Nguyen v. Vu, Civil Action No. 18-cv-01132-CMA-NRN

• Decision Date: 30 October 2018
• Docket Number: Civil Action No. 18-cv-01132-CMA-NRN
• Parties: ALEX NGUYEN and SARAH NGUYEN, Plaintiffs, v. MAI VU and HUNG VU, Defendants.
• Court: U.S. District Court — District of Colorado

ALEX NGUYEN and SARAH NGUYEN, Plaintiffs, v. MAI VU and HUNG VU, Defendants.

Civil Action No. 18-cv-01132-CMA-NRN

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

October 30, 2018

REPORT & RECOMMENDATION ON

DEFENDANTS' MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND FOR NONJOINDER (DKT. #19);

DEFENDANTS' MOTION TO DISMISS FOR FORUM NON CONVENIENS (DKT. #16);

DEFENDANTS' MOTION CHALLENGING REQUEST FOR RETRACTION UNDER THE TEXAS DEFAMATION MITIGATION ACT (DKT. #21); AND

PLAINTIFFS' OPPOSED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT (DKT. #32)

N. Reid Neureiter United States Magistrate Judge

This matter is before the Court on the following:

(1) Defendants' Motion to Dismiss for Failure to State a Claim and for Nonjoinder (Dkt. #19);

(2) Defendants' Motion to Dismiss for Forum Non Conveniens (Dkt. #16);

(3) Defendants' Motion Challenging Request for Retraction Under the Texas Defamation Mitigation Act (Dkt. #21); and

(4) Plaintiffs' Opposed Motion for Leave to File Second Amended Complaint (Dkt. #32).

These Motions were referred by Judge Christine M. Arguello pursuant to two Memoranda dated August 28, 2018 (Dkt. #34 and #36).

The Court has reviewed the parties' filings, taken judicial notice of the Court's entire file in this case, and considered the applicable Federal Rules of Civil Procedure, statutes, and case law. The Court also heard extensive oral argument at a hearing held on September 28, 2018. Being fully informed, and for the reasons addressed more fully herein, the Court RECOMMENDS that Defendants' Motion to Dismiss for Failure to State a Claim and for Nonjoinder (Dkt. # 19) be GRANTED in part. The Court FINDS and CONCLUDES that Plaintiffs' defamation claim fails to state a claim on which relief may be granted and therefore should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6). The Motion is DENIED in part, to the extent it seeks dismissal for nonjoinder. The Court further RECOMMENDS that Defendants' remaining motions be DENIED as moot.

The Court also notes, however, that Defendants' Motion Challenging Request for Retraction Under the Texas Defamation Mitigation Act ("TDMA") (Dkt. #21), seeking dismissal of Plaintiffs' claim for failing to comply with certain TDMA requirements (indicating this motion essentially seeks dismissal for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6)), fails to comply with CMA Civ. Practice Standard 7.1D(b), which requires "[a]ll requests for relief under any part of Fed. R. Civ. P. 12 [to] be brought under a single motion." As a result, Docket #21 is a noncompliant motion under CMA Civ. Practice Standard 7.1A(e)(1), that could have been "denied in whole or part without prejudice, or their determination delayed relative to compliant motions." CMA Civ. Practice Standard 7.1A(e)(2).

Finally, in light of the Court's recommendation that Plaintiff's sole claim be dismissed for failure to state a claim, and the concession by Plaintiffs' counsel at the September 28, 2018 hearing that Plaintiffs' proposed Second Amended Complaint does not address or rectify the issues raised in Defendants' Motion to Dismiss (Dkt. #19), the Court further RECOMMENDS that Plaintiffs' Opposed Motion for Leave to File Second Amended Complaint (Dkt. #32) be DENIED as futile.

I. Factual Background

A. The Family Dispute—and Texas Lawsuit—Between First Cousins

This case arises out of a heated family dispute between two first cousins (Dkt. #10 ¶4).¹ Plaintiff Sarah Nguyen, her first cousin Teresa Vu, and their respective spouses (Plaintiff Alex Nguyen and Quoc Le) co-owned a car wash in Houston, Texas.² Teresa and Quoc alleged Sarah and Alex owed them approximately $100,000.00 from the car wash business. On May 25, 2017, Teresa and Quoc's FLP sued Sarah and Alex's FLP and also Alex in Texas state court when Sarah and Alex refused to pay them (the "Texas Lawsuit") alleging (among other claims) breach of contract, and seeking to recover lost profits/unpaid distributions, among other damages. (See, e.g., FifthAmended Petition filed in the Texas Lawsuit, Dkt. #16-4.)³ Thus, Plaintiffs in this case were, for all intents and purposes, the defendants in the Texas Lawsuit.⁴

The court in the Texas Lawsuit granted partial summary judgment in favor of Le-Vu FLP (Quoc and Teresa's FLP) on December 12, 2017, finding the defendants in that case (essentially the Plaintiffs here) did in fact owe money to first cousin Teresa and Quoc's FLP, and ordered defendants to pay approximately $123,000.00 in unpaid distribution damages, value destruction damages, costs, and attorney fees (Dkt. #16-2). The parties to the Texas Lawsuit thereafter reached a settlement in February 2018, pursuant to which the Texas defendants (again, essentially the Plaintiffs here) paid $147,000.00 to "purchas[e] all of Le-Vu FLP's interest in the company" (the "Texas Settlement") (Dkt. #10 ¶ 13).

B. The First Cousins' Parents become Embroiled in the Family Dispute

The Texas Lawsuit was contentious and, not surprisingly, Teresa's parents, Defendants Mai and Hung Vu, took her and Quoc's side (Dkt. #10 ¶ 4). To that end, Mai and Hung Vu, who live in Colorado, had a number of conversations with Mai's brother Peter Hoang and his wife Martha (Sarah's parents) regarding the Texas Lawsuit. Duringthese conversations—which allegedly escalated into heated arguments—Mai and Hung Vu stated their niece Sarah and her husband Alex owed and should pay the Vu's daughter and son-in-law Teresa and Quoc the approximately $100,000 that Teresa and Quoc sought to recover in the Texas Lawsuit (e.g., Dkt. #10 ¶¶ 4, 8-11). So the business dispute between the cousins escalated into a family dispute between the cousins' respective parents.

These intra-family conversations, arguments, and associated accusations of misconduct, form the basis of the defamation lawsuit presently before this Court. As Plaintiffs acknowledge: "It is within this context [the cousins' carwash dispute, and filing of the Texas Lawsuit] that the events regarding the defamation allegations made the subject of this lawsuit arose" (id. ¶ 7). Specifically, Plaintiffs here, Sarah and Alex, allege that Sarah's aunt and uncle (Defendants Mai and Hung Vu) made defamatory statements about them to Sarah's parents, the Hoangs, on approximately five separate occasions. To wit:

(1) on or about August 20, 2016, Mai and Hung called Peter "and accused Alex and Sarah of stealing $100,000 from Quoc and Teresa. An argument ensued, but this was the first of many times Mai and Hung accused Alex of theft" (id. ¶8);

(2) and (3) on or about February 25, 2017, and again on or about March 12, 2017, Mai said to Peter and Martha "Are you going to get Alex and Sarah to give Quoc and [Teresa] Phuong back the $100,000 they robbed of them?" (id. ¶9);

(4) on or about May 22, 2017, Mai said to Peter while visiting Houston "Hey, you still haven't got Alex and Sarah to give the money they stole back yet" (id. ¶10); and (5) on or about June 20, 2017, Mai and Hung told Peter and Martha, "your children are thieves. They robbed our kids." This statement was made in the course of an argument where "[p]lastic water bottles were [] thrown" (id. ¶11).⁵

All of these statements were made to Mai's brother Peter and his wife Martha (Plaintiff Sarah's parents), possibly in the presence of a few other immediate family members,⁶ but none were made to or in the presence of any non-family third party.

Plaintiffs also allege that, on or about August 8, 2017, Peter's brother, Dung Hoang, "called Peter from Canada, after returning from a trip to Denver, to warn him and have him tell Alex Nguyen they should be careful and watch out as she [sic] heard Mai & Hung making threats" (id. ¶12). Dung allegedly said to Peter "you need to watch yourself. I heard Mai talking about their family going to take care of you, your family, and Alex and Sarah (threaten to take care of the thieves)" (id.). At the September 28, 2018 hearing, Plaintiffs' counsel confirmed the latter parenthetical statement was counsel's characterization of the conversation, not the words actually spoken.

All of the alleged defamatory statements were made prior to or within a few months after the filing of the Texas Lawsuit on May 25, 2017 (id. ¶¶8-11). After the Texas Court granted summary judgment in favor of the Texas plaintiffs on their claim for breach of contract, ordering the Plaintiffs here to pay in excess of $100,000.00 indamages (for unpaid distributions, value destruction, and also attorney fees), and three months after the parties to the Texas lawsuit entered the Texas Settlement, Plaintiffs filed this lawsuit on May 11, 2018 (Dkt. #1). The suit asserts one claim for defamation against Defendants Mai and Hung Vu based on the statements they made to Plaintiffs' parents/in-laws.

II. Defendants' Motion to Dismiss for Failure to State a Claim (Dkt. #19)

Defendants argue Plaintiffs' defamation claim (the only claim in this case) fails pursuant to Fed. R. Civ. P. 12(b)(6) because all of the alleged defamatory statements constitute "verbal abuse made in the course of family arguments and demands for payment which are at most non-actionable 'verbal abuse'" (Dkt. #19 at 1).⁷

A. Legal Standard for Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6)

Dismissal is appropriate under Rule 12(b)(6) if the plaintiff fails to state a claim upon which relief can be granted. To survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility in this context means the plaintiff has pled enough factual content to allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The plausibility standard is not a probability requirement—"it asks for more than a sheer possibility that a defendant...