Piper v. Gooding & Co.

Decision Date10 August 2018
Docket NumberNo. CV-18-00244-PHX-DLR,CV-18-00244-PHX-DLR
Citation334 F.Supp.3d 1009
CourtU.S. District Court — District of Arizona
Parties Peter J. PIPER, Plaintiff, v. GOODING & COMPANY INCORPORATED, et al., Defendants.

Aaron Trachtman Goodman, Mark A. Nadeau, DLA Piper LLP, Ronald D. Roach, RDR Law PLC, Phoenix, AZ, for Plaintiff.

Andrew Foster Halaby, Rachael Marie Peters Pugel, Snell & Wilmer LLP, Amy Lynn Stein, Foran Glennon Palandeck Ponzi & Rudloff PC, Phoenix, AZ, Brian Ledahl, Nathan D. Meyer, Russ August & Kabat, Los Angeles, CA, Nancy Ortmeyer Kuhn, Robert N. Kelly, Jackson & Campbell PC, Washington, DC, for Defendants.


Douglas L. Rayes, United States District Judge

Before the Court is Defendant Gooding & Company's ("Gooding") amended motion to dismiss for failure to state a claim (Doc. 70), and Plaintiff Peter Piper's motion for preliminary injunction (Doc. 74). The motions are fully briefed. On July 17, 2018, the Court held an evidentiary hearing on the preliminary injunction motion. For the reasons discussed below, Gooding's motion to dismiss is granted in part and denied in part, and Piper's preliminary injunction motion is granted.

I. Background

This case involves a dispute over the ownership of a rare 1954 Ferrari ("the Ferrari"). Piper's father, James, purchased the Ferrari in 1962, had it restored in 1982, and won Most Elegant Sports car at the Pebble Beach Concours d'Elégance in August 1989. (Doc. 69 ¶¶ 13-15.) Following the Concours d'Elégance, a potential buyer offered James $1.7 million for the Ferrari. (¶ 16.) He declined to sell it.

Also in 1989, James moved to Mexico and became romantically involved with Maria Socorro De Rodriguez La Pine ("Socorro"). (¶ 17.) On September 19, 1989, James died, purportedly from heart complications. (¶¶ 18, 79-80.) Because James' body was immediately cremated, further investigation into his cause of death was impossible. At the time of James' death he still owned the Ferrari. (¶ 75.)

Soon after James' death, Socorro advised Piper that she was taking steps to protect James' assets for distribution to the family. (¶ 20.) Socorro represented to Piper that James had hired an attorney to transfer title of his Ferraris, including the 1954 Ferrari, into a holding entity for the benefit of Piper and his siblings. (¶ 87.) Piper met with James' attorney and orally authorized the transfer of the Ferraris to the holding entity.1 (¶¶ 88-89.) Piper, however, never received documentation confirming the transfer. (¶¶ 89-90.)

Unbeknownst to Piper, Socorro was suspected of murdering several prior love interests and dispossessing the decedents of their assets. (¶¶ 19-20.) Despite being unaware of this fact, Piper began to suspect that Socorro was involved in his father's death and confronted her. (¶ 90.) After being confronted by Piper, Socorro vanished. Piper was left with no information concerning the whereabouts of the Ferrari, as James and Socorro, the two people possessing that information, suddenly were gone. (¶ 91.)

In fact, the Ferrari was being stored in an empty shop next to Francorchamps of America, Inc. ("FAI"), the same company that restored the Ferrari in 1982. (¶¶ 102-04.) The Ferrari remained in FAI's empty shop until 1991, at which time Socorro sold the vehicle to Robert Butler. (¶¶ 106-07.) Butler purchased the Ferrari for $300,000.00, less than twenty percent of the market value just two years prior. (¶ 107.) Rod Drew, the owner of FAI, was unaware of the allegations against Socorro until after she sold the Ferrari. (¶ 109.) In 1995, Butler listed the Ferrari for sale, mislabeling it a 1955. (¶ 117.) Butler then sold the Ferrari for $150,000.00 to Todd Morici. (¶ 118.) Morici, in turn, sold the Ferrari to Defendant Falcon Woods LLC ("Falcon Woods"). (¶ 119.)

Piper intermittently searched for the Ferrari, including discussing with the FBI the possibility that his father was murdered and the vehicle stolen. (¶ 22.) It was not until December 2017 that Piper discovered information advertising the vehicle for sale at auction. (Id. ) Gooding, on behalf of Falcon Woods, planned to auction the Ferrari in Scottsdale, Arizona on January 20, 2018, for an estimated price between $1.6 million and $2 million. (¶¶ 140, 155.) Gooding's provenance for the Ferrari contained multiple errors, including that James sold the vehicle in 1991, two years after his death, and that he initially acquired it in 1982. (¶¶ 141, 143.)

On January 18, 2018, Piper visited Gooding's auction, viewed the Ferrari, and confirmed that it was his father's. (¶¶ 159-60.) That same day, Piper presented Gooding's in-house counsel with notice of his claim to the Ferrari. (¶ 161.) On January 19, 2018, Gooding placed a notice on the vehicle, informing potential purchasers that it was processing a new title. (¶¶ 126, 162.) On January 20, 2018, the Ferrari was withdrawn from auction. (¶ 169.) On January 23, 2018, Piper filed his verified complaint and application for temporary restraining order application. (¶ 171.) Piper's complaint alleges seven claims, including: (1) conversion; (2) trespass to chattels; (3) unjust enrichment; (4) civil conspiracy; (5) violations of the Racketeer Influence and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. ; (6) violations of Arizona's RICO statute, A.R.S. § 13-2314 ; and (7) replevin of the Ferrari. Gooding moves to dismiss all of Piper's claims.2

II. Legal Standard

When analyzing a complaint for failure to state a claim to relief under Rule 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer , 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. Litig. , 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid dismissal, the complaint must plead sufficient facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This plausibility standard "is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ).

III. Discussion

Gooding argues that each of Piper's tort claims (conversion, trespass to chattels, unjust enrichment, and civil conspiracy) fail because Falcon Woods has superior title as a result of Socorro conveying good title to the Ferrari. Gooding also argues that Piper's federal and state RICO claims should be dismissed for failure to properly allege a pattern of racketeering activity or the requisite level of continuity.

A. Tort Claims

Assuming, as Piper alleges, that Socorro wrongfully acquired the Ferrari, Gooding argues that Falcon Woods nonetheless has superior title for three independent reasons. (Doc. 70 at 11.)

First, Gooding asserts that Socorro conveyed good title under California's innocent purchaser defense.3 As a general rule, "[t]he possessor of stolen goods has void rather than voidable title, and therefore cannot convey good title ... regardless of how innocently the goods were acquired by him." Suburban Motors, Inc. v. State Farm Mut. Auto. Ins. Co. , 218 Cal.App.3d 1354, 268 Cal.Rptr. 16, 19 (1990). But under California's innocent purchaser defense, Cal. Com. Code § 2403(1), an innocent purchaser for value, without actual or constructive notice that his vendor has secured the vehicle by a fraudulent purchase, may take good title. Id. The law distinguishes between a purchaser whose vendor obtained title by fraud and a purchaser whose vendor obtained title by theft. See Cal. Com. Code § 2403(1) ; State Farm Mut. Auto. Ins. Co. v. Dep't of Motor Vehicles, 53 Cal.App.4th 1076, 62 Cal.Rptr.2d 178, 181 (1997). Gooding argues that, at most, the allegations in the complaint support that Socorro procured the Ferrari by fraud rather than theft, that Butler was a good faith purchaser without notice, and that the innocent purchaser defense applies. The Court disagrees.

Piper has alleged sufficient facts that, if true, plausibly prevent application of the innocent purchaser defense. According to the complaint, Piper and his siblings, as the only heirs to James' estate, inherited the Ferrari through intestate succession. Absent from the complaint is any allegation that Piper was defrauded into selling Socorro the Ferrari or authorizing her to transfer ownership of it. Nevertheless, Socorro sold the Ferrari. Accordingly, the Court finds that Piper has sufficiently alleged that Socorro obtained the Ferrari by theft.

Second, Gooding argues that because Piper is not entitled "to the benefit of the common law rule that a thief cannot pass title to stolen property" because he failed to "utilize provisions of law that would protect his interest" in the Ferrari. (Doc. 70 at 11.) Gooding contends that Piper fails to allege that he filed a police report "put[ting] the public on constructive notice of [his] purported rights[.]" (Id. at 12-13.) For support, Gooding cites California Civil Code § 3543, which provides that "[w]here one of two innocent persons must suffer by the act of a third, he, by whose negligence it happened, must be the sufferer." California, however, has refused to apply § 3543 to cases where criminal conduct, such as theft, is the proximate cause of the injury:

a party is not bound in transactions of this character either to anticipate or take precaution against the commission of a crime by which another may be deceived; that is where it is through the instrumentality of a criminal act that the wrong is accomplished, it is the crime, and not the negligent act, which is the proximate cause of injury; and in such a case the maxim that where one of two innocent

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