Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01982/USCOURTS-casd-3_13-cv-01982-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1964 Civil Remedies: Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TRICIA VARRASSO, et al.,

Plaintiffs,

Case No. 13-cv-1982 BAS (JLB)

ORDER:

(1)DENYING LEAVE TO 

AMEND AS FUTILE; AND

(2)GRANTING 

DEFENDANT’S MOTION 

TO DISMISS PLAINTIFFS’ 

SECOND AMENDED 

COMPLAINT

(DOC. 42, 47)

v.

ARLEN BARKSDALE, et al.,

Defendants.

On August 26, 2013, Plaintiffs Tricia Varrasso, Donald Varrasso, and 

Harold Will filed a Complaint claiming damages against Defendants Sun West 

Solar, Inc. et al. for defrauding Plaintiffs. Doc. 1. Plaintiffs then amended their 

complaint on September 9, 2013. Soon afterward, Defendants filed separately 

noticed motions to dismiss the complaint. Then, on October 22, 2013, Plaintiffs 

filed a motion for leave to amend the complaint. Doc. 20. The court granted their 

request. Plaintiffs therefore filed their Second Amended Complaint on January 14, 

2014. Then, less than two weeks later and the day before motions to dismiss were 

Case 3:13-cv-01982-BAS-JLB Document 70 Filed 07/03/14 Page 1 of 8
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due, Plaintiffs again moved for leave to amend their complaint. Doc. 42. The next 

day, five separately-noticed motions to dismiss from various defendants were 

filed.1

I. BACKGROUND

Plaintiffs Tricia Varrasso, Donald Varrasso, and Harold Will loaned money 

to Defendant Sun West Solar, Inc. The initial loan, termed a “guaranteed good 

deal,” totalled $645,000 and was secured with stock in Sun West and a property 

interest in the “Texan Resort,” a property purportedly owned by Defendant.

Second Am. Comp. ¶ 129. 

Plaintiff was allegedly induced to loan Sun West an additional $155,000, but 

that transaction is not challenged in the Complaint. Proposed Third Am. Compl. ¶ 

2. Plaintiffs claim that Defendants are involved in a racket. Second Am. Compl. 

¶¶ 210–211.

II. PLAINTIFFS’ MOTION TO AMEND

Rule 15(a) of the Federal Rules of Civil Procedure provides that after a 

responsive pleading has been served, a party may amend its complaint only with 

the opposing party’s written consent or the court’s leave. Fed. R. Civ. P. 15(a). 

“The court should freely give leave when justice so requires,” and apply this policy 

with “extreme liberality.” Id.; DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 

(9th Cir. 1987). However, leave to amend is not to be granted automatically. 

Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Jackson 

v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990)). Granting leave to amend 

rests in the sound discretion of the district court. Pisciotta v. Teledyne Indus., Inc., 

 

1 Defendants claim this continued series of amendments are in bad faith. Doc. 56, 4–5. While the 

Court declines to consider the merits of their allegations for the time being, a continued pattern of 

conduct subverting Defendants’ attempts to address Plaintiffs’ allegation could show bad faith and 

undue prejudice against Defendants.

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91 F.3d 1326, 1331 (9th Cir. 1996). 

The Court considers five factors in assessing a motion for leave to amend: 

(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of the 

amendment, and (5) whether the plaintiff has previously amended the complaint. 

Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004); see also Foman v. Davis, 

371 U.S. 178, 182 (1962). The party opposing amendment bears the burden of 

showing any of the factors above. See DCD Programs, 833 F.2d at 186. Of these 

factors, prejudice to the opposing party carries the greatest weight. Eminence 

Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). However, 

absent prejudice, a strong showing of the other factors may support denying leave 

to amend. See id.

“Futility of amendment can, by itself, justify the denial of a motion for leave 

to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Futility is a 

measure of the amendment’s legal sufficiency. “[A] proposed amendment is futile 

only if no set of facts can be proved under the amendment . . . that would constitute 

a valid and sufficient claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 

209, 214 (9th Cir. 1988). Thus, the test of futility is identical to the one applied 

when considering challenges under Rule 12(b)(6) for failure to state a claim upon 

which relief may be granted. Baker v. Pac. Far E. Lines, Inc., 451 F. Supp. 84, 89 

(N.D. Cal. 1978); see Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991) (“A 

district court does not err in denying leave to amend . . . where the amended 

complaint would be subject to dismissal.” (citation omitted)).

Rule 8 of the Federal Rules of Civil Procedure requires each plaintiff to 

“plead a short and plain statement of the elements of his or her claim.” Bautista v. 

Los Angeles Cnty., 216 F.3d 837, 849 (9th Cir.2000). Rule 8 requires each 

allegation to be “simple, concise, and direct.” Fed.R.Civ.P. 8(d)(1). Where the 

allegations in a complaint are “argumentative, prolix, replete with redundancy and 

largely irrelevant,” the complaint is properly dismissed for failure to comply with 

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Rule 8(a). McHenry v. Renne, 84 F.3d 1172, 1177–79 (9th Cir.1996); see also 

Nevijel v. N. Coast Life Ins. Co., 651 F.2d 671, 673–74 (9th Cir.1981) (affirming 

dismissal of complaint that was “verbose, confusing and almost entirely 

conclusory”).

“A complaint that fails to comply with Rule 8 may be dismissed pursuant to 

Federal Rule of Civil Procedure 41(b).”Bravo v. Cnty. of San Diego, No. C 12–

06460, 2014 WL 555195, at *2 (N.D.Cal. Feb.10, 2014).“The propriety of 

dismissal for failure to comply with Rule 8 does not depend on whether the 

complaint is wholly without merit.” McHenry, 84 F.3d at 1179. “Even if the 

factual elements of the cause of action are present, but are scattered throughout the 

complaint and are not organized into a ‘short and plain statement of the claim,’ 

dismissal for failure to satisfy Rule 8 is proper.” Bravo, 2014 WL 555195, at *2 

(citing McHenry, 84 F.3d at 1178). Accordingly, the court has discretion to deny 

motions for leave to amend if the proposed pleading fails to state a “short and plain 

statement” on which relief may be granted as “futile” under Rule 15(a).

Here, amendment is futile because the proposed pleading does not include a 

“short and plain statement,” but instead includes voluminous unnecessary materials 

failing to notify Defendants of the basis for the claims. 

Plaintiffs begin the Proposed Third Amended Complaint claiming in an 

ambiguous and legally conclusory fashion that Defendant Sun West Solar, Inc. 

“bilk[ed] them out of their money through an elaborate scheme of fraudulent tricks, 

devices, schemes, and artifices.” Prop. Third Am. Compl. ¶ 4. However, the 

proposed complaint fails to show, even though it proceeds for seventy-three pages, 

how the Plaintiffs individually or collectively relied on any defendants’ promises. 

It is even unclear as to whether Plaintiffs have received any interest payments from 

Sun West Solar, Inc. or any other defendant. A proper complaint focuses on a 

simple and plain recitation of the relevant facts establishing a plausible claim for 

relief. This proposed complaint fails to properly allege such relief and therefore 

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would not survive a motion to dismiss. The relevant facts necessary to properly 

plead may be included in the proposed complaint, but they are so buried in 

convoluted rhetoric and conjectural statements about the business structure of the 

entities involved that this proposed complaint cannot put Defendants on notice of 

the charges against which they must defend. Consequently, the proposed amended 

complaint would be futile because it could not survive a motion to dismiss.

Accordingly, Plaintiffs’ request for leave to amend is DENIED.

III. DEFENDANTS’ MOTIONS TO DISMISS

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. 

R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The 

court must accept all factual allegations pleaded in the complaint as true and must 

construe them and draw all reasonable inferences from them in favor of the 

nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337–38 (9th Cir.

1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed 

factual allegations, rather, it must plead “enough facts to state a claim to relief that 

is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A 

claim has “facial plausibility when the plaintiff pleads factual content that allows 

the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 

550 U.S. at 556). “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.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 

550 U.S. at 557).

“[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to 

relief’ requires more than labels and conclusions, and a formulaic recitation of the 

elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (quoting 

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Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need 

not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Despite the 

deference the court must pay to the plaintiff’s allegations, it is not proper for the 

court to assume that “the [plaintiff] can prove facts that [he or she] has not alleged 

or that defendants have violated the . . . laws in ways that have not been alleged.” 

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 

U.S. 519, 526 (1983).

Generally, courts may not consider material outside the complaint when 

ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 

896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically 

identified in the complaint whose authenticity is not questioned by parties may also 

be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) 

(superceded by statutes on other grounds). Moreover, the court may consider the 

full text of those documents, even when the complaint quotes only selected 

portions. Id. It may also consider material properly subject to judicial notice 

without converting the motion into one for summary judgment. Barron v. Reich, 

13 F.3d 1370, 1377 (9th Cir. 1994). 

As a general rule, a court freely grants leave to amend a complaint which has 

been dismissed. Fed. R. Civ. P. 15(a). However, leave to amend may be denied 

when “the court determines that the allegation of other facts consistent with the 

challenged pleading could not possibly cure the deficiency.” Schreiber Distrib. 

Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

When a claim is “grounded in fraud and its allegations fail to satisfy the 

heightened pleading requirements of Rule 9(b), a district court may dismiss the . . . 

claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). To 

satisfy the particularity requirement of Rule 9(b), “[a]verments of fraud must be 

accompanied by ‘the who, what, when, where, and how’ of the misconduct 

charged.” Vess, 317 F.3d at 1106 (9th Cir.2003) (quoting Cooper v. Pickett, 137 

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F.3d 616, 627 (9th Cir. 1997)). Plaintiffs must plead enough facts to give 

defendants notice of the time, place, and nature of the alleged fraud together with 

an explanation of the statement and why it was false or misleading. See id. at 

1107. Averments of fraud must be pled with sufficient particularity so as to give 

the defendants notice of the circumstances surrounding an allegedly fraudulent 

statement. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547 (9th Cir. 1994) 

(superceded by statute on other grounds as stated in Ronconi v. Larkin, 253 F.3d 

423, 429 n.6 (9th Cir. 2001)). The circumstances constituting the alleged fraud 

must “be specific enough to give defendants notice of the particular misconduct . . . 

so that they can defend against the charge and not just deny that they have done 

anything wrong.” Vess, 317 F.3d at 1106 (quoting Bly-Magee v. California, 236 

F.3d 1014, 1019 (9th Cir. 2001)) (internal quotation marks omitted). “Malice, 

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

generally.” Fed. R. Civ. P. 9(b).

In making their allegations of fraud, Plaintiffs fail to allege the actual 

misconduct perpetrated by the defendants, alone or in concert, that might give rise 

to liability. While Plaintiffs claim Defendants have “refused to return” the socalled “investment,” the Second Amended Complaint fails to provide facts 

supporting its legal conclusion that Defendants made misrepresentations. See, e.g., 

Second Am. Compl. ¶ 195. Plaintiffs do not plead with particularly who made the

misrepresentations, what those misrepresentations were, when the 

misrepresentations were made, and how each misrepresentations is false or 

misleading. Without particularity, the claims fail to meet the pleading standards of 

either Rule 8 or 9. 

Accordingly, Plaintiffs’ motion for leave to file an amended complain is 

DENIED. Doc. 42. Defendant’s motion to dismiss the Second Amended 

Complaint is GRANTED. Doc. 47. All other motions to dismiss are dismissed as 

moot. Doc. 44, 45, 46, 48. The Second Amended Complaint is dismissed without 

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prejudice, with leave to amend. An amended complaint must be filed within 14 

days from the date of this order.

IT IS SO ORDERED.

DATED: July 3, 2014

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