Opinion
CIV. NO. 2:13-1754 WBS CKD
11-04-2014
STARBUCKS CORPORATION, a corporation, Plaintiff, v. AMCOR PACKAGING DISTRIBUTION, et al., Defendants.
MEMORANDUM AND ORDER RE: MOTION TO DISMISS CROSS-COMPLAINT
Plaintiff Starbucks Corporation ("Starbucks") filed this case against defendants Amcor Packaging Distribution, Amcor Packaging (USA), Inc. (collectively "Amcor"), and Pallets Unlimited after discovering mold on its coffee bags, coffee, and several wooden shipping pallets provided to Starbucks by defendants. (Compl. ¶ 9 (Docket No. 1).) Starbucks alleges that defendants supplied it with defective pallets that caused the mold. (Id.) Pallets Unlimited and Amcor filed cross-claims against each other, (Amcor Cross-cl. (Docket No. 14); Pallets Cross-cl. (Docket No. 15)), and Pallets Unlimited later filed a "cross-claim" against third-party defendant Ozburn-Hessey Logistics ("OHL"). (Pallets Compl. (Docket No. 25).) OHL now moves to dismiss the claims against it.
Because OHL was not previously a party to the case and its liability is allegedly derivative of Pallets Unlimited's, this pleading is more accurately called a "third-party complaint." See Fed. R. Civ. P. 14(a)(1) ("A defending party may, as a third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it."); see also United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983) ("[A] third-party claim may be asserted only when the third party's liability is in some way dependent on the outcome of the main claim and the third party's liability is secondary or derivative.").
I. Factual and Procedural History
Amcor allegedly sold Starbucks 9,480 wooden pallets, used to store and transport almost 70,000 bags of unroasted Starbucks coffee beans. (Compl. ¶¶ 8-9.) Pallets Unlimited was hired by Amcor to "manufacture[], assemble[] or provide" some or all of the pallets. (Id. ¶ 8.) Under a separate contract, Starbucks also hired OHL to provide warehouse services for Starbucks products. (Pallets Compl. ¶ 11.)
Starbucks alleges the pallets used to transport and store its beans were defective because they did not meet the specifications in Starbucks's contract with Amcor, and "as a result, excessive moisture was present in the pallets, which caused mold to develop in pallets and the coffee bags and [coffee], which were in direct contact with the faulty pallets." (Compl. ¶ 9.) Starbucks asserts claims against Amcor and Pallets Unlimited for strict product liability, breach of warranty, and negligence, as well as a claim against Amcor for breach of contract. (Id. ¶¶ 13-38.)
On July 22, 2014, Pallets Unlimited filed a third-party complaint against OHL alleging that it delivered wooden pallets to OHL's warehouse starting in December 21, 2011, and at that time, none of the pallets contained mold. (Pallets Compl. ¶¶ 8-9.) OHL then stored the pallets at its facility until sending them out to various locations determined by Starbucks. (Id. ¶ 13) During this time, OHL was allegedly responsible for ensuring they were "properly stored and protected from the elements such that they would not develop any mold." (Id.) Pallets Unlimited alleges that, because "the pallets and coffee beans at issue were stored in the sole possession of OHL, . . . the mold likely developed as a result of the storage conditions at the [warehouse]." (Id. ¶ 14.)
Based on these allegations, Pallets Unlimited brings four claims against OHL: (1) full indemnification, (2) partial indemnification, (3) negligence, and (4) declaratory relief. (Id. ¶¶ 15-27.) OHL moves to dismiss all four claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.
II. Legal Standard
On a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court must accept the allegations in the pleadings as true and draw all reasonable inferences in favor of the third-party plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). To survive a motion to dismiss, a plaintiff must plead "only 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). This "plausibility standard," however, "asks for more than a sheer possibility that a defendant has acted unlawfully," and where a plaintiff pleads facts that are "merely consistent with a defendant's liability," it "stops short of the line between possibility and plausibility." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).
III. Pallets Unlimited's Claims for Full or Partial Indemnity
A. Judicial Notice of the "OHL Agreement"
In general, a court may not consider items outside the pleadings when deciding a motion to dismiss, but it may consider items of which it can take judicial notice. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). "A district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff's complaint necessarily relies." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998), superseded by statute on other grounds as stated in Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 681-82 (9th Cir. 2006). The policy underlying this rule seeks to "[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based." Parrino, 146 F.3d at 706.
Through the "incorporation by reference" doctrine, the court may also "take into account documents . . . alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading . . . even though the plaintiff does not explicitly allege the contents of that document in the complaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (quotation marks and citations omitted). "A court 'may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).'" Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1160-61 (9th Cir. 2012) (quoting United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) ) .
In its third-party complaint, Pallets Unlimited alleges that "OHL had a contract with [Starbucks] whereby OHL agreed to store the wooden pallets at issue . . . at the [warehouse]." (Pallets Compl. ¶ 11.) OHL has provided the court with a copy of the contract ("OHL Agreement") which it represents contains the terms by which "OHL provided warehouse services to Starbucks" regarding the pallets and coffee at issue. (OHL's Mem. at 3 (Docket No. 29); OHL's Req. for Judicial Notice Ex. 5 (Docket No. 30-5)). OHL represents this is the contract to which Pallets Unlimited's pleading refers. (OHL's Mem. at 3.)
OHL and Starbucks both agree that the OHL Agreement is authentic. In fact, they have provided the court with two declarations affirming its authenticity: one from Frank Eichler, chief administrative officer and general counsel of OHL, (OHL's Reply Ex. 1, Eichler Decl. (Docket No. 40-1)), and one from Jeff Ferrell, sourcing category manager at Starbucks, (Starbucks's Response Ex. 1, Ferrell Decl. (Docket No. 42-1)) . Moreover, Starbucks has requested that the court file the OHL Agreement under seal, citing "proprietary, commercially sensitive and private information regarding Starbucks vendor relationship, facilities' locations, operational specifications and procedures, costs, metrics, pricing, business practices and other similar proprietary information relating to Starbucks warehousing and service requirements." This request further suggests that the Agreement is what it purports to be.
Nevertheless, despite the fact that its pleading makes reference to "a contract . . . whereby OHL agreed to store the wooden pallets" in its pleading, Pallets Unlimited does not agree that the document which has been provided is the relevant contract. (See Pallets's Opp'n at 4-7 (Docket No. 38).) Pallets Unlimited argues that its allegation was a "speculative reference" based only upon "information and belief" that "a contract" existed. (Id. at 4-6.) At the time of pleading, it argues, "Pallets Unlimited was unaware of any actual contract between OHL and Starbucks, much less the specific OHL Agreement sought to be relied upon." (Id. at 5.) None of the terms of the OHL Agreement were quoted or paraphrased specifically in the pleading, however, and Pallets Unlimited asserts that its limited reference to "a contract" did not sufficiently refer to this contract to consider it incorporated by reference. (Id. at 6.)
Pallets Unlimited also offers several "procedural and evidentiary objections" to considering the OHL Agreement. (Id. at 4, 6 n.1 (citing Fed. Rs. Evid. 401, 402, 803, 901, 902).) Presumably, these objections would become relevant if the court were to convert OHL's motion to dismiss into one for summary judgment. See Parrino, 146 F.3d at 706 n.4 ("[W]here a defendant attaches extrinsic evidence to a Rule 12(b)(6) motion, the court ordinarily must convert that motion into one for summary judgment under Rule 56 to give the plaintiff an opportunity to respond."). The court sees no reason to convert OHL's motion, and thus, does not address these objections further.
Accordingly, although Pallets Unlimited has offered no concrete reason for doubting its authenticity, the parties' disagreement regarding whether the OHL Agreement applies to the facts alleged prevents the court from considering it for purposes of this motion to dismiss. See Knievel, 393 F.3d at 1076 (allowing consideration of documents "whose authenticity no party questions" on a motion to dismiss); Parrino, 146 F.3d at 706 (same). The court will thus not consider the OHL Agreement.
B. Equitable Indemnity
Under California law, indemnity may be either "express indemnity," which refers to an express contract term providing for indemnification, or "equitable indemnity," which embraces traditional equitable indemnity and implied contractual indemnity. Prince v. Pac. Gas & Elec. Co., 45 Cal. 4th 1151, 1157-60 (2009) (reviewing the historical forms of indemnity under California law). Pallets Unlimited does not allege the existence of a contract between it and OHL, leaving only the possibility of equitable indemnity. See id.
Equitable indemnity allows a defendant to "seek apportionment of loss between the wrongdoers in proportion to their relative culpability." Gem Developers v. Hallcraft Homes of San Diego, Inc., 213 Cal. App. 3d 419, 426 (4th Dist. 1989). To state a claim for equitable indemnity, plaintiff must make: "(1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is . . . equitably responsible." Bailey v. Safeway, Inc., 199 Cal. App. 4th 206, 217 (1st Dist. 2011).
Crucially, California law requires that, "[w]ith limited exception, there must be some basis for tort liability against the proposed indemnitor . . . generally based on a duty owed to the underlying plaintiff." BFGC Architects Planners, Inc. v. Forcum/Mackey Constr., Inc., 119 Cal. App. 4th 848, 852-53 (4th Dist. 2004) ("Without any action sounding in tort, there is no basis for a finding of potential joint and several liability . . . thereby precluding a claim for equitable indemnity."); see Stop Loss Ins. Brokers, Inc. v. Brown & Toland Med. Grp., 143 Cal. App. 4th 1036, 1040-41 (1st Dist. 2006) ("The question is whether, with respect to the claims analysis, [the indemnitor] owed [the plaintiff] a duty of care sounding in tort."). This rule appears to follow from two principles. First, equitable indemnity requires two or more parties to share a "joint legal obligation" or become "jointly or severally liable" to the same plaintiff. See Prince, 5 Cal. 4th at 1158; Stop Loss, 143 Cal. App. 4th at 1040. Second, "California law does not permit equitable apportionment of damages for breach of contract . . . ." Stop Loss, 143 Cal. App. 4th at 1041 n.2.
The exceptions apply to vicarious liability, strict liability, and implied contractual indemnity. See BFGC, 119 Cal App. 4th at 852.
Ordinary breach of contract, without something more, will thus not support equitable indemnity because, "[a]lthough in some circumstances the same act may support both contract and tort liability, [the California Supreme Court] held that 'breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law.'" Tesoro Ref. & Mktg. Co. LLC v. Pac. Gas & Elec. Co., Civ. No. 14-00930 JCS, 2014 WL 4364393, at *4 (N.D. Cal. Aug. 29, 2014) (quoting Erlich v. Menezes, 21 Cal. 4th 543, 551-52 (1999)). For example, breach of contract may also give rise to liability in tort where
(1) the breach is accompanied by a traditional common law tort, such as fraud or conversion; (2) the means used to breach the contract are tortious, involving deceit or undue coercion or; (3) one party intentionally breaches the contract intending or knowing that such a breach will cause severe, unmitigable harm in the form of mental anguish, personal hardship, or substantial consequential damages.Erlich, 21 Cal. 4th at 551-52. However, "mere negligent breach of contract" is not sufficient to impose tort liability under California law. Id.; see also Tesoro, 2014 WL 4364393, at *4-5 (rejecting the argument that "equitable indemnity is appropriate for negligent performance of contractual obligations" under California law).
Pallets Unlimited's third-party complaint appears to allege that OHL owed Starbucks a duty of care regarding the storage conditions of the pallets, but it leaves the source of this duty ambiguous. In particular, it makes two allegations in an effort to support a duty of care as between OHL and Starbucks. First, it alleges that "OHL had a contract with [Starbucks] whereby OHL agreed to store the wooden pallets at issue . . . at the [warehouse]." (Pallets Compl. ¶ 11.) And second, it alleges that "OHL was responsible for ensuring that the wooden pallets and coffee beans were properly stored and protected from the elements such that they would not develop any mold," (id. ¶ 13.), and through its "negligence or fault," allowed mold to develop, (id. ¶¶ 20, 22).
As explained above, the court does not consider the specific terms of this alleged contract. It only assumes the truth of this allegation on its face--that is, it assumes that some contractual relationship existed between OHL and Starbucks with regard to storage of the wooden pallets at issue--as it must for purposes of this motion. See Scheuer, 416 U.S. at 236.
With regard to the alleged "contract . . . to store the wooden pallets at issue," (id. ¶ 11.), the third-party complaint describes a contractual duty, not a duty "sounding in tort." Because California law does not recognize claims of equitable indemnity premised on a contractual duty, the third-party complaint does not state a claim for indemnity upon which relief can be granted on that ground. See BFGC Architects, 119 Cal. App. 4th at 852-53; Stop Loss, 143 Cal. App. 4th at 1040-41.
Setting the allegation of a contract aside, nothing in Pallets Unlimited's pleading supports any viable theory that OHL owed and breached a duty to Starbucks in tort. The allegation that "OHL was responsible for ensuring that the wooden pallets and coffee beans were properly stored and protected from the elements" is a conclusory allegation not entitled to deference under Iqbal. See 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). The same is true of the allegation that OHL was "negligent" or at "fault." Neither allegation contains facts that might aid the court in uncovering a duty owed by OHL to Starbucks. Pallets Unlimited thus fails to allege any facts allowing this court to identify the source for any such duty in tort.
The court finds this case comparable to the recent situation faced by Magistrate Judge Spero in Tesoro. See Tesoro, 2014 WL 4364393. In Tesoro, underlying plaintiff Tesoro Refining & Marketing Company LLC ("Tesoro") sued Pacific Gas and Electric Company ("PG & E") after a loss of electrical power to its refinery forced a temporarily shut down. Id. at *1. PG & E in turn sued Foster Wheeler Martinez, Inc. and Martinez Cogen Limited Partnership (collectively, "FWM"), which also provided electricity to Tesoro's refinery, for equitable indemnity. Id. FWM argued that equitable indemnity was not available because (1) a contract between FWM and Tesoro absolved it of liability to Tesoro and (2) PG & E had not adequately alleged that FWM was liable to Tesoro in tort. After concluding PG & E could not base its claim upon the contract, id. at *3-5, the court set aside the existence of the contract and surveyed California law for any "independent tort duty" upon which to base equitable indemnity, id. at *5-6. It concluded that California law afforded no basis in negligence for a duty in these circumstances. Id. (citing Cal. Civ. Code § 1714(a); Langley v. Pac. Gas & Elec. Co., 41 Cal. 2d 655, 660 (1953)). Pallets Unlimited fails to point to any source not considered in Tesoro. (See Pallets's Opp'n at 11-12.)
While some set of facts may allow Pallets Unlimited to show that OHL's actions at the facility give rise to an independent tort or even "both contract and tort liability," id. at *4, it has not done so on the facts alleged. That is, there is no "joint legal obligation" or basis for "joint and several liability" to Starbucks in these allegations. See Prince, 5 Cal. 4th at 1158; Stop Loss, 143 Cal. App. 4th at 1040. Accordingly, the court will grant OHL's motion to dismiss these claims.
IV. Pallets Unlimited's Negligence Claim
To state a claim for negligence under California law, a plaintiff must allege duty, breach, causation, and damages. Conroy v. Regents of Univ. of Cal., 45 Cal. 4th 1244, 1250 (2009). "[T]he threshold element of a cause of action for negligence is the existence of a duty to use due care toward an interest of another . . . . Whether this essential prerequisite has been satisfied in a particular case is a question of law." Glenn K. Jackson, Inc. v. Roe, 273 F.3d 1192, 1196-97 (9th Cir. 2001) (quoting Adelman v. Associated International Insurance Co., 90 Cal. App. 4th 352, 360 (2001)).
Because the court need not simply accept "a conclusory assertion that [OHL] 'owed a duty of care,'" see Fimbres v. Chapel Mortgage Corp., Civ. No. 09-0886 IEG POR, 2009 WL 4163332, at *7 (S.D. Cal. Nov. 20, 2009) (citing Iqbal, 556 U.S. 662.), it must determine whether Pallets Unlimited alleges facts sufficient to establish that OHL actually owed it a duty. Pallets Unlimited alleges two possible duties on which it predicates its negligence claim: (1) a general duty of care owed by all owners of property--sometimes called "premises liability"--and (2) a duty to notify.
A. Pallets Unlimited Fails to Allege Facts Supporting Premises Liability
Pallets Unlimited alleges that "OHL owed a duty . . . to store the coffee beans and pallets at issue at its [warehouse] at or above the standard of care in the industry, which includes storing them in such a way that mold would not develop . . ." (Pallets Compl. ¶ 18.) This duty arises, it contends, from "premises liability" faced by all property owners in California. (See Pallets's Opp'n at 10.) And as a result of OHL's breach of this duty, Pallets Unlimited alleges that it "suffered damages including, but not limited to, potential liability to [Starbucks]." (Pallets Compl. ¶ 18).
California Civil Code section 1714(a) provides, in part:
Everyone is responsible, not only for the result of his or her willful acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself.Cal. Civ. Code § 1714(a); see also Cabral v. Ralphs Grocery Co., 51 Cal. 4th 764, 771 (2011) ("The general rule in California is that '[e]veryone is responsible . . . for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person.'" (quoting Cal. Civ. Code § 1714(a))). Courts have understood this subsection to impose a "duty to use ordinary care," which makes an individual "liable for injuries caused by his failure to exercise reasonable care in the circumstances." Cabral, 51 Cal. 4th at 771 (quoting Parsons v. Crown Disposal Co., 15 Cal. 4th 456, 472 (1997)).
"Premises liability" is generally invoked for the idea that landowners or possessors have a duty to avoid subjecting others to a risk of bodily injury or property damage. See, e.g., Brooks v. Eugene Burger Mgmt. Corp., 215 Cal. App. 3d 1611, 1619-24 (5th Dist. 1989) (involving bodily injury to a child allegedly caused by inadequate fencing around a roadway); Wilson v. Rancho Sespe, 207 Cal. App. 2d 10, 17 (2d Dist. 1962) (stating that premises liability "is applicable also with respect to liability for damage to property"); see also Cal. Civ. Prac. Torts § 16:1 ("The term 'premises liability' refers to the liability of certain persons for injuries and damages to others arising from the ownership or possession of real property.").
However, Pallets Unlimited does not allege injury to its person or property. In fact, it does not allege ownership over the wooden pallets at issue while they were stored at OHL's warehouse. It repeatedly alleges that the pallets were "constructed by" Pallets Unlimited, (Pallets Compl. ¶¶ 8-9, 11, 13-14, 18), but makes no mention of whether it retained ownership of the pallets or transferred them to Starbucks upon delivery.
Pallets Unlimited states in its opposition brief that OHL breached its duty as a premises owner "to ensure that Pallets Unlimited's wooden pallets and Starbuck's [sic] coffee beans" were properly stored. (Pallets's Opp'n at 9.) While this could be construed as a statement of ownership, the court may not consider any material other than the challenged pleadings for purposes of this motion, see Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001), and no similar allegations appear in Pallets Unlimited's complaint.
Moreover, and perhaps more tellingly, Pallets Unlimited does not allege that it suffered damages in the form of harm to its pallets. It alleges damages solely in the form of "potential liability" to Starbucks, (id. ¶ 18), which would presumably consist of a money judgment against it, as well as "damages relating to attorney's fees and costs of suit herein," (id. ¶ 17). Any duty allegedly owed to Pallets Unlimited is thus better understood as a duty to protect it from the prospect of purely economic loss it now faces as a result of Starbucks's claims against it.
Pallets Unlimited has not provided, and the court cannot find, any basis in California law for such a duty. If anything, California law appears to point in the opposite direction. For instance, in Quelimane Co. v. Stewart Title Guaranty Co., the California Supreme Court stated that
During oral argument, Pallets Unlimited points to Campbell v. Ford Motor Co., 206 Cal. App. 4th 15 (2012), for support. The court finds no support for its position in Campbell. In fact, Campbell declined to find a duty in the circumstances of that case, holding that "a property owner has no duty to protect family members of workers on its premises from secondary exposure to asbestos used during the course of the property owner's business." Id. at 34.
In the business arena it would be unprecedented to impose a duty on one actor to operate its business in a manner that would ensure the financial success of transactions between third parties. With rare exceptions, a business entity has no duty to prevent financial loss to others with whom it deals directly. A fortiori, it has no greater duty to prevent financial losses to third parties who may be affected by its operations.19 Cal. 4th 26, 59 (1998) (considering whether CPA auditors' duty of care in the preparation of an independent audit of a client's financial statements extends to persons other than the client); see also Glenn K. Jackson Inc., 273 F.3d at 1196-99 (surveying California law on the existence of a legal duty of one party to another in the absence of privity of contract between them).
In fact, a California Court of Appeal recently rejected a similar attempt to raise a negligence claim "through the backdoor." Mega RV Corp. v. HWH Corp., 225 Cal. App. 4th 1318, 1338 (4th Dist. 2014). In Mega RV Corp., the owners of a motorhome sued both the manufacturer of an allegedly defective hydraulic part and a company that provided ineffective repair services. Id. at 1322-24. The manufacturer filed a cross-complaint against the repairer for negligence, equitable indemnity, and declaratory relief--the same claims at issue here. Id. at 1324. Also like here, the manufacturer predicated its claim of negligence on an alleged duty that the repairer owed to it and breached while servicing the owner's motorhome. Id. at 1338.
The court also noted that the claim of negligence it analyzed arose "in an indemnity cause of action . . . in a case in which there was nothing to indemnify" because the other defendant had settled with the underlying plaintiff. Mega RV Corp., 225 Cal. App. 4th at 1338 n.15. Pallets Unlimited's claim can be construed as a similar tactic, attempting to salvage its indemnity claim using allegations of negligence.
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The court rejected this position "as a matter of law" because "[the manufacturer] did not suffer personal injury or injury to other property as a result of [the repairer's] alleged tort." Id. at 1338. Like Pallets Unlimited, the manufacturer only asserted that it "suffered consequential economic damages" by being forced to defend against the owner's claim. Id.;(see Pallets's Compl. ¶ 18). No previously recognized tort existed under those circumstances, "where the wrong has resulted only in economic loss rather than damage to person or property." Mega RV Corp., 225 Cal. App. 4th at 1338 (citing Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 988-993 (2004) (discussing tort claims for economic loss generally)). And the court declined to create one. Id. at 1340-42 (applying the six factors from J'Aire Corp. v. Gregory, 24 Cal. 3d 799 (1979)).
Similarly, this court concludes there is no basis in California law or in the facts alleged by Pallets Unlimited for such a duty.
B. Pallets Unlimited Fails to Allege Facts Supporting a Duty to Notify
Pallets Unlimited further alleges that OHL owed a duty to notify it "of any specifications required of the pallets that are unique to the pallets ordered by Starbucks, " such as a limited moisture content. (Pallets Compl. ¶ 17.) Pallets Unlimited makes no mention of this allegation in its opposition brief, raising the possibility that it abandons this position. The court thus gives only brief consideration to this theory. See Conservation Force v. Salazar, 677 F. Supp. 2d 1203, 1211 (N.D. Cal. 2009) (offering only brief consideration to a claim "[w]here plaintiffs fail to provide a defense for a claim in opposition") (citing Locricchio v. Office of U.S. Trustee, 313 Fed. Appx. 51, 52 (9th Cir. 2009)).
"A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as 'seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement.'" Shin v. Kong, 80 Cal. App. 4th 498, 509 (1st Dist. 2000) (citing Wilkins v. Nat'l Broad. Co., 71 Cal. App. 4th 1066, 1082 (2d Dist. 1999)). For example, California law imposes on real estate agents an affirmative duty to disclose certain information to those who "enter into a discussion with a real estate agent regarding a real estate transaction" even in the absence of a contract between them. See Cal. Civ. Code § 2079.16.
Pallets Unlimited's complaint fails to allege facts supporting a special relationship between it and OHL. Its states only that a duty to disclose "was owed to [it] by OHL individually and as an agent of [Starbucks]." (Pallets Compl. ¶ 17.) Even assuming that OHL was an agent of Starbucks, however, this allegation asserts a relationship between OHL and Starbucks, not between OHL and Pallets Unlimited. See Shin v. Kong, 80 Cal. App. 4th 498 (2000) ("[A] plaintiff's action must be founded on a duty owed to the plaintiff; not a duty owed only to some other person. . . . 'Negligence in the air, so to speak, will not do.'" (quoting Prosser & Keeton, Torts § 53 (5th ed. 1984))). Absent alleged facts that support some kind of special relationship between Pallets Unlimited and OHL, the court cannot conclude that OHL owed a duty to disclose.
Accordingly, because Pallets Unlimited fails to allege facts that support a duty of care owed to it by OHL, the court must grant OHL's motion to dismiss this claim.
V. Pallets Unlimited's Claim for Declaratory Relief
A court may grant declaratory relief where there is "a case of actual controversy within its jurisdiction," subject to certain exceptions. 28 U.S.C. § 2201(a). The court may "declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Id.
However, "[c]laims for declaratory relief are not independent causes of action, but rather the ultimate prayer for relief." Bates v. Suntrust Mortgage, Inc., Civ. No. 2:13-01402 TLN DA, 2013 WL 6491528, at *4 (E.D. Cal. Dec. 10, 2013) (Nunley, J.). "A plaintiff is not entitled to such relief without a viable underlying claim, so when the underlying claim is dismissed, the declaratory relief cause of action must be dismissed as well." Id.; Allied Prop. & Cas. Ins. Co. v. Dick Harris, Inc., Civ. No. 2:13-00325 WBS, 2013 WL 2145961, at *7 (E.D. Cal. May 15, 2013) (dismissing a claim for declaratory relief because plaintiff could not state any other claim).
Accordingly, because Pallets Unlimited has not stated a claim for relief against OHL, its request for declaratory judgment must also be dismissed.
IT IS THEREFORE ORDERED that third-party defendant Ozburn-Hessey Logistics's motion to dismiss be, and the same hereby is, GRANTED.
Pallets Unlimited has twenty days from the date this Order is signed to file an amended third-party complaint, if it can do so consistent with this Order. Dated: November 4, 2014
/s/_________
WILLIAM B. SHUBB
UNITED STATES DISTRICT JUDGE