United States District Court, E.D. California
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
GARIAND E. BURRELL, Jr., Senior District Judge.
Defendants Arcadis U.S., Inc. ("Arcadis") and Malcolm Pirnie, Inc. ("Malcolm Pirnie") (collectively, "Defendants") move under Federal Rules of Civil Procedure ("Rules") 12(b)(6) and 19 for an order dismissing Plaintiff's First Amended Complaint ("FAC"), which comprises the following seven state-law claims: 1) breach of oral contract, 2) breach of implied partnership agreement, 3) fraud, 4) fraud, 5) breach of the implied covenant of good faith and fair dealing, 6) common count: services rendered, and 7) fraud. Plaintiff opposes the motion. Diversity jurisdiction is the alleged basis of subject-matter jurisdiction.
I. FACTUAL BACKGROUND
The following allegations in Plaintiff's FAC concern the motion. Plaintiff and Malcolm Pirnie, which "is, and at all times mentioned has been, a corporation, incorporated under the laws of New York, " entered into "a written agreement... effective [in] July 2007" (hereinafter referenced as "2007 Contract") governing "recruiting services, candidate research, and acquisition services relating to potential acquisitions by Malcolm Pirnie." (FAC ¶¶ 2, 12, ECF No. 18.) In addition to the 2007 Contract, "[a]s part of an oral agreement implicit in the conduct of the parties at the time that [P]laintiff and Malcolm Pirnie started their business relationship and thereafter, the parties... agreed that [Plaintiff] would have a joint interest in and responsibility for the profitability of the business." (Id. ¶ 13.)
"In approximately 2006 and 2007, Malcolm Pirnie began seriously exploring the potential purchase by and/or merger with other companies, including Arcadis." (Id. ¶ 16.) "On or about September 10, 2008, Malcolm Pirnie executive management... requested that [P]laintiff consult with and assist William Kraekel... with the negotiations for this transaction with Arcadis." (Id.) Plaintiff was "assured that he was a major stakeholder, that he would be taken care of' after the sale to Arcadis had been completed, and that money would be set aside to facilitate distribution to non-shareholders." (Id. ¶ 16.) "On or about September 10 and 11, 2008, " Mr. Kraekel told Plaintiff that "if the sale to Arcadis proceeded as planned, the shareholders would receive their full payment in two installments, the final of which would not occur until July 2012, " and "distribution to non-shareholders [like Plaintiff] would only be made after the shareholders had received their designated proportion of the profits." (Id. ¶ 18.)
"Plaintiff devoted substantial amounts of time to [the sale to Arcadis], even though not required [to] by [the 2007] [C]ontract, with the understanding that, as an acknowledged strategic partner and major stakeholder' with Malcolm Pirnie, he would receive a proportionate share of profits earned from the sale." (Id. ¶ 16.) "The sale of Malcolm Pirnie to Arcadis was completed on or about June 25, 2009." (Id. ¶ 20.) "On or about November 3, 2011[, ] Plaintiff was informed... that no money had been set aside or otherwise designated for payment to [P]laintiff and that he would not receive any of the profits from the sale." (Id. ¶ 26.)
Earlier in 2009, "prior to but in anticipation of the sale of Malcolm Pirnie to Arcadis, ... [Mr.] Kraekel asked [P]laintiff to recruit [Guy] Matelli to join Arcadis in light of the pending sale." (Id. ¶ 57.) "At that time, [P]laintiff did not have a contract to recruit with Arcadis.... Accordingly, it was orally agreed by and between [P]laintiff, Malcolm Pirnie and Arcadis, that... [Mr.] Matelli's recruitment... was to result in payment to [P]laintiff of $90, 000...." (Id. ¶ 58.) "In reliance on this expressed promise of payment for his services, ... [P]laintiff... set about recruitment efforts which resulted in successfully persuading [Mr.] Matelli to join Arcadis, " where he "commenced employment" "[i]n or about late May 2010." (Id. ¶ 59.) "[N]o compensation whatsoever for his successful recruitment of [Mr.] Matelli was made." (Id. ¶ 60.)
"Effective on July 1, 2010, [P]laintiff entered into another written contract" (hereinafter referenced as "2010 Contract") "with Malcolm Pirnie, as a wholly owned subsidiary of Arcadis, " which "included a new incentive compensation payment' program that allowed [P]laintiff the opportunity to earn considerably more for the successful recruitment of executive level employees." (Id. ¶ 46.) "No  assignments from Arcadis [outside the water division] were ever received, and thus [P]laintiff was deprived of the opportunity to realize the economic benefits offered by the incentive compensation provision." (Id. ¶ 50.) "[P]laintiff did not receive from Arcadis/Malcolm Pirnie the good faith cooperation and participation necessary to effectuate [P]laintiff's performance [of recruitment assignments] even within the water division and, to the contrary, senior management exhibited a routine of impeding performance." (Id. 50.)
A. 2007 and 2010 Contracts
Defendants state they attached "true and correct copies of" the referenced 2007 and 2010 Contracts as exhibits to their motion. (See Mem. P. & A. in Supp. Defs.' Mot. to Dismiss ("Defs.' Mot.") 2 n.1, Exs. 1 & 2, ECF Nos. 20-1, 20-2, 20-3.) Plaintiff has not disputed the authenticity of what Defendants contend are the 2007 and 2010 Contracts. Further, Plaintiff cites to the exhibit Defendants describe as the 2010 Contract in his opposition brief, where he disputes the meaning of the language in that contract. (Pl.'s Opp'n 7:20, ECF No. 23.)
Since Plaintiff alleges the existence of the 2007 and 2010 Contracts in his FAC, "and the parties do not dispute the authenticity of the[se] document[s], " which "[D]efendant[s] attache[d] to [their] motion to dismiss, " the documents are considered under the "incorporation by reference doctrine". Knievel v. ESPN , 393 F.3d 1068, 1076 (9th Cir. 2005) (quoting In re Silicon Graphics Inc. Sec. Litig. , 183 F.3d 970, 986 (9th Cir. 1998)). Under this doctrine a court is permitted "to take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading, '" Knievel , 393 F.3d at 1076, "without converting the motion to dismiss into a motion for summary judgment." U.S. v. Ritchie , 342 F.3d 903, 908 (9th Cir. 2003).
The following portions of the 2007 and 2010 Contracts are germane to the motion. The named parties to each contract are Malcolm Pirnie and "The Purvis Company, " with "Ron L. Purvis" listed as the signatory for The Purvis Company. (2007 Contract 4, 2010 Contract 4.) The 2007 Contract describes the "scope of work" as "RECRUITING SERVICES, " "CANDIDATE RESEARCH SERVICES, " and "ACQUISIION SERVICES... relating to potential acquisitions by [Malcolm] Pirnie." (2007 Contract ¶ 2.) The 2010 Contract describes the "scope of work" as "RECRUITING SERVICES, " and contains a provision stating it "shall be construed and enforced in accordance with the laws of the State of New York." (2010 Contract ¶¶ 2, 10.)
A. First, Second, Third, and Fourth Claims
1. Statute of Limitations
Defendants argue Plaintiff's first, second, third, and fourth claims should be dismissed because each of these claims is barred by the applicable statute of limitations. The statute of limitations for Plaintiff's first claim, in which he alleges breach of an oral contract, and for his second claim, in which he alleges breach of an implied contract, is, as prescribed in California Civil Procedure Code § 339, two years. The statute of limitations for ...