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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 MOMENTUM COMMERCIAL FUNDING, LLC, a California limited liability company, 13 14 15 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., 16 17 18 Defendant. MICHAEL P. BEASLEY, JR., aka MICHAEL PAUL BEASLEY, JR., Counter Claimant, 19 20 21 22 23 24 v. MOMENTUM COMMERCIAL FUNDING, LLC, a California limited liability company, Counter Defendant. A 2012 Rolls-Royce Ghost EWB spawned this litigation. 25 Plaintiff-Counter Defendant Momentum Commercial Funding, LLC 26 (“Momentum”) leased the luxury vehicle to a professional 27 basketball player, Defendant-Counter Claimant Michael P. Beasley, 28 1 1 Jr. (“Beasley”). 2 sued him for breach of contract. 3 Momentum, arguing that the contract violated California’s Vehicle 4 Leasing Act (“VLA”). 5 Beasley’s Counterclaim under Rule 12(b)(6). 6 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 7 8 I. 9 FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND Momentum leased a Rolls-Royce to Beasley. See Equipment 10 Lease Agreement (“Lease”), attached to Counterclaim as Exh. A. 11 Beasley agreed to make monthly payments during the 37-month lease 12 term and to return the Rolls-Royce once the term expired. 13 1. 14 addenda to the Lease. 15 attached to Counterclaim as Exh. B; Addendum #2 to Equipment 16 Lease Agreement, attached to Counterclaim as Exh. C; TRAC Lease 17 Addendum to Equipment Lease Agreement, attached to Counterclaim 18 as Exh. D. 19 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 20 soured. 21 the Rolls-Royce in “horrible condition.” 22 Beasley refused to pay the $122,810.76 Momentum alleges he owes, 23 Momentum sued Beasley for breaching the Lease. 24 Beasley responded by suing Momentum for violating the VLA’s 25 disclosure requirements, contending that these violations 26 1 27 28 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. 2 1 rendered the Lease unenforceable. Countercl. ¶ 28. 2 3 II. OPINION 4 A. Judicial Notice 5 Beasley requests “the Court take judicial notice that the 6 business of being a professional basketball player does not 7 require, nor is it in any way aided or assisted by, the driving 8 of a luxury vehicle.” 9 notice of a fact that is not reasonably disputed if the fact 10 “can be accurately and readily determined from sources whose 11 accuracy cannot be reasonably questioned.” 12 201(b)(2). 13 requests it and the court is supplied with the necessary 14 information.” 15 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 16 supply it with the necessary information. 17 one-sentence request in an opposition brief, without more, does 18 not suffice under federal evidentiary rules. 19 20 21 B. Merely including a Discussion 1. Vehicle Leasing Act California’s VLA regulates the leasing of automobiles. See 22 Cal. Civ. Code § 2985.7 et seq. See also LaChapelle v. Toyota 23 Motor Credit Corp., 102 Cal. App. 4th 977, 982 (2002). 24 applies to a “lease contract,” defined as “any contract for or 25 in contemplation of the lease or bailment for the use of a motor 26 vehicle . . . primarily for personal, family or household 27 purposes . . . .” 28 contract, however, “does not include a lease for . . . business Cal. Civ. Code § 2985.7(d). 3 The VLA A lease 1 or commercial purposes . . . .” 2 2. 3 Id. Analysis Beasley argues Momentum willfully violated the VLA by not 4 complying with the statute’s disclosure requirements. Countercl. 5 ¶¶ 21-28. 6 2985.8(c)(1) by not disclosing in the Lease that Beasley was 7 responsible for the difference between the Rolls-Royce’s residual 8 value and realized value once the Lease expired. 9 Beasley also claims Momentum violated that same provision by not Specifically, Beasley states Momentum violated section Id. ¶ 21. 10 accurately stating in the Lease the amount due before Beasley 11 received the car. 12 Momentum violated section 2985.8(a) by not disclosing all lease 13 terms in a single document. 14 Id. ¶ 25. And, finally, Beasley alleges Id. ¶ 22. Here, dismissal turns on whether the Lease constitutes a 15 “lease contract” under the VLA. 16 because the parties executed the Lease for business and 17 commercial purposes and, so, the VLA does not apply. 18 3-5. 19 personal purposes, rendering the VLA applicable. 20 7. 21 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 22 does not apply to business or commercial contracts. 23 Civ. Code § 2985.7(d) (“Lease contract does not include a lease 24 for . . . business or commercial purposes . . . .”). 25 Lease plainly states that the Commercial Code governes the 26 contract and that this was not a consumer transaction. 27 ¶ 27 (citing Division 10 of the California Commercial Code). 28 the following language appeared right above Beasley’s signature 4 See Cal. Here, the Exh. A And 1 line: 2 solely for commercial or business purposes.” 3 Lastly, Beasley certified “[he] intend[ed] that more than 50% of 4 the use of the [Rolls-Royce]” would relate to his “trade or 5 business . . . .” 6 “[Beasley] warrants that [he] will use the Equipment Exh. A at 3. Exh. D. Beasley claims he “did not understand the complex lease 7 documentation . . . .” Opp’n at 2. This explanation does not 8 suffice. 9 information contradicting the allegations supporting his The exhibits attached to Beasley’s counterclaim contain 10 counterclaim: 11 yet he signed papers clearly indicating the Lease served business 12 and commercial purposes. 13 accept as true the conclusory allegation. 14 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citing 15 Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir. 16 1998) (“[W]e are not required to accept as true conclusory 17 allegations which are contradicted by documents referred to in 18 the complaint.”). 19 himself out of a claim by including unnecessary details contrary 20 to his claims.” 21 omitted). 22 his counterclaim show he agreed to lease the Rolls-Royce solely 23 for business and commercial purposes—purposes falling outside the 24 VLA’s scope. 25 allegation, the Court dismisses Beasley’s counterclaim. 26 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 27 beyond doubt that the plaintiff can prove no set of facts in 28 support of his claim which would entitle him to relief.” 5 Navarro 1 v. Block, 250 F.3d 729, 732 (9th Cir. 2001) (citations and 2 internal quotation marks omitted). 3 there is no set of facts to support Beasley’s VLA claim and 4 therefore will give him one more opportunity to plead this 5 counterclaim. 6 without prejudice. 2 The Court is not convinced Accordingly, Beasley’s counterclaim is dismissed 7 8 III. ORDER 9 For the reasons set forth above, the Court GRANTS WITHOUT 10 PREJUDICE Momentum’s Motion to Dismiss Beasley’s counterclaim. 11 If Beasley wants to file a first amended counterclaim, he shall 12 file it within twenty days from the date of this Order. 13 Momentum’s responsive pleadings are due within twenty days 14 thereafter. 15 case will proceed on Momentum’s breach of contract claim. 16 17 If Beasley elects not to amend his counterclaim, the IT IS SO ORDERED. Dated: March 17, 2017 18 19 20 21 22 23 24 25 26 27 2 28 Having granted dismissal, the Court need not address whether it may consider Momentum’s declarations. 6

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