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MP Nexlevel of California, Inc. v. Cvin, LLC

United States District Court, E.D. California

July 7, 2014

MP NEXLEVEL OF CALIFORNIA, INC., Plaintiff,
v.
CVIN, LLC, et al., Defendants.

MEMORANDUM DECISION AND ORDER RE DEFENDANTS' MOTIONS TO DISMISS (DOCS. 56, 57, 61)

LAWRENCE J. O'NEILL, District Judge.

I. PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

Judges in the Eastern District of California carry the heaviest caseloads in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. Given the shortage of district judges and staff, this Court addresses only the arguments, evidence, and matters necessary to reach the decision in this order. The parties and counsel are encouraged to contact the offices of United States Senators Feinstein and Boxer to address this Court's inability to accommodate the parties and this action. The parties are required to reconsider consent to conduct all further proceedings before a Magistrate Judge, whose schedules are far more realistic and accommodating to parties than that of U.S. District Judge Lawrence J. O'Neill, who must prioritize criminal and older civil cases.

Civil trials set before Judge O'Neill trail until he becomes available and are subject to suspension mid-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if Judge O'Neill is unavailable on the original date set for trial. Moreover, this Court's Fresno Division randomly and without advance notice reassigns civil actions to U.S. District Judges throughout the nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject to reassignment to a U.S. District Judge from outside the Eastern District of California.

II. INTRODUCTION

This case concerns disputes that arose over a large-scale broadband infrastructure construction project ("the Project") throughout California's Central Valley. See Plaintiff's First Amended Complaint ("the FAC"), Doc. 44 ¶ 1.[1] The goal of the Project is to create an approximately 1, 371-mile broadband fiber network through 18 Central Valley counties. Id. ¶ 22.

Plaintiff MP Nexlevel ("MP") entered into numerous contracts to participate in the construction of the Project. Id. ¶¶ 1, 4. Because of various ongoing disputes that arose during the construction of the Project, MP brought this suit against Defendant CVIN, LLC ("CVIN")[2] d/b/a Vast Networks, and Defendant Corporation for Education Network Initiatives in California ("CENIC").

Defendants have moved to dismiss under Fed.R.Civ.P. 12(b)(6). Docs. 56, 57, 61. Pursuant to Local Rule 230(g), the Court rules on the papers without oral argument. For the reasons discussed below, the Court GRANTS Defendants' motions.

III. BACKGROUND

MP alleges that, based on their representations, CVIN and Defendant CENIC were in a partnership and would jointly build and operate the project. Id. ¶ 55.MP alleges it submitted bids to work on the Project as a direct contractor for CVIN based, in part, on its belief that CVIN and CENIC were in a partnership. Id. ¶ 55-56.

Since November 18, 2011, MP has entered into fourteen contracts with CVIN to provide construction-related services on the Project ("the contracts"). Id. ¶ 58. The Project is divided into 30 "Segments, " and MP contracted with CVIN to provide its services on Segments 8, 10, 12, 13, 14, 15, 18, 19, 21, 22, 25, 26, 27, and 30. Id. ¶¶ 53, 58. Separate contracts govern the parties' obligations as to the construction of each Segment. Id. ¶ 18.

As with many construction projects, things have not gone as planned, and disputes have arisen between the parties. MP claims that "[a]s a result of CVIN's mismanagement and rushed, inadequate and incomplete engineering, the Project suffered significant delays and [MP] suffered cost overruns and other damages." Id. ¶ 77.

MP asserts that "CVIN wrongfully blames [MP] for delays on the Project that are directly attributable to CVIN's failures, including without limitation, provision of defective plans and specifications, and failures to timely provide materials or to obtain necessary permits or approvals." Id. ¶ 70. And MP claims that "[d]espite the fact that [MP] completed or is in the process of completing all work under the Contracts except for two segments... CVIN wrongfully refuses to comply with the payment terms of the Contract." Id. ¶ 91. Further, MP claims CVIN wrongfully terminated it from the two Segments on which it has not completed work (Segments 19 and 27). Id. ¶ 91, n. 3.

MP asserts that "CVIN is grossly undercapitalized... and is not able to fulfill its contractual obligations to [MP]." Id. ¶ 114. Specifically, MP alleges CVIN has not paid it money it is owed under the contracts. Id. ¶ 102. And because MP has not been paid, MP alleges it faces legal action from its subcontractors due to its inability to pay them. Id. ¶¶ 102-03.

MP alleges the Member Defendants are liable for CVIN's conduct because they "used CVIN as a mere shell, instrumentality, or conduit for the construction of the Project by the CVIN Member Defendants." Id. ¶ 116. That is, MP asserts that the Member Defendants are alter egos for CVIN. Id. ¶¶ 115-17.

MP asserts sixty causes of action against Defendants.[3] Claims one through fourteen are for breach of each of the fourteen contracts MP entered into for the construction of the Project. Id. at 19-35. Claims fifteen through twenty-eight are for breach of an express warranty of plans and specifications that MP alleges was contained in each of the contracts. Id. at 35-42. Claims 29 through 42 are for violation of California Civil Code § 8800 ("§ 8800"). Id. at 43-53. Claims 43 through 54 are for violation of California Civil Code § 8812 ("§ 8812"). Id. at 54-63. These groups of claims contain fourteen individual causes of action, and each pertains to an individual Segment. MP asserts further individual claims for a foreclosure of a mechanics lien against CVIN, id. at 64-65; quantum meruit, id. at 65-66; injunctive relief, id. at 67-68; violation of California Civil Code § 8710 ("§ 8710"), id. at 68; unjust enrichment, id. at 69; and declaratory judgment, id. at 70.

IV. STANDARD OF DECISION

A motion to dismiss pursuant to Fed R. Civ. P. 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. A 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to ...


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