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May v. Semblant, Inc.

United States District Court, N.D. California, San Jose Division

July 23, 2014

DONALD MAY, Plaintiff,
v.
SEMBLANT, INC., et al., Defendants.

ORDER GRANTING DEFENDANTS' PARTIAL MOTION TO DISMISS [Re: ECF No. 33]

BETH LABSON FREEMAN, District Judge.

Defendants Semblant, Inc. ("Semblant") and Steve Lowder ("Lowder") bring this Partial Motion to Dismiss Plaintiff Donald May's ("May" or "Plaintiff") First Amended Complaint ("FAC"). Plaintiff brings suit against Defendants alleging fraudulent misrepresentation, breach of oral contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and wrongful termination, arising from an employment dispute with his former employer, Semblant, and its Chief Executive Officer, Lowder. Defendants move to dismiss Plaintiff's second cause of action, for breach of oral contract, and third cause of action, for breach of the implied covenant of good faith and fair dealing, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim.

Having considered the briefing and oral argument of the parties, the Court hereby GRANTS Defendants' Motion to Dismiss, with leave to amend.

I. BACKGROUND

A. Procedural History

Plaintiff filed his initial Complaint on April 8, 2013. (ECF 1) This Court has already evaluated the pleadings in this case: on September 27, 2013, Judge Edward Davila granted in part and denied in part Defendants' Motion to Dismiss, (ECF 31), dismissing Plaintiff's breach of contract claim with leave to amend and giving Plaintiff the opportunity to add a claim for breach of the implied warranty of good faith and fair dealing. ( Id. ) Judge Davila further granted Defendants' Request for Judicial Notice ("RJN"), ( see ECF 31 at 4), and took judicial notice of the Employment Agreement ("Agreement") entered into between Plaintiff and Semblant. (RJN, ECF 14)

Plaintiff filed his First Amended Complaint ("FAC") on October 28, 2013. (ECF 32) Defendants thereafter filed the instant Motion to Dismiss ("Mot. to Dismiss") on November 7, 2013. (ECF 33) Plaintiff filed his Opposition ("Opp. to Mot. to Dismiss") on November 21, 2013, (ECF 35), and Defendants replied on November 27, 2013. (ECF 37) The case was reassigned to the undersigned judge on April 17, 2014, and oral argument was heard on July 17, 2014.

B. Factual Allegations in the FAC

This is an employment dispute between Plaintiff, a citizen of California, and Defendants, who Plaintiff alleges are citizens of Arizona. (FAC ¶ 1) In February 2012, Plaintiff alleges he was solicited by agents of Semblant to become a Senior Vice President of Worldwide Sales and Marketing. (FAC ¶ 2) Plaintiff states that Semblant was represented to be a "United Kingdom based technology development company." ( Id. ) After a series of meetings with Steve Lowder, Semblant's CEO, and other officers and agents of Semblant, Plaintiff was made a verbal offer of employment. (FAC ¶ 3) Plaintiff accepted this verbal offer on April 10, 2012. ( Id. )

Plaintiff states that some time later, "after Plaintiff had started employment with Semblant, " (FAC ¶ 4), he was provided a written employment contract that included terms "far afield from what had been agreed to" verbally. ( Id. ) Plaintiff states that he:

[O]bserved that the terms and conditions of the offer and position were not as represented by Lowder and Semblant. Plaintiff discussed the discrepancies with Lowder who insisted that Plaintiff execute the agreement notwithstanding the discrepancies but that he, Lowder, would get the necessary changes made to the agreement to conform with the verbal agreement when he had a chance to confer with Semblant's Board of Directors.

(FAC ¶ 14). Based on these representations, Plaintiff signed the Agreement. ( Id. )

Plaintiff alleges that, in the two months following his signing of the document, he learned that the representations made to him regarding Semblant "were false and that Semblant was engaged in attempting to defraud the public." (FAC ¶ 5) He claims that at least one of Semblant's products was not "marketable or saleable, " that the company was not financially sound, and that Lowder was "known to be less than candid with Semblant employees and the public." (FAC ¶ 15) Plaintiff further alleges that Semblant and Lowder "planned to effect a plan to use trade secret and confidential information" obtained from another company "for their own purposes." ( Id. )[1] Plaintiff states that he "protested... and refused to participate in the[se] unlawful actions, " and was terminated and threatened with legal action. (FAC ¶ 5)

Plaintiff thereafter brought this suit, alleging five causes of action: (1) misrepresentation, (2) breach of oral contract, (3) breach of implied covenant of good faith and fair dealing, (4) promissory estoppel, and (5) wrongful termination. Only the ...


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