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Excellence Charters LLC v. Coleman Marine Diesel, Inc.

United States District Court, S.D. California

March 30, 2017




         Pending before the Court in this admiralty action is Defendant's motion to dismiss the second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and a motion to strike pursuant to Rule 12(f). Plaintiff filed an opposition and requested sanctions. Defendant replied. The Court decides the matter on the papers submitted and without oral argument. See Civ. L. R. 7.1 (d)(1). For the reasons stated below, the motions are denied. Plaintiff's request for sanctions is also denied.

         I. BACKGROUND

         Plaintiff entered into an agreement with Defendant for repair of the Excellence, a fishing vessel. Plaintiff alleges that due to Defendant's defective installation of the fuel line and vent systems, the vessel drew water into the engine fuel systems, which caused extensive damage, expensive repairs, and lost chartering opportunities.

         Plaintiff asserts six causes of action: (1) breach of oral maritime contract; (2) breach of implied maritime contract; (3) third party beneficiary claim for breach of contract; (4) breach of warranty of workmanlike performance; (5) negligence; and (6) bailment. The Court has jurisdiction pursuant to 28 U.S.C. § 1333. Defendant filed a motion to dismiss the entire complaint under Rule 12(b)(6), [1] or alternatively, to strike certain requests for relief under Rule 12(f).


         A motion under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted where the complaint lacks a cognizable legal theory. Shroyer v. New Cingular Wireless Serv., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory, yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

         In reviewing a Rule 12(b)(6) motion, the Court must assume the truth of all factual allegations and construe them most favorably to the nonmoving party. Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997, 999 n.3 (9th Cir. 2006). Even if doubtful in fact, factual allegations are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Id. at 556 (internal quotation marks and citation omitted). On the other hand, legal conclusions need not be taken as true merely because they are couched as factual allegations. Id. at 555; see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Generally, the Court does not “require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. Nevertheless, a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). Thus, “[t]o 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.'” Iqbal, 556 U.S. at 678 (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. at 678. “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

         In support of dismissal, Defendant argues the complaint does not include sufficient factual allegations to meet the notice pleading requirement, and that the action is barred by the doctrine of laches. Defendant also moves to strike the request for special damages under Rule 12(f).[2]

         Defendant argues special damages are not recoverable because Plaintiff did not include sufficient factual allegations. Under Rule 12(f), “the court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." According to its plain meaning, Rule 12(f) does not authorize striking requests for relief. Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973-74 (9th Cir. 2010). To the extent Defendant suggests that Plaintiff is not entitled to special damages, its argument is considered under Rule 12(b)(6). See id. at 974.

         A. Breach of Oral and Implied Contract

         Defendant claims that the complaint does not sufficiently allege the contract, its terms, and breach. Plaintiff alleges it exchanged oral and written communications with Defendant between March 2010 and January 2011 for Defendant to "repower [the Excellence], remove its engines, replace its engines with MAN diesel engines, install a fuel line system, and install a fuel vent system, and to do all such work properly, carefully, and skillfully" in return for payment. Defendant worked on the vessel from May 2010 through about January 2011 under specific job numbers listed in the complaint. Plaintiff performed its obligations under the contract. When problems were reported after completion of the work, Defendant performed an inspection and additional work, and communicated with the vessel's captain. Plaintiff alleges Defendant breached the contract by defective installation, which caused damage to the vessel, and by representing that the fuel line and vent systems were installed in working condition. (Sec. A. Compl. ("SAC") at 2-4.) These factual allegations are sufficient to meet the notice pleading requirements of Rule 8 and Iqbal v. Ashcroft for breach of contract under either oral or implied theory. See Restatement (Second) of Contracts § 4 et seq.[3]

         Defendant next contends that the breach of contract claims fail because the parties had a written contract, and that as a matter of law, a party cannot state a claim for breach of an oral or implied contract contradicting the terms of the written agreement. In ...

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