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Stoneville Usa, Inc v. Pental Granite and Marble

September 18, 2012

STONEVILLE USA, INC., PLAINTIFF,
v.
PENTAL GRANITE AND MARBLE, INC.; PETER PENTAL; STYLENQUAZA LLC; AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Otis D. Wright, II United States District Judge

O

ORDER GRANTING IN PART DEFENDANTS' MOTION TO DISMISS [22]

Pending before the Court is Defendant Pental Granite and Marble, Inc.'s Motion to Dismiss Plaintiff Stoneville USA, Inc.'s First Amended Complaint under Federal Rule of Civil Procedure 12(b)(6).*fn1 (ECF No. 22.) For the following reasons, Pental's Motion is GRANTED IN PART.

I. FACTUAL BACKGROUND

Stoneville imports, distributes, and sells man-made-stone products, including Quartz products. (FAC ¶ 16.) Stoneville entered into an alleged agreement with Pental in July 2009, where Pental would provide Stoneville a Chroma Quartz product on a consignment basis, and Stoneville would remit payment for the sold product by the end of the following month after the product was sold; no other relevant terms were specified. (Id. ¶ 20.) This relationship continued for over two years, during which Pental did not require Stoneville to purchase a minimum number of units of the product, and did not indicate anything to the contrary. (Id. ¶ 22.) Also during this period, Stoneville purchased samples of products from Pental to market and advertise in the greater Los Angeles region. (Id. ¶ 23.) Stoneville alleges that it spent "considerable time, money, and effort marketing and advertising" Chroma Quartz in the Los Angeles region, and that these efforts created a greater demand for Chroma Quartz generally, and not just for Stoneville's brand. (Id.)

Further, during this time period, Stoneville alleges that on multiple occasions, it discussed with Pental the ongoing nature of their relationship. (Id. ¶ 25.) However, in January 2012, Pental "suddenly and without notice" modified their arrangement and required an upfront payment of $1.2M--$1.5M within a month, and minimum monthly orders of 20 containers of product thereafter. (Id. ¶ 27.) Pental indicated that it intended to sell Chroma Quartz itself in the Los Angeles region if Stoneville was unable to fulfill the new requirements. (Id.) Stoneville was unable to meet these requirements, and Pental stopped supplying Chroma Quartz to Stoneville, allegedly causing damage to Stoneville's company, customers, and business. (Id. ¶28.)

II. LEGAL STANDARD

Dismissal under Rule 12(b)(6) can be based on "the lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)-a short and plain statement-to survive a motion to dismiss for failure to state a claim under Rule 12(b)(6). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003); Fed. R. Civ. P. 8(a)(2). For a complaint to sufficiently state a claim, its "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While specific facts are not necessary so long as the complaint gives the defendant fair notice of the claim and the grounds upon which the claim rests, a complaint must nevertheless "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Iqbal's plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully," but does not go so far as to impose a "probability requirement." Id. Rule 8 demands more than a complaint that is merely consistent with a defendant's liability-labels and conclusions, or formulaic recitals of the elements of a cause of action do not suffice. Id. Instead, the complaint must allege sufficient underlying facts to provide fair notice and enable the defendant to defend itself effectively. Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The determination whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 566 U.S. at 679.

When considering a Rule 12(b)(6) motion, a court is generally limited to the pleadings and must construe all factual allegations in the complaint as true and in the light most favorable to the plaintiff. Lee v. City of L.A. , 250 F.3d 668, 688 (9th Cir. 2001). Conclusory allegations, unwarranted deductions of fact, and unreasonable inferences need not be blindly accepted as true by the court. Sprewell v. Golden State Warriors , 266 F.3d 979, 988 (9th Cir. 2001). Yet, a complaint should be dismissed only if "it appears beyond doubt that the plaintiff can prove no set of facts" supporting plaintiff's claim for relief. Morley v. Walker , 175 F.3d 756, 759 (9th Cir. 1999).

As a general rule, leave to amend a complaint that has been dismissed should be freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).

III. DISCUSSION

Stoneville's FAC alleges seven causes of action against Pental: (1) breach of oral contract; (2) breach of covenant of good faith and fair dealing; (3) breach of implied contract; (4) unjust enrichment for supplies received; (5) unjust enrichment for the benefit of marketing payments; (6) common counts of work and labor; and (7) unfair business ...


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