Olteanu v. Gonzales

Background

Andreea Melissa Olteanu alleged that the defendants participated in a financial conspiracy involving the Michael & Anca Olteanu Trust. She alleged that trust funds were diverted, used to establish companies in Romania, and laundered through various accounts. She also alleged that the scheme contributed to financial distress, three assassination attempts against her, and the death of her husband, Mark Porcelli.

The Second Amended Complaint asserted claims under the Racketeer Influenced and Corrupt Organizations Act, federal fraud and money-laundering statutes, the Bank Secrecy Act, the Foreign Account Tax Compliance Act, California’s wrongful-death statute, breach of fiduciary duty, intentional infliction of emotional distress, civil conspiracy, and other statutes and legal theories. Merrill Lynch and Eric Gonzales were the Moving Defendants. The other defendants did not respond to the Second Amended Complaint.

Motion to Compel Arbitration

The Moving Defendants asked the court to compel arbitration based on arguments they had made in earlier filings. Because the formation of an arbitration agreement was at issue, the defendants had to show that there was no genuine dispute about whether an arbitration contract had been formed. The court had previously found that the earlier complaint did not contain enough facts to decide arbitrability.

The court concluded that the Moving Defendants did not explain how the Second Amended Complaint resolved that problem. The court therefore denied the motion to compel arbitration.

Motion to Dismiss

The court applied Federal Rule of Civil Procedure 8, which requires a complaint to provide enough factual content to make a claim plausible, and Rule 9(b), which requires fraud allegations to describe the alleged misconduct with particularity. The court also considered the less demanding pleading standard generally applied to complaints filed by people without lawyers. The court rejected the Moving Defendants’ argument that an attorney had secretly written the complaint, finding that they had not shown that an attorney ghostwrote the filings.

Even under the less demanding standard, however, the court found that the Second Amended Complaint did not state a claim for relief against Merrill Lynch or Gonzales. The court said the allegations that Gonzales initiated fraudulent transfers and that Merrill Lynch allowed fraudulent wire transfers were conclusions rather than specific facts supporting a reasonable inference of liability. The court also found that Olteanu did not plead facts connecting the defendants’ alleged conduct to Porcelli’s death. The court concluded that the claims against the Moving Defendants did not satisfy the pleading requirements and dismissed them.

Defendants Who Did Not Move to Dismiss

The court also dismissed the claims against the defendants who had not filed dismissal motions. Olteanu had not served those defendants with the Second Amended Complaint as the court had previously required. The court nevertheless considered the sufficiency of the claims because it would have had to examine their merits if Olteanu later sought a default judgment.

The court found that the allegations against those defendants were also conclusory. For example, the complaint alleged that the defendants engaged in a scheme involving interstate communications, authorized fraudulent transfers, coordinated through email, laundered assets, and contributed to financial turmoil. The court found that the complaint did not provide facts supporting a reasonable inference that those defendants acted wrongfully or that their conduct caused Porcelli’s death. The court therefore dismissed the claims against the remaining defendants.

Other Motions and Disposition

The court denied Olteanu’s outstanding motions and requests to file motions because she had not pleaded facts supporting a plausible claim for relief. In its conclusion, the court denied the motion to compel arbitration, granted the Moving Defendants’ motion to dismiss, and dismissed the claims against the remaining defendants.

The court dismissed the Second Amended Complaint without leave to amend, finding that further amendment would be futile because the earlier amended complaint had already been dismissed after the court identified the same lack of supporting factual allegations, and the Second Amended Complaint did not correct those deficiencies. The order disposed of Docket Nos. 104, 119, 120, 122, and 123.