United States District Court, S.D. California
WILLIAM Q. HAYES, District Judge.
The matter before the Court is the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by Defendants R & R Fruits and Vegetables of California, Inc. and Chris Lizaola. (ECF No. 8).
On January 22, 2015, Plaintiff Ana Lucia Medina Cordova commenced this action by filing the Complaint in this Court. (ECF No. 1). On February 13, 2015, Defendants R & R Fresh Fruits and Vegetables of California, Inc. ("R & R") and Chris Lizaola filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 3). On March 2, 2015, Plaintiff filed the First Amended Complaint ("FAC") pursuant to Federal Rule of Civil Procedure 15(a)(1), which is the operative pleading in this case. (ECF No. 6). On March 3, 2015, the Court issued an order denying the motion to dismiss as moot. (ECF No. 7).
On March 11, 2015, Defendants filed the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 8). On March 30, 2015, Plaintiff filed an opposition. (ECF No. 9). On April 1, 2015, Defendants filed a reply. (ECF No. 11).
II. Allegations of the FAC
Plaintiff shipped tomatoes with a principal value of $167, 083.10 to Defendant R & R from Mexico. Defendant R & R has failed to promptly pay for the tomatoes and has an outstanding balance of $110, 351.36. "On or about March 21, 2014, R&R, by and through Lizaola, its authorized representative, began its fraudulent scheme to order and receive Tomatoes from Plaintiff while R&R concealed its intent to later falsely argue that the Tomatoes were not acceptable in order to try and avoid payment to Plaintiff from R&R." (ECF No. 5 at 5). Plaintiff made twenty shipments of tomatoes to Defendant R & R. Defendant R & R received these shipments but paid only part of the invoice amount on thirteen invoices from March 21, 2014, until May 1, 2014. From May 12, 2014, until May 21, 2014, Defendant R & R received seven shipments of tomatoes but failed to pay any of the invoiced amounts and "falsely argue[d] that the tomatoes were not acceptable." Id. at 6. "If the Tomatoes were truly not acceptable R&R would not have continued to order and receive Tomatoes from Plaintiff." Id. "As a [Perishable Agricultural Commodities Act] dealer, R&R knew or should have known that it had to have the Tomatoes federally inspected within 8 hours of receipt in order to reject the Tomatoes." Id.
Plaintiff asserts the following claims for relief: (1) violation of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. section 499a et seq. against Defendant R & R; (2) breach of contract against Defendant R & R; (3) fraud against Defendant R & R; (4) negligent misrepresentation against Defendant R & R; (5) goods sold and delivered against Defendant R & R; and (6) breach of fiduciary duty against Defendant Lizaola. Plaintiff requests damages in the amount of $110, 351.36, punitive damages, interest, costs, and reasonable attorneys' fees.
III. 12(b)(6) Standard
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides that "[a] pleading that states a claim for relief must contain... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "A district court's dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'" Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)).
"[A] plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)). "To survive a motion to dismiss, a complaint must contain 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). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citation 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 to relief." Id. at 679. "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations and citation omitted).
Claims sounding in fraud or mistake must additionally comply with the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a complaint "must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Rule 9(b) "requires... an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (quotation omitted); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (averments of fraud must be accompanied by "the who, what, when, where, and how of the misconduct charged") (quotation omitted).
Defendants move to dismiss Plaintiff's first claim for violation of PACA, third claim for fraud, fourth claim for negligent misrepresentation, and sixth claim for breach of fiduciary duty. "Defendants R&R Fresh Fruits and Vegetables of California, Inc. and Chris Lizaola hereby incorporate their Memorandum in Support of Motion to Dismiss etc. filed herein on February 13, 2015 in order to avoid repetition and this Supplemental Memorandum will only address the differences in the first amended complaint as opposed to the original complaint." (ECF No. 8-1 at 2). Plaintiff objects to Defendants incorporating by ...