Rolled Alloys, Inc. v. Walls et al, No. 3:2020cv01961 - Document 20 (S.D. Cal. 2021)

Court Description: ORDER Granting in part and Denying in part Defendants' Motion to Dismiss (Doc. No. 15 ). Signed by Judge Anthony J. Battaglia on 9/3/2021. (jrm)

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Rolled Alloys, Inc. v. Walls et al Doc. 20 Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.159 Page 1 of 16 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 Rolled Alloys, Inc., a Delaware corporation, 13 14 15 16 17 18 19 20 Case No.: 20-cv-01961-AJB-KSC ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS Plaintiff, v. (Doc. No. 15) John Gregory Walls and Pamela Walls, husband and wife, dba Executive Hospitality, Inc.; and Executive Hospitality, Inc, a suspended California corporation; JGW, LLC, a California Limited Liability Company, Defendants. 21 22 Before the Court is JGW, LLC; John G. Walls (“Mr. Walls”); and Pamela Coker’s, 23 sued as Pamela Walls (“Mrs. Walls”), (collectively, “Defendants”) motion to dismiss. 24 (Doc. No. 15.) Rolled Alloys, Inc. (“Plaintiff”) filed an opposition, (Doc. No. 17), and 25 Defendants filed a reply, (Doc. No. 18). For the reasons set forth below, the Court 26 GRANTS IN PART and DENIES IN PART Defendants’ motion. 27 28 1 20-cv-01961-AJB-KSC Dockets.Justia.com Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.160 Page 2 of 16 1 I. BACKGROUND 1 2 Plaintiff, a Delaware Corporation, purchased an entertainment package for the April 3 2020 Masters Golf Tournament (“2020 Masters”) in Augusta, Georgia. The package 4 included tournament badges, van transportation (including a driver), lodging, maid service, 5 meals, and various other entertainment services. Plaintiff claims that based on statements 6 made by Mr. Walls, it believed it purchased the package from “Executive Hospitality, Inc.” 7 The contract (“Agreement”)2 lists the company as “Executive Hospitality.”3 8 In October 2019, Plaintiff signed the Agreement, which indicates the services would 9 be provided from April 6 to 12, 2020. On March 2, 2020, Plaintiff sent Executive 10 Hospitality its final installment payment. Later, however, due to the COVID-19 pandemic, 11 the 2020 Masters was postponed from April to November 2020, and no spectators were 12 allowed to attend the November event. After learning about the postponement, Plaintiff 13 demanded that Mr. Walls and Executive Hospitality provide the remaining services under 14 the Agreement. According to Plaintiff, the owner or operator of Magnolia Manor, the 15 private clubhouse provided for in the Agreement, represented that Magnolia Manor was 16 available for use during the 2020 Masters. Plaintiff claims that despite due demands for 17 performance of remaining services or a refund, neither were provided. 18 Plaintiff commenced this action to obtain a refund for the services paid for under the 19 Agreement but never received, and to hold Defendants liable for statutory violations and 20 fraudulent conduct. Defendants move to dismiss all counts. 21 22 23 24 25 26 27 28 1 The following facts are taken from Plaintiff’s FAC and are construed as true for the limited purpose of resolving the instant motion. See Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247 (9th Cir. 2013). 2 The Court may consider the contents of the Agreement in adjudicating the motion to dismiss because the document is attached to the FAC. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (“A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment.”) (citations omitted). 3 Throughout the order, the Court will refer to Executive Hospitality as Executive Hospitality and not Executive Hospitality, Inc., except when addressing Plaintiff’s fraud and negligent misrepresentation claims. 2 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.161 Page 3 of 16 1 II. LEGAL STANDARD 2 A motion to dismiss pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 3 tests the legal sufficiency of a complaint, i.e., whether the complaint lacks either a 4 cognizable legal theory or facts sufficient to support such a theory. Navarro v. Block, 250 5 F.3d 729, 732 (9th Cir. 2001) (citations omitted). For a complaint to survive a Rule 12(b)(6) 6 motion to dismiss, it must contain “sufficient factual matter, accepted as true, to ‘state a 7 claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 8 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In reviewing the 9 motion, the court “must accept as true all of the allegations contained in a complaint,” but 10 it need not accept legal conclusions. Id. “Threadbare recitals of the elements of a cause of 11 action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 12 U.S. at 555). 13 III. DISCUSSION 14 Defendants’ motion to dismiss raises various challenges to Plaintiff’s causes of 15 action for Violation of California Business and Professions Code Section 17550.14, Fraud 16 and/or Negligent Misrepresentation, Declaratory Relief/Unjust Enrichment, and Breach of 17 Contract. The Court discusses them in turn. 18 A. Defendant Mrs. Walls’ Dismissal 19 As an initial matter, Defendants contend that contrary to Plaintiff’s allegation, Mrs. 20 Walls is not married to Mr. Walls, and that the Court should not accept Plaintiff’s assertion 21 as true. (Doc. Nos. 15 at 9; 18 at 3.) 4 However, absent clear and binding case law mandating 22 that, for purposes of a motion to dismiss, an allegation concerning someone’s relationship 23 status must be construed as a legal conclusion, the Court declines to dismiss Mrs. Walls as 24 a defendant on this basis. 25 Next, Defendants argue that even if the Court assumes Mrs. Walls is married to Mr. 26 Walls, she should be dismissed because Plaintiff alleges no factual or legal basis to hold 27 28 4 The pinpoint page citations refer to the page numbers that appear at the top of each ECF filing. 3 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.162 Page 4 of 16 1 Mrs. Walls liable. (Doc. No. 15 at 9–10.) Under Rule 8(a), a complaint must contain “a 2 short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. 3 R. Civ. P. 8(a)(2). “[T]he pleading standard Rule 8 announces does not require ‘detailed 4 factual allegations,’ but it demands more than an unadorned, the-defendant- 5 unlawfully-harmed-me accusation.” Ashcroft, 556 U.S. at 678 (quoting Bell Atlantic 6 Corp., 550 U.S. at 555). The FAC does not contain any factual allegations showing why 7 Plaintiff is entitled to relief from Mrs. Walls. Plaintiff mentions Mrs. Walls only once: 8 “John Gregory Walls (“Walls”) and Pamela Walls are husband and wife, are permanent 9 residents of San Diego County, California, and all of [Mr.] Walls’ acts alleged herein were 10 undertaken on behalf of the Walls’ marital community.” (Doc. No. 12 at 2.) Beyond that 11 allegation, the FAC does not allege any wrongdoing by Mrs. Walls. 12 In an attempt to hold Mrs. Walls liable, Plaintiff asserts that it can name Mrs. Walls 13 as a defendant because an innocent spouse’s share of the community property assets may 14 be reached when her spouse engages in tortious conduct.5 (Doc. No. 17 at 11–12.) The 15 Court acknowledges that there appears to be “no California authority that would preclude 16 a plaintiff from naming the non-wrongdoing spouses solely in their capacity as co- 17 representatives of the community estate.” Reynolds & Reynolds Co. v. Universal Forms, 18 Labels & Sys., Inc., 965 F. Supp. 1392, 1396 (C.D. Cal. 1997). However, “current statutory 19 law makes clear that it is not necessary in California to name both spouses in the action in 20 order to bind the community estate.” Id. (citing Cal. Fam. Code § 910 (“[T]he community 21 estate is liable for a debt incurred by either spouse before or during marriage. . . regardless 22 of whether one or both spouses are parties . . . to a judgment for the debt.”)). As such, when 23 a plaintiff names a non-debtor spouse in a community representative capacity—and not in 24 25 26 27 28 5 Plaintiff claims a distinction exists between contractual and tortious conduct; however, case law does not indicate that such a distinction exists. See Reynolds & Reynolds Co. v. Universal Forms, Labels & Sys., Inc., 965 F. Supp. 1392, 1396 (C.D. Cal. 1997) (dismissing defendants’ spouses from case despite Plaintiff’s tort and contract claims); Cal. Fam. Code § 910(a) (stating “the community estate is liable for a debt incurred by either spouse”); id. § 902 (defining a debt as obligations “based on contract, tort or otherwise”). 4 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.163 Page 5 of 16 1 an effort to reach that spouse’s separate property—“the non-debtor spouse may opt not to 2 participate in the litigation[] and will be dismissed as essentially a nominal defendant upon 3 the non-debtor spouse’s request.” Id. at 1397. 4 Here, there is no indication that Plaintiff seeks to reach Mrs. Walls’ separate 5 property. Indeed, Plaintiff’s opposition brief makes clear that it names Mrs. Walls as a 6 defendant only in a community representative capacity. (Doc. No. 17 at 12 (arguing that 7 “[b]ecause the ‘innocent spouse’s share of community assets’ may be reached as a result 8 of Walls’ tortious conduct, his spouse is properly named as a defendant.”) And as 9 previously discussed, the FAC does not present factual allegations to establish that Mrs. 10 Walls harmed Plaintiff, and instead, names her in this litigation solely because she is 11 alleged to be Mr. Walls’ wife. The Court therefore finds that Plaintiff joined Mrs. Walls in 12 her capacity as a community estate co-representative. See Reynolds & Reynolds Co., 965 13 F. Supp. at 1397–98. The Court also construes Mrs. Walls’ motion to dismiss as 14 communicating her desire to not participate in this litigation. (Doc. No. 18 at 3.) 15 Accordingly, as Mrs. Walls is a non-debtor spouse who is sued only as a community 16 representative and declines participation in this litigation, the Court GRANTS Defendants’ 17 motion to dismiss as to Mrs. Walls and DISMISSES her as a nominal defendant in this 18 action. See Reynolds & Reynolds Co., 965 F. Supp. at 1397. 19 B. Mr. Walls’ Personal Liability 20 As another preliminary matter, Defendants argue the FAC does not allege facts 21 showing Mr. Walls’ personal liability for the Agreement. (Doc. No. 15 at 10.) The Court 22 disagrees. An agent avoids personal liability when he discloses his agency and the 23 principal’s identity. Restatement (Second) of Agency § 4 (Am. L. Inst. 1958); see Dones 24 v. Life Ins. Co. of North America, 55 Cal. App. 5th 665, 690 (2020) (explaining that the 25 purpose behind this disclosure is to ensure a party knows who they are dealing with and 26 can protect itself from entering a contract with a company that cannot meet its obligations). 27 When the agent uses a fictitious business name and does not disclose the principal’s name, 28 the agent is not protected from personal liability. See G. W. Andersen Const. Co. v. Mars 5 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.164 Page 6 of 16 1 Sales, 164 Cal. App. 3d 326, 332–33 (1985) (holding the agent personally liable because 2 the “plaintiff did not know the name or corporate status of the principal” and California 3 holds the agent liable “unless the name of the principal is disclosed”) (emphasis in 4 original); W.W. Leasing Unlimited v. Com. Standard Title Ins. Co., 149 Cal. App. 3d 792, 5 795–96 (1983) (finding the agent personally liable when defendant used only a fictitious 6 business name when dealing with plaintiff and at no time disclosed the principal’s name). 7 Here, Plaintiff alleges that “[a]t no time during any oral or written communications 8 during which Walls induced Rolled Alloys to execute the Purported Contract did Walls: 1) 9 disclose that he was acting as an agent for an entity called JGW, LLC; 2) mention the name 10 JGW, LLC; or 3) indicate that JGW, LLC would be liable in any way for any obligations 11 arising out of the Purported Contract.” (Doc. No. 12 at 2.) Because the FAC contains 12 allegations that Mr. Walls was acting as an agent for JGW, LLC and did not disclose JGW, 13 LLC as the principal at any time, the Court finds that Plaintiff has sufficiently pled a basis 14 for holding him personally liable for the Agreement. 15 Defendants’ arguments to the contrary are unavailing. First, Defendants maintain 16 that “[i]t is not necessary that Walls disclosed Executive Hospitality’s legal name of JGW, 17 LLC.” (Doc. No. 18 at 5.) Yet, California case law indicates “us[ing] a tradename under 18 which the principal transacts his business is not of itself a sufficient identification of the 19 principal to protect the agent from personal liability.” W.W. Leasing Unlimited, 149 Cal. 20 App. 3d at 796 (emphasis added); see G.W. Andersen Const. Co., 164 Cal. App. 3d at 333. 21 Second, that Mr. Walls is not named on the Agreement is beside the point. Plaintiff 22 contracted with Executive Hospitality, and Mr. Walls was Executive Hospitality’s 23 representative in that transaction. (Doc. No. 12 at 2 (“Walls induced Rolled Alloys to enter 24 into what he represented would be a contract between a Rolled Alloys and an entity Walls 25 identified as ‘Executive Hospitality, Inc.’”), 12 (the Agreement stating “REP: JW”).) As 26 noted earlier, because Plaintiff alleges that Mr. Walls, acting as an agent, did not disclose 27 his principal’s name, Plaintiff has adequately pled a basis on which to hold Mr. Walls 28 personally liable in this action. See G. W. Andersen Const. Co., 164 Cal. App. 3d at 332– 6 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.165 Page 7 of 16 1 33; W.W. Leasing Unlimited, 149 Cal. App. 3d at 795–96. Third, the Court declines 2 Defendants’ invitation to conclude, at the motion to dismiss stage, that “Executive 3 Hospitality is a disclosed entity for agency purposes.” (Doc. No. 18 at 5.) As previously 4 noted, within the four corners of the FAC, Plaintiff has pled, and the Court assumes as true, 5 that the principal entity is JGW, LLC—not Executive Hospitality—and that at no time prior 6 to litigation did Mr. Walls disclose that Executive Hospitality was doing business as JGW, 7 LLC (the principal). (Doc. No. 12 at 2, 3, 4.) Accordingly, as Plaintiff has sufficiently pled 8 a basis to hold Mr. Wall personally liable in this action, the Court DENIES Defendants’ 9 motion to dismiss Mr. Walls as a defendant. 10 C. California Business & Professions Code Section 17550.14 11 Turning to Plaintiff’s claim under California Business and Professions Code 12 § 17550.14 (“Section 17550.14”), Defendants contend that the FAC presents conclusory 13 allegations and no facts showing that Defendants qualify as sellers of travel under the 14 statute. (Doc. No. 15 at 12.) Plaintiff argues that the FAC and Agreement provide sufficient 15 facts to demonstrate that Defendants qualify as sellers of travel. (Doc. No. 17 at 6.) Plaintiff 16 further asserts that because Defendants did not perform the Agreement or provide a refund, 17 the FAC demonstrates Defendants violated Section 17550.14. (Doc. No. 17 at 8.) The 18 Court discusses these issues in turn. 19 1. “Seller of Travel” 20 California regulates “sellers of travel in order to eliminate unfair advertising, sales, 21 and business practices, to establish standards that will safeguard the people against 22 financial hardship, to encourage competition, fair dealing, and propriety in the travel 23 business.”6 Cal. Bus. & Prof. Code § 17550. Relevant here, a “seller of travel” is a person 24 who sells, provides, furnishes, contracts for, or arranges land transportation “either 25 26 27 28 6 To the extent that Defendants argue that California’s Sellers of Travel Act does not apply to an agreement for tickets to a sporting event in Georgia, the Court disagrees. The Agreement states that the provisions therein “shall be governed by and enforced, determined and construed in accordance with the contract laws of the State of California.” (Doc. No. 12 at 12.) This indicates that California law applies to issues concerning the Agreement. 7 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.166 Page 8 of 16 1 separately or in conjunction with other travel services if the total charge to the passenger 2 exceeds three-hundred dollars ($300).” Id. § 17550.1. “Travel services” include “lodging, 3 surface transportation, transfers, tours, meals, guides, baggage transfer, sightseeing, 4 recreational activities, vehicle rental, or other travel-related services.” Id. § 17550.9. 5 Here, Plaintiff alleges that Defendants are sellers of travel, and the Agreement 6 attached to the FAC shows that Executive Hospitality, through its representative Mr. Walls, 7 sold Plaintiff land transportation in the form of “DEDICATED TRANSPORTATION 8 (VAN & DRIVER).” (Doc. No. 12 at 12.) The Agreement also shows that the land 9 transportation services were sold in conjunction with other travel services such as lodging 10 in an executive five-bedroom home, all-day access to Magnolia Manor private clubhouse, 11 as well as breakfast, lunch, and catered dinners, for a total price of $116,000. These facts 12 are sufficient to establish that Executive Hospitality is a “seller of travel” within the 13 meaning of the statute. 14 Defendants argue that even if they qualify as sellers of travel, Section 17550.14(c)7 15 permits the parties to change terms and conditions related to cancellation policies. (Doc. 16 No. 15 at 13.) Section 17550.14(c) states, in pertinent part, that “[i]f terms and conditions 17 relating to a refund upon cancellation by the passenger have been disclosed and agreed to 18 by the passenger and the passenger elects to cancel for any reason . . . the making of a 19 refund in accordance with those terms and conditions shall be deemed to constitute 20 compliance with this section.” Here, there is no allegation that Plaintiff elected to cancel 21 the Agreement. Defendants’ argument that Section 17550.14(c) and the Agreement’s 22 refund provision apply is therefore unavailing. 23 2. Section 17550.14 Violation 24 There being allegations to establish that Defendants are sellers of travel, the Court 25 considers whether Plaintiff has adequately pled a Section 17550.14 violation. Relevant 26 here, a seller of travel is obligated to either provide the transportation or travel services that 27 28 7 Defendants cite to 17550.15(c) but quote language from 17550.14(c). (Doc. No. 15 at 12.) Considering the language quoted, the Court assumes Defendants intended to cite to 17550.14(c), not 17550.15(c). 8 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.167 Page 9 of 16 1 the buyer purchased or issue a refund for all services not provided within thirty days after 2 the buyer requests a refund. Cal. Bus. & Prof. Code § 17550.14(a)(1)(B). Here, the FAC 3 states that Defendants did not provide a refund or deliver any services expected and paid 4 for under the Agreement. (Doc. No. 12 at 4, 5.) Specifically, Plaintiff alleges that “[a]fter 5 learning of the postponement, Rolled Alloys demanded that the travel services that were 6 the subject of the [Agreement] be provided” and that “more than 30 days has elapsed since 7 the date Rolled Alloys requested a refund and the date defendants manifested their 8 unequivocal intent not to provide travel services required under the [Agreement].”8 (Doc. 9 No. 12 at 5.) Based on the foregoing, the Court finds that the FAC contains sufficient facts 10 alleging that Defendants violated Section 17550.14. Accordingly, the Court DENIES 11 Defendant’s motion to dismiss Plaintiff’s California Business and Professions Code 12 Section 17550.14 claim. 13 D. Fraud and Negligent Misrepresentation Claims 14 As to Plaintiff’s fraud and negligent misrepresentation claims, Defendants assert that 15 Plaintiff has not pled these claims with enough particularity to meet the Rule 9(b) standard. 16 (Doc. No. 15 at 14.) Plaintiff counters that its fraud claims comply with Rule 9(b), and that 17 negligent misrepresentation claims do not need to satisfy Rule 9(b). (Doc. No. 17 at 10 18 n.3.) The Court first addresses whether negligent misrepresentation claims are subject to 19 Rule 9(b) and then whether Plaintiff has adequately pled its negligent misrepresentation 20 and fraud claims under the applicable standard. 21 1. Rule 9(b)’s Applicability to Negligent Misrepresentation Claims 22 As an initial matter, no Ninth Circuit precedent directly addresses whether Rule 9(b) 23 applies to negligent misrepresentation claims. To be sure, in a 2005 unpublished opinion, 24 the Ninth Circuit did not apply Rule 9(b) to a negligent misrepresentation claim. Miller v. 25 Int’l Bus. Machines Corp., 138 Fed. App’x 12, 17 (9th Cir. 2005) (“Finally, claim nine is 26 27 28 8 The FAC states that Plaintiff made the refund demand after learning about the 2020 Masters postponement, and Mr. Walls declared his intent to not provide the travel services in late-March 2020. (Doc. No. 12 at 4, 5.) 9 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.168 Page 10 of 16 1 not a fraud claim. Rather, it is a negligent misrepresentation claim. We hold that Rule 8(a) 2 has been satisfied.”). More recently, however, the Ninth Circuit applied Rule 9(b) to a 3 negligent misrepresentation claim. Kelly v. Rambus, Inc., 384 Fed. App’x 570, 573 (9th 4 Cir. 2010) (summarily concluding that “Kelly’s state law claims for common law fraud 5 and negligent misrepresentation fail to meet the heightened pleading standards of Rule 9(b) 6 of the Federal Rules of Civil Procedure.”). 7 There being no binding precedent, district courts are split on the issue. Consistent 8 with other district courts in California, this Court holds that Rule 9(b) does apply to 9 negligent misrepresentation claims. 9 In coming to this conclusion, the Court finds Zetz v. 10 Bos. Sci. Corp., a decision out of a district court in the Eastern District of California, 11 persuasive. 398 F. Supp. 3d 700, 713 n.3 (E.D. Cal. 2019). There, the court noted that “[t]he 12 Ninth Circuit has held that all claims sounding in fraud or grounded in fraud must meet 13 Rule 9(b)’s heightened pleading requirement.” Id. (citing Kearns v. Ford Motor Co., 567 14 F.3d 1120, 1125 (9th Cir. 2009)). And because “California courts have expressly held that 15 causes of action for intentional and negligent misrepresentation sound in fraud,” the Zetz 16 court applied Rule 9(b) to the negligent misrepresentation claims before it. Id. (citing 17 Daniels v. Select Portfolio Servicing, Inc., 246 Cal. App. 4th 1150, 1166 (2016)) 18 (alterations and citation omitted). Finding the reasoning in Zetz persuasive, the Court will 19 similarly apply Rule 9(b)’s heightened pleading standard to Plaintiff’s negligent 20 misrepresentation claims. 21 22 23 24 25 26 27 28 9 See, e.g., Stein v. Farmers Ins. Co. of Arizona, No. 19-CV-0410-DMS (NLS), 2020 WL 8918888, at *16–17 (S.D. Cal. Mar. 30, 2020) (“There is some conflict in the case law regarding whether the Rule 9(b)’s heightened pleading standard applies; however, ‘the majority of the districts courts in California consider negligent misrepresentation a species of fraud and apply Rule 9(b).’”); City of Escondido v. Gen. Reinsurance Corp., No. 19CV868-MMA (BGS), 2019 WL 6917983, at *28 (S.D. Cal. Dec. 18, 2019) (“Sitting in diversity, the Court finds that Rule 9(b) applies because negligent misrepresentation substantially ‘sound[s] in fraud’ under California law.”). 10 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.169 Page 11 of 16 2. Whether Plaintiff’s Claims Satisfy Rule 9(b)10 1 2 “To satisfy Rule 9(b), a pleading must identify the who, what, when, where, and how 3 of the misconduct charged, as well as what is false or misleading about [the purportedly 4 fraudulent] statement, and why it is false.” United States ex rel. Cafasso v. Gen. Dynamics 5 C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011). Moreover, if the plaintiff brings claims 6 against multiple defendants, the complaint must “identify the role of each defendant in the 7 alleged fraudulent scheme.” Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007) 8 (citation and quotation omitted).11 9 Plaintiff alleges that Mr. Walls made three misrepresentations and/or omissions. The 10 Court finds that Plaintiff satisfied its burden under Rule 9(b) for two of the three alleged 11 misrepresentations and omissions. First, Plaintiff claims that Defendants “made material 12 misrepresentations and omissions regarding the corporate status of Executive Hospitality 13 Inc.” (what). (Doc. No. 12 at 6.) The FAC states that in October 2019 (when), Mr. Walls 14 (who) represented that Plaintiff would be entering an Agreement with “an entity Walls 15 identified as ‘Executive Hospitality, Inc.’” (Id. at 3.) At this time, Mr. Walls did not 16 disclose that Executive Hospitality, Inc. did not have the “powers, rights, and privileges” 17 to execute contracts in California because its business license was suspended in 2011 18 (how/why). (Id. at 2, 3.) Further, Plaintiff alleges that at “no time during any oral or written 19 communications” (when and where) did Mr. Walls (who) disclose “he was acting as an 20 agent for an entity called JGW, LLC,” “mention the name JGW, LLC,” or “indicate that 21 JGW, LLC would be liable in any way for the obligations arising out of the” Agreement 22 (how/why). (Id. at 3.) Plaintiff adds that in the March 2, 2020, written communication 23 (when and where), Mr. Walls (who) expressly represented that he was acting as the 24 25 26 27 28 10 To the extent that Defendants assert that Plaintiff’s fraud and/or negligent misrepresentation claim should be dismissed in its entirety because Plaintiff does not indicate “which statements were alleged to have been made fraudulently, and which negligently” (Doc. No. 18 at 6), the Court is unpersuaded. Absent binding case law instructing that a complaint must plead fraud and negligent misrepresentation claims separately, the Court finds this argument unavailing. 11 Following Mrs. Walls’s dismissal, only two defendants remain: Mr. Walls, and JGW, LLC. (Doc. No. 12 at 1.) 11 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.170 Page 12 of 16 1 President of Executive Hospitality and did not disclose that JGW, LLC existed (why/how). 2 (Id. at 4.) Although the FAC refers to Defendants in the plural form when stating the claim, 3 the earlier FAC allegations indicate that Plaintiff is alleging this particular 4 misrepresentation against Mr. Walls. Accordingly, the Court concludes that Plaintiff 5 satisfied its burden under Rule 9(b) for this alleged misrepresentation and/or omission. 6 Second, Plaintiff claims that Defendants “made material misrepresentations and 7 omissions regarding the . . . defendants’ intent not to provide the travel services required 8 to be provided under the” Agreement (what). (Doc. No. 12 at 6.) Plaintiff alleges that at 9 the time Mr. Walls demanded and received Plaintiff’s final payment under the Agreement 10 in March 2020 (when), Mr. Walls knew that Executive Hospitality’s right to conduct 11 business in California had been suspended and had already manifested an intent not to 12 perform on the contract but did not disclose these circumstances to Plaintiff (how/why). 13 (Id. at 4.) Plaintiff details that Mr. Walls “revealed in a telephone conversation in 14 late-March 2020 that he had ‘closed his business’ and made the decision not to provide the 15 travel services for which Rolled Alloys bargained and paid before he demanded and 16 received the final payment on March 2, 2020.” (Id. (emphasis in original).) As with the 17 prior allegation, although the FAC refers to Defendants in the plural form, the allegations 18 clarify that the allegations pertain to Mr. Walls. Considering these facts and the reasonable 19 inferences drawn therefrom, the Court finds that Plaintiff satisfied its burden under Rule 20 9(b) for this alleged misrepresentation and/or omission. 21 Based on the foregoing, the Court DENIES Defendants’ motion to dismiss 22 Plaintiff’s fraud and/or negligent misrepresentation claims concerning the corporate status 23 of Executive Hospitality, Inc. and Defendants’ intent not to provide the travel services 24 required under the Agreement. 25 Third and lastly, Plaintiff claims that Defendants “made material misrepresentations 26 and omissions regarding the . . . defendants’ prior bankruptcy filings” (what). (Doc. No. 12 27 at 6.) Apart from this statement, however, the FAC contains no reference to any bankruptcy 28 filing or proceeding. Plaintiff does not allege any facts to indicate who, when, where, and 12 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.171 Page 13 of 16 1 how/why Defendants made misrepresentations and/or omissions regarding prior 2 bankruptcy filings. The Court therefore concludes that this claim does not satisfy Rule 9(b). 3 Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiff’s 4 misrepresentation claim regarding Defendants’ prior bankruptcy filings WITH LEAVE 5 TO AMEND. 12 6 E. Declaratory Relief/Unjust Enrichment 7 The Declaratory Judgment Act does not require a federal court to “grant declaratory 8 judgment; therefore, it is within a district court’s discretion to dismiss an action for 9 declaratory judgment.” Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 533 (9th Cir. 10 2008); 28 U.S.C. § 2201(a). “In making such a determination, a district court is to consider 11 a variety of factors, including whether retaining jurisdiction would: (1) involve the needless 12 determination of state law issues; (2) encourage the filing of declaratory actions as a means 13 of forum shopping; (3) risk duplicative litigation; (4) resolve all aspects of the controversy 14 in a single proceeding; (5) serve a useful purpose in clarifying the legal relations at issue; 15 (6) permit one party to obtain an unjust res judicata advantage; (7) risk entangling federal 16 and state court systems; or (8) jeopardize the convenience of the parties.” Allstate Ins. Co. 17 v. Herron, 634 F.3d 1101, 1107 (9th Cir. 2011) (citing Gov’t Emps. Ins. Co. v. Dizol, 133 18 F.3d 1220, 1225 n.5 (9th Cir. 1998)). 19 Here, Defendants argue that Plaintiff is not entitled to declaratory relief/unjust 20 enrichment, because Plaintiff did not contract with Executive Hospitality, Inc., a suspended 21 corporation, it contracted with Executive Hospitality dba JGW, LLC. (Doc. No. 15 at 16.) 22 However, the allegations in the FAC, which the Court must accept as true at this stage, 23 24 25 26 27 28 12 To the extent that Plaintiff argues that Defendants waived their challenge to the negligent misrepresentation claims by failing to independently challenge it in their opening brief, the Court is unpersuaded. The opening brief contains a section specifically entitled, “Rolled Alloy’s Claim for Fraud and or Negligent Misrepresentation Should be Dismissed Because Rolled Alloys Fails to Meet Heightened Fraud Pleading Requirements.” (Doc. No. 15 at 13.) In that section, Defendants argued that Plaintiff’s alleged material misrepresentations and omissions, a necessary and similar element for both fraud and negligent misrepresentation, do not meet Rule 9(b)’s standard. Moreover, Plaintiff does not provide any case law indicating that Defendants must specifically separate out their challenges to negligent misrepresentation and fraud claims. 13 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.172 Page 14 of 16 1 states that Mr. Walls induced Plaintiff to enter an Agreement with an entity Mr. Walls 2 represented as Executive Hospitality, Inc. and “not at a single time did Walls mention the 3 name ‘JGW, LLC.’” (Doc. No. 12 at 2, 3.) As Defendants’ challenge to Plaintiff’s claim 4 for declaratory relief/unjust enrichment concerns a factual dispute that the Court may not 5 consider on a motion to dismiss, the Court DENIES Defendants’ motion to dismiss 6 Plaintiff’s declaratory relief/unjust enrichment claim on this basis. (Doc. No. 12 at 7.) 7 F. Breach of Contract 8 As to Plaintiff’s last cause of action, Defendants first contend that the FAC does not 9 state a breach of contract claim because Plaintiff does not identify which Defendant 10 breached the Agreement. (Doc. Nos. 15 at 17; 18 at 8.) The Court disagrees. Although the 11 FAC refers to the breaching parties as “defendants,” the FAC specifies the breaching 12 defendants as “Walls and JGW, LLC.” (Doc. No. 12 at 8.) Accordingly, the Court finds 13 that the FAC does identify Mr. Walls and JGW, LLC as the alleged breaching parties. 14 Next, Defendants argue that the FAC fails to state a breach of contract claim because 15 the plain terms of the Agreement indicate that no refund would be provided. (Doc. No. 15 16 at 17.) “Resolution of contractual claims on a motion to dismiss is proper if the terms of 17 the contract are unambiguous.” Bedrosian v. Tenet Healthcare Corp., 208 F.3d 220 (9th 18 Cir. 2000). “A contract provision will be considered ambiguous when it is capable of two 19 or more reasonable interpretations.” Monaco v. Bear Stearns Residential Mortg. Corp., 554 20 F. Supp. 2d 1034, 1040 (C.D. Cal. 2008) (citing Bay Cities Paving & Grading, Inc. v. 21 Lawyers’ Mut. Ins. Co., 5 Cal. 4th 854, 867 (1993)). “Language in a contract must be 22 interpreted as a whole and in the circumstances of the case.” Id. (citing Bank of W. v. 23 Superior Court, 2 Cal. 4th 1254, 1265 (1992)). If the language “leaves doubt as to the 24 parties’ intent,” Consul Ltd. v. Solide Enters., Inc., 802 F.2d 1143, 1149 (9th Cir. 1986), 25 the motion to dismiss must be denied. Monaco, 554 F. Supp. 2d at 1040. 26 Here, the refund provision, titled “Event cancellation and Insurance,” provides, “[i]n 27 the event that its organizers partly or wholly cancel an Event no refunds will be made. 28 Client may make independent arrangements for insurance with client’s own broker.” (Doc. 14 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.173 Page 15 of 16 1 No. 12 at 12.) According to Defendants, this provision made “it clear that Plaintiff agreed 2 that no refund would be provided” and “advised [Plaintiff] to obtain insurance for this 3 package.” (Doc. No. 15 at 17.) Plaintiff counters that the provision does not apply because 4 the 2020 Masters was not cancelled—it was postponed, and the provision applies only to 5 “partly or wholly cancel[ed]” events. (Doc. No. 12 at 12.) To “cancel” means “to decide 6 not to conduct or perform (something planned or expected) usually without expectation of 7 conducting or performing it at a later time.” Merriam Webster’s Online Dictionary (2021). 8 Because the 2020 Masters was held later than originally planned, it does not fit within the 9 common understanding of the word cancel. See id. The refund provision, however, can also 10 be triggered if the organizers had “partly” canceled the 2020 Masters. In the Court’s view, 11 the provision’s language leaves doubt as to whether the parties intended postponed events 12 to be construed as partly canceled events, and that based on the plain meaning of the word 13 cancel, Plaintiff has raised a reasonable interpretation that they did not. Consequently, the 14 Court finds that dismissal of the breach of contract claim is inappropriate at this stage. 15 Additionally, Plaintiff asserts that because other organizers did not cancel the other 16 services under the Agreement, the refund provision clearly does not apply to those 17 non-cancelled events, and Defendants breached the Agreement by not performing or 18 providing a refund. (Doc. No. 17 at 16.) Defendants did not reply to, and therefore appears 19 to have conceded, this point. Accordingly, the Court DENIES Defendants’ motion to 20 dismiss the breach of contract claim. 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 15 20-cv-01961-AJB-KSC Case 3:20-cv-01961-AJB-KSC Document 20 Filed 09/03/21 PageID.174 Page 16 of 16 1 IV. CONCLUSION 2 Based on the foregoing, the Court enters the following orders: 3 • Defendants’ motion to dismiss is GRANTED IN PART and DENIED IN 4 PART. (Doc. No. 15.) 5 • Defendant Mrs. Walls is DISMISSED from this action. 6 • Defendants’ motion to dismiss Plaintiff’s California Business & Professions 7 8 Code § 17550.14 claim is DENIED. • Defendants’ motion to dismiss Plaintiff’s fraud and/or negligent 9 misrepresentation claims is DENIED IN PART and GRANTED IN PART 10 WITH LEAVE TO AMEND only the claim regarding Defendants’ prior 11 bankruptcy filings. 12 13 • Defendants’ motion to dismiss Plaintiff’s declaratory relief/unjust enrichment claim is DENIED. 14 • Defendants’ motion to dismiss Plaintiff’s breach of contract claim is DENIED. 15 • Should Plaintiff desire to amend its complaint as provided in this Order, it must 16 17 file a Second Amended Complaint no later than September 10, 2021. • Defendants must file a responsive pleading no later than September 17, 2021. 18 19 20 IT IS SO ORDERED. Dated: September 3, 2021 21 22 23 24 25 26 27 28 16 20-cv-01961-AJB-KSC

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