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Clear Connection Corporation v. Comcast Cable Communications Management, LLC

United States District Court, Ninth Circuit

December 3, 2013

CLEAR CONNECTION CORPORATION, a California Corporation Plaintiff,
v.
COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC, a Delaware limited liability company and DOES 1 through 30 inclusive, Defendant. COMCAST CABLE COMMUNICATION MANAGEMENT, LLC, Counterclaimant,
v.
CLEAR CONNECTION CORPORATION, a California corporation, CLEAR CONNECTION, LLC, an Arizona limited liability company, and KURK MOODY, an individual, Counterdefendants.

ORDER

TROY L. NUNLEY, District Judge.

This matter is before the Court on Defendant and Counterclaimant Comcast Cable Communications Management, LLC's ("Comcast") motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). (See Def.'s Mot. for J. on the Pleadings, ECF 31.) Plaintiff and Counter-Defendant Clear Connection Corporation ("Clear Connection") opposes the motion. (See Pl.'s Opp'n to Def..'s Mot. for J. on the Pleadings, ECF 32.) For the reasons set forth below, Comcast's motion is GRANTED with leave to amend.[1]

BACKGROUND

This matter arises out of Clear Connection's allegations that Comcast terminated its commercial agreement with Clear Connection to provide cable technician services to Comcast customers. Clear Connection operates a cable engineering, design and installation business. (Pl.'s Compl., ECF 1-1 ¶ 4.) "The bulk of the work done by [Clear Connection] for Comcast... related to providing service technicians to Comcast for the servicing of Comcast customers." (Id.) Clear Connection entered into a Preferred Vendor Agreement ("PVA") with Comcast which was periodically supplemented by Statements of Work ("SOW"). ( Id. ¶ 7.)

"To Service the geographical [a]reas assigned to" it, Clear Connection "lease[d] several commercial warehousing properties within" the service areas including but not limited to properties located in both Sacramento and Fresno. ( Id. ¶ 9.) Clear Connection alleges that in September 2009, Comcast communicated to it a "contractor realignment plan, " the purpose of which "was to limit the service technician contractors to Comcast's chosen geographical [a]reas." ( Id. ¶¶ 17.) "Under this plan, Comcast informed [Clear Connection] that its sole service area would be Fresno" and "directed [Clear Connection] to shut down operations in all other [a]reas." ( Id. ¶ 18.)

Clear connection alleges that Comcast sent it a letter on July 28, 2010, informing Clear Connection that it "would cease performing work for the Central Valley market and would focus its efforts on the South Valley market." ( Id. ¶ 38.) Clear Connection maintains that this change amounted to a breach of contract "by modifying the contract without [Clear Connection's] consent..." (Id.)

Clear Connection further alleges that Comcast represented that it "would reduce the rates it paid to [Clear Connection] for cable installation and servicing" but "despite the 5% decrease in pricing, [Comcast] would provide [Clear Connection] with an increased volume of work which would make up' the difference in the decrease in pricing to" Clear Connection. ( Id. ¶ 41.) Clear Connection alleges that "[t]he representations made by [Comcast] were in fact false" and that Comcast "intended to decrease the pricing it paid to [Clear Connection] by a reduction of 7.75 to 8.1%" and "did not intend to increase the volume of work that it contracted to [Clear Connection] and did not actually increase this volume." ( Id. ¶ 42.)

Clear Connection alleges that Comcast "made numerous representations to [it]... related to the service [a]rea, the amount of work, the volume, and the overall profitability [Clear Connection] would expect as a result of [Comcast's] realignment." ( Id. ¶ 27.) Clear Connection alleges that these representations were false and that Comcast's "true motives were to increase profitability" by decreasing Clear Connections service area, total compensation, "and to ultimately terminate [Clear Connection] from providing services to" Comcast. ( Id. ¶ 28.) In December 2010, Comcast sent Clear Connection a letter informing it "that it planned to terminate its agreement with [Clear Connection] and offered [Clear Connection] its choice of either a thirty or sixty day notice of termination." ( Id. ¶ 24.)

Clear Connection filed its complaint in California Superior Court for the County of Sacramento on August 6, 2012, asserting claims for: (1) Fraud in the Inducement; (2) Breach of Contract; (3) Fraud; and (4) Intentional Interference with Contractual Relations. ( Id. at 7:3-11:28.) Comcast removed the matter to this court on November 30, 2012, on the basis of diversity of citizenship. (See Def.'s Notice of Removal, ECF 1.)

STANDARD

Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). Moreover, Rule 12(h)(2) of the Federal Rules of Civil Procedure provides in relevant part that a defense of failure to state a claim upon which relief can be granted may be made by motion for judgment on the pleadings. FED. R. CIV. P. 12(h)(2). When considering a motion for judgment on the pleadings based on a defense of failure to state a claim upon which relief can be granted, a court should employ those standards normally applicable to a motion to dismiss pursuant FRCP 12(b)(6). See Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., Ltd. , 132 F.3d 526, 528-29 (9th Cir. 1997); 5B Wright & Miller, Federal Practice and Procedure, Civil § 1368 at 515-16 (3d ed. 2007).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto , 405 U.S. 319, 322 (1972). A court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn , 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citing Twombly , 550 U.S. at 556).

Nevertheless, a court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose , 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal , 556 U.S. at 678. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly , 550 U.S. at 555; see also Iqbal , 556 U.S. at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts that it has not alleged or that the defendants have violated the... laws in ways that have not been alleged[.]" Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters , 459 U.S. 519, 526 (1983).

Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal , 556 U.S. at 678 (quoting Twombly , 550 U.S. at 570). Only where a plaintiff has failed to "nudge[] [his or her] claims... across the line from conceivable to plausible[, ]" is the complaint properly dismissed. Id. at 680. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 678. This ...


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