Global Acquisitions Network et al v. Bank of America Corporation et al, No. 2:2012cv08758 - Document 60 (C.D. Cal. 2013)
Court Description: ORDER GRANTING DEFENDANT BANK OF AMERICA, N.A.S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT 50 by Judge Dean D. Pregerson. (lc). Modified on 6/7/2013 (lc).
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Global Acquisitions Network et al v. Bank of America Corporation et al Doc. 60 1 2 O 3 4 NO JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 GLOBAL ACQUISITIONS NETWORK, a Wyoming corporation; SHAWN CORNEILLE, an individual, 13 14 15 16 17 18 19 20 21 22 Plaintiffs, v. BANK OF AMERICA CORPORATION, a Delaware corporation; ORIANA CAPITAL PARTNERS,LLC, a Connecticut limited liability company; ZANCO, a company of unknown business form, HLB FINANCIAL, LLC, a company of unknown form; W/C INVESTMETN HOLDINGS INC., a Florida corporatin; DEXTER CHAPPELL, an individual; VALERIE CHAPPELL, an individual; JON LEARY, an individual; GLEN McINERNEY also known as LARRY BENNETT, an individual; et al. 23 Defendants. 24 25 26 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 12-08758 DDP (CWx) ORDER GRANTING DEFENDANT BANK OF AMERICA, N.A.’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT [Dkt. No. 50] Before the court is Defendant Bank of America, N.A. (“BANA”)’s 27 Motion to Dismiss the First Amended Complaint. Having considered 28 the parties’ submissions, the court adopts the following argument. Dockets.Justia.com 1 I. Background The factual allegations in this action are presented at length 2 3 in the court’s Order Granting Defendants’ Motion to Dismiss With 4 Leave to Amend Certain Claims (the “Order”), dated February 19, 5 2013. 6 (“FAC”) are identical, the court will not recite them again. 7 On February 19, 2013, the court granted Bank of America Because the basic allegations of the First Amended Complaint 8 Corporation’s Motion to Dismiss as to all claims, giving Plaintiffs 9 leave to amend the four fraud-based claims (Claims 5, 6, 7, and 8) 10 to meet Rule 9(b)’s particularity requirements and leave to amend 11 the conspiracy claim (Claim 9). 12 II. Legal Standard 13 A complaint may be dismissed for failure to state a claim upon 14 which relief can be granted. 15 survive a motion to dismiss, a complaint must contain sufficient 16 factual matter, accepted as true, to ‘state a claim to relief that 17 is plausible on its face.’ 18 the plaintiff pleads factual content that allows the court to draw 19 the reasonable inference that the defendant is liable for the 20 misconduct alleged.” 21 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 22 See Fed. R. Civ. P. 12(b)(6). “To A claim has facial plausibility when Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) Although the court must accept as true all of the factual 23 allegations in a complaint, that principle “is inapplicable to 24 legal conclusions. 25 of action, supported by mere conclusory statements, do not 26 suffice.” 27 28 Threadbare recitals of the elements of a cause Id. To determine whether a complaint states a claim sufficient to withstand dismissal, a court considers the contents of the 2 1 complaint and its attached exhibits, documents incorporated into 2 the complaint by reference, and matters properly subject to 3 judicial notice. 4 U.S. 308, 322-23 (2007); Lee v. City of Los Angeles, 250 F.3d 668, 5 688 (9th Cir. 2001). Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 6 Where a motion to dismiss is granted, a district court should 7 provide leave to amend unless it is clear that the complaint could 8 not be saved by any amendment. 9 Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008) (citation omitted). 10 Manzarek v. St. Paul Fire & Marine III. Discussion 11 A. Negligence and Breach of Fiduciary Duty Claims 12 Plaintiff concedes that the claims for negligence and breach 13 of fiduciary duty were dismissed without leave to amend. 14 These claims are therefore DISMISSED from the FAC. 15 B. Fraud-Based Claims 16 “A cause of action for fraud requires the plaintiff to prove 17 (a) a knowingly false misrepresentation by the defendant, (b) made 18 with the intent to deceive or to induce reliance by the plaintiff, 19 (c) justifiable reliance by the plaintiff, and (d) resulting 20 damages.” 21 Nat’l Broad. Co., 71 Cal. App. 4th 1066 (Cal. Ct. App. 1999)) 22 (internal quotation marks omitted). 23 fraud in the inducement of a contract are the same as for actual 24 fraud. 25 1296 (citing Cal. Civ. Code § 1572; Zinn v. Ex–Cell–O Corp., 148 26 Cal. App. 2d 56, 68 (Cal. Ct. App. 1957)). 27 misrepresentation is a “species of the tort of deceit.” 28 Arthur Young & Co., 3 Cal. 4th 370, 407 (1992). Glenn K. Jackson, 273 F.3d at 1201 (quoting Wilkins v. The elements of a claim for Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291, 3 Negligent Bily v. Justifiable 1 reliance on the misrepresentation by the plaintiff is a key element 2 of a cause of action for negligent misrepresentation. 3 Id. at 413. BANA argues that Plaintiffs’ fraud-based claims in the FAC 4 should be dismissed because, as in the original Complaint, 5 Plaintiffs fail to allege justifiable reliance and fail to plead 6 their fraud claims with particularity. 7 1. Justifiable Reliance 8 The court’s Order indicated that it was implausible that 9 Plaintiffs could have relied on the Bank Officer’s statements when 10 they chose to enter into the loan agreement because those 11 statements were made on February 9 and the agreement was dated 12 February 1. BANA argues that the FAC does not correct this 13 deficiency. The FAC does include as an exhibit email 14 correspondence concerning the agreement suggesting that the 15 agreement was signed later in February and backdated to February 1. 16 (FAC Exh. 5.) 17 date upon which the agreement was in fact signed, or that the 18 parties agreed to backdate the agreement. 19 that after the February 9 call, “Plaintiffs went ahead with 20 concluding negotiations for the NRL, and entered into an agreement 21 regarding the NRL with Defendant OCP. 22 effective as of February 1, 2012.” 23 without alleging specifically that the agreement was backdated. 24 However, the FAC does not specifically allege that Paragraph 30 states only The agreement is dated Paragraph 30 thus implies Assuming arguendo that Plaintiffs have sufficiently alleged 25 that the agreement was backdated, BANA also argues that any 26 reliance was not justifiable. 27 because [Plaintiffs] failed to do adequate due diligence does not 28 make the Bank Officer’s statements fraudulent, and it makes their The court’s Order stated: “simply 4 1 alleged reliance on those statements less justifiable.” 2 19-20.) 3 they did due diligence with respect to the Oriana Defendants, and 4 that this due diligence led them to “reasonably believ[e] the 5 representations made by” the Bank officer. 6 (Order at Plaintiffs assert in their Opposition to this Motion that (Opp. at 5.) The court finds that even if the FAC is read to allege that 7 the agreement was backdated, Plaintiffs have still not alleged 8 facts to show that any reliance was justifiable. 9 indicated that in the original Complaint Plaintiffs The court’s Order 10 d[id] not allege what kind of evidence the Bank Officer 11 relied on in making his statements, nor d[id] they allege 12 that they requested any supporting documentation from the 13 Bank Officer or any additional information about his 14 ability to comment on the Oriana Defendants’ financial 15 resources. 16 parties who owned complex securities and were represented 17 by counsel in their transaction with Oriana. Plaintiffs are purportedly sophisticated 18 (Order at 19.) Likewise, in the FAC, Plaintiffs have not alleged 19 any such facts, nor have they alleged any other facts showing that 20 reliance was justifiable. 21 diligence with respect to the Oriana Defendants, but this does not 22 amount to due diligence with respect to the Bank Officer and his 23 representations, particularly when the representations that Oriana 24 Defendants had sufficient financial resources were critical to 25 Plaintiffs’ decision to enter into the agreement. 26 diligence in such a situation would include requesting proof of the 27 Oriana Defendants’ financial resources or other factual bases upon 28 which the Bank Officer relied for his representations. They allege only that they did due 5 Ordinarily due 2. Pleading with Particularity 1 The court’s Order dismissed Plaintiffs’ fraud-based claims for 2 3 the additional reason that Plaintiffs failed to plead those claims 4 with the level of particularity required by Rule 9(b). 5 20.) 6 later time the Oriana Defendants did not disburse the loan funds 7 and stated that they did not have the capacity to do so does not 8 mean that the Bank Officer’s statements about the Oriana 9 Defendants’ financial resources were untrue at that earlier time. . (Order at Specifically, the court indicated that “[m]erely because at a 10 . . [Plaintiffs] allege no facts to show that the Bank Officer had 11 access to other information at the time of the phone call that 12 would have contradicted his assessment of the Oriana Defendants’ 13 financial resources.” 14 (Id. at 20-21.) Plaintiffs cite ¶¶ 22-44 and ¶¶ 115-51 of the FAC to 15 demonstrate that they have now pleaded the fraud claims with 16 particularity. 17 intended to cure the above-noted deficiency is ¶ 131, where 18 Plaintiffs allege that “[w]hen BOA Bank Officer/John Doe 1 made the 19 representations and statements alleged above, he knew these 20 representations to be false.” 21 is not sufficiently particular to meet the pleading standard for 22 fraud claims; indeed, it is a bare allegation with no particularity 23 at all. 24 to cure this deficiency. 25 The only paragraph that might be seen as being However, this conclusory allegation There is no indication that Plaintiffs could amend so as Additionally, the court noted in the Order that in an amended 26 complaint, Plaintiffs would need to present phone records 27 establishing that the alleged call took place. 28 (“[a]ny amended pleading must attach and incorporate any telephone 6 (Order at 22 1 records allegedly evidencing the telephone call in question.”).) 2 Plaintiffs have failed to do so, despite the four months that have 3 elapsed since the court’s Order. 4 For these reasons, and because any amendment would be futile, 5 the court DISMISSES the fraud-based claims without leave to amend. 6 C. Conspiracy Claim 7 As discussed in the court’s Order, a plaintiff must “clearly 8 allege specific action on the part of each defendant that 9 corresponds to the elements of a conspiracy . . . . [The] plaintiff 10 cannot indiscriminately allege that conspiracies existed between 11 and among all defendants.” 12 Terarecon, Inc., 260 F. Supp. 2d 941, 948 (N.D. Cal. 2003). 13 court’s Order, the court indicated that the conspiracy claim 14 against Bank of America in the original Complaint was deficient 15 because “[a]lthough the Bank of America Bank Officer is listed as a 16 defendant under the heading for the conspiracy claim, the 17 allegations do not specifically mention the Bank Officer’s actions, 18 and BAC is entirely absent from this claim. 19 fail to allege any specific action on the part of any Bank of 20 America defendants with respect to the alleged conspiracy.” 21 at 23.) 22 not named at all in the conspiracy allegations. 23 AccuImage Diagnostics Corp. v. In the Plaintiffs therefore The FAC does not correct this deficiency. (Order Again, BANA is Additionally, BANA argues that Plaintiffs’ conspiracy claim 24 fails because BANA does not owe Plaintiffs any underlying duty, and 25 a conspiracy can “only be formed by parties who are already under a 26 duty to the plaintiff, the breach of which will support a cause of 27 action against them - individually and not as conspirators - in 28 tort.” Chavers v. Gatke Corp., 107 Cal. App. 4th 606, 614 7 1 (2003)(emphasis in original). 2 Plaintiffs have not pleaded their fraud-based claims with 3 sufficient particularity and dismissed those claims without leave 4 to amend, the court also finds that Plaintiffs have not stated a 5 claim for any duty owed by BANA to Plaintiffs and DISMISSES the 6 conspiracy claim without leave to amend. 7 IV. Conclusion 8 9 10 Since the court found that For the reasons stated above, BANA’s Motion to Dismiss is GRANTED. The FAC is dismissed in its entirety against BANA with prejudice. 11 12 IT IS SO ORDERED. 13 14 15 Dated: June 7, 2013 DEAN D. PREGERSON United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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