Joe Tsai v. Wesley Weili Wang

Filing 31

ORDER by Magistrate Judge Donna M. Ryu granting in part and denying in part 20 Motion to Dismiss. Initial Case Management Conference set for 8/16/2017 01:30 PM. Joint case management statement due by 8/9/2017. (dmrlc1, COURT STAFF) (Filed on 6/14/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JOE TSAI,
Plaintiff,

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ORDER ON DEFENDANT'S MOTION
TO DISMISS

v.

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WESLEY WEILI WANG,

Re: Dkt. No. 20

Defendant.

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United States District Court
Northern District of California

Case No. 17-cv-00614-DMR

Defendant Wesley Weili Wang moves pursuant to Federal Rule of Civil Procedure

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12(b)(6) to dismiss Plaintiff Joe Tsai’s complaint. [Docket No. 20.] This matter is suitable for

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resolution without oral argument pursuant to Civil Local Rule 7-1(b). For the following reasons,

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Defendant’s motion is granted in part and denied in part.

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I.

BACKGROUND

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Plaintiff makes the following allegations in his complaint, all of which are taken as true

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solely for purposes of Defendant’s motion to dismiss.1 Plaintiff is a reseller of fine wines, and

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alleges upon information and belief that Defendant is “in the business of purchasing, selling, and

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holding fine wines.” Compl. ¶¶ 6, 7. Plaintiff alleges that on April 4, 2011, he and Defendant

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“entered into an oral agreement wherein Defendant agreed to purchase wines on behalf of Plaintiff

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and as Plaintiff’s agent,” and Defendant “agreed to deliver wines to Plaintiff as they were

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purchased.” Id. at ¶ 8. Between April 2011 and April 2012, Plaintiff paid a total of $3,556,384 to

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Defendant for the purchase of wines, and “Defendant accepted Plaintiff’s payments and orders of

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wines and agreed to purchase wines on behalf of Plaintiff and as Plaintiff’s agent.” Id. at ¶ 11.

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When reviewing a motion to dismiss for failure to state a claim, the court must “accept as true
all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94
(2007) (per curiam) (citation omitted).

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However, Defendant only delivered and shipped wines totaling $2,436,862.58 in purchase price,

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and “failed to deliver the remainder of wines from numerous sales orders or return Plaintiff’s

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money, the valued [sic] of which is at least $1,110,737.42.” Id. at ¶ 12. Plaintiff alleges on

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information and belief that Defendant used Plaintiff’s money to buy wine but kept it for himself.

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Id.

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Plaintiff made numerous demands for the delivery of the remainder of the wines purchased

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with his money and/or a return of his money. Specifically, Plaintiff spoke with Defendant by

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telephone in late January 2015, and Defendant told Plaintiff “to follow up with him in three

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months.” Id. at ¶ 14. In April 2015, Plaintiff sent a representative to meet with Defendant.
Plaintiff alleges that during this meeting, Defendant said that the wines he purchased on behalf of

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United States District Court
Northern District of California

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Plaintiff were “in proper storage” and promised to “a) deliver the wines and b) return Plaintiff’s

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money for any unpurchased wines or purchased but undeliverable wines by the end of 2015.” Id.

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at ¶ 15. Plaintiff alleges upon information and belief that “Defendant made that promise knowing

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it to be false an[d] intending to deceive Plaintiff and to induce Plaintiff to continue to rely on

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Defendant to honor their agreement.” Id. At an in-person meeting in September 2015, Defendant

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admitted that he owed Plaintiff money, and informed Plaintiff that he had sold some of the wines

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he had purchased on Plaintiff’s behalf but had used the proceeds, as well as other funds from

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Plaintiff, to pay for his defense in a criminal matter. Id. at ¶ 16. Plaintiff alleges that he “has done

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everything he was obligated to do, but, to date, Defendant has failed to deliver the wine or issue a

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refund.” Plaintiff asserts that Defendant owes him at least $1,110,737.42. Id. at ¶ 18.

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Plaintiff further alleges that Defendant has delivered counterfeit wines. Plaintiff alleges on

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information and belief that “Defendant delivered the counterfeit wine intending to deceive

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Plaintiff into believing that he had purchased rare and valuable wine, when the bottles in fact

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contained a cheap substitute.” Id. at ¶ 13. In particular, Defendant sent Plaintiff four bottles of

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wines that were “falsely labeled 1990 Henry Jayer Vosne-Romanee 1st Cru Cros Parantoux.” Id.

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Plaintiff paid Defendant a total of $26,600 for fake wine. Id.

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Plaintiff filed suit against Defendant on February 7, 2017 asserting sixteen claims related

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to the parties’ alleged oral agreement. Defendant now moves to dismiss all of Plaintiff’s claims.
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II.

LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in

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the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).
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When reviewing a motion to dismiss for failure to state a claim, the court must “accept as true all
of the factual allegations contained in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94 (2007)
(per curiam) (citation omitted), and may dismiss a claim “only where there is no cognizable legal
theory” or there is an absence of “sufficient factual matter to state a facially plausible claim to
relief.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing

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Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
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2001)) (quotation marks omitted). A claim has facial plausibility when a plaintiff “pleads factual

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content that allows the court to draw the reasonable inference that the defendant is liable for the

United States District Court
Northern District of California

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misconduct alleged.” Iqbal, 556 U.S. at 678 (citation omitted). In other words, the facts alleged
must demonstrate “more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (citing

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Papasan v. Allain, 478 U.S. 265, 286 (1986)); see Lee v. City of L.A., 250 F.3d 668, 679 (9th Cir.
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2001), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir.
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2002).
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III.

DISCUSSION
A.

Fraud

Plaintiff’s first claim is “actual fraud.” Plaintiff alleges that Defendant delivered wines to

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Plaintiff on September 22, 2015. That delivery included at least four bottles labeled 1990 Henri
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Jayer Vosne-Romanee 1st Cru Cros Parantoux (the “Jayer wines”) that were fake. Compl. ¶ 20.

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Plaintiff alleges that Defendant misrepresented to Plaintiff that the wines were authentic and/or
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concealed from Plaintiff the fact that the wines were fake, and that Defendant knew that the wines
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were fake. Id. at ¶¶ 21, 23. Plaintiff also claims that he reasonably relied on Defendant’s
misrepresentation and brought the wines to Acker Merrall & Condit Company (“Acker”) for resale
at auction. On August 17, 2016, Acker informed Plaintiff that the four bottles of Jayer wine “were
problematic.” Id. at ¶ 26.

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To state a claim for fraud, Plaintiff must allege “(1) misrepresentation (false representation,

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concealment, or nondisclosure); (2) knowledge of falsity (or ‘scienter’); (3) intent to defraud, i.e.,

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to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Kearns v. Ford Motor Co.,

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567 F.3d 1120, 1126 (9th Cir. 2009) (quotation omitted). “Each element in a cause of action for

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fraud . . . must be factually and specifically alleged.” Cadlo v. Owens-Illinois, Inc., 125 Cal. App.

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4th 513, 519 (2004). Allegations of fraud must be stated with “specificity including an account of

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the ‘time, place, and specific content of the false representations as well as the identities of the

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parties to the misrepresentations.’” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)

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(quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)); see also Vess v.
Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (averments of fraud must include

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United States District Court
Northern District of California

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“the who, what, when, where, and how” of the misconduct charged). Vague or conclusory

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allegations are insufficient to satisfy Rule 9(b)’s particularity requirement. Moore v. Kayport

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Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989). “A party alleging fraud must ‘set forth

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more than the neutral facts necessary to identify the transaction.’” Kearns, 567 F.3d at 1124

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(quoting In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994)).

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Plaintiff does not adequately plead the alleged misrepresentations. Rule 9(b) requires that

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a party “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P.

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9(b). Plaintiff’s conclusory allegations fail to convey the “time, place, and specific content” of the

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misrepresentations made by Defendant about the authenticity of the Jayer wines. As such, they

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are not “specific enough to give [Defendant] notice of the particular misconduct which is alleged

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to constitute the fraud charged so that [he] can defend against the charge and not just deny that [he

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has] done anything wrong.” Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir.1993) (quotation

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omitted).

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The fraud claim is also insufficiently pleaded as to knowledge of falsity, or scienter.

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Although Rule 9(b) permits that “[m]alice, intent, knowledge, and other conditions of a person’s

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mind may be alleged generally,” it does not give license to Plaintiff to rest on conclusory

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statements. “[N]othing in the Federal Rules of Civil Procedure relieves a plaintiff of the

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obligation to ‘set forth facts from which an inference of scienter could be drawn.’” Oestreicher v.
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Alienware Corp., 544 F. Supp. 2d 964, 968 (N.D. Cal. 2008) (quoting Cooper v. Pickett, 137 F.3d

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616, 628 (9th Cir.1997)). Here, Plaintiff does not allege any facts beyond conclusory assertions to

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support an inference that Defendant knew the Jayer wines were fake.

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Finally, Plaintiff alleges on information and belief that “Defendant delivered the

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counterfeit wine intending to deceive Plaintiff into believing that he had purchased rare and

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valuable wine, when the bottles in fact contained a cheap substitute.” Id. at ¶ 13. Again, the

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complaint contains no factual allegations to support this statement. This is insufficient, because “a

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plaintiff who makes allegations on information and belief must state the factual basis for the

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belief.” Neubronner, 6 F.3d at 672.
Plaintiff’s first claim for relief for fraud is dismissed with leave to amend.

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United States District Court
Northern District of California

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B.

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Plaintiff’s second claim for relief is concealment fraud. Plaintiff alleges that starting on

Concealment Fraud

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April 4, 2011, Defendant “agreed to undertake on behalf of Plaintiff and for the benefit of Plaintiff

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in the purchase of wines,” and that Defendant was Plaintiff’s agent for wine purchases and owed

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Plaintiff a fiduciary duty. Compl. ¶ 30. He further alleges that Defendant had a duty to disclose

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that the Jayer wines were fake, but instead concealed that fact from Plaintiff. Id. at ¶¶ 33, 34.

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A claim for fraudulent concealment under California law “requires knowing concealment

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or non-disclosure by a defendant with the intent to defraud, which induces justifiable reliance and

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causes injury to the plaintiff.” 625 3rd St. Assocs., L.P. v. Alliant Credit Union, 633 F. Supp. 2d

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1040, 1050 (N.D. Cal. 2009). “Fraud or deceit may consist of the suppression of a fact by one

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who is bound to disclose it or who gives information of other facts which are likely to mislead for

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want of communication of the fact.” Id. Accordingly, in order to state a claim for fraudulent

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concealment, “there must be allegations demonstrating that the defendant was under a legal duty

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to disclose those facts.” Los Angeles Mem’l Coliseum Comm’n v. Insomniac, Inc., 233 Cal. App.

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4th 803, 831 (2015). A plaintiff can make that showing by alleging that (1) the defendant had a

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fiduciary relationship with the plaintiff; (2) the defendant exclusively knew material facts not

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known to the plaintiff; (3) the defendant actively concealed a material fact from the plaintiff; or (4)

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the defendant made partial representations, while also suppressing some material facts. See id. In
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the absence of a fiduciary relationship, “the duty to disclose generally presupposes a relationship

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grounded in some sort of transaction between the parties. Thus, a duty to disclose may arise from

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the relationship between seller and buyer, employer and prospective employee, doctor and patient,

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or parties entering into any kind of contractual relationship.” Id. (internal citations and quotation

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omitted). “All of these relationships are created by transactions between parties from which a duty

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to disclose facts material to the transaction arises under certain circumstances.” LiMandri v.

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Judkins, 52 Cal. App. 4th 326, 337 (1997).

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Defendant argues that Plaintiff’s concealment fraud claim is insufficient because the

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complaint does not allege facts establishing that the Jayer wines were fake or that Defendant knew
that they were fake. The court concludes that Plaintiff has sufficiently pleaded that the Jayer

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Northern District of California

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wines were fake by alleging that “some of the wines actually delivered by Defendant were

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counterfeit,” and that “[a]mong the counterfeit wine Defendant sent Plaintiff were [the Jayer

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wines].” Compl. ¶ 13. However, as discussed above, Plaintiff has not sufficiently pleaded that

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Defendant knew that the Jayer wines were fake, because Plaintiff’s allegations about such

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purported knowledge are entirely conclusory.

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Defendant also argues that Plaintiff does not sufficiently plead that Defendant had a legal

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duty to disclose to Plaintiff that the Jayer wines were fake. In response, Plaintiff asserts that he

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has pleaded facts establishing a fiduciary relationship between the parties, which would obligate

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Defendant to disclose this information to Plaintiff. See Insomniac, 233 Cal. App. 4th at 831. “A

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fiduciary relationship is any relation existing between parties to a transaction wherein one of the

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parties is . . . duty bound to act with the utmost good faith for the benefit of the other party.”

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Gilman v. Dalby, 176 Cal. App. 4th 606, 613 (2009) (quotation and citation omitted). “A

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fiduciary’s power to transact business with his beneficiary is severely limited; he must use the

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utmost good faith and, if he profits from the transaction, the law presumes the agreement was

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entered into by the beneficiary without sufficient consideration and under undue influence.”

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Comm. On Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197, 222 (1983)

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(quotations omitted). “The obligation to put the interests of the other party first is why a fiduciary

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relationship generally does not arise out of ordinary arms-length business dealings. In a typical
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business contract or relationship, one party does not commit to act in the other party’s best interest

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rather than in its own.” World Surveillance Grp. Inc. v. La Jolla Cove Investors, Inc., 66 F. Supp.

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3d 1233, 1235 (N.D. Cal. 2014). “In the commercial context, traditional examples of fiduciary

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relationships include those of trustee/beneficiary, corporate directors and majority shareholders,

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business partners, joint adventurers, and agent/principal.” Id. at 614. “Inherent in each of these

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relationships is the duty of undivided loyalty the fiduciary owes to its beneficiary, imposing on the

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fiduciary obligations far more stringent than those required of ordinary contractors.” Wolf v.

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Superior Court, 106 Cal. App. 4th 25, 30 (2003).

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Here, Plaintiff alleges that the parties “entered into an oral agreement wherein Defendant
agreed to purchase wines on behalf of Plaintiff and as Plaintiff’s agent.” Compl. ¶ 8 (emphasis

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Northern District of California

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added). Plaintiff further alleges that “Defendant agreed to undertake to act on behalf of Plaintiff

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and for the benefit of Plaintiff in the purchase of wines.” Id. at ¶ 30. These conclusory allegations

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do not plead any facts to support that Defendant agreed to act as Plaintiff’s agent. “An agent is

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one who represents another, called the principal, in dealings with third persons.” Cal. Civ. Code §

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2295. “An agent has such authority as the principal, actually or ostensibly, confers upon him.”

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Cal. Civ. Code § 2315. Plaintiff does not allege any facts about the definite terms and obligations

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of the parties under an agreement. For example, Plaintiff does not allege whether Defendant had

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authority to represent Plaintiff in dealings with any third parties under the terms of their

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agreement. Nor does Plaintiff allege facts to support an inference that Defendant knowingly

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undertook the duty of putting Plaintiff’s interests before his own and acting as Plaintiff’s fiduciary.

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Since the complaint does not sufficiently plead that the parties had a fiduciary relationship or that

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Defendant knew that the Jayer wines were fake, Plaintiff’s second claim for relief for concealment

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fraud is dismissed with leave to amend.

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C.

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Plaintiff’s third claim is for promissory fraud. Plaintiff alleges that starting on April 4,

Promissory Fraud

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2011, Defendant promised to deliver wines to Plaintiff as they were purchased, and that Defendant

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made the promises with the intent to deceive Plaintiff and/or induce Plaintiff to give him money.

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Compl. ¶¶ 42, 43. Plaintiff further alleges that in April 2015, he sent a representative to meet with
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Defendant, and that Defendant promised to deliver the remaining wines already purchased and

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return Plaintiff’s money for any unpurchased or undeliverable wines by the end of 2015. Id. at ¶

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47. According to Plaintiff, Defendant did not intend to deliver the wines or return Plaintiff’s

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money when he made his promises, and made the promises with the intent to deceive Plaintiff.

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Defendant instead used Plaintiff’s money to pay the legal fees he incurred as a result of his

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criminal case. Id. at ¶ 49.

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“An action for promissory fraud may lie where a defendant fraudulently induces the

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plaintiff to enter into a contract.” Lazar v. Superior Court, 12 Cal.4th 631, 638 (1996).

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“‘Promissory fraud’ is a subspecies of the action for fraud and deceit . . . where a promise is made
without [ ] intention to perform, there is an implied misrepresentation of fact that may be

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Northern District of California

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actionable fraud.” Id. Like all fraud claims, allegations of promissory fraud must be stated with

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particularity. See id. at 645. “A statement is not necessarily fraudulent merely because it is

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contradicted by later-discovered facts.” Richardson v. Reliance Nat. Indem. Co., No. C 99-2952

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CRB, 2000 WL 284211, at *4–5 (N.D. Cal. Mar. 9, 2000) (citing In re GlenFed, Inc. Sec. Litig.,

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42 F.3d 1541, 1548 (9th Cir. 1994)). Under Rule 9(b), a plaintiff must plead facts establishing the

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falsity of a statement at the time it is made. See id. “The rule therefore precludes plaintiff from

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simply pointing to a statement by a defendant, noting that the content of the statement ‘conflicts

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with the current state of facts,’ and concluding that ‘the charged statement must have been false’ at

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the time it was made.” Id. (citing GlenFed, 42 F.3d at 1548). Instead,

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a plaintiff must set forth, as part of the circumstances constituting
fraud, an explanation as to why the disputed statement was untrue or
misleading when made. This can be done most directly by pointing
to inconsistent contemporaneous statements or information (such as
internal reports) which were made by or available to the defendants.

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GlenFed, 42 F.3d at 1549. Moreover, “a plaintiff must point to facts which show that defendant

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harbored an intention not to be bound by terms of the contract at formation.” Hsu v. OZ Optics

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Ltd., 211 F.R.D. 615, 620 (N.D. Cal. 2002) (emphasis in original).

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Here, Plaintiff alleges two separate promises by Defendant that he claims were fraudulent
when made: Defendant’s April 2011 promise “to deliver wines to Plaintiff as they were
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purchased,” and his April 2015 promise to “deliver the remaining wines already purchased and . . .

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return Plaintiff’s money” for any unpurchased or undeliverable wines by the end of 2015. See

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Compl. ¶¶ 42, 47. This claim fails as currently pleaded. Plaintiff’s bare allegations merely state

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that Defendant had no intention to honor the parties’ agreement by delivering the wines and/or

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returning the money. See id. at ¶ 49 (“Defendant did not intend to deliver wines or return

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Plaintiff’s money when they made their promises.”). This is inadequate; a plaintiff “fail[s] to

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plead fraud with specificity as required by Rule 9(b)” by merely alleging that “[defendant] had no

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intention to be bound by the terms as agreed.” Nikoonahad v. Rudolph Techs., Inc., No. C 08-

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2290 JF (PVT), 2008 WL 4065831, at *4 (N.D. Cal. Aug. 27, 2008) (citing Hsu, 211 F.R.D. at

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620). Simply pointing to Defendant’s alleged failure to perform under the parties’ agreement is

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Northern District of California

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insufficient to establish Defendant’s fraudulent intent. See Canard v. Bricker, No. 14-CV-04986-

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JSC, 2015 WL 846997, at *6 (N.D. Cal. Feb. 25, 2015) (collecting cases).
The court also concludes that the allegations in the complaint fail to give rise to a plausible

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inference that Defendant did not intend to honor his promises to deliver wines to Plaintiff at the

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time he made them. As to the first promise, Plaintiff asserts that starting on April 4, 2011,

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Defendant promised to deliver wines to Plaintiff as they were purchased. As to the second,

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Defendant allegedly promised in April 2015 to deliver the wines purchased on Plaintiff’s behalf

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by the end of 2015. Compl. ¶¶ 42, 47. Plaintiff alleges that that Defendant actually delivered

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wines in May 2011 and November 2011, and alleges that Defendant delivered wines again on

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September 22, 2015, only some of which were fake. Id. at ¶¶ 10, 20. Therefore, Plaintiff admits

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that Defendant delivered wines from May 2011 until at least September 2015, rendering Plaintiff’s

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promissory fraud claims based on Defendant’s promises to deliver wines implausible.

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Plaintiff’s promissory fraud claim is dismissed with leave to amend.1

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D.

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Plaintiff’s fifth claim is for breach of contract. He alleges that on April 4, 2011, “Plaintiff

Breach of Contract

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Since the court finds that Plaintiff has failed to state a claim for promissory fraud, the court will
not address Defendant’s argument that Plaintiff’s fraud-based claims may be barred by the
economic loss rule.
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and Defendant entered into an oral contract for the purchase of fine wines,” and that he wired a

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total of $3,556,384 to Plaintiff for the purchase of wines. Compl. ¶ 71. Further, “Defendant

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accepted Plaintiff’s payment and order of wines and agreed to purchase on behalf of Plaintiff and

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as Plaintiff’s agent and deliver wines to Plaintiff as they were purchased.” Id. Plaintiff alleges

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that although he performed under the contract, Defendant has performed only some of its

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obligations, since he has delivered and shipped only $2,436,862.58 worth of wine. Id. at ¶ 73. He

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has failed to deliver the remainder of wines purchased with Plaintiff’s money or return Plaintiff’s

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money for unpurchased or undeliverable wines. Id. at ¶ 74. Defendant moves to dismiss

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Plaintiff’s breach of contract claim, arguing that the complaint does not sufficiently allege the

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existence of a contract and that the claim is time-barred.

United States District Court
Northern District of California

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The elements of a claim for breach of contract are: “(1) the existence of the contract; (2)

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performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4)

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damages.” Rockridge Trust v. Wells Fargo, N.A., 985 F. Supp. 2d 1110, 1141–42 (N.D. Cal.

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2013). “To allege the existence of a contract, a plaintiff must plead [1] mutual assent, [2]

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sufficiently definite contractual terms, and [3] consideration.” Id. As to the first element,

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“[c]ontract formation requires mutual consent, which cannot exist unless the parties agree on the

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same thing in the same sense.” Bustamante v. Intuit, Inc., 141 Cal. App. 4th 199, 208 (2006)

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(quotations omitted). Second, a contract must be sufficiently definite, so that the court may

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“ascertain the parties’ obligations and . . . determine whether those obligations have been

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performed or breached.” Ersa Grae Corp. v. Fluor Corp., 1 Cal. App. 4th 613, 623 (1991). As to

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the third element, California law defines “good consideration” to support a contract as follows:

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Any benefit conferred, or agreed to be conferred, upon the promisor,
by any other person, to which the promisor is not lawfully entitled,
or any prejudice suffered, or agreed to be suffered, by such person,
other than such as he is at the time of consent lawfully bound to
suffer, as an inducement to the promisor, is a good consideration for
a promise.
Cal. Civ. Code § 1605.

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Plaintiff’s complaint insufficiently alleges consideration to support the alleged contract.
“When a promise is given by one party to another, without anything being bargained for or given

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in exchange for it, the promise is without consideration.” Nault v. Smith, 194 Cal. App. 2d 257,

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265-66 (1961) (citation omitted). In an oral contract, consideration must be pleaded. Castro v.

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JPMorgan Chase Bank, N.A., No. 14-CV-01539 NC, 2014 WL 2959509, at *2 (N.D. Cal. June 30,

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2014) (citing Acheson v. W.U. Tel. Co., 96 Cal. 641, 644 (1892)). The complaint alleges that

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Defendant “agreed to purchase on behalf of Plaintiff and as Plaintiff’s agent and deliver wines to

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Plaintiff as they were purchased,” (Compl. ¶ 71), but does not allege that Defendant received any

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bargained-for compensation, benefit, or promise from Plaintiff in exchange for his performance.

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Accordingly, Plaintiff has failed to allege the existence of a contract between the parties.

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Defendant also argues that Plaintiff’s breach of contract claim is time-barred. Under
California law, oral contracts are subject to a two-year statute of limitations. Cal. Code Civ. Proc.

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Northern District of California

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§ 339(1); Boon Rawd Trading Int’l Co., Ltd. v. Paleewong Trading Co., Inc., 688 F. Supp. 2d 940,

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948 (N.D. Cal. 2010). A claim for relief accrues at “the time when the cause of action is complete

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with all of its elements.” Norgart v. Upjohn Co., 21 Cal. 4th 383, 397 (1999). “An important

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exception to this rule of accrual, however, is the ‘discovery rule,’ which postpones accrual until

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the plaintiff discovers, or has reason to discover, the facts underlying the cause of action.” Boon

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Rawd, 688 F. Supp. 2d at 948. Here, Plaintiff alleges that Defendant breached the parties’

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agreement when he “failed to deliver the remainder of wines purchased with Plaintiff’s money or

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return Plaintiff’s money for any unpurchased wines or wines purchased but undeliverable.”

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Compl. ¶ 74. Plaintiff also alleges that “he has made numerous demands for the delivery of the

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remainder of wines purchased with his money, and/or a return of his money that has not been used

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to purchase wines, including a telephone call in late January of 2015 to Defendant’s cellular

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phone.” Id. at ¶ 14. Based on these facts, Plaintiff’s breach of contract claim may be time-barred,

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since it appears that Plaintiff knew by January 2015 that Defendant was in breach of their oral

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agreement by failing to deliver wines purchased with his money and/or return any money that had

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not been used to purchase wines but did not file the present lawsuit until February 7, 2017, over

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two years later. However, Plaintiff’s allegations about the parties’ agreement are so sparse that the

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court cannot say definitively that Plaintiff is unable to allege a breach of contract claim that is not

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time-barred. Accordingly, the court dismisses this claim with leave to amend.
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E.

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Breach of Implied Covenant of Good Faith and Fair Dealing

Plaintiff’s sixth claim is for breach of the implied covenant of good faith and fair dealing.
He alleges that Defendant “breached the implied covenant of good faith and fair dealing by failing

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and refusing and continuing to refuse to tender their performance as required by the contract.
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5

Defendant has failed to deliver the remainder of wines purchased with Plaintiff’s money or return
Plaintiff’s money for any unpurchased wines or wines purchased but undeliverable.” Compl. ¶ 80.

6

This claim fails for the same reasons that his breach of contract claim fails. “California

7
law . . . provides that a covenant of good faith and fair dealing is an implied term in every
8

contract.” Chodos v. W. Publ’g Co., 292 F.3d 992, 996 (9th Cir. 2002). Thus, any action for

9
breach of the implied covenant requires the existence of a contract. Jenkins v. JP Morgan Chase
10
Bank, N.A., 216 Cal. App. 4th 497, 525 (2013). As discussed above, Plaintiff failed to plead the

United States District Court
Northern District of California

11

existence of a contract, since he does not allege any consideration to support the parties’

12
agreement. Accordingly, his claim for breach of implied covenant of good faith and fair dealing
13
also fails. This claim is subject to the same two-year statute of limitations as the breach of
14

contract claim. See Boon Rawd, 688 F. Supp. 2d at 953. As discussed above, Plaintiff’s breach of

15
contract claim appears to have accrued in January 2015. His breach of the implied covenant of
16
good faith and fair dealing claim is based upon the same conduct as the breach of contract claim—
17
18

Defendant’s failure to deliver wines purchased with Plaintiff’s money or return Plaintiff’s money
for unpurchased or undeliverable wines. As with Plaintiff’s breach of contract claim, the breach

19
of breach of the implied covenant of good faith and fair dealing claim may also be time barred.
20
This claim is dismissed with leave to amend.
21
F.

22

Unjust Enrichment

Plaintiff’s seventh claim is unjust enrichment. Plaintiff alleges that he and Defendant

23
entered into a contract. Compl. ¶ 83. He asserts that Defendant received money from Plaintiff for
24
25
26

the purchase of wines but did not deliver the wines or return Plaintiff’s money, totaling at least
$1,110,737.42. According to Plaintiff, “Defendant was unjustly enriched by appropriating
Plaintiff[’s] money which was paid by Plaintiff to Defendant for the delivery of wines.” Id. at ¶¶

27
84-87.
28
12

1

“[I]n California, there is not a standalone cause of action for ‘unjust enrichment,’ which is

2

synonymous with ‘restitution.’” Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir.

3

2015) (citations omitted). Unjust enrichment and restitution “describe the theory underlying a

4

claim that a defendant has been unjustly conferred a benefit ‘through mistake, fraud, coercion, or

5

request.’” Id. “When a plaintiff alleges unjust enrichment, a court may ‘construe the cause of

6

action as a quasi-contract claim seeking restitution.’” Id. (citing Rutherford Holdings, LLC v.

7

Plaza Del Rey, 223 Cal. App. 4th 221, 231 (2014). However, “an action based on an implied-in-

8

fact or quasi-contract cannot lie where there exists between the parties a valid express contract

9

covering the same subject matter.” Rutherford, 223 Cal. App. 4th at 231; see also Klein v.
Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1388 (2012) (“[a] plaintiff may not . . . pursue or

11
United States District Court
Northern District of California

10

recover on a quasi-contract claim if the parties have an enforceable agreement regarding a

12

particular subject matter.”).

13

Here, Plaintiff expressly alleges the existence of an express oral contract between the

14

parties in connection with his unjust enrichment claim. See Compl. ¶ 83. A plaintiff may assert

15

inconsistent theories of recovery at the pleading stage, including inconsistent claims alleging both

16

the existence and the absence of an enforceable contract. See Fed. R. Civ. P. 8(2)(2), (3); see also

17

Clear Channel Outdoor, Inc. v. Bently Holdings Cal. LP, No. C-11-2576 EMC, 2011 WL

18

6099394, at *9 (N.D. Cal. Dec. 7, 2011) (“even though a plaintiff may not ultimately prevail under

19

both unjust enrichment and breach of contract, it may plead both in the alternative.”). However, a

20

plaintiff may not plead the existence of an enforceable contract and simultaneously maintain a

21

quasi-contract claim unless the plaintiff also pleads facts suggesting that the contract may be

22

unenforceable or invalid. See Klein, 202 Cal. App. 4th at 1389 (holding that consumers could not

23

maintain unjust enrichment claim based on retail purchases of gasoline, which they alleged were

24

enforceable contractual relationships, where their unjust enrichment claim did not deny the

25

existence or enforceability of the agreements). Here, Plaintiff has not alleged in the alternative

26

that his agreement with Defendant was unenforceable or invalid. Accordingly, he is precluded

27

from asserting a quasi-contract claim under the theory of unjust enrichment. See id. at 1389-90;

28

see also World Surveillance Grp. Inc. v. La Jolla Cove Inv'rs, Inc., No. 13-CV-03455-WHO, 2014
13

1

WL 1411249, at *2 (N.D. Cal. Apr. 11, 2014) (dismissing unjust enrichment claim because

2

plaintiff explicitly pleaded the existence of enforceable agreements between the parties).

3

Plaintiff’s unjust enrichment claim is dismissed with leave to amend.

4

G.

5

Plaintiff’s eighth claim is for breach of fiduciary duty. Plaintiff alleges that “Defendant

Breach of Fiduciary Duty

6

agreed to undertake to act on behalf of Plaintiff and for the benefit of Plaintiff in the purchase of

7

wines. Furthermore, Defendant is an agent for the purchase of wines. Thus, Defendant has a

8

fiduciary obligation towards Plaintiff.” Compl. ¶ 90. Plaintiff alleges that Defendant “breached

9

[his] fiduciary duty by failing to use reasonable care and by failing to provide undivided loyalty.”

10

United States District Court
Northern District of California

11

Id. at ¶ 92.
To plead a claim for breach of fiduciary duty, “a plaintiff must show the existence of a

12

fiduciary relationship, its breach, and damage caused by the breach.” Apollo Capital Fund, LLC v.

13

Roth Capital Partners, LLC, 158 Cal. App. 4th 226, 243 (2007). As discussed above in

14

connection with Plaintiff’s concealment fraud claim, Plaintiff has failed to sufficiently allege the

15

existence of a fiduciary relationship between the parties. His breach of fiduciary duty claim is

16

therefore dismissed with leave to amend.

17

H.

18

Plaintiff’s ninth claim for relief is conversion. Plaintiff alleges that he is “the owner of or

Conversion

19

entitled to immediately possess wines for which he paid Defendant $1,110,737.42 but did not take

20

delivery of.” Compl. ¶ 97. Further, he alleges that “Defendant intentionally, wrongfully, and

21

substantially interfered with Plaintiff’s interest in the above-described property by taking

22

possession of the wine, failing to deliver the wines to Plaintiff, and refusing to deliver the wines or

23

refund the money paid to Plaintiff after Plaintiff demanded its return.” Id. at ¶ 98.

24

“Conversion is the wrongful exercise of dominion over the property of another. The

25

elements of a conversion are the plaintiff’s ownership or right to possession of the property at the

26

time of the conversion; the defendant’s conversion by a wrongful act or disposition of property

27

rights; and damages.” Farmers Ins. Exchange v. Zerin, 53 Cal. App. 4th 445, 451 (1997); G.S.

28

Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir. 1992).
14

1

Defendant argues that Plaintiff cannot maintain a conversion claim based on his alleged

2

breach of the parties’ agreement, arguing that California’s economic loss rule precludes this claim.

3

“Conduct amounting to a breach of contract becomes tortious only when it also violates an

4

independent duty arising from principles of tort law.” Applied Equipment Corp. v. Litton Saudi

5

Arabia Ltd., 7 Cal.4th 503, 515 (1994). In other words, “an omission to perform a contract

6

obligation is never a tort, unless that omission is also an omission to perform a legal duty.” Id.

7

“[N]o claim for conversion will lie where the right to payment is a mere contractual one.” La

8

Jolla Cove Investors, Inc. v. Sultan Corp., No. 11CV1628 JM RBB, 2011 WL 4916138, at *2

9

(S.D. Cal. Oct. 17, 2011) (citing Imperial Valley Co. v. Globe Grain & Milling Co., 187 Cal. 352,

10

United States District Court
Northern District of California

11

354 (1921)).
Here, it appears that Plaintiff’s conversion claim is based solely on Defendant’s alleged

12

duties under the contract, and the amount of damages he seeks is identical to the amount of wine

13

to be delivered and/or money to be returned under the parties’ agreement. Plaintiff argues that he

14

has alleged a valid claim for conversion because he alleges that Defendant owed Plaintiff a duty

15

independent of contract, pointing to his allegations that Defendant owed Plaintiff a fiduciary duty,

16

which he breached. See Compl. ¶¶ 90-92. However, as discussed above, Plaintiff has not

17

sufficiently alleged that Defendant owed him a fiduciary duty. Accordingly, Plaintiff’s conversion

18

claim as pleaded appears to be barred by the economic loss rule. See, e.g., McGehee v. Coe

19

Newnes/McGehee ULC, No. C 03-5145 MJJ, 2004 WL 2452855, at *2-3 (N.D. Cal. Feb. 10,

20

2014) (dismissing conversion counterclaim where “the duty Plaintiffs owed Defendant was only a

21

contractual one”). The claim is dismissed with leave to amend.

22

I.

23

Plaintiff’s tenth claim is for intentional interference with prospective economic relations.

Intentional Interference with Prospective Economic Relations

24

He alleges that he and “buyers of fine wine from Plaintiff were in an economic relationship that

25

probably would have resulted in an economic benefit and advantage to Plaintiff when Plaintiff

26

sells fine wine to such buyers.” Compl. ¶ 103. Further, he alleges that Defendant “knew that

27

Plaintiff purchased wine for the purpose of reselling them” and thus “knew of the relationship

28

between Plaintiff and buyers of fine wine from Plaintiff.” Id. at ¶ 104.
15

1
2
3
4
5
6

To state a claim for intentional interference with prospective economic advantage, a
plaintiff must allege the following:
(1) an economic relationship between the plaintiff and another,
containing a probable future economic benefit or advantage to
plaintiff, (2) defendant’s knowledge of the existence of the
relationship, (3) that defendant intentionally engaged in acts or
conduct designed to interfere with or disrupt the relationship, (4)
actual disruption, and (5) damage to the plaintiff as a result of
defendant’s acts.

7

Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 439 n.1 (1995) (quotations

8

omitted); see Sole Energy Co. v. Petrominerals Corp., 128 Cal. App. 4th 212, 233 n.7 (2005).

9

Plaintiff’s claim is insufficiently pleaded as to the first element, which applies to “existing
noncontractual relations which hold the promise of future economic advantage.” Westside Ctr.

11
United States District Court
Northern District of California

10

Assocs.v. Safeway Stores 23, Inc., 42 Cal. App. 4th 507, 524 (1996). The relationship must be one

12

that “eventually will yield the desired benefit, not necessarily the more speculative expectation

13

that a potentially beneficial relationship will eventually arise.” Id. “Courts have held that, in

14

order to state a claim for intentional interference with prospective business advantage, it is

15

essential that the Plaintiff allege facts showing that Defendant interfered with Plaintiff’s

16

relationship with a particular individual.” Damabeh v. 7-Eleven, Inc., No. 12-CV-01739 LHK,

17

2013 WL 1915867, at *10 (N.D. Cal. May 8, 2013) (citing Westside, 42 Cal. App. 4th at 527).

18

“Allegations that a defendant interfered with the plaintiff’s relationship with an ‘as yet

19

unidentified’ customer will not suffice.” Id. (citing Westside, 42 Cal. App. 4th at 527). Here,

20

Plaintiff alleges only that he and unnamed buyers of fine wine were “in an economic relationship

21

that probably would have resulted in an economic benefit and advantage to Plaintiff.” Compl. ¶

22

103. This allegation is speculative and insufficient. See Westside, 42 Cal. App. 4th at 527

23

(holding that “[w]ithout an existing relationship with an identifiable buyer, [plaintiff’s]

24

expectation of a future sale was ‘at most a hope for an economic relationship and a desire for

25

future benefit.’” (internal citations omitted)).

26

Plaintiff also does not allege that Defendant intentionally acted to disrupt Plaintiff’s

27

relationships with his potential wine buyers. Instead, he alleges that Defendant engaged in the

28

alleged conduct so that he could keep Plaintiff’s money to pay his legal bills. Id. at ¶ 16. At most,
16

1

this is merely incidental interference that was not “designed” or intended to disrupt Plaintiff’s

2

relationships.

3

Plaintiff’s intentional interference claim is dismissed with leave to amend.

4

J.

5

Plaintiff’s fourth, eleventh, and thirteenth claims are for negligent misrepresentation,

Negligence-Based Claims

6

negligent interference with prospective economic relations, and negligence. As to the negligent

7

misrepresentation claim, Plaintiff alleges three misrepresentations by Defendant: 1) Defendant’s

8

representation regarding the authenticity of the Jayer wines; 2) Defendant’s representation in April

9

2011 that he would deliver wines to Plaintiff as they were purchased; and 3) Defendant’s
representation in April 2015 that he would deliver the remaining wines already purchased and

11
United States District Court
Northern District of California

10

return Plaintiff’s money for unpurchased or undeliverable wines by the end of 2015. Compl. ¶¶

12

55-56, 61, 62. Plaintiff’s negligent interference claim is based on his allegation that Plaintiff was

13

in economic relationships with “buyers of fine wine . . . that probably would have resulted in an

14

economic benefit and advantage to Plaintiff when Plaintiff sells wine to such buyers,” and that

15

Defendant disrupted those relationships by failing to act with reasonable care. Id. at ¶¶ 110-113.

16

With respect to the negligence claim, Plaintiff alleges simply that Defendant was negligent with

17

respect to the conduct as described in the complaint. Id. at ¶ 120.

18

Under California law, to state a claim for negligent misrepresentation, Plaintiff must allege

19

that Defendant made: (1) a misrepresentation of a past or existing material fact, (2) without

20

reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the

21

misrepresentation, (4) ignorance of the truth and justifiable reliance on the misrepresentation by

22

the party to whom it was directed, and (5) resulting damage. Glenn K. Jackson Inc. v. Roe, 273

23

F.3d 1192, 1201 n.2 (9th Cir. 2001). “As with any negligence claim, the tort of negligent

24

misrepresentation requires that [a plaintiff] allege a duty of care.” Plastino v. Wells Fargo Bank,

25

873 F. Supp. 2d 1179, 1190 (N.D. Cal. 2012).

26

To state a claim for negligent interference, Plaintiff must allege that “(1) an economic

27

relationship existed between the plaintiff and a third party which contained a reasonably probable

28

future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the
17

1

relationship and was aware or should have been aware that if it did not act with due care its actions

2

would interfere with this relationship and cause plaintiff to lose in whole or in part the probable

3

future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4)

4

such negligence caused damage to plaintiff in that the relationship was actually interfered with or

5

disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably

6

expected from the relationship.” UMG Recordings, Inc. v. Global Eagle Entertainment, Inc., 117

7

F. Supp. 3d 1092, 1118 (C.D. Cal. 2015) (quotation omitted). “The tort of negligent interference

8

with economic relationship arises only when the defendant owes the plaintiff a duty of care.”

9

Lange v. TIG Ins. Co., 68 Cal.App.4th 1179, 1187 (1998).
The elements of a negligence claim are (1) existence of duty to exercise due care, (2)

11
United States District Court
Northern District of California

10

breach of duty, (3) causation, and (4) damages. Id. A negligent misrepresentation claim is subject

12

to Rule 9(b)’s particularity requirements. See Neilson v. Union Bank of Cal., N.A., 290 F.Supp.2d

13

1101, 1141 (C.D. Cal. 2003) (noting that “[i]t is well-established in the Ninth Circuit that both

14

claims for fraud and negligent misrepresentation must meet Rule 9(b)’s particularity

15

requirements.”).

16

Here, all three negligence claims must be dismissed because Plaintiff has not alleged that

17

Defendant owed him a duty of care. The negligent misrepresentation and negligent interference

18

claims suffer from additional shortcomings. As to the negligent misrepresentation claim, as noted

19

above, the allegations must be specific enough to give Defendant notice of the particular

20

misconduct that is alleged to constitute the fraud so that it can defend against the claim. See Bly–

21

McGee, 236 F.3d at 1019. Defendant challenges only the sufficiency of the alleged

22

misrepresentation regarding the authenticity of the Jayer wines. As discussed above, the

23

complaint fails to allege facts establishing that Defendant actually made a false statement

24

regarding the authenticity of the allegedly fake Jayer wines. Plaintiff does not specify the “time,

25

place, and specific content” of the alleged misrepresentations by Defendant that the Jayer wines

26

were authentic.

27

Regarding the negligent interference claim, Plaintiff has not sufficiently alleged the

28

existence of an economic relationship between Plaintiff and a third party which contained a
18

1

reasonably probable future economic benefit or advantage to Plaintiff, as discussed above in

2

connection with the intentional interference claim.

3
4

Accordingly, Plaintiff’s negligent misrepresentation, negligent interference with
prospective economic relations, and negligence claims are dismissed with leave to amend.

5

K.

6

Plaintiff’s twelfth claim is for violation of California’s Unfair Competition Law, California

Unfair Competition

7

Business and Professions Code section 17200 (“UCL”). He alleges that “by engaging in the

8

conduct described [in the complaint], [Defendant] has engaged in ‘unfair, unlawful and fraudulent

9

business act or practice and unfair, deceptive untrue or misleading advertising’ in violation” of the

10

UCL. Compl. ¶ 116.

United States District Court
Northern District of California

11

Under Section 17200, unfair competition is defined as “any unlawful, unfair or fraudulent

12

business act or practice” and “unfair, deceptive, untrue or misleading advertising.” See Cal. Bus.

13

& Prof. Code § 17200. A business practice is “unlawful” under section 17200 if it violates an

14

underlying state or federal statute or common law. See Cal-Tech Commc’ns, Inc. v. Los Angeles

15

Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). An act is “unfair” if the act “threatens an incipient

16

violation of a [competition law], or violates the policy or spirit of one of those laws because its

17

effects are comparable to or the same as a violation of the law.” Id. at 187. To the extent the

18

claims sound in fraud, they are subject to the heightened pleading standards of Rule 9(b). See

19

Kearns, 567 F.3d at 1125. Additionally, “[a] plaintiff alleging unfair business practices under the

20

unfair competition statutes ‘must state with reasonable particularity the facts supporting the

21

statutory elements of the violation.’” Silicon Knights, Inc. v. Crystal Dynamics, Inc., 983 F. Supp.

22

1303, 1316 (N.D. Cal. 1997) (quoting Khoury v. Maly's of California, 14 Cal. App. 4th 612, 619

23

(1993)).

24

Here, Plaintiff has failed to state “with reasonable particularity” the facts supporting this

25

claim. Plaintiff does not specifically identify any conduct that he alleges is unfair, unlawful, or

26

fraudulent for the purposes of the UCL, and as discussed above, Plaintiff has not adequately stated

27

any fraud-based claims. Further, “the central issue presented under [the UCL] is whether the

28

public at large, or consumers generally, are affected by the alleged . . . business practice of
19

1

defendants.” In re Webkinz Antitrust Litig., 695 F. Supp. 2d 987, 998-99 (N.D. Cal. 2010).

2

Plaintiff does not allege that Defendant’s actions “state a connection to the protection of the

3

general public.” See id. Instead, Plaintiff alleges only harm to himself based on Defendant’s

4

alleged breach of their agreement. He has accordingly failed to state a UCL claim. The UCL

5

claim is dismissed with leave to amend.

6

L.

7

Plaintiff’s fourteenth claim for relief is common count. Common count is a “simplified

Common Count

8

form[s] of pleading normally used to aver the existence of various forms of monetary

9

indebtedness.” McBride v. Boughton, 123 Cal. App. 4th 379, 394 (2004). “‘When a common
count is used as an alternative way of seeking the same recovery demanded in a specific [claim],

11
United States District Court
Northern District of California

10

and is based on the same facts,’ it does not survive if the underlying claim does not survive.”

12

McAfee v. Francis, No. 5:11-CV-00821-LHK, 2011 WL 3293759, at *2 (N.D. Cal. Aug. 1, 2011)

13

(citing McBride, 123 Cal. App. 4th at 394 (“[The Plaintiff's] common count must stand or fall with

14

his first cause of action.”)). Since Plaintiff’s common count claim is derivative of his breach of

15

contract claim, the common count is also dismissed with leave to amend.

16

M.

17

Plaintiff’s fifteenth claim is account stated. “An account stated is ‘an agreement, based on

Account Stated

18

the prior transactions between the parties, that the items of the account are true and that the

19

balance struck is due and owing from one party to another.’” Nat’l Ins. Co. of Hartford v. Expert

20

Auto. Reconditioning, Inc., No. SACV 13-0873-DOC, 2013 WL 6190591, at *3 (C.D. Cal. Nov.

21

24, 2013) (quoting Gleason v. Klamer, 103 Cal. App. 3d 782, 786 (1980)). “An account stated

22

constitutes a new contract which supersedes and extinguishes the original obligation.” Zinn v.

23

Fred R. Bright Co., 271 Cal. App. 2d 597, 600 (1969) (citations omitted). Thus, an “action upon

24

an account stated is not upon the original dealings and transactions of the parties,” rather it is

25

“upon the new contract by and under which the parties have adjusted their differences and reached

26

an agreement.” Martini E Ricci Iamino S.P.A.--Consortile Societa Agricola v. Trinity Fruit Sales

27

Co., 30 F. Supp. 3d 954, 976 (E.D. Cal. 2014) (citations omitted).

28

To establish an account stated claim, a plaintiff must show: “(1) previous transactions
20

1

between the parties establishing the relationship of debtor and creditor; (2) an agreement between

2

the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by

3

the debtor, express or implied, to pay the amount due.” Zinn, 271 Cal. App. 2d at 600 (citations

4

omitted). The agreement necessary to establish an account stated need not be express and may be

5

implied from the circumstances. Martini E Ricci, 30 F. Supp. 3d at 976 (citations omitted). Here,

6

Plaintiff has sufficiently alleged the elements of an account stated claim. He alleges that

7

Defendant owes him $1,110,737.42 based on their prior dealings and that “Defendant admitted

8

that he owed Plaintiff money.” Compl. ¶¶ 16, 128. He also alleges that Defendant, “by words or

9

conduct, agreed that the amount stated . . . was the correct amount owed to Plaintiff,” and that

10

United States District Court
Northern District of California

11

“Defendant, by words or conduct, promised to pay the stated amount.” Compl. ¶¶ 129-30.
Defendant argues that in order to allege account stated, Plaintiff must allege the existence

12

of a writing that sets forth the state of the parties “account,” and the balance owed by one to the

13

other. Reply 9 (quoting Coffee v. Williams, 103 Cal. 550, 556 (1894)). However, more recent

14

cases indicate that that is no longer the rule. See Truestone, Inc. v. Simi West Industrial Park II,

15

163 Cal. App. 3d 715, 726 (1984) (“an account stated . . . need not be in writing” (citing Fogarty

16

v. McGuire, 170 Cal. App. 2d 405, 409 (1959); Mitchell v. Fleming, 77 Cal. App. 241, 245

17

(1926)); see also Boehmke v. Westfall, 106 Cal. App. 754, 757 (1930) (stating it is settled “that a

18

writing is not essential to the creation of an account stated.”). Indeed, Judicial Council of

19

California Civil Jury Instruction 373 provides that an agreement may be formed “by words or

20

conduct.” CACI 373. Accordingly, Defendant’s motion to dismiss Plaintiff’s account stated

21

claim is denied.

22

N.

23

Plaintiff’s sixteenth claim is claim and delivery. Claim and delivery is not a separate

Claim and Delivery

24

action but a remedy to return specific property and to award incidental damages. Adler v. Taylor,

25

No. 04-8472-RGK(FMOX), 2005 WL 4658511, at *3 (C.D. Cal. Feb. 2, 2005). In California,

26

courts use claim and delivery which is identical to the federal remedy of replevin. Id. An action

27

for claim and delivery requires a plaintiff to show a right to possession and the defendant’s

28

wrongful possession of the property at issue. Id; see Stalcup v. Liu, No. 11-00002-JSW, 2011 WL
21

1

1753493, at *6 (N.D. Cal. April 22, 2011); Cal. Civ. Code § 3379; Cal. Civ. Proc. Code §

2

512.010.
Plaintiff’s claim and delivery action is based on Defendant’s allegedly wrongful possession

3
4

of $1,110,737.42 belonging to Plaintiff. Compl. ¶ 134. However, for claim and delivery, “it is

5

essential that the specific personal property claimed should be described with a reasonable degree

6

of certainty; and, as a rule, money is not the subject of such an action unless it be marked or

7

designated in some manner so as to make it specific as regards its capability of identification.”

8

Hillyer v. Eggers, 32 Cal. App. 764, 766 (1917) (citations omitted). Here, Plaintiff does not allege

9

that the money allegedly owed by Defendant is “marked or designated in some manner” that
makes it capable of specific identification. See id.; see also Sharon v. Nunan, 63 Cal. 234, 234-35

11

(1883) (holding that replevin was a proper remedy for recovery of money in “gold and silver

12

coins, sealed up in a canvas bag, marked with a tag” and held in a vault). Accordingly, he has

13

failed to state a claim for claim and delivery. This claim is dismissed with leave to amend.

14

IV.

CONCLUSION

15

For the foregoing reasons, Defendant’s motion to dismiss is granted in part and denied in

16

part. All claims except the fifteenth claim for account stated are dismissed with leave to amend.

17

Any amended complaint must be filed within two weeks of the date of this order. The initial case

18

management conference is set for August 16, 2017 at 1:30. The parties’ joint case management

19

conference statement must be submitted by August 9, 2017.

______________________________________
Donna M. Ryu
yu
United States onna M. R
DMagistrate Judge

NO

24

D

RDERE

OO
IT IS S

R NIA

23

Dated: June 14, 2017

RT

25

Judge

ER

27
28
22

A

H

26

FO

22

IT IS SO ORDERED.

LI

21

S DISTRICT
TE
C
TA

RT
U
O

S

20

UNIT
ED

United States District Court
Northern District of California

10

N

F
D IS T IC T O
R

C