Pacific Northwest Inc. v. Randhawa et al
Filing
143
ORDER signed by Judge Morrison C. England, Jr. on 01/18/12 ORDERING that defendant's 110 Motion to Dismiss Second Cause of Action for Fraud is DENIED. (Benson, A.)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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PARADISE NORTHWEST INC.,
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No. 2:09-cv-02027-MCE-KJN
Plaintiff,
MEMORANDUM AND ORDER
v.
SATVINDER PALSINGH RANDHAWA,
LORNA MARIE RANDHAWA dba GREAT
EASTERN EXPORT & TRADING
COMPANY,
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Defendants and ThirdParty Plaintiffs,
AIR DIFFUSION SYSTEMS, A JOHN
HINDE COMPANY,
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Third-Party Defendant.
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----oo0oo----
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Through this action, Paradise Northwest Inc. (“Plaintiff”)
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seeks redress from Satvinder Palsingh Randhawa and Lorna Marie
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Randhawa doing business as Great Eastern Export & Trading Company
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(“Defendants”) for Defendants’ alleged fraud and breach of
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contract in connection with Plaintiff’s provision of engineering
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goods and services to Defendants.
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Jurisdiction is premised on diversity of citizenship pursuant to
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28 U.S.C. § 1332.
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Motion to Dismiss Plaintiff’s Second Cause of Action, for fraud
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under California law, on grounds that said cause of action fails
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to state a cause of action on which relief can be granted and
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consequently must be dismissed pursuant to Federal Rule of Civil
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Procedure 12(b)(6).
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Motion to Dismiss will be denied.1
Presently before the Court is Defendants’
For the reasons set below, Defendants’
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BACKGROUND2
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The instant dispute arises out of a project to re-oxygenate
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Lake Nainital, a body of water located in Utterakhand, India.
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According to Plaintiff’s Second Amended Complaint (“SAC”),
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Defendants formed an oral contract with Plaintiff, pursuant to
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which Plaintiff agreed to provide certain ozone equipment
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hydrology-related engineering services in connection with the
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project.
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two other payments that totaled $30,843.00, and represented that
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the Indian Government would ultimately be paying for Plaintiff’s
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services and that Defendants would forward monies so received to
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Plaintiff to cover the balance of its invoices.
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///
Defendants did make a down payment for equipment and
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Because oral argument was not of material assistance, the
Court orders this matter submitted on the briefs. E.D. Cal.
Local Rule 230(g).
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The factual assertions in this section are based on the
allegations in Plaintiff’s Second Amended Complaint unless
otherwise specified.
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After Plaintiff rendered services pursuant to the oral contract,
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Defendants were in fact paid directly by the Indian Government.
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Plaintiff alleges, however, that Defendants failed to release any
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of those funds to Plaintiff despite their agreement to do so.
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a result, Plaintiff has not been paid for the balance of its
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final invoice in the amount of $85,296.74.
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that Defendants never intended to compensate Plaintiff for the
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engineering services as promised, and have victimized others with
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similar acts of fraud.
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As
Plaintiff contends
Defendants Satvinder and Lorna Randhawa are a husband and
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wife doing business under the fictitious business name “Great
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Eastern Export and Trading Company.”
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STANDARD
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On a motion to dismiss for failure to state a claim under
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Rule 12(b)(6), all allegations of material fact must be accepted
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as true and construed in the light most favorable to the
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nonmoving party.
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337-38 (9th Cir. 1996).
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plain statement of the claim showing that the pleader is entitled
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to relief,” to “give the defendant fair notice of what the...
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claim is and the grounds upon which it rests.”
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v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and
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quotations omitted).
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///
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Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,
Rule 8(a)(2) requires only “a short and
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Bell Atl. Corp.
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Although “a complaint attacked by a Rule 12(b)(6) motion” need
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not contain “detailed factual allegations, a plaintiff's
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obligation to provide the ‘grounds’ of his ‘entitlement to
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relief’ requires more than labels and conclusions, and a
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formulaic recitation of the elements of a cause of action will
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not do.”
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2869 (1986)).
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to raise a right to relief above the speculative level.”
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(citing 5 C. Wright & A. Miller, Federal Practice and Procedure
Id. at 555 (quoting Papasan v. Allain, 478 U.S. 265,
A plaintiff’s “factual allegations must be enough
Id.
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§ 1216 (3d ed. 2004) (“[T]he pleading must contain something
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more...than...a statement of facts that merely creates a
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suspicion [of] a legally cognizable right of action.”)).
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Further, “Rule 8(a)(2)...requires a ‘showing,’ rather than a
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blanket assertion, of entitlement to relief.
Without some
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factual allegation in the complaint, it is hard to see how a
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claimant could satisfy the requirements of providing...grounds on
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which the claim rests.”
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citations omitted).
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facts to state a claim to relief that is plausible on its face.”
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Id. at 570.
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across the line from conceivable to plausible, their complaint
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must be dismissed.”
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Twombly, 550 U.S. at 555 n.3 (internal
A pleading must therefore contain “enough
If the “plaintiffs...have not nudged their claims
Id.
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ANALYSIS
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In California the required elements of fraud are
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“a) misrepresentation; b) knowledge of falsity; c) intent to
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defraud, i.e., to induce reliance; d) justifiable reliance; and
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e) resulting damage.”
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62, 79 (2008) (citation omitted).
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plaintiff must meet a heightened pleading standard under which “a
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party must state with particularity the circumstances
In re Estate of Young, 160 Cal. App. 4th
When alleging fraud, a
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constituting fraud....”
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muster under Rule 9(b), a pleading must provide enough
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information to put the defendant on notice of the conduct
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complained of so that an adequate defense can be formulated.
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See, e.g., Harrison v. Westinghouse Savannah River Co., 176 F.3d
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776, 784 (4th Cir. 1989).
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Fed. R. Civ. P. 9(b).
In order to pass
Defendants previously moved to dismiss Plaintiff’s fraud
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claim, as stated in its initial complaint, in 2009 on much the
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same grounds as it now targets the same claim asserted within the
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SAC.
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claim was unsuccessful, and their present attempt is no more
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persuasive.
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outlines the circumstances under which Plaintiff believes it was
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defrauded.
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to provide both hydrology-related engineering services and ozone
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equipment to Defendants in exchange for a promise to pay for
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those goods and services once Defendants themselves received
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payment from the government of India.
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///
That previous attempt on Defendants’ part to dismiss the
The SAC, like the initial complaint, sufficiently
The SAC alleges that Plaintiff made an oral contract
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SAC, ¶¶ 10-13.
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Plaintiff alleges that Defendants knew that said promise to pay
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was false, that Defendants intended to induce performance by
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Plaintiff based on such representations, that Plaintiff did in
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fact rely to its detriment in providing engineering services, and
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that Plaintiff thereafter suffered damage due to Defendants’
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nonpayment.
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are adequate to state a viable fraud claim.
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enough specificity to give Defendants sufficient notice of the
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accusations being levied against them.
Id. at 18-20.
These allegations, taken as a whole,
They clearly provide
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CONCLUSION
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Based on the foregoing, Defendants’ Motion to Dismiss Second
Cause of Action, for Fraud (ECF No. 110) is hereby DENIED.
IT IS SO ORDERED.
Dated: January 18, 2012
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_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE
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