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John Mcallister, Individually and John Mcallister, Dds, Inc v. Patterson Companies

March 3, 2011

JOHN MCALLISTER, INDIVIDUALLY AND JOHN MCALLISTER, DDS, INC., PLAINTIFFS,
v.
PATTERSON COMPANIES, INC., PATTERSON DENTAL SUPPLY, INC., PATTERSON DENTAL AND SIRONA DENTAL SYSTEMS, LLC; AND DOES 1-50, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

ORDER Re: Defendant Sirona Dental Systems, LLC's Motion to Dismiss Second Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) [27]

Defendant Sirona Dental Systems, LLC's Motion to Dismiss the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) [27] was set for hearing on February 22, 2011. Having taken this matter under submission on February 18, 2011, and having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS:

The Court hereby GRANTS IN PART AND DENIES IN PART Defendant Sirona Dental Systems, LLC's Motion to Dismiss the Second Amended Complaint.

In a Rule 12(b)(6) motion to dismiss, the Court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the non-moving party. Klarfeld v. United States, 944 F.2d 583, 585 (9th Cir. 1991). A dismissal can be based on the lack of cognizable legal theory or the lack of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). However, a party need not state the legal basis for his claim, only the facts underlying it. McCalden v. California Library Ass'n, 955 F.2d 1214, 1223 (9th Cir. 1990).

Defendant Sirona Dental Systems, LLC ("Defendant") moves to dismiss Plaintiffs' Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Specifically, Defendant argues that Plaintiffs have failed to allege plausible claims against Defendant with regard to: (1) Plaintiffs' Second Cause of Action for Rescission; (2) Plaintiffs' Third Cause of Action for Negligence; (3) Plaintiffs' Fourth Cause of Action for Breach of Warranty of Merchantability; and (4) Plaintiffs' Fifth Cause of Action for Breach of Warranty of Fitness for Particular Purpose.*fn1

As a preliminary matter, the Court hereby GRANTS Defendant's Request for Judicial Notice of the official transcript of this Court's hearing in this Action from December 14, 2010 ("Hearing Transcript") pursuant to Federal Rule of Evidence 201. Fed. R. Evid. 201. See also Phillips v. Bank of Am. Corp., 2011 WL 132861, at *3 (N.D. Cal. Jan. 14, 2011)(stating that a court may take judicial notice of matters of public record, including prior federal and state court proceedings).

A. Defendant's Motion To Dismiss As To The Second Cause Of Action For Rescission

The Court DENIES Defendant's Motion to Dismiss as to Plaintiffs' claim for Rescission.

To withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff need only plead the underlying facts to support a claim upon which relief may be granted. See McCalden, 955 F.2d at 1223. In California, a party to a contract may rescind the contract "[i]f the consideration for the obligation of the rescinding party fails, in whole or in part, through the fault of the party as to whom he rescinds." Cal. Civ. Proc. Code § 1689(b)(2). In order to state a claim for rescission, a plaintiff must therefore allege, among other elements, the existence of the contract between the parties that is sought to be rescinded. See Sharabianlou v. Karp, 181 Cal. App. 4th 1133, 1145 (2010).

Here, the Court finds that Plaintiffs allege sufficient facts to state a claim for Rescission at this juncture. While Defendant correctly points out that the Second Amended Complaint states that the contract underlying this Rescission claim was entered into between Plaintiffs and Defendants Patterson Companies, Inc., Patterson Dental Supply, Inc., and Patterson Dental ("Defendants Patterson Companies"), the Second Amended Complaint specifically alleges that Defendants Patterson Companies acted as agents of Defendant in advertising, marketing and selling the defective items to Plaintiffs. (Second Amended Complaint ("SAC") ¶ 3.) As the Court must presume all factual allegations of the Complaint to be true and draw all reasonable inferences in favor of the non-moving party, the Court finds that Plaintiffs have sufficiently alleged that Defendant is also effectively a party to this underlying contract as a result of this alleged agency relationship. See Klarfeld v. United States, 944 F.2d 583, 585 (9th Cir. 1991).

It should be noted that Plaintiffs have attached to their Opposition various Exhibits consisting of contract papers, websites images and advertisements in support of their allegations here that an agency relationship existed between Defendants Patterson and Defendant. Defendant in turn has submitted various evidentiary objections to these Exhibits. However, as the Second Amended Complaint sufficiently alleges this agency relationship, and the Court generally may not consider material beyond the pleadings in ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court did not consider these Exhibits in making its ruling here. See Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). As such, Defendant's evidentiary objections here with regard to these Exhibits need not be addressed.

Accordingly, Defendant's Motion to Dismiss Plaintiffs' claim for Rescission is DENIED.

B. Defendant's Motion To Dismiss As To The Third Cause Of Action For Negligence The Court GRANTS Defendant's Motion to Dismiss as to Plaintiffs' claim for Negligence.

In order to state a claim for negligence, a plaintiff must plead: (1) a legal duty of care toward the plaintiff; (2) a breach of that duty; (3) legal causation; and (4) damages. Century Sur. Co. v. Crosby Ins., Inc., 124 Cal. App. 4th 116, 127 (2004). If a complaint lacks allegations of fact to show the defendant owed the plaintiff a legal duty of care, it is "fatally defective." ...


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