Golden State Equity Investors, Inc. v. Alliance Creative Group, Inc.

Filing 14

ORDER Denying Defendant's 6 Motion to Dismiss for Failure to State a Claim. Signed by Judge Michael M. Anello on 4/7/2017. (ag)

Download PDF
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 11 GOLDEN STATE EQUITY INVESTORS, INC. v. ORDER DENYING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM ALLIANCE CREATIVE GROUP, INC. [Doc. No. 6] Plaintiff, 12 13 14 Case No.: 16cv1694-MMA (DHB) Defendant. 15 16 17 Plaintiff Golden State Equity Investors, Inc. filed the First Amended Complaint 18 (“FAC”) on September 1, 2016, against Defendant Alliance Creative Group, Inc. alleging 19 a breach of contract. See Doc. No. 5, p. 7. Defendant now moves to dismiss the FAC for 20 failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil 21 Procedure 12(b)(6). See Doc. No. 6, p. 1. The Court took the matter under submission 22 on the briefs and without oral argument pursuant to Civil Local Rule 7.1.d.1. See Doc. 23 No. 11. For the reasons set forth below, the Court DENIES Defendant’s motion to 24 dismiss. 25 // 26 // 27 // 28 // 1 16cv1694-MMA(DHB) 1 I. BACKGROUND 2 Because this matter is before the court on a motion to dismiss, the Court must 3 accept as true the allegations set forth in the FAC, but in doing so, does not make any 4 findings of fact. See Hosp. Bldg. Co. v. Trs. Of Rex Hosp., 425 U.S. 738, 740 (1976). 5 Plaintiff alleges the following. 6 i. 7 Plaintiff is an investment company focused on private money lending. See FAC ¶ Overview 8 1. Defendant is a digital engagement company “engaged in the business of creative 9 packaging.” See FAC ¶ 2. Plaintiff and Defendant “have been in a contractual 10 11 relationship for the past twelve (12) years.” See Doc. No. 6-1, p. 2. Specifically, on April 27, 2004, the parties entered into two agreements whereby 12 Plaintiff invested $300,000.00 into Defendant’s company in exchange for interest 13 repayments and rights to purchase 3,000,000 shares of Common Stock. See FAC ¶ 7. 14 The first agreement (“Original Note”) stated that, starting on June 15, 2004, Defendant 15 would pay 7 ¾ per annum interest rate on Plaintiff’s $300,000.00 investment until the 16 principal amount was paid in full. See FAC, Exh. C. The Original Note’s maturity date 17 was initially April 27, 2006. See FAC, Exh. C. The second agreement (“Warrant to 18 Purchase Common Stock” or “Warrant”) allowed Plaintiff the right to purchase 19 3,000,000 shares of Defendant’s Common Stock. See FAC, Exh. B. The Warrant’s 20 expiration date was initially April 27, 2006. See FAC, Exh. B. 21 Seven years later, on April 25, 2011, the parties entered into an “Addendum” with 22 new terms. See FAC, Exh. D. The Addendum “extended the maturity date of the 23 Original Note and the expiration date of the Warrant to April 25, 2012.” See FAC ¶ 10; 24 see also Doc. No. 6-1, p. 2. The Addendum further acknowledged that $143,847.00 of 25 the principal balance remained outstanding under the Original Note. See FAC, Exh. D. 26 On March 18, 2013, the parties then entered into an “Exchange Agreement” 27 whereby the Original Note (and its 7 ¾ per annum rate) was exchanged for a “New Note” 28 in which Defendant agreed to pay Plaintiff the remaining outstanding balance of 2 16cv1694-MMA(DHB) 1 $143,312.00 at a lower 3 ¾ per annum interest rate. See FAC, Exh. E. The Exchange 2 Agreement provided for Defendant to issue Common Stock to Plaintiff pursuant to the 3 New Note’s terms. See id. at §2.21 (stating “[Defendant] shall honor all conversions of 4 the New Note and shall deliver Underlying Shares in accordance with the terms, 5 conditions and time periods set forth therein”); see also id. at §2.04 (stating “[a]ny 6 Underlying Shares, when issued in accordance with the terms of the New Note will be 7 duly and validly issued . . .”). 8 The New Note’s terms, signed by the parties on March 31, 2013, extended the 9 maturity date of the principal outstanding balance to March, 6, 2018. See FAC, Exh. A. 10 Furthermore, Section 3.1 in the New Note states “at the option of the Holder [Plaintiff], 11 this Debenture may be converted, either in whole or in part, up to the full Principal 12 Amount . . . into [Defendant’s] Common Shares . . . .” See FAC, Exh. A. The New Note 13 also contains various provisions outlining the terms of conversions or transfers of 14 Common Stock to the Plaintiff. See FAC, Exh. A, art. 3 (titled “Conversion of 15 Debenture”). 16 On March 21, 2014, after the Exchange Agreement and New Note were signed, 17 Plaintiff elected to purchase 100,000 shares of Defendant’s Common Stock by sending 18 Defendant a document titled “Warrant Notice of Exercise.” See FAC, Exh. F. This 19 document’s subject line stated “Warrant Notice,” and the request included a PDF 20 attachment titled “ACGX Warrant Exercise 032114.” See id. Moreover, the document 21 stated Plaintiff made the request “pursuant to the terms of the Warrant to Purchase 22 Common Stock (Conversion Warrants) issued by [Defendant] to [Plaintiff].” See id. 23 (emphasis added). According to this request, Plaintiff paid “$50,000 as cash and $50,000 24 as a debit against the existing warrant credit balance” for Defendant’s Common Stock. 25 See id. Defendant accepted the payments and “issued the shares requested by Plaintiff” 26 based on “the existing warrant credit balance.” See id.; see also Doc. No. 10, p. 4. 27 28 On April 20, 2016, Plaintiff sent Defendant another Conversion Notice exercising Plaintiff’s “option to convert $2,500 Principal Amount of the [New Note] into shares of 3 16cv1694-MMA(DHB) 1 [Defendant’s] Common Stock.” See FAC, Exh. G. Plaintiff contends it made this 2 Conversion Notice pursuant to Section 3.1 of the New Note. See FAC ¶ 18. When 3 Defendant failed to deliver the shares, Plaintiff sent a demand letter to Defendant 4 pursuant to section 3.2(b) of the New Note seeking “cash at 120% of the principal 5 amount . . . plus the outstanding Warrant Credit balance.” See FAC ¶ 20. Defendant did 6 not make these payments. 7 As a result, Plaintiff filed this action for breach of contract. Plaintiff alleges two 8 theories of liability. First, Plaintiff contends that, despite that the Exchange Agreement 9 did not expressly extend the Warrant’s expiration date, the parties’ subsequent conduct 10 impliedly extended the Warrant’s expiration date. Thus, Defendant breached that implied 11 agreement when it failed to deliver the shares requested on April 20, 2016. Second, 12 Plaintiff contends Defendant breached the New Note when it refused to deliver the shares 13 or provide cash pursuant to Plaintiff’s demand letter. See FAC ¶¶ 25-28. Defendant 14 contends the Court should dismiss Plaintiff’s action for four reasons: (1) Plaintiff fails to 15 attach a valid Warrant agreement as an exhibit; (2) Plaintiff fails to allege a breach under 16 the New Note; (3) the New Note is invalid; and (4) the Statute of Frauds precludes 17 liability. See Doc. No. 6-1, pp. 2, 3, 6, 8. 18 19 II. LEGAL STANDARD A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro 20 v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain “a short and plain 21 statement of the claim showing that the pleader is entitled to relief. . . .” Fed. R. Civ. P. 22 8(a)(2). However, plaintiffs must also plead “enough facts to state a claim to relief that is 23 plausible on its face.” Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 24 570 (2007). That is, the pleadings must contain factual allegations “plausibly suggesting 25 (not merely consistent with)” a right to relief. Twombly, 550 U.S. at 545. The 26 plausibility standard thus demands more than a “formulaic recitation of the elements of a 27 cause of action,” or “naked assertions devoid of further factual enhancement.” Ashcroft 28 v. Iqbal, 556 U.S. 662, 678 (2009). Instead, the complaint “must contain allegations of 4 16cv1694-MMA(DHB) 1 underlying facts sufficient to give fair notice and to enable the opposing party to defend 2 itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). 3 In reviewing a motion to dismiss under Rule 12(b)(6), courts must assume the truth 4 of all factual allegations and must construe them in the light most favorable to the 5 nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). 6 The court need not take legal conclusions as true merely because they are cast in the form 7 of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). 8 Similarly, “conclusory allegations of law and unwarranted inferences are not sufficient to 9 defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). In 10 determining the propriety of a Rule 12(b)(6) dismissal, courts generally may not look 11 beyond the complaint for additional facts. United States v. Ritchie, 342 F.3d 903, 12 908 (9th Cir. 2003). “A court may, however, consider certain materials—documents 13 attached to the complaint, documents incorporated by reference in the complaint, or 14 matters of judicial notice—without converting the motion to dismiss into a motion for 15 summary judgment.” Id. Where dismissal is appropriate, a court should grant leave to 16 amend unless the plaintiff could not possibly cure the defects in the pleading. 17 Knappenberger v. City of Phoenix, 566 F.3d 936, 942 (9th Cir. 2009). 18 19 20 III. Discussion A. Timeliness of Defendant’s Motion to Dismiss As an initial matter, Plaintiff contends that this Court should not consider 21 Defendant’s motion to dismiss because Defendant filed the motion one day after the 22 applicable deadline expired. See Doc. No. 8, p. 2; see also Fed. R. Civ. P. 12(a)(1); 23 15(a)(3); 6(a). Generally, public policy favors disposition of cases on their merits. See 24 Hernandez v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998). Coincidentally, the 25 docket reflects that Plaintiff’s FAC was also untimely by one day. See Doc. No. 5; see 26 also Fed. R. Civ. P. 15(a)(1)(B) (dictating a 21-day deadline). This situation requires the 27 Court to take an equitable approach and allow the case to proceed on the merits. 28 Therefore, the Court deems both Plaintiff’s FAC and Defendant’s motion to dismiss to be 5 16cv1694-MMA(DHB) 1 timely, and considers Defendant’s motion to dismiss on the merits. See Pioneer 2 Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 395 3 (1993). 4 B. 5 Breach of Contract Under California Law Under California law, “[a] cause of action for breach of contract requires proof of 6 the following elements: (1) existence of the contract; (2) plaintiff’s performance or 7 excuse for nonperformance; (3) defendant’s breach; and (4) damages to plaintiff as a 8 result of the breach.” See CDF Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239 9 (2008). Likewise, “[a] cause of action for breach of implied contract has the same 10 elements as does a cause of action for breach of contract, except that the promise is not 11 expressed in words but is implied from the promisor’s conduct.” See Yari v. Producers 12 Guild of Am., Inc., 161 Cal. App. 4th 172, 182, 73 Cal. Rptr. 3d 803, 811 (2008). 13 C. 14 Plaintiff’s Implied Contract Theory Plaintiff first contends the terms of the Warrant are valid and enforceable because 15 the parties’ conduct following the Exchange Agreement created an implied-in-fact 16 contract extending the Warrant’s expiration date. See FAC ¶¶ 25-28. By accepting 17 payments “as a debit against the existing warrant credit balance” and “pursuant to the 18 terms of the Warrant to Purchase Common Stock,” Plaintiff contends Defendant’s 19 conduct constituted an implied agreement to extend the Warrant. See FAC ¶ 12, n. 1. 20 Therefore, it appears that one of Plaintiff’s theories of liability is that Defendant breached 21 the Warrant when it failed to deliver shares in response to Plaintiff’s April 20, 2016 22 Conversion Notice. See FAC ¶ 20. Regarding Plaintiff’s implied contract theory, 23 Defendant argues the Warrant expired on April, 25, 2012, and was “never renewed.” See 24 Doc. No. 6-1, p. 2. 25 i. 26 Defendant contends this Court should dismiss the FAC because Plaintiff Plaintiff sufficiently alleges the terms of an implied agreement. 27 “inexplicably failed to attach a copy . . . or recite verbatim the material provisions” of a 28 valid Warrant agreement because the Warrant agreement that Plaintiff includes as part of 6 16cv1694-MMA(DHB) 1 its FAC is expired. See Doc. No. 6-1, p. 5. The argument that a plaintiff must attach a 2 copy of a contract or recite its terms verbatim in order to state a claim for breach of 3 contract has been squarely rejected by California courts. See Miles v. Deutsche Bank 4 National Trust Co., 236 Cal. App. 4th 394, 402 (2015). For example, in Miles, the court, 5 following the California Supreme Court’s ruling in Construction Protective Services, Inc. 6 v. TIG Specialty Ins. Co., 29 Cal. 4th 189, 199 (2002), rejected that very argument and 7 stated that a plaintiff may “plead the legal effect of the contract rather than its precise 8 language.” Miles, 236 Cal. App. 4th at 402. Attaching a copy or reciting verbatim the 9 material provision of a valid agreement is not “the exclusive means of pleading a 10 11 contract.” Id. (emphasis added). Rather, and applicable here in an implied contract dispute, courts must look to see 12 if the plaintiff pleads the agreement according to its legal effect. Defendant asserts 13 Plaintiff has not done so sufficiently because the FAC “fail[s] to fully describe the terms 14 of said Warrant agreement,” and thus, the Court “cannot fully understand what the 15 alleged relationship of the parties was.” See Doc. No. 6-1, p. 8. Defendant further 16 alleges there are no “reasonable details” of a valid Warrant in Plaintiff’s FAC. See Doc. 17 No. 6-1, p. 7. Plaintiff, however, alleges that the only implied term of the Warrant is that 18 the expiration date was extended by the parties’ conduct. See FAC ¶ 12, n. 1; see also 19 Doc. No. 8, p. 8. In other words, all other terms of the Warrant agreement that the parties 20 entered into in 2006 remain the same. The purpose of the Warrant appears to be to give 21 Plaintiff a right to purchase Defendant’s common stock. See FAC, Exh. B. Therefore, 22 the Court must examine whether Plaintiff’s FAC contains reasonable details suggesting 23 the parties’ conduct intended to extend the Warrant’s expiration date. See Goodrich & 24 Pennington Mort. Fund, Inc. v. Chase Home Finance, LLC, No. 05-CV-636-JLS, 2008 25 WL 698464, at *7 (S.D. Cal. Mar. 14, 2008). 26 A contract may either be express or implied. “An implied contract is one, the 27 existence and terms of which are manifested by conduct.” Cal. Civ. Code §1621; see 28 also Foley v. Interactive Data Corp., 47 Cal. 3d 654, 677 (1988) (“Generally, courts seek 7 16cv1694-MMA(DHB) 1 to enforce the actual understanding of the parties to a contract, and in so doing may 2 inquire into the parties’ conduct to determine if it demonstrates an implied contract.”). 3 “Such implied-in-fact contract terms ordinarily stand on equal footing with express 4 terms.” Foley, 47 Cal. 3d at 677; see also Northstar Financial Advisors Inc. v. Schwab 5 Investments, 799 F.3d 1036, 1054 (9th Cir. 2015) (finding the parties’ conduct and the 6 defendant’s “representations” that the defendant would perform created the terms of an 7 implied contract). As to the basic elements of a contract cause of action, “there is no 8 difference between an express and implied contract.” See Division of Labor Law 9 Enforcement v. Transpacific Transportation Co., 69 Cal. App. 3d 268, 275 (1997). 10 “While an implied in fact contract may be inferred from the conduct, situation or mutual 11 relations of the parties, the very heart of this kind of agreement is an intent to promise.” 12 Id. Depending on the facts, the parties’ conduct can demonstrate the required “meeting 13 of minds or an agreement” just as much as words on paper. See Caron v. Andrew, 133 14 Cal. App. 2d 412, 417 (1955); see also Desny v. Wilder, 46 Cal. 2d 715, 736 (1956) (“If 15 made in fact, contracts may be established by direct evidence or they may be inferred 16 from circumstantial evidence.”). The existence of an implied contract based on the 17 circumstances “is clearly a question of fact.” See Del E. Webb Corp. v. Structural 18 Material Co., 123 Cal. App. 3d 593, 611 (1981). 19 In Goodrich & Pennington, the defendant, involved in a loan dispute with the 20 plaintiff, moved to dismiss the plaintiff’s breach of contract action for failing to allege a 21 valid implied contract. See Goodrich & Pennington, 2008 WL 698464 at *4. The court, 22 in examining whether a promise could be implied, looked to the parties’ course of 23 conduct surrounding the loan. See id. at *7. The Goodrich & Pennington court noted the 24 defendant affirmatively acted “pursuant to its obligations” under a previous agreement. 25 See id. Additionally, the defendant in Goodrich & Pennington “received a benefit” by 26 accepting plaintiff’s payments during the parties’ disputed business dealings. See id. 27 From this conduct, the court noted that the plaintiff “reasonably believed” the defendant 28 would continue performing based on the parties’ agreement. See id. Therefore, based on 8 16cv1694-MMA(DHB) 1 the parties’ conduct, the court held that the plaintiff sufficiently pled an implied-in-fact 2 contract. See id. 3 Here, although Plaintiff acknowledges that the parties failed to expressly extend 4 the Warrant’s expiration in the Exchange Agreement, Plaintiff sufficiently alleges that the 5 parties’ conduct demonstrates the parties’ actual understanding to extend the Warrant. 6 See FAC, ¶ 12, n. 1, ¶ 17. Specifically, on March 21, 2014, after the Exchange 7 Agreement and New Note were signed, Defendant issued 100,000 shares of Common 8 Stock to Plaintiff in response to Plaintiff’s “Warrant Notice of Exercise.” See FAC ¶ 17. 9 Similar to Goodrich & Pennington, Defendant performed pursuant to its prior obligations 10 “of the Warrant” and accepted Plaintiff’s payments. See FAC ¶ 17, see also FAC, Exh. 11 F. Therefore, based on conduct, the FAC sufficiently alleges Plaintiff “reasonably 12 believed” Defendant would continue performing pursuant the parties’ previous Warrant 13 agreement. See Goodrich & Pennington Mort. Fund, Inc., 2008 WL 698464, at *7. 14 The Court is unpersuaded that, as Defendant argues in its reply brief, this 15 transaction was a “one-off” transaction independent of the allegedly expired and invalid 16 Warrant. See Doc. No. 10, p. 4. As an initial matter, the Court does not accept factual 17 assertions outside of the FAC as true for the purposes of ruling on Defendant’s 12(b)(6) 18 motion. Further, the March 21, 2014 Notice of Exercise, which Defendant performed, 19 specifically stated that Plaintiff’s request for Defendant to issue Common Stock was 20 “pursuant to the terms of the Warrant.” See FAC, Exh. F. Additional language such as 21 “Warrant Notice,” “Warrant Exercise,” and that “[t]he undersigned makes the 22 representations and covenants set forth in Article 5 of the Warrant to Purchase Common 23 Stock (Conversion Warrants)” in the Notice of Exercise all demonstrate the parties’ intent 24 to extend the Warrant. See FAC, Exh. F. Thus, the Court finds Plaintiff sufficiently 25 pleads an implied agreement to extend the Warrant, the terms of which are included in 26 the Warrant agreement attached as part of the FAC and detail Plaintiff’s contractual right 27 to purchase shares. Therefore, regarding Plaintiff’s first theory of breach, Plaintiff 28 sufficiently pleads the legal effect, nature, and character of an implied contract, and that 9 16cv1694-MMA(DHB) 1 Defendant breached that implied contract. See, e.g., Zenith Ins. Co. v. Cozen O’Conner, 2 148 Cal. App. 4th 998, 1011 (2007). 3 iii. 4 Also, Defendant contends that the alleged implied contract is barred by the statute 5 The Statute of Frauds does not bar Plaintiff’s action. of frauds and is therefore invalid. See Doc. No. 6-1, p. 6. 6 California’s statute of frauds “declares several types of agreements ‘invalid’ unless 7 ‘they, or some note or memorandum thereof, are in writing and subscribed by the party to 8 be charged or by the party’s agent.’” Westside Estate Agency, Inc. v. Randall, 211 Cal. 9 Rptr. 3d 119, 124-25 (Ct. App. 2016) (quoting Cal. Civ. Code § 1624(a)); see also 10 Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 799 (9th Cir. 1991). For example, an oral 11 agreement “that by its terms is not to be performed within a year from the making thereof 12 is invalid.” Cal. Civ. Code § 1624(a)(1). The statute of frauds’ primary evidentiary 13 purpose is “to require reliable evidence of the existence and terms of the contract and to 14 prevent enforcement through fraud or perjury of contracts never in fact made.” In re 15 Estate of Duke, 61 Cal. 4th 871, 889 (2015). “It is a well established rule in California 16 that if, by its terms, performance of a contract is possible within one year, the contract 17 does not fall within the statute [of frauds] even though it is probable that it will extend 18 beyond one year.” Hopper v. Lennen & Mitchell, 145 F.2d 364, 366 (9th Cir. 1944) 19 (emphasis added). “The statute of frauds may be satisfied where . . . the contract 20 provides that a buyer will select and acquire certain [property rights] after the original 21 written contract is executed.” Alameda Belt Line v. City of Alameda, 133 Cal. App. 4th 22 15, 22 (2003). 23 Defendant’s argument fails because Plaintiff’s performance under the Warrant was 24 possible within one year. See FAC, Exh. B, §1.1. As Plaintiff argues, “Plaintiff could 25 have exercised the monthly maximum amount of 15% over the course of eight months 26 and purchased all 3,000,000 shares it had a right to purchase well before one year.” See 27 Doc. No. 8, p. 6. Because “performance of a contract is possible within one year,” the 28 10 16cv1694-MMA(DHB) 1 statute of frauds does not invalidate the alleged implied contract.1 See Hopper, 146 F.2d 2 at 366. 3 D. 4 Plaintiff’s Theory of Breach Based on the New Note Lastly, it appears Plaintiff contends as a separate or alternative theory of liability 5 that Defendant breached the New Note when Defendant “failed to deliver the shares 6 [requested in the April 20, 2016 Conversion Notice]” to Plaintiff. See FAC ¶ 20. 7 Specifically, the FAC alleges Defendant breached both sections 3.1 and 3.2 of the New 8 Note when Defendant did not convert stock pursuant to Plaintiff’s Conversion Notice or 9 issue payment requested in the demand letter. See FAC, Exh. H. 10 Defendant alleges the “New Note cannot be an enforceable agreement without a 11 valid Warrant to rely upon.” See id. at p. 8. However, as discussed above, the Court 12 finds Plaintiff’s FAC sufficiently alleges the Warrant’s expiration was impliedly 13 extended through conduct. Thus, even assuming that the validity of the New Note is 14 dependent on the validity of the Warrant agreement, Defendant’s argument fails. 15 Also, Defendant argues that it owed no duty to convert the shares requested in the 16 Conversion Notice. See Doc. No. 6-1, p. 9. Specifically, Defendant contends “the New 17 Note clearly states that Plaintiff cannot issue a conversion notice to Defendant if the 18 amount of shares contained in the conversion notice would put Plaintiff’s ownership 19 interest in Defendant’s outstanding stock over 9.99%.” See Doc. No. 6-1, p. 9. 20 Defendant does not argue that conversion of the requested shares would have resulted in 21 Plaintiff obtaining an ownership interest exceeding 9.99%, but rather, Defendant argues 22 that Plaintiff must plead that conversion of the requested shares would not have had such 23 a result. The Court is unconvinced that dismissal is warranted on that basis. Defendant’s 24 argument is less an argument that it did not have a duty to perform under the contract as 25 much as it is an argument that Plaintiff must plead facts precluding the existence of any 26 27                                                                   1 28 For that reason, the Court need not address the issues of partial performance and estoppel that Plaintiff raises. 11 16cv1694-MMA(DHB) 1 potential defenses that Defendant might raise. However, “plaintiffs need not anticipate 2 and attempt to plead around all potential defenses.” See Xechem, Inc. v. Bristol-Myers 3 Squibb Co., 372 F.3d 899, 901 (7th Cir. 2004). Unless a plaintiff “pleads itself out of 4 court” in the complaint, “[c]omplaints need not contain any information about defenses 5 and may not be dismissed for that omission.” Id. 6 7 Accordingly, the Court is unpersuaded that Defendant’s arguments justify dismissal of the FAC. 8 9 10 11 IV. Conclusion The Court, having considered all of Defendant’s arguments, and for the reasons stated above, DENIES Defendant’s motion to dismiss. See Doc. No. 6. IT IS SO ORDERED. 12 13 14 15 16 Dated: April 7, 2017 _____________________________ Hon. Michael M. Anello United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 12 16cv1694-MMA(DHB)

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?