J D Factors LLC v. Reddy Ice Holdings Inc

Filing 25

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS by Judge Dean D. Pregerson. For the reasons stated above, Reddy's Motion to Dismiss is GRANTED. Plaintiff's First Amended Complaint is DISMISSED, with leave to amend. Any amended complaint shall be filed within ten days of the date of this Order. Plaintiffs counsel is cautioned that any further material misquotations may result in sanctions. (lom)

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NO JS-6

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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J D FACTORS, LLC, a
California limited liability
company,

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Plaintiff,

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v.
REDDY ICE HOLDINGS INC., a
Delaware corporation,

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Defendant.
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___________________________

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Case No. CV 14-06709 DDP (FFMx)
ORDER GRANTING DEFENDANT’S MOTION
TO DISMISS

[Dkt. No. 20]

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Presently before the court is Defendant Reddy Ice Holdings

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Inc. (“Reddy”)’s Motion to Dismiss.

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submissions of the parties, the court grants the motion and adopts

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the following order.

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I.

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Having considered the

Background
Plaintiff is in the business of “factoring.”

(First Amended

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Complaint (“FAC”) ¶ 11.)

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in exchange for its clients’ accounts.

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notifies its clients’ account debtors that all payments owed to the

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client should instead be paid directly to Plaintiff.

Plaintiff advances funds to its clients
(Id.)

Plaintiff then

(Id.)

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On September 15, 2010, Plaintiff purchased accounts from a

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client, Harry Group, Inc. (“Harry Group”).

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Defendant Reddy was one of Harry Group’s clients and account

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debtors.

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Reddy in January 2011.

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Plaintiff between January 2011 and April 2014.

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The FAC is somewhat unclear, in that it alleges that Plaintiff

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received payment on invoices issued to Reddy by Reddy.

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17.)

(Id. ¶ 14.)

(Compl. ¶ 12.)

Plaintiff sent notice of the assignment to
(Id. ¶ 15.)

Reddy made payments to
(Compl. ¶ 27.)

(Compl. ¶

It appears, however, that the FAC refers to invoices paid by

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Reddy and issued by Harry Group.

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FAC alleges that Reddy stopped making payments to Plaintiff, and

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has not yet paid on invoices for April through June 2014.

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Plaintiff therefore filed the instant complaint, bringing causes of

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action for breach of contract, account stated, and services

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rendered.

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II.

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(FAC, Ex. D).

In any event, the

(Id.)

Reddy now moves to dismiss.

Legal Standard
A complaint will survive a motion to dismiss when it contains

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“sufficient factual matter, accepted as true, to state a claim to

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relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

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662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

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570 (2007)).

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“accept as true all allegations of material fact and must construe

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those facts in the light most favorable to the plaintiff.” Resnick

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v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).

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need not include “detailed factual allegations,” it must offer

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“more than an unadorned, the-defendant-unlawfully-harmed-me

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accusation.”

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allegations that are no more than a statement of a legal conclusion

When considering a Rule 12(b)(6) motion, a court must

Iqbal, 556 U.S. at 678.

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Although a complaint

Conclusory allegations or

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“are not entitled to the assumption of truth.” Id. at 679.

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other words, a pleading that merely offers “labels and

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conclusions,” a “formulaic recitation of the elements,” or “naked

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assertions” will not be sufficient to state a claim upon which

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relief can be granted.

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quotation marks omitted).

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In

Id. at 678 (citations and internal

“When there are well-pleaded factual allegations, a court should

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assume their veracity and then determine whether they plausibly

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give rise to an entitlement of relief.” Id. at 679.

Plaintiffs

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must allege “plausible grounds to infer” that their claims rise

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“above the speculative level.”

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“Determining whether a complaint states a plausible claim for

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relief” is a “context-specific task that requires the reviewing

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court to draw on its judicial experience and common sense.”

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556 U.S. at 679.

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III. Discussion

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Twombly, 550 U.S. at 555.

Iqbal,

As an initial matter, the court notes that Plaintiff appears

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to misapprehend the proper legal standard, citing exclusively to

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pre-Iqbal and non-binding authorities.

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analyze the viability and plausibility of each of Plaintiff’s

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claims, in turn.

The court proceeds to

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A.

Breach of Contract

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The elements of a breach of contract claim are (1) the

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existence of a contract, (2) performance or excuse for

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nonperformance, (3) defendant’s breach, and (4) damages.

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West Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011).

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Oasis

Notably, Plaintiff’s breach of contract claim does not allege
that Reddy breached a contract with Harry Group, nor that Plaintiff
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stands in Harry Group’s shoes.

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v. Nery’s USA, Inc., No. 11-cv-1589-JM, 2013 WL 2895002 at *9 (S.D.

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Cal. July 26, 2013) (“An assignee under a contract ‘stands in the

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shoes’ of an assignor with rights and remedies subject to the

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defenses that may be asserted against the assignee by the

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obligor.”).

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makes some reference to standing in Harry Group’s shoes, the FAC

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does not.

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Reddy of Harry Group’s assignment, a contract was formed directly

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While Plaintiff’s opposition to the instant motion

Instead, Plaintiff’s FAC alleges that upon notifying

between Plaintiff and Reddy.

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See Genesis Merchant Partners, LP

(FAC ¶ 24.)

“An essential element of any contract is the consent of the

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parties, or mutual assent.”

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270 (2001).

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to any agreement with Plaintiff.

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contend that because Harry Group’s accounts were transferred

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pursuant to Article 9 of the Uniform Commercial Code, a contract

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was automatically formed between Plaintiff and Reddy, regardless of

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consent.

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however, does not support that proposition.

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court in ImagePoint, Inc. v. JPMorgan Chase Bank, N.A., 27

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F.Supp.3d 494, 505 (S.D.N.Y. 2014) stated that the obligation at

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issue in that case was not created by Article 9 of the UCC, but

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rather by a separate, direct agreement between the parties.

Donovan v. RRL Corp., 26 Cal.4th 261,

Plaintiff does not dispute that Reddy never assented

(Opp. At 7-9.)

Rather, Plaintiff appears to

The only case cited by Plaintiff,
To the contrary, the

Because Plaintiff has failed to allege the existence of a

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contract between itself and Reddy, the First Cause of Action is

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dismissed.

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///

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///
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B.

Account Stated

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The elements of claim for an account stated are “(1) previous

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transactions between the parties establishing the relationship of

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debtor and creditor; (2) an agreement between the parties, express

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or implied, on the amount due from the debtor to the creditor; (3)

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a promise by the debtor, express or implied, to pay the amount

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due.”

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Zinn v. Fred R. Bright Co., 271 Cal.App.2d 597, 600 (1969).
It has not escaped the court’s notice that, in reciting the

elements of the claim, Plaintiff’s opposition misquotes Truestone,

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Inc. v. Simi West Industrial Park II, 163 Cal. App. 3d 715, 725

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(1984).

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agreement between the parties regarding the amount owed.

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10.)

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this court will not tolerate such practices.

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Plaintiff’s misquotation omits the crucial element of an
(Opp. at

Whether a product of carelessness or deliberate obfuscation,

Regardless, the FAC fails to allege facts establishing the

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elements of an account stated claim.

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does conclusorily assert that the elements are adequately alleged,

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the Second Claim for Relief makes no reference to any agreement

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between the parties, let alone an agreement regarding a specific

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amount due.

While Plaintiff’s opposition

The claim is dismissed.

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C.

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Unlike Plaintiff’s breach of contract claim, the services

Services Rendered

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rendered claim does appear to allege that Plaintiff is standing in

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Harry Group’s shoes.

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performed services for Reddy and that Reddy has refused to pay for

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services in the amount of $157,525.49.

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FAC does not allege, however, that Reddy ever requested any

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services from Harry Group.

(FAC ¶ 38.)

The FAC alleges that Harry Group

(FAC ¶¶ 37, 40-41.)

The

See Judicial Council of California
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Civil Jury Instruction 371 (listing elements of common count for

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services rendered claim, including a request by defendant that a

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plaintiff perform services for the defendant’s benefit).

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Accordingly, the Third Cause of Action is dismissed.

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IV.

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Conclusion
For the reasons stated above, Reddy’s Motion to Dismiss is

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GRANTED.

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leave to amend.

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days of the date of this Order.

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Plaintiff’s First Amended Complaint is DISMISSED, with
Any amended complaint shall be filed within ten
Plaintiff’s counsel is cautioned

that any further material misquotations may result in sanctions.

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IT IS SO ORDERED.

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Dated: February 12, 2015
DEAN D. PREGERSON
United States District Judge

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