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Broken Drum Bar, Inc. v. Site Centers Corp.

United States District Court, C.D. California

October 10, 2019

BROKEN DRUM BAR, INC., Plaintiff,
v.
SITE CENTERS CORP. et al, Defendants.

          ORDER GRANTING, IN PART, DENYING IN PART, DEFENDANTS' MOTION TO DISMISS [44]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff Broken Dram Bar, Inc. ("Broken Dram Bar") brings several claims against Defendants Site Centers Corp. Inc. ("Site Centers") and DDR Urban LP ("DDR") involving a lease dispute. Defendant DDR owns and operates a shopping center in Long Beach, California. (See Second Am. Compl. ("SAC") ¶¶ 10, 11, 13, ECF No.37.)

         Defendants move to dismiss on the following grounds: (1) Defendant Site Centers is an improper defendant; and (2) Plaintiff fails to sufficiently allege breach of covenant of good faith and fair dealing, intentional misrepresentation, and negligent interference with prospeetive economic relations. (See generally Mot. to Dismiss SAC("Mot."), ECF No.44-l.)[1]

         For the reasons that follow, the Court GRANTS, IN PART and DENIES, IN PART, Defendants' Motion to Dismiss.

         II. BACKGROUND

         Stefan Guillen is the President of Plaintiff Broken Drum Bar, Inc. (Mot. 2-3.) Brian Maginnis is an investor of Broken Drum Bar. (SAC ¶ 95.) Defendant DDR owns and operates the Pike Outlets in Long Beach, California. (Mot. 1.) Defendant Site Centers and Defendant DDR are allegedly agents and employees of each another. (See SAC ¶ 8.)

         In 2017, Guillen, on behalf of Broken Dram Bar, commenced the process of obtaining a lease for unit number 550 ("Lease") listed as "Long Beach Restaurant with 2am Liquor and Entertainment" (previously occupied by Sargent Pepper's Dueling Pianos ("Sgt Pepper's")). (See SAC ¶¶ 13, 15, 22.) In July 2017, Guillen visited unit number 550 and the tenant next door to review the space and listen to the music during hours of operations. (SAC ¶¶ 16, 17.) He also attempted to meet with the owners of Sgt Pepper's, but the listing statement advised against disturbing current tenants. (SAC ¶ 19.) Accordingly, Guillen was prohibited from communicating with Sgt. Pepper's staff. (SAC ¶ 19.)

         In August 2017, Guillen and Maginnis, met Patrick Brady, the Vice President of Leasing for Defendant DDR, in the office of Morgan Erickson, Regional Property Manager for Defendant Site Centers. (SAC ¶ 22.) Guillen presented Patrick Brady a detailed outline of his business plan, which indicated that Broken Dram Bar, like Sgt. Pepper's, intended to use the space as a live music and entertainment venue. (SAC¶¶16, 20, 23.) During the Lease negotiations, Brady allegedly pressured Guillen to sign the Lease without any rent abatement in exchange for $90, 000.00 in tenant improvements. (SAC ¶¶ 26, 27.) The two discussed potential improvements, but allegedly at no time did the parties discuss mitigating noise complaints. (SAC ¶ 27.) In September 2017, Brady informed Broken Drum Bar that Guillen's proposal had been recommended for approval and that "final approval and consent [for] use as a live music and bar .. . would take a few more weeks." (SAC ¶ 32.)

         On March 1, 2018, Broken Dram Bar took over the lease of unit number 550 from Sgt. Pepper's. (SAC ¶ 34.) On March 17, 2018, Broken Drum Bar held a soft opening. (SAC ¶ 35.) During the soft opening, security guards positioned themselves in front of Broken Dram Bar due to noise complaints. (SAC ¶ 35.) Throughout Broken Drum Bar's operation of the business, Defendants allegedly placed security personnel at the entrance of Broken Dram Bar, and the security personnel were instructed to take notes of employee names and patrons entering the business. (SAC ¶ 38.)

         Broken Dram Bar alleges that Defendants never informed it of prior noise complaints against unit number 550. (SAC ¶ 36.) Broken Drum Bar further alleges that Erickson, regional manager for Site Centers, falsely stated that there had been no noise complaints relating to unit number 550 prior to Broken Dram Bar's tenancy. (SAC ¶ 39.) However, Broken Dram Bar alleges that on May 23, 2018 the manager of Cinemark, a tenant in the shopping center, informed Broken Dram Bar that the noise complaints from unit number 550 were nothing new and had been an issue with the prior tenants, Sgt. Peppers. (SAC ¶ 37.) Defendants demanded that Broken Drum Bar remedy the noise issue or change the nature of their business. (SAC ¶ 41.) In response, Broken Drum Bar informed Defendants that they would withhold rent until Defendants fixed the property. (SAC ¶ 45.) However, shortly thereafter, Broken Drum Bar ceased operation. (SAC ¶ 46.)

         On January 7, 2019, Plaintiff Broken Drum Bar filed this lawsuit in Los Angeles County Superior Court. (Notice of Removal, ECF No. 1.) On February 27, 2019, Defendants removed this case on the basis of diversity jurisdiction. (Notice of Removal.) On June 5, 2019, Plaintiff filed its Second Amended Complaint alleging six claims for relief: (1) negligence; (2) breach of implied covenant of good faith and fair dealing; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) negligent interference with prospective economic relations; and (6) breach of quiet enjoyment. (See generally SAC.) On June 20, 2019, Defendants filed a motion to dismiss. (See Mot.)

         III. LEGAL STANDARD

         A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't,901 F.2d 696, 699 (9th Cir. 1988). To survive a dismissal motion, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)-a short and plain statement of the claim. Porter v. Jones,319 F.3d 483, 494 (9th Cir. 2003). The factual "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). That is, the complaint must "contain sufficient factual matter, ...


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