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Great American Insurance Co. v. Vasquez Marshall Architects

United States District Court, S.D. California

September 6, 2019

GREAT AMERICAN INSURANCE COMPANY, Plaintiff,
v.
VASQUEZ MARSHALL ARCHITECTS et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS AND DISMISSING PLAINTIFF'S COMPLAINT WITH LEAVE TO AMEND [DOC. NOS. 16, 17]

          Hon. Cathy Ann Bencivengo United States District Judge.

         Before the Court are Defendant Vasquez Marshall Architects' and Defendant BDS Engineering, Inc.'s (collectively “Defendants”) motions to dismiss Plaintiff's complaint based on identical grounds. [Doc. Nos. 16, 17.] Plaintiff filed a consolidated opposition to both motions [Doc. No. 19], and Defendants replied. [Doc. Nos. 20, 21.] The Court deems them suitable for determination on the papers submitted and without oral argument. See S.D. Cal. CivLR 7.1(d)(1). For the reasons set forth below, the Court grants Defendants' motions to dismiss with leave to amend.

         I.BACKGROUND

         Plaintiff Great American Insurance Company (“GAIC”) filed a complaint against Defendants Vasquez Marshall Architects (“VMA”) and BDS Engineering, Inc. (“BDS”) on June 21, 2019. [Doc. No. 1.] The complaint alleges five claims for: (1) breach of contract; (2) breach of express warranty; (3) breach of professional duty/negligence/gross negligence; (4) negligent misrepresentation; and (5) breach of implied warranty. [Id. at ¶¶ 46-71.[1]

         Plaintiff alleges that on September 30, 2014, non-party K.O.O. Construction, Inc. entered into a design/build contract with the Navy for the Close Quarters Dynamic Shooting Facility Project at Camp Michael Monsoor in Pine Valley, California. [Id. at ¶ 9.] K.O.O. Construction then entered into a subcontract for the architectural and civil engineering portion of the work with Defendant VMA and Defendant VMA hired Defendant BDS. [Id. at ¶¶ 14-19.] Essentially, the complaint alleges that Defendants held themselves out as capable of meeting the expectations of the contract which did not allow for any significant off-site borrow material to be brought on-site or on-site material to be taken off-site (a “balanced site”) but failed to meet said expectations. [Id. at ¶¶ 14-71.] According to the complaint, K.O.O. Construction assigned to Plaintiff all of the claims that are the subject matter of this complaint and Plaintiff paid for the damages suffered as a result of Defendants' breach. [Id. at ¶ 3.]

         II. REQUEST FOR JUDICIAL NOTICE

         Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it . . . is generally known within the trial court's territorial jurisdiction; or . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). “[U]nder Fed.R.Evid. 201, a court may take judicial notice of ‘matters of public record.'” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)).

         Defendants ask the Court to take judicial notice of K.O.O. Construction's certificate of status and contractor's license, as well as a California Court of Appeals opinion. [Doc. Nos. 16-2, 17-2.] Plaintiff has not opposed and therefore Defendants' requests for judicial notice are granted.

         III. LEGAL STANDARD

         To survive a motion to dismiss under Rule 12(b)(6), “a complaint must 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) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, the Court “accept[s] factual allegations in the complaint as true and construe[s] 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). On the other hand, the Court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678; see also Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001) (“Conclusory allegations of law are insufficient to defeat a motion to dismiss”). Nor is the Court “required to accept as true allegations that contradict exhibits attached to the Complaint or . . . allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010).

         When resolving a motion to dismiss for failure to state a claim, courts may not generally consider materials outside the pleadings. See Schneider v. Cal. Dep't of Corrs., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998); Jacobellis v. State Farm Fire & Cas. Co., 120 F.3d 171, 172 (9th Cir. 1997); Allarcom Pay Television Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). “The focus of any Rule12(b)(6) dismissal . . . is the complaint.” Schneider, 151 F.3d at 1197 n.1. “A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

         Generally, when dismissing a complaint for failure to state a claim, the court should deny opportunity to amend only if amendment would be futile. See Albrecht v. Lund, 845 F.2d 193, 195 (9th Cir. 1988) (dismissal without leave to amend is appropriate if amendment “could not possibly cure the deficiency”), amended, 856 F.2d 111 (9th Cir. 1988).

         IV. DISCUSSION

         Defendants contend: (1) Plaintiff lacks standing because the complaint failed to demonstrate a valid and effective assignment; (2) Plaintiff lacks capacity to sue because K.O.O. Construction is a suspended corporation; and (3) the complaint fails to demonstrate sufficient grounds ...


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