Doc. 40. 

IT IS FURTHER ORDERED denying without prejudice First Texas’ motion to 

quash subpoena (Doc. 63). 

IT IS FURTHER ORDERED denying without prejudice Airbus’ motion to 

compel First Texas’ compliance with subpoena (Doc. 49). 

IT IS FURTHER ORDERED denying without prejudice First Texas’ motion for 

a protective order (Doc. 78). 

 Dated this 28th day of May, 2015. 

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