Dreamdealers USA, LLC v. Sun

Filing 29

ORDER granting in part and denying in part #20 Motion to Dismiss. Signed by Judge James C. Mahan on 8/1/2014. (Copies have been distributed pursuant to the NEF - DKJ)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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DREAMDEALERS USA, LLC dba
EXOTICS RACING,

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2:13-CV-1605 JCM (VCF)

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Plaintiff(s),

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v.

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LEE POH SUN aka JAMES LEE POH
SUN,

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Defendant(s).

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ORDER

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Presently before the court is a motion to dismiss from plaintiff Dreamdealers USA, LLC

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d/b/a Exotics Racing (“Dreamdealers”) and third-party defendant Brandon Grade (“Grade”). (Doc.

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#20). The motion seeks dismissal of counterclaims raised by defendant Lee Poh Sun aka James Lee

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Poh Sun (“Lee”). Lee has filed an opposition (doc. #24), to which Dreamdealers and Grade have

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replied (doc #26).

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I.

Background

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This case arises from an incident at the Las Vegas Speedway. Dreamdealers allows

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customers to rent exotic cars and drive them around the speedway as part of a high-speed racing

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experience.

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Lee decided to take part in the racing experience and drove several of Dreamdealers’ exotic

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cars. While driving the cars, Lee was paired up with an employee of Dreamdealers, Grade. While

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James C. Mahan
U.S. District Judge

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driving a Lamborghini, Lee crashed into a wall, causing damage to himself and the car.

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In March, 2013, Dreamdealers initiated the instant action in order to recover damages

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resulting from the loss of property caused by the car accident. Due to the requirements associated

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with serving foreign citizens1, Plaintiff was unable to serve Lee until January, 2014.

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In August, 2013, before being served by Dreamdealers, Lee sued Dreamdealers in state court

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(case no. A-13-686729-C). In September, 2013, Dreamdealers removed the lawsuit to the United

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States District Court, District of Nevada (case no. 2:13-cv-01605-MMD-NJK).

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On March, 11, 2013, the two lawsuits between these parties were consolidated.

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In Lee’s answer to the complaint from Dreamdealers and Grade (doc. #14), Lee raised 13

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counterclaims which Dreamdealers and Grade ask this court to dismiss.

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II.

Discussion

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A. Standard of Review

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A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can

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be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide “[a] short and plain

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statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2); Bell

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Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual

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allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements

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of a cause of action.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citation omitted). “Factual

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allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus,

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to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim

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to relief that is plausible on its face.” Iqbal, 129 S.Ct. at 1949 (citation omitted).

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In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when

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considering motions to dismiss. First, the court must accept as true all well-pled factual allegations

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in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 1950.

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Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not

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suffice. Id. at 1949. Second, the court must consider whether the factual allegations in the complaint

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James C. Mahan
U.S. District Judge

Lee is a resident of Singapore.

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allege a plausible claim for relief. Id. at 1950. A claim is facially plausible when the plaintiff's

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complaint alleges facts that allows the court to draw a reasonable inference that the defendant is

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liable for the alleged misconduct. Id. at 1949.

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Where the complaint does not permit the court to infer more than the mere possibility of

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misconduct, the complaint has “alleged – but not shown – that the pleader is entitled to relief.” Id.

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(internal quotations omitted). When the allegations in a complaint have not crossed the line from

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conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

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B. Analysis

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Claims 1-6 and 12-132

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The instant motion seeks dismissal of claims 1-6 and 12-13 because the counterclaims were

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duplicative of the claims that were brought by Lee in case no. 2:13-cv-01605-MMD-NJK. Since the

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filing of this motion, the two lawsuits have been consolidated.

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The parties argue whether or not the consolidation of the cases merge the duplicative claims
or if the court needs to dismiss one of the sets of duplicative claims.

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“[C]onsolidation is permitted as a matter of convenience and economy in administration, but

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does not merge the suits into a single cause . . .” Johnson v. Manhattan R. Co., 289 U.S. 479, 496-97

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(1933). As the claims do not automatically merge together, this court dismisses one set of the

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duplicative claims. One iteration of claims 1-6 and 12-13 remains.

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Claim 7: Respondeat Superior

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The parties agree that claim 7 should be dismissed. (Doc. #24 at 4). Respondeat superior

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is not an independent cause of action, it is simply a theory of attributing liability. Fernandez v.

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Penske Truck Leasing Co., L.P., 2012 WL 1832571 at * 6 n.1 (D. Nev. May 18, 2012). Accordingly,

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claim 7 is dismissed with prejudice.

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...

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...

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James C. Mahan
U.S. District Judge

These claims are 1) negligence; 2) negligence per se; 3) res ipsa loquitur; 4) negligent hiring, supervision
and/or retention; 5) negligent entrustment of a vehicle; 6) ultrahazardous/inherently/abnormally dangerous activities; 12)
punitive/exemplary damages; 13) breach of the covenant of good faith and fair dealing.

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Claims 8 - 9: Misrepresentation

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Dreamdealers argues that Lee has failed to adequately plead allegations of intentional and

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negligent misrepresentation because such allegations must be made with heightened particularity as

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required by Fed. R. Civ. P. 9(b).

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Lee responds that allegations of misrepresentation sound of negligence rather than fraud, and
thus do not need to be made with particularity. The court disagrees.

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“Misrepresentation is a form of fraud where a false representation is relied upon in fact.”

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Larson v. Homecomings Fin., LLC, 680 F.Supp. 2d 1230, 1234 (D. Nev. 2009); see also Kennedy

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v. Carriage Cemetery Servs., 727 F.Supp. 2d 925, 931-32 (D. Nev. 2010). Accordingly, Rule 9(b)

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applies.

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Alternatively, Lee argues that the allegations do meet 9(b)’s requirements. He is incorrect.

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Pleading fraud with particularity requires “an account of the time, place, and specific content of the

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false representations, as well as the identities of the parties to the misrepresentations.” Larson, 680

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F.Supp. at1234 (D. Nev. 2009) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)).

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Lee alleges the day that the misrepresentations were made and the place that they were made,

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but he fails to allege the specific content of the false representations. Lee simply alleges that

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Dreamdealers “represented” that insurance was provided. Further, Lee fails to allege who from

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Dreamdealers made the misrepresentations.

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Because Lee’s intentional and negligent misrepresentation claims do not allege facts with
particularity as required by Fed. R. Civ. P. 9(b), these claims are dismissed without prejudice.
Claim 10: Contribution

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This claim survives the motion to dismiss. Dreamdealers and Grade argue that the

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contribution claim must be dismissed if the rest of the counterclaim is dismissed. This is not the

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case. Because there are claims against Lee which could lead to a judgment against him, these claims

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are appropriate.

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The Supreme Court of Nevada has recognized that a third-party plaintiff has the right to seek

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contribution in an original action prior to entry of judgment. Pack v. LaTourette, 277 P.3d 1246,

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James C. Mahan
U.S. District Judge

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1249 (Nev. 2012).

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Claim 11: Indemnity

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The Nevada Supreme Court has held that “a cause of action for indemnity. . . accrues when

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payment has been made.” Rodriguez v. Primadonna Co., LLC, 125 Nev. 578, 590 (Nev. 2009). As

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there has been no judgment against Lee, no payment has yet been made, and the cause of action is

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not available. Accordingly, claim 11 is dismissed.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Dreamdealers’ motion to

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dismiss (doc. # 20), and the same hereby, is GRANTED IN PART and DENIED IN PART consistent

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with the foregoing.
DATED August 1, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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