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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 PARADISE NORTHWEST INC., 12 13 14 15 No. 2:09-cv-02027-MCE-KJN Plaintiff, MEMORANDUM AND ORDER v. SATVINDER PALSINGH RANDHAWA, LORNA MARIE RANDHAWA dba GREAT EASTERN EXPORT & TRADING COMPANY, 16 17 18 Defendants and ThirdParty Plaintiffs, AIR DIFFUSION SYSTEMS, A JOHN HINDE COMPANY, 19 Third-Party Defendant. 20 21 ----oo0oo---- 22 23 Through this action, Paradise Northwest Inc. (“Plaintiff”) 24 seeks redress from Satvinder Palsingh Randhawa and Lorna Marie 25 Randhawa doing business as Great Eastern Export & Trading Company 26 (“Defendants”) for Defendants’ alleged fraud and breach of 27 contract in connection with Plaintiff’s provision of engineering 28 goods and services to Defendants. 1 1 Jurisdiction is premised on diversity of citizenship pursuant to 2 28 U.S.C. § 1332. 3 Motion to Dismiss Plaintiff’s Second Cause of Action, for fraud 4 under California law, on grounds that said cause of action fails 5 to state a cause of action on which relief can be granted and 6 consequently must be dismissed pursuant to Federal Rule of Civil 7 Procedure 12(b)(6). 8 Motion to Dismiss will be denied.1 Presently before the Court is Defendants’ For the reasons set below, Defendants’ 9 BACKGROUND2 10 11 12 The instant dispute arises out of a project to re-oxygenate 13 Lake Nainital, a body of water located in Utterakhand, India. 14 According to Plaintiff’s Second Amended Complaint (“SAC”), 15 Defendants formed an oral contract with Plaintiff, pursuant to 16 which Plaintiff agreed to provide certain ozone equipment 17 hydrology-related engineering services in connection with the 18 project. 19 two other payments that totaled $30,843.00, and represented that 20 the Indian Government would ultimately be paying for Plaintiff’s 21 services and that Defendants would forward monies so received to 22 Plaintiff to cover the balance of its invoices. 23 /// Defendants did make a down payment for equipment and 24 25 26 27 28 1 Because oral argument was not of material assistance, the Court orders this matter submitted on the briefs. E.D. Cal. Local Rule 230(g). 2 The factual assertions in this section are based on the allegations in Plaintiff’s Second Amended Complaint unless otherwise specified. 2 1 After Plaintiff rendered services pursuant to the oral contract, 2 Defendants were in fact paid directly by the Indian Government. 3 Plaintiff alleges, however, that Defendants failed to release any 4 of those funds to Plaintiff despite their agreement to do so. 5 a result, Plaintiff has not been paid for the balance of its 6 final invoice in the amount of $85,296.74. 7 that Defendants never intended to compensate Plaintiff for the 8 engineering services as promised, and have victimized others with 9 similar acts of fraud. 10 As Plaintiff contends Defendants Satvinder and Lorna Randhawa are a husband and 11 wife doing business under the fictitious business name “Great 12 Eastern Export and Trading Company.” 13 STANDARD 14 15 16 On a motion to dismiss for failure to state a claim under 17 Rule 12(b)(6), all allegations of material fact must be accepted 18 as true and construed in the light most favorable to the 19 nonmoving party. 20 337-38 (9th Cir. 1996). 21 plain statement of the claim showing that the pleader is entitled 22 to relief,” to “give the defendant fair notice of what the... 23 claim is and the grounds upon which it rests.” 24 v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and 25 quotations omitted). 26 /// 27 /// 28 /// Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, Rule 8(a)(2) requires only “a short and 3 Bell Atl. Corp. 1 Although “a complaint attacked by a Rule 12(b)(6) motion” need 2 not contain “detailed factual allegations, a plaintiff's 3 obligation to provide the ‘grounds’ of his ‘entitlement to 4 relief’ requires more than labels and conclusions, and a 5 formulaic recitation of the elements of a cause of action will 6 not do.” 7 2869 (1986)). 8 to raise a right to relief above the speculative level.” 9 (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. 10 § 1216 (3d ed. 2004) (“[T]he pleading must contain something 11 more...than...a statement of facts that merely creates a 12 suspicion [of] a legally cognizable right of action.”)). 13 Further, “Rule 8(a)(2)...requires a ‘showing,’ rather than a 14 blanket assertion, of entitlement to relief. Without some 15 factual allegation in the complaint, it is hard to see how a 16 claimant could satisfy the requirements of providing...grounds on 17 which the claim rests.” 18 citations omitted). 19 facts to state a claim to relief that is plausible on its face.” 20 Id. at 570. 21 across the line from conceivable to plausible, their complaint 22 must be dismissed.” 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// Twombly, 550 U.S. at 555 n.3 (internal A pleading must therefore contain “enough If the “plaintiffs...have not nudged their claims Id. 4 ANALYSIS 1 2 3 In California the required elements of fraud are 4 “a) misrepresentation; b) knowledge of falsity; c) intent to 5 defraud, i.e., to induce reliance; d) justifiable reliance; and 6 e) resulting damage.” 7 62, 79 (2008) (citation omitted). 8 plaintiff must meet a heightened pleading standard under which “a 9 party must state with particularity the circumstances In re Estate of Young, 160 Cal. App. 4th When alleging fraud, a 10 constituting fraud....” 11 muster under Rule 9(b), a pleading must provide enough 12 information to put the defendant on notice of the conduct 13 complained of so that an adequate defense can be formulated. 14 See, e.g., Harrison v. Westinghouse Savannah River Co., 176 F.3d 15 776, 784 (4th Cir. 1989). 16 Fed. R. Civ. P. 9(b). In order to pass Defendants previously moved to dismiss Plaintiff’s fraud 17 claim, as stated in its initial complaint, in 2009 on much the 18 same grounds as it now targets the same claim asserted within the 19 SAC. 20 claim was unsuccessful, and their present attempt is no more 21 persuasive. 22 outlines the circumstances under which Plaintiff believes it was 23 defrauded. 24 to provide both hydrology-related engineering services and ozone 25 equipment to Defendants in exchange for a promise to pay for 26 those goods and services once Defendants themselves received 27 payment from the government of India. 28 /// 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 5 SAC, ¶¶ 10-13. 1 Plaintiff alleges that Defendants knew that said promise to pay 2 was false, that Defendants intended to induce performance by 3 Plaintiff based on such representations, that Plaintiff did in 4 fact rely to its detriment in providing engineering services, and 5 that Plaintiff thereafter suffered damage due to Defendants’ 6 nonpayment. 7 are adequate to state a viable fraud claim. 8 enough specificity to give Defendants sufficient notice of the 9 accusations being levied against them. Id. at 18-20. These allegations, taken as a whole, They clearly provide 10 CONCLUSION 11 12 13 14 15 16 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 17 18 19 _____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28 6

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