Global Acquisitions Network et al v. Bank of America Corporation et al
Filing
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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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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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GLOBAL ACQUISITIONS NETWORK,
a Wyoming corporation; SHAWN
CORNEILLE, an individual,
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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.
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Defendants.
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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
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Motion to Dismiss the First Amended Complaint.
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the parties’ submissions, the court adopts the following argument.
Having considered
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I. Background
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The factual allegations in this action are presented at length
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in the court’s Order Granting Defendants’ Motion to Dismiss With
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Leave to Amend Certain Claims (the “Order”), dated February 19,
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2013.
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(“FAC”) are identical, the court will not recite them again.
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On February 19, 2013, the court granted Bank of America
Because the basic allegations of the First Amended Complaint
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Corporation’s Motion to Dismiss as to all claims, giving Plaintiffs
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leave to amend the four fraud-based claims (Claims 5, 6, 7, and 8)
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to meet Rule 9(b)’s particularity requirements and leave to amend
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the conspiracy claim (Claim 9).
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II. Legal Standard
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A complaint may be dismissed for failure to state a claim upon
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which relief can be granted.
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survive a motion to dismiss, a complaint must contain sufficient
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factual matter, accepted as true, to ‘state a claim to relief that
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is plausible on its face.’
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the plaintiff pleads factual content that allows the court to draw
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the reasonable inference that the defendant is liable for the
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misconduct alleged.”
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(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
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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
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allegations in a complaint, that principle “is inapplicable to
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legal conclusions.
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of action, supported by mere conclusory statements, do not
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suffice.”
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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
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complaint and its attached exhibits, documents incorporated into
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the complaint by reference, and matters properly subject to
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judicial notice.
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U.S. 308, 322-23 (2007); Lee v. City of Los Angeles, 250 F.3d 668,
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688 (9th Cir. 2001).
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
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Where a motion to dismiss is granted, a district court should
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provide leave to amend unless it is clear that the complaint could
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not be saved by any amendment.
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Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008) (citation omitted).
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Manzarek v. St. Paul Fire & Marine
III. Discussion
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A. Negligence and Breach of Fiduciary Duty Claims
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Plaintiff concedes that the claims for negligence and breach
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of fiduciary duty were dismissed without leave to amend.
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claims are therefore DISMISSED from the FAC.
These
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B. Fraud-Based Claims
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“A cause of action for fraud requires the plaintiff to prove
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(a) a knowingly false misrepresentation by the defendant, (b) made
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with the intent to deceive or to induce reliance by the plaintiff,
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(c) justifiable reliance by the plaintiff, and (d) resulting
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damages.”
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Nat’l Broad. Co., 71 Cal. App. 4th 1066 (Cal. Ct. App. 1999))
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(internal quotation marks omitted).
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fraud in the inducement of a contract are the same as for actual
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fraud.
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1296 (citing Cal. Civ. Code § 1572; Zinn v. Ex–Cell–O Corp., 148
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Cal. App. 2d 56, 68 (Cal. Ct. App. 1957)).
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misrepresentation is a “species of the tort of deceit.”
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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,
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Negligent
Bily v.
Justifiable
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reliance on the misrepresentation by the plaintiff is a key element
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of a cause of action for negligent misrepresentation.
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Id. at 413.
BANA argues that Plaintiffs’ fraud-based claims in the FAC
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should be dismissed because, as in the original Complaint,
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Plaintiffs fail to allege justifiable reliance and fail to plead
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their fraud claims with particularity.
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1. Justifiable Reliance
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The court’s Order indicated that it was implausible that
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Plaintiffs could have relied on the Bank Officer’s statements when
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they chose to enter into the loan agreement because those
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statements were made on February 9 and the agreement was dated
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February 1.
BANA argues that the FAC does not correct this
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deficiency.
The FAC does include as an exhibit email
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correspondence concerning the agreement suggesting that the
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agreement was signed later in February and backdated to February 1.
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(FAC Exh. 5.)
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date upon which the agreement was in fact signed, or that the
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parties agreed to backdate the agreement.
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that after the February 9 call, “Plaintiffs went ahead with
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concluding negotiations for the NRL, and entered into an agreement
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regarding the NRL with Defendant OCP.
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effective as of February 1, 2012.”
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without alleging specifically that the agreement was backdated.
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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
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that the agreement was backdated, BANA also argues that any
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reliance was not justifiable.
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because [Plaintiffs] failed to do adequate due diligence does not
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make the Bank Officer’s statements fraudulent, and it makes their
The court’s Order stated: “simply
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alleged reliance on those statements less justifiable.”
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19-20.)
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they did due diligence with respect to the Oriana Defendants, and
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that this due diligence led them to “reasonably believ[e] the
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representations made by” the Bank officer.
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(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
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the agreement was backdated, Plaintiffs have still not alleged
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facts to show that any reliance was justifiable.
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indicated that in the original Complaint Plaintiffs
The court’s Order
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d[id] not allege what kind of evidence the Bank Officer
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relied on in making his statements, nor d[id] they allege
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that they requested any supporting documentation from the
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Bank Officer or any additional information about his
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ability to comment on the Oriana Defendants’ financial
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resources.
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parties who owned complex securities and were represented
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by counsel in their transaction with Oriana.
Plaintiffs are purportedly sophisticated
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(Order at 19.)
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any such facts, nor have they alleged any other facts showing that
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reliance was justifiable.
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diligence with respect to the Oriana Defendants, but this does not
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amount to due diligence with respect to the Bank Officer and his
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representations, particularly when the representations that Oriana
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Defendants had sufficient financial resources were critical to
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Plaintiffs’ decision to enter into the agreement.
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diligence in such a situation would include requesting proof of the
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Oriana Defendants’ financial resources or other factual bases upon
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which the Bank Officer relied for his representations.
Likewise, in the FAC, Plaintiffs have not alleged
They allege only that they did due
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Ordinarily due
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2. Pleading with Particularity
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The court’s Order dismissed Plaintiffs’ fraud-based claims for
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the additional reason that Plaintiffs failed to plead those claims
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with the level of particularity required by Rule 9(b).
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20.)
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later time the Oriana Defendants did not disburse the loan funds
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and stated that they did not have the capacity to do so does not
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mean that the Bank Officer’s statements about the Oriana
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Defendants’ financial resources were untrue at that earlier time. .
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. . [Plaintiffs] allege no facts to show that the Bank Officer had
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access to other information at the time of the phone call that
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would have contradicted his assessment of the Oriana Defendants’
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financial resources.”
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(Order at
Specifically, the court indicated that “[m]erely because at a
(Id. at 20-21.)
Plaintiffs cite ¶¶ 22-44 and ¶¶ 115-51 of the FAC to
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demonstrate that they have now pleaded the fraud claims with
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particularity.
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intended to cure the above-noted deficiency is ¶ 131, where
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Plaintiffs allege that “[w]hen BOA Bank Officer/John Doe 1 made the
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representations and statements alleged above, he knew these
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representations to be false.”
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is not sufficiently particular to meet the pleading standard for
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fraud claims; indeed, it is a bare allegation with no particularity
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at all.
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to cure this deficiency.
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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
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complaint, Plaintiffs would need to present phone records
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establishing that the alleged call took place.
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(“[a]ny amended pleading must attach and incorporate any telephone
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(Order at 22
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records allegedly evidencing the telephone call in question.”).)
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Plaintiffs have failed to do so, despite the four months that have
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elapsed since the court’s Order.
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For these reasons, and because any amendment would be futile,
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the court DISMISSES the fraud-based claims without leave to amend.
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C. Conspiracy Claim
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As discussed in the court’s Order, a plaintiff must “clearly
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allege specific action on the part of each defendant that
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corresponds to the elements of a conspiracy . . . . [The] plaintiff
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cannot indiscriminately allege that conspiracies existed between
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and among all defendants.”
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Terarecon, Inc., 260 F. Supp. 2d 941, 948 (N.D. Cal. 2003).
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court’s Order, the court indicated that the conspiracy claim
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against Bank of America in the original Complaint was deficient
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because “[a]lthough the Bank of America Bank Officer is listed as a
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defendant under the heading for the conspiracy claim, the
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allegations do not specifically mention the Bank Officer’s actions,
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and BAC is entirely absent from this claim.
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fail to allege any specific action on the part of any Bank of
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America defendants with respect to the alleged conspiracy.”
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at 23.)
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not named at all in the conspiracy allegations.
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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
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fails because BANA does not owe Plaintiffs any underlying duty, and
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a conspiracy can “only be formed by parties who are already under a
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duty to the plaintiff, the breach of which will support a cause of
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action against them - individually and not as conspirators - in
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tort.”
Chavers v. Gatke Corp., 107 Cal. App. 4th 606, 614
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(2003)(emphasis in original).
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Plaintiffs have not pleaded their fraud-based claims with
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sufficient particularity and dismissed those claims without leave
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to amend, the court also finds that Plaintiffs have not stated a
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claim for any duty owed by BANA to Plaintiffs and DISMISSES the
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conspiracy claim without leave to amend.
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IV. Conclusion
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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.
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IT IS SO ORDERED.
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Dated: June 7, 2013
DEAN D. PREGERSON
United States District Judge
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