NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DALE L. MIESEN, an individual who is a 

shareholder and who is also bringing this 

action on behalf of and/or in the right of 

AIA Services Corporation and its wholly 

owned subsidiary AIA Insurance, Inc., 

Plaintiff-Appellant, 

 v. 

JOHN D. MUNDING, married individual 

and the community property comprised 

thereof; et al., 

Defendants-Appellees, 

and 

AIA SERVICES CORPORATION, an 

Idaho corporation; AIA INSURANCE, 

INC., an Idaho corporation, 

Defendants.

No. 19-35255 

D.C. No. 2:18-cv-00270-RMP 

MEMORANDUM*

Appeal from the United States District Court

for the Eastern District of Washington

Rosanna Malouf Peterson, District Judge, Presiding

Submitted July 9, 2020**

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

JUL 30 2020

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 19-35255 

Seattle, Washington

Before: FERNANDEZ and NGUYEN, Circuit Judges, and BOLTON,*** District 

Judge.

Plaintiff-Appellant Dale L. Miesen (“Mr. Miesen”) is a minority shareholder 

of AIA Services Corporation (“AIA Services”) seeking to assert claims related to 

legal malpractice against Defendant-Appellee John D. Munding (“Mr. Munding”) 

in a derivative capacity on behalf of AIA Services and in a “double derivative” 

capacity on behalf of AIA Services’ wholly owned subsidiary, AIA Insurance, Inc. 

(“AIA Insurance”). The district court dismissed Mr. Miesen’s claims without 

prejudice and denied leave to amend after concluding that (1) it lacked subjectmatter jurisdiction and (2) Mr. Miesen’s two demand letters were insufficient 

under Federal Rule of Civil Procedure 23.1. Mr. Miesen appeals. We have 

jurisdiction under 28 U.S.C. § 1291, and we affirm. Although the district court 

erred in concluding it lacked subject-matter jurisdiction, it correctly dismissed the 

Amended Complaint without prejudice and without leave to amend based on the 

insufficiency of the Rule 23.1 demand letters.

1. Diversity jurisdiction exists where an action is between “citizens of 

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

*** The Honorable Susan R. Bolton, United States District Judge for the 

District of Arizona, sitting by designation.
3 19-35255 

different States” and “the matter in controversy exceeds the sum or value of 

$75,000, exclusive of interest and costs.”1 28 U.S.C. § 1332(a). Section 1332

requires “‘complete diversity’ of citizenship, meaning that ‘the citizenship of each 

plaintiff is diverse from the citizenship of each defendant.’” Demarest v. HSBC 

Bank USA, N.A., 920 F.3d 1223, 1226 (9th Cir. 2019) (quoting Caterpillar Inc. v. 

Lewis, 519 U.S. 61, 68 (1996)).

Complete diversity exists whether AIA Services and AIA Insurance 

(collectively, “AIA Entities”) are aligned as plaintiffs or defendants. Mr. Miesen is 

a citizen of Texas. Mr. Munding, his wife, and his law firm are citizens of 

Washington. The AIA Entities are citizens of Idaho. Mr. Munding argues that 

because the Amended Complaint “designated [the AIA Entities] as plaintiffs and 

defendants,” and because both AIA Entities are Idaho citizens, diversity 

jurisdiction is “destroy[ed].” But subject-matter jurisdiction is not destroyed 

because a corporation is listed on both sides of the caption in a derivative action. 

See, e.g., Arduini v. Hart, 774 F.3d 622 (9th Cir. 2014) (case proceeded in 

diversity where corporation named on both sides); Rosenbloom v. Pyott, 765 F.3d 

1137 (9th Cir. 2014) (same); Larson v. Dumke, 900 F.2d 1363 (9th Cir. 1990)

(same). Mr. Munding cites no authority requiring a district court to determine 

party alignment where diversity of citizenship exists regardless of alignment. 

1 The parties do not dispute that the amount-in-controversy requirement is met.
4 19-35255 

Because the parties are completely diverse regardless of alignment, and the 

amount-in-controversy requirement is undisputedly met, the district court had 

subject-matter jurisdiction. 

2. District court determinations regarding the demand requirement for 

derivative actions are reviewed for abuse of discretion. Potter v. Hughes, 546 F.3d 

1051, 1056 (9th Cir. 2008). “A district court abuses its discretion when it applies 

an incorrect rule of decision, or when it applies the correct rule to factual 

conclusions that are ‘illogical, implausible, or without support in the record.’” 

Stetson v. Grissom, 821 F.3d 1157, 1163 (9th Cir. 2016) (quoting Rodriguez v. 

Disner, 688 F.3d 645, 653 (9th Cir. 2012)). Conclusions of law are reviewed de 

novo. Id.

In his Amended Complaint, Mr. Miesen included excerpts of the two

demand letters he sent to the boards of the AIA Entities. The Federal Rules of 

Civil Procedure required Mr. Miesen to “state with particularity . . . any effort . . . 

to obtain the desired action from the directors” and to establish that this demand 

was “adequate” under applicable state law. Fed. R. Civ. P. 23.1(b); Potter, 546 

F.3d at 1055 (citing Fed. R. Civ. P. 23.1). Applicable state law required Mr. 

Miesen to make a “written demand . . . upon the corporation to take suitable 

action.” Idaho Code § 30-29-742. 

The district court correctly concluded that Mr. Miesen’s letters, as excerpted 
5 19-35255 

in the Amended Complaint, did not make an adequate demand on the boards 

because it did not sufficiently describe the action he sought to have the boards take. 

Mr. Miesen’s excerpted letters described his proposed claims in terms of “all 

possible claims” or similarly generic, conclusory language. The letters failed to

describe with particularity the claims for relief he sought or the factual bases for 

those claims. Such language cannot have been expected to provide the boards with 

enough information to take “suitable action.” Without knowing the factual bases 

for the claims, the boards could not determine the likelihood of the lawsuit’s 

success and would have had difficulty weighing factors like the expenses involved 

in litigation or whether litigation would further the AIA Entities’ general business

interests. These are considerations the boards were entitled to make. See Daily 

Income Fund, Inc. v. Fox, 464 U.S. 523, 533 & n.9 (1984). The district court did 

not abuse its discretion by dismissing Mr. Miesen’s Amended Complaint for 

failure to meet Rule 23.1’s pleading requirements. 

3. A district court’s denial of leave to amend is reviewed for abuse of 

discretion. Gonzalez v. Planned Parenthood of Los Angeles, 759 F.3d 1112, 1114 

(9th Cir. 2014). After a party has amended a pleading once as a matter of course, 

the Federal Rules of Civil Procedure permit the party to further amend “only with 

the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2); 

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). 
6 19-35255 

Leave should be “freely give[n] . . . when justice so requires.” Fed. R. Civ. P. 

15(a)(2). 

Here, amendment would have been futile. Mr. Miesen suggests that were he 

given leave to amend, he would “quote the entire letters or attach the letters to his 

amended complaint.” But the omitted portions of the letters are no more specific, 

nor any more relevant, than the excerpts included in the Amended Complaint.

Because amendment could not have cured the deficiencies of the Amended 

Complaint, the district court did not abuse its discretion by denying Mr. Miesen’s 

request for leave to amend.

AFFIRMED.