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United States District Court for the Northern District of California
October 31, 2008, Decided; October 31, 2008, Filed
Case No. 08-3074 SC
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
This matter comes before [*2] the Court on the Motion to Dismiss ("Motion") by the defendants Steven Peter Small ("Small"), the Law Offices of Steven P. Small ("Law Offices"), Robert Von Felden ("Von Felden"), Eco-Fiber Solutions, Inc. ("Eco-Fiber"), NVS Group-Display Innovations, Inc. ("NVS") (collectively, "Defendants"). Docket No. 11. The plaintiff Terry L. Ritter ("Plaintiff" or "Ritter") filed an Opposition and the Defendants submitted a Reply. Docket Nos. 24, 25. For the following reasons, Defendants' Motion is GRANTED in part and DENIED in part.
The present action arises out of the alleged efforts by Defendants Small and Von Felden to induce Plaintiff to agree to pay $ 5,000,000 over 12 months to purchase 45% of the stock in the company Eco-Fiber. Compl. P 11. Plaintiff allegedly paid a total of $ 400,000 of the $ 5,000,000 to Defendants before filing this lawsuit. Id. P 18e. The alleged misrepresentations began February 20, 2008. Id. P 13.
Eco-Fiber was incorporated in August of 2007 and uses the law office of Defendant Small for its offices. Id. P 4. Von Felden is listed as the President of Eco-Fiber. Compl. Ex. A, Memorandum of Understanding ("MOU"). According to Plaintiff's allegations, Von [*3] Felden and Small misrepresented to Plaintiff that Von Felden had assigned to Eco-Fiber proprietary and patentable chemical treatments for water-resistant, non-wicking paper for use in multiple markets, including food, frozen food, fresh fish, etc. Compl. P 18a. In addition, Plaintiff alleges that, although Defendants Small and Von Felden told Plaintiff that the money he invested in the company would be used for bona fide post-investment costs, including the marketing of Eco-Fiber to major industry companies, Plaintiff's capital was actually used to pay personal expense items of Defendants, including Defendant Small's daughter's cell phone bill. Id. P 18b.
Based on these and other allegations, Plaintiff filed suit in this Court under the following causes of action: (1) securities fraud under section 10b of the Securities and Exchange Act of 1934 ("Securities Act"); (2) the offer and sale of unregistered securities in violation of section 12(a)(1) of the Securities Act; (3) the sale of securities in violation of the California qualification requirement of California Corporations Code Sections 25110 and 25130; (4) material representation in securities transaction under California corporate [*4] securities law, California Corporations Code Section 25501; (5) common law fraud; (6) negligent misrepresentation; (7) conversion of Plaintiff's money; (8) injunctive relief; and (9) declaratory relief.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2008 U.S. Dist. LEXIS 111329 *; 2008 WL 4766740
TERRY L. RITTER, Plaintiff, v. STEVEN PETER SMALL; LAW OFFICES OF STEVEN P. SMALL; ROBERT VON FELDEN; ECO-FIBER SOLUTIONS, INC., a California Corporation; NVS GROUP-DISPLAY INNOVATIONS, INC., a Delaware Corporation, also known as NVS GROUP-DISPLAY PACKAGING INNOVATIONS; AND DOES 1 THROUGH 100, Defendants.
law office, allegations, motion to dismiss, do business, scienter, stock, factual allegations, misleading, sale of securities, misrepresentation, particularity