Mohebbi v. Khazen

• Citation: 50 F.Supp.3d 1234
• Decision Date: 23 June 2014
• Docket Number: Case No. 13–cv–03044–BLF
• Court: U.S. District Court — Northern District of California
• Parties: Saeid Mohebbi, Plaintiff, v. Mahnaz Khazen, et al., Defendants.

50 F.Supp.3d 1234

Saeid Mohebbi, Plaintiff
v.
Mahnaz Khazen, et al., Defendants.

Case No. 13–cv–03044–BLF

United States District Court, N.D. California, San Jose Division.

Signed June 23, 2014

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Aria Vatankhah, Aria Law Group PLC, Palo Alto, CA, for Plaintiff.

Edward Gartenberg, Gartenberg Gelfand Hayton & Selden LLP, Los Angeles, CA, Ray Edwin Gallo, Dominic R. Valerian, Gallo LLP, San Rafael, CA, for Defendants.

ORDER (1) GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS; (2) GRANTING PLAINTIFF'S MOTION TO FILE A SECOND AMENDED COMPLAINT

Re: ECF Nos. 34, 48

BETH LABSON FREEMAN, United States District Judge

Plaintiff Saeid Mohebbi (“Plaintiff” or “Mohebbi”) brings this First Amended Complaint (“FAC”) against Defendants Mahnaz Khazen, Michael Shadman, Violet Parvarandeh, Pirooz Parvarandah, and Stacey Conti (collectively, “Individual Defendants”), as well as U.S. Immigration Investment Center LLC (“USIIC”), USIIC LLP, and USIIC 1 LP (collectively, “USIIC Defendants”), for twenty-three causes of action, including claimed violations of federal and state securities laws, fraud, false advertising, conversion, unjust enrichment, and common law torts. These claims arise out of a contractual investment relationship entered into between the parties. Plaintiff alleges that, in exchange for Defendants' assistance in applying for a federal EB–5 immigration visa, he invested over $1 million in a partnership. Plaintiff alleges that Defendants fraudulently induced this investment and failed to comply with their obligations pursuant to the contract, and seeks rescission of the agreement, damages, including punitive damages, and attorneys' fees.

Defendants move to dismiss the FAC on two grounds: (1) that the claims alleged in the Complaint are subject to an arbitration agreement, and thus not appropriately adjudicated by the district court, and (2) that each of Plaintiff's causes of action fails to state a claim for relief pursuant to Federal Rule of Civil Procedure 12(b)(6). In response, Plaintiff both opposes the Motion to Dismiss and seeks leave of Court to file a Second Amended Complaint (“SAC”). In Plaintiff's motion, he requests leave of court to withdraw five causes of action from his FAC, allege four new causes of action, and allege new facts regarding the causes of action that remain. (ECF 50) Defendants opposed this request. (ECF 53) Pursuant to Civil Local Rule 7–1, the Court finds the Motion to Amend to be appropriate for determination without oral argument. Civil L–R 7–1(b).

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Having reviewed the briefing and oral argument of the parties, as well as the relevant case law, the Court GRANTS IN PART AND DENIES IN PART Defendant's Motion to Dismiss. The Court GRANTS Plaintiff's Motion for Leave to Amend the Pleadings, pursuant to the terms of this Order.

I. BACKGROUND

A. Procedural History

Plaintiff filed its Complaint on July 2, 2013. (ECF 1) Defendants filed a Motion to Dismiss on August 7, 2013. (ECF 19) Plaintiff elected to file a First Amended Complaint on August 28, 2013, naming the same Defendants. (ECF 29) Defendants filed a second Motion to Dismiss (“Motion”) on September 11, 2013. (ECF 34) Plaintiff filed an Opposition on September 25, 2013 (ECF 37) Defendants replied on October 2, 2013. (ECF 39)¹

Plaintiff further filed a Motion to Amend/Correct the Pleadings, seeking to file a Second Amended Complaint, on April 23, 2014. (ECF 50) Defendants responded on May 7, 2014. ( ECF 53) That same day, Plaintiff filed a Motion to Shorten Time in which to hear the Motion for Leave to Amend. (ECF 54) After briefing, the Court denied this Motion. (ECF 61) Plaintiff filed his Reply to Defendants' Opposition on May 14, 2014. (ECF 62)

B. Factual Allegations in the FAC

Plaintiff is a Farsi-speaking Iranian citizen who resides in California. (FAC, ECF 29 ¶ 8) Defendants Khazen, Shadman, Violet Parvarandeh, and Pirooz Parvarandah are individuals who reside in California. (Id. ¶¶ 12–15) Defendant Conti is an individual who resides in Montana. (Id. ¶ 16) Defendant USIIC LLC is a Delaware corporation with its principal place of business in California. (Id. ¶ 9) Defendants USIIC LLP and USIIC 1 LP are partnerships organized under Delaware law with principal places of business in California. (Id. ¶¶ 10–11)

Plaintiff's FAC arises out of a series of interactions with the Individual Defendants, and two contractual agreements entered into with USIIC LLC. Plaintiff alleges that Defendants, through fraud and misrepresentations, induced Plaintiff into making investments worth over $1 million in two partnership entities, in exchange for Defendants' assistance in navigating federal visa procedures in order to obtain permanent residency and citizenship in the United States. (FAC, ECF 29 ¶¶ 19–22). In order to best understand the Plaintiff's Complaint, a chronological description of his interactions with the Defendants is most illustrative.

In 2012, Plaintiff, who was interested in seeking permanent residency in the United States, learned about the EB–5 Immigrant Investor Visa Program via Farsi language satellite advertisements. (Id. ¶ 27) This program is designed for foreign citizen investors, and permits a foreign national to qualify for a green card, provided that individual invests a certain amount of money (either $500,000 or $1,000,000, depending

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on certain factors) in the United States. Plaintiff was thereafter shown a video produced by Defendant USIIC, in which it described the ways in which USIIC could assist foreign nationals in applying for the EB–5 program and investing in the United States. (Id. ) Plaintiff contacted USIIC in March 2012, (id. ), and met in person with the CEO of USIIC, Defendant Khazen, during a trip to the United States in April 2012. (Id. ¶¶ 28–29) During this meeting, Plaintiff was given USIIC promotional materials and was told about various “low-risk” investment opportunities, (id. ¶ 29), and alleges that Defendant Khazen informed him that USIIC was a United States Customs and Immigration Services (“USCIS”) approved “EB–5 Regional Center.” (Id. ¶ 29) It was during this meeting that Plaintiff initially expressed interest in investing with USIIC so as to qualify for an EB–5 Visa. (Id. ) In June of 2012, Plaintiff received correspondence from Khazen that encouraged him to transfer funds to USIIC. (Id. ¶ 30) Then, in July of 2012, Plaintiff met with Khazen and Shadman in Dubai, a meeting in which Plaintiff alleges he was presented with information again stating that USIIC was an approved EB–5 regional center “with its foundation in banking.” (Id. ¶ 32)

On July 22, 2012, Plaintiff was presented with an “Engagement Agreement,” (ECF 29–3 at 13–18) (hereinafter “July 22 Agreement”), which outlined the terms of the relationship between Defendants and Plaintiff, including, among other things, that Defendants would seek out investment opportunities for Plaintiff that were compliant with the requirements of the EB–5 Visa Program. (FAC, ECF 29 ¶ 32) Plaintiff acknowledges that he signed this agreement, (id. ), despite it being in English and Plaintiff being a native Farsi speaker who understood and spoke little English himself. (Id. ¶ 36) Plaintiff alleges that he asked Defendant Khazen to explain the contents of the document, which Khazen did in “five minutes in Farsi.” (Id. ) Plaintiff further alleges that Khazen did not inform Plaintiff that the contract contained an arbitration provision. (Id. )

In August 2012, Plaintiff was sent an email, in Farsi, from Defendant Shadman, stating that Plaintiff needed to transfer $1,000,000 to USIIC in order to be eligible for the EB–5 Visa program. (ECF 29 ¶ 34) Plaintiff states that Shadman's email claimed an August 15 deadline for the transfer of funds so that Plaintiff could be processed in the “first group” of green card applicants. (Id. ¶ 34) Plaintiff, acting on the information provided in Shadman's email, transferred $600,000 to Defendants on August 16, 2012. (Id. )

On August 27, 2012, Plaintiff received an email from Khazen, written in English, which stated that USIIC's Regional Center status was “pending.” (Id. ¶ 36) Plaintiff received a second version of this email, which was translated into Farsi by a USIIC employee, Maryam Karimaneh. (Id. ) That same day, Plaintiff received an email, also in Farsi, from Khazen, which stated that Plaintiff could not be provided with information about the pending Regional Center approval or the bank in which his money had been invested. (Id. ) Plaintiff's concerns about these facts caused him to travel to the United States on a six-month tourist visa beginning in September 2012. (Id. ¶ 37) During this visit, Plaintiff met with Defendants Violet and Pirooz Parvarandah, who he alleges personally reassured Plaintiff that his funds had been properly invested. (Id. ) After this meeting, on September 24, 2012, Plaintiff transferred an additional $480,000 to USIIC's escrow account, bringing his total investment to $1.08 million. (FAC, ECF 29 ¶ 37)

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