Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-00138/USCOURTS-casd-3_08-cv-00138-1/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SCHNEIDER RUCINSKI ENTERPRISES,

Plaintiff,

CASE NO. 08cv138-WQH-POR

ORDER

vs.

TOUCH ASIA; STRATASOFT, INC.; INX,

INC.; US COLO AT ONE WILSHIRE,

Defendants.

HAYES, Judge: 

The matters before the Court are (1) the motion to dismiss for lack of diversity jurisdiction

(Doc. # 52) filed by Defendant US COLO at One Wilshire; (2) the motion to dismiss for failure to

state a claim or, in the alternative motion for more definite statement (Doc. # 53) filed by

Defendant US COLO at One Wilshire; (3) the motion to dismiss for lack of subject matter

jurisdiction or, in the alternative to dismiss for failure to state a claim, or in the alternative, for a

more definite statement (Doc. # 54) filed by Defendants INX, Inc. and Stratasoft, Inc.; and (4) the

motion for leave to file a second amended complaint filed by Plaintiff Schneider Rucinski

Enterprises (Doc. # 59). 

BACKGROUND

On January 23, 2008, Plaintiff Schneider Rucinski Enterprises filed a complaint against

Defendants Touch Asia Outsourcing Solutions, Inc. (Touch Asia), Rudy Ngaw, Stratasoft, Inc.

(Stratasoft), INX, Inc. (INX), Lane McCarty, Jason Pace, Mike Bridges, Michael Bridges, Jr.,

Navros Haji, and US COLO. (Doc. # 1). The complaint alleged twenty claims for relief,

Case 3:08-cv-00138-WQH-POR Document 63 Filed 11/07/08 Page 1 of 4
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including claims for specific performance, breach of contract, breach of lease agreement, breach of

guarantee, claim and delivery, conversion, fraud and deceit, declaratory relief, account stated,

imposition of constructive trust, injunctive relief, unfair competition, intentional and negligent

interference with contractual relations, intentional and negligent interference with prospective

economic advantage, breach of the implied covenant of good faith and fair dealing, negligent

misrepresentation, fraudulent inducement, and civil conspiracy. (Doc. # 1).

On February 19, 2008, and March 14, 2008, Defendants INX, Inc. and Stratasoft, Inc. filed

motions to dismiss for lack of subject matter jurisdiction. (Docs. # 7, 8, 17, 18). On April 29,

2008, this Court entered an order granting Defendants’ motions to dismiss the complaint for lack

of subject matter jurisdiction. (Doc. # 48). The Court found that the complaint had failed to

establish diversity jurisdiction or federal question jurisdiction. The Court dismissed the complaint

its entirety without prejudice and granted Plaintiff leave to file and serve an amended complaint on

or before May 30, 2008. 

On May 30, 2008, Plaintiff filed a First Amended Complaint (FAC) against Defendants

Stratasoft, Inc.; INX Inc.; US COLO One Wilshire; and Touch Asia. (Doc. # 51). In the FAC, 

Plaintiff asserts eighteen claims for relief, including intentional fraud and intentional

misrepresentation, fraud and deceit, constructive trust fund, RICO violations, unfair business

practices, intentional interference with contractual relations, negligent misrepresentation,

injunctive relief, breach of contract, breach of implied good faith, computer fraud, fraudulent

inducement, telemarketing fraud, warranty fraud, breach of fiduciary duty, civil conspiracy,

fraudulent conversion and conveyance, and breach of guaranty. (Doc. # 51). 

On June19, 2008 Defendant US COLO filed a motion to dismiss for lack of diversity

jurisdiction (Doc. # 52) and a motion to dismiss for failure to state a claim or, in the alternative,

motion for a more definite statement (Doc. # 53). US COLO contends that the FAC fails to

provide a short and plain statement of the nature of the dispute between the parties; and that it fails

to identify the essential elements of each claim for relief or provide facts supporting these

elements. (Doc. # 53-2). Defendants INX, Inc. and Stratasoft, Inc filed a motion to dismiss for

lack of subject matter jurisdiction or, in the alternative to dismiss for failure to state a claim or, in

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the alternative, for a more definite statement. (Doc. # 54). Defendants INX and Stratasoft contend

that the FAC does not establish subject matter jurisdiction because there is neither complete

diversity of parties nor any federal question presented. Defendants, contend in the alternative, that

the FAC should be dismissed because Plaintiff has failed to make sufficient factual allegations by

which Defendants may be held liable for the alleged claims. 

On August 4, 2008, Plaintiff filed a motion for leave to further amend her complaint. 

(Doc. # 59). On August 15, 2008, Plaintiff filed a “response for more definitive statement of facts

or (second amended complaint) draft.” (Doc. # 62). The proposed second amended complaint

alleges that “this amended complaint likewise falls within the federal jurisdiction of this Court as it

involves a complaint for RICO act violation, federal law, through the commission of mail and wire

fraud, interstate transport of stolen properties and bank fraud.” (Id. at 2). Plaintiff contends that

the RICO violations alleged in her FAC, “will be specifically stated and thoroughly shown in the

Second Amended Complaint as requested by defendants.” (Id.) 

DISCUSSION

The Court concludes that the first amended complaint does not establish diversity

jurisdiction and fails to adequately allege a federal RICO claim. Rule 15 of the Federal Rules of

Civil Procedure mandates that leave to amend “be freely given when justice so requires.” Fed. R.

Civ. P. 15(a). This policy is applied with “extraordinary liberality.” Morongo Band of Mission

Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Once an answer to the complaint has been

filed, “leave to amend should be granted as unless amendment would cause prejudice to the

opposing party, is sought in bad faith, is futile, or creates undue delay.” Johnson v. Mammoth

Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992); see also Howey v. United States, 481 F.2d

1187, 1190 (9th Cir. 1973) (“[u]ndue delay, bad faith, futility of amendment, and prejudice to

opposing party are all relevant in determining propriety of a motion for leave to amend . . .”).

In this case, Plaintiff moves to file her second amended complaint in an attempt to provide

“a more defined statement as requested” by Defendants. (Doc. # 62 at 2). The proposed second

amended complaint attempts to allege facts to support a federal RICO claim. Allowing Plaintiff to

file a second amended complaint will not create undue delay and will not unduly prejudice the

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Defendants. The Court cannot conclude that the proposed amendments would be futile based on

the pleadings or that Plaintiff is proceeding in bad faith. 

CONCLUSION

IT IS HEREBY ORDERED that (1) the motion to dismiss for lack of diversity jurisdiction

(Doc. # 52) filed by Defendant US COLO is GRANTED; (2) the motion to dismiss for failure to

state a claim or, in the alternative motion for more definite statement (Doc. # 53) filed by

Defendant US COLO is GRANTED; (3) the motion to dismiss for lack of subject matter

jurisdiction or, in the alternative to dismiss for failure to state a claim, or in the alternative, for a

more definite statement (Doc. # 54) filed by Defendants INX, Inc. and Stratasoft, Inc. is

GRANTED; and (4) the motion for leave to file a second amended complaint filed by Plaintiff

Schneider Rucinski Enterprises (Doc. # 59) is GRANTED. Plaintiff shall file the Second

Amended Complaint specifically set forth in Document # 62 within 10 days of the date of this

order. 

DATED: November 7, 2008

WILLIAM Q. HAYES

United States District Judge

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