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Global Private Funding, Inc. v. Empyrean West, LLC

United States District Court, C.D. California

September 11, 2014

GLOBAL PRIVATE FUNDING, INC., a California corporation, Plaintiff,
v.
EMPYREAN WEST, LLC, an Arizona corporation; JAY L. CARTER, individually and as managing partner of EMPYREAN WEST LLC; DAVID C. KELLER, individually and as CEO of EMPYREAN WEST LLC; U.S. FUEL CORPORATION, a Nevada corporation; HARRY BAGOT, individually and as President/CEO of U.S. FUEL CORPORATION; STANLEY N. DRINKWATER, III, individually and as Chairman of the Board; U.S. FUEL CORPORATION; WILLIAM CHADY, individually and as Chief Operating Officer of U.S. FUEL CORPORATION; ROBERT SCHWARTZ, individually, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [DKT. NOS. 53, 61]

DEAN D. PREGERSON, District Judge.

Presently before the Court are two motions to dismiss Plaintiff's First Amended Complaint, filed by two different groups of defendants (the "Motions"). (Docket Nos. 53, 61.) For the reasons stated in this order, U.S. Fuel's motion is GRANTED and Empyrean, Carter, and Keller's motion is GRANTED IN PART and DENIED IN PART.

I. Background

Plaintiff's First Amended Complaint ("FAC") is difficult to decipher. As best the Court can understand, Plaintiff's allegations are as follows.

Plaintiff Global Private Equity, Inc. ("Plaintiff" or "Global") is a private, equity-based lender to established companies, as well as startups, offering business, financial, and technical services to its clients. (FAC ¶ 2.) Defendant Empyrean West, LLC ("Empyrean") is engaged in the business of funding United States businesses which support local economic development through foreign investments. (Id.) Defendants Jay Carter ("Carter") and David Keller ("Keller") are, respectively, the managing partner and CEO of Empyrean. (Id. ¶¶ 7, 8.)

On July 30, 2012, Plaintiff executed a confidentiality and non-disclosure agreement with Empyrean which formed the initial basis of the business relationship between the two companies. (Id. ¶ 20.) On August 31, 2012, Plaintiff and Empyrean entered into a Master Service Agreement ("MSA"), to which the confidentiality agreement was attached. (Id.) Under the MSA, Plaintiff agreed to perform various business-related services for Empyrean, including "business incubation, business sales, merges [sic] and acquisitions, company formation, restructing [sic], project funding, financial packaging, real estate sales, financing, marketing, advertising, online development, technology applications, infrastructure and telecom services." (Id.) The MSA also included a Business Incubation Addendum, executed on September 29, 2012. (Id.) Empyrean agreed to furnish foreign investors for Plaintiff's clients under the EB-5 visa program. (Id.) Empyrean also agreed to pay Plaintiff 10% of the gross revenue, plus a deferred percentage of other revenues generated. (Id. ¶ 22.)

On July 19, 2012, U.S. Fuel executed a confidentiality and non-disclosure agreement with Plaintiff defining the business relationship between the two companies. (Id. ¶ 23.) On August 13, 2012, Plaintiff and U.S. Fuel entered into a Master Service Agreement ("MSA"), to which the confidentiality agreement was attached. (Id.)

Plaintiff alleges that it provided Empyrean "confidential information concerning their clients with the intention of obtaining financing for various projects through the resources of particular foreign investors through the foreign investment program management by [Empyrean]." (Id. ¶ 28.) Plaintiff alleges that although it "provided the projects for [Empyrean] to fund, " Empyrean "was unable to produce a single investor from any location, whether in the United States or in any foreign country." (Id. ¶ 27.) Essentially, Plaintiff alleges that it provided Empyrean with multiple investment opportunities, each of which Empyrean found some fault with. (Id. ¶ 37.) Then, after rejecting the project, Empyrean would work directly with the underlying company on the project on the very same terms proposed by Plaintiff, leaving Plaintiff out and thus avoiding payment of any percentages owed to Plaintiff as a result of Plaintiff's services in finding investment opportunities for Empyrean. (Id. ¶ 36.) Empyrean commenced one such project with U.S. Fuel, apparently a client of Plaintiff. (Id. ¶ 35.) Empyrean and U.S. Fuel each told Plaintiff that they intended to terminate their MSAs with Plaintiff because of purported breaches by Plaintiff. (Id. ¶¶ 35, 39.)

The Court previously dismissed Plaintiff's Complaint without prejudice. (Docket No. 47.) Plaintiff then filed the FAC, bringing eighteen causes of action against various defendants. (Docket No. 51.) Defendants have now moved to dismiss the FAC. (Docket Nos. 53, 61.) After the Motions were filed, Plaintiff stipulated to dismiss certain defendants and withdrew some causes of action. (See Docket Nos. 38, 83, 84, 85, 86, 87, 88.)

II. Legal Standard

A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes , 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations, " it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal , 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id . at 679. In other words, a pleading that merely offers "labels and conclusions, " a "formulaic recitation of the elements, " or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id . at 678 (citations and internal quotation marks omitted).

"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id . at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly , 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 679.

III. Discussion

A. Dismissed Defendants ...


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