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Paradise Northwest Inc. v. Randhawa

December 9, 2009

PARADISE NORTHWEST INC., PLAINTIFF,
v.
SATVINDER PALSINGH RANDHAWA, LORNA MARIE RANDHAWA DBA GREAT EASTERN EXPORT & TRADING COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Presently before the Court is a Motion by Defendants Satvinder Palsingh Randhawa and Lorna Marie Randhawa dba Great Eastern Export & Trading Company requesting that this Court issue an order dismissing Plaintiff Paradise Northwest's First Cause of Action alleging violation of the RICO Act and Plaintiff's Second Cause of Action alleging fraud. In the alternative, Defendants move for a more definite statement of Plaintiff's First and Second Causes of Action. Additionally, Defendants move to strike Plaintiff's allegation of diversity jurisdiction.

For the reasons set forth below, Defendants' motions are denied.

BACKGROUND*fn1

This dispute arises out of a project to re-oxygenate a lake in India. Defendants Satvinder Randhawa and Lorna Marie Randhawa ("Defendants"), are a husband and wife doing business as Great Eastern Export and Trading Company. Defendants are alleged to have entered into an oral contract with Plaintiff Paradise Northwest, Inc. ("Plaintiff") under the terms of which Plaintiff agreed to perform hydrology-related engineering services. Plaintiff claims it was led to believe that the Indian government would be paying for its services, and Defendants would arrange to have payment transferred from the Indian government to Plaintiff. However, Plaintiff contends that since submitting to Defendants a final invoice of $85,296.74, it still has not been paid in full.

Plaintiff argues that it was never the intent of the Defendants to turn over the full payment from the Indian government, but that Defendants instead planned to keep the money for themselves. Plaintiff further claims that Defendants have, in a similar fashion, victimized others including Air Diffusion System, an equipment manufacturer and travel/logistics company that was allegedly never paid for its services, and Harpinder Singh Randhawa, a relative of Defendants that allegedly was never paid for his labor.

Consequently, Plaintiff has filed suit against Defendants alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), fraud, and breach of contract. Defendants now move to dismiss the First and Second Cause of Action or, in the alternative, move for a more definite statement. Defendants also move to strike Plaintiff's allegation of diversity jurisdiction.

STANDARD

A. Motion to Dismiss

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Id. at 1964-65 (internal citations and quotations omitted). Factual allegations must be enough to raise a right to relief above the speculative level.

Id. at 1965 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action")).

"Rule 8(a)(2)...requires a 'showing,' rather than a blanket assertion of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Twombly, 550 U.S. 556 n.3. A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs...have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. Nevertheless, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556.

Claims sounding in fraud require a heightened pleading standard. Federal Rule of Civil Procedure 9(b) provides that "a party must state with particularity the circumstances constituting fraud." "A pleading is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations." Neubronner v. Milken, 6 F.3d 666, 671-672 (9th Cir. 1993) (internal quotations and citations omitted). "The complaint must specify such facts as the times, dates, places, benefits received, and other details of the alleged fraudulent activity." Id. at 672.

A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. A court should "freely give" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is denied only when it is clear the ...


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