-MAN Terrance D Rutherford v. FIA Card Services, N.A. et al, No. 2:2011cv04433 - Document 75 (C.D. Cal. 2012)
Court Description: ORDER GRANTING DEFENDANTS MOTIONS TO DISMISS FIRST AMENDED COMPLAINT WITH PREJUDICE 47 , 50 , 73 by Judge Dean D. Pregerson. ( MD JS-6. Case Terminated ) . (lc) Modified on 11/16/2012 .(lc). Modified on 11/16/2012 (lc).
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-MAN Terrance D Rutherford v. FIA Card Services, N.A. et al Doc. 75 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 TERRANCE D. RUTHERFORD, 12 Plaintiff, 13 14 15 v. FIA CARD SERVICES, N.A., ALASKA AIRLINES, INC., HORIZON AIR INDUSTRIES, INC., 16 Defendants. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 11-04433 DDP (MANx) ORDER GRANTING DEFENDANTS’ MOTIONS TO DISMISS FIRST AMENDED COMPLAINT [Dkt. Nos. 47, 50 & 73] 18 Presently before the court are two Motions to Dismiss 19 20 Plaintiff’s First Amended Complaint (“FAC”). 21 submissions of the parties and heard oral argument, the court 22 grants the motions and adopts the following order 23 I. 24 Having considered the Background Plaintiff, a resident of Los Angeles, California, works for 25 Alaska, an Alaska corporation whose principal place of business is 26 in Washington. 27 with a principal place of business in Washington (FAC ¶ 8). 28 which operates Bank of America’s credit card operations, is a (FAC ¶¶ 5, 7.) Horizon is Washington corporation FIA, Dockets.Justia.com 1 Delaware corporation with a Delaware principal place of business. 2 (FAC ¶ 6). 3 All Defendants do business in California. (FAC ¶ 11.) The Airlines and FIA entered into a marketing partnership (the 4 “Affinity Agreement”), under which FIA agreed to issue “Alaska 5 Airlines” brand credit cards and make payments to Alaska. 6 12, 14, 16.) 7 employees would be trained by the airlines and paid by the Bank to 8 market the Alaska credit cards to consumers. 9 (FAC ¶¶ The Airlines and Bank further agreed that airline (FAC ¶¶ 19, 21-22.) Plaintiff alleges that the airlines made a written offer to 10 Airlines employees, under which employees were promised varying 11 levels of payment for submitting credit card applications that the 12 Bank ultimately processed.1 13 the terms of the Incentive Program and the Bank’s offer “through 14 various means including web, email, and flyers.” 15 Plaintiff alleges that this offer was accepted, and a contract 16 formed (the “Incentive Contract”) once an airline employee sent a 17 completed credit card application to the Bank. 18 Under the Incentive Contract, the Bank was obligated to pay airline 19 employees up to forty-five dollars per application within a period 20 of approximately two-months. 2 (Id. ¶ 20.) The airlines presented (FAC ¶¶ 30, 31). (FAC ¶ 42.) (FAC ¶ 27, 29.) The airlines also 21 22 23 1 A “processed” application contains enough information to allow FIA to approve or reject the application. (Complaint ¶ 20.) 2 24 25 26 27 28 The FAC is somewhat unclear on the identity of the alleged offeror. The FAC alleges that “[o]n behalf of itself and the airlines . . . Bank of America offered to pay . . . .” (FAC ¶ 24) (emphasis added). The FAC also states, however, that “[t]hese offers were made to airline employees in writing by the airlines,” and that “[t]he airlines presented Bank of America’s offer.” (FAC ¶¶ 26, 44) (emphasis added). Because the FAC uses the term “Incentive Contracts,” these allegations could conceivably refer to separate and distinct contracts. Plaintiff’s opposition, however, refers only to a single “Incentive Program Contract.” 2 1 allegedly occasionally offered employees additional incentives to 2 submit credit applications, such as cash, trips, and prizes. 3 ¶¶ 50-51.) 4 (FAC In 2007, Plaintiff submitted approximately 1,000 credit card 5 applications completed by members of his church. 6 500 of the applications were ultimately approved by the bank. 7 (Id.) 8 to the applications into Plaintiff’s paycheck. 9 (FAC ¶ 65.) Over Nevertheless, the Bank never deposited any payment related (Id.) Plaintiff filed this purported class action against FIA and 10 the Airlines on May 23, 2011, alleging causes of action for breach 11 of contract and unjust enrichment. 12 complaint, with leave to amend, on March 27, 2012. 13 subsequently filed the FAC. 14 Airlines entered into a written, unilateral contract (or contracts, 15 see n. 2 supra) with Plaintiff. 16 alleges that Bank of America breached the contract each time it 17 failed to pay Plaintiff, and that the Airlines breached the 18 contract each time the Airlines did “not ensure” that Plaintiff was 19 paid. 20 This court dismissed the Plaintiff The FAC alleges that both the Bank and (FAC ¶¶ 81, 85.) The FAC further (FAC ¶¶ 88-89.) The FAC also alleges that Plaintiff is an intended beneficiary 21 of the Affinity Agreement between the Bank and the Airlines. 22 ¶ 92.) 23 duty to make payments to Plaintiff, and that the Bank and Airlines 24 breached that duty by failing to pay Plaintiff or failing to ensure 25 payments were made to him. 26 Bank now move to dismiss the FAC in its entirety. 27 \\\ 28 \\\ (FAC Plaintiff alleges that the Airlines and the Bank both had a (FAC ¶¶ 93-96.) 3 The Airlines and the 1 2 II. Legal Standard A complaint will survive a motion to dismiss when it contains 3 “sufficient factual matter, accepted as true, to state a claim to 4 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 5 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 6 570 (2007)). 7 “accept as true all allegations of material fact and must construe 8 those facts in the light most favorable to the plaintiff.” Resnick 9 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). When considering a Rule 12(b)(6) motion, a court must Although a complaint 10 need not include “detailed factual allegations,” it must offer 11 “more than an unadorned, the-defendant-unlawfully-harmed-me 12 accusation.” 13 allegations that are no more than a statement of a legal conclusion 14 “are not entitled to the assumption of truth.” Id. at 679. 15 other words, a pleading that merely offers “labels and 16 conclusions,” a “formulaic recitation of the elements,” or “naked 17 assertions” will not be sufficient to state a claim upon which 18 relief can be granted. 19 quotation marks omitted). 20 Iqbal, 556 U.S. at 678. Conclusory allegations or In Id. at 678 (citations and internal “When there are well-pleaded factual allegations, a court should 21 assume their veracity and then determine whether they plausibly 22 give rise to an entitlement of relief.” Id. at 679. 23 must allege “plausible grounds to infer” that their claims rise 24 “above the speculative level.” Twombly, 550 U.S. at 555. 25 “Determining whether a complaint states a plausible claim for 26 relief” is a “context-specific task that requires the reviewing 27 court to draw on its judicial experience and common sense.” 28 556 U.S. at 679. 4 Plaintiffs Iqbal, 1 2 III. Discussion A. 3 4 The Incentive Contract 1. Choice of Law As explained in the court’s earlier order dismissing 5 Plaintiff’s original complaint, this court, sitting in diversity, 6 applies California’s choice of law rules to determine whether 7 California or Washington law applies. 8 Fastbucks Franchise Corp., 622 F.3d 996, 1002 (9th Cir. 2010). 9 California employs several different choice of law analyses. Bridge Fund Capital Corp. v. See 10 Arno v. Club Med Inc., 22 F.3d 1464, 1469 n. 6 (Noting conflict 11 among California courts). 12 under California Civil Code § 1646, look to the place of 13 performance or contract formation. 14 Corp. v. Liberty Mutual Ins. Co., 472 F.Supp.2d 1183, 1197 (S.D. 15 Cal. 2007). 16 Some courts, applying a statutory test See, e.g., Costco Wholesale Other courts have suggested, however, that California’s modern 17 approach limits § 1646 analyses to matters of contract 18 interpretation, and that other choice of law questions are more 19 properly analyzed under a “governmental interests” analysis. 20 Frontier Oil Corp. v. RLI Ins. Co., 153 Cal.App.4th 1436, 1459-1460 21 (2007). 22 seeking to invoke foreign law must establish that 1) the foreign 23 law materially differs from California law, and 2) the 24 jurisdictions’ interests in applying their own law truly conflict. 25 Pokorny v. Quixtar, Inc., 601 F.3d 987, 994-995 (9th Cir. 2010); 26 Washington Mutual Bank, FA v. Superior Court, 24 Cal.4th 906, 919 27 (2001). Under the governmental interests analysis, the party If there is a true conflict, the court must then weigh the 28 5 1 competing interests and apply the law of the state whose interest 2 stands to be most impaired. 3 Id. In instances where the parties have not made a choice of law, 4 as is the case here, some courts apply a third test, based on 5 Section 188 of the Restatement (Second), Conflict of Laws (the 6 “Restatement”). 7 Cal.App.4th 825, 838 (2005). 8 determine which state “has the most significant relationship to the 9 transaction and the parties.” See, e.g. ABF Capital Corp. v. Berglass, 130 The Section 188 approach seeks to Restatement § 188(2). The relevant 10 factors include the place of contract formation, the place at which 11 the contract was negotiated, the place of performance, the location 12 of the contract’s subject matter, and the location of the parties. 13 Id.; See also Shannon-Vail Five v. Bunch, 27- F.3d 1207, 1211 (9th 14 Cir. 2001). 15 significant relationship to the matter, the court then applies that 16 information to factors set out in section 6(2) of the Restatement, 17 such as the interstate system’s needs, the various states’ 18 respective interests in the issue, the protection of reasonable 19 expectations, and the provision of uniform, predictable results. 20 Berglass, 130 Cal.App.4th at 838. 21 Having thus determined which state has the most The majority of these factors weigh in favor of applying 22 California law to this dispute. 23 himself a resident of California, where both the Bank and the 24 Airlines also have a significant business presence. 25 agrees with Plaintiff that the subject matter of the written 26 contract is not a relevant factor. 27 28 At the outset, Plaintiff is The court (Opp. to Alaska Mot. at 5). The place of contract formation and performance, however, also appears to be California. Plaintiff argues that the place of 6 1 contract formation and performance “could be numerous states and 2 Canada.” 3 may have formed a unilateral contract with Defendants and performed 4 it in a number of states, Plaintiff here has not. 5 appears to be an artfully pled attempt to avoid California law, 6 Plaintiff’s FAC does not specify the location from which he sent 7 the completed credit card applications to the Bank. 8 allege, however, that Plaintiff gathered the applications from 9 members of his church. (Opp. to Airlines’ Mot. at 5.) While another plaintiff Indeed, in what The FAC does Common sense dictates that Plaintiff, a 10 resident of Los Angeles, also attends church in California. 11 Furthermore, one of the writings alleged to comprise the contract 12 states, “If customers hand you back the application, it must be 13 dropped into the mail as soon as possible.” 14 the urgency with which the contract requires applications be 15 mailed, Plaintiff would have been required to mail the applications 16 to the Bank soon after collecting them from fellow churchgoers. 17 In light of the fact that the Section 188(2) factors weigh (FAC, Ex. 8.) Given 18 heavily in favor of California, the interstate system’s needs, the 19 various interests of the respective states, consideration of the 20 parties’ reasonable expectations, and the need for uniformity would 21 be best served by the application of California law to this 22 dispute. 23 Contract. 24 25 Accordingly, California law applies to the Incentive 2. Statute of Limitations The Airlines argue that under California law, Plaintiff’s 26 claim is time barred. 27 out a two-year statute of limitations for oral contracts and a (Airlines’ Mot. at 12). 28 7 California law sets 1 four-year statute of limitations for written contracts. 2 Civ. Pro. §§ 337(1), 339(1). 3 Cal. Code Plaintiff responds that he has alleged a continuing breach, 4 and therefore the statute of limitations is not at issue. 5 Bank Mot. at 6-7.) 6 “failure to pay all sums owed, and the airlines’ failure to ensure 7 that all sums are paid . . . is continuing.” 8 Plaintiff further appears to argue that the statute of limitations 9 is not a factor because he has pled that neither he nor other, 10 11 (Opp. to Indeed, the FAC does state that the Bank’s unnamed class members have been paid. (FAC ¶ 68.) (FAC ¶¶ 64, 66, 67). At this stage, however, no class has yet been certified, and 12 only Plaintiff’s individual claims are at issue. 13 plaintiff cannot himself establish a live case or controversy, he 14 may not seek relief on behalf of himself or any other member of a 15 purported class. 16 F.3d 1018, 1022 (9th Cir. 2003). 17 the allegations pled as to Plaintiff himself. 18 alleges a single instance of performance under the alleged written 19 contract. 20 contract occurred in 2007. 21 contract claim until May 23, 2011.3 22 deciding that a written contract exists, California’s four-year 23 statute of limitations on a written contract has run. 24 breach of contract claim based on the Incentive Contracts is, 25 therefore, dismissed with prejudice. If a named Lierboe v. State Farm Mut. Auto Ins. Co., 350 The court therefore looks only to Plaintiffs only That performance and acceptance of the unilateral Plaintiff did not file a breach of Thus, assuming without Plaintiff’s 26 27 28 3 In perhaps another instance of artful pleading, Plaintiff does not specify the month in which he submitted the credit card applications to the Bank. 8 1 B. 2 The parties agree that Delaware law controls the Affinity 3 Agreement, of which Plaintiff asserts he is an intended third-party 4 beneficiary. 5 third party beneficiary may, in some cases, have standing to 6 enforce a contract. 7 Wilmington, 630 A.2d 629, 633 (Del. 1993). 8 parties’ intent to view the third party as a beneficiary is, 9 however, essential. The Affinity Agreement (Affinity Agreement, § 18(e)). Under Delaware law, a Triple C Railcar Serv., Inc., v. City of Id. The contracting In other words, “[i]n order for there to 10 be a third party beneficiary, the contracting parties must intend 11 to confer the benefit.” 12 F.2d 530, 535 (3d Cir. 1988) (quoting Ins. Co. of N. Am. v. 13 Waterhouse, 424 A.2D 675, 679 (Del.Super. 1980). 14 parties’ intent is determined by the language of the contract 15 itself. Pierce Assocs., Inc. v. Nemous Found., 865 The contracting Id. 16 Here, Plaintiff argues that Section 7(d), which describes an 17 employee incentive program, evinces the parties’ intent to confer 18 third party beneficiary status upon airline employees. 19 15-16.) 20 states that there are no third party beneficiaries to the contract. 21 (Affinity Agreement § 18(g) (emphasis added).) 22 with Plaintiff that, in some cases, the structure of an agreement 23 may indicate an attempt to create third party beneficiaries even in 24 the absence of language to that effect. 25 disclaiming third party beneficiaries may not be dispositive when 26 contradicted by other contractual provisions granting rights to 27 third parties. 28 Corp., 421 F.3d 234, 245 (3d. Cir. 2005) The court disagrees. (Opp. at The Affinity Agreement expressly The court agrees Indeed, even language See, e.g., Caldwell Trucking PRP v. Rexon Tech. 9 That is not, however, the 1 situation here. Here, the employee incentive program section 2 comprises a single paragraph of an agreement that spans over fifty- 3 five pages. 4 explicitly contradicted by any other provision of the Affinity 5 Agreement. 6 for breach of the Affinity Agreement, which must therefore be 7 dismissed with prejudice.4 The express language of Section 18(g) is not Plaintiff therefore lacks standing to bring his claim 8 C. 9 Plaintiff’s Third Cause of Action for Unjust Enrichment is not Unjust Enrichment 10 an independent cause of action under California law. 11 Superior Court, 165 Cal.App.4th 901, 911 (2008); Serna v. Bank of 12 America, N.A., No. CV 11-10595 CAS; 2012 WL 2030705 * 11 (C.D. Cal. 13 June 4, 2012). 14 dismissed with prejudice. 15 IV. 16 17 Jogani v. Plaintiff’s unjust enrichment claim is therefore Conclusion For the reasons stated above, the Motions to Dismiss are GRANTED, with prejudice. 18 19 IT IS SO ORDERED. 20 21 22 Dated:November 16, 2012 DEAN D. PREGERSON United States District Judge 23 24 25 26 27 28 4 Though not raised by either party, it appears that even if Plaintiff did have standing to bring a third party claims, such a claim would be time-barred. 10 Del. C. § 8106. 10
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