Timothy Blixseth v. Samuel Byrne et al

Filing 96

Judge Richard G. Stearns: ORDER entered granting 57 Motion to Dismiss (RGS, law1)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 10-12182-RGS
TIMOTHY BLIXSETH
v.
SAMUEL BYRNE ET AL.
MEMORANDUM AND ORDER
ON DEFENDANTS’ MOTION TO DISMISS
October 11, 2016
STEARNS, D.J.
This case is one of many involving the bankruptcy estate of the
Yellowstone Club, a luxury property development near Big Sky, Montana,
and its founders, Timothy Blixseth and Edra Blixseth, long since divorced.
In this iteration, Timothy Blixseth alleges that defendants CrossHarbor
Capital Partners, LLC, CIP Yellowstone Lending, and Samuel Byrne
(CrossHarbor’s founder and managing partner) conspired with Edra
Blixseth to ruin him financially. Defendants move to dismiss pursuant to
Fed. R. Civ. P. 12(b)(6), for want of a claim worthy of adjudication.
BACKGROUND
The saga of this case is too involuted to warrant an attempt to improve
on the rendering offered by Bankruptcy Judge Ralph Kirscher in Blixseth v.

Kirschner (In re Yellowstone Mountain Club, LLC), 436 B.R. 598 (Bankr. D.
Mont. 2010).1 For present purposes, the essential facts alleged in the First
Amended Complaint (Complaint) are as follows.
Timothy Blixseth,2 through various limited liability corporations,
founded and developed the Yellowstone Club (Club), an exclusive winter ski
resort for the super-rich situated on a pristine mountainside. On June 28,
2007, Blixseth agreed to sell the Club to Byrne and CrossHarbor for $510
million. The first phase of the sale was completed in August of 2007, when
Byrne and his company paid $54 million for a selection of lots on the Club
premises. Upon completion of due diligence in January of 2008, Byrne and
his company entered into an asset purchase agreement with Blixseth for the
Club totaling over $455 million (after accounting for the previously
purchased lots).

The story did not end in 2010, but continues today as Blixseth and
his creditors continue to battle over the disposition of his remaining assets,
if any. See http://www.wsj.com/articles/ex-real-estate-mogul-timothyblixseth-ordered-to-pay-286-million-1475177977 (last visited Oct. 11, 2016).
The Club, on the other hand, has survived hard times and is by all accounts
prospering. See http://dealbook.nytimes.com/2014/12/31/huge-ski-resortfor-the-rich-is-bouncing-back/?_r=0 (last visited Oct. 11, 2016).
1

For ease of exposition, throughout the remainder of this opinion,
“Blixseth” will refer to plaintiff Timothy Blixseth, while “Edra” will denote
his ex-wife, Edra Blixseth.
2
2

The relationship between Blixseth and the defendants began almost
immediately to sour. Blixseth blames the deterioration on a Byzantine
conspiracy between Edra and Byrne to steal his interest in the Club in the
Blixseths’ then-pending divorce proceeding. The conspiracy is alleged to
have unfolded as follows. On March 21, 2008, Edra dispatched an unnamed
agent to Boston to meet with Byrne. Five days later, on March 26, 2008,
Byrne and CrossHarbor terminated the asset purchase agreement. To cast
an aura of legitimacy on the termination, Byrne and Edra disseminated
letters falsely naming Blixseth as the target of a grand jury investigation.3
Blixseth and Edra reached a marital settlement agreement (MSA) on
June 26, 2008. As part of the MSA, Edra released Blixseth from any liability
for the numerous debts incurred by the business entities that were
transferred to Edra, including those of the Club. The MSA also required Edra
to make a multi-million dollar cash payment to Blixseth. On August 7, 2008,
Edra took two bridge loans totaling $35 million from CIP Yellowstone
Lending (a CrossHarbor subsidiary) and agreed that defendants would
collaborate with her on development efforts at the Club.

According to Judge Kirscher, the sale fell through when Byrne
realized that Blixseth could not bring enough money to the closing to satisfy
the Club’s current liabilities. In re Yellowstone Mtn. Club, 436 B.R.at 631.
3
3

According to Blixseth, these transactions gave CrossHarbor “total
management and ownership control over the Yellowstone Club and Edra
personally, to the extent that Byrne expressly prevented Edra from
complying with provisions of the MSA.” Am. Compl. ¶ 69. Blixseth contends
that Byrne knew that Edra could never repay the loans, and when she
inevitably defaulted, forced her to put the Club into bankruptcy. The plot
came to fruition when CrossHarbor purchased the Club in the bankruptcy
proceedings at a fire sale price.
Blixseth filed this action in the Central District of California in April of
2010, asserting ten state-law claims. That court ordered the case transferred
to the District of Massachusetts in November of 2010. After the filing of the
defendants’ motion to dismiss and an initial round of briefing, the court
ordered a stay while the bankruptcy proceedings against Blixseth wended
their way through the federal courts. Five years later, defendants moved to
reopen the case. Blixseth did not oppose that motion. The court then lifted
the stay and invited supplemental briefing on the original motion to dismiss.
Defendants have supplemented their briefs; Blixseth has not.
DISCUSSION
Defendants first argue that Blixseth’s claims are barred by the doctrine
of issue preclusion (more commonly known as collateral estoppel).
4

Specifically, they point out that in the bankruptcy proceeding, Blixseth
claimed “that Edra, in the period of time between mid-August of 2008 and
November 10, 2008, concocted a scheme with Byrne to drive the [Club] into
bankruptcy so that Byrne could purchase the [Club] at a deep discount.” In
re Yellowstone Mtn. Club, 436 B.R. at 641. The argument was intended to
support Blixseth’s contention that the proximate cause of the bankruptcy was
not his own misdeeds, but “the conduct of other persons, including but not
limited to, the collusion of Edra, Sam Byrne and CrossHarbor Capital to
thwart a purchase of the [Club] by the filing of a Chapter 11 petition in bad
faith.” Id. at 643. The Bankruptcy Court, however, dismissed the theory as
a gossamer confection. Id. at 641, 663. In its final amended judgment, the
Court expressly held that there was no factual foundation to support a
finding “that the MSA, and the entire divorce proceeding, was a fraud
orchestrated by Byrne.” Blixseth v. Kirschner (In re Yellowstone Mtn. Club,
LLC), 2012 WL 6043282, at *3 (Bankr. D. Mont. Dec. 5, 2012).4
As the parties recognize, with respect to issue preclusion, federal law
applies. See Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973, 978 (1st

This echoed a conclusion reached by Judge Kirscher two years
earlier. See In re Yellowstone Mtn. Club, 436 B.R. at 663 (“The Court has
not yet seen any credible evidence to support this particular conspiracy
theory asserted by Blixseth [that Byrne had conspired with Edra to force the
Club into bankruptcy].”).
5
4

Cir. 1995). Under federal law, the party invoking collateral estoppel must
demonstrate “that (1) the issue sought to be precluded in the later action is
the same as that involved in the earlier action; (2) the issue was actually
litigated; (3) the issue was determined by a valid and binding final judgment;
and (4) the determination of the issue was essential to the judgment.”
Ramallo Bros. Printing, Inc. v. El Día, Inc., 490 F.3d 86, 90 (1st Cir. 2007).
The parties to the second action need not be identical to those in the first
action, so long as the party against whom issue preclusion is sought “has had
a full and fair opportunity for judicial resolution of the same issue.”
Rodríguez-García v. Miranda-Marín, 610 F.3d 756, 771 (1st Cir. 2010)
(quoting Fiumara v. Fireman’s Fund Ins. Cos., 746 F.2d 87, 92 (1st Cir.
1984)).
The dispositive issue here is whether the issues litigated in the
Montana proceeding are, for all practical purposes, identical to those
asserted in his Complaint. To be sure, Blixseth recycles many of the “facts”
that he used to buttress his conspiracy theory in the bankruptcy proceeding.
See, e.g., Am. Compl. ¶ 43 (“[B]eginning in March 2008, Byrne and Edra
created a scheme whereby Edra would insist on obtaining the Yellowstone
Club from Mr. Blixseth as a condition of a marital settlement between them,
and Byrne would arrange whatever financing would be needed to effectuate
6

the Marital Settlement Agreement for Edra.”). But mere factual similarity is
not enough; “the reach of collateral estoppel ‘must be confined to situations
where the matter raised in the second suit is identical in all [material]
respects to that decided in the first proceeding.’” Faigin v. Kelly, 184 F.3d
67, 78 (1st Cir. 1999) (quoting C.I.R. v. Sunnen, 333 U.S. 591, 599-600
(1948)). Thus, “the issues must be defined by reference to the judicial
determinations at stake.” Id.
The bankruptcy proceeding culminated in three conclusions of import
to the issues at hand. First, the Bankruptcy Court found that Blixseth had
engaged in a series of fraudulent transfers, including the siphoning of over
$200 million from the Club for his personal use. In re Yellowstone Mtn.
Club, 436 B.R. at 644, 655-660. Second, it ruled that the releases Blixseth
obtained from Edra through the MSA were fraudulent and unenforceable.
Id. at 660-668. Finally, it held that Blixseth had breached his fiduciary
duties to the Club and to the minority investors in the Club-related limited
liability companies he had created. Id. at 669-671.5

All of these conclusions were subsequently affirmed, first by the
district court, see Blixseth v. Glasser (In re Yellowstone Mtn. Club, LLC),
2014 WL 1369363 (D. Mont. Apr. 7, 2014), and then by the Ninth Circuit, see
Blixseth v. Glasser (In re: Yellowstone Mtn. Club, LLC), 2016 WL 3947830
(9th Cir. July 22, 2016).
7
5

To the extent that Blixseth’s claims in the present action rest on Edra’s
purported failure to abide by the releases declared fraudulent in the
bankruptcy action, they are clearly barred. But Blixseth’s present claims go
beyond reliance on the releases by asserting the following: (1) that
defendants aided and abetted Edra’s breach of her fiduciary duty to Blixseth
arising from the divorce proceeding; (2) that defendants interfered with
Blixseth’s contractual relations or prospective business relations arising
from the MSA; and (3) that defendants breached fiduciary duties of
disclosure to Blixseth regarding their dealings with Edra concerning the
Club. These issues were not adjudicated in the bankruptcy proceeding,
which focused on Blixseth’s personal culpability for the Club’s bankruptcy.
The fact that the bankruptcy was not precipitated by a conspiracy among
Edra and the defendants does not compel the conclusion that Edra and the
defendants owed no duties to Blixseth.
The dispute, however, is ultimately one of limited academic interest.
Blixseth’s Complaint is a hodgepodge of conspiratorial imaginings,
conclusory and contradictory assertions of fact, and overheated rhetoric. To
cross the plausibility threshold to defeat a motion to dismiss, a complaint
must “plead[] factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft
8

v. Iqbal, 556 U.S. 662, 678 (2009). Merely reciting the elements of a cause
of action adorned with the prediction that each is or will be met during the
course of discovery does not suffice. Ocasio-Hernández v. Fortuño-Burset,
640 F.3d 1, 8 (1st Cir. 2011).
Boiled down to its core, Blixseth’s Complaint relies on his efforts to
portray Byrne as a master puppeteer orchestrating the actions of his puppet
Edra. The faint outlines of this portrait come nowhere clearer in focus than
in Count II, in which Blixseth contends that defendants breached a fiduciary
duty they owed directly to him. In support of this contention, Blixseth argues
that “[a]s a result of Byrne’s total control over Edra’s ability to pay her bills
and meet her obligations,” a fiduciary duty arose “to Edra’s creditors,
including Plaintiff.” Am. Compl. ¶ 113. The law, however, does not impose a
fiduciary duty on a lender for the benefit of a borrower’s third-party
creditors. See Resolution Trust Corp. v. BVS Dev., Inc., 42 F.3d 1206, 1214
(9th Cir. 1994); Schwan’s Sales Enters., Inc. v. Commerce Bank & Trust Co.,
397 F. Supp. 2d 189, 195 (D. Mass. 2005).6

The parties engage in a running skirmish about whether California or
Massachusetts law applies to many of the counts in the Complaint. Rather
than engage in a choice-of-law analysis for claims doomed to fail regardless
of which state’s law is applied, the court will provide parallel citations, as
necessary, throughout this opinion.
9
6

A limited exception arises where a lender exercises unqualified control
over a borrower. See FAMM Steel, Inc. v. Sovereign Bank, 571 F.3d 93, 103
(1st Cir. 2009) (control must extend to the day-to-day operations of the
debtor); Wagner v. Benson, 101 Cal. App. 3d 27, 35 (1980) (“extensive
control and shared profits”). Although Blixseth asserts that the loan and
associated agreement gave CrossHarbor and Byrne “total management and
ownership control over the Yellowstone Club and Edra personally,” Am.
Compl. ¶ 69, there is no factual content (such as allegations about how this
agreement was to be carried out, the structure of the Club’s management or
operations, Club decisions that defendants made or participated in, or the
sharing of profits) to back up this conclusory assertion. This failure is
particularly glaring given that even a very high level of involvement in a
debtor enterprise does not create a fiduciary duty.

See, e.g., FDIC v.

Fordham (In re Fordham), 130 B.R. 632, 649 (Bankr. D. Mass. 1991)
(holding that “meeting with the consulting engineers, reviewing and
approving construction plans, approving the construction manager, and
reviewing requisitions to the extent necessary to justify a corresponding
disbursement” did not suffice to show total control). Indeed, Blixseth’s
Complaint suggests there are no facts from which he could make this
showing, as he alleges that defendants took no steps to satisfy their
10

(unspecified) obligations to the Club under the development agreement.
Am. Compl. ¶¶ 74, 78.
The same is true of Blixseth’s claim that defendants exercised a degree
of control sufficient to invoke the related “instrumentality” doctrine. Under
this doctrine, a lender may be liable for the debts of a borrower where “the
lender exerts such a degree of control over the borrower that the borrower
becomes a mere business conduit for the lender.” FAMM Steel, 571 F.3d at
104. Neither creditor status nor participation in the management of a debtor
corporation is sufficient to demonstrate the requisite degree of control. Id.
at 105. The utter lack of facts alleged to support a claim of dominant control
dooms this theory as well.7
Blixseth next attempts to hold defendants liable for Edra’s alleged
breaches of duty by claiming that she effectively formed a de facto joint
venture or partnership with defendants. See Cal. Corp. Code § 16306(a)
(partners are liable for partnership debts); Orosco v. Sun-Diamond Corp.,
51 Cal. App. 4th 1659, 1670 (1997) (“Normally . . . a partnership or joint
venture is liable to an injured third party for the torts of a partner or venturer

7 Even if there were adequate allegations of control, the instrumentality

doctrine would not result in a breach of fiduciary duty to Blixseth. The
doctrine addresses liability for a debtor corporation’s debts and does not
create fiduciary duties. See FAMM Steel, 571 F.3d at 104.
11

acting in furtherance of the enterprise.”). Assuming that such a relationship
in fact existed, there is no indication that Blixseth had any link with this
hypothesized de facto entity which might lead to viable claims. At most, he
has pointed to possible claims against Edra personally stemming from her
breaches of the MSA. The same is true of Blixseth’s invocation of the rule
that officers and directors of an insolvent corporation have a fiduciary duty
to preserve the corporation’s assets. There is simply no evidentiary support
for the suggestion that defendants were officers or directors of any insolvent
corporation, much less one that owed Blixseth money.
Because Blixseth cannot attribute Edra’s actions to defendants on the
basis of any of his legal theories, several other counts of his Complaint
collapse under the same load: to wit, Count V claims a fraud by the
defendants based on asserted violations of an alleged fiduciary duty of
disclosure. See Am. Compl. ¶¶ 128, 132. Similarly, Count I alleges that the
defendants aided and abetted Edra’s breach of her fiduciary duty to Blixseth
arising from the divorce proceedings. Even assuming that the duty Blixseth
invokes exists,8 he has failed to allege facts establishing the fundamental

Under California law, the parties to a divorce proceeding owe a
fiduciary duty to one another with respect to community property “until such
time as the assets and liabilities have been divided by the parties or by a
court.” Cal. Fam. Code § 1100(e). It appears from Blixseth’s Complaint that
the MSA was approved by the California state court on July 3, 2008.
12
8

element of an aiding and abetting claim: that defendants took some concrete
act to facilitate Edra’s alleged breach (or stood by ready to do so). See Am.
Master Lease LLC v. Idanta Partners, Ltd., 225 Cal. App. 4th 1451, 1477
(2014); Arcidi v. Nat’l Ass’n of Gov’t Emps., Inc., 447 Mass. 616, 623-624
(2006). The Complaint merely asserts that “Byrne expressly prevented Edra
from complying with provisions of the MSA.” Am. Compl. ¶ 69. How Byrne
accomplished this is never explained. To the contrary, the only factual
allegation linking Byrne to an MSA provision is the admission that the loan
to Edra was intended to enable Edra to fulfill her obligations to Blixseth
under the MSA. See Am. Compl. ¶¶ 66, 81, 109.
In a similar vein, Count III alleges that defendants intentionally
interfered with Blixseth’s contractual relations stemming from the MSA by
“specifically prohibiting” Edra from “making all of the payments called for in
the [MSA].” Am. Compl. ¶ 119. But there is simply nothing alleged that
would permit a determination that Byrne prevented Edra from doing
anything. See Pac. Gas & Elec. Co. v. Bear Stearns & Co., 791 P.2d 587, 589590 (Cal. 1990) (“[I]ntentional acts designed to induce a breach or disruption

Blixseth, however, asserts that the MSA did not become final until August 13,
2008, and that Edra’s fiduciary duties continued to that point. Because the
MSA is not part of the record, the court is unable to make a definitive
determination about the duration of Edra’s duties.
13

of the contractual relationship” comprise an essential element of the tort);
Draghetti v. Chmielewski, 416 Mass. 808, 816 (1994) (a defendant must
“knowingly induce[]” a breach of contract and that interference must be
“improper in motive or means”).
Count IV’s allegation of an intentional interference with Blixseth’s
prospective business relations is equally hopeless. To establish the tort, a
plaintiff must show, inter alia, that some actual relationship or expectancy
rested with a third party, and that the defendant took some improper action
to interfere with that relationship. See Edwards v. Arthur Andersen LLP,
189 P.3d 285, 290 (Cal. 2008); Swanset Dev. Corp. v. City of Taunton, 423
Mass. 390, 397 (1996). Blixseth alleges no more than that he “had an
economic relationship with numerous third parties, including Edra and
several entities that [Blixseth] obtained pursuant to the MSA.” Am. Compl.
¶ 123.

It is left to the reader to guess precisely what advantageous

relationship that defendants might have pounced on (and in any event there
are no factual allegations describing an actual ambush).9 See, e.g., Roth v.
Rhodes, 25 Cal. App. 4th 530, 546 (1994).

9 In his opposition to

the motion to dismiss, Blixseth argues that he had
a prospective economic relationship with Edra attributable to the MSA
releases and his “continuing participation in the Yellowstone Club.” Opp’n
at 21. The releases, however, were determined to be fraudulent in the
Montana bankruptcy proceeding, and cannot form the basis of a legitimate
14

Blixseth’s equitable claims are also easily dispatched.

Count VII

asserts a claim of unjust enrichment against defendants based on their
“control” of Edra and their acquisition of the Yellowstone Club at an unfairly
discounted price. Unjust enrichment, however, is an equitable recourse that
is denied to a plaintiff like Blixseth whose fraudulent conduct and fiduciary
breaches were the moving force in the Club’s near-death downward spiral.
See Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47,
57 (1st Cir. 2009) (noting “the primacy of equitable concerns” in addressing
unjust enrichment claims under Massachusetts law); First Nationwide Sav.
v. Perry, 11 Cal. App. 4th 1657, 1665 (1992) (“[A]n unjust enrichment claim
is based upon equitable principles.”).
Count

VIII

seeks

equitable

indemnification.

Equitable

indemnification attaches when parties share liability for a tort, see Stop Loss
Ins. Brokers, Inc. v. Brown & Toland Med. Grp., 143 Cal. App. 4th 1036,
1040 (2006); Greater Bos. Cable Corp. v. White Mtn. Cable Constr. Corp.,
414 Mass. 76, 79 (1992), or arises from an express or implied contractual
agreement, see Stop Loss Ins. Brokers, 143 Cal. App. 4th at 1040-1041; Fall

expectancy. See In re Yellowstone Mtn. Club, 436 B.R. at 660-668. In
addition, Blixseth does not identify what “continuing” interest he had in the
Club, which the MSA awarded to Edra after a bitter and protracted divorce
proceeding.
15

River Hous. Auth. v. H.V. Collins Co., 414 Mass. 10, 13-14 (1992). There is
simply no allegation in the Complaint that Blixseth and the defendants share
liability for any tort committed against anyone. Moreover, Blixseth and the
defendants had no mutual contractual arrangement after March of 2008.
That leaves only Count VI, which alleges that defendants defamed
Blixseth by disseminating false grand jury target letters. Blixseth bases this
claim on California law, which, as defendants note, imposes a one-year
statute of limitations on defamation actions. See Cal. Civ. Proc. Code §
340(c). An affirmative defense like the statute of limitations may, as a rule,
only be raised by way of a motion to dismiss when the facts supporting the
defense are apparent from the face of the pleadings. See Trans-Spec Truck
Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 320 (1st Cir. 2008) (“Where the
dates included in the complaint show that the limitations period has been
exceeded and the complaint fails to ‘sketch a factual predicate’ that would
warrant the application of either a different statute of limitations period or
equitable estoppel, dismissal is appropriate.”). Blixseth, not surprisingly,
relies on this rule in resisting a statute of limitations bar. As he points out,
his Complaint studiously avoids any mention of the date of the single
incident of publication to a Wall Street Journal reporter of the fabricated
grand jury letters. Equally unsurprising is the reluctance of the court to
16

countenance this transparent attempt to circumvent the statute of
limitations. There is nothing new to Blixseth’s ploy. It has been essayed
enough times to lead wary courts into requiring at the outset that defamation
plaintiffs come forward with sufficient facts to permit a determination
whether the limitations period has expired. See, e.g., Jones v. Thyssenkrupp
Elevator Corp., 2006 WL 680553, at *6-7 (N.D. Cal. Mar. 14, 2006).
Although this approach is appealing, Blixseth’s own pleadings, despite
their crafted dodginess, exclude the possibility that the alleged defamatory
publication took place in the year prior to the filing of the Complaint.
Blixseth brought suit on April 23, 2010. The Complaint alleges that the
defamatory letters were generated “[a]t the same time” as Blixseth and
CrossHarbor were finalizing the failed agreement to purchase the Club in
March of 2008, and that the letters were fabricated to “undermine
[Blixseth’s] ability to close the sale,” as well as to diminish his support among
Club members, thus clearing the way for his ultimate ouster by Edra and
Byrne. Am. Compl. ¶ 47. Although the Complaint states that the letters were
given to a Wall Street Journal reporter “[a]t times presently unknown,” id.,
it also alleges that “upon receipt of the false ‘Grand Jury Target Letters’ . . .
the Defendants disseminated copies of those false letters to third parties,
including The Wall Street Journal.” Am. Compl. ¶ 137. The only sensible
17

chronology to be wrung from these allegations dates the dissemination of the
letters to March of 2008, prior to CrossHarbor’s termination of the purchase
and sale agreement, or at the latest in mid-August of 2008, when ownership
of the Club was transferred by the MSA from Blixseth to Edra.
Blixseth attempts a final “Hail Mary,” citing the rule that every act of
publication gives rise to a separate cause of action for defamation. Shively
v. Bozanich, 80 P.3d 676, 683 (Cal. 2003). Yet the Complaint fails to identify
any publication of the allegedly defamatory letters apart from the
dissemination to a Wall Street Journal reporter. Count VI is plainly barred
by the statute of limitations.
Finally, Counts IX and X fail as purely derivative claims. Count IX
asserts a claim for civil conspiracy. Civil conspiracy is not a generic cause of
action, but must be based on a concerted effort by defendants to commit an
underlying tort directed at a plaintiff. See Applied Equip. Corp. v. Litton
Saudi Arabia Ltd., 869 P.2d 454, 457 (Cal. 1994); Kurker v. Hill, 44 Mass.
App. Ct. 184, 188 (1998).10 Given the court’s determination that none of the

Massachusetts will entertain a cause of action for civil conspiracy
despite the absence of an underlying tort where a combination of defendants
exercises a unique coercive power over a plaintiff. See Kurker, 44 Mass. App.
Ct. at 188. In his briefing, Blixseth explicitly relies only on California law,
and asserts that he does not seek to “collect damages solely for the existence
of a civil conspiracy.” Opp’n at 28.
18
10

underlying torts are adequately pled, Count IX does not survive. Count X
seeks punitive damages under California law, but the statute authorizing
special damages also requires an underlying breach of a non-contractual
duty. See Cal. Civ. Code § 3294. None is shown here.
ORDER
For the foregoing reasons, defendants’ motion to dismiss is
ALLOWED. The Clerk is directed to close the case.
SO ORDERED.
/s/ Richard G. Stearns
__________________________
UNITED STATES DISTRICT JUDGE

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