The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge
ORDER DENYING MOTION TO DISMISS
On September 7, 2005, Plaintiff filed his original complaint. On January 16, 2006, Plaintiff filed his amended complaint ("FAC"). Defendant Triarc Company, Inc. ("Triarc") filed its motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), which Plaintiff opposed. Defendant bases its motion on two arguments: 1) the statute of limitations bars Plaintiff's claims against Triarc, and 2) Plaintiff's claim is not brought under any cognizable legal theory because Triarc, as a shareholder in Encore Capital Group, Inc. ("Encore"), it was not liable for Encore's torts.
I. Plaintiff's Allegations
Triarc is a shareholder of Encore. Plaintiff alleges he was employed by Encore as its executive vice president, secretary, and general counsel. He alleges he discovered certain serious financial and accounting issues and brought them to the attention of Encore's board of directors. As a result, he contends, Encore retaliated by improperly dismissing him. (FAC, ¶ 15.) He alleges he entered into a settlement agreement with Encore in June, 2002. (Id., ¶ 17.) He alleges Triarc, in order to sell its shares of Encore at a favorable price, entered into a conspiracy to interfere with his contractual relations with Encore and to intentionally cause him emotional distress by publishing defamatory material about him. (Id., ¶¶ 28--29, 42.) His argument is that Encore breached its settlement agreement by repeatedly making public statements regarding the circumstances of his leaving employment at Encore. He alleges Triarc and its co-conspirators engaged in certain overt acts in furtherance of the conspiracy from the spring of 2001 through the time of filing. (Id., ¶¶ 30, 31, 34--35.)
A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is appropriate only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45--46 (1957); Navarro, 250 F.3d at 732.
In ruling on a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party, drawing all reasonable inferences from the allegations in favor of the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337--38 (9th Cir. 1996). However, the Court does not accept unreasonable inferences or assume the truth of legal conclusions cast in the form of factual allegations. Ileto v. Glock Inc., 349 F.3d 1191, 1200 (9th Cir. 2003) (citing Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)).
Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc.,749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law.") A complaint may also be dismissed under Rule 12(b)(6) if, accepting as true the allegations in the complaint, the running of the statute is apparent on the face of the complaint. Huynh v. Chase Manhattan Bank, 465 F.3d 992, 996 --97 (9th Cir. 2006) (citing Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980)) (further citations omitted).
If a motion to dismiss is granted, the court may grant leave to amend. Leave should be granted unless "the pleading could not possibly be cured by the allegation of other facts" and if it appears "at all possible that the plaintiff can correct the defect." Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000).
Because this Court is sitting in diversity, it applies California state law on substantive matters, including statutes of limitations and the tolling of statutes of limitations, under the doctrine of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 533 (1949).
A. Statute of Limitations
Defendant relies on a statute of limitations argument to defeat Plaintiff's claims for interference with contractual relations and for intentional infliction of emotional distress. California's limitations period for claims for interference with contractual relations and for intentional infliction of emotional distress are subject to a two-year limitations period. Cal. Code Civ. Proc. §§ 335.1, 339. Causes of action for interference with contractual relations, even if based on allegations of defamation, are subject to a two-year limitations period. Knoell v. Petrovich, 76 Cal.App.4th 164, 168 (Cal.App. 2 Dist. 1999). In this case, it is clear the ...