United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ERIC RIMES,

Plaintiff,

v.

NOTEWARE DEVELOPMENT LLC,

Defendant.

___________________________________/

No. C-09-0281 EMC

ORDER DENYING DEFENDANT’S

MOTION TO DISMISS

(Docket No. 45)

Plaintiff Eric Rimes has filed suit against Defendants Noteware Development LLC Jim

Noteware, asserting claims for failure to pay wages, breach of contract, violation of California Labor

Code § 201, and violation of California Business & Professions Code § 17200. Currently pending

before the Court is Mr. Noteware’s motion to dismiss. Having considered the parties’ briefs and

accompanying submissions, the Court hereby DENIES the motion. The denial is without prejudice.

I. FACTUAL & PROCEDURAL BACKGROUND

In his complaint, Mr. Rimes alleges that he was employed by Noteware Development as a

vice president from August 2006 to May 2008. See Compl. ¶ 6. According to Mr. Rimes, his

contract with Noteware Development provided for a certain annual salary, plus bonuses, but

Noteware Development failed to pay him all the salary and bonuses he had earned. See id. ¶ 13. 

Although not entirely clear from the face of the complaint, it appears that Mr. Rimes has asserted

claims not only against Noteware Development but also against Mr. Noteware individually on an

alter ego theory. See id. ¶ 4; see also Opp’n at 2.

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II. DISCUSSION

In his motion, Mr. Noteware has moved to dismiss on the following grounds: (1) improper

service of process; (2) lack of personal jurisdiction; (3) improper venue; and (4) failure to state a

claim for relief. Each of these arguments is addressed below.

A. Service of Process

Mr. Noteware’s first contention is that he was not properly served in accordance with Federal

Rule of Civil Procedure 4(e). According to Mr. Noteware, service was not properly effected

because the summons was simply “left . . . on the driveway of a Noteware family house in Montana,

with no person in the Noteware household ever being served or even informed regarding the

existence or contents of the summons and complaint.” Mot. at 2 (emphasis added).

Accepting the representations made in Mr. Noteware’s motion, there would appear to be a

problem with service of process. For example, Rule 4(e)(2) requires service of process on a person

(either the individual personally or to another person under certain circumstances). See Fed. R. Civ.

P. 4(e)(2). Under Rule 4(e)(1), service of process may be effected pursuant to state law, see Fed. R.

Civ. P. 4(e)(1), but Mr. Rimes has not established that either California law or Montana law allows

for a summons and complaint simply to be left at a household in the absence of any receiving

person. See, e.g., Cal. Code of Civ. Proc. § 415.10 (personal service); id. § 415.20(b) (substitute

service).

That being said, Mr. Noteware has not offered any evidence to substantiate the

representations in his motion. He has not, for instance, submitted a declaration signed under penalty

of perjury nor has he obtained a declaration signed under penalty of perjury from his teenage

daughter, the one who purportedly found the summons and complaint on the driveway. On the other

hand, Mr. Rimes has also failed to provide evidence indicating that service of process was proper. 

In fact, Mr. Rimes’s actions suggest that there may have been a problem with the initial service of

process because he recently decided to re-serve the summons and complaint on April 7, 2010. See

McFadden Decl. ¶ 2 & Ex. A.

Because Mr. Rimes has now re-served the summons and complaint, the Court finds that Mr.

Noteware’s motion to dismiss, challenging the initial service of process, is moot. Mr. Noteware is

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 It is not clear from the McFadden declaration whether a return receipt was included in the new

service of process.

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not precluded from arguing that the new service of process was not properly effected, e.g., pursuant

to California Code of Civil Procedure § 415.40. See Cal. Code Civ. Proc. § 415.40 (allowing for

service on a person outside of California to be made “by sending a copy of the summons and of the

complaint to the person to be served by first-class mail, postage prepaid, requiring a return

receipt”).1

 

B. Personal Jurisdiction

Mr. Noteware contends that, even if there were no issue with service of process, the claims

against him should still be dismissed because this Court lacks personal jurisdiction over him. Mr.

Noteware does not offer any evidence to substantiate this argument but simply asserts that he “has

no personal contacts with California, other than in his capacity as a Managing Member of Noteware

Development LLC.” Mot. at 2.

The problem with this argument is that the Ninth Circuit has rejected the argument that, for

purposes of personal jurisdiction, “‘employees who act in their official capacity are somehow

shielded from suit in their individual capacity.’” Davis v. Metro Prods., Inc., 885 F.2d 515, 521 (9th

Cir. 1989). While employees are not automatically shielded from suit, personal jurisdiction still

must be analyzed based on the contacts the individual has had with the forum state. See generally

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479 (1985) (noting that, in a breach-of-contract case,

“factors [such as] prior negotiations and contemplated future consequences, along with the terms of

the contract and the parties’ actual course of dealing . . . must be evaluated in determining whether

the defendant purposefully established minimum contacts within the forum”). One basis for

asserting jurisdiction is an alter ego claim. The Ninth Circuit has stated that “the corporate form

may be ignored in cases in which the corporation is the agent or alter ego of the individual

defendant, or where there is an identity of interests between the corporation and the individuals.” Id.

at 520-21. As noted above, Mr. Rimes asserts an alter ego theory against Mr. Noteware. However,

as noted below that alter ego theory is not sufficiently alleged nor has any evidence been proffered

in regard thereto.

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Accordingly, the Court grants Mr. Noteware’s motion to dismiss for lack of personal

jurisdiction. The dismissal, however, is without prejudice. 

C. Venue

Mr. Noteware’s third argument is that venue in this case is improper. But this argument, as

presented in the motion to dismiss, is wholly conclusory. See Mot. at 2. Mr. Noteware provides no

explanation at all as to why venue is improper. The Court therefore rejects Mr. Noteware’s

argument. Cf. Leary v. Livingston County, 528 F.3d 438, 449 (6th Cir. 2008) (stating that “[i]t is a

settled appellate rule that issues averred to in a perfunctory manner, unaccompanied by some effort

at developed argumentation, are deemed waived”) (internal quotation marks omitted); Norton v.

Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998) (stating that “[i]ssues not sufficiently argued in the

briefs are considered waived and normally will not be addressed on appeal”). Mr. Noteware’s

motion to dismiss for improper venue is denied without prejudice.

For further proceedings, the Court notes that under 28 U.S.C. § 1391(a), 

[a] civil action wherein jurisdiction is founded only on diversity of

citizenship [as in the instant case] may, except as otherwise provided

by law, be brought only in (1) a judicial district where any defendant

resides, if all defendants reside in the same State, (2) a judicial district

in which a substantial part of the events or omissions giving rise to the

claim occurred, or a substantial part of property that is the subject of

the action is situated, or (3) a judicial district in which any defendant

is subject to personal jurisdiction at the time the action is commenced,

if there is no district in which the action may otherwise be brought.

28 U.S.C. § 1391(a). “The phrase ‘if there is no district in which the action may otherwise be

brought’ indicates that venue may be based on § 1391(a)(3) ‘only if neither [§ 1391(a)(1) or (2)] can

be satisfied.’ It does not mean that venue is improper in one district merely because there is another

equally appropriate district in which the defendants are subject to personal jurisdiction at the time

the action is commenced.” Doctor’s Assocs. v. Stuart, 85 F.3d 975, 983 (2d Cir. 1996).]

D. Failure to State a Claim for Relief

Finally, Mr. Noteware asserts that the case against him should be dismissed for failure to

state a claim for relief. See Fed. R. Civ. P. 12(b)(6). Although the motion is conclusory and devoid

of any support, the Court finds that on it face, the complaint is deficient. That is, Mr. Rimes’s

assertion that he is the alter ego of the corporation is pled only as conclusory allegations. This fails

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to establish the facial plausibility for pleading required by Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)

and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). See, e.g., Laguna v. Coverall N. Am., Inc.,

No. 09cv2131 JM(RBB), 2009 U.S. Dist. LEXIS 118098, at *7-9 (S.D. Cal. Dec. 18, 2009)

(concluding that alter ego liability was facially plausible because “[t]he SAC alleges that Allied is

the sole shareholder in Coverall and Coverall Cleaning Concepts, LLC; regularly removed cash and

other assets from Coverall to minimize the ability of creditors to attach funds; did not respect normal

corporate formalities (failed to keep corporate minutes and/or backdated such minutes); failed to

contribute capital, issue stock, or otherwise complete the formation of these entities; and failed to

provide adequate capital and operating funds”); Lacey v. Malandro Commun., Inc., No.

CV-09-01429-PHX-GMS, 2009 U.S. Dist. LEXIS 113993, at *16-18 (D. Ariz. Dec. 8, 2009)

(concluding that alter ego liability was facially plausible because “[t]he amended complaint alleges

that the Company is a shell corporation that was undercapitalized and that it does not possess

sufficient assets to satisfy Plaintiff’s judgment,” “that Ms. Malandro is the sole and executive

shareholder of the company and that she failed to maintain the requisite corporate formalities,” and

“that Ms. Malandro intentionally drained the Company of any assets, misused corporate funds to

perform exclusively personal tasks, and misreported income to the Internal Revenue Service”); Fund

Raising v. Alaskans for Clean Water, No. CV 09-4106 AHM (VBKx), 2009 U.S. Dist. LEXIS

106549, at *11-12 (C.D. Cal. Oct. 29, 2009) (concluding that Twombly and Iqbal standards were met

where “[p]etitioner has alleged specific facts that indicate that ‘separate personalities of the

corporation and the individual no longer exist’ – including that Gillam has commingled his assets

with those of the corporations and that he has failed to observe corporate formalities”). See DirecTV

Latin Am., LLC v. Park 610, LLC, No. 08 Civ. 3987 (VM) (GWG), 2009 U.S. Dist. LEXIS 110295,

at *66-68 (S.D.N.Y. Nov. 27, 2009) (taking note that, under Iqbal, naked assertions devoid of

further factual enhancement are insufficient to state a claim; concluding that there were insufficient

allegations to establish alter ego liability because “[t]he second amended complaint simply alleges

that Park 610 was owned by Tumely and Loraine, that Tumely and Loraine were in turn wholly

owned by Avila, and that Tumely and Loraine were the instruments of Avila, Pratola, and Zunda’s

fraudulent conduct”); Emeraldian Ltd. P’ship v. Wellmix Shipping Ltd., No. 08 Civ. 2991 (RJH),

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2009 U.S. Dist. LEXIS 89355, at *9-10 (S.D.N.Y. Sept. 28, 2009) (concluding that allegations were

not sufficient to establish reasonable grounds for alter ego liability because “[t]he Third Amended

Complaint contains primarily conclusory allegations that merely recite the factors considered by

courts in this Circuit when evaluating alter ego claims”).

III. CONCLUSION

For the foregoing reasons, the complaint against Mr. Noteware is dismissed without

prejudice. Plaintiff shall have 20 days from the date of this order to amend the complaint.

This order disposes of Docket No. 45.

IT IS SO ORDERED.

Dated: April 21, 2010

_________________________ EDWARD M. CHEN

United States Magistrate Judge

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ERIC RIMES,

Plaintiff,

v.

NOTEWARE DEVELOPMENT LLC,

Defendant.

___________________________________/

No. C-09-0281 EMC

CERTIFICATE OF SERVICE

I, the undersigned, hereby certify that I am an employee in the U.S. District Court, Northern

District of California. On the below date, I served a true and correct copy of the attached, by placing

said copy/copies in a postage-paid envelope addressed to the person(s) listed below, by depositing

said envelope in the U.S. Mail; or by placing said copy/copies into an inter-office delivery

receptacle located in the Office of the Clerk.

Jim Noteware 

5402 Fieldwood Drive 

Houtson, TX 77056 

(713) 960-0280 

Fax: (713) 654-0038 

Email: jimnoteware@aol.com 

Dated: April 21, 2010 RICHARD W. WIEKING, CLERK

By: /s/ Leni Doyle 

Leni Doyle

Deputy Clerk

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