-CWH DFR Apparel Co., Inc v. Triple Seven Promotional Products, Inc. et al, No. 2:2011cv01406 - Document 23 (D. Nev. 2012)
Court Description: ORDER Granting 11 Defendants' Motion to Dismiss and Denying 19 Defendants' Motion to Strike as Moot. IT IS FURTHER ORDERED that Plaintiff file an amended complaint within fourteen (14) days of the entry of this order, failure to do so will result in unamended claims being dismissed with prejudice. Amended Complaint deadline: 9/26/2012. Signed by Judge Kent J. Dawson on 09/11/2012. (Copies have been distributed pursuant to the NEF - AC)
Download PDF
<![CDATA[
-CWH DFR Apparel Co., Inc v. Triple Seven Promotional Products, Inc. et al Doc. 23 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 10 DFR APPAREL CO., INC., 11 Plaintiff, 12 v. 13 Case No. 2:11-CV-01406-KJD-CWH TRIPLE SEVEN PROMOTIONAL PRODUCTS, INC., et al., ORDER 14 Defendants. 15 16 Presently before the Court is Defendants’ Motion to Dismiss (#11). Plaintiff filed a response 17 in opposition (#18) to which Defendants replied (#20). Also before the Court is Defendants’ Motion 18 to Strike (#19). Plaintiff filed a response in opposition (#21) to which Defendants replied (#22). 19 I. Background 20 On March 23, 2010, Plaintiff DFR Apparel Co., Inc. (“DFR”) placed a purchase order for 21 170,000 pieces of glassware with Triple Seven Promotional Products, Inc. (“Triple Seven”) for 22 delivery on May 26, 2010. The purchase order valued $90,270.00, of which DFR paid half up front. 23 On April 29, 2010 DFR cancelled the order after the product did not comply with DFR’s written 24 specifications. 25 26 Dockets.Justia.com 1 On May 21, 2010 DFR placed a replacement purchase order for the 170,000 pieces of 2 glassware. Triple Seven valued the second order at $163,200.00 because of the more costly material 3 needed to meet DRF’s specifications. DFR scheduled for the replacement purchase to be delivered by 4 July 30, 2010. DFR alleges that Triple Seven understood that time was of the essence for delivery of 5 the entire 170,000 pieces of glassware. On May 24, 2010, Triple Seven confirmed the replacement 6 order. On that same day, DFR paid Triple Seven an additional $36,465.00 for the initial deposit of 7 the replacement order. 8 On August 6, 2010, when the first container of the replacement order arrived, DFR paid 9 Triple Seven another $40,800.00. However, on August 16, 2010 DFR’s customer HUB Folding Box, 10 Inc. (“HUB”), after receiving the shipment, rejected the entire container because it failed to meet the 11 specifications set forth by DFR. 12 On August 19, 2010 DFR paid Triple Seven an additional $37,500.00 for the replacement 13 order. On September 2, 2010, after DFR and HUB informed Triple Seven that the product failed to 14 meet their specifications, Triple Seven confirmed to DFR in writing that a second replacement order 15 would be completed by September 21, 2010. On September 2, 2010 DFR relayed the information to 16 HUB. HUB immediately rejected the delivery date. 17 On September 10, 2010 HUB terminated its business relationship with DFR “as a result of 18 Triple Seven’s failure to both timely ship product and manufacture product in compliance with 19 DFR’s and HUB’s specifications.” On January 25, 2011 HUB reiterated it would no longer use DFR 20 as a supplier. Triple Seven’s promotional catalogue often referred to an entity identified as “777 21 Promotion Products, Inc.” Plaintiff filed the present complaint on September 2, 2011 alleging claims 22 for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, 23 fraud, conversion, and tortious interference with contract. Plaintiff named as defendants: Triple 24 Seven Promotional Products, Inc.; Deco West, Inc. (which appears to share an address and corporate 25 officers with Triple Seven); and 777 Promotional Products, Inc. (“777”). Defendants then filed the 26 present motion to dismiss. 2 1 II. Standard for a Motion to Dismiss 2 In considering a motion to dismiss, “all well-pleaded allegations of material fact are taken as 3 true and construed in a light most favorable to the non-moving party.” Wyler Summit Partnership v. 4 Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted). 5 Consequently, there is a strong presumption against dismissing an action for failure to state a claim. 6 See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted). 7 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted 8 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 9 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the 10 context of a motion to dismiss, means that the plaintiff has pleaded facts which allow “the court to 11 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. 12 The Iqbal evaluation illustrates a two-prong analysis. First, the Court identifies “the 13 allegations in the complaint that are not entitled to the assumption of truth,” that is, those allegations 14 which are legal conclusions, bare assertions, or merely conclusory. Id. at 1949-51. Second, the 15 Court considers the factual allegations “to determine if they plausibly suggest an entitlement to 16 relief.” Id. at 1951. If the allegations state plausible claims for relief, such claims survive the motion 17 to dismiss. Id. at 1950. 18 III. Analysis 19 A. 777 Promotional Products, Inc. and Deco West, Inc. 20 Defendants seek to dismiss the complaint against 777 Promotional Products, Inc. (“777") 21 asserting that 777 is not a legal entity capable of being sued. Defendants also assert that the claims 22 asserted are conclusory and do not specify any conduct taken by either defendant. Particularly, 23 Defendants argue the only contractual relationship asserted in the complaint is between Plaintiff and 24 Defendant Triple Seven Promotional Products, Inc. In response, Plaintiff argues that Deco West and 25 777 are alter egos of Triple Seven, an assertion not pled in the complaint. 26 3 1 In order to state a claim for alter-ego liability in Nevada, a plaintiff must allege that: (1) the 2 corporation is influenced and governed by the person asserted to be the alter ego; (2) there is such 3 unity of interest and ownership that one is inseparable from the other; and (3) the facts are such that 4 adherence to the corporate fiction of a separate entity would, under the circumstances, sanction fraud 5 or promote injustice. See Polaris Ind. Corp. v. Kaplan, 747 P.2d 884, 886 (Nev. 1987); Wilson 6 Logistics Nev., Inc. v. Lincoln Gen’l Ins. Co., 2011 WL 5080176, at *2 (D. Nev. Oct. 26, 2011). In 7 this action, Plaintiff has not made any factual allegations in the complaint that meet the pleading 8 requirements for asserting an alter-ego theory. Therefore, the Court grants Defendants’ motion to 9 dismiss the claims against 777 and Deco West. However, the Court also grants Plaintiff leave to 10 amend its complaint. Failure to file a timely amended complaint will result in the claims against 11 Deco West and 777 being dismissed with prejudice. 12 B. Fraud 13 Fed. R. Civ. Pro. 8(a) generally provides that a pleading that sets forth a claim must contain 14 “a short and plain statement of the claim showing the pleader is entitled to relief.” However, Fed. R. 15 Civ. Pro. 9(b) requires all allegations of fraud to be stated “with particularity,” including “the time, 16 place and nature of the alleged fraudulent activities.” Fecht v. Price Co., 70 F.3d 1078, 1082 (9th Cir. 17 2009). Rule 9(b) must specify the “who, what, when, where, and how” of the alleged activities. Rule 18 9(b) “does not allow a complaint to merely lump multiple defendants together but require[s] 19 plaintiffs to differentiate their allegations surrounding his alleged participation in fraud.” Swartz v. 20 KPMG LLP, 476 F.3d 756, 764-765 (9th Cir. 2007). In cases of fraud involving multiple defendants, 21 a plaintiff must, at a minimum, “identif[y] the role of [each] defendant[ ] in the alleged fraudulent 22 scheme.” Id. (citing Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir.1989)). 23 i. Third Claim- Fraud in the Inducement 24 Pursuant to Nevada law, a claim for fraud in the inducement requires a party to allege 25 each of the following elements: (1) a false representation; (2) knowledge or belief that the 26 representation was false or knowledge that the defendant had an insufficient basis for making the 4 1 representation; (3) intent to induce the plaintiff to consent to the contract’s formation; (4) justifiable 2 reliance upon the misrepresentation; and (5) damage resulting from such reliance. J.A. Jones Constr. 3 v. Lehrer McGovern Bovis, 89 P.3d 1009, 1018 (Nev. 2004). 4 Plaintiff alleges Defendants “fraudulently induced Plaintiff into entering into the 5 purchase orders, and did so in bad faith with the intent to not fulfill the terms of the contracts as set 6 forth in the purchase orders.” Plaintiff claims it “would not have entered into the contracts but for 7 Defendants’ representations that it would act in good faith and honor the terms of the purchase 8 orders.” Plaintiff’s allegations do not meet the particularity required by Fed. R. Civ. Pro. 9(b). The 9 complaint fails to plead any knowledge or belief on the part of any defendant that the representation 10 was false. Accordingly, Plaintiff’s fraud in the inducement claim is dismissed with leave to amend. 11 If Plaintiff reasserts fraud claims against Deco West and 777, it must describe the particular acts of 12 each defendant with the particularity required by Rule 9. 13 ii. Fourth Claim- Fraud 14 Plaintiff alleges Defendants “knowingly and willfully manufactured and shipped 15 product not to specification and otherwise shipped product past the agreed upon shipment dates.” 16 Plaintiff claims that Defendants knew their representations were false and “intended to induce 17 Plaintiff to act on these false statements and misrepresentations.” As discussed supra, Plaintiff’s 18 allegations do not meet the particularity required by Fed. R. Civ. Pro. 9(b). Accordingly, Plaintiff’s 19 fraud claim is dismissed with leave to amend. 20 IV. Conclusion 21 22 Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (#11) is GRANTED; 23 IT IS FURTHER ORDERED that Plaintiff file an amended complaint within fourteen (14) 24 days of the entry of this order, failure to do so will result in unamended claims being dismissed with 25 prejudice; 26 /// 5 1 IT IS FURTHER ORDERED that Defendants’ Motion to Strike (#19) is DENIED as moot. 2 DATED this 11th day of September 2012. 3 4 5 6 _____________________________ Kent J. Dawson United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 6
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
