Mosley v. Groupon Inc., et.al.

Filing 37

ORDER GRANTING 14 GROUPON'S MOTION TO DISMISS WITH LEAVE TO AMEND. Amended complaint due 11/11/2015. Signed by Hon. Beth Labson Freeman on 8/14/2015. (blflc2, COURT STAFF) (Filed on 8/14/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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WILLIAM MOSLEY, et al.,

Case No. 15-cv-01205-BLF

Plaintiffs,
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v.

ORDER GRANTING MOTION TO
DISMISS WITH LEAVE TO AMEND

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GROUPON, INC., et al.,

[Re: ECF 14]

Defendants.

United States District Court
Northern District of California

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Plaintiffs William and Frances Mosley (“Plaintiffs”) got a bad deal. After purchasing a

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$39 Groupon.com coupon from defendant Groupon, Inc. (“Groupon”) for a “licensed, bonded, and

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insured technician” to come to their house to perform vent cleaning and HVAC inspection

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services, they were informed by the technician who arrived at their home—“Ben”—that their

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ducts were contaminated with asbestos. Compl. ¶¶ 13, 22, ECF 1. Ben offered to remove the four

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contaminated ducts for $1,196 and Mrs. Mosley agreed to those terms after he assured her that he

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was “licensed and qualified to abate asbestos.” Id. ¶ 23. As it turns out, Ben was neither licensed

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nor qualified to do the asbestos work. In fact, Plaintiffs allege, he does not appear to have been

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licensed at all. Id. ¶¶ 21, 34. Ben botched the job and contaminated Plaintiffs’ house, exposing

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Mr. Mosley and their belongings to asbestos, and ultimately requiring Plaintiffs to hire a different

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company to undo the damage that Ben had caused. Id. ¶¶ 27-31. To make matters worse, Ben

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insisted on getting paid and, when Plaintiffs refused, made threatening phone calls causing them to

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fear for their physical safety. Id. ¶¶ 32, 37-38.

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Understandably upset by Ben’s conduct, Plaintiffs sued Groupon as well as American Duct

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Pros, Inc. (“ADP”) and its alleged alter ego National Duct Cleaning Services, Inc. (“NDCS”).

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ADP and NDCS never responded to Plaintiffs’ complaint and the Clerk of the Court entered

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default against them on April 1 and April 16, 2015 respectively. ECF 12, 27. Before the Court is

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Groupon’s Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), which was

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heard on August 13, 2015. Groupon Mot., ECF 14.
Plaintiffs assert eleven causes of action against Groupon for fraud (First Claim), negligent

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misrepresentation (Second Claim), negligence per se (Third Claim), negligence (Fourth Claim),

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intentional infliction of emotion distress (Sixth Claim),1 negligent infliction of emotional distress

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(Seventh Claim), breach of contract (Eighth Claim), breach of the implied covenant of good faith

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and fair dealing (Ninth Claim), violation of California’s Unfair Competition Law (“UCL”), Cal.

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Bus. & Prof. Code § 17200 et seq. (Tenth Claim), false advertising in violation of California
Business & Professions Code § 17500 et seq. (Eleventh Claim), and violation of the California

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United States District Court
Northern District of California

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Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (Twelfth Claim). Groupon’s

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motion challenges Plaintiffs’ common law claims only (First through Ninth Claims). For the

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reasons stated on the record of the hearing, Groupon’s motion is GRANTED with leave to amend.
To summarize the Court’s oral ruling, there are two major deficiencies in the allegations

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that undermine Plaintiffs’ First through Ninth Claims against Groupon: first, there are no facts

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plausibly linking Ben to Groupon and second, there are no facts plausibly indicating that Ben’s

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misconduct and the resultant harm to Plaintiffs was foreseeable to Groupon.
As to the first, by their own allegations, Plaintiffs booked Ben’s services through an ADP

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representative and Ben answered in the affirmative when Mrs. Mosley “asked if he was from

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ADP.” Compl. ¶ 19. The only non-conclusory allegation that Plaintiffs could point to regarding

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Ben’s employment or agency with Groupon is the fact that he indicated he needed to call “the

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secretary in Illinois” in order to schedule a follow-up appointment to perform the agreed-upon

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duct removal. Id. ¶ 25. Plaintiffs suggest that this could mean he needed to call Groupon, which

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is headquartered in Illinois. Id. ¶ 7. That is possible. Much more likely is the inference that he

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was calling ADP—the company that he told Mrs. Mosley he worked for—, which is also based in

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Illinois. Id. ¶¶ 8, 19. The existing allegations are therefore insufficient to establish that Groupon

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The Fifth Claim for negligent hiring and supervision is asserted only against ADP and NDCS.
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can be held liable for Ben’s actions as his employer or principal. Ashcroft v. Iqbal, 556 U.S. 662,

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678 (2009) (Rule 8(a) requires more than a “sheer possibility” that a defendant acted wrongly).

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To be sure, Plaintiffs have adequately alleged that Ben was not licensed and, in that

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manner, may show that Groupon breached the original agreement to provide a “licensed, bonded,

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or insured” technician to perform vent cleaning and HVAC inspection services. As alleged,

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however, the deal that Plaintiffs purchased made no mention of asbestos abatement. As such,

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absent further factual enhancement, there is no plausible suggestion that Ben’s misrepresentation

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concerning his asbestos qualifications, his entry into a separate agreement to perform duct removal

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and asbestos abatement, and the consequent injury to Plaintiffs from those actions were all

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United States District Court
Northern District of California

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foreseeable from the failure to send a “licensed, bonded, or insured” technician to clean vents.
Finally, as addressed on the record, Plaintiffs have also failed to factually allege that

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Groupon is a “home improvement contractor” or a “home improvement salesperson” bound by

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California Business & Professions Code §§ 7150-1768 such that Groupon’s violation of any of

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those sections could constitute negligence per se.

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Plaintiffs requested leave to amend to address all of these deficiencies and amendment

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does not appear to be futile at this stage, though the Court has serious doubts concerning

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Plaintiffs’ ability to demonstrate Groupon’s liability for Ben’s conduct. For the reasons stated

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above and on the record of the August 13, 2015 hearing, Groupon’s Motion to Dismiss is

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GRANTED, with leave to amend, with respect to Plaintiffs’ First, Second, Third, Fourth, Sixth,

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Seventh, Eighth, and Ninth Claims against Groupon. As requested by Plaintiffs, with no

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opposition from Groupon, Plaintiffs shall file their amended pleading by no later than November

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11, 2015. Because default has already been entered against ADP and NDCS, Plaintiffs shall take

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care to restrict their amendments to allegations and claims against Groupon or be required to serve

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ADP and NDCS with the amended complaint.

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IT IS SO ORDERED.
Dated: August 14, 2015
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BETH LABSON FREEMAN
United States District Judge
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