Starbucks Corporation v. Amcor Packaging Distribution, et al.,

Filing 44

MEMORANDUM and ORDER granting 29 Motion to Dismiss signed by Senior Judge William B. Shubb on 11/4/14: Pallets Unlimited has twenty days from the date this Order is signed to file an amended third-party complaint, if it can do so consistent with this Order. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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STARBUCKS CORPORATION, a
corporation,

CIV. NO. 2:13-1754 WBS CKD
MEMORANDUM AND ORDER RE: MOTION
TO DISMISS CROSS-COMPLAINT

Plaintiff,

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v.
AMCOR PACKAGING DISTRIBUTION,
et al.,

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Defendants.

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----oo0oo----

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Plaintiff Starbucks Corporation (“Starbucks”) filed

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this case against defendants Amcor Packaging Distribution, Amcor

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Packaging (USA), Inc. (collectively “Amcor”), and Pallets

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Unlimited after discovering mold on its coffee bags, coffee, and

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several wooden shipping pallets provided to Starbucks by

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defendants.

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defendants supplied it with defective pallets that caused the

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mold.

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against each other, (Amcor Cross-cl. (Docket No. 14); Pallets

(Id.)

(Compl. ¶ 9 (Docket No. 1).)

Starbucks alleges that

Pallets Unlimited and Amcor filed cross-claims

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1

Cross-cl. (Docket No. 15)), and Pallets Unlimited later filed a

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“cross-claim”1 against third-party defendant Ozburn-Hessey

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Logistics (“OHL”).

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moves to dismiss the claims against it.

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I.

(Pallets Compl. (Docket No. 25).)

OHL now

Factual and Procedural History

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Amcor allegedly sold Starbucks 9,480 wooden pallets,

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used to store and transport almost 70,000 bags of unroasted

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Starbucks coffee beans.

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hired by Amcor to “manufacture[], assemble[] or provide” some or

(Compl. ¶¶ 8-9.)

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all of the pallets.

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Starbucks also hired OHL to provide warehouse services for

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Starbucks products.

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(Id. ¶ 8.)

Pallets Unlimited was

Under a separate contract,

(Pallets Compl. ¶ 11.)

Starbucks alleges the pallets used to transport and

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store its beans were defective because they did not meet the

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specifications in Starbucks’s contract with Amcor, and “as a

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result, excessive moisture was present in the pallets, which

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caused mold to develop in pallets and the coffee bags and

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[coffee], which were in direct contact with the faulty pallets.”

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(Compl. ¶ 9.)

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Unlimited for strict product liability, breach of warranty, and

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negligence, as well as a claim against Amcor for breach of

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Starbucks asserts claims against Amcor and Pallets

Because OHL was not previously a party to the case and
its liability is allegedly derivative of Pallets Unlimited’s,
this pleading is more accurately called a “third-party
complaint.” See Fed. R. Civ. P. 14(a)(1) (“A defending party
may, as a third-party plaintiff, serve a summons and complaint on
a nonparty who is or may be liable to it for all or part of the
claim against it.”); see also United States v. One 1977 Mercedes
Benz, 708 F.2d 444, 452 (9th Cir. 1983) (“[A] third-party claim
may be asserted only when the third party’s liability is in some
way dependent on the outcome of the main claim and the third
party’s liability is secondary or derivative.”).
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contract.

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(Id. ¶¶ 13-38.)
On July 22, 2014, Pallets Unlimited filed a third-party

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complaint against OHL alleging that it delivered wooden pallets

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to OHL’s warehouse starting in December 21, 2011, and at that

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time, none of the pallets contained mold.

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9.)

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them out to various locations determined by Starbucks.

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13)

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they were “properly stored and protected from the elements such

(Pallets Compl. ¶¶ 8-

OHL then stored the pallets at its facility until sending
(Id. ¶

During this time, OHL was allegedly responsible for ensuring

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that they would not develop any mold.”

(Id.)

Pallets Unlimited

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alleges that, because “the pallets and coffee beans at issue were

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stored in the sole possession of OHL, . . . the mold likely

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developed as a result of the storage conditions at the

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[warehouse].”

(Id. ¶ 14.)

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Based on these allegations, Pallets Unlimited brings

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four claims against OHL: (1) full indemnification, (2) partial

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indemnification, (3) negligence, and (4) declaratory relief.

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(Id. ¶¶ 15-27.)

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Federal Rule of Civil Procedure 12(b)(6) for failure to state a

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claim upon which relief can be granted.

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II.

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OHL moves to dismiss all four claims pursuant to

Legal Standard
On a motion to dismiss for failure to state a claim

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under Rule 12(b)(6), the court must accept the allegations in the

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pleadings as true and draw all reasonable inferences in favor of

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the third-party plaintiff.

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236 (1974), overruled on other grounds by Davis v. Scherer, 468

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U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972).

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survive a motion to dismiss, a plaintiff must plead “only enough

See Scheuer v. Rhodes, 416 U.S. 232,

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To

1

facts to state a claim to relief that is plausible on its face.”

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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

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“plausibility standard,” however, “asks for more than a sheer

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possibility that a defendant has acted unlawfully,” and where a

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plaintiff pleads facts that are “merely consistent with a

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defendant’s liability,” it “stops short of the line between

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possibility and plausibility.”

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678 (2009) (quoting Twombly, 550 U.S. at 557).

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III. Pallets Unlimited’s Claims for Full or Partial Indemnity

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A.

This

Ashcroft v. Iqbal, 556 U.S. 662,

Judicial Notice of the “OHL Agreement”

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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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motion to dismiss may consider a document the authenticity of

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which is not contested, and upon which the plaintiff’s complaint

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necessarily relies.”

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(9th Cir. 1998), superseded by statute on other grounds as stated

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in Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 681-82 (9th

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Cir. 2006).

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“[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by

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deliberately omitting references to documents upon which their

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claims are based.”

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Barron v. Reich, 13

“A district court ruling on a

Parrino v. FHP, Inc., 146 F.3d 699, 706

The policy underlying this rule seeks to

Parrino, 146 F.3d at 706.

Through the “incorporation by reference” doctrine, the

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court may also “take into account documents . . . alleged in a

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complaint and whose authenticity no party questions, but which

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are not physically attached to the [plaintiff’s] pleading . . .

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even though the plaintiff does not explicitly allege the contents
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of that document in the complaint.”

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1068, 1076 (9th Cir. 2005) (quotation marks and citations

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omitted).

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complaint, and thus may assume that its contents are true for

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purposes of a motion to dismiss under Rule 12(b)(6).’”

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HSBC Bank Nevada, N.A., 691 F.3d 1152, 1160-61 (9th Cir. 2012)

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(quoting United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.

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2003)).

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Knievel v. ESPN, 393 F.3d

“A court ‘may treat such a document as part of the

Davis v.

In its third-party complaint, Pallets Unlimited alleges

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that “OHL had a contract with [Starbucks] whereby OHL agreed to

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store the wooden pallets at issue . . . at the [warehouse].”

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(Pallets Compl. ¶ 11.)

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the contract (“OHL Agreement”) which it represents contains the

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terms by which “OHL provided warehouse services to Starbucks”

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regarding the pallets and coffee at issue.

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(Docket No. 29); OHL’s Req. for Judicial Notice Ex. 5 (Docket No.

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30-5)).

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Unlimited’s pleading refers.

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OHL has provided the court with a copy of

(OHL’s Mem. at 3

OHL represents this is the contract to which Pallets
(OHL’s Mem. at 3.)

OHL and Starbucks both agree that the OHL Agreement is

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authentic.

In fact, they have provided the court with two

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declarations affirming its authenticity: one from Frank Eichler,

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chief administrative officer and general counsel of OHL, (OHL’s

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Reply Ex. 1, Eichler Decl. (Docket No. 40-1)), and one from Jeff

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Ferrell, sourcing category manager at Starbucks, (Starbucks’s

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Response Ex. 1, Ferrell Decl. (Docket No. 42-1)).

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Starbucks has requested that the court file the OHL Agreement

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under seal, citing “proprietary, commercially sensitive and

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private information regarding Starbucks vendor relationship,
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Moreover,

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facilities’ locations, operational specifications and procedures,

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costs, metrics, pricing, business practices and other similar

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proprietary information relating to Starbucks warehousing and

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service requirements.”

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Agreement is what it purports to be.

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This request further suggests that the

Nevertheless, despite the fact that its pleading makes

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reference to “a contract . . . whereby OHL agreed to store the

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wooden pallets” in its pleading, Pallets Unlimited does not agree

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that the document which has been provided is the relevant

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contract.

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Unlimited argues that its allegation was a “speculative

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reference” based only upon “information and belief” that “a

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contract” existed.

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argues, “Pallets Unlimited was unaware of any actual contract

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between OHL and Starbucks, much less the specific OHL Agreement

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sought to be relied upon.”

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OHL Agreement were quoted or paraphrased specifically in the

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pleading, however, and Pallets Unlimited asserts that its limited

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reference to “a contract” did not sufficiently refer to this

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contract to consider it incorporated by reference.2

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(See Pallets’s Opp’n at 4-7 (Docket No. 38).)

(Id. at 4-6.)

Pallets

At the time of pleading, it

(Id. at 5.)

None of the terms of the

(Id. at 6.)

Accordingly, although Pallets Unlimited has offered no
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Pallets Unlimited also offers several “procedural and
evidentiary objections” to considering the OHL Agreement. (Id.
at 4, 6 n.1 (citing Fed. Rs. Evid. 401, 402, 803, 901, 902).)
Presumably, these objections would become relevant if the court
were to convert OHL’s motion to dismiss into one for summary
judgment. See Parrino, 146 F.3d at 706 n.4 (“[W]here a defendant
attaches extrinsic evidence to a Rule 12(b)(6) motion, the court
ordinarily must convert that motion into one for summary judgment
under Rule 56 to give the plaintiff an opportunity to respond.”).
The court sees no reason to convert OHL’s motion, and thus, does
not address these objections further.
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concrete reason for doubting its authenticity, the parties’

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disagreement regarding whether the OHL Agreement applies to the

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facts alleged prevents the court from considering it for purposes

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of this motion to dismiss.

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(allowing consideration of documents “whose authenticity no party

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questions” on a motion to dismiss); Parrino, 146 F.3d at 706

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(same).

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B.

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See Knievel, 393 F.3d at 1076

The court will thus not consider the OHL Agreement.
Equitable Indemnity
Under California law, indemnity may be either “express

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indemnity,” which refers to an express contract term providing

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for indemnification, or “equitable indemnity,” which embraces

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traditional equitable indemnity and implied contractual

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indemnity.

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1157-60 (2009) (reviewing the historical forms of indemnity under

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California law). Pallets Unlimited does not allege the existence

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of a contract between it and OHL, leaving only the possibility of

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equitable indemnity.

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Prince v. Pac. Gas & Elec. Co., 45 Cal. 4th 1151,

See id.

Equitable indemnity allows a defendant to “seek

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apportionment of loss between the wrongdoers in proportion to

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their relative culpability.”

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of San Diego, Inc., 213 Cal. App. 3d 419, 426 (4th Dist. 1989).

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To state a claim for equitable indemnity, plaintiff must make:

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“(1) a showing of fault on the part of the indemnitor and (2)

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resulting damages to the indemnitee for which the indemnitor is

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. . . equitably responsible.”

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App. 4th 206, 217 (1st Dist. 2011).

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28

Gem Developers v. Hallcraft Homes

Bailey v. Safeway, Inc., 199 Cal.

Crucially, California law requires that, “[w]ith
limited exception, there must be some basis for tort liability
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against the proposed indemnitor . . . generally based on a duty

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owed to the underlying plaintiff.”3

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Inc. v. Forcum/Mackey Constr., Inc., 119 Cal. App. 4th 848, 852-

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53 (4th Dist. 2004) (“Without any action sounding in tort, there

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is no basis for a finding of potential joint and several

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liability . . . thereby precluding a claim for equitable

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indemnity.”); see Stop Loss Ins. Brokers, Inc. v. Brown & Toland

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Med. Grp., 143 Cal. App. 4th 1036, 1040-41 (1st Dist. 2006) (“The

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question is whether, with respect to the claims analysis, [the

BFGC Architects Planners,

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indemnitor] owed [the plaintiff] a duty of care sounding in

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tort.”).

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First, equitable indemnity requires two or more parties to share

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a “joint legal obligation” or become “jointly or severally

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liable” to the same plaintiff.

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Stop Loss, 143 Cal. App. 4th at 1040.

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does not permit equitable apportionment of damages for breach of

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contract . . . .”

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This rule appears to follow from two principles.

See Prince, 5 Cal. 4th at 1158;
Second, “California law

Stop Loss, 143 Cal. App. 4th at 1041 n.2.

Ordinary breach of contract, without something more,

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will thus not support equitable indemnity because, “[a]lthough in

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some circumstances the same act may support both contract and

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tort liability, [the California Supreme Court] held that ‘breach

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of contract becomes tortious only when it also violates a duty

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independent of the contract arising from principles of tort

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law.’”

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No. 14-00930 JCS, 2014 WL 4364393, at *4 (N.D. Cal. Aug. 29,

Tesoro Ref. & Mktg. Co. LLC v. Pac. Gas & Elec. Co., Civ.

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The exceptions apply to vicarious liability, strict
liability, and implied contractual indemnity. See BFGC, 119 Cal
App. 4th at 852.
8

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2014) (quoting Erlich v. Menezes, 21 Cal. 4th 543, 551-52

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(1999)).

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liability in tort where

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For example, breach of contract may also give rise to

(1) the breach is accompanied by a traditional common law
tort, such as fraud or conversion; (2) the means used to
breach the contract are tortious, involving deceit or undue
coercion or; (3) one party intentionally breaches the
contract intending or knowing that such a breach will cause
severe, unmitigable harm in the form of mental anguish,
personal hardship, or substantial consequential damages.
Erlich, 21 Cal. 4th at 551-52.

However, “mere negligent breach

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of contract” is not sufficient to impose tort liability under

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California law.

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(rejecting the argument that “equitable indemnity is appropriate

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for negligent performance of contractual obligations” under

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California law).

Id.; see also Tesoro, 2014 WL 4364393, at *4-5

Pallets Unlimited’s third-party complaint appears to

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allege that OHL owed Starbucks a duty of care regarding the

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storage conditions of the pallets, but it leaves the source of

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this duty ambiguous.

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an effort to support a duty of care as between OHL and Starbucks.

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First, it alleges that “OHL had a contract with [Starbucks]

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whereby OHL agreed to store the wooden pallets at issue . . . at

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the [warehouse].”4

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alleges that “OHL was responsible for ensuring that the wooden

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pallets and coffee beans were properly stored and protected from

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In particular, it makes two allegations in

(Pallets Compl. ¶ 11.)

And second, it

As explained above, the court does not consider the
specific terms of this alleged contract. It only assumes the
truth of this allegation on its face--that is, it assumes that
some contractual relationship existed between OHL and Starbucks
with regard to storage of the wooden pallets at issue--as it must
for purposes of this motion. See Scheuer, 416 U.S. at 236.
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the elements such that they would not develop any mold,” (id. ¶

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13.), and through its “negligence or fault,” allowed mold to

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develop, (id. ¶¶ 20, 22).

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With regard to the alleged “contract . . . to store the

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wooden pallets at issue,” (id. ¶ 11.), the third-party complaint

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describes a contractual duty, not a duty “sounding in tort.”

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Because California law does not recognize claims of equitable

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indemnity premised on a contractual duty, the third-party

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complaint does not state a claim for indemnity upon which relief

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can be granted on that ground.

See BFGC Architects, 119 Cal.

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App. 4th at 852-53; Stop Loss, 143 Cal. App. 4th at 1040-41.

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Setting the allegation of a contract aside, nothing in

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Pallets Unlimited’s pleading supports any viable theory that OHL

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owed and breached a duty to Starbucks in tort.

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that “OHL was responsible for ensuring that the wooden pallets

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and coffee beans were properly stored and protected from the

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elements” is a conclusory allegation not entitled to deference

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under Iqbal.

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555).

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“negligent” or at “fault.”

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that might aid the court in uncovering a duty owed by OHL to

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Starbucks.

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allowing this court to identify the source for any such duty in

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tort.

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The allegation

See 556 U.S. at 678 (quoting Twombly, 550 U.S. at

The same is true of the allegation that OHL was
Neither allegation contains facts

Pallets Unlimited thus fails to allege any facts

The court finds this case comparable to the recent

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situation faced by Magistrate Judge Spero in Tesoro.

See Tesoro,

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2014 WL 4364393.

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& Marketing Company LLC (“Tesoro”) sued Pacific Gas and Electric

In Tesoro, underlying plaintiff Tesoro Refining

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Company (“PG & E”) after a loss of electrical power to its

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refinery forced a temporarily shut down.

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turn sued Foster Wheeler Martinez, Inc. and Martinez Cogen

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Limited Partnership (collectively, “FWM”), which also provided

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electricity to Tesoro’s refinery, for equitable indemnity.

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FWM argued that equitable indemnity was not available because (1)

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a contract between FWM and Tesoro absolved it of liability to

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Tesoro and (2) PG & E had not adequately alleged that FWM was

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liable to Tesoro in tort.

Id. at *1.

PG & E in

Id.

After concluding PG & E could not base

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its claim upon the contract, id. at *3-5, the court set aside the

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existence of the contract and surveyed California law for any

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“independent tort duty” upon which to base equitable indemnity,

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id. at *5-6.

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in negligence for a duty in these circumstances.

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Cal. Civ. Code § 1714(a); Langley v. Pac. Gas & Elec. Co., 41

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Cal. 2d 655, 660 (1953)).

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any source not considered in Tesoro.

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12.)

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It concluded that California law afforded no basis
Id. (citing

Pallets Unlimited fails to point to
(See Pallets’s Opp’n at 11-

While some set of facts may allow Pallets Unlimited to

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show that OHL’s actions at the facility give rise to an

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independent tort or even “both contract and tort liability,” id.

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at *4, it has not done so on the facts alleged.

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is no “joint legal obligation” or basis for “joint and several

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liability” to Starbucks in these allegations.

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4th at 1158; Stop Loss, 143 Cal. App. 4th at 1040.

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the court will grant OHL’s motion to dismiss these claims.

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IV.

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That is, there

See Prince, 5 Cal.
Accordingly,

Pallets Unlimited’s Negligence Claim
To state a claim for negligence under California law, a
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plaintiff must allege duty, breach, causation, and damages.

2

Conroy v. Regents of Univ. of Cal., 45 Cal. 4th 1244, 1250

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(2009).

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negligence is the existence of a duty to use due care toward an

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interest of another . . . .

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has been satisfied in a particular case is a question of law.”

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Glenn K. Jackson, Inc. v. Roe, 273 F.3d 1192, 1196–97 (9th Cir.

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2001) (quoting Adelman v. Associated International Insurance Co.,

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90 Cal. App. 4th 352, 360 (2001)).

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“[T]he threshold element of a cause of action for

Whether this essential prerequisite

Because the court need not simply accept “a conclusory

11

assertion that [OHL] ‘owed a duty of care,’” see Fimbres v.

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Chapel Mortgage Corp., Civ. No. 09-0886 IEG POR, 2009 WL 4163332,

13

at *7 (S.D. Cal. Nov. 20, 2009) (citing Iqbal, 556 U.S. 662.), it

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must determine whether Pallets Unlimited alleges facts sufficient

15

to establish that OHL actually owed it a duty.

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alleges two possible duties on which it predicates its negligence

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claim: (1) a general duty of care owed by all owners of property-

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-sometimes called “premises liability”--and (2) a duty to notify.

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21

A.

Pallets Unlimited

Pallets Unlimited Fails to Allege Facts Supporting

Premises Liability
Pallets Unlimited alleges that “OHL owed a duty . . .

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to store the coffee beans and pallets at issue at its [warehouse]

23

at or above the standard of care in the industry, which includes

24

storing them in such a way that mold would not develop . . .”

25

(Pallets Compl. ¶ 18.)

26

“premises liability” faced by all property owners in California.

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(See Pallets’s Opp’n at 10.)

28

this duty, Pallets Unlimited alleges that it “suffered damages

This duty arises, it contends, from

And as a result of OHL’s breach of

12

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including, but not limited to, potential liability to

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[Starbucks].”

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(Pallets Compl. ¶ 18).

California Civil Code section 1714(a) provides, in
part:
Everyone is responsible, not only for the result of his or
her willful acts, but also for an injury occasioned to
another by his or her want of ordinary care or skill in the
management of his or her property or person, except so far
as the latter has, willfully or by want of ordinary care,
brought the injury upon himself or herself.
Cal. Civ. Code § 1714(a); see also Cabral v. Ralphs Grocery Co.,
51 Cal. 4th 764, 771 (2011) (“The general rule in California is
that ‘[e]veryone is responsible . . . for an injury occasioned to
another by his or her want of ordinary care or skill in the
management of his or her property or person.’” (quoting Cal. Civ.
Code § 1714(a))).

Courts have understood this subsection to

impose a “duty to use ordinary care,” which makes an individual
“liable for injuries caused by his failure to exercise reasonable
care in the circumstances.”

Cabral, 51 Cal. 4th at 771 (quoting

Parsons v. Crown Disposal Co., 15 Cal. 4th 456, 472 (1997)).
“Premises liability” is generally invoked for the idea
that landowners or possessors have a duty to avoid subjecting
others to a risk of bodily injury or property damage.

See, e.g.,

Brooks v. Eugene Burger Mgmt. Corp., 215 Cal. App. 3d 1611, 161924 (5th Dist. 1989) (involving bodily injury to a child allegedly
caused by inadequate fencing around a roadway); Wilson v. Rancho
Sespe, 207 Cal. App. 2d 10, 17 (2d Dist. 1962) (stating that
premises liability “is applicable also with respect to liability
for damage to property”); see also Cal. Civ. Prac. Torts § 16:1
(“The term ‘premises liability’ refers to the liability of
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1

certain persons for injuries and damages to others arising from

2

the ownership or possession of real property.”).

3

However, Pallets Unlimited does not allege injury to

4

its person or property.

5

over the wooden pallets at issue while they were stored at OHL’s

6

warehouse.5

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“constructed by” Pallets Unlimited, (Pallets Compl. ¶¶ 8-9, 11,

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13-14, 18), but makes no mention of whether it retained ownership

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of the pallets or transferred them to Starbucks upon delivery.

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In fact, it does not allege ownership

It repeatedly alleges that the pallets were

Moreover, and perhaps more tellingly, Pallets Unlimited

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does not allege that it suffered damages in the form of harm to

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its pallets.

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liability” to Starbucks, (id. ¶ 18), which would presumably

14

consist of a money judgment against it, as well as “damages

15

relating to attorney’s fees and costs of suit herein,” (id.

16

¶ 17).

17

better understood as a duty to protect it from the prospect of

18

purely economic loss it now faces as a result of Starbucks’s

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claims against it.

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It alleges damages solely in the form of “potential

Any duty allegedly owed to Pallets Unlimited is thus

Pallets Unlimited has not provided, and the court
cannot find, any basis in California law for such a duty.6
5

If

Pallets Unlimited states in its opposition brief that
OHL breached its duty as a premises owner “to ensure that Pallets
Unlimited’s wooden pallets and Starbuck’s [sic] coffee beans”
were properly stored. (Pallets’s Opp’n at 9.) While this could
be construed as a statement of ownership, the court may not
consider any material other than the challenged pleadings for
purposes of this motion, see Arpin v. Santa Clara Valley Transp.
Agency, 261 F.3d 912, 925 (9th Cir. 2001), and no similar
allegations appear in Pallets Unlimited’s complaint.
6

During oral argument, Pallets Unlimited points to
14

1

anything, California law appears to point in the opposite

2

direction.

3

Guaranty Co., the California Supreme Court stated that

For instance, in Quelimane Co. v. Stewart Title

8

In the business arena it would be unprecedented to impose a
duty on one actor to operate its business in a manner that
would ensure the financial success of transactions between
third parties. With rare exceptions, a business entity has
no duty to prevent financial loss to others with whom it
deals directly.
A fortiori, it has no greater duty to
prevent financial losses to third parties who may be
affected by its operations.

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19 Cal. 4th 26, 59 (1998) (considering whether CPA auditors’ duty

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7

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of care in the preparation of an independent audit of a client's

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financial statements extends to persons other than the client);

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see also Glenn K. Jackson Inc., 273 F.3d at 1196-99 (surveying

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California law on the existence of a legal duty of one party to

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another in the absence of privity of contract between them).
In fact, a California Court of Appeal recently rejected

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a similar attempt to raise a negligence claim “through the

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backdoor.”7

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1338 (4th Dist. 2014).

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motorhome sued both the manufacturer of an allegedly defective

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Campbell v. Ford Motor Co., 206 Cal. App. 4th 15 (2012), for
support. The court finds no support for its position in
Campbell. In fact, Campbell declined to find a duty in the
circumstances of that case, holding that “a property owner has no
duty to protect family members of workers on its premises from
secondary exposure to asbestos used during the course of the
property owner’s business.” Id. at 34.

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Mega RV Corp. v. HWH Corp., 225 Cal. App. 4th 1318,
In Mega RV Corp., the owners of a

The court also noted that the claim of negligence it
analyzed arose “in an indemnity cause of action . . . in a case
in which there was nothing to indemnify” because the other
defendant had settled with the underlying plaintiff. Mega RV
Corp., 225 Cal. App. 4th at 1338 n.15. Pallets Unlimited’s claim
can be construed as a similar tactic, attempting to salvage its
indemnity claim using allegations of negligence.
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hydraulic part and a company that provided ineffective repair

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services.

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complaint against the repairer for negligence, equitable

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indemnity, and declaratory relief--the same claims at issue here.

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Id. at 1324.

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claim of negligence on an alleged duty that the repairer owed to

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it and breached while servicing the owner’s motorhome.

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1338.

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Id. at 1322-24.

The manufacturer filed a cross-

Also like here, the manufacturer predicated its

Id. at

The court rejected this position “as a matter of law”

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because “[the manufacturer] did not suffer personal injury or

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injury to other property as a result of [the repairer’s] alleged

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tort.”

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only asserted that it “suffered consequential economic damages”

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by being forced to defend against the owner’s claim.

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Pallets’s Compl. ¶ 18).

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under those circumstances, “where the wrong has resulted only in

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economic loss rather than damage to person or property.”

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Corp., 225 Cal. App. 4th at 1338 (citing Robinson Helicopter Co.,

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Inc. v. Dana Corp., 34 Cal. 4th 979, 988–993 (2004) (discussing

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tort claims for economic loss generally)).

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declined to create one.

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from J’Aire Corp. v. Gregory, 24 Cal. 3d 799 (1979)).

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Id. at 1338.

Like Pallets Unlimited, the manufacturer

Id.;(see

No previously recognized tort existed

Mega RV

And the court

Id. at 1340-42 (applying the six factors

Similarly, this court concludes there is no basis in

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California law or in the facts alleged by Pallets Unlimited for

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such a duty.

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B.

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Pallets Unlimited Fails to Allege Facts Supporting a

Duty to Notify
Pallets Unlimited further alleges that OHL owed a duty
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to notify it “of any specifications required of the pallets that

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are unique to the pallets ordered by Starbucks,” such as a

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limited moisture content.

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Unlimited makes no mention of this allegation in its opposition

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brief, raising the possibility that it abandons this position.

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The court thus gives only brief consideration to this theory.

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See Conservation Force v. Salazar, 677 F. Supp. 2d 1203, 1211

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(N.D. Cal. 2009) (offering only brief consideration to a claim

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“[w]here plaintiffs fail to provide a defense for a claim in

(Pallets Compl. ¶ 17.)

Pallets

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opposition”) (citing Locricchio v. Office of U.S. Trustee, 313

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Fed. Appx. 51, 52 (9th Cir. 2009)).

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“A duty to disclose facts arises only when the parties

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are in a relationship that gives rise to the duty, such as

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‘seller and buyer, employer and prospective employee, doctor and

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patient, or parties entering into any kind of contractual

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agreement.’”

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2000) (citing Wilkins v. Nat’l Broad. Co., 71 Cal. App. 4th 1066,

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1082 (2d Dist. 1999)).

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real estate agents an affirmative duty to disclose certain

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information to those who “enter into a discussion with a real

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estate agent regarding a real estate transaction” even in the

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absence of a contract between them.

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§ 2079.16.

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Shin v. Kong, 80 Cal. App. 4th 498, 509 (1st Dist.

For example, California law imposes on

See Cal. Civ. Code

Pallets Unlimited’s complaint fails to allege facts

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supporting a special relationship between it and OHL.

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only that a duty to disclose “was owed to [it] by OHL

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individually and as an agent of [Starbucks].”

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17.)

Its states

(Pallets Compl. ¶

Even assuming that OHL was an agent of Starbucks, however,
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1

this allegation asserts a relationship between OHL and Starbucks,

2

not between OHL and Pallets Unlimited.

3

App. 4th 498 (2000) (“[A] plaintiff’s action must be founded on a

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duty owed to the plaintiff; not a duty owed only to some other

5

person. . . . ‘Negligence in the air, so to speak, will not do.’”

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(quoting Prosser & Keeton, Torts § 53 (5th ed. 1984))).

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alleged facts that support some kind of special relationship

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between Pallets Unlimited and OHL, the court cannot conclude that

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OHL owed a duty to disclose.

10

See Shin v. Kong, 80 Cal.

Absent

Accordingly, because Pallets Unlimited fails to allege

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facts that support a duty of care owed to it by OHL, the court

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must grant OHL’s motion to dismiss this claim.

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V.

Pallets Unlimited’s Claim for Declaratory Relief

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A court may grant declaratory relief where there is “a

15

case of actual controversy within its jurisdiction,” subject to

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certain exceptions.

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the rights and other legal relations of any interested party

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seeking such declaration, whether or not further relief is or

19

could be sought.”

20

28 U.S.C. § 2201(a).

The court may “declare

Id.

However, “[c]laims for declaratory relief are not

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independent causes of action, but rather the ultimate prayer for

22

relief.”

23

TLN DA, 2013 WL 6491528, at *4 (E.D. Cal. Dec. 10, 2013) (Nunley,

24

J.).

25

viable underlying claim, so when the underlying claim is

26

dismissed, the declaratory relief cause of action must be

27

dismissed as well.”

28

Harris, Inc., Civ. No. 2:13-00325 WBS, 2013 WL 2145961, at *7

Bates v. Suntrust Mortgage, Inc., Civ. No. 2:13-01402

“A plaintiff is not entitled to such relief without a

Id.; Allied Prop. & Cas. Ins. Co. v. Dick

18

1

(E.D. Cal. May 15, 2013) (dismissing a claim for declaratory

2

relief because plaintiff could not state any other claim).

3

Accordingly, because Pallets Unlimited has not stated a

4

claim for relief against OHL, its request for declaratory

5

judgment must also be dismissed.

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IT IS THEREFORE ORDERED that third-party defendant

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Ozburn-Hessey Logistics’s motion to dismiss be, and the same

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hereby is, GRANTED.

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Pallets Unlimited has twenty days from the date this

10

Order is signed to file an amended third-party complaint, if it

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can do so consistent with this Order.

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Dated:

November 4, 2014

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