Arimilli v. Rezendes
2:21-cv-00345
D. Ariz.Mar 11, 2025Background
- Plaintiff Nirmala Arimilli invested $125,000 in Defendant Keith Rezendes’s tutoring company, AvidBrain, in 2017, allegedly relying on his representations about the company's filings and prospects.
- After discovering discrepancies, Arimilli confronted Rezendes, who responded with hostility; their last communication was in November 2017.
- Arimilli filed an initial suit in 2020, which was removed to federal court in 2021; multiple amended complaints followed, adding various defendants and causes of action.
- Defendants moved to dismiss the sixth amended complaint on various grounds, including failure to state a claim and insufficient service of process.
- The court also addressed Arimilli’s motion for sanctions based on failure of certain defendants to appear or retain counsel as ordered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dismiss claims against Glaeseman | Glaeseman should be liable as officer/co-owner of AvidBrain, involved in fraud/concealment. | Insufficient, conclusory and non-specific allegations—no direct involvement pled. | Motion granted; all claims against Glaeseman dismissed with prejudice. |
| Dismiss claims against Holdiman | Service was attempted by leaving complaint with Holdiman’s mother in the US. | Service insufficient; Holdiman resides in Colombia and was not properly served. | Motion granted; all claims dismissed with prejudice for insufficient service of process. |
| Fraud-based claims (various counts) | Fraudulent misrepresentation, inducement, and concealment by Rezendes and others related to investment. | No specific, plausible allegations against others; statute of limitations for some claims. | Only fraud claims against Rezendes related to certain representations survive; others dismissed with prejudice. |
| Default/sanctions against entities | Defendants failed to obtain counsel as ordered; Arimilli seeks sanctions/default. | — | Defaults entered against AvidBrain and TutorNode for certain counts; monetary sanctions denied. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (specifies pleading standard for plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (requiring nonconclusory, plausible factual allegations)
- Smith v. Jackson, 84 F.3d 1213 (9th Cir. 1996) (complaint review favors non-movant)
- Atkinson v. Marquart, 541 P.2d 556 (Ariz. 1975) (fiduciary duty of corporate directors)
- Wells Fargo Bank v. Ariz. Laborers, Teamsters and Cement Masons Loc. No. 395 Pension Tr. Fund, 38 P.3d 12 (Ariz. 2002) (aiding and abetting tortious conduct elements)
- Rowland v. Union Hills Country Club, 757 P.2d 105 (Ariz. Ct. App. 1998) (requirements for civil conspiracy in Arizona)
- Peery v. Hansen, 585 P.2d 574 (Ariz. Ct. App. 1978) (elements of common law fraud in Arizona)