Eshagh v. Terminix International

Filing 27

MEMORANDUM, DECISION RE: Motion to Dismiss 10 , signed by Judge Oliver W. Wanger on 7/25/2011. (Kusamura, W)

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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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1:11-cv-00222-OWW-DLB

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EDVARD ESHAGH,

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MEMORANDUM DECISION RE: MOTION
TO DISMISS (Doc. 10)

Plaintiff,

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v.

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THE TERMINIX INTERNATIONAL
CO., L.P., et al.,

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Defendants.

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I. INTRODUCTION.

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Edvard Eshagh (“Plaintiff”) proceeds with an action against

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Terminix International Company, L.P. and Terminix International,

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Inc., (“Defendants”) pursuant to 28 U.S.C. § 1332.1
On

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April

7,

2010, Defendants

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Plaintiff’s complaint.

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June 24, 2011.

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2011.

(Doc. 18).

a

motion

to

dismiss

Plaintiff filed opposition on

Defendants filed a reply on July 5,

(Doc. 23).
II. FACTUAL BACKGROUND.

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Defendants provide termite prevention services.

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(Doc. 10).

filed

From 1999 to

the present, Plaintiff has contracted with Defendants for termite

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Plaintiff seeks to proceed as a class representative pursuant to Fed. R. Civ.
P. 23. Because the complaint is subject to dismissal, the court does not reach
the propriety of Plaintiff’s attempt to assert his claims in a class action suit
at this time.

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prevention services at his residence under a Control Service

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Agreement (“CSA”).

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Pursuant to Defendants’ internal policy, certain “Minimum

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Basic Requirements” must be satisfied in order for a property to

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qualify for

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Plaintiff’s property has been in violation of two of the Minimum

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Basic

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“uncorrected stucco hazard” within the meaning of Defendants’

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internal policies.

a

“Terminix

Requirements.

Guarantee.”

First,

At

all

Plaintiff’s

times

property

relevant,

has

an

Second, Plaintiff’s property is incapable of

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receiving an “entire structure treatment” due to various attributes

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of the property.

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Terminix

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represented that they had performed “all necessary services” within

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the meaning of the CSA.

Despite these deficiencies, Defendants issued

Guarantees

for

Plaintiff’s

property

and

falsely

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Defendants did not disclose to Plaintiff that they were not

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performing all “necessary services” required by Defendants internal

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procedures.

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options for addressing a stucco condition such as Plaintiff’s: (1)

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lower the exterior grade to expose the bottom edge of the stucco

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and create three inches clearance of exposed foundation; (2) seal

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off or recommend sealing off the stucco; or (3) cut stucco back

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from

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Defendants did not address the stucco condition on Plaintiff’s

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property as required by Defendants’ policies, leaving Plaintiff’s

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property susceptible to termite damage.

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ground

Defendants internal policies set forth the following

contact

for

proper

inspection

and

treatment.

In February 2008, Plaintiff discovered a termite infestation

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at his property when a section of flooring gave way.

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another area of floor gave way in a different area of Plaintiff’s
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In 2009,

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property.

The State of California inspected Plaintiff’s property

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in 2010 and concluded that Terminix had not adequately treated

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Plaintiff’s property for termite prevention.
III. DISCUSSION.

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A. Statute of Limitations

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1. Breach of Contract Cause of Action

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Plaintiff’s fourth cause of action is for breach of contract.

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Plaintiff alleges that Defendants breached the terms of the CSA by

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failing to perform “all necessary services” within the meaning of

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the CSA. Plaintiff complains that Defendants did not correct the

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stucco hazard and did not provide an “Entire Structure Treatment.”

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(Comp. at 39).

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Under California law, the ordinary statute of limitations for

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breach of a written contract is four years. Cal. Civ. Pro. § 337;

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e.g., Vu v. Prudential Property & Casualty Ins. Co., 26 Cal. 4th

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1142, 1148 (Cal. 2001).

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cause of action accrues. Cal. Civ. Pro. § 312; Fox v. Ethicon

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Endo-Surgery,

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speaking, a cause of action accrues at ‘the time when the cause of

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action is complete with all of its elements.’” Id.

Inc.,

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The limitations period commences when the

Cal.4th

797,

806

(2005).

“Generally

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The discovery rule “postpones accrual of a cause of action

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until the plaintiff discovers, or has reason to discover, the cause

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of action.”

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App. 4th 1308, 1318 (Cal. Ct. App. 2007) (citation omitted).

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Delayed

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relationship between the parties is one of special trust.

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Where the discovery rule applies, the limitations period does not

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accrue

E-Fab, Inc. v. Accountants, Inc. Services, 153 Cal.

accrual

until

of

the

a

cause

aggrieved

of

action

party
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has

may

result

notice

of

where

the

the
Id.

facts

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constituting the injury.

Id.

A

person with actual notice of

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circumstances sufficient to put a prudent person upon inquiry is

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deemed to have constructive notice of all facts that a reasonable

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inquiry would disclose.

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the limitations period, inquiry notice is triggered by suspicion.

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Id.

Id. at 1319.

For purposes of accrual of

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“A plaintiff whose complaint shows on its face that his claim

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would be barred without the benefit of the discovery rule must

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specifically plead facts to show (1) the time and manner of

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discovery and (2) the inability to have made earlier discovery

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despite reasonable diligence.”

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Inc., 74 Cal. App. 4th 151, 160 (Cal. Ct. App. 1999) partially

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superceded on other grounds as stated in Grisham v. Philip Morris

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U.S.A., Inc., 40 Cal. 4th 623, 637 n.8 (Cal. Ct. App. 2007).

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Application of the discovery rule ordinarily presents questions of

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fact.

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810).

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McKelvey v. Boeing North American,

E-Fab, 153 Cal. App. 4th at 1320 (citing Fox, 35 Cal. 4th at

Defendants

contend

that

the

statute

of

limitations

for

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Plaintiff’s breach of contract claims began to run when Plaintiff

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first had reason to know that the stucco siding on his property

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provided a possible point of entry for termites.

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complaint is an Inspection Report Defendant provided to Plaintiff

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on November 30, 2006.

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Attached to the

The November 2006 report provides:

The stucco siding extends beneath the outside grade level
creating/providing possible points of entry for wood
destroying organisms behind the stucco into the
structure. No evidence of active infestation/infection
was noted at the time of this inspection as a result of
this condition. Periodic inspection is provided.

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Defendants motion does not establish, as a matter of law, that the
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November 2006 report was sufficient to put Plaintiff on notice of

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his claim for breach of contract.

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of contract claim is that Defendants did not perform “necessary

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services.”

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Defendants were not performing necessary services related to the

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stucco issue; to the contrary, the November 2006 report implicitly

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represents that the only action necessary with respect to the

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stucco siding was periodic inspection.

The

November

2006

The crux of Plaintiff’s breach

report

does

not

suggest

that

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Defendants contend, in the alternative, that the statute of

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limitations on Plaintiff’s breach of contract claim began to run on

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the date on which Plaintiff first learned there was termite damage

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to his property.

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Inspection Report which provides:

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Attached to the complaint is a February 1, 2008

Evidence of subterranean termites at/in subarea.
No
active infestation was noted at this time. This company
has previously treated this structure for the control
and/or eradication of this wood destroying organism. No
additional treatment is recommended at this time.
Periodic inspection is advised.

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Assuming arguendo that the statute of limitations began to run on

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February 1, 2008, Plaintiff’s breach of contract claim is timely.

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Plaintiff filed his complaint on February 8, 2011, less than four

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years from the date of the February 2008 Inspection Report.2

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Cal. Civ. Pro. § 337.

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See

Defendants also contend that an inspection report from March
2002 indicated termite damage at Plaintiff’s property.

Defendants

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Defendants’ motion erroneously contends that the two-year statute of
limitations set forth in California Code of Civil Procedure section 339 applies
to Plaintiff’s contract claims.
Section 339 applies to “[a]n action upon a
contract...not founded upon an instrument of writing.”
Cal. Civ. Pro. § 339
(2011) (emphasis added). Plaintiff’s counsel failed to identify this error.

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attach

what

appears

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Plaintiffs’ property, however, the March 2002 report submitted by

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Defendants is not properly authenticated and is not a document

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incorporated

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Accordingly, Defendants motion to dismiss Plaintiff’s contract

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claims as time barred is DENIED, without prejudice.

into

or

to

be

a

March

referenced

by

2002

report

Plaintiff’s

concerning

complaint.

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2.

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California’s Unfair Competition Law (“UCL”) sets forth a

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UCL and FAL Claims

four-year statute of limitations period.

Cal. Bus. & Prof. Code §

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17208; Cortez v. Purolator Air Filtration Products Co., 23 Cal. 4th

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163, 179 (Cal. 2000).

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claims is an open question under California law.

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Guardian Life Ins. Co. of America, 171 Cal. App. 4th 912, 920 (Cal.

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Ct. App. 2009); but see Karl Storz Endoscopy-Am., Inc. v. Surgical

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Techs., Inc., 285 F.3d 848, 857 (9th Cir. 2002) (“claims under

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California Business and Professions Code § 17200 et seq. are

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subject to a four-year statute of limitations which began to run on

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the

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discovery”).

date

the

cause

Whether the discovery rule applies to UCL

of

action

accrued,

not

on

Broberg v. The

the

date

of

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Claims under California’s False Advertising Law (“FAL”) are

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subject to either the three-year statute of limitations provided by

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California Code of Civil Procedure 338(a) or the four-year statute

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of limitations applicable to UCL claims. See McCready v. Am. Honda

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Motor Co., 2006 U.S. Dist. LEXIS 44137 * 9 (N.D. Cal. 2006) (noting

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open question); but see Streamcast Networks, Inc. v. Skype Techs.,

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S.A., 2006 U.S. Dist. LEXIS 97393 * 26 n.8 (C.D. Cal. 2006)

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(applying section 338 without analysis).

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For reasons discussed below, Plaintiff’s UCL and FAL claims

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are not pled with the specificity required to satisfy federal

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pleading standards; accordingly, it is unnecessary to reach the

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statute of limitations issue governing these claims.

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motion to dismiss Plaintiff’s UCL and FAL claims as time barred is

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DENIED, without prejudice.

Defendants’

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3.

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Plaintiff advances two tort claims: (1) breach of professional

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Tort Claims

duty; and (2) assumpsit.3

The two-year statute of limitations set

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forth in California Code of Civil Procedure section 339 applies to

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claims of professional negligence that are not specifically covered

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under discrete statutes.

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Eng'rs & Geologists, 89 Cal. App. 4th 638, 642-43 (Cal. Ct. App.

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2001).

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of limitations set forth in section 339.

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Murphy’s Flat Fluming, 22 Cal. 621, 630 (Cal. 1863) (holding that

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action in assumpsit is “an action upon a contract, obligation, or

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liability, not founded on an instrument in writing”); Cal. Code.

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Civ. Pro. 339.

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The

See Roger E. Smith v. Shn Consulting

Assumpsit actions are also subject to the two-year statute

complaint

alleges

Plaintiff

See Unions Water Co. v.

discovered

a

termite

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infestation at his property in February 2008 when a portion of the

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floor collapsed due to termite damage; the statute of limitations

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began to run on Plaintiff’s tort claims at that time.

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person is put on inquiry notice that termite prevention services

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have not been adequately performed when they learn their property

A reasonable

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Assumpsit, a Latin word meaning “he promised,” is an ancient quasi-contractual
theory of recovery developed in the King’s and Queen’s courts of England. Jogani
v. Superior Court, 165 Cal. App. 4th 901, 905-906 (Cal. Ct. App. 2008).
It
appears Plaintiff’s assumpsit claim is in fact an unjust enrichment claim.

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is collapsing due to termite damage.

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Defendants “lulled Plaitnif to believe it was simply an example of

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a vaccine not working 100%” is unavailing; a reasonable person with

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knowledge of the objective facts Plaintiff alleges would have, at

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a minimum, conducted an investigation that would have revealed the

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basis for Plaintiff’s tort causes of action.

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claims were not filed within two years of February 2008 as required

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by section 339.

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causes

of

action

Plaintiff’s allegation that

Plaintiff’s tort

Defendants motion to dismiss Plaintiff’s tort
is

GRANTED.

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tort

claims

are

DISMISSED, with prejudice.

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Plaintiff’s

B. Pleading Deficiencies

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1. Plaintiff’s UCL and False Advertising Claims
Plaintiff’s UCL claims are predicated, at least in part, on

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allegations sounding in fraud.

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Defendants engaged in “fraudulent...business practices;” “never

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intended to...fulfill its promise...to provide termite prevention

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services;” and employed “false” advertisements.

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Plaitniff’s UCL and FAL claims are subject to Federal Rule of Civil

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Procedure 9(b). E.g., Kearns v. Ford Motor Co., 567 F.3d 1120, 1125

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(9th Cir. 2009) (Rule 9(b) applies to all claims that "sound in

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fraud" or are "grounded in fraud").

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Inter alia, Plaintiff alleges

(Comp. at 36-37).

Rule 9(b) imposes an elevated pleading standard with respect

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to fraud claims.

To comply with Rule 9(b), allegations of fraud

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must be specific enough to give defendants notice of the particular

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misconduct which is alleged to constitute the fraud.

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KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (internal quotation

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marks omitted).

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place, and specific content of the false representations as well as

Swartz v.

Allegations of fraud must include the "time,

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the identities of the parties to the misrepresentations." Id.

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(internal quotation marks omitted). The "[a]verments of fraud must

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be accompanied by the who, what, when, where, and how of the

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misconduct charged." Kearns 567 F.3d at 1124. (internal quotation

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marks omitted). A plaintiff alleging fraud "must set forth more

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than the neutral facts necessary to identify the transaction. The

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plaintiff must set forth what is false or misleading about a

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statement, and why it is false."

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F.3d 1097, 1106 (9th Cir. 2003).

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The

complaint

does

not

Vess v. Ciba-Geigy Corp. USA, 317

allege

the

relevant

facts

with

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sufficient particularity to satisfy Rule 9.

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complaint

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advertising materials Plaintiff relied on, does not identify any

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individuals alleged to have made fraudulent statements, and does

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not clearly establish when the misleading statements Plaintiff

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allegedly relied on were made.

does

not

allege

what

specific

Inter alia, the
representations

or

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In his opposition, Plaintiff argues that the information

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needed to satisfy Rule 9 – such as the identify of person making

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representations and the dates on which such representations were

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made– can be gleaned from the twenty exhibits Plaintiff attached to

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his complaint.

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into the factual allegations underlying Plaintiff’s UCL and FAL

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claims.

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voluminous exhibits to a complaint and expecting Defendants, and

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the court, to comb through approximately one-hundred pages of

The complaint does not incorporate these documents

Plaintiff cannot satisfy Rule 9 by simply attaching

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documents in order to piece together a cognizable claim.4

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Plaintiff’s UCL and FAL claims are DISMISSED, without prejudice.

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2. Tort Claims

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Defendants

argument

that

the

economic

loss

rule

bars

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Plaintiff’s tort causes of action is moot in light of the statute

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of limitations holding.

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3. Contract Claims

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Defendants contend that the contract underlying Plaintiff’s

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claim for breach of contract cannot be ascertained from the face of

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the complaint.

Although the complaint is fairly ambiguous, it is

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sufficient to provide fair notice that Plaintiff’s claim is for

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breach of the document attached to the complaint as Exhibit I and

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the annual extensions thereto.

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Subterranean Termite Plan Agreement” and is signed by Defendants’

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employee and Plaintiff.

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into the complaint and is described as the operative agreement

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throughout the complaint.

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allegations of the complaint, the terms reflected in Exhibit I, and

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the references

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complaint is sufficient to provide the notice required by Rule 8.

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However, to the extent Plaintiff’s seeks to assert claims for

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breach arising out of contracts other than Exhibit I, such claims

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are not properly pled, and any such claims are DISMISSED, without

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prejudice.

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///

to

Exhibit I is entitled “California

Exhibit I is incorporated by reference

Exhibit

(Comp. at 16, 29).

I

contained in

the

In light of the

complaint,

the

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This is especially so where, as here, a significant amount of superfluous
evidentiary matter is attached, and where there are twenty exhibits appended to
the complaint that are docketed on the CM/ECF system without titles.

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Defendants also contend that Plaintiff’s “property damage

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claim should be dismissed” pursuant to the terms of the parties’

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agreement.

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Defendants from liability for property damage.

Plaintiff rejoins

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that the

by

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unconscionable.

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recover for damage to his property under his breach of contract

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claim, the property damage exclusion Defendants invoke does not

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provide a basis to dismiss the breach of contract cause of action

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asserted in the complaint, which seeks to recover “damages in an a

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amount to be determined at trial.”

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attempt to limit the amount of contract damages Plaintiff may

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recover can be addressed in the context of a motion for summary

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judgment or in a motion in limine.

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C. Motion to Strike Plaintiff’s Request for Injunctive Relief

Defendants note that the contract purports to exempt

provision

of

the

contract

invoked

Defendants is

Even assuming arguendo that Plaintiff cannot

(Comp. At 40).

Defendants’

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Defendants’ seek to strike Plaintiff’s prayer for injunctive

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relief because Plaintiff has not alleged he has an inadequate

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remedy at law.5 As the complaint is subject to dismissal for the

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reasons stated above, Defendants’ motion to strike is moot.
ORDER

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For the reasons stated, IT IS ORDERED:

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1) Plaintiff’s UCL and FAL claims are DISMISSED, without

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prejudice;

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2) Plaintiff’s breach of professional duty and assumpsit

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claims are DISMISSED as time barred, with prejudice;

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Defendants’ argument is misplaced, as injunctive relief is available under the
UCL. E.g., Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144
(Cal. 2003).

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3) Plaintiff shall file an amended complaint within 20 days

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following electronic service of this memorandum decision;

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Defendants shall filed responsive pleading within 15 days

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following service of an amended complaint; and

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4) Defendants shall file a form of order consistent with this

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memorandum decision within five (5) days of electronic service

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of this decision.

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IT IS SO ORDERED.

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Dated:
hkh80h

July 25, 2011

/s/ Oliver W. Wanger
UNITED STATES DISTRICT JUDGE

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