Randhawa v. Skylux, Inc., et al.

Filing 148

ORDER signed by Judge William B. Shubb on 10/24/12 ORDERING Defendants' motion to dismiss for failure to state a claim be, and the same hereby is, GRANTED as to the first, second, third, fifth, and seventh causes of action; Defendants&# 039; motion to dismiss for failure to state a claim be, and the same hereby is, DENIED as to the fourth cause of action; Defendants' motion to dismiss for improper venue be, and the same hereby is, DENIED. Plaintiffs have fourteen days from the date of this Order to file an amended complaint if they can do so consistent with this Order. (Matson, R)

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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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MOHIT RANDHAWA aka HARPAL
SINGH, and SHANNON CALLNET PVT
LTD,

Case No.: 2:09-CV-02304 WBS
DAD

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Plaintiffs,
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MEMORANDUM AND ORDER RE:
MOTION TO DISMISS

v.
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SKYLUX INC.; INTERACTIVE
INTELLIGENCE, INC.; MUJEEB
PUZHAKKARAILLATH; SKYLUX
TELELINK PVT LTD; and DOES 1
through 20, inclusive,

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Defendants.
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----oo0oo---This matter is again before the court on defendants’

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Skylux, STPL, and Puzhakkaraillath (together, “defendants”)

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motion to dismiss plaintiffs’ claims against them in the Fourth

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Amended Complaint pursuant to Rule of Civil Procedure 12(b)(6)

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and Rule 12(b)(3).

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Shannon Callnet’s causes of action in the Fourth
Amended Complaint for breach of contract, breach of implied
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covenant of good faith and fair dealing, and breach of express

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warranty, are all based on the MOU.

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agent of Randhawa.

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standing to bring the claim unless Shannon Callnet alleges facts

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sufficient to support another theory that would allow it to sue

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under the MOU. See Berclain Am. Latina v. Baan Co., 74 Cal. App.

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4th 401, 405 (1st Dist. 1999) (breach of contract claims

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“generally require[] the party to be a signatory to the contract,

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or to be an intended third party beneficiary”).

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(Id. Ex. A.)

The MOU is signed by an

Thus, only Randhawa has

In their opposition brief, plaintiffs fail to argue any

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theory that would give Shannon Callnet a right to sue under the

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MOU.

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“inadvertent mistake” and that “[p]laintiff Randhawa is indeed

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the correct party to bring contractual causes of action against

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STPL, since it was Randhawa who executed the MOU.”

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to Mot. to Dismiss Fourth AC (Docket No. 145) at 4.)

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plaintiffs voluntarily concede that Shannon Callnet does not have

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standing to assert its contractual claims, the first, second, and

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third causes of action will be dismissed.

Instead, Shannon Callnet argues that it made an

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(Pl.’s Opp.
Since

In its fourth cause of action, Shannon Callnet alleges

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a breach of implied warranty through the purchase of software

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from STPL.1

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warranty at all in its opposition brief, its allegations are

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sufficient to state a valid claim upon which relief can be

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granted.

Here, while Shannon Callnet does not address implied

The plaintiffs allege that STPL was hired to set up the

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Unlike the cause of action for express warranty, no
standing issues arise in this claim because Shannon Callnet’s
implied warranty claim is based on an alleged purchase of
software, not on the express terms of the MOU.
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call center, which included “obtaining all required licenses” and

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providing the software.

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upon STPL’s expertise in choosing that software, STPL had reason

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to know of this reliance, and yet the “system crashed.”

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38-44.)

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(Fourth AC Ex. A.)

Callnet was relying

(Id. ¶¶

Defendants argue that Shannon Callnet cannot assert a

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claim for implied warranty because the claim is barred by a

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disclaimer in a license agreement between Shannon Callnet and

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Interactive.

Defendants request that the court judicially notice

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a provision of the license agreement because the court previously

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interpreted it in an order regarding motions to dismiss, to

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compel arbitration, and to transfer venue.

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Compel Arbitration (Docket No. 61) at 3-6.)

(Order Re: Mot. to

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In general, a court may not consider items outside the

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pleadings when deciding a motion to dismiss, but it may consider

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items of which it can take judicial notice.

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F.3d 1370, 1377 (9th Cir. 1994).

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notice of facts “not subject to reasonable dispute” because they

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are either “(1) generally known within the territorial

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jurisdiction of the trial court or (2) capable of accurate and

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ready determination by resort to sources whose accuracy cannot

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reasonably be questioned.”

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Barron v. Reich, 13

A court may take judicial

Fed. R. Evid. 201.

Here, the license agreement was submitted by

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Interactive in a previous motion to compel arbitration.

Since

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the defendants wish to rely on the substance of the license

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agreement, not merely its existence, the court declines to take

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judicial notice of it.

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LJO SMS, 2007 WL 2758040, at *9 (holding that “the assertions set

See Garcia v. Almieda, Civ. No. 03-06658

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forth in the [previously filed motion for reconsideration], along

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with supporting exhibits, are inappropriate for judicial notice

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as being subject to dispute” (emphasis added)).

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therefore not take judicial notice of the license agreement.

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The court will

In plaintiffs’ fifth cause of action, both Randhawa and

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Shannon Callnet allege that STPL violated California’s Unfair

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Competition Law (“UCL”).

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California Business and Professions Code Section 17200
et seq. prohibits unfair competition, which is defined to include

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“any unlawful, unfair, or fraudulent business act or practice.”

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Cal. Bus. & Prof. Code § 17200.

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separate and distinct theory of liability . . . .”

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Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009) (citing South

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Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th

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861, 886 (4th Dist. 1999)).

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“Each prong of the UCL is a
Kearns v.

Plaintiffs do not clearly state which prong of the UCL

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they are relying upon.

They simply allege that defendants were

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engaged in “unfair practices,”

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alleging that defendants “induced” and “defraud[ed]” them,

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(Fourth AC ¶¶ 47, 49).

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discerning what prong to proceed under because neither party

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cites, nor can this court find, any UCL cause of action that

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resembles the facts before the court.

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plaintiffs’ UCL claims will accordingly be granted.

(Fourth AC ¶ 47), while also

The court has further difficulty

The motion to dismiss

In plaintiffs’ seventh2 cause of action, both

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The sixth and eighth causes of action are against
Interactive and are not addressed in this motion to dismiss.
Judgment in those claims was entered pursuant to an arbitration
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plaintiffs allege that STPL was unjustly enriched through its

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actions.

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enrichment.”

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4th 779, 793 (2d Dist. 2003).

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“general principle, underlying various legal doctrines and

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remedies” and is “synonymous with restitution.”

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Boughton, 123 Cal. App. 4th 379, 387 (1st Dist. 2004).

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Plaintiffs neither explain the theory nor the facts that would

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give rise to a restitution cause of action.

“There is no cause of action in California for unjust
Melchiro v. New Line Prods., Inc., 106 Cal. App.
Unjust enrichment is instead a

McBride v.

See Rosal v. First

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Fed. Bank of Cal., 671 F. Supp. 2d 1111, 1133 (N.D. Cal. 2009)

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(dismissing an unjust enrichment claim where “plaintiff fail[ed]

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to adequately explain the theory on which his unjust enrichment

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claim [was] based” and relied on conclusory allegations).

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Therefore, the court will dismiss plaintiffs’ seventh cause of

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action.3

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Plaintiffs have now been permitted to amend their

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complaint three times.

The court cannot permit them to amend

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indefinitely.

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court is not required to permit futile amendments.

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Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992);

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Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th Cir.

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1990); Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738

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(9th Cir. 1987); Klamath-Lake Pharm. Ass’n v. Klamath Med. Serv.

While leave to amend must be freely given, the
See DeSoto v.

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proceeding between Interactive and the plaintiffs.
131.)
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(Docket No.

Defendants attempt to revive their argument, addressed
in the court’s prior order, that the court should enforce the
forum selection clause of the MOU and dismiss plaintiffs’ claims
for lack of venue. Defendants do not present any new facts to
cause the court to change its previous order.
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Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983).

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The court will permit plaintiffs to amend their

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complaint one more final time.

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is still deficient, the court will have to assume plaintiffs can

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do no better, and any order dismissing that complaint or any of

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the claims in it will be without leave to amend.

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IT IS THEREFORE ORDERED that:

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(1) Defendants’ motion to dismiss for failure to state

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If their Fifth Amended Complaint

a claim be, and the same hereby is, GRANTED as to the first,
second, third, fifth, and seventh causes of action;

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(2) Defendants’ motion to dismiss for failure to state

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a claim be, and the same hereby is, DENIED as to the fourth cause

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of action;

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(3) Defendants’ motion to dismiss for improper venue
be, and the same hereby is, DENIED.

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Plaintiffs have fourteen days from the date of this

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Order to file an amended complaint if they can do so consistent

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with this Order.

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DATED:

October 24, 2012

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