United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTIONS TO DISMISS; SETTING CASE MANAGEMENT
CONFERENCE RE: DKT. NOS. 81, 83
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE
the Court are the motions to dismiss filed by Defendant
Glendonbrook Pty Ltd. (“Glendonbrook”), Dkt. No.
81, and Defendant Zurich American Insurance Company
(“Zurich”), Dkt. No. 83. Glendonbrook and Zurich
(together, “Defendants”) move to dismiss the
amended complaint filed by Plaintiff John Gidding
(“Plaintiff”), Dkt. No. 80 (“Am.
Compl.”), for failure to state a claim upon which
relief can be granted. Plaintiff has filed an opposition to
each motion, Dkt. Nos. 85 & 87, and Defendants have each
filed a reply, Dkt. Nos. 89 & 91.
reasons set forth below, the Court GRANTS IN PART and DENIES
IN PART Zurich’s motion to dismiss and GRANTS
Glendonbrook’s motion to dismiss. Because no set of
amended factual allegations can cure the defects in the
dismissed claims, they are DISMISSED WITH PREJUDICE. Because
one claim survives dismissal, the Court SETS a case
management conference for August 16, 2016, at 2:00pm to
discuss scheduling in this matter.
Court previously granted Defendants’ motion to dismiss
and special motion to strike Plaintiff’s initial
complaint and dismissed his claims in part with prejudice and
in part without prejudice. See Gidding v. Zurich Am. Ins.
Co., No. 15-cv-01176, 2015 WL 6871990 (N.D. Cal. Nov. 9,
2015) (Dkt. No. 77). Plaintiff was granted leave to amend
with respect to several of his claims against Zurich, Dkt.
No. 77 at 16-17, but he amended his complaint only as to his
claims for (1) filing a false and fraudulent information
return under 26 U.S.C. § 7434 and (2) intentional
interference with contractual relations. Am. Compl.
¶¶ 40-73. Plaintiff also asserts a breach of
contract claim against Glendonbrook without leave to do so.
Id. ¶¶ 74-80.
basic premise of Plaintiff’s complaint remains
unchanged. After Plaintiff lost a large jury verdict to
Glendonbrook in January 2010,  Plaintiff sued the attorneys who
represented him for malpractice. Id. ¶¶
10-14. One of his attorneys and his firm were insured by a
subsidiary of Zurich, which began negotiating a settlement
with Plaintiff on their behalf. Dkt. No. 83 at 3; see
also Am. Compl. ¶¶ 16, 36. On or about
September 7, 2011, Plaintiff and Zurich reached an agreement
in principle to settle the malpractice action for $100, 000.
Id. ¶ 16.
about September 15, 2011, Zurich “issued” a $100,
000 settlement check that was made payable to Plaintiff and
his business, Midshore Marketing LP. Id. ¶ 17.
Zurich informed Glendonbrook, which placed a judgment lien on
the anticipated settlement proceeds. Id. ¶ 21.
On October 30, 2011, Plaintiff renounced the settlement
before he received a final signature page and the check.
Id. ¶ 22. On November 6, 2011, Zurich sought to
enforce the settlement agreement in the state court hearing
the malpractice action. Id. ¶ 24. On December
19, 2011, the court found the agreement unenforceable.
Id. ¶ 25. On January 10, 2012, Zurich moved for
reconsideration. Id. ¶ 27. “On or after
January 15, 2012, ” Zurich filed an information return
with the IRS stating that it had paid Plaintiff $100, 000 in
2011. Id. ¶ 28. And, according to Plaintiff, on
May 25, 2012, the state court reversed itself and found the
settlement agreement enforceable. Id. ¶ 29.
on these allegations, Plaintiff again asserts a claim for
filing a false and fraudulent information return under 26
U.S.C. § 7434 against Zurich. Plaintiff appears to
allege that Zurich knew the information return it filed with
the IRS, which stated that it paid him $100, 000 in 2011, was
false because at the time it was filed the state court had
ruled that the settlement agreement awarding that money was
unenforceable. Id. ¶¶ 40-58. Plaintiff
also reasserts a claim under California law for intentional
interference with contractual relations against Zurich and a
John Doe defendant, based on Zurich’s failure to inform
him that his settlement proceeds would inure to Glendonbrook
under the judgment lien. Id. ¶¶ 59-73. And
Plaintiff asserts a breach of contract claim against
Glendonbrook for failing to inform him who would receive the
proceeds of the jury verdict against him, which was reduced
to an amended judgment by stipulation. Id.
¶¶ 13, 74-80.
again moves to dismiss for failure to state a claim.
Glendonbrook moves to dismiss the contract claim asserted
against it on the grounds that it was already dismissed with
Federal Rule of Civil Procedure 12(b)(6)
Rule of Civil Procedure 8(a) requires that a complaint
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief[.]” A
defendant may move to dismiss a complaint for failing to
state a claim upon which relief can be granted under Federal
Rule of Civil Procedure 12(b)(6). “Dismissal under Rule
12(b)(6) is appropriate only where the complaint lacks a
cognizable legal theory or sufficient facts to support a
cognizable legal theory.” Mendiondo v. Centinela
Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To
survive a Rule 12(b)(6) motion, a plaintiff must plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 540, 570 (2007). A claim is facially
plausible when a plaintiff pleads “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
reviewing the plausibility of a complaint, courts
“accept factual allegations in the complaint as true
and construe the pleadings in the light most favorable to the
nonmoving party.” Manzarek v. St. Paul Fire &
Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
Nonetheless, Courts do not “accept as true allegations
that are merely conclusory, unwarranted deductions of fact,
or unreasonable inferences.” In re Gilead Scis.
Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). And
even where facts are accepted as true, “a plaintiff may
plead [him]self out of court” if he “plead[s]
facts which establish that he cannot prevail on his . . .
claim.” Weisbuch v. Cnty. of Los Angeles, 119
F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and
must be construed so as to do justice.” Fed.R.Civ.P.
8(e). For that reason, “a pro se complaint,
however inartfully pleaded, must be held to less stringent
standards than formal pleadings drafted by lawyers.”
Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal
quotations marks and citations omitted). If dismissal is
still appropriate, a court “should grant leave to amend
even if no request to amend the pleading was made, unless it
determines that the pleading could not possibly be cured by
the allegation of other facts.” Lopez v.
Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quotation
marks and citation omitted). Where leave to amend is
appropriate, “before dismissing a pro se complaint the
district court must provide the litigant with notice of the
deficiencies in his complaint in order to ensure that the
litigant uses the opportunity to amend effectively.”
Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir.
Federal Rule of Civil Procedure 9(b)
Rule of Civil Procedure 9(b) heightens these pleading
requirements for all claims that “sound in fraud”
or are “grounded in fraud.” Kearns v. Ford
Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (citation
omitted); Fed.R.Civ.P. 9(b) (“In alleging fraud or
mistake, a party must state with particularity the
circumstances constituting fraud or mistake.”).
“[The Ninth Circuit] has interpreted Rule 9(b) to
require that allegations of fraud are specific enough to give
defendants notice of the particular misconduct which is
alleged to constitute the fraud charged so that they can
defend against the charge and not just deny that they have
done anything wrong.” Neubronner v. Milken, 6
F.3d 666, 671 (9th Cir. 1993) (internal quotation marks and
short, a fraud claim must state “the who, what, when,
where, and how” of the alleged conduct, Cooper v.
Pickett, 137 F.3d 616, 627 (9th Cir. 1997), and
“set forth an explanation as to why [a] statement or
omission complained of was false and misleading, ”
In re GlenFed, Inc. Secs. Litig., 42 F.3d 1541, 1548
(9th Cir. 1994) (en banc), superseded by statute on other
grounds as stated in Ronconi v. Larkin, 252 F.3d 423,
429 & n.6 (9th Cir. 2001). “Malice, intent,
knowledge and other conditions of a person’s mind may
be alleged generally.” Fed.R.Civ.P. 9(b). And where
multiple defendants are accused of fraudulent conduct, the
plaintiff must identify the role of each defendant in the
fraud. See Swartz v. KPMG LLP, 476 F.3d 756, 764-65
(9th Cir. 2007) (“Rule 9(b) does not allow a complaint
to merely lump multiple defendants together but require[s]
plaintiffs to differentiate their allegations when suing more
than one defendant and inform each defendant separately of
the allegations surrounding his alleged participation in the
REQUESTS FOR JUDICIAL NOTICE
turning to the substance of Defendants’ motions, the
Court addresses Zurich’s three requests for judicial
notice. These materials include orders from several state
court actions that Plaintiff filed, as well as a document
associated with the information return Zurich filed with the
IRS that Plaintiff attached to a declaration filed in support
of his opposition. Dkt. Nos. 84, 86 & 90. Zurich contends
that the state court materials are noticeable ...