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Novelposter v. Javitch Canfield Group

United States District Court, N.D. California

April 1, 2014

NOVELPOSTER, Plaintiff,
v.
JAVITCH CANFIELD GROUP, et al., Defendants.

ORDER DENYING MOTIONS TO DISMISS Re: Dkt. Nos. 16, 24

WILLIAM H. ORRICK, District Judge.

In this case, plaintiff NovelPoster contends that defendants breached a contract to run NovelPoster and then failed to return control over NovelPoster's webserver and email accounts back to NovelPoster in violation of federal and state computer fraud and privacy laws. Defendants Daniel Canfield and Mark Javitch have moved to dismiss. Under Civil Local Rule 7-1(b), these motions can be resolved without oral argument. The April 2, 2014 hearing is VACATED. Because I accept the factual allegations in the Complaint as true, and because those allegations plausibly state claims for relief, I DENY the Motions to Dismiss.

BACKGROUND

Plaintiff NovelPoster is a general partnership that designs, sells, and distributes text-based poster products and is owned by Alex Yancher and Matt Grinberg. Complaint ¶ 1, 4. NovelPoster alleges that it entered into a contract on May 9, 2013, whereby defendants - the Javitch Canfield Group, Mark Javitch and Daniel Canfield - would run NovelPoster in exchange for payments of revenues. Id. The contract was allegedly terminated by NovelPoster just over a month later on June 14, 2013. Id. According to NovelPoster, during the contract period, defendants refused to provide Yancher and Grinberg access to necessary computer accounts and impermissibly accessed Yancher's and Grinberg's private email. Id. ¶ 2. Post-termination, NovelPoster alleges that defendants failed to return control of the NovelPoster website and computer accounts to NovelPoster's control and effectively locked out Yancher and Grinberg from being able to oversee and operate the company. Id. ¶ 1.

Based on these allegations, NovelPoster alleges the following violations of law: (i) Computer Fraud and Abuse Act, 18 U.S.C. § 1030 ("CFAA"); (ii) Electronic Communications Privacy Act, 18 U.S.C. § 2510 ("ECPA"); (iii) California's Computer Crime Law, Penal Code § 502 ("CCCL"); (iv) California's Invasion of Privacy Act, Penal Code § 630 ("CIPA"); (v) Conversion; (vi) Breach of Contract; (vii) Breach of the Implied Covenant of Good Faith and Fair Dealing; (viii) California's Unfair Competition Law, Business and Professions Code § 17200 ("UCL"); and (ix) Unjust Enrichment.

Defendant Canfield moves to dismiss, arguing that NovelPoster fails to allege sufficient facts as to his individual actions and fails to plead sufficient facts to support its causes of action generally.[1] Defendant Javitch moves to dismiss, likewise arguing that the facts alleged fail to state a claim.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). A claim is facially plausible when the plaintiff pleads facts that "allow 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) (citation omitted). There must be "more than a sheer possibility that a defendant has acted unlawfully." Id. While courts do not require "heightened fact pleading of specifics, " a plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 570.

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the Court accepts the plaintiff's allegations as true and draws all reasonable inferences in favor of the plaintiff. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

If the court dismisses the complaint, it "should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In making this determination, the court should consider factors such as "the presence or absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and futility of the proposed amendment." Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir.1989).

DISCUSSION

I. BREACH OF CONTRACT

Javitch and Canfield argue that NovelPoster fails to allege sufficient facts in support of its breach of contract claim. "[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011). "A written contract may be pleaded either by its terms- set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference-or by its legal effect." McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457, 1489 (Cal.App. 2006). As the McKell Court recognized, "[i]n order to plead a contract by its legal effect, plaintiff must allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.'" Id. (quoting 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 480, p. 573).

Here, NovelPoster alleges the following regarding the written contract:[2]

On or about May 8, 2013, Mr. Grinberg emailed a proposed contract to Defendants, also including Mr. Yancher. The proposed ...

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