Momentum Commercial Funding, LLC v. Beasley

Filing 20

ORDER signed by District Judge John A. Mendez on 3/17/17. The Court GRANTS WITHOUT PREJUDICE Momentum's Motion to Dismiss Beasley's counterclaim 10 . If Beasley wants to file a first amended counterclaim, he shall file it within twenty days from the date of this Order. Momentum's responsive pleadings are due within twenty days thereafter. If Beasley elects not to amend his counterclaim, the case will proceed on Momentum's breach of contract claim. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MOMENTUM COMMERCIAL FUNDING,
LLC, a California limited
liability company,

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Plaintiff,

No.

2:16-cv-02085-JAM-CKD

ORDER GRANTING COUNTER
DEFENDANT’S MOTION TO DISMISS

v.
MICHAEL P. BEASLEY, JR., aka
MICHAEL PAUL BEASLEY, JR.,

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Defendant.
MICHAEL P. BEASLEY, JR., aka
MICHAEL PAUL BEASLEY, JR.,
Counter Claimant,

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v.
MOMENTUM COMMERCIAL FUNDING,
LLC, a California limited
liability company,
Counter Defendant.
A 2012 Rolls-Royce Ghost EWB spawned this litigation.

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Plaintiff-Counter Defendant Momentum Commercial Funding, LLC

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(“Momentum”) leased the luxury vehicle to a professional

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basketball player, Defendant-Counter Claimant Michael P. Beasley,

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Jr. (“Beasley”).

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sued him for breach of contract.

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Momentum, arguing that the contract violated California’s Vehicle

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Leasing Act (“VLA”).

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Beasley’s Counterclaim under Rule 12(b)(6).

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opposes.

Believing Beasley shortchanged it, Momentum

ECF No. 7.

ECF No. 1.

Then Beasley sued

Momentum now moves to dismiss
ECF No. 10.

Beasley

ECF No. 13. 1

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I.

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FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Momentum leased a Rolls-Royce to Beasley.

See Equipment

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Lease Agreement (“Lease”), attached to Counterclaim as Exh. A.

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Beasley agreed to make monthly payments during the 37-month lease

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term and to return the Rolls-Royce once the term expired.

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1.

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addenda to the Lease.

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attached to Counterclaim as Exh. B; Addendum #2 to Equipment

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Lease Agreement, attached to Counterclaim as Exh. C; TRAC Lease

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Addendum to Equipment Lease Agreement, attached to Counterclaim

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as Exh. D.

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Id. at

After receiving the Rolls-Royce, Beasley also signed three
See Addendum to Equipment Lease Agreement,

Over time, Momentum and Beasley’s contractual relationship

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soured.

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the Rolls-Royce in “horrible condition.”

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Beasley refused to pay the $122,810.76 Momentum alleges he owes,

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Momentum sued Beasley for breaching the Lease.

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Beasley responded by suing Momentum for violating the VLA’s

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disclosure requirements, contending that these violations

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Beasley failed to make several payments, and he returned
Compl. ¶¶ 10-11.

After

Id. ¶ 14.

This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for February 7, 2017. In deciding this motion, the
Court takes as true all well-pleaded facts in the Counterclaim.
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rendered the Lease unenforceable.

Countercl. ¶ 28.

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II.

OPINION

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A.

Judicial Notice

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Beasley requests “the Court take judicial notice that the

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business of being a professional basketball player does not

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require, nor is it in any way aided or assisted by, the driving

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of a luxury vehicle.”

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notice of a fact that is not reasonably disputed if the fact

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“can be accurately and readily determined from sources whose

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accuracy cannot be reasonably questioned.”

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201(b)(2).

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requests it and the court is supplied with the necessary

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information.”

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Opp’n at 2.

A court may take judicial

Fed. R. Evid.

The court “must take judicial notice if a party

Fed. R. Evid. 201(c)(2).

The Court denies Beasley’s request because he did not

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supply it with the necessary information.

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one-sentence request in an opposition brief, without more, does

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not suffice under federal evidentiary rules.

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B.

Merely including a

Discussion
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Vehicle Leasing Act

California’s VLA regulates the leasing of automobiles.

See

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Cal. Civ. Code § 2985.7 et seq.

See also LaChapelle v. Toyota

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Motor Credit Corp., 102 Cal. App. 4th 977, 982 (2002).

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applies to a “lease contract,” defined as “any contract for or

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in contemplation of the lease or bailment for the use of a motor

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vehicle . . . primarily for personal, family or household

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purposes . . . .”

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contract, however, “does not include a lease for . . . business

Cal. Civ. Code § 2985.7(d).

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The VLA

A lease

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or commercial purposes . . . .”

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2.

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Id.

Analysis

Beasley argues Momentum willfully violated the VLA by not

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complying with the statute’s disclosure requirements.

Countercl.

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¶¶ 21-28.

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2985.8(c)(1) by not disclosing in the Lease that Beasley was

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responsible for the difference between the Rolls-Royce’s residual

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value and realized value once the Lease expired.

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Beasley also claims Momentum violated that same provision by not

Specifically, Beasley states Momentum violated section

Id. ¶ 21.

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accurately stating in the Lease the amount due before Beasley

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received the car.

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Momentum violated section 2985.8(a) by not disclosing all lease

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terms in a single document.

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Id. ¶ 25.

And, finally, Beasley alleges

Id. ¶ 22.

Here, dismissal turns on whether the Lease constitutes a

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“lease contract” under the VLA.

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because the parties executed the Lease for business and

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commercial purposes and, so, the VLA does not apply.

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3-5.

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personal purposes, rendering the VLA applicable.

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Momentum argues it does not

See Mot. at

Beasley disagrees, maintaining that he signed the Lease for

The Court agrees with Momentum.

See Opp’n at 5-

The law makes clear the VLA

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does not apply to business or commercial contracts.

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Civ. Code § 2985.7(d) (“Lease contract does not include a lease

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for . . . business or commercial purposes . . . .”).

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Lease plainly states that the Commercial Code governes the

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contract and that this was not a consumer transaction.

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¶ 27 (citing Division 10 of the California Commercial Code).

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the following language appeared right above Beasley’s signature
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See Cal.

Here, the

Exh. A
And

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line:

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solely for commercial or business purposes.”

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Lastly, Beasley certified “[he] intend[ed] that more than 50% of

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the use of the [Rolls-Royce]” would relate to his “trade or

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business . . . .”

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“[Beasley] warrants that [he] will use the Equipment
Exh. A at 3.

Exh. D.

Beasley claims he “did not understand the complex lease

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documentation . . . .”

Opp’n at 2.

This explanation does not

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suffice.

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information contradicting the allegations supporting his

The exhibits attached to Beasley’s counterclaim contain

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counterclaim:

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yet he signed papers clearly indicating the Lease served business

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and commercial purposes.

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accept as true the conclusory allegation.

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citing

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Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir.

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1998) (“[W]e are not required to accept as true conclusory

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allegations which are contradicted by documents referred to in

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the complaint.”).

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himself out of a claim by including unnecessary details contrary

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to his claims.”

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omitted).

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his counterclaim show he agreed to lease the Rolls-Royce solely

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for business and commercial purposes—purposes falling outside the

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VLA’s scope.

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allegation, the Court dismisses Beasley’s counterclaim.

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Beasley says he did not understand the documents,

In these situations, a court need not
See Sprewell v. Golden

In other words, an individual can “plead

Sprewell, 266 F.3d at 988 (internal citation

Beasley has done just that.

The exhibits attached to

Because these exhibits trump Beasley’s conclusory
See id.

A court may dismiss with prejudice “only if it appears

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beyond doubt that the plaintiff can prove no set of facts in

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support of his claim which would entitle him to relief.”
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Navarro

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v. Block, 250 F.3d 729, 732 (9th Cir. 2001) (citations and

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internal quotation marks omitted).

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there is no set of facts to support Beasley’s VLA claim and

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therefore will give him one more opportunity to plead this

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counterclaim.

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without prejudice. 2

The Court is not convinced

Accordingly, Beasley’s counterclaim is dismissed

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III.

ORDER

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For the reasons set forth above, the Court GRANTS WITHOUT

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PREJUDICE Momentum’s Motion to Dismiss Beasley’s counterclaim.

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If Beasley wants to file a first amended counterclaim, he shall

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file it within twenty days from the date of this Order.

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Momentum’s responsive pleadings are due within twenty days

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thereafter.

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case will proceed on Momentum’s breach of contract claim.

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If Beasley elects not to amend his counterclaim, the

IT IS SO ORDERED.
Dated: March 17, 2017

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Having granted dismissal, the Court need not address whether it
may consider Momentum’s declarations.
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