United States District Court, C.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION TO DISMISS 
D. WRIGHT, II UNITED STATES DISTRICT JUDGE
Robert Jaffee and Barbara Jaffee are the victims of a
financial scam allegedly perpetrated by Defendant Rudolph
Carryl. In addition to suing Carryl, however, Plaintiffs have
also sued multiple other defendants that are allegedly in
possession of their money, including Defendants Oppenheimer &
Co., Inc. and Freedom Investments, Inc. (collectively
"Oppenheimer Defendants"). Plaintiffs assert claims
against Oppenheimer Defendants for conversion and money had
and received, and seek to impose a constructive trust on
their funds they received from Carryl. On March 31, 2016,
Defendants moved to dismiss Plaintiffs' First Amended
Complaint. For the reasons discussed below, the Court
GRANTS IN PART and DENIES IN
PART Defendants' Motion. (ECF No. 58.)
are a married couple residing in Los Angeles County. (First
Am. Compl. ("FAC") ¶ 1.) They were looking for
a new investment advisor to handle their investment portfolio
and were introduced to Rudolph Carryl of Carryl Capital
Management, LLC ("CCM"). (Id. ¶ 8.)
After discussing Carryl's investment philosophies over
several meetings, Plaintiffs transferred their portfolio to
him. (Id.) In January 2012, Carryl solicited from
Plaintiffs a "Special Situation Investment" for a
pediatric healthcare facility that Carryl promised would
return a profit of at least thirty percent by November 2012.
(Id. ¶ 9.) Based on Carryl's
representations, Plaintiffs transferred a total of $1.25
million to CCM's bank account. (Id. ¶ 10.)
In September 2012, Carryl again solicited money from
Plaintiffs for a second investment opportunity that he
promised would return a profit of at least ten percent by
December 2012. (Id. ¶ 11.) Based on this
representation, Plaintiffs wired an additional $200, 000 to
CCM. (Id. ¶¶ 12, 37.) On December 10,
2012, Plaintiffs received a notice from Carryl stating that
their initial $1.25 million investment, plus a 32.1%
gain-totaling $1, 651, 250.00-would be wired back to
Plaintiffs' bank account on December 24, 2012.
(Id. ¶ 13.) Plaintiffs did not receive the
funds on December 24, 2012, and to this date Carryl still has
not returned Plaintiffs' money. (Id.
¶¶ 14-15.) Plaintiffs allege that Carryl instead
disbursed their money among the numerous defendants in this
action, including the Oppenheimer Defendants. (Id.
¶¶ 17, 43-44.)
January 11, 2016, Plaintiffs filed a First Amended Complaint,
which asserts three claims for relief against Defendants:
conversion, money had and received, and imposition of a
constructive trust. (Id. ¶¶ 42-52.)
Plaintiffs' claims against Defendants are based on
Carryl's alleged misappropriation of Plaintiffs'
funds and the delivery of those funds to the Oppenheimer
Defendants. (Id. ¶ 44.) On March 31, 2016, the
Oppenheimer Defendants moved to dismiss Plaintiffs' First
Amended Complaint. (ECF No. 58.) On May 2, 2016, Plaintiffs
filed an Opposition to Defendants' Motion. (ECF No. 71.) On
May 9, 2016, the Oppenheimer Defendants filed their Reply.
(ECF No. 77.) That Motion to Dismiss is now before this
may dismiss a complaint under Rule 12(b)(6) for lack of a
cognizable legal theory or insufficient facts pleaded to
support an otherwise cognizable legal theory. Balistreri
v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th
Cir. 1990). To survive a dismissal motion, a complaint need
only satisfy the minimal notice pleading requirements of Rule
8(a)(2)-a short and plain statement of the claim. Porter
v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual
"allegations must be enough to raise a right to relief
above the speculative level." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). That is, the
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).
determination whether a complaint satisfies the plausibility
standard is a "context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense." Id. at 679. A court is generally
limited to the pleadings and must construe all "factual
allegations set forth in the complaint . . . as true and . .
. in the light most favorable" to the plaintiff. Lee
v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). But
a court need not blindly accept conclusory allegations,
unwarranted deductions of fact, and unreasonable inferences.
Sprewell v. Golden State Warriors, 266 F.3d 979, 988
(9th Cir. 2001).
general rule, a court should freely give leave to amend a
complaint that has been dismissed. Fed.R.Civ.P. 15(a). But a
court may deny leave to amend when "the court determines
that the allegation of other facts consistent with the
challenged pleading could not possibly cure the
deficiency." Schreiber Distrib. Co. v. Serv-Well
Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986);
see Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.
Oppenheimer Defendants argue that they are not liable for
conversion because they were simply bailees of the money they
received from Carryl. (Mot. 3- 5.) They also argue that the
claim for money had and received does not exist without the
predicate conversion claim, and also that Plaintiffs have
failed to plead sufficient facts to state a claim for money
had and received. (Mot. 5-6.) Finally, the Oppenheimer
Defendants argue that the imposition of a constructive trust
is a remedy, not a claim, and thus should also be dismissed.
(Mot. 6.) For the reasons discussed below, the Court grants
in part and denies in part the Motion.
Oppenheimer Defendants argue that they are merely bailees and
thus not liable for conversion. "A bailment is generally
defined as ‘the delivery of a thing to another for
special object or purpose . . . to conform to the objects or
purposes of the delivery which may be as various as the
transactions of men.'" Windeler v. Scheers
Jewelers, 8 Cal.App.3d 844, 850 (1970); United
States v. Alcaraz-Garcia, 79 F.3d 769, 774 n.11 (9th
Cir. 1996) ("A bailment is the deposit of personal
property with another, usually for a particular
purpose."). The bailor is the person who owns the thing
or object; the bailee is the person entrusted with possession
of the object. See Windeler, 8 Cal.App.3d at 850;
Alcaraz-Garcia, 79 F.3d at 774 n.11. "A bailee
who receives bailed property from a thief, without notice of
the true owner's claim and returns the property to the
bailor according to the terms of the bailment, is not liable
for conversion." Software Design & Application v.
Hoefer & Arnett, 49 Cal.App.4th 472, 485 (1996); see
also Simonian v. Patterson, 27 Cal.App.4th 773, 782
(1994) ("[N]o conversion occurs when a mere bailee,
whether common carrier, or ...