Dalrada Financial Corporation v. Bonar

Opinion

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 8 DALRADA FINANCIAL Case No.: 24-cv-2166-WQH-BLM CORPORATION, a Wyoming 9 corporation; and DEPOSITION ORDER 10 TECHNOLOGY LTD., a United Kingdom company and wholly owned 11 subsidiary of Dalrada Financial Corp., 12 Plaintiffs, 13 vs. 14 WILLIAM IAN MARTIN BONAR, as an 15 individual and in his official capacity; and DOES 1–50, inclusive, 16 Defendants. 17 HAYES, Judge: 18 The matter before the Court is the Motion for Leave to File a First Amended 19 Complaint (ECF No. 38) filed by Plaintiffs Dalrada Financial Corporation (“DFCO”) and 20 Deposition Technology, Ltd. (“Deposition Tech.”) (collectively, “Plaintiffs”). 21 22 I. PROCEDURAL BACKGROUND On November 19, 2024, Plaintiffs initiated this action by filing a Complaint against 23 Defendants William Bonar (“William”), Marion Bonar (“Marion”), Ian Mackenzie (“Ian”), 24 Samantha Mackenzie (“Samantha”), Jillian Hughes (“Jillian”), and Does 1–50. (ECF No. 25 1.) 26 On December 30, 2024, Defendants Marion, Samantha, Ian, and Jillian (collectively, 27 the “Specially Appearing Defendants”) specially appeared to file respective Motions to 28 1 Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2). (ECF Nos. 6–9.) On July 2 16, 2025, the Court issued an Order dismissing the Specially Appearing Defendants for 3 lack of personal jurisdiction. (ECF No. 29.) 4 On August 1, 2025, Defendant William filed an Answer to the Complaint. (ECF No. 5 36.) 6 On August 7, 2025, Plaintiffs filed the pending Motion for Leave to File a First 7 Amended Complaint (“Motion to Amend”), seeking to add new allegations against 8 Defendant William and the previously dismissed Specially Appearing Defendants. (ECF 9 No. 38.) On September 2, 2025, Defendant William filed a Response in Opposition to 10 Plaintiffs’ Motion to Amend. (ECF No. 41.) On September 8, 2025, Plaintiffs filed a Reply. 11 (ECF No. 42.) 12 II. CONTENTIONS 13 Plaintiffs contend that leave to amend should be granted because “newly discovered 14 evidence has come to light that supports the reassertion of claims against certain defendants 15 who were previously dismissed without prejudice.” (ECF No. 38 at 2.) Plaintiffs further 16 contend that the proposed First Amended Complaint (“FAC”) properly alleges personal 17 jurisdiction over the Specially Appearing Defendants because their conduct was “funded 18 and supported by” Plaintiff DFCO, the “California parent corporation,” “via a California 19 bank.” (ECF No. 42 at 2–3.) Lastly, Plaintiffs contend that amendment will not prejudice 20 Defendant William because “[d]iscovery has not yet begun, no trial date has been set, and 21 the proposed amendments arise from facts Defendants have long known.” (Id. at 3.) 22 Defendant William first contends that the proposed FAC attempts to “revive” the 23 Court’s dismissal of the Specially Appearing Defendants for lack of personal jurisdiction 24 (ECF No. 29). (ECF No. 41 at 10.)1 Defendant William argues that the proposed FAC’s 25 26 27 1 Defendant William notes that the proposed FAC strikes out allegations against Defendant Jillian but leaves her name in the case caption, so “it is not clear if [the proposed FAC] seeks to attempt to continue 28 1 allegations against the Specially Appearing Defendants “provide no basis for personal 2 jurisdiction to overcome the Court’s dismissal” because the allegations describe conduct 3 that “occurred outside of California.” (Id. at 7.) 4 Defendant William further contends that the proposed FAC’s new allegations do not 5 stem from newly discovered evidence because Plaintiffs “were aware” of the contracts, 6 leases, and loans alleged in the proposed FAC when they filed the initial Complaint. (Id. at 7 5, 9, 10.) 8 Defendant William also makes several arguments challenging the merits of the 9 proposed FAC, including that the loans made to Defendants do not constitute “personal 10 loans” under the Sarbanes-Oxley Act, that Defendants Marion and Samantha lacked 11 “corporate decision making” authority, and that Defendant William’s Employment 12 Agreement “is not fully executed.” (Id. at 6–8.) 13 III. LEGAL STANDARD 14 Federal Rule of Civil Procedure 15 provides: “[t]he court should freely give leave 15 [to amend] when justice so requires.” Fed. R. Civ. P. 15(a). “This policy is to be applied 16 with extreme liberality.” Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th 17 Cir. 2003) (per curiam) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 18 712 (9th Cir. 2001)). District courts consider several factors when deciding whether to 19 grant leave to amend: “undue delay, bad faith or dilatory motive on the part of the movant, 20 repeated failure to cure deficiencies by amendments previously allowed, undue prejudice 21 to the opposing party by virtue of allowance of the amendment, [and] futility of 22 amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962); see also Smith v. Pac. Props. 23 Dev. Corp., 358 F.3d 1097, 1101 (9th Cir. 2004). “Not all of the [Foman] factors merit 24 equal weight. As this circuit and others have held, it is the consideration of prejudice to the 25 opposing party that carries the greatest weight.” Eminence Cap., 316 F.3d at 1052. “The 26 27 Motion to Amend, the Court will assume the Proposed FAC intended to add Defendant Jillian as a 28 1 party opposing amendment bears the burden of showing prejudice.” DCD Programs, Ltd. 2 v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). “Absent prejudice, or a strong showing of 3 any of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor 4 of granting leave to amend.” Eminence Cap., 316 F.3d at 1052. 5 Although Rule 15(a) provides a liberal standard, a district court “does not abuse its 6 discretion in denying leave to amend where amendment would be futile.” Flowers v. First 7 Hawaiian Bank, 295 F.3d 966, 976 (9th Cir. 2002) (citation omitted). Denial of leave to 8 amend is acceptable if “the amendments to the complaint will fail to cure fatally defective 9 allegations.” Hinton v. Pac. Enters., 5 F.3d 391, 395 (9th Cir. 1993) (citing Moore v. 10 Kayport Package Express, Inc., 885 F.2d 531, 538 (9th Cir. 1989)); see also In re 11 Cloudera, Inc., 121 F.4th 1180, 1190 (9th Cir. 2024) (affirming denial of leave to amend 12 where plaintiff “ha[d] not identified . . . the specific facts that he would plead in a future 13 complaint to remedy the previous complaint’s shortcomings”). 14 District courts in the Ninth Circuit deny leave to amend as futile when the court has 15 previously dismissed parties for lack of personal jurisdiction and the proposed amendments 16 do not allege new facts that would establish personal jurisdiction. See, e.g., Ocampo v. 17 United States, No. 3:18-cv-01012, 2023 WL 6305801, at *15 (S.D. Cal. Sept. 27, 2023); 18 O’Hagin’s, Inc. v. UBS AG, No. SA CV 16-0716-DOC, 2017 WL 11665635, at *9 (C.D. 19 Cal. Feb. 9, 2017); Johnson v. Comm’n on Presidential Debates, No. SA CV 12-1600 20 FMO, 2014 WL 12597805, at *13 (C.D. Cal. Jan. 6, 2014); but see Swartz v. KPMG LLP, 21 476 F.3d 756, 766 (9th Cir. 2007) (reversing denial of leave to amend where proposed 22 amendments “contained numerous factually detailed allegations of appellees’ contacts” 23 with the forum state). 24 IV. DISCUSSION 25 A. Allegations Against the Specially Appearing Defendants 26 The proposed FAC reasserts the allegations of the initial Complaint (ECF No. 1) and 27 adds new allegations against the Specially Appearing Defendants, whom the Court 28 previously dismissed for lack of personal jurisdiction in its July 16 Order (ECF No. 29). 1 (ECF No. 38-2 at 44–46, 48, 52–58.) The Court declined to grant Plaintiffs jurisdictional 2 discovery to establish the Specially Appearing Defendants’ California contacts, finding 3 that discovery “would not change the jurisdictional analysis” because Plaintiffs “failed to 4 make a ‘colorable showing’” of personal jurisdiction. (ECF No. 29 at 18 (citing Mitan v. 5 Feeney, 497 F. Supp. 2d 1113, 1119 (C.D. Cal. 2007)).) 6 Plaintiffs’ proposed amendments allege that Defendant Ian leased vehicles for 7 personal use by Defendants Marion and Samantha, using Plaintiff Deposition Tech.’s 8 company funds. (ECF No. 38-2 at 44–45.) Plaintiffs’ proposed amendments further allege 9 that the Specially Appearing Defendants used Plaintiff Deposition Tech.’s company bank 10 account to take out personal loans and lease a commercial building for personal use. (Id. at 11 45–46.) 12 As alleged in the proposed FAC, the leases and loans occurred in the United 13 Kingdom (“UK”), and the relevant vehicles and property were located in the UK. (See id. 14 at 44–46.) The proposed FAC does not allege facts showing conduct related to California, 15 except for stating that the injured Plaintiff DFCO (Plaintiff Deposition Tech.’s parent 16 company) “has a principal place of business in California.” (Id. at 33.) Like in the initial 17 Complaint, there are “no allegations that the Specially Appearing Defendants ‘traveled to, 18 conducted activities within, contacted anyone in, or sent anything or anyone to’” 19 California. (ECF No. 29 at 16 (quoting Walden v. Fiore, 571 U.S. 277, 289 (2014)).) As 20 the Court found in its July 16 Order, “[t]he mere fact that DFCO, as the parent company of 21 subsidiaries operating in the UK and Scotland, ultimately sustained the injuries inflicted 22 on those subsidiaries does not create a meaningful connection between the Specially 23 Appearing Defendants and California.” (Id. at 17.) To establish a prima facie case of 24 personal jurisdiction, Plaintiffs must show that the Specially Appearing Defendants 25 themselves have independent minimum contacts with California—which the FAC fails to 26 do. See Walden, 571 U.S. at 285 (“[T]he plaintiff cannot be the only link between the 27 defendant and the forum.”). 28 1 Because the FAC does not allege new facts that would cure the lack of personal 2 jurisdiction identified in the July 16 Order, the Court finds that amendment of allegations 3 against the Specially Appearing Defendants would be futile. See Moore, 885 F.2d at 538 4 (“Leave to amend need not be given if a complaint, as amended, is subject to dismissal.”). 5 Accordingly, Plaintiffs’ Motion to Amend (ECF No. 38) is denied with respect to 6 allegations against the Specially Appearing Defendants. 7 B. Allegations Against Defendant William 8 The proposed FAC contains four new allegations against Defendant William. First, 9 it alleges that Defendant William breached his Employment Agreement because, after 10 leaving Plaintiff Deposition Tech., he started a new company with a website that “show[s] 11 products suspiciously similar to Plaintiffs’ EVOS machines which are proprietary to 12 Plaintiffs.” (ECF No. 38-2 at 46.) Second, it alleges that Defendant William “left the 13 company taking Plaintiff’s client list with him with the intent to interfere with Plaintiffs’ 14 sales and income revenue.” (Id. at 51.) Third, it alleges that Defendant William took 15 Plaintiffs’ “proprietary information without consent” after resigning from Plaintiff 16 Deposition Tech. and is “now using this proprietary information to build [Plaintiffs’ 17 EVOS] machines for [his] own company.” (Id. at 54.) Fourth, it alleges that “all 18 Defendants” used their corporate positions to take out “personal loans from the company 19 and vehicle leases that were neither disclosed to Plaintiffs nor approved.” (Id. at 48.) 20 Defendant William contends that the proposed FAC’s amendments are “futile, lack 21 good faith, are misleading, constitute harassment and provide prejudice through increased 22 unnecessary costs.” (ECF No. 41 at 8.) To meet its burden of demonstrating prejudice, the 23 non-movant must show that amendment “greatly alters the nature of the litigation and 24 requires defendants to undertake, at a late hour, an entirely new course of defense.” 25 Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Here, 26 Defendant William provides no evidence that amendment would cause such prejudice— 27 especially because the case is still in the early stages of discovery, with no trial date set. 28 See Leighton, 833 F.3d at 188. 1 After considering the parties’ submissions and finding that amendment would not 2 || prejudice Defendant William, the Court concludes that the remaining Foman factors do not 3 || warrant deviating from the “presumption under Rule 15(a) in favor of granting leave to 4 ||amend” the allegations against Defendant William. Eminence Capital, 316 F.3d at 1052 5 ||(emphasis omitted). The Court will defer consideration of arguments on the merits of the 6 |\allegations against Defendant William until after the filing of a substantive motion 7 ||challenging those merits. See Breier v. N. Cal. Bowling Proprietors’ Ass’n, 316 F.2d 787, 8 (9th Cir. 1963) (‘[T]he sufficiency of an amended pleading ordinarily will not be 9 || considered on a motion for leave to amend.”); Hynix Semiconductor Inc. v. Toshiba Corp., 10 || No. C-04-4708, 2006 WL 3093812, at *2 (N.D. Cal. Oct. 31, 2006) (“In view of Rule 11 15(a)’s permissive standard, courts ordinarily defer consideration of challenges to the 12 ||merits of a proposed amended pleading until after leave to amend is granted and the 13 |}amended pleading 1s filed.’’). 14 Accordingly, Plaintiffs’ Motion to Amend (ECF No. 38) is granted with respect to 15 || allegations against Defendant William. 16 || V. CONCLUSION 17 IT IS HEREBY ORDERED that Plaintiffs’ Motion to Amend (ECF No. 38) is 18 denied with respect to allegations against Defendants Marion, Ian, Samantha, and Jillian 19 ||(collectively, the “Specially Appearing Defendants”), and granted with respect to 20 || allegations against Defendant William. Plaintiffs may file a new proposed First Amended 21 ||Complaint that removes the Specially Appearing Defendants no later than fourteen (14) 22 from the date this Order is filed. 23 24 Dated: September 23, 2025 BME: Me Z. A a 25 Hon. William Q. Hayes United States District Court 27 28 7 a ee