Zamora v. Solar

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [13]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiffs Hector Zamora and Horacio Zamora (collectively "Plaintiffs") bring suit against Defendant Zuni Solar and allege that the company breached a land use contract when it failed to obtain the necessary permiting for a solar energy venture. Defendant now moves to dismiss Plaintiffs' action for failing to state a claim. (Mot. to Dismiss First Am. Compl. ("Mot."), ECF No. 13.) For the reasons discussed below, the Court GRANTS the Motion WITH PREJUDICE.

         II. FACTUAL BACKGROUND

         Plaintiffs are California citizens and co-owners and joint tenants of a vacant property located in Apple Valley. (First Am. Compl. ("FAC") ¶¶ 1, 6, Ex. 1, ECF No. 11.) Defendant, a business entity engaged in the development of solar energy, is incorporated in Delaware. (Id. ¶¶ 2, 6.) On or about March 9, 2011, Plaintiffs and Belectric, Inc., ^[1] a California-based solar energy company, entered into a Site Lease Option and Easement Agreement ("Agreement") for a twenty-year lease of Plaintiffs' vacant property. (Id. ¶¶ 5, 6, Ex. 1.) The agreement called for Belectric to use the vacant property for the purpose of generating solar power in exchange for $27, 500 in annual rent and, notably, included a cancellation clause if Belectric was unable to obtain the required permits from Apple Valley to build the intended solar power facilities.^[2] (Id. ¶ 6.) However, pursuant to its rights under the Agreement, Belectric assigned the remainder of its interest in the Agreement to Defendant sometime in 2013. (Id. ¶ 5.) Over the next two years, Plaintiffs and Defendant performed the terms of the Agreement in the manner specified by the contract. (Id. ¶¶ 16, 29.) Defendant hired a contractor and began to pursue the requisite permits. (Id. ¶ 27-28, Ex. 3.) However, on or about June 16, 2015, Defendant gave written notice to Plaintiffs that it had been unable to obtain the requisite building permits for the planned solar facility, and was thus terminating the Agreement. (Id. ¶ 9, Ex. 2.) Plaintiffs allege that Defendant acted in bad faith by not diligently pursuing the requisite building permits, and that Defendant used its failure as a pretext for terminating the Agreement after its contractor missed a deadline and the bargain was no longer economically viable. (Id. ¶¶ 10, 17, 22-23, 27-28.)

         On January 22, 2016, Plaintiffs filed suit against Defendant in California Superior Court, Los Angeles County (Notice of Removal ("Not.") ¶ 1, ECF No. 1.) On February 24, 2016, Defendant removed the case to this Court under U.S.C. § 1332. (Not.) On March 2, 2016, Defendant moved to dismiss Plaintiff's Complaint (Def.'s Mot. to Dismiss Pl.'s Original Compl., ECF No. 8.)

         On March 18, 2016, Plaintiffs filed their First Amended Complaint, again seeking relief for breach of contract, breach of the Covenant of Good Faith and Fair Dealing, as well as Declaratory Relief, and Contractual Indemnification. (FAC.) On April 1, 2016, Defendant moved to dismiss Plaintiffs' FAC. (Mot., ECF Nos. 13- 14.^[3]) A timely opposition and reply were filed. (Pl.'s Opp'n to Def.'s Mot. to Dismiss ("Opp'n"), ECF No. 15; (Def.'s Reply to Pl.'s Opp'n ("Reply"), ECF No. 16.) After a hearing on the Motion, this Court issued an Order to Show Cause regarding any current litigation against Defendant's contractors and asked whether this case should be stayed pending resolution of the contractor litigation. (Order to Show Cause Re: Pending Litigation ("OSC"), ECF No. 19.) Timely responses to the OSC were filed by both Plaintiffs and Defendant. (Def.'s Resp. to Order ("Resp."), ECF No. 20; Pl.'s Br. In Supp. of Stay, ECF No. 22.)^[4] Defendant's Motion to Dismiss the FAC is now before the court for consideration.

         III. LEGAL STANDARD

         Dismissal under Rule 12(b)(6) can be based on "the lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)-a short and plain statement-to survive a motion to dismiss for failure to state a claim under Rule 12(b)(6). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003); Fed.R.Civ.P. 8(a)(2).

         For a complaint to sufficiently state a claim, its "[f]actual 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). While specific facts are not necessary so long as the complaint gives the defendant fair notice of the claim and the grounds upon which the claim rests, a complaint must nevertheless "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).

         Iqbal's plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully, " but does not go so far as to impose a "probability requirement." Id. Rule 8 demands more than a complaint that is merely consistent with a defendant's liability. Id. Labels, conclusions, or formulaic recitals of the elements of a cause of action do not suffice. Id. Instead, the complaint must allege sufficient underlying facts to provide fair notice and enable the defendant to defend itself effectively. Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The 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." Iqbal, 556 U.S. at 679.

         When considering a Rule 12(b)(6) motion, a court is generally limited to the pleadings and must construe "[a]ll 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). Conclusory allegations, unwarranted deductions of fact, and unreasonable inferences need not be blindly accepted as true by the court. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Yet, a complaint should be dismissed only if "it appears beyond doubt that the plaintiff can prove no set of facts" supporting plaintiff's claim for relief. Morley v. Walker, 175 F.3d 756, 759 (9th Cir. 1999).

         As a general rule, Courts should freely grant leave to amend a complaint that has been dismissed should be freely granted. Fed.R.Civ.P. 15(a). However, a court may deny leave to amend when it "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. 2000). A denial of leave to amend is proper on a breach of contract claim where an amendment would be futile because the terms of the contract, which are not subject to change, preclude plaintiff's claim. Ratcliff Architects v. Vanit Constr. Mgmt., Inc., 88 Cal.App.4th 595, 604 (2001).

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