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FLEXIBLE FUNDING, LLC v. IRON MOUNTAIN INFORMATION MGMT.

September 30, 2005.

FLEXIBLE FUNDING, LLC, Plaintiff,
v.
IRON MOUNTAIN INFORMATION MANAGEMENT, Defendant.



The opinion of the court was delivered by: JEFFREY WHITE, District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S IRON MOUNTAIN'S MOTION TO DISMISS AMENDED COMPLAINT OR, IN THE ALTERNATIVE, MOTION FOR CHANGE OF VENUE
INTRODUCTION
This matter comes before the Court upon consideration of Defendant Iron Mountain Information Management's ("Iron Mountain") Motion to Dismiss Amended Complaint or, In the Alternative, Motion for Change of Venue.

Iron Mountain moves to dismiss this action pursuant to Federal Rules of Civil Procedure 12(b)(3) and 12(b)(6) on the grounds that Plaintiff Flexible Funding, LLC ("Flexible") filed this action in an improper forum and that Flexible's amended complaint fails to state a claim on which relief can be granted. In the alternative, Iron Mountain moves for a change of venue to the United States District Court for the District of Massachusetts.

  Having considered the parties' pleadings and relevant legal authority, the Court finds this matter suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). The Court HEREBY DENIES the motion to dismiss for failure to state a claim. The Court GRANTS the motion to transfer.

  FACTUAL AND PROCEDURAL BACKGROUND

  According to Flexible's Amended Complaint, on or about January 13, 2003, Flexible and L&L Temporaries, Inc. ("L&L") signed and executed an Accounts Receivable Financing Agreement (the "Agreement"), whereby Flexible obtained rights in L&L's accounts receivable. (Am. Compl., ¶ 5, Ex. A.) L&L granted Flexible a security interest in all of L&L's accounts, accounts receivable, contract rights, deposit accounts, bank accounts, and books, records, and computer programs relating to the accounts. (Id., ¶ 5.) This security interest was perfected by a UCC-1 Financing Statement filed with the Secretary of State for the State of Massachusetts. (Id.) Flexible thereafter would advance L&L funds on invoices and received individual assignments from L&L on those invoices. (Id., ¶¶ 5-8.)

  L&L's accounts receivable for Iron Mountain were covered by the Agreement. (Id., ¶ 10.) On March 21, 2003, October 22, 2003, and December 9, 2004, Flexible sent letters to Iron Mountain's accounts payable department. (Id., Exs. B, C, D.) The first letter states that L&L "has contracted to Flexible . . . to provide financing services," and directs that current outstanding and future invoices due should be mailed to L&L/Flexible at a post office box in California. (Id., Ex. B.) The second two letters state that L&L has assigned its accounts receivable to Flexible and direct that payments on current outstanding invoices be mailed to the same post office box. (Id., Exs. C, D.)

  Flexible alleges that Iron Mountain paid certain invoices directly to L&L in contravention of the letters described above, which it contends are notices of assignment and which require Iron Mountain to remit all payments on the invoices subject to the assignments to Flexible.

  On April 13, 2005, Flexible filed a complaint against Iron Mountain in the Superior Court of the State of California, County of San Francisco.

  On May 11, 2005, Iron Mountain filed an interpleader action in the United States District Court for the District of Massachusetts, Iron Mountain Management v. L&L Temporaries, Inc., et al., 05-10979 DPW. On May 20, 2005, Iron Mountain filed a notice of removal on the basis of diversity jurisdiction, and Flexible's state court action was removed to this Court.

  On July 25, 2005, in response to a motion to dismiss, Flexible filed its amended complaint. On August 23, 2005, Iron Mountain filed the instant motion to dismiss.

  ANALYSIS

  A. Motion to Dismiss for Failure To State A Claim.

  A motion to dismiss is proper under Rule 12(b)(6) where the pleadings fail to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion should not be granted unless it appears beyond a doubt that a plaintiff can show no set of facts supporting his or her claim. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). In ruling on a Rule 12(b)(6) motion, the complaint is construed in the light most favorable to the non-moving party and all material allegations in the complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The court, however, is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged. Cleggy v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).

  Taking the facts set forth in the Amended Complaint as true and construing them in the light most favorable to Flexible, the Court cannot find that there are no set of facts upon which relief can be granted. Flexible asserts it notified Iron Mountain that invoices had been assigned to it and that Iron Mountain disregarded those notices and paid L&L directly. To the extent there are questions about the legal sufficiency of the notices, those questions are best addressed by way of summary judgment. If Iron Mountain believes a more ...


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