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Country Fresh Batter, Inc. v. Lion Raisins, Inc.

United States District Court, E.D. California

February 23, 2018

LION RAISINS, INC., Defendant.


         This matter is before the court on defendant's motion to dismiss. (Doc. No. 5.) On January 23, 2018, a hearing on the motion was held. Attorney Andrew M. Hutchison appeared telephonically on behalf of plaintiff Country Fresh Batter, Inc. Attorney Keith C. Rickelman appeared on behalf of defendant Lion Raisins, Inc. Having reviewed the parties' briefing, heard arguments, and for the reasons that follow, defendant's motion to dismiss will be granted.


         In its complaint, plaintiff alleges as follows. Plaintiff, doing business as Hope's Cookies, has purchased raisins from defendants since 2014. (Doc. No. 1 (Compl.) at ¶ 6.) On or about December 16, 2016, plaintiff and defendant entered into the 2017 Raisins Contract (hereinafter “the Contract”), pursuant to which defendant was to supply plaintiff with 756, 000 pounds of raisins for 2017. (Id. at ¶¶ 7-8.) From January 2017 through April 2017, plaintiff submitted purchase orders to defendant pursuant to the terms of the Contract. (Id. at ¶ 9.) Defendant accepted plaintiff's purchase orders and fulfilled those orders through August 2017. (Id.) In August 2017, plaintiff placed purchase orders 30093, 30094, and 30095 (hereinafter “the Purchase Orders”), all of which defendant confirmed on August 25, 2017. (Id. at ¶ 11.) On September 12, 2017, without advance notice or warning, defendant terminated the Contract as well as the Purchase Orders. (Id. at ¶ 12.) In so doing, defendant invoked the “Performance” clause of the Contract, asserting that plaintiff was in breach by failing to pull shipments evenly as required under the Contract. (Id. at ¶ 20.) Plaintiff alleges that defendant's assertion-that plaintiff had breached the contract-was “false, wrongful, and without justification, ” but also that plaintiff knew the assertion to be false when it was made. (Id. at ¶¶ 22-25.) Because of defendant's breach of the contract in this way, and because of defendant's false statement regarding plaintiff's breach, plaintiff alleges it incurred substantial costs to find alternative sources of raisins. (Id. at ¶ 26.)

         Plaintiff's complaint alleges breach of contract and fraud. On December 5, 2017, defendant moved to dismiss both plaintiff's fraud claim and claim for punitive damages. (Doc. No. 5.) On January 9, 2018, plaintiff filed its opposition. (Doc. No. 6.) On January 15, 2018, defendant filed its reply. (Doc. No. 7.)


         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). “Dismissal 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 plaintiff is required to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. See also Iqbal, 556 U.S. at 676 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

         In ruling on such a motion, the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint if their authenticity is not contested and the plaintiff's complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).


         As indicated above, defendant moves to dismiss the second cause of action of the complaint, in which plaintiff alleges fraud. Defendant also moves to dismiss plaintiff's punitive damages claim. Before turning to the motion to dismiss, however, the court will first address defendant's request for judicial notice. (Doc. No. 5-3.)

         A. Request for Judicial Notice

         Federal Rule of Evidence 201 provides that the court may take judicial notice of “a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”

          Defendant requests that the court take judicial notice of plaintiff's complaint. (Doc. No. 5-3.) Because the court does not need to take judicial notice of pleadings before it, the court construes this as a request for the court to take judicial notice of the Contract and the Purchase Orders at issue, which are attached to plaintiff's complaint. (See Compl. at ¶¶ 7-12.) Accordingly, the court will take judicial notice of the Contract and the Purchase Orders because they have been incorporated by reference into plaintiff's complaint. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

         B. ...

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