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Standard v. Cameron

United States District Court, N.D. Texas

November 14, 2017

DONNA M. STANDARD, Plaintiff
v.
CRAIG CAMERON, et al., Defendants

          ORDER ON DEFENDANTS' MOTION TO DISMISS AND MOTION TO CHANGE VENUE, AND ORDER TRANSFERRING CASE TO THE NORTHERN DISTRICT OF TEXAS - FORT WORTH DIVISION (DOC. NOS. 5, 6)

         This case stems from the delivery of a horse to Plaintiff Donna Standard (“Standard”) by Defendants Craig Cameron (“Craig”) and Dalene Cameron (“Dalene”) doing business as Craig Cameron Horsemanship and Double Horn Ranch (collectively “the Camerons” or “Defendants”). Standard brings state law claims against Defendants for fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, trespass to chattels, and conspiracy. Defendants have filed a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, a Rule 12(b)(3) motion to dismiss for improper venue, a Rule 12(b)(5) motion to dismiss for improper service of process, a Rule 12(b)(6) motion to dismiss for failure to state a claim, and a 28 U.S.C. § 1404 motion to change venue. After review, the Court will deny the Rule 12(b)(1) motion, grant the Rule 12(b)(2), transfer this case to the Northern District of Texas, and decline to address the remaining issues.

         GENERAL BACKGROUND

         From the Complaint, Defendants are citizens of Texas. On March 5, 2010, Standard attended an equestrian competition called “Road To The Horse”[1] in Murfreesboro, Tennessee. While at the event, Standard purchased an American Quarter Horse (Registration No. 4995791) called WR Shining Alamo (“Alamo”) from the owner and breeder, Joe Wood. After Standard purchased Alamo, Craig selected Alamo as his horse for the competition and began to call Alamo “Troubadour” during the competition. After three days of riding and training, Alamo and Craig won the competition. After Alamo won, Standard asked Dalene if she knew someone who could transport Alamo from Tennessee back to Standard's home in California. Dalen offered to transport Alamo from Tennessee to the Cameron's ranch in Erath County, Texas and have Craig train Alamo. Standard was going to attend the Cameron's horsemanship clinic at the Cameron's ranch in New Mexico in October 2010, and Craig would deliver Alamo to Standard at his New Mexico ranch at that time. Dalene quoted a cost of between $900 to $1, 000 per month from mid-March until October 2010 for the services. Standard agreed to have the Cameron's train Alamo. The Cameron's took possession of Alamo from breeder Joe Wood on March 7, 2010.

         In 2016, Standard attended another Road To The Horse event. At the event, Standard began to question whether the horse she received from the Camerons was Alamo. Standard obtained the DNA of the horse that was in her possession. The results of the DNA showed that the horse was not Alamo, rather it was WR Shiners Gin (“Gin”), the half-brother of Alamo. In addition to the DNA results, photographs of Alamo and Gin show that the bone structure (which does not change) of these two horses are not the same. Thus, DNA evidence conclusively demonstrates that the horse delivered by the Camerons and currently in Standard's possession is not Alamo, even though Alamo was entrusted to the Camerons on March 7, 2010. Rather, the horse delivered by the Camerons is Gin. In 2010, Standard is informed and believes that Gin was not at the 2010 Road To The Horse event, but instead was shipped to Fort Worth, Texas about 2 to 3 weeks after the 2010 Road To The Horse event.

         Standard paid Joe Wood $3, 000 for Alamo. However, because Alamo won the 2010 Road To The Horse event, Standard believes that Alamo's value exceeds $200, 000.00. While Alamo was a rideable horse, Gin is not. Standard alleges that she has suffered in excess of $200, 000 in compensatory damages, and believes that the fraudulent conduct of the Camerons entitle her to exemplary damages.

         I. Motion To Dismiss Due To Lack Of Subject Matter Jurisdiction

         Defendants' Argument

         The Camerons argue that Standard cannot meet the amount in controversy requirement. Standard paid the Camerons $900 to $1, 000 to train and board Alamo from April to September 2010, and paid $3, 000 for Alamo. Winning the Road To The Horse competition could not have increased Alamo's value to anywhere close $75, 000.00, let alone the $200, 000 alleged in the Complaint. Alamo was an untrained horse, who competed with two other untrained horses, after receiving three hours of training.

         Standard's Opposition

         Standard argues that if the allegations are taken as true, then there is over $75, 000 in controversy. The Camerons are well known in the horse training industry and have participated in and conducted numerous horse related events. Further, punitive damages are alleged and must be taken into account in establishing the amount in controversy.

         Legal Standard

         Federal Rules of Civil Procedure 12(b)(1) allows for a motion to dismiss based on lack of subject matter jurisdiction. See Fed. R. Civ. Pro. 12(b)(1). It is a fundamental precept that federal courts are courts of limited jurisdiction. Vacek v. United States Postal Serv., 447 F.3d 1248, 1250 (9th Cir. 2006). Limits upon federal jurisdiction must not be disregarded or evaded. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). “It is presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); Vacek, 447 F.3d at 1250. Rule 12(b)(1) motions may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. See Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014); Savage v. Glendale Union High School Dist. No. 205, 343 F.3d 1036, 1040 n.2 (9th Cir. 2003). When a defendant challenges jurisdiction “facially, ” all material allegations in the complaint are assumed true, and the court determines whether the factual allegations are sufficient to invoke the court's subject matter jurisdiction. See Leite, 749 F.3d at 1121; see also Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir. 2009). However, courts do not accept the truth of legal conclusions merely because they are cast in the form of factual allegations. Holy See, 557 F.3d at 1073.

         Federal courts may exercise “diversity jurisdiction” when the amount in controversy exceeds $75, 000 and the parties are in complete diversity, i.e. the citizenship of each plaintiff is different from that of each defendant. See Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see also 28 U.S.C. § 1332(a).

         Discussion

         The Camerons have not submitted affidavits or other evidence outside of the complaint as part of their Rule 12(b)(1) motion. Rather, they attack the sufficiency of the allegations. Therefore, this is a facial attack on subject matter jurisdiction. See Leite, 749 F.3d at 1121; Savage, 343 F.3d at 1040 n.2. Further, there is no argument that there is an absence of complete diversity of citizenship. The Camerons appear to be citizens of Texas, and Standard appears to be a citizen of California. The issue is the amount in controversy.

         The factual allegations, which the Court accepts as true, see Leite, 749 F.3d at 1121, show that there is more than $75, 000 in controversy. The $3, 000 cost of Alamo and the $5, 400 to $6, 000 in boarding and training fees for six months (April 2010 to September 2010) are properly and clearly alleged, as is the $200, 000 current value of Alamo. The Complaint explains that Alamo is worth over $200, 000 because he won the 2010 Road To The Horse event and Standard estimates his value would exceed $200, 000.00. See Complaint ¶ 21. Under California law, a property owner's testimony is admissible as to the property's value. See Cal. Evid. Code § 813; Bateman v. Donovan, 131 F.2d 759, 764 (9th Cir. 1942); Prussin v. Bekins Van Lines, LLC, 2017 U.S. Dist. LEXIS 42813, *7 (N.D. Cal. Mar. 23, 2017); Schroeder v. Auto Driveaway Co., 11 Cal.3d 908, 921 (1974). Although the horse in Standard's possession is Gin, as of March 5, 2010, Standard owned Alamo. Thus, the complaint shows two bases for the $200, 000 valuation: Alamo won the 2010 competition and owner Standard's valuation. The $200, 000 figure is not a mere legal conclusion. The attacks made by the Camerons presuppose information that is not in the complaint, and partially misconstrues the allegations in the Complaint.[2] There is no basis for the Court to discount the estimate, which the Court assumes to be true. See Leite, 749 F.3d at 1121. The $200, 000 estimated value by itself easily exceeds the $75, 000 controversy threshold. Additionally, an unknown amount of punitive damages are requested and thus, in controversy. See Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001).

         Given the express allegations that total approximately $209, 000 (exclusive of punitive damages), the Complaint adequately alleges an amount in controversy that exceeds $75, 000.00. See Leite, 749 F.3d at 1121. Because the Complaint adequately alleges diversity jurisdiction, the Camerons' Rule 12(b)(1) will be denied.

         II. Motion To Dismiss Due To Lack Of Personal Jurisdiction

         Defendants' Argument

         Defendants argue inter alia that they do not have sufficient minimum contacts with California. All of the allegations in the Complaint relate to activity that occurred outside of California, including the purchase of Alamo and delivery of Gin. Even the alleged act of switching Alamo with Gin occurred outside of California. Defendants argue that none of their activities were directed at California, since the training occurred in Texas, Alamo was purchased in Tennessee, and delivery occurred in New Mexico. It is not enough to foresee that the horse would eventually end up in California. Defendants argue that they have done nothing to bring themselves into the California market, and it was not foreseeable that they would be subject to California jurisdiction. However, even if the Court finds that purposeful availment, it would not be reasonable for California to assert jurisdiction over Defendants for numerous reasons, including that the events at issue have no ...


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