Ohlweiler v. Bank of America Corporation, No. 3:2015cv02268 - Document 9 (S.D. Cal. 2015)
Court Description: ORDER Granting 4 Motion to Dismiss Without Prejudice and With Leave to Amend. Within thirty (30) days of the issuance of this Order, Plaintiff must file either a second amended complaint or a notice of election not to file an amended complaint. Defendant must file any response within fourteen (14) days after service of the amended pleading. Signed by Judge Gonzalo P. Curiel on 12/9/15. (All non-registered users served via U.S. Mail Service)(dlg)
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Ohlweiler v. Bank of America Corporation Doc. 9 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 ROBERT J. OHLWEILER 11 12 13 14 15 v. CASE NO. 3:15-cv-2268-GPC-KSC Plaintiff, BANK OF AMERICA CORPORATION, and DOES 1 to 10, ORDER GRANTING MOTION TO DISMISS [ECF No. 4] Defendants. 16 17 Before the Court is Defendant Bank of America, N.A.’s (“Defendant”) October 18 16, 2015 Motion to Dismiss for Failure to State a Claim. Def. Mot., ECF No. 4. The 19 motion has been fully briefed. Pl. Resp., ECF No. 6; Def. Reply, ECF No. 8. Upon 20 consideration of the moving papers and the applicable law, the Court GRANTS 21 Defendant’s motion to dismiss. 22 23 FACTUAL AND PROCEDURAL BACKGROUND Plaintiff Robert J. Ohlweiler (“Plaintiff”) alleges that around 2002, he opened 24 bank accounts (“ALC accounts”) with Defendant on behalf of an S corporation, 25 “Robert J. Ohlweiler, A Law Corporation” (“ALC”), of which he was the president 26 and sole shareholder. Compl. 2, ECF No. 1-1. Plaintiff alleges that at the time, he 27 signed agreements on behalf of ALC with the Defendant whereby the Defendant 28 agreed to hold ALC harmless for any acts of fraud committed against these -1- 3:15-cv-2268-GPC-KSC Dockets.Justia.com 1 accounts. Compl. 3. Plaintiff also alleges that Plaintiff was the intended third party 2 beneficiary of the agreements made between ALC and Defendant. Id. 3 Plaintiff alleges that in July and August of 2013, the entire amount in the 4 ALC accounts was fraudulently withdrawn. Id. Plaintiff alleges that “[f]rom the 5 discovery of the fraudulent activity in or about August of 2013 to present Plaintiff 6 has been attempting to negotiate with Defendant to return these funds to Plaintiff,” 7 and that “Plaintiff has on several occasions . . . completed and returned fraud 8 statements as requested by Defendant,” but that “[i]n each such incident Defendant 9 has either told Plaintiff that he had used the wrong forms or completed ignored the 10 documents.” Id. 11 On August 31, 2015, Plaintiff, a resident of California, proceeding pro se, 12 filed a civil action against Defendant, a national bank with its main office in North 13 Carolina. Notice of Removal 3–4, ECF No. 1. Plaintiff pled two causes of action for 14 (1) breach of third party beneficiary contract; and (2) intentional fraud. Compl. 3–5. 15 On October 9, 2015, Defendant removed the case to federal court on the basis of 16 diversity jurisdiction. Notice of Removal 3. On October 16, 2015, Defendant filed 17 this motion to dismiss. Def Mot. On November 19, 2015, Plaintiff responded. Pl. 18 Resp. On December 4, 2015, Defendant replied. Def. Reply. 19 20 LEGAL STANDARD A Rule 12(b)(6) dismissal may be based on either a “‘lack of a cognizable 21 legal theory’ or ‘the absence of sufficient facts alleged under a cognizable legal 22 theory.’” Johnson v. Riverside Healthcare System, LP, 534 F.3d 1116, 1121–22 (9th 23 Cir. 2008) (quoting Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 24 1990)). 25 “To survive a motion to dismiss, a complaint must contain sufficient factual 26 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” 27 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 28 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads -2- 3:15-cv-2268-GPC-KSC 1 factual content that allows the court to draw the reasonable inference that the 2 defendant is liable for the misconduct alleged.” Id. at 679 (citing Twombly, 550 U.S. 3 at 556). “Threadbare recitals of the elements of a cause of action, supported by mere 4 conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 5 555 (noting that on a motion to dismiss the court is“not bound to accept as true a 6 legal conclusion couched as a factual allegation.”). “The pleading standard . . . does 7 not require ‘detailed factual allegations,’ but it demands more than an unadorned, 8 the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (citations 9 omitted). “Review is limited to the complaint, materials incorporated into the 10 complaint by reference, and matters of which the court may take judicial notice.” 11 See Metlzer Inv.GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 12 2008). 13 In analyzing a pleading, the Court sets conclusory factual allegations aside, 14 accepts all non-conclusory factual allegations as true, and determines whether those 15 nonconclusory factual allegations accepted as true state a claim for relief that is 16 plausible on its face. Iqbal, 556 U.S. at 676–84; Turner v. City & Cty. of San 17 Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015) (noting that “conclusory allegations 18 of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) 19 dismissal”) (internal quotation marks and citation omitted). And while “[t]he 20 plausibility standard is not akin to a probability requirement,” it does “ask[] for 21 more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. 22 at 678 (internal quotation marks and citation omitted). In determining plausibility, 23 the Court is permitted “to draw on its judicial experience and common sense.” Id. at 24 679. 25 26 DISCUSSION Defendant makes several arguments as to why Plaintiff’s claims should be 27 dismissed. First, Defendant argues that the claim for breach of third party 28 beneficiary contract should be dismissed because (1) the Plaintiff is neither the real -3- 3:15-cv-2268-GPC-KSC 1 party in interest nor a third party beneficiary; and (2) the claim is not sufficiently 2 pled. Def. Mot. 4–6. Second, Defendant argues that the fraud claim should be 3 dismissed because (1) the Plaintiff is not the real party in interest; and (2) the claim 4 is not pled with sufficient particularity. Id. at 6. The Court will address each 5 argument in turn. 6 I. Breach of Third Party Beneficiary Contract 7 A. 8 Defendant argues that Plaintiff lacks standing to pursue the case because he is Party in Interest or Third Party Beneficiary 9 not the real party in interest. Def. Mot. 4. Under Fed. R. Civ. P. Rule 17(a), “[a]n 10 action must be prosecuted in the name of the real party in interest.” See also, e.g., 11 Mission Oaks Ranch, Ltd. v. Cty. of Santa Barbara, 65 Cal. App. 4th 713, 724 12 (1998), disapproved of on other grounds by Briggs v. Eden Council for Hope & 13 Opportunity, 19 Cal. 4th 1106 (1999) (“One who is not a party to a contract has no 14 right to enforce it unless it is an intended third party beneficiary of the contract.”). 15 Defendant argues that since Defendant’s contract is with ALC, not with Plaintiff, 16 Plaintiff has no right to enforce the contract. Def. Mot. 4. 17 Plaintiff appears to concedes the point in his response, but argues that he does 18 have standing because he is the intended third party beneficiary of the contract 19 between ALC and Defendant. See Pl. Resp. 3–4. Plaintiff argues that this is so 20 because ALC “was in essence the alter ego of Plaintiff,” since ALC is an S 21 corporation, “[f]or over ten years the only individual that signed checks [and] made 22 deposits and withdrawals was Plaintiff,” and “if the corporation had become liable 23 to the Defendant, the Plaintiff would have been held legally responsible.” Id. at 5. 24 However, as Defendant points out, Plaintiff misunderstands the import of the 25 “alter ego” doctrine, which allows a court to “pierce the corporate veil” by 26 disregarding a corporate entity and treating the corporation’s acts as if they were 27 done by individuals where the corporation has been used by those individuals to 28 accomplish a wrongful purpose. See Def. Reply 2, Toho-Towa Co. v. Morgan Creek -4- 3:15-cv-2268-GPC-KSC 1 Prods., Inc., 217 Cal. App. 4th 1096, 1106 (2013). Instead, the relevant inquiry 2 under third party beneficiary doctrine is whether the contracting parties clearly 3 manifested an intent to make the obligation inure to the benefit of the third party. 4 See City & Cty. of San Francisco v. W. Air Lines, Inc., 204 Cal. App. 2d 105, 121 5 (1962); see also Restatement (Second) of Contracts § 302, comment a (1981).While 6 Plaintiff did allege in the Complaint that he was the intended third party beneficiary 7 of these agreements, he did not plead any facts supporting this contention, such as 8 the terms of the contract, or a copy of the contract itself. See Compl. 3. Without 9 more, Plaintiff’s conclusory allegation cannot survive Defendant’s motion to 10 dismiss. 11 B. 12 Defendant also argues that the contract claim is insufficiently pled because in Whether Contract Claim is Sufficiently Pled 13 order to plead a contract claim, a contract must be pled by its terms, by reciting it 14 verbatim or attaching and incorporating it, or by its legal effect, by alleging the 15 substance of its relevant terms. Def. Mot. 5–6 (citing McKell v. Washington Mut., 16 Inc., 142 Cal. App. 4th 1457, 1489 (2006)). The Court agrees with Defendant. Since 17 Plaintiff did not recite the contract or include it in the Complaint, Plaintiff was 18 required to plead the contract’s legal effects. “This is more difficult, for it requires a 19 careful analysis of the instrument, comprehensiveness in statement, and avoidance 20 of legal conclusions.” McKell, 142 Cal. App. 4th at 1489. The only detail Plaintiff 21 provides as to the nature of the contract between ALC and Defendant was that 22 therein, “Defendant agreed to hold A.L.C. harmless from any and all acts of fraud 23 committed against these accounts,” which is of no relevance to the third party 24 beneficiary claim. See Compl. 3. Plaintiff’s conclusory statement that “these 25 agreements were made for the benefit of the Plaintiff and Plaintiff was the intended 26 third party beneficiary of these agreements” does not suffice to plead the contract’s 27 legal effects. See id. 28 // -5- 3:15-cv-2268-GPC-KSC 1 II. Intentional Fraud 2 A. 3 Defendant argues that Plaintiff is also not the real party in interest for Party in Interest 4 purposes of the fraud claim. For the same reasons as discussed above in Part I.A, the 5 Court agrees. Plaintiff has not established that he is the real party in interest for 6 purposes of the fraud claim. 7 B. 8 Defendant also argues that Plaintiff’s fraud claim is not pled with sufficient Whether Fraud Claim is Pled with Sufficient Particularity 9 particularity. Fed. R. Civ. P. Rule 9(b) requires plaintiffs to “state with particularity 10 the circumstances constituting fraud.” A court may dismiss a claim for failing to 11 satisfy Rule 9(b)’s heightened pleading requirements. See Vess v. Ciba–Geigy Corp. 12 USA, 317 F.3d 1097, 1107 (9th Cir. 2003). To avoid dismissal, the plaintiff must 13 include “the who, what, when, where, and how” of the alleged fraud. Id. at 1106 14 (internal quotation marks omitted). The complaint must “be specific enough to give 15 defendants notice of the particular misconduct so that they can defend against the 16 charge and not just deny that they have done anything wrong.” See id. (internal 17 quotation marks omitted). 18 Plaintiff’s fraud claim cannot meet this standard. Plaintiff alleges that 19 Defendant committed fraud by “beg[inning] a pattern of behavior with the intent to 20 prevent Plaintiff from providing the documents necessary to prove the fraud 21 committed against the A.L.C. accounts” and “perform[ing] acts to prevent paying 22 Plaintiff the money fraudulently taken from the A.L.C. accounts as was agreed to at 23 the time of opening these accounts.” Compl. 4. These general allegations of fraud 24 are not particular enough to satisfy Rule 9(b)’s particularity requirement. 25 III. Leave to Amend 26 Fed. R. Civ. P. Rule 15 provides that courts should freely grant leave to 27 amend when justice requires it. Accordingly, when a court dismisses a complaint for 28 failure to state a claim, “leave to amend should be granted unless the court -6- 3:15-cv-2268-GPC-KSC 1 determines that the allegation of other facts consistent with the challenged pleading 2 could not possibly cure the deficiency.” DeSoto v. Yellow Freight Sys., Inc., 957 3 F.2d 655, 658 (9th Cir. 1992) (internal quotation marks omitted). Amendment may 4 be denied, however, if amendment would be futile. See id. 5 The Court will grant Plaintiff leave to amend in order to cure the deficiencies 6 identified in the complaint. 7 CONCLUSION 8 For the foregoing reasons, IT IS HEREBY ORDERED that: 9 1. Defendant Bank of America, N.A.’s motion to dismiss for failure to state a 10 claim, ECF No. 4, is GRANTED without prejudice and with leave to amend. 11 2. Within thirty (30) days of the issuance of this Order, Plaintiff must file 12 either a second amended complaint or a notice of election not to file an amended 13 complaint. Failure to comply with this order will result in dismissal of the action 14 pursuant to Fed. R. Civ. P. 41(b). Defendant must file any response within fourteen 15 (14) days after service of the amended pleading. 16 IT IS SO ORDERED. 17 18 DATED: December 9, 2015 19 20 HON. GONZALO P. CURIEL United States District Judge 21 22 23 24 25 26 27 28 -7- 3:15-cv-2268-GPC-KSC
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