NetJets Services Inc et al v. William Papariella et al, No. 2:2012cv06869 - Document 35 (C.D. Cal. 2013)
Court Description: ORDER GRANTING DEFENDANTS MOTION TO DISMISS IN PART AND DENYING IN PART 29 by Judge Dean D. Pregerson: All claims brought by Plaintiff Netjets Services are DISMISSED, with leave to amend. Plaintiffs claim for intentional interference with contractual relations is also DISMISSED with leave to amend. Any amended complaint shall be filed within fourteen days of the date of this of this order. (lc). Modified on 5/28/2013. (lc).
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NetJets Services Inc et al v. William Papariella et al Doc. 35 1 2 O 3 4 NO JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 NETJETS SERVICES, INC., a Delaware corporation; MARQUIS JET PARTNERS, INC., a Delaware corporation, 13 Plaintiffs, 14 v. 15 16 WILLIAM PAPARIELLA, an individual, 17 Defendant. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 12-06869 DDP (JCGx) ORDER GRANTING DEFENDANT’S MOTION TO DISMISS IN PART AND DENYING IN PART [Dkt. No. 29] 18 19 Presently before the court is Defendant William Papariella’s 20 Motion to Dismiss. 21 parties, the court grants the motion and adopts the following 22 order. 23 I. 24 Having considered the submissions of the Background Plaintiff NetJets Inc. (“NetJets”) operates a fractional jet 25 ownership program, through which participants purchase shares of a 26 private aircraft. 27 Marquis Jet Partners, Inc. (“Marquis”) sells blocks of prepaid 28 flight time on NetJets planes. (First Amended Complaint “FAC” ¶ .) Plaintiff (Id. ¶ 8.) Dockets.Justia.com 1 Prior to June 3, 2011, Defendant was a Marquis employee, and 2 had access to confidential customer information. 3 Defendant signed a confidentiality agreement, which listed NetJets 4 as a third part beneficiary. 5 (Id. ¶¶ 13, 14.) (Id. ¶ 13, Ex. A at 4.) Plaintiffs allege that Defendant transferred NetJets’ and 6 Marquis’ confidential information to his own personal e-mail 7 accounts and electronic devices. 8 sold competitors’ services to Marquis’ customers, sometimes without 9 those customers’ knowledge. (Id. ¶¶ 14, 15.) (Id. ¶¶ 16, 17.) Defendant also On June 3, 2011, 10 Defendant resigned from Marquis and went to work for a competitor, 11 Centennial. 12 (Id. ¶ 14.) Plaintiffs now bring four causes of action against Defendant 13 for 1) breach of duty of loyalty, 2) breach of contract, 3) 14 “intentional interference with existing and prospective economic 15 advantage,” and 4) unfair competition in violation of California 16 Business and Professions Code § 17200. 17 dismiss all claims brought by Plaintiff NetJets Services, Inc. and 18 to dismiss the second claim for breach of duty of loyalty and third 19 claim for intentional interference with existing and prospective 20 economic advantage as to all Plaintiffs. 21 II. 22 Papariella now moves to Legal Standard A complaint will survive a motion to dismiss when it contains 23 “sufficient factual matter, accepted as true, to state a claim to 24 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 25 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 26 570 (2007)). 27 “accept as true all allegations of material fact and must construe 28 those facts in the light most favorable to the plaintiff.” Resnick When considering a Rule 12(b)(6) motion, a court must 2 1 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 2 need not include “detailed factual allegations,” it must offer 3 “more than an unadorned, the-defendant-unlawfully-harmed-me 4 accusation.” 5 allegations that are no more than a statement of a legal conclusion 6 “are not entitled to the assumption of truth.” Id. at 679. 7 other words, a pleading that merely offers “labels and 8 conclusions,” a “formulaic recitation of the elements,” or “naked 9 assertions” will not be sufficient to state a claim upon which Iqbal, 556 U.S. at 678. 10 relief can be granted. 11 Although a complaint Conclusory allegations or In quotation marks omitted). 12 Id. at 678 (citations and internal “When there are well-pleaded factual allegations, a court should 13 assume their veracity and then determine whether they plausibly 14 give rise to an entitlement of relief.” Id. at 679. 15 must allege “plausible grounds to infer” that their claims rise 16 “above the speculative level.” Twombly, 550 U.S. at 555. 17 “Determining whether a complaint states a plausible claim for 18 relief” is a “context-specific task that requires the reviewing 19 court to draw on its judicial experience and common sense.” 20 556 U.S. at 679. 21 III. Discussion Plaintiffs Iqbal, 22 A. 23 There are three Plaintiffs in this action: Netjets, Marquis, Plaintiff Netjets Services, Inc. 24 and Netjets Services, Inc. (“Netjets Services”). The First Amended 25 Complaint, however, makes virtually no reference to any 26 relationship between Defendant and Netjets Services. 27 alleges that Netjets Services is a Delaware Corporation with a 28 principal place of business in Ohio. 3 (FAC ¶ 3.) The FAC The FAC also 1 alleges that in a state court proceeding, Defendant alleged that he 2 was a Netjets Services employee. 3 states no facts regarding Netjets Services. 4 proceeds to allege causes of action either on behalf of Netjets 5 Services or on behalf of unspecified and undifferentiated 6 “Plaintiffs.” (FAC ¶ 9.) Beyond that, the FAC Nevertheless, the FAC 7 Defendant argues that because the FAC alleges no facts 8 whatsoever regarding any relationship between himself and Netjets 9 Services, all claims brought by Netjets Services should be 10 dismissed. 11 need not plead facts integral to their claims because such facts 12 can be inferred from other filings. 13 Defendants argue, in response, that Netjets Services (Opp. at 10.) Plaintiffs’ arguments have no merit. The FAC’s first cause of 14 action alleges that Defendant breached a duty of loyalty to his 15 employers, NetJets Services and Marquis, yet nowhere alleges that 16 Defendant was ever employed by Netjets Services. 17 does refer to allegations in a state court proceeding, it proceeds 18 to allege that Defendant “was employed by Marquis until he resigned 19 . . . .” Though the FAC (FAC ¶14.) 20 Plaintiffs also argue that Netjets Services’ Breach of 21 Contract is sufficiently pled, even though the FAC makes no 22 allegation that Defendant entered into any contract with Netjets 23 Services nor alleges that Netjets Services was a beneficiary of any 24 agreement entered into by Defendant. 25 alleges that Defendant entered into a confidentiality agreement 26 that identified Netjets, not Netjets Services, as an intended third 27 party beneficiary. 28 FAC’s breach of contract claim makes no mention of Netjets (FAC ¶ 13.) (Opp. at 10.) The FAC Plaintiffs do not dispute that the 4 1 Services. 2 Certification of Interested Parties identifies a relationship 3 between Netjets Services and Netjets, “it must also be conceded 4 that Netjets Services is an affiliate of its parent corporation, 5 Netjets,” and that they need not include specific factual 6 allegations about Netjets Services in their complaint (Opp. at 11.) 7 Plaintiffs are mistaken. 8 must contain sufficient factual matter, accepted as true, to state 9 a claim that is plausible on its face.”) (emphasis added) (internal Instead, Plaintiffs argue that because their Iqbal, 556 U.S. at 678 ([A] complaint 10 quotation and citation omitted). 11 any facts regarding Netjets Services, all claims brought by 12 Plaintiff Netjets Services are dismissed, with leave to amend. Because the FAC does not allege 13 B. 14 The FAC alleges that Defendant occupied a “position of trust Breach of Duty of Loyalty to Marquis 15 and confidence” as a sales executive for Marquis, and that 16 Defendant therefore had a fiduciary duty and duty of loyalty to 17 Marquis. 18 duty of loyalty by diverting sales away from Marquis, 19 misappropriating confidential information, and poaching Marquis 20 employees. 21 dismiss the breach of duty loyalty claim as to Netjets Services and 22 Marquis, Defendant appears to have abandoned his arguments with 23 respect to Marquis. 24 Plaintiff Marquis’ Breach of Duty of Loyalty claim is, therefore, 25 denied. 26 C. 27 (FAC ¶ 20.) The FAC alleges that Defendant breached that (FAC ¶ 22.) Though Defendant initially moved to (Reply at 3-5, 11.) The Motion to Dismiss Intentional Interference with Existing and Prospective Economic Advantage 28 5 1 Plaintiffs bring a third cause of action for “intentional 2 interference with existing and prospective economic advantage.” 3 The torts of intentional interference with contract and intentional 4 interference with prospective economic advantage are, however, 5 distinct. 6 1134, 1157 (2003). 7 separately. 8 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th See Fed. R. Civ. P. 8(d)(2). 1. 9 The court therefore addresses each claim Intentional Interference with Contract A claim for intentional interference with contractual 10 relations requires “(1) a valid contract between plaintiff and a 11 third party; (2) defendant’s knowledge of this contract; (3) 12 defendant’s intentional acts designed to induce a bread or 13 disruption of the contractual relationship; (4) actual breach or 14 disruption . . ., and (5) resulting damage.” 15 v. Stewart Title Guaranty Co., 19 Cal.4th 77, 55 (1998). 16 argues that the FAC fails to allege any facts regarding Plaintiffs’ 17 contracts with third parties. Quelimane Co., Inc. Defendant (Mot. at 14.) 18 A complaint must provide a defendant with “some facts 19 surrounding the type or nature of the ‘contracts’ their conduct 20 allegedly interfered with.” 21 Terarecon, Inc., 260 F.Supp.2d 941, 956 (N.D. Cal. 941). 22 The FAC alleges that Plaintiffs “provide . . . fractional owners 23 with private aircraft” and “offers . . . a prepaid lease offering 24 25 hours of occupied flight time . . . .” 25 Plaintiffs argue that because “Defendant was employed by 26 Plaintiffs, he is well aware and on notice of the nature of the 27 contacts between Plaintiffs and their customers . . . .” 28 13.) AccuImage Diagnostics Corp. v. 6 (FAC ¶¶ 7-8.) (Opp. at 1 Plaintiffs’ allegations are insufficient. Perhaps as a result 2 of the third cause of action’s conflation of two distinct claims, 3 the FAC does not identify any existing contract. 4 failure stems from the FAC’s imprecision in referring to 5 “Plaintiffs,” collectively. 6 brought on behalf of Plaintiff Netjets Services are viable. 7 unclear from the FAC whether remaining Plaintiff Marquis or Netjets 8 is alleged to have entered into a contract with some third party, 9 though references to “Redirected Restricted Marquis Customer[s]” Part of this As explained above, none of the claims It is 10 suggests the former. 11 “economic relationship[s] between Plaintiffs and their customers 12 that likely would have resulted in an economic relationship to 13 Plaintiffs.”1 14 “prepaid lease” and “fractional ownership” business arrangements, 15 those allegations alone do not adequately identify the existing 16 contracts allegedly disrupted. 17 19 Thus, even though the FAC does generally identify 2. 18 These references, however, apply to alleged Intentional Interference with Prospective Economic Advantage The elements of this tort are similar, but not identical to 20 those of an intentional interference with contract claim. 21 Interference with prospective economic advantage requires “(1) an 22 economic relationship between the plaintiff and some third party, 23 with the probability of future economic benefit to the plaintiff; 24 (2) the defendant’s knowledge of the relationship; (3) intentional 25 acts on the part of the defendant designed to disrupt the 26 27 28 1 As discussed below, this language is more applicable to claims for intentional interference with prospective economic advantage than interference with contract. 7 1 relationship; (4) actual disruption of the relationship; and (5) 2 economic harm . . . .” 3 quotation and citations omitted). 4 plaintiff must plead some intentional wrongful act other than the 5 interference itself. 6 interference with prospective economic advantage is broader than a 7 claim for interference with contract, in that the former claim does 8 not depend upon the existence of a valid contract. 9 Korea Supply, 29 Cal.4th at 1153 (internal To satisfy the third element, a Id. at 1154. In other respects, however, an Id. at 1157-58. The FAC alleges that an economic relationship between 10 Plaintiffs and “Redirected Restricted Marquis Customer[s]” “likely 11 would have resulted in an economic benefit to Plaintiffs.” 12 32.) 13 likely benefit by selling flights and services to competitors in 14 breach of his duty of loyalty. 15 satisfy the first three elements of an interference with 16 prospective advantage claim. 17 Rezente, No. CIV. 10-1704 WBS, 2011 WL 1402882 at *4-5 (E.D. Cal. 18 Apr. 13, 2011). 19 disrupt Marquis’ business relationships by booking Restricted 20 Marquis Customers on competitors’ planes, and that Marquis lost 21 revenue as a result.2 22 intentional interference with prospective economic advantage is, 23 therefore, adequately pled. 24 IV. (FAC ¶ The FAC further states that Defendant interfered with this (FAC ¶ 33.) These allegations See Ikon Office Solutions, Inc. V. The FAC also alleges that Defendant actually did (FAC ¶¶ 32, 34-35.) Marquis’ claim for Conclusion 25 26 27 28 2 does only with does Plaintiff again uses the term “Plaintiffs,” collectively, as this portion of Defendant’s Reply. It appears, however, that Plaintiff Marquis had any prospective business relationships Restricted Marquis Customers. As described above, the FAC not allege any specific facts regarding Netjets Services. 8 1 For the reasons stated above, Defendant’s Motion to Dismiss is 2 GRANTED in part and DENIED in part. All claims brought by 3 Plaintiff Netjets Services are DISMISSED, with leave to amend. 4 Plaintiffs’ claim for intentional interference with contractual 5 relations is also DISMISSED with leave to amend. 6 complaint shall be filed within fourteen days of the date of this 7 order.3 Any amended 8 9 IT IS SO ORDERED. 10 11 12 Dated: May 28, 2013 13 DEAN D. PREGERSON United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 3 27 28 Though Plaintiffs’ conflation of their interference with contract claim and interference with prospective advantage claim is not in and of itself fatal to either claim, Plaintiffs may wish to separate any such amended claims in the interest of clarity. 9
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