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Jump San Diego, LLC v. Kruger

United States District Court, S.D. California

June 19, 2012

JANAY KRUGER, as an individual, and KRUGER DEVELOPMENT COMPANY, a California Corporation, Defendants.


          Hon. Cathy Ann Bencivengo United States District Judge

         This matter comes before the Court on Defendants Janay Kruger and Kruger Development Company's (collectively “Defendants”) motion to dismiss [Doc No. 25.] The motions have been fully briefed, and the Court finds them suitable for submission without oral arguments. For the following reasons, Defendants' motion is DENIED.

         I. Procedural Background

         On June 25, 2014, Plaintiff filed a complaint against Defendants asserting three claims: (1) negligence; (2) negligent Misrepresentation; and (3) breach of contract. [Doc. No. 1.] Defendants moved to dismiss the complaint in its entirety. [Doc. Nos. 4, 6.] The Court granted the motions, primarily on statute of limitations grounds. [Doc. No. 10.]

         On appeal, the Court of Appeals reversed and remanded, stating that Plaintiff should be allowed an opportunity to file an amended complaint because it was not certain that Plaintiff “could prove no set of facts that would establish the timeliness of the claim[s].” [Doc. No. 16.]

         On January 10, 2017, Plaintiff filed its first amended complaint (“FAC”) asserting a claim of negligence and a claim of breach of contract. [Doc. No. 22.] On January 24, 2017, Defendants filed their motion seeking to dismiss under the Federal Rules of Civil Procedure. [Doc. No. 25.] Plaintiff filed its opposition to the motion [Doc. No. 26] and Defendants filed their reply [Doc. No. 27].

         II. The Allegations in the FAC

         In March 2011, Plaintiff retained Defendants to provide land-use consulting advice concerning the appropriateness of a San Diego property (the “Property”) for an indoor trampoline business. The complaint alleges “Defendants advised Plaintiff that the Property was properly zoned for Plaintiff's business. Defendants confirmed this advice in writing on or about December 16, 2011.” [Doc. No. 22 at ¶ 14.]

         On January 13, 2012, Plaintiff executed a ten-year lease on the Property that required a security deposit of approximately $77, 000. [Id. at ¶ 15.] After executing the lease, Plaintiff was informed that the Property “was actually not properly zoned for Plaintiff's business.” [Id. at ¶ 16.] Thereafter, Plaintiff was informed that a Conditional Use Permit (“CUP”) “may be required” and that “Plaintiff may not be required to pay any additional costs related to zoning variance over and above what Plaintiff anticipated to pay in construction and development costs.” [Id. at ¶ 17.] Plaintiff was “informed that deposits Plaintiff made in connection with the [CUP] application would be similar to fees required by the City of San Diego in any event to construct the contemplated improvements, ” but “was not aware that the Defendants' land-use advice had caused Plaintiff any damage.” [Id.]

         Plaintiff filed its CUP application on July 2, 2012. [Id. at ¶ 18.] After July 2, 2012, Plaintiff was required to pay the costs associated with the attorneys and consultants needed to prepare draft permit findings, attend meetings with City staffers and go through the CUP hearing process with the Planning Commission. [Id. at ¶ 20.]

         In the Fall of 2012, Plaintiff received a cycles report from the City, but prior to obtaining this report Plaintiff could not calculate whether it had been damaged by Defendants' erroneous advice “[b]ecause of Plaintiff's substantial planned investment into the Property.” [Id. at 21.] After receiving the cycles report from the City “it became apparent that Plaintiff would be forced to incur significant construction and development costs above and beyond the improvements it already intended to undertake.” [Id.]

         Plaintiff also alleges that it would not have executed the lease but for Defendants' consulting advice. [Id. at 23.] Plaintiff's business was delayed in opening because of Defendants erroneous advice and if not for the delay resulting from the CUP process, “Plaintiff could have been the first-to-market indoor trampoline business . . . would have not lost significant revenue . . . [or] incurred additional construction costs and post-CUP application fees in excess of $300, 000. [Id.]

         Based on these allegations, Plaintiff asserted negligence and breach of contract claims against Defendants.

         III. Legal Standard

         Under Rule 12(b)(6), a party may bring a motion to dismiss based on the failure to state a claim upon which relief may be granted. A Rule 12(b)(6) motion challenges the sufficiency of a complaint as failing to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). For purposes of ruling on a Rule 12(b)(6) motion, the court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the non-moving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But, a “pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).

         “When ruling on a motion to dismiss, [the court] may ‘generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice.'” Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007)). Matters of public record are properly subject to judicial notice. Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (citation omitted); see also Fed. R. Evid. 201.

         IV. Defendants' Request for Judicial Notice

         Defendants request that the Court take judicial notice of three documents: (1) a certified copy of a CUP application Dated: June 19, 2012 and filed by Plaintiff with the City of San Diego Development Services Department; (2) a certified copy of a City of San Diego invoice dated May 17, 2012, for “Multi Prelim” and reflecting payment by Plaintiff; and (3) a certified copy of a City of San ...

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