United States District Court, C.D. California
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
D. WRIGHT, II UNITED STATES DISTRICT JUDGE
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
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.,  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. (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,
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.)
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.) 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.
Defendant's Motion to Dismiss the FAC is now before the
court for consideration.
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).
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).
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.
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).
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