Mazal Group LLC v. Agner Emilio Espana et al

Filing 27

ORDER re: Defendants Darman's and Espana's Motions to Dismiss, or, in the Alternative, Motions for More Definite Statement 10 12 by Judge Ronald S.W. Lew. The Court GRANTS Darman's Motion 10 . The Court GRANTS in part and DENIES in part Espana's Motion 13 as follows: the Court DENIES Espana's Motion as to Plaintiff's breach of contract claim; and the Court GRANTS Espana's Motion as to Plaintiff's unjust enrichment, unfair competition, negligent interference with prospective economic advantage, and fraudulent misrepresentation claims. The Court gives Plaintiff twenty days from the date of this order to amend its Complaint. (jre)

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1 O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 MAZAL GROUP, LLC, a California Limited 13 Liability Company 14 Plaintiff, 15 v. 16 17 AGNER EMILIO ESPANA, an individual; ERAN HENRY 18 DARMAN, an individual; and DOES 1 to 10, 19 20 21 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2:17-cv-05856-RSWL-KS ORDER re: Defendants Darman’s and Espana’s Motions to Dismiss, or, in the Alternative, Motions for More Definite Statement [10, 12] Currently before the Court are Defendant Eran Henry 22 Darman’s (“Darman”) Motion to Dismiss the Complaint, 23 or, in the Alternative, Motion for More Definite 24 Statement (“Darman’s Motion”) [10] and Defendant Agner 25 Emilio Espana’s (“Espana”) Motion to Dismiss, or, in 26 the Alterative, Motion for More Definite Statement 27 (“Espana’s Motion”) [12]. Having reviewed all papers 28 submitted pertaining to these Motions, the Court NOW 1 1 FINDS AND RULES AS FOLLOWS: the Court GRANTS Darman’s 2 Motion; the Court GRANTS in part and DENIES in part 3 Espana’s Motion. 4 I. BACKGROUND 5 A. Factual Background 6 Plaintiff Mazal Group, LLC (“Plaintiff”) is a 7 California limited liability company that manufactures 8 and distributes beauty products. 9 No. 1. Compl. ¶¶ 5, 9, ECF Espana and Darman are individuals residing in 10 Broward County, Florida. Id. ¶ 6. Plaintiff alleges 11 that Defendants are engaged in a business relationship 12 and that each Defendant was an agent of the other at 13 all times relevant to this litigation. Id. Defendants 14 dispute Plaintiff’s agency theory, see, e.g., Def. 15 Darman’s Mot. to Dismiss (“Darman’s Mot.”) 1, 4, ECF 16 No. 10, but the parties do not dispute that Defendants 17 are officers of H & A Marketing and Sales, Inc. (“H & 18 A”), a Florida corporation, see Compl. ¶ 40; Def. 19 Darman’s Reply (“Darman’s Reply”), Ex. A, ECF No. 19. 20 Plaintiff enters into licensing agreements with 21 clients to license the right to sell beauty products. 22 Compl. ¶ 8. On February 3 and 9, 2017, Plaintiff and 23 Espana entered into licensing agreements to sell 24 Plaintiff’s products. Id. ¶ 9. On April 3, 2017, 25 Plaintiff and Espana entered into a licensing agreement 26 to sell Plaintiff’s brands at a trade show. Id. 27 Plaintiff alleges both Defendants were parties to these 28 agreements (the “Licensing Agreements”). 2 Id. ¶¶ 6, 9. 1 The Licensing Agreements contain a provision regarding 2 the proper channels for sale of the licensed products: 3 4 5 6 7 8 9 10 Authorized Sales Channels. Licensee shall only sell, offer for sale, or otherwise advertise MG Products at the MG Licensed Location(s). Sale, offers for sale, or advertisement of MG Products via other sales channels including, but not limited to online, wholesale or distribution channels, or transfer of bulk quantities of Products at reduced cost is strictly prohibited and considered a material breach of this Agreement. This Agreement is only for retail sales direct to end-use consumers at the Licensed Location(s). Licensee is not authorized to sell, list, advertise or otherwise market MG Products online, either directly or indirectly. 11 Id., Ex. A § 1.03. 12 On May 1, 2017, Plaintiff discovered its products 13 were being sold on eBay. Id. ¶ 12. Plaintiff traced 14 the serial and batch numbers of these products back to 15 the products that Plaintiff provided to Espana as part 16 of the Licensing Agreements. Id. After conducting an 17 investigation in July 2017, Plaintiff discovered other 18 eBay and Amazon sellers who were selling Plaintiff’s 19 products with the serial numbers of the products 20 subject to the Licensing Agreements. 21 Id. Plaintiff contacted Defendants regarding the 22 alleged violations of the Licensing Agreements, but 23 Defendants allegedly refused to comply with Plaintiff’s 24 demands to adhere to the Licensing Agreements. Id. ¶¶ 25 14-15. 26 B. Procedural Background 27 Plaintiff filed its Complaint against Defendants on 28 August 8, 2017, alleging (1) breach of contract, (2) 3 1 unjust enrichment, (3) statutory and common law unfair 2 competition and business practices, (4) negligent 3 interference with an economic relation, and (5) 4 fraudulent misrepresentation. 5 See generally id. On October 2, 2017, Darman filed his Motion [10]. 6 On October 16, 2017, Plaintiff filed its Opposition to 7 Darman’s Motion [16]. On October 30, 2017, Darman 8 filed his Reply [19]. 9 On October 3, 2017, Espana filed his Motion [12]. 10 Plaintiff filed its Opposition to Espana’s Motion on 11 November 8, 2017 [21]. 12 Espana did not file a Reply. II. DISCUSSION 13 A. Legal Standard 14 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 15 allows a party to move for dismissal of one or more 16 claims if the pleading fails to state a claim upon 17 which relief can be granted. To survive a motion to 18 dismiss on 12(b)(6) grounds, a complaint must “contain 19 sufficient factual matter, accepted as true, to state a 20 claim to relief that is plausible on its face.” 21 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(internal 22 quotation marks omitted). Dismissal can be based on a 23 “lack of a cognizable legal theory or the absence of 24 sufficient facts alleged under a cognizable legal 25 theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 26 696, 699 (9th Cir. 1990). 27 In ruling on a 12(b)(6) motion, a court may 28 generally consider only allegations contained in the 4 1 pleadings, exhibits attached to the complaint, and 2 matters properly subject to judicial notice. Swartz v. 3 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court 4 must presume all factual allegations of the complaint 5 to be true and draw all reasonable inferences in favor 6 of the non-moving party. Klarfeld v. United States, 7 944 F.2d 583, 585 (9th Cir. 1991). 8 The question presented by a motion to dismiss is 9 not whether the plaintiff will ultimately prevail, but 10 whether the plaintiff has alleged sufficient factual 11 grounds to support a plausible claim to relief, thereby 12 entitling the plaintiff to offer evidence in support of 13 its claim. Iqbal, 556 U.S. at 678; Swierkiewicz v. 14 Sorema N.A., 534 U.S. 506, 511 (2002). While a 15 complaint need not contain detailed factual 16 allegations, a plaintiff must provide more than “labels 17 and conclusions” or “a formulaic recitation of a cause 18 of action’s elements.” Bell Atl. Corp. v. Twombly, 550 19 U.S. 544, 555 (2007)(internal citation omitted). 20 However, “[a] complaint should not be dismissed under 21 Rule 12(b)(6) ‘unless it appears beyond doubt that the 22 plaintiff can prove no set of facts in support of his 23 claim which would entitle him to relief.’” Balistreri, 24 901 F.2d at 699 (quoting Conley v. Gibson, 355 U.S. 41, 25 45-46 (1957)). 26 B. Discussion 27 Plaintiff notes in its Oppositions that Darman and 28 Espana did not seek to meet and confer with Plaintiff 5 1 prior to filing the Motions as Local Rule 7-3 requires.1 2 “When a party fails to comply with Local Rule 7-3, the 3 court can, in its discretion, refuse to consider the 4 motion.” Carmax Auto Superstores Cal. Ltd. Liab. Co. 5 v. Hernandez, 94 F. Supp. 3d 1078, 1087 (C.D. Cal. 6 2015)(internal citations omitted). “Failure to comply 7 with the Local Rules does not automatically require the 8 denial of a party’s motion, however, particularly where 9 the non-moving party has suffered no apparent prejudice 10 as a result of the failure to comply.” Id. (internal 11 citations omitted). 12 Plaintiff does not argue that the Court should deny 13 Darman’s or Espana’s Motions because of their failure 14 to comply with Local Rule 7-3; nor does Plaintiff argue 15 that Darman or Espana’s failure to meet and confer 16 prejudiced Plaintiff. Further, Defendants each appear 17 in this matter pro se and live in Florida. While it is 18 the duty of the parties to comply with the Local Rules, 19 the lack of evidence of prejudice to Plaintiff and 20 Defendants’ out-of-state and pro se status excuse their 21 initial failure to comply with Local Rule 7-3. See 22 Brodie v. Bd. of Trs. of the Cal. State Univ., No. CV 23 12-07690 DDP (AGRx), 2013 U.S. Dist. LEXIS 122059, at 24 25 1 According to Local Rule 7-3, “counsel contemplating the 26 filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the 27 contemplated motion and any potential resolution. The conference shall take place at least seven (7) days prior to the filing of 28 the motion.” 6 1 *2 (C.D. Cal. Aug. 27, 2013)(considering merits of 2 motion when non-moving party failed to show it suffered 3 prejudice from failure to comply with Local Rule 7-3). 4 However, moving forward in this matter, all parties 5 should be on notice that they are required to comply 6 with all of the Court’s Local Rules.2 7 1. 8 The Court now turns to the merits of Defendants’ 9 Motions. Breach of Contract Plaintiff asserts a breach of contract claim 10 premised on the contract Plaintiff and Espana signed. 11 “To plead a breach of contract claim, a plaintiff must 12 allege: (1) the existence of a contract, (2) [its] 13 performance of the contract . . . , (3) defendant’s 14 breach, and (4) resulting damage.” Benton v. Baker 15 Hughes, No. CV 12-07735 MMM (MRWx), 2013 U.S. Dist. 16 LEXIS 94988, at *16-17 (C.D. Cal. June 30, 2013). In 17 its Complaint, Plaintiff alleges that “each Defendant 18 was an agent of the other Defendant and was acting in 19 the course of their agency at all relevant times.” 20 Compl. ¶ 6. To sufficiently plead an agency 21 relationship, a plaintiff must allege facts 22 2 23 late. The Court also notes that Darman filed his Reply six days According to Local Rule 7-10, “A moving party may, not later than fourteen (14) days before the date designated for the 24 25 26 27 28 hearing of the motion, serve and file a reply memorandum.” Reply briefs are optional. In the interests of adjudicating motions on the merits, the Court will consider Darman’s Reply in ruling on his Motion. See Chabot v. Chabot, No. 4:11-CV-217-BLW, 2011 U.S. Dist. LEXIS 131361, at *31 (D. Idaho Nov. 14, 2011). However, as noted, Darman is cautioned that his pro se status will not relieve his duty to comply with the Local Rules. In the future, the Court may not consider a late-filed pleading. 7 1 demonstrating the principal’s control over its agent. 2 Imageline, Inc. v. Inc., No. CV 10-9794 3 PSG (MANx), 2011 U.S. Dist. LEXIS 39828, at *12 (C.D. 4 Cal. Apr. 6, 2011)(citing Sonora Diamond Corp. v. 5 Superior Court, 99 Cal. Rptr. 2d 824 (Ct. App. 2000)). 6 Other than stating that Defendants are agents of 7 each other, the only allegations Plaintiff makes 8 regarding the alleged agency relationship between 9 Darman and Espana is that Defendants “are engaged in a 10 business relationship and partnership, the details of 11 which Plaintiff is entirely ignorant,” Compl. ¶ 6; 12 “Defendants are engaged in business together as 13 verified by the Florida Secretary of State,” id. ¶ 39; 14 and Darman “was in league with” Espana, id. ¶ 40. 15 These allegations alone fail to satisfy the pleading 16 requirements of Rule 8(a). See Hines v. Wells Fargo 17 Home Mortg., Inc., No. 2:14-CV-01386 JAM-KJN, 2015 U.S. 18 Dist. LEXIS 8700, at *10 (E.D. Cal. Jan. 23, 2015)(“The 19 FAC also alleges that West Coast Financial ‘worked 20 closely with’ and ‘in concert with’ Defendant. These 21 statements—even if the Court, as it must, takes them as 22 true—do not establish an agency relationship.”). 23 Consequently, the Court GRANTS Darman’s Motion as to 24 Plaintiff’s breach of contract claim. 25 With regards to Espana’s Motion, Espana contends 26 that Plaintiff has failed to sufficiently plead breach 27 and damages. Def. Espana’s Mot. to Dismiss (“Espana’s 28 Mot.”) 4:19, 5:1-2, ECF No. 13. 8 1 To plead breach, Plaintiff alleges “Defendants 2 repeatedly violated Section 1.03 of the Agreements 3 constituting a material breach . . . by intentionally 4 selling to re-sellers rather than end-users as 5 required.” Compl. ¶ 17. Plaintiff is not required to 6 provide specific evidence of Espana’s breach at the 7 pleading stage. Rather, to plead breach, Plaintiff 8 only needs to allege how Espana breached a relevant 9 term of the Licensing Agreements. See TreeFrog Devs., 10 Inc. v. Seidio, Inc., No. 13cv0158-IEG(KSC), 2013 WL 11 4028096, at *4 (S.D. Cal. Aug. 6, 2013)(internal 12 citations omitted)(denying motion to dismiss breach of 13 contract counterclaim where claimant alleged 14 nonclaimant’s breach of a specific term of the 15 agreement). Plaintiff has done so by alleging how 16 Espana breached Section 1.03 of the Licensing 17 Agreements. 18 Finally, to sufficiently plead damages for a 19 breach of contract claim, a plaintiff must allege 20 appreciable and actual damage rather than nominal 21 damages or speculative harm. In re Facebook Privacy 22 Litig., 791 F. Supp. 2d 705, 717 (N.D. Cal. 2011). 23 Plaintiff pleaded actual damages by alleging (1) that 24 Espana’s breach “did harm to Plaintiff and [its] 25 relations to other vendors and others,” and (2) that 26 Section 8.03 of the Licensing Agreements provided that 27 Espana would pay Plaintiff $100,000 in liquidated 28 damages in the event of breach. 9 Compl. ¶¶ 17-18, Ex. 1 A. See Castro v. Wells Fargo Bank, N.A., No. CV 12- 2 2393 RSWL(AGRx), 2012 WL 2077294, at *1 (C.D. Cal. June 3 6, 2012)(holding plaintiffs sufficiently alleged 4 damages for breach of contract claim by alleging that 5 they suffered “financial and other continuing damages 6 as a result of Defendants’ breach and that Plaintiffs 7 will lose their home if Defendants’ breach continues”). 8 Because Plaintiff has put forward sufficient 9 factual allegations for each element of its breach of 10 contract cause of action against Espana, the Court 11 DENIES Espana’s Motion as to Plaintiff’s breach of 12 contract claim. 13 2. Unjust Enrichment 14 In its Complaint, Plaintiff alleges that Defendants 15 “drew benefit from and enjoyment due to their 16 participation in” the Licensing Agreements and 17 “unjustly retained and enjoyed such benefits while 18 violating the [Licensing Agreements] to Plaintiff’s 19 detriment.” Compl. ¶¶ 21-22. Plaintiff’s unjust 20 enrichment claim is premised solely on the Licensing 21 Agreements between Plaintiff and Espana through which 22 Plaintiff alleges Defendants unjustly obtained a 23 benefit to Plaintiff’s detriment. Because Plaintiff 24 has not sufficiently alleged that Darman was a party to 25 these Licensing Agreements through an agency theory, 26 Plaintiff has failed to plead a claim of unjust 27 enrichment against Darman. Therefore, the Court GRANTS 28 Darman’s Motion as to Plaintiff’s unjust enrichment 10 1 claim. 2 Additionally, in California, “unjust enrichment is 3 an action in quasi-contract, which does not lie when an 4 enforceable, binding agreement exists defining the 5 rights of the parties.” Paracor Fin., Inc. v. Gen. 6 Elec. Capital Corp., 96 F.3d 1151, 1167 (9th Cir. 7 1996). Plaintiff bases its unjust enrichment claim 8 entirely on the Licensing Agreements, binding 9 agreements that define the rights of the parties, and 10 thus, an unjust enrichment claim cannot proceed. 11 See Nestle USA, Inc. v. Crest Foods, Inc., No. LA 12 CV16-07519 JAK (AFMx), 2017 U.S. Dist. LEXIS 136557, at 13 *53 (C.D. Cal. July 28, 2017)(granting motion to 14 dismiss unjust enrichment claim that was based solely 15 on binding contracts). Accordingly, the Court GRANTS 16 Espana’s Motion as to Plaintiff’s unjust enrichment 17 claim. 18 3. 19 Plaintiff’s unfair business practices claim appears Unfair Business Practices 20 to be primarily premised on California’s Unfair 21 Competition Law (“UCL”). The UCL prohibits “unlawful, 22 unfair or fraudulent business practices.” 23 Prof. Code § 17200 et seq. Cal. Bus. & The UCL separately 24 prohibits business practices that are (1) unlawful, (2) 25 unfair, or (3) fraudulent. Chabner v. United of Omaha 26 Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). 27 Under the unlawful prong, “section 17200 ‘borrows’ 28 violations of other laws and treats them as unlawful 11 1 practices that the unfair competition law makes 2 independently actionable.” Id. (quoting Cel-Tech 3 Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 4 539-40 (Cal. 1999)). Importantly, “a common law 5 violation such as breach of contract is insufficient” 6 to support a claim under the unlawful prong of section 7 17200. Shroyer v. New Cingular Wireless Servs., 622 8 F.3d 1035, 1044 (9th Cir. 2010). Because Plaintiff 9 does not go beyond alleging a violation of common law, 10 it fails to state a claim under the lawful prong of 11 section 17200. 12 Under the unfair prong, California Courts of Appeal 13 are split as to the test for what constitutes an unfair 14 business practice. See Drum v. San Fernando Valley Bar 15 Ass’n, 106 Cal. Rptr. 3d 46, 53-54 (Ct. App. 16 2010)(internal citations omitted)(describing three 17 tests courts use when analyzing the unfair prong in 18 actions involving consumers). In its Complaint, 19 Plaintiff does not assert any specific allegations 20 regarding an unfair business practice. Instead, it 21 essentially relies on its breach of contract 22 allegations. See Compl. ¶ 28. Accordingly, Plaintiff 23 has failed to state a claim under the unfair prong of 24 the UCL. See Grant v. Pensco Tr. Co., No. 25 12-cv-06084-WHO, 2014 U.S. Dist. LEXIS 53224, at *19 26 (N.D. Cal. Apr. 15, 2014)(granting motion to dismiss 27 UCL claim when plaintiff did not include any specific 28 allegations regarding the unfair prong and simply 12 1 incorporated breach of contract allegations). 2 Finally, to state a claim under the “fraudulent” 3 prong of the UCL, a plaintiff must plead that the 4 defendant’s allegedly fraudulent business practice is 5 one by which “members of the public are likely to be 6 deceived.” Obesity Research Inst., 165 F. Supp. 3d at 7 953 (quoting Schanll v. Hertz Corp., 93 Cal. Rptr. 2d 8 439, 457 (Ct. App. 2000)). The heightened pleading 9 standard of Federal Rule of Civil Procedure 9(b) 10 applies to a claim under the “fraudulent” prong of the 11 UCL, requiring Plaintiff to plead its fraud claim with 12 particularity. Id. Under the heightened standard of 13 Rule 9(b), Plaintiff must allege “the who, what, when, 14 where, and how” of Espana’s fraudulent conduct. Vess 15 v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 16 2003)(internal citations omitted). Here, the Complaint 17 merely states that “Defendants [have] been, and [are] 18 engaged in ‘unlawful, unfair, or fraudulent business 19 practices’ in violation of §§ 17200.” Compl. ¶ 27. 20 This allegation does not meet the heightened pleading 21 standard that Rule 9(b) requires of fraud claims. 22 Accordingly, Plaintiff has failed to sufficiently 23 plead a claim under any of the three prongs of the UCL, 24 and the Court GRANTS Darman’s and Espana’s Motions as 25 to Plaintiff’s unfair business practices claim. 26 27 28 4. Negligent Interference with Prospective Economic Relations To adequately plead the first element of a 13 1 negligent interference with prospective economic 2 relations claim, a plaintiff “must identify with 3 particularity the relationships or opportunities with 4 which [the d]efendant is alleged to have interfered.” 5 Damabeh v. 7-Eleven, Inc., No. 5:12-CV-1739-LHK, 2013 6 U.S. Dist. LEXIS 66565, at *30-31 (N.D. Cal. May 8, 7 2013). Further, generic “[r]elationships with the 8 ‘general public’ and ‘tourists’ do not satisfy the 9 specificity requirement.” Blue Dolphin Charters, Ltd. 10 v. Knight & Carver Yachtcenter, Inc., No. 11 11-cv-565-L(WVG), 2011 U.S. Dist. LEXIS 127628, at *14 12 (S.D. Cal. Nov. 3, 2011). The only relationships to 13 which Plaintiff refers are with licensees. 14 ¶ 34. See Compl. Plaintiff has not pleaded any facts showing a 15 specific economic relationship with which Defendants 16 interfered. See R Power Biofuels, LLC v. Chemex LLC, 17 No. 16-CV-00716-LHK, 2016 U.S. Dist. LEXIS 156727, at 18 *49 (N.D. Cal. Nov. 11, 2016)(finding allegation that 19 plaintiff had an economic relationship with “major 20 consumers of biodiesel” was not specific enough to 21 survive 12(b)(6) motion). Accordingly, the Court 22 GRANTS Darman’s and Espana’s Motions as to Plaintiff’s 23 negligent interference cause of action. 24 5. 25 Under California law, the elements of a fraudulent Fraudulent Misrepresentation 26 misrepresentation claim include: (1) misrepresentation; 27 (2) knowledge of falsity; (3) intent to defraud; 28 (4) justifiable reliance; and (5) resulting damages. 14 1 Agosta v. Astor, 15 Cal. Rptr. 3d 565, 569 (Ct. App. 2 2004). According to Rule 9(b), a plaintiff must plead 3 each element of a fraud claim with particularity. 4 F.T.C. v. Lights of Am., Inc., 760 F. Supp. 2d 848, 850 5 (C.D. Cal. 2010). This means that “fraud claims must 6 be accompanied by the ‘who, what, when, where, and how’ 7 of the fraudulent conduct charged.’” Id. (quoting 8 Vess, 317 F.3d at 1106). 9 Plaintiff alleges that Defendants deceived 10 Plaintiff into believing that Espana was the sole 11 person engaged in the Licensing Agreements, when in 12 reality, Espana and Darman were working together. 13 Compl. ¶ 40. However, Plaintiff does not identify any 14 specific misrepresentation Defendants made to deceive 15 Plaintiff, or when such a misrepresentation occurred. 16 Further, Plaintiff does not differentiate between 17 Defendants when alleging that Defendants “knowingly and 18 intentionally misrepresented the identity of the 19 licensee” and “their intention to abide by the terms of 20 the AGREEMENTS.” Id. ¶¶ 45-46. Such a failure to 21 allege the specific identities of who made the alleged 22 misrepresentations results in a failure to meet the 23 heightened pleading standard of Rule 9(b). See Swartz, 24 476 F.3d at 764 (“Rule 9(b) does not allow a complaint 25 to merely lump multiple defendants together but 26 require[s] plaintiffs to differentiate their 27 allegations when suing more than one defendant . . . 28 and inform each defendant separately of the allegations 15 1 surrounding his alleged participation in the fraud.” 2 (internal quotations omitted)). 3 While the Complaint may contain a recitation of the 4 elements of a fraud claim, see Compl. ¶¶ 44-48, because 5 Plaintiff fails to provide any details with regards to 6 the alleged fraud, the Court GRANTS Darman’s and 7 Espana’s Motions as to Plaintiff’s fraud claim. See 8 Vess, 317 F.3d at 1106 (finding plaintiff failed to 9 plead its fraud claim with particularity where it 10 alleged a “fraudulent conspiracy” between defendants 11 but did not “provide the particulars of when, where, or 12 how the alleged conspiracy occurred”). 13 6. 14 Rule 15(a)(2) directs courts to “freely give leave Leave to Amend 15 [to amend] when justice so requires.” Leave to amend 16 lies “within the sound discretion of the trial court.” 17 United States v. Webb, 655 F.2d 977, 979 (9th Cir. 18 1981). This policy should “be applied with extreme 19 liberality.” Owens v. Kaiser Found. Health Plan, Inc., 20 244 F.3d 708, 712 (9th Cir. 2001)(quoting Morongo Band 21 of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th 22 Cir. 1990)). 23 Plaintiff has yet to file an amended complaint. 24 is likely that, with the opportunity to amend the 25 Complaint, Plaintiff will be able to cure the 26 deficiencies in the causes of action Plaintiff pleads 27 against Defendants. Accordingly, the Court GRANTS 28 Plaintiff leave to amend its Complaint. 16 It 1 2 III. CONCLUSION Based on the foregoing, the Court GRANTS Darman’s 3 Motion [10]. The Court GRANTS in part and DENIES in 4 part Espana’s Motion [13] as follows: the Court DENIES 5 Espana’s Motion as to Plaintiff’s breach of contract 6 claim; and the Court GRANTS Espana’s Motion as to 7 Plaintiff’s unjust enrichment, unfair competition, 8 negligent interference with prospective economic 9 advantage, and fraudulent misrepresentation claims. 10 The Court gives Plaintiff twenty days from the date 11 of this order to amend its Complaint. 12 IT IS SO ORDERED. 13 14 DATED: December 4, 2017 s/ RONALD S.W. LEW 15 HONORABLE RONALD S.W. LEW Senior U.S. District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 17

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