{ Converted to text using OCR. The PDF is the controlling document. The Exhibits are in the PDF. JM}
Matthew D. Francis (6978)
Adam P. McMillen (10678)
WATSON ROUNDS
5371 Kietzke Lane
Reno, NV 89511
Telephone: 775-324-4100
Facsimile: 775-333-8171
Attorneys for Plaintiff Jed Margolin
In The First Judicial District Court of the State of Nevada
In and for Carson City
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JED MARGOLIN, an individual, Plaintiff, VS.
OPTIMA TECHNOLOGY CORPORATION, a California corporation, OPTIMA TECHNOLOGY CORPORATION, a Nevada corporation, REZA ZANDIAN aka GOLAMREZA ZANDIANJAZI aka GHOLAM REZA ZANDIAN aka REZA JAZI aka J. REZA JAZI aka G. REZA JAZI aka GHONONREZA ZANDIAN JAZI, an individual, DOE Companies 1-10, DOE Corporations 11-20, and DOE Individuals 21-30, Defendants.
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Case No.: 09OC00579 1B Dept. No.: 1
OPPOSITION TO MOTION TO DISMISS
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COMES NOW Plaintiff Jed Margolin and hereby files this opposition to Defendant Reza Zandian's ("Zandian") motion to dismiss the amended complaint on a special appearance and in the alternative for leave to amend the complaint. This opposition is based on the following Memorandum of Points and Authorities and all pleadings, motions, and papers on file herein.
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MEMORANDUM OF POINTS AND AUTHORITIES
I. FACTUAL BACKGROUND
Plaintiff Jed Margolin is the named inventor on numerous patents and patent applications, including United States Patent No. 5,566,073 ("the '073 Patent"), United States Patent No. 5,904,724 ("the '724 Patent"), United States Patent No. 5,978,488 ("the '488 Patent") and United States Patent No. 6,377,436 ("the '436 Patent") (collectively "the Patents"). See Amended Complaint, ¶ 9. Mr. Margolin is the legal owner and owner of record for the '488 and '436 Patents, and has never assigned those patents. Id., ¶ 10. In 2004, Mr. Margolin granted to Optima Technology Group ("OTG"), a Cayman Islands Corporation specializing in aerospace technology, a Power of Attorney regarding the '073 and '724 Patents. Id., ¶ 11. Subsequently, Mr. Margolin assigned the '073 and '724 Patents to OTG. Id., ¶ 13.
In May 2006, OTG and Mr. Margolin licensed the '073 and '724 Patents to Geneva Aerospace, Inc., and Mr. Margolin received a royalty payment pursuant to the royalty agreement between Mr. Margolin and OTG. Id., ¶ 12. In about October 2007, OTG licensed the '073 Patent to Honeywell International, Inc., and Mr. Margolin received a royalty payment pursuant to the royalty agreement between Mr. Margolin and OTG. Id., ¶ 14.
On about December 5, 2007, Defendant Zandian filed with the U.S. Patent and Trademark Office ("USPTO") fraudulent assignment documents allegedly assigning all four of the Patents to Optima Technology Corporation ("OTC"), a company apparently owned by Defendant Zandian. Id., ¶ 15; see also the fraudulent assignment documents attached hereto as Exhibit 1 (the Exhibits cited in this brief are attached to the McMillen Affidavit, dated 12/5/11, attached hereto).[1] Upon discovery of the fraudulent filings, Mr. Margolin: (a) filed a report with the Storey County Sheriffs Department; (b) took action to regain record title to the `488 and '436 Patents that he legally owned; and (c) assisted OTG in regaining record title of
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[1] The signature on the attached Recordation Form Cover Sheet is that of Reza Zandian; also, the internal address for Optima Technology Corporation, which is apparently another name for Zandian, lists John Peter Lee Limited, 830 Las Vegas Boulevard South, Las Vegas, Nevada 89101, 702-382-4044, info@johnpeterlee.com.
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the '073 and '724 Patents that it legally owned and upon which it contracted with Mr. Margolin for royalties. Id., ¶ 16.
Shortly before this, Mr. Margolin and OTG had been named as defendants in an action for declaratory relief regarding non-infringement of the '073 and '724 Patents in the United States District Court for the District of Arizona, in a case titled: Universal Avionics Systems Corporation v. Optima Technology Group, Inc., No. CV 07-588-TUC-RCC (the "Arizona Action"). Id., ¶ 17. Plaintiff in the Arizona Action asserted that Mr. Margolin and OTG were not the owners of the '073 and '724 Patents, and Mr. Margolin and OTG filed a cross-claim for declaratory relief against Optima Technology Corporation ("Zandian" or "OTC") in order to obtain legal title to the respective patents.
On August 18, 2008, the United States District Court for the District of Arizona entered a default judgment in favor of Mr. Margolin and OTG on their declaratory relief action, and ordered that OTC had no interest in the '073 or '724 Patents, and that the assignment documents filed by Zandian with the USPTO were "forged, invalid, void, of no force and effect." See Exhibit B to Zandian's Motion to Dismiss, on file herein.
Due to Defendants' fraudulent acts, title to the Patents was clouded and interfered with Plaintiff's and OTG's ability to license the Patents. Id., ¶ 19. In addition, during the period of time Mr. Margolin worked to correct record title of the Patents in the Arizona Action and with the USPTO, he incurred significant litigation and other costs associated with those efforts. Id., ¶ 20.
II. PROCEDURAL BACKGROUND
Plaintiff filed his Complaint on December 11, 2009. Personal service on Defendant Zandian was attempted on February 2, 2010.[2] Based on that date of service, Zandian's answer to the Complaint was due on or before February 22, 2010. Zandian did not answer the Complaint or respond in any way. On December 2, 2010, a default was entered against
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[2] See Affidavit of Service, dated 2/18/10, attached hereto as Exhibit 2.
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Zandian. Plaintiff then filed and served a Notice of Entry of Default on Zandian on December 7, 2010 and on his last known attorney on December 16, 2010.
On February 25, 2011, Plaintiff filed in this Court and served a certificate of service indicating that the application for entry of default against Zandian was sent to attorney John Peter Lee. On February 28, 2011, Plaintiff filed an application for default judgment against Defendants Zandian, Optima Technology Corporation, a California Corporation, and Optima Technology Corporation, a Nevada Corporation.
On March 1, 2011, a default judgment was entered against Zandian and the other defendants for $121,594.46. On March 7, 2011, notice of entry of that default was filed and served by mail on Zandian and his counsel.
On June 9, 2011, Zandian filed a motion to dismiss and to set aside the default. On August 3, 2011, this Court set aside the default, denied the motion to dismiss without prejudice and granted Plaintiff ninety (90) days from August 3, 2011 to properly effectuate service of the Complaint and Summons and/or an Amended Complaint.
On September 27, 2011, this Court ordered that service of process against Defendants be made by publication in the San Diego Union-Tribune, the Reno Gazette-Journal and the Las Vegas Review Journal. As reflected in the affidavits of service filed on November 7, 2011, Defendants were served by publication in the San Diego Union-Tribune (09/23/2011; 09/30/2011; 10/07/2011; 10/14/2011), the Reno Gazette-Journal (09/16/2011; 09/23/2011; 09/30/2011; 10/07/2011) and the Las Vegas Review Journal (10/07/2011; 10/14/2011; 10/21/2011; 10/28/2011).
III. ARGUMENT
A. DEFENDANT'S MOTION TO DISMISS CITES MATTERS OUTSIDE THE PLEADINGS AND THUS THE MOTION SHOULD BE TREATED AS A MOTION FOR SUMMARY JUDGMENT
"If a motion to dismiss for failure to state a claim upon which relief can be granted has been filed, and matters outside the pleading are presented to and not excluded by the trial court, the motion shall be treated as a motion for summary judgment." Kellar v. Snowden, 87 Nev. 488, 491-92, 489 P.2d 90, 92-93 (1971). In this case, Defendant Zandian has presented
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matters outside the Amended Complaint and if the Court does not exclude those matters then Zandian's motion must be treated as a motion for summary judgment.
For example, Defendant Zandian references the Arizona default judgment to argue that he was not a part of the Arizona action. See Zandian's Motion to Dismiss, Exhibit B, and 3:15 and 3:22-23. Another example is where Defendant Zandian argues that he was not served in the Arizona action and Zandian cites the docket of the Arizona action for support of this argument. Id. at 4:26-27, citing Exhibit C (which is the docket of the Arizona action).
As a result of Zandian's citation to matters outside of the pleadings, the motion to dismiss should be treated as a motion for summary judgment.
B. LEGAL STANDARD FOR SUMMARY JUDGMENT UNDER NRCP 56
Summary judgment under NRCP 56 may not be used as a shortcut to resolving disputes regarding material facts. Parmana v. Petricciani, 70 Nev. 427, 436, 272 P.2d 492 (1954), abrogated on other grounds by Wood v. Safeway, Inc., 121 Nev. 724,121 P.3d 1026 (2005).
A court "should exercise great care in granting motions for summary judgment". Short v. Hotel Riviera, Inc., 79 Nev. 94, 103, 378 P.2d 979, 984 (1963). NRCP 56 authorizes summary judgment only where the moving party is entitled to judgment as a matter of law and no genuine issue remains for trial. Wood v. Safeway, Inc., 121 Nev. 724, 731, 121 P.3d 1026, 1031 (2005). All evidence favorable to the party against whom summary judgment was rendered will be accepted as true. Bowyer v. Davidson, 94 Nev. 718, 720, 584 P.2d 686, 687 (1978). The pleadings and other proof must be construed in a light most favorable to the nonmoving party. Wood v. Safeway, Inc., 121 Nev. 724, 732, 121 P.3d 1026, 1031 (2005).
C. MATERIAL ISSUES OF FACT EXIST AS TO DEFENDANT ZANDIAN'S INVOLVEMENT IN THE UNDERLYING FRAUDULENT ASSIGNMENT
Applying the legal standard for summary judgment to the pleadings and other proof attached to Zandian's motion to dismiss, and/or submitted in this action, material issues of fact plainly exist as to whether or not Defendants, including Zandian in his personal capacity, executed and filed fraudulent documents with the United States Patent and Trademark Office
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("PTO"), among other issues that have caused Plaintiff Margolin's damages. Zandian has provided no undisputed fact that he was not personally involved in signing the fraudulent documents. He merely argues that he was not involved. Clearly, a material issue of fact exists with that issue alone.
D. IN THE ALTERNATIVE, ADDITIONAL DISCOVERY IS REQUIRED PURSUANT TO NRCP 56(f)
In the alternative that the above is not sufficient to defeat the instant motion for summary judgment, it should still be denied based upon the complete lack of discovery in this matter.
NRCP 56(f) provides in pertinent part:
Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just. Id.
"NRCP 56(f) permits a district court to grant a continuance when a party opposing a motion for summary judgment is unable to marshal facts in support of its opposition. A district court's decision to refuse such a continuance is reviewed for abuse of discretion." Aviation Ventures, Inc. v. Joan Morris, Inc., 121 Nev. 113, 117-18, 110 P.3d 59, 62 (2005). In addition:
In Hamlimi v. Blacketor, this court concluded that a district court had abused its discretion when it denied an NRCP 56(f) motion for a continuance and granted summary judgment in a case where the complaint had been filed only a year before summary judgment was granted. This court noted that summary judgment is improper when a party seeks additional time to conduct discovery to compile facts to oppose the motion. Furthermore, this court held that when no dilatory motive was shown, it was an abuse of discretion to refuse a request for further discovery at such an early stage in the proceedings.
Aviation Ventures, Inc., 121 Nev. at 118, 110 P.3d at 62 (citations omitted).
In addition, Nevada courts regularly consult the Federal Rules of Civil Procedure in interpreting the Nevada rules. See for example AA Primo Builders, LLC v. Washington. 245 P.3d 1190, 1193 (Nev. 2010). The case law interpreting the federal counterpart of NRCP 56(t) states in part as follows:
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Rule 56(f) "provides a device for litigants to avoid summary judgment when they have not had sufficient time to develop affirmative evidence." Seville Classics, Inc. v. Meskill Enterprises, LLC. 2005 WL 6141289, *1 (C.D. Cal. 2005)(granting plaintiffs application for ex parte order under Rule 56(f) denying defendant's motion for summary judgment), quoting United States v. Kitsap Physicians Serv., 314 F.3d 995, 1000 (9th Cir. 2002). The purpose of Rule 56(f) is to serve as a safeguard against an improvident or premature grant of summary judgment. 10B Charles A. Wright, Arthur R. Miller, Federal Practice and Procedure 3d, § 2740 (2009)(citations omitted). As such, courts have held that technical rulings regarding Rule 56(f) are improper and the Rule "should be applied with a spirit of liberality." Id.
"Rule 56(f) motions 'should be granted almost as a matter of course unless the nonmoving party has not diligently pursued discovery of the evidence."' Caldwell v. Roseville Joint Union High School Distric., 2006 WL 3747288, * 1 (E. D. Cal. 2006)(quotations omitted — granting Rule 56(f) ex parte application for continuance).
Thus, under NRCP 56(f), a motion for summary judgment should be denied if it appears that additional discovery will assist in developing the facts of the case. Clearly, discovery in the form of written discovery and especially the taking of the depositions of the parties and the fact witnesses (if any), will not only assist in developing the facts of the case but will likely establish unequivocally whether or not Defendants, including Zandian in his personal capacity, were responsible for the filing of the fraudulent documents with the PTO and caused the Plaintiffs damages.
No discovery has been conducted to date as no answer to the complaint or the amended complaint has been filed by Defendants. McMillen Aff., ¶ 31. The written discovery and deposition discovery that will assist in developing the facts of this case and will establish whether Defendants are liable or not for the causes of action filed by Plaintiff is as follows:
Discovery needs to be done regarding Zandian's contention that he never acted in his individual capacity in such a way to cause a justiciable injury to the Plaintiff, as outlined on page 3, lines 20-21 of Zandian's motion to dismiss (see also page 4, lines 6-7). McMillen Aff., ¶ 32. Discovery into all aspects of the Plaintiff's claims in this matter needs to be
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accomplished. Id. at ¶ 33. The deposition of Defendant Reza Zandian, and written discovery, needs to be undertaken in order to determine his residency and contacts with the State of Nevada for jurisdictional purposes and issues related to his role in forging the assignment documents, among other issues. Id. at ¶ 34. Discovery needs to be done regarding issues related to Plaintiff's claims, including whether or not Defendant Zandian acted in his personal capacity in such a way to cause a justiciable injury to Plaintiff. Id. at ¶ 35. Discovery needs to be done regarding the Plaintiffs damages. Id. at ¶ 36. Discovery into the Defendants' claims and defenses needs to been done. Id. at ¶ 37.
The above referenced discovery will assist in developing the facts of this case, therefore, pursuant to NRCP 56(f), Defendant Zandian's motion to dismiss/summary judgment should be denied. Id. at ¶ 38.
Therefore, it is respectfully requested in the alternative that the instant motion be denied so that additional discovery can take place.
E. DEFENDANTS HAVE BEEN PROPERLY SERVED WITH THE SUMMONS AND COMPLAINT
NRCP 4(e)(1)(i) allows service by publication when the person on whom service is to be made resides out of the state, or has departed from the state, or cannot, after due diligence, be found within the state, or by concealment seeks to avoid service, and a cause of action exists against the person to whom service is to be made and is a necessary party. In addition, NRCP 4(e)(1)(iii) commands as follows:
The order shall direct the publication to be made in a newspaper, published in the State of Nevada, to be designated by the court or judge thereof, for a period of 4 weeks, and at least once a week during said time. In addition to instate publication, where the present residence of the defendant is unknown the order may also direct that publication be made in a newspaper published outside the State of Nevada whenever the court is of the opinion that such publication is necessary to give notice that is reasonably calculated to give a defendant actual notice of the proceedings.
NRCP 4(e)(1)(iii)(emphasis added).
In this case, the complaint was filed on December 11, 2009. Plaintiff attempted to serve Defendants at their last-known residential and/or business address of 8401 Bonita
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Downs Road, Fair Oaks, California 95628. As Plaintiff was having difficulty serving Zandian, the summons and complaint were mailed to Zandian's attorney, John Peter Lee, on January 8, 2010, and a request for assistance in serving Zandian was made. See Letter, dated 1/8/10, from Cassandra Joseph to John Peter Lee, attached hereto as Exhibit 3.[3] Moreover, an attempt at personal service of Zandian occurred on February 2, 2010 in Fair Oaks, California.
On August 4, 2011, Adam McMillen sent a letter to John Peter Lee requesting that Mr. Lee accept service on behalf of his client, Reza Zandian.
See Letter, dated 8/04/11, from Adam McMillen to John Peter Lee, attached hereto as Exhibit 4. Mr. McMillen also requested that Mr. Lee provide a current address for Reza Zandian. Id.
On August 8, 2011, Mr. Lee sent Mr. McMillen a letter stating as follows:
We cannot accept service, nor can we give you Reza Zandian's current address. Except to indicate that he does not reside in Nevada at the present time and is not subject to the jurisdiction of the courts of this State within the provisions of the litigation commenced by your firm involving an Arizona judgment which cannot be domesticated in Nevada.
See Letter, dated 8/8/11, from John Peter Lee to Adam McMillen, attached hereto as Exhibit 5 (emphasis added). Mr. Lee was unwilling to assist the Plaintiff in serving his client.
Nevertheless, as stated above, all three Defendants were served by publication prior to November 2011. Therefore, all three Defendants have been served with the summons and complaint and were given proper notice of this lawsuit.
F. ZANDIAN'S BUSINESS ACTIVITIES AND PROPERTY HOLDINGS ARE SUBSTANTIAL, CONTINUOUS AND SYSTEMATIC, AND HE SHOULD BE DEEMED PRESENT IN THE FORUM
Nevada's long arm statute states as follows:
1. A court of this state may exercise jurisdiction over a party to a civil action on any basis not inconsistent with the Constitution of this state or the Constitution of the United States.
2. Personal service of summons upon a party outside this state is sufficient to confer upon a court of this state jurisdiction over the party so served if the service is made by delivering a copy of the summons, together with a copy of
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[3] John Peter Lee never responded to Cassandra Joseph's request for assistance in serving Zandian and the Defendant entities. At least, Mr. Lee never responded until well after the default was entered by filing the instant motion, even though he represented Zandian prior to this action.
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the complaint, to the party served in the manner provided by statute or rule of court for service upon a person of like kind within this state.
3. The method of service provided in this section is cumulative, and may be utilized with, after or independently of other methods of service.
NRS 14.065(1)-(3).
In addition, in Nevada, "[t]here are two types of personal jurisdiction: general and specific." Baker v. Eighth Judicial Dist. Court ex rel. County of Clark, 116 Nev. 527, 532, 999 P.2d 1020, 1023 (2000). "General jurisdiction is required in matters where a defendant is held to answer in a forum for causes of action unrelated to his forum activities." Baker v. Eighth Judicial Dist. Court ex rel. County of Clark, 116 Nev. 527, 532, 999 P.2d 1020, 1023 (2000). "General jurisdiction over a nonresident will lie where the nonresident's activities in the forum are 'substantial' or 'continuous and systematic. ‘ ” Id. Said another way, "General jurisdiction over the defendant 'is appropriate where the defendant's forum activities are so "substantial" or "continuous and systematic" that [he] may be deemed present in the forum.’ ” Freeman v. Second Judicial Dist. Court ex rel. County of Washoe, 116 Nev. 550, 553, 1 P.3d 963, 965 (2000).
In addition, the following citation acknowledges that there must be minimum contacts for the Court to exercise jurisdiction over a nonresident and states that owning property or doing business within the state is enough to confer jurisdiction:
We acknowledged in Metal-Matic, Inc. v. 8th Judicial District Court, 82 Nev. 263, 415 P.2d 617 (1966), citing therein International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); McGee v. International Life, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), that since Pennoyer v. Neff, 5 Otto 714, 95 U.S. 714, 24 L.Ed. 565 (1877), a jurisdictional evolution has been taking place to such extent that the old jurisdictional landmarks have been left far behind so that in many instances states may now properly exercise jurisdiction over nonresidents not amenable to service within their borders. The point has not been reached, however, where state boundaries are not without significance. There must still be some `affiliating' circumstances without which the courts of the state may not entertain jurisdiction. Hanson v. Denckla, supra. Each case depends upon its own circumstances, but while we adhere to the generalities of 'minimal contact,' that contact must be of significance. In this case it must amount to owning property or doing, business within this state.
McCulloch Corp. v. O'Donnell, 83 Nev. 396, 398, 433 P.2d 839, 840 (1967) (emphasis added).
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In this case, Zandian owns property and does business within the state. In fact, as detailed below, Zandian's forum activities are so "substantial" or "continuous and systematic" that he may be deemed present in the forum and therefore general jurisdiction is appropriate.
Zandian owns real property throughout Nevada. He owns two parcels in Clark County (30 acres combined).[4] He owns 10 parcels in Washoe County ((APN: 79-150-09: 560 acres)(APN: 079-150-10: 639 acres)(APN: 079-150-13: 560 acres)(APN: 084-040-02: 627 acres)(APN: 084-040-04: 640 acres)(APN: 084-040-06: 633 acres)(APN: 084-040-10: 390 acres)(APN 084-130-07: 275 acres)(APN: 79-150-12:160 acres)).[5] He owns and/or is partial owner of 6 parcels in Lyon County (330.20 acres combined).[6] He is part owner of two parcels in Churchill County (56.75 acres combined).[7] He is part owner of one parcel in Elko County (17.6 acres).[8] It is unknown at this time if he owns other property in other names or through other entities.
With regards to doing business within Nevada, Zandian is a managing member of Johnson Spring Water Company LLC, a Nevada LLC.[9] Zandian is a managing member of Wendover Project L.L.C., a Nevada LLC.[10] Zandian is or was recently a manager of 11000 Reno Highway, Fallon, LLC, a Nevada LLC.[11] Currently, 11000 Reno Highway, Fallon, LLC is listed as the owner of 640 acres of real property in Churchill County.[12]
Zandian is or was recently a managing member and registered agent of Misfits Development LLC, a Nevada LLC.[13] Zandian is or was recently a managing member and
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[4] See Zandian's Clark County property information, attached hereto as Exhibit 6.
[5] See Zandian's Washoe County property information, attached hereto as Exhibit 7.
[6] See Zandian's Lyon County property information, attached hereto as Exhibit 8.
[7] See Zandian's Churchill County property information, attached hereto as Exhibit 9.
[8] See Zandian's Elko County property information, attached hereto as Exhibit 10.
[9] See Zandian's manager information for Johnson Spring Water Company LLC, attached hereto as Exhibit 11.
[10] See Zandian's manager information for Wendover Project L.L.C., attached hereto as Exhibit 12.
[11] See Zandian's manager information for 11000 Reno Highway, Fallon, L.L.C., attached hereto as Exhibit 13.
[12] See 11000 Reno Highway, Fallon, LLC's Churchill County property information, attached hereto as Exhibit 14.
[13] See Zandian's managing member and resident agent information for Misfits Development LLC, attached hereto as Exhibit 15.
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registered agent of Elko North 5th Avenue, LLC, a Nevada LLC.[14] Zandian is a managing member and registered agent for Stagecoach Valley LLC, an active Nevada LLC.[15]
Zandian acted as the resident agent for a revoked Nevada limited liability company named Rock and Royalty LLC, where Zandian's resident agent address was 1401 S. Las Vegas Boulevard, Las Vegas, Nevada 89104.[16] Zandian was a managing member of Gold Canyon Development LLC, a Nevada LLC that is now in default status.[17] Zandian was a managing member of High Tech Development LLC, a Nevada LLC that has been dissolved.[18] Zandian was a managing member of Lyon Park Development LLC, a Nevada LLC that has been dissolved.[19] Zandian was a managing member of Churchill Park Development LLC, a Nevada LLC that has been dissolved.[20] Zandian was a manager of Sparks Village LLC, a Nevada LLC that is in default status.[21] Zandian was president, secretary, treasurer, director and resident agent of Optima Technology Corporation, a now revoked Nevada close corporation.[22] Zandian was a managing member of I-50 Plaza LLC, a Nevada LLC in default status.[23] Zandian was a manager of Dayton Plaza, LLC, a Nevada LLC in default status.[24] Finally, Zandian was a manager of Reno Highway Plaza, LLC, a Nevada LLC in revoked status.[25]
Also, Zandian listed Carson City and Las Vegas addresses for his registered agent and officer information for Rock and Royalty LLC, Optima Technology Corporation, High Tech
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[14] See Zandian's managing member and resident agent information for Elko North 5th Avenue, LLC, attached as Exhibit 16.
[15] See Zandian's managing member and resident agent information for Stagecoach Valley LLC, attached hereto as Exhibit 17.
[16] See Zandian's resident agent information for Rock and Royalty LLC, attached hereto as Exhibit 18.
[17] See Zandian's managing member information for Gold Canyon Development LLC, attached hereto as Exhibit 19.
[18] See Zandian's managing member information for High Tech Development LLC, attached hereto as Exhibit 20.
[19] See Zandian's managing member information for Lyon Park Development LLC, attached hereto as Exhibit 21.
[20] See Zandian's managing member information for Churchill Park Development LLC, attached hereto as Exhibit 22.
[21] See Zandian's manager information for Sparks Village LLC, attached hereto as Exhibit 23.
[22] See Zandian's information for Optima Technology Corporation, attached hereto as Exhibit 24.
[23] See Zandian's information for I-50 Plaza LLC, attached hereto as Exhibit 25.
[24] See Zandian's information for Dayton Plaza, LLC, attached hereto as Exhibit 26.
[25] See Zandian’s information for Reno Highway Plaza, LLC, attached hereto as Exhibit 27.
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Development LLC, Lyon Park Development LLC, Churchill Park Development LLC, Sparks Village, LLC, 1-50 Plaza LLC, Dayton Plaza, LLC, 11000 Reno Highway Fallon LLC, Misfits Development LLC, Elko North 5t Ave, LLC, and Stagecoach Valley LLC.[26]
As demonstrated above, Zandian clearly owns or partially owns many properties within and throughout the state of Nevada and Zandian clearly does a significant amount of business within the state. His property ownership holdings and his business dealings, alone, show that Zandian's forum activities are so "substantial" or "continuous and systematic" that he should be deemed present in the forum and therefore general jurisdiction is appropriate.
G. NEVADA HAS ABROGATED THE DOCTRINE OF SPECIAL/GENERAL APPEARANCES
Zandian argues that he is making a special appearance "for the purpose of testing both the sufficiency of service and the jurisdiction of the court; thus, Zandian has not consented to personal jurisdiction of any Nevada court by bringing the instant motion." See Motion to Dismiss Amended Complaint on Special Appearance, dated 11/17/11, 2:12-15, on file herein.
However, the Nevada Supreme Court has abrogated the doctrine of special/general appearances. Hansen v. Eighth Judicial Dist. Court ex rel. County of Clark, 116 Nev. 650, 656, 6 P.3d 982, 985 (2000). "Now, before a defendant files a responsive pleading such as an answer, that defendant may move to dismiss for lack of personal jurisdiction, insufficiency of process, and/or insufficiency of service of process, and such a defense is not 'waived by being joined with one or more other defenses.’ Alternatively, a defendant may raise its defenses, including those relating to jurisdiction and service, in a responsive pleading." Hansen, 116 Nev. at 656, 6 P.3d at 986.
Zandian could have raised his alleged defenses of insufficiency of service of process and lack of jurisdiction in a motion to dismiss without waiving such defenses and his "special" appearance is a nullity. Therefore, Zandian's motion is merely a motion to dismiss. However, as shown above and below, the motion to dismiss is factually and procedurally fatally flawed.
H. ZANDIAN CANNOT MEET THE STANDARD FOR A MOTION TO DISMISS
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[21] See Exhibits 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, and 25, attached hereto.
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"In considering 'a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party."' Germaine Music v. Universal Songs of Polygram, 275 F. Supp. 2d 1288, 1294 (D. Nev. 2003) affd in part, 130 F. App'x. 153 (9th Cir. 2005).
In his third paper filed with this Court, Zandian moves this Court to dismiss the case based upon service of process and jurisdiction. However, as shown above, Zandian was properly served and his forum contacts are so substantial as to create general jurisdiction over him in the State of Nevada. See supra. Therefore, construing the complaint in the light most favorable to the Plaintiff, Zandian's motion to dismiss cannot meet the standard for a motion to dismiss.
I. RES JUDICATA AND ISSUE PRECLUSION DO NOT PREVENT THIS ACTION
Zandian's motion to dismiss is difficult to decipher, but it appears that Zandian is making an argument that res judicata or maybe issue preclusion might apply in this case. However, Zandian provides no factual or legal authority for his arguments.
"The failure of a moving party to file a memorandum of points and authorities in support of a motion shall constitute a consent to the denial of the motion..." FJDCR 15(5). Accordingly, Zandian's motion should be denied.
Nevertheless, there is a three-part test for determining whether claim preclusion applies: (1) the parties or their privies are the same, (2) the final judgment is valid, and (3) the subsequent action is based on the same claims or any part of them that were or could have been brought in the first case. Five Star Capital Corp. v. Ruby, 124 Nev. 1028, 194 P.3d 709, 713 (Nev. 2008).
In this case, the parties/privies are not the same and this action is not based on the same claims that were or could have been brought in the first case. For example, Zandian argues that the Arizona action has no application to him: "Because no summons was ever issued as to Zandian in the underlying U.S. District Court action which forms the basis of the instant action, any domestication of the U.S. District Court action as it pertains to Zandian is a clear
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violation of Zandian's constitutional right to notice under the Due Process clauses of the Fifth and Fourteenth Amendments of the U.S. Constitution." See Motion to Dismiss Amended Complaint on Special Appearance, dated 11/17/11, 5:5-10, on file herein. While Zandian is incorrect in his assessment that Plaintiff is trying to domesticate the Arizona judgment, Zandian is correct that he was not a party to the Arizona case.
In addition, the Arizona case was a declaratory judgment action brought by Universal Avionics Systems Corporation ("Universal") against Plaintiff, OTG, OTC and Jed Margolin. See Arizona Complaint, dated 7/15/08, attached hereto as Exhibit 28 (original complaint sealed). Universal sought a declaratory judgment that the '073 and '724 patents were invalid and not infringed. Id.
OTG counterclaimed against Universal and cross-claimed against OTC, Joachim Naimer, Jane Naimer, Frank Hummel and Jane Doe Hummel. See Arizona Answer, Counterclaims, Cross-Claims and Third-Party Claims, dated 1/24/08, attached hereto as Exhibit 29. OTG claimed patent infringement against Universal, Naimer and Hummel. Id. OTG claimed breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence against Universal. Id. OTG sought a declaratory judgment against OTC that OTC had no interest or right in the durable power of attorney from Jed Margolin or the above mentioned patents, that OTC's filing/recording of documents with the PTO was invalid and void, and ordering the PTO to correct and expunge its records with regards to the same. Id. OTG claimed injurious falsehood/slander of title, trespass to chattels, unfair competition, unfair and deceptive competition/business practices, unlawful conspiracy, joint and several liability, and punitive damages against Universal and OTC. Id.
In this case, Jed Margolin is claiming conversion, tortious interference with contract, intentional interference with prospective economic advantage, unjust enrichment, and unfair and deceptive trade practices against all Defendants in this matter. The parties/privies and claims in this matter are not the same as the parties/privies and claims in the Arizona action.
Therefore, as the parties/privies and claims in the Arizona action are not the same as the parties/privies and claims in this action, claim preclusion does not apply.
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Also, there is a four-part test for the application of issue preclusion: "'(1) the issue decided in the prior litigation must be identical to the issue presented in the current action; (2) the initial ruling must have been on the merits and have become final; ... (3) the party against whom the judgment is asserted must have been a party or in privity with a party to the prior litigation'; and (4) the issue was actually and necessarily litigated." Five Star Capital Corp., 124 Nev. 1028, 194 P.3d at 713. The only identical issues decided in the Arizona case is the fact that OTC/Zandian filed a forged assignment with the United States Patent Office and that OTC/Zandian have no interest in the above mentioned patents or the durable power of attorney.
The Arizona court ordered that OTC "has no interest in U.S. Patents Nos. 5,566,073 and 5,904,724 ("the Patents") or the Durable Power of Attorney from Jed Margolin dated July 20, 2004." See Exhibit B to Zandian's Motion to Dismiss Amended Complaint on Special Appearance, dated 11/17/11, on file herein. The Arizona court also ordered that the "Assignment Optima Technology Corporation filed with the USPTO is forged, invalid, void, of no force and effect, and is hereby struck from the records of the USPTO." See Exhibit B to Zandian's Motion to Dismiss Amended Complaint on Special Appearance, dated 11/17/11, on file herein. Therefore, those issues have already been decided. However, the same claims have not been decided.
Therefore, the current action against Zandian and all the other Defendants is properly before this Court.
IV. CONCLUSION
Based upon the foregoing, Plaintiff respectfully requests that this Court deny Zandian's motion to dismiss/for summary judgment. If this Court decides to grant any of Zandian's requests, then Plaintiff respectfully requests leave to amend the Complaint in order to remedy any defects therein. It is respectfully requested in the alternative that the instant motion be denied so that additional discovery can take place.
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AFFIRMATION PURSUANT TO NRS 239B.030
The undersigned does hereby affirm that the preceding document does not contain the social security number of any person.
Dated this 5th day of December, 2011.
BY: _______________
Matthew D. Francis (6978)
Adam P. McMillen (10678)
WATSON ROUNDS
5371 Kietzke Lane
Reno, NV 89511
Telephone: 775-324-4100
Facsimile: 775-333-8171
Attorneys for Plaintiff Jed Margolin
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CERTIFICATE OF SERVICE
Pursuant to NRCP 5(b), I certify that I am an employee of Watson Rounds, and that on this date, I deposited for mailing, in a sealed envelope, with first-class postage prepaid, a true and correct copy of the foregoing document, OPPOSITION TO MOTION TO DISMISS, addressed as follows:
John Peter Lee
John Peter Lee, Ltd.
830 Las Vegas Blvd. South Las Vegas, NV 89101
Dated: December 5, 2011
Carla Ousby
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