United States District Court, S.D. California
SASA INVESTMENT HOLDINGS, LLC, a Florida limited liability company, SANJAY MADAN; and ANJLI MADAN, Plaintiffs,
HEMANT CHHATRALA; JENISH PATEL; TRAV-COR & INVESTMENTS, INC., a California corporation; ORANGE COAST TITLE COMPANY, a California Corporation; BANK OF AMERICA, N.A.; CHHATRALA INVESTMENTS, LLC a California limited partnership; JSAKGP, INC., a California corporation; PRAGATI INVESTMENTS, LLC, a California limited liability company; and SHIVA MANAGEMENT, INC., a California corporation, Defendants.
ORDER GRANTING: (1) PLAINTIFFS' MOTION FOR AN
EXTENSION OF TIME TO FILE OPPOSITION [DOC. 30], AND (2)
DEFENDANTS' MOTIONS TO DISMISS THE COMPLAINT [DOC. 7, 8,
THOMAS J. WHELAN, UNITED STATES DISTRICT JUDGE
before the Court are motions to dismiss filed by Defendant
Orange Coast Title Company (“OCTC”), Defendant
Pragati Investment, LLC (“Pragati”), and
Defendant Bank of America, N.A. (“BOA”).
Plaintiffs SASA Investment Holdings, LLC, Sanjay Madan and
Anjli Madan oppose all three motions.
Court decides these matters on the papers submitted and
without oral argument. See Civil L. R. 7.1(d.1). As
an initial matter, the Court GRANTS
Plaintiffs' request for an extension of time to oppose
BOA's motion [Doc. 30] and, therefore, deems
Plaintiffs' opposition to BOA's motion as timely
filed. For the reasons stated below, the Court
GRANTS Defendants' motions [Docs. 7, 8,
October 2013, Plaintiff Sanjay Madan met with Bhavesh
Patel, a managing member of a Florida limited
liability company. (Compl. ¶ 12.) Based on B.
Patel's advice, Madan, Plaintiff Anjili Madan, and
Plaintiff SASA Investment Holdings, LLC (“SASA”)
paid $450, 000 to Defendant Chhatrala, LLC, for a membership
interest in Chhatrala, LLC, Chhatrala Opportunity Fund, and
Waterfall Properties, LLC. (Id. ¶¶ 13-
14.) Thereafter, in January 2014, Chhatrala, LLC and SASA
entered a Membership Interest Purchase agreement, whereby
SASA paid Chhatrala $200, 000 for a 5% membership interest in
Defendant JSAK. (Id. ¶¶ 15-16.)
did not receive executed copies of the Partnership Agreement,
any amendments made to the agreement, or the Membership
Interest Agreement. (Compl. ¶ 18.) Nor did they
receive any information regarding how or where their funds
were being invested. (Id. ¶ 19.) Madan,
therefore, reached out to B. Patel and Defendant Jenish Patel
(who claimed to be a Chhatrala, LLC representative) numerous
times to obtain copies of the agreements but received no
response. (Id. ¶¶ 20-24.) Accordingly, in
order to find out what happened to their investment,
Plaintiffs filed a petition for pre-suit discovery.
(Id. ¶ 28.) The petition was granted, and
Plaintiff's counsel took depositions and requested
documents from Chhatrala, LLC, its partners, investors, and
related entities. (Id. ¶ 29.)
discovered B. Patel had invested their funds in non-existent
partnerships and placed the funds in a bank account at Mega
Bank, which was controlled by J. Patel although he had no
authority to use Plaintiffs' funds. (Compl.
¶ 31.) Plaintiffs further allege that J. Patel's
fraudulent transactions were “handled” by
Defendants Trav-Cor & Investments, Inc. (Trav-Cor), OCTC
and BOA. (Id. ¶ 34.)
December 4, 2018, Plaintiffs filed this lawsuit against nine
defendants. The Complaint lists three causes of action: fraud
and conversion against J. Patel, and accounting presumably
against all defendants. (Compl. ¶¶ 36-50.)
Defendants OCTC, BOA, and Pragati have all filed motions to
dismiss under Federal Rule of Procedure 12(b)(6) asserting
the same argument: (1) they have no relationship with
Plaintiffs that would require an accounting; and (2) they do
not owe Plaintiffs money. (OCTC MTD [Doc. 7-1]
3:25-28; BOA MTD [Doc. 29] 3:25-28; Pragati
MTD [8-1] 5:7-8, 23-25).
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the complaint's sufficiency. See North
Star Int'l. v. Arizona Corp. Comm'n., 720 F.2d
578, 581 (9th Cir. 1983). Dismissal of a claim according to
this rule is proper only in “extraordinary”
cases. United States v. Redwood City, 640 F.2d 963,
966 (9th Cir. 1981). A complaint may be dismissed as a matter
of law for two reasons: (1) lack of a cognizable legal
theory, or (2) insufficient facts under a cognizable theory.
Robertson v. Dean Witter Reynolds, Inc., 749 F.2d
530, 534 (9th Cir. 1984).
Supreme Court explained, “[w]hile a complaint attacked
by a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, 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.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). Rather, the allegations in the
complaint “must be enough to raise a right to relief
above the speculative level.” Id.
Additionally, all material allegations in the complaint,
“even if doubtful in fact, ” are assumed to be
true. Id. The court must assume the truth of all
factual allegations and must “construe them in the
light most favorable to the nonmoving party.”
Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir.
2002). The complaint and all reasonable inferences therefrom
are construed in the plaintiff's favor. Walleri v.
Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th
Cir. 1996). Nevertheless, conclusory legal allegations and
unwarranted inferences are insufficient to defeat a motion to
dismiss. Ove v. Gwinn, 264 F.3d 817, 821 (9th Cir.
OCTC, BOA, and Pragati argue the Complaint fails to state an
accounting cause of action. The Court agrees.
of action for an accounting is a proceeding in equity whereby
the court adjudicates the amount due to the plaintiff.
See Fredianelli v. Jenkins, 931 F.Supp.2d 1001, 1025
(N.D. Cal. 2013) (quoting Verdier v. Super. Ct. in and
for City & Cty of S.F., 88 Cal.App. 2d 572, 530
(1948). An action for an accounting is appropriate when (1)
there is a relationship between the plaintiff and defendant
that requires an accounting, or (2) the “accounts are
so complicated that an ordinary legal action demanding a
fixed sum is impracticable, ” and there is some balance
due to the plaintiff that can “only be ascertained by
an accounting.” See Teselle v. McLoughlin, 173
Cal.App.4th 156, 179 (2009); Quinteros v. Aurora Loan
Servs., 740 F.Supp.2d 1163, 1170 (E.D. Cal. 2010).
Additionally, there is no right to an accounting if ...