United States District Court, C.D. California
ORDER DENYING IN PART AND GRANTING IN PART COUNTERDEFENDANTS' MOTION TO DISMISS [Dkt. No. 30.]
DEAN D. PREGERSON, District Judge.
Presently before the Court is the Motion to Dismiss Defendant's Counterclaims filed by Steven Winogradsky and Winogradsky/Sobel (collectively, "Counterdefendants"). Having heard oral arguments and considered the parties' submissions, the Court adopts the following order.
Defendant Modrock Productions ("Modrock") is a company formed for the limited purpose of putting on a musical stage show involving classic rock songs. (Counterclaims, ¶ 12.) Modrock alleges it entered into a written contract with Steven Winogradsky and Winogradsky/Sobel ("WS") for services related to clearing the necessary rights to the songs to be used in the show. (Id. at ¶ 16.) Modrock alleges that use of the songs was vital to the show and that it would not have invested time and money in mounting the show if it had known that certain songs would turn out to be unavailable. (Id. at ¶ 13.)
Modrock alleges that around March 2012 it received notification from Winogradsky and/or WS that all but one of the songs, including the Kinks songs "Sunny Afternoon" and "Dedicated Follower of Fashion, " had been verbally cleared for use by agents or employees of Plaintiff, which holds the rights to the songs. (Id. at ¶ 18.) In May of 2012, Modrock alleges, it received notification that all necessary songs were now verbally cleared. (Id. at ¶ 22.) Modrock alleges that, relying on the Counterdefendants' representations, it then began production on the show. (Id. at ¶ 22-24.)
A year later, shortly before the show was set to open, Modrock alleges that Winogradsky and/or WS informed Modrock that Plaintiff's position was now that "Sunny Afternoon" and "Dedicated Follower of Fashion" were not cleared, because songwriter Ray Davies had not given his permission for them to be used. (Id. at ¶ 25.) Modrock believes that it had legitimate verbal licenses from Plaintiff. (Id. at ¶ 26.) Modrock proceeded to stage the show and pay royalties to Plaintiff. (Id. at ¶ 27-28.) Modrock alleges that Plaintiff "reneged" on the verbal licenses in order to support Ray Davies' own musical show, also called "Sunny Afternoon." (Id. at ¶ 30.)
Apparently as an alternative theory of the case, however, Modrock also alleges that Winogradsky and/or WS breached their contract and engaged in negligent misrepresentation and other related torts when they represented to Modrock that they had secured verbal clearances which they had not, in fact, secured. (Id. at ¶¶ 32-58.)
II. LEGAL STANDARD
In order to survive a motion to dismiss for failure to state a claim, a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must include "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 Twombly, 550 U.S. at 570). 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).
A. Contract-Related Claims
Modrock makes claims against Winogradsky and WS for breach of contract and breach of the implied covenant of good faith and fair dealing, alleging that they failed in their contractual duties either by failing to properly obtain licenses or by failing to disclose that the licenses were unavailable. (Counterclaims, ¶¶ 32-39.) Counterdefendants argue that the Counterclaims are not adequately pled because they do not allege the essential terms of the contract and because Modrock's factual assertions do not indicate an actual breach. (Mot. Dismiss at 7-13.)
Under California law, the elements of a breach of contract claims are 1) the existence of a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damages. Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011). "[F]ederal procedural law, unlike California law, does not require submission of the written agreement itself to state a claim for breach of contract." Sutherland v. Francis, No. 12-CV-05110-LHK, 2013 WL 2558169, at *4 n.3 (N.D. Cal. June 10, 2013). A contract may be pled verbatim or pled "according to its legal effect." 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1235 (3d ed. 2008). "[F]ederal procedure requires only that the defendant have notice of the contract alleged to be breached." Kassa v. BP W. Coast Products, LLC, No. C-08-02725 RMW, 2008 WL 3494677, at *4 (N.D. Cal. Aug. 12, 2008).
Counterdefendants argue that Modrock is required to plead numerous terms of the contract, "such as the amount of the fee, the term, the time frame for each party's performance, whether there were any other performance obligations, guarantees, releases, options, remedies, whether and how the agreement could be terminated, and so on." (Mot. Dismiss at 6:1-4.) The Court finds that such detailed pleading is not necessary to put Counterdefendants on notice as to the elements of Modrock's claims, nor to state a plausible claim. Some of the terms Counterdefendants list are irrelevant to the claim (the amount of Counterdefendants' fees, for example, is not at issue), while others are relevant only as defenses. If there are contractual defenses, ...