Amg And Associates, Llc v. Ameripride Services Inc. et al

NOTICE OF MOTION AND MOTION to Dismiss 1st, 2d and 3d causes of action

C.D. Cal.July 25, 2016

i FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 David Jacobs (State Bar No. 73545) Kevin D. Sullivan (State Bar No. 270343) EPSTEIN BECKER & GREEN, P.C. 1925 Century Park East, Suite 500 Los Angeles, California 90067-2506 Telephone: 310.556.8861 Facsimile: 310.553.2165 djacobs@ebglaw.com ksullivan@ebglaw.com Attorneys for Defendant AMERIPRIDE SERVICES INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA AMG & ASSOCIATES, LLC, a California limited liability company, CASE NO. 16-cv-05146 RGK (AFMx) DEFENDANT AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT DATE: August 22, 2016 TIME: 9:00 a.m. CTRM: 850 JUDGE: Hon. R. Gary Klausner Plaintiff, v. AMERIPRIDE SERVICES, INC. a Delaware corporation; CYRIL W. WELCHS; DOES 1 through 25, inclusive, and All Persons Claiming Any Right, Title, Estate, Lien or Interest in the Real Property Described Herein or Any Part Thereof, Defendants. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 1 of 21 Page ID #:125 i FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION...................................................................................1 II. STATEMENT OF FACTS.....................................................................2 A. The Parties.................................................................................................2 B. The Parties Signed a Letter of Intent Regarding the Potential Sale of the Property. ....................................................................................................2 C. AMG Admits That AmeriPride Never Signed the Option Agreement for the Sale of the Property. ............................................................................3 D. The Subsequent Email Exchanges Attempting to Resolve the Disagreement Over the Terms of the Option Agreement for the Sale of the Property. ..............................................................................................4 E. AMG’s Causes of Action. .........................................................................4 III. ARGUMENT ...........................................................................................5 A. The Pleading Standard. .............................................................................5 B. Because No Contract Exists Requiring the Sale of the Property, Plaintiff’s Cause of Action for Breach of Contract Fails..........................5 1. The Letter of Intent Did Not Create a Contract Requiring the Sale of the Property. ..................................................................................6 2. The Proposed Option Agreement Did Not Create a Contract Requiring the Sale of the Property. ...................................................8 3. Even if the Proposed Option Agreement Were Considered a Contract Requiring the Sale of the Property, It Would Be Invalid as a Matter of Law Under the Statute of Frauds....................................9 4. The Email Exchanges Did Not Create a Contract Requiring the Sale of the Property. ..................................................................................9 5. Because AmeriPride Never Assented to the Sale of the Property, AMG’s Cause of Action for Breach of Contract Fails as a Matter of Law. .................................................................................................10 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 2 of 21 Page ID #:126 -ii - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. Specific Performance is a Remedy – Not a Cause of Action. ................11 D. Declaratory Relief is a Remedy – Not a Cause of Action. .....................12 IV. CONCLUSION......................................................................................13 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 3 of 21 Page ID #:127 -iii - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Federal Cases Adams v. Johnson, 355 F.3d 1179 (9th Cir. 2004).............................................................................5 Alcalde v. NAC Real Estate Invs. & Assignments, Inc., 316 F. App’x 661 (9th Cir. 2009)..................................................................5, 10 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ......................................................................................5, 10 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..........................................................................................10 Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990 (N.D. Cal. 2010) ........................................................12, 13 Fayer v. Vaughn, 649 F.3d 1061 (9th Cir. 2011) (per curiam)........................................................5 First National Mortgage Company v. Federal Realty Investment Trust, 631 F.3d 1058 (9th Cir. 2011).........................................................................7, 8 Foster Poultry Farms v. Alkar-Rapidpak-MP Equip., 868 F. Supp. 2d 983 (E.D. Cal. 2012).................................................................9 Harara v. ConocoPhillips Co., 377 F. Supp. 2d 779 (N.D. Cal. 2005) ..............................................................11 Inamed Corp. v. Kuzmak, 275 F. Supp. 2d 1100.........................................................................................11 Inkster v. Fed. Home Loan Mortgage Corp., 2012 WL 5933034 (E.D. Cal. Nov. 27, 2012) ..................................................11 LOL Finance Company v. Mebane, 2011 U.S. Dist. LEXIS 3337 (E.D. Cal. Jan. 12, 2011)....................................11 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 4 of 21 Page ID #:128 -iv - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Progeny Ventures, Inc. v. W. Union Fin. Servs., Inc., 752 F. Supp. 2d 1127.........................................................................................12 Rennick v. O.P.T.I.O.N. Care, Inc., 77 F.3d 309 (9th Cir. 1996) .............................................................................6, 7 Riese v. Chase Home Fin., LLC, 2011 U.S. Dist. LEXIS 103011 (N.D. Cal. Sept. 13, 2011)..............................11 Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952 (N.D. Cal. 2010) ..............................................................12 Saldana v. Bank of Am., N.A., 2015 U.S. Dist. LEXIS 57665 (N.D. Cal. May 1, 2015) ............................11, 12 Shaterian v. Wells Fargo Bank, N.A., 829 F. Supp. 2d 873 (N.D. Cal. 2011) ..............................................................12 Swany v. San Ramon Valley Unified School Dist., 720 F. Supp. 764 (N.D. Cal. 1989)................................................................6, 10 United States v. Washington, 759 F.2d 1353 (9th Cir. 1985) (en banc)...........................................................13 Warzon v. Drew, 60 F.3d 1234 (7th Cir. 1995)...............................................................................5 Weisbuch v. County of Los Angeles, 119 F.3d 778 (9th Cir. 1997).........................................................................5, 10 California Cases Chavez v. Indymac Mortg. Servs., 219 Cal. App. 4th 1052 (2013)............................................................................9 Copeland v. Baskin Robbins USA, 96 Cal. App. 4th 1251 (2002)..............................................................................7 Donovan v. RRL Corp., 26 Cal.4th 261 (2001)..........................................................................................9 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 5 of 21 Page ID #:129 -v - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457 (2006)......................................................................5, 10 California Statutes Cal. Civ. Code § 1624(a), (a)(3)...................................................................................................9 Other Authorities Local Rule 7-3 ..................................................................................................11, 12 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 6 of 21 Page ID #:130 1 FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO THE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT on August 22, 2016, at 9:00 a.m., or as soon thereafter as the matter may be heard before the Honorable R. Gary Klausner in Courtroom 850 of the United States District Court, Central District of California, located at the Edward R. Roybal Federal Building and United States Courthouse, 255 East Temple Street, Los Angeles, California 90012-3332, defendant AmeriPride Services Inc. (“AmeriPride”) will and hereby does move, pursuant to Federal Rules of Civil Procedure, rule 12(b)(6), to dismiss the first, second, and third causes of action in plaintiff AMG & Associates, LLC’s (“AMG”) complaint. AMG’s first, second, and third causes of action for specific performance, declaratory relief, and breach of contract, respectively, fail as a matter of law. Regarding the first and second causes of action for specific performance and declaratory relief, respectively, such claims are remedies and not themselves causes of action. For this reason, AMG’s causes of action for specific performance and declaratory relief fail as a matter of law. Thus, the first and second causes of action should be dismissed without leave to amend. Regarding the third cause of action, AMG alleges facts that affirmatively establish AmeriPride never entered any contract requiring the sale of the real property at issue in this case. Yet AMG’s claim for breach of contract necessarily relies on the existence of a contract. Because AMG’s complaint shows on its face that no contract exists, the third cause of action should be dismissed without leave to amend. This motion is based upon this notice of motion, the accompanying memorandum of points and authorities, all pleadings on file in this action, and such further written or oral argument as may be permitted by this Court. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 7 of 21 Page ID #:131 -2 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This motion is made following the conference of counsel pursuant to L.R. 7-3, which took place on July 13, July 19, and July 21, 2016. At the parties’ July 21, 2016 teleconference, the parties agreed that a potential resolution could not be reached. As such, the parties’ meet-and-confer efforts have been exhausted. Respectfully submitted, DATED: July 25, 2016 EPSTEIN BECKER & GREEN, P.C. By: /s/ Kevin D. Sullivan David Jacobs Kevin D. Sullivan Attorneys for Defendant AMERIPRIDE SERVICES INC. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 8 of 21 Page ID #:132 - 1 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiff AMG & Associates, LLC (“AMG”) pleads itself out of court on its primary cause of action for breach of contract by affirmatively establishing in its complaint that no contract was entered into with defendant AmeriPride Services Inc. (“AmeriPride”) that required the sale of AmeriPride’s real property at issue in this case. The complaint identifies three different bases for AMG’s assertion that an agreement existed requiring AmeriPride to sell its property to AMG. But none of the bases support AMG’s assertion. First, AMG contends that a letter of intent concerning the potential sale of the property somehow constitutes a contract requiring the sale of the property. This contention fails. The letter of intent – authored by AMG and attached to its complaint – specifically states that it is not a contract: “This letter is not an offer and as such may not be accepted to form a contract; rather, this letter serves as an expression of Buyer’s interest to purchase the property.” Thus, AMG may not rely on the letter of intent as the basis for any contract requiring the sale of the property. Second, AMG contends that a proposed option agreement for the sale of the property somehow constitutes a contract requiring the sale of the property. This contention fails because AMG admits in its complaint that AmeriPride never signed the option agreement. Thus, there was no mutual assent. And even if the proposed option agreement were considered a contract, it would be invalid as a matter of law under the statute of frauds because it was never signed by AmeriPride. Thus, AMG may not rely on the option agreement as the basis for any contract requiring the sale of the property. Third, perhaps knowing that the option agreement not executed by AmeriPride cannot form the basis for a valid agreement, AMG attempts to co-opt an email exchange to serve as assent on behalf of AmeriPride. But that attempt Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 9 of 21 Page ID #:133 -2 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fails, too. The email exchange in question discusses the various options for which AmeriPride’s real estate broker “can get support” from AmeriPride in order to execute the option agreement. But merely discussing potential approval for an agreement does not transform that discussion into assent or into to a contract. Thus, AMG may not rely on the email exchange as the basis for any contract. Because AmeriPride never entered into any contract requiring the sale of the property, AMG’s cause of action for breach of contract fails as a matter of law. Accordingly, the third cause of action in AMG’s complaint should be dismissed without leave to amend. AMG also styles as its first and second causes of action claims for specific performance and declaratory relief, respectively. But those are remedies for AMG’s claim for breach of contract. They are not independent causes of action. Even if they were independent causes of action, they would still fail because they are derivative of AMG’s claim for breach of contract that fails. Moreover, AMG’s claim for declaratory relief is redundant of its claim for breach of contract. Thus, the first and second causes of action in AMG’s complaint should be dismissed without leave to amend. II. STATEMENT OF FACTS A. The Parties. Plaintiff AMG was a potential purchaser of the property at issue in this action. (Dkt. No. 1-1, ¶ 6.) Defendant AmeriPride owns the real property at issue in this action. (Dkt. No. 1-1, ¶ 2.) B. The Parties Signed a Letter of Intent Regarding the Potential Sale of the Property. In October 2014, AmeriPride and AMG’s representatives signed a letter of intent, attached as Exhibit 1 to the complaint. (Dkt. No. 1-1, Ex. 1.) The letter of intent was authored by AMG and was prepared “to specify the basic terms and Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 10 of 21 Page ID #:134 -3 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 conditions under which [AMG] will purchase the property” at issue in this matter. (Id. at p. 1.) The letter of intent specifically states that it is not a contract: This letter is not an offer and as such may not be accepted to form a contract; rather, this letter serves as an expression of Buyer’s [i.e., AMG’s] interest to purchase the property. We expect that any binding agreement, which would be negotiated between the Buyer and Seller, will be generally consistent with the price, terms and conditions in this letter. (Id. at p. 3 (emphasis added).) Notwithstanding that there was no contract into which the parties entered requiring the sale of the property, the parties did “agree to negotiate in good faith to execute a mutually acceptable Purchase and Sale Agreement within ten (10) business days of Seller’s acceptance . . . .” (Dkt. No. 1-1, Ex. 1, p. 3.) As explained below, that provision cannot be used to support a claim for breach of contract requiring the sale of the property. C. AMG Admits That AmeriPride Never Signed the Option Agreement for the Sale of the Property. AMG alleges that in July 2015, AmeriPride sent AMG copies of an option agreement for the sale of the property. (Dkt. No. 1-1, 3:22–23.) Although AMG signed the option agreement, AmeriPride never signed the option agreement. AMG specifically admits in its complaint that AmeriPride “fail[ed] and refus[ed] to counter-sign the Option Agreement.” (Dkt. No. 1-1, 6:7–9; see also id. at 7:6–8 (alleging that there exists a controversy “regarding AmeriPride’s obligation to counter-sign the Option Agreement”); id. at 4:24–26 (admitting that AmeriPride did not provide any counter-signed option agreement).) Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 11 of 21 Page ID #:135 -4 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D. The Subsequent Email Exchanges Attempting to Resolve the Disagreement Over the Terms of the Option Agreement for the Sale of the Property. The parties never came to a meeting of the minds over significant provisions of the option agreement – the effective date of the indemnity/guaranty provision, the effective date of the option agreement itself, and the requirement that AMG would provide audited financial statements. (Dkt. No. 1-1, 4:2–5:17.) Because there was no agreement in place, AmeriPride sent an email discussing the potential ways to move forward: “There are 3 ways forward that I can get support for . . . .” (Dkt. No. 1-1, 4:9 (emphasis added).) The email then goes on to state the three different potential ways. (Id. at 4:9–20.) AMG subsequently responded that it preferred the second way and requested that AmeriPride prepare the appropriate documents. (Id. at 4:21–23.) AMG contends that this exchange somehow means that AMG entered into the proposed option agreement. (Id. at 6:2–4.) Despite that contention, the parties ultimately never agreed to the option agreement. (Id. at 5:11–23.) E. AMG’s Causes of Action. AMG styles its complaint to include four purported causes of action. (Dkt. No. 1-1, 5:24–9:1.) AMG’s first “cause of action” is for specific performance. (Dkt. No. 1-1, 5:24–6:28.) AMG’s second “cause of action” is for declaratory relief. (Id. at 7:2– 26.) As explained below, specific performance and declaratory relief are not actually causes of action – they are merely remedies to Plaintiff’s claim for breach of contract. AMG’s third cause of action is for breach of contract. To support this cause of action, AMG alleges that AmeriPride “breached the Letter Agreement [i.e., the letter of intent attached as Exhibit 1 to the complaint], [the unexecuted] Option Agreement [a portion of which is attached as Exhibit 2], and email agreements alleged [in the complaint] . . . .” (Compl, 8:8–11.) But as explained below Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 12 of 21 Page ID #:136 -5 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (1) AMG’s complaint affirmatively establishes that no agreement requiring the purchase of the property existed, and (2) the parties agreement in the letter of intent “to negotiate in good faith to execute a mutually acceptable Purchase and Sale Agreement within ten (10) business days of Seller’s acceptance” (id.) cannot be used to support a claim for breach of contract requiring the sale of the property. AMG’s fourth cause of action is for breach of the covenant of good faith and fair dealing. (Dkt. No. 1-1, 8:14–9:1.) At this time, AmeriPride does not move to dismiss this cause of action. III. ARGUMENT A. The Pleading Standard. “Whether the case can be dismissed on the pleadings depends on what the pleadings say. ‘[A] plaintiff may plead herself out of court.’ Warzon v. Drew, 60 F.3d 1234, 1239 (7th Cir. 1995). If the pleadings establish facts compelling a decision one way, that is as good as if depositions and other expensively obtained evidence on summary judgment establishes the identical facts.” Weisbuch v. County of Los Angeles, 119 F.3d 778, 783, n. 1 (9th Cir. 1997). The Court is not obligated to “assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). B. Because No Contract Exists Requiring the Sale of the Property, Plaintiff’s Cause of Action for Breach of Contract Fails. It is axiomatic that a claim for breach of contract may not lie where no contract exists. See, e.g., McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457, 1489 (2006) (a claim for breach of contract under California law requires a plaintiff to prove, inter alia, the existence of a contract); Alcalde v. NAC Real Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 13 of 21 Page ID #:137 -6 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Estate Invs. & Assignments, Inc., 316 F. App’x 661, 662 (9th Cir. 2009) (same); Swany v. San Ramon Valley Unified School Dist., 720 F. Supp. 764, 782 (N.D. Cal. 1989) (finding for defendants on plaintiff’s breach of contract claim where no contract existed). Here, the complaint identifies three different bases for AMG’s assertion that an agreement existed for AmeriPride’s sale of the property to AMG. (Dkt. No. 1- 1, 5:18–20 (alleging that AmeriPride “refused to honor the agreements between the parties as set forth in the [letter of intent], the [unexecuted] Option Agreement, and the November 10, 2015 email.”); see also id. at 5:28–6:4 (describing the purported agreements). But none of these bases support AMG’s assertion that a contract exists. To the contrary, the facts alleged and the letter of intent and unexecuted option agreement affirmatively establish that no contract exists. Accordingly, AMG’s cause of action for breach of contract should be dismissed without leave to amend. 1. The Letter of Intent Did Not Create a Contract Requiring the Sale of the Property. AMG contends that the October 2014 letter of intent concerning the potential sale of the property somehow constitutes a contract for the sale of the property. This contention fails. “[T]he purpose and function of a preliminary letter of intent is not to bind the parties to their ultimate contractual objective. Instead, it is only to provide the initial framework from which the parties might later negotiate a final . . . agreement, if the deal works out.” Rennick v. O.P.T.I.O.N. Care, Inc., 77 F.3d 309, 315 (9th Cir. 1996) (internal quotation marks omitted) (citing A/S Apothekernes Laboratorium v. I.M.C. Chem. Grp., Inc., 873 F.2d 155, 158 (7th Cir. 1989)). Thus, “calling a document ‘letter of intent’ implies, unless circumstances suggest otherwise, that the parties intended it to be a nonbinding Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 14 of 21 Page ID #:138 -7 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 expression in contemplation of a future contract, as opposed to its being a binding contract.” Rennick, 77 F.3d at 315. In First National Mortgage Company v. Federal Realty Investment Trust, 631 F.3d 1058 (9th Cir. 2011), the Ninth Circuit reaffirmed the well-established law regarding the formation of contracts as follows: Creation of a valid contract requires mutual assent. Kruse v. Bank of Am., 202 Cal. App. 3d 38, 59, 248 Cal.Rptr. 217 (1988). “Where . . . there is a manifest intention that the formal agreement is not to be complete until reduced to a formal writing to be executed, there is no binding contract until this is done.” Smissaert v. Chiodo, 163 Cal. App. 2d 827, 830–31, 330 P.2d 98 (1958). Thus, an “agreement to agree,” without more, is not a binding contract. Autry v. Republic Prods., 30 Cal.2d 144, 151–52, 180 P.2d 888 (1947). Id. at 1065. Here, the letter of intent – authored by AMG – specifically states that it is not a contract: “This letter is not an offer and as such may not be accepted to form a contract; rather, this letter serves as an expression of Buyer’s [i.e., AMG’s] interest to purchase the property.” (Dkt. No. 1-1, Ex. 1, p. 3.) Because the letter of intent unequivocally states that it is not a contract, AMG may not rely on the letter of intent as the basis for any contract requiring the sale of the property. In opposition, Plaintiff will likely rely on the case of Copeland v. Baskin Robbins USA, 96 Cal. App. 4th 1251 (2002). Such reliance would be misplaced. Plaintiff attempts to glean from Copeland that a letter of intent may bind the parties such that it provides for a cause of action for breach of contract to purchase the property at issue. But all Copeland holds is that a letter of intent may form the basis for a claim of breach of contract to negotiate an agreement. Id. at 1253, 1255. Yet AMG alleges much more than that in its cause of action for breach of contract. AMG alleges breach of contract such that there was an actual agreement requiring the purchase of the property. Indeed, Plaintiff seeks specific Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 15 of 21 Page ID #:139 -8 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 performance compelling the sale of the property as a remedy for purported breach of the alleged agreement. But AMG cannot seek such relief because it pleads facts that affirmatively establish there was no contract requiring the sale of the property.1 2. The Proposed Option Agreement Did Not Create a Contract Requiring the Sale of the Property. AMG also contends that the option agreement – a portion of which is attached as Exhibit 2 to the complaint – that Alexis Gevorgian purportedly executed on AMG’s behalf somehow constitutes a contract for the sale of the property. This contention also fails because the option agreement was never signed by AmeriPride. “Creation of a valid contract requires mutual assent.” First Nat. Mortg., 631 F.3d at 1065. Here, AMG admits in its complaint that AmeriPride did not provide any counter-signed option agreement. (Dkt. No. 1-1, ¶ 9.) Indeed, AMG specifically admits in its complaint that AmeriPride “fail[ed] and refus[ed] to counter-sign the Option Agreement.” (Id. at 6:7–9; see also id. at 7:6–8 (alleging that there exists a controversy “regarding AmeriPride’s obligation to counter-sign the Option Agreement”).) Because there was no mutual assent to the option agreement, the option agreement cannot form the basis for any contract requiring the sale of the property. 1 The only agreement that AMG sufficiently pleads is found within a single provision of the letter of intent: “Buyer and Seller agree to negotiate in good faith to execute a mutually acceptable Purchase and Sale Agreement within ten (10) business days of Seller’s acceptance . . . .” (Dkt. No. 1-1, Ex. 1, p. 3.) To the extent AMG seeks to bring a claim for breach of contract to negotiate an agreement, it should be ordered to limit its pleading to just that. As explained above, AMG’s cause of action for breach of contract – as currently pled – goes well beyond that limited claim. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 16 of 21 Page ID #:140 -9 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. Even if the Proposed Option Agreement Were Considered a Contract Requiring the Sale of the Property, It Would Be Invalid as a Matter of Law Under the Statute of Frauds. A contract for the sale of real property is invalid unless the contract “or some note or memorandum thereof, [is] in writing and subscribed by the party to be charged or by the party’s agent.” Cal. Civ. Code § 1624(a), (a)(3). As explained above, AMG admits in its complaint that AmeriPride never signed the option agreement. It is well-established that “[a] contract coming within the statute of frauds is invalid unless it is memorialized by a writing subscribed by the party to be charged or by the party’s agent.” Chavez v. Indymac Mortg. Servs., 219 Cal. App. 4th 1052, 1057 (2013) (citations omitted). Thus, even if the proposed option agreement were considered a contract, it would be invalid as a matter of law under the statute of frauds. 4. The Email Exchanges Did Not Create a Contract Requiring the Sale of the Property. Perhaps knowing that the option agreement not executed by AmeriPride cannot form the basis for a valid agreement, AMG attempts to co-opt the November 2015 email to serve as assent on behalf of AmeriPride. But that attempt fails, too. “An essential element of any contract is the consent of the parties, or mutual assent.” Donovan v. RRL Corp., 26 Cal.4th 261, 270 (2001). “The existence of mutual assent is determined based on an objective standard.” Foster Poultry Farms v. Alkar-Rapidpak-MP Equip., 868 F. Supp. 2d 983, 995–996 (E.D. Cal. 2012) (citing Weddington Prods., Inc. v. Flick, 60 Cal. App. 4th 793, 811 (1998)). Here, with an option agreement that AmeriPride did not execute, its November 2015 email plainly discusses the potential ways to move forward: “There are 3 ways forward that I can get support for . . . .” (Dkt. No. 1-1, 4:9 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 17 of 21 Page ID #:141 -10 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (emphasis added).) The email then goes on to state the three different ways. (Id. at 4:9–20.) AMG subsequently responded that he preferred the second way and requested that AmeriPride prepare the appropriate documents. AMG contends that this exchange somehow means that AmeriPride entered into the proposed option agreement. But nothing about this exchange plausibly suggests that AMG ever actually assented to the option agreement. A claim for relief must be plausible rather than merely conceivable or speculative. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Because the November 2015 email exchange does not support AMG’s assertion that AmeriPride assented to the terms of the option agreement, the option agreement paired with the November 2015 email exchange cannot form the basis for any contract requiring the sale of the property. 5. Because AmeriPride Never Assented to the Sale of the Property, AMG’s Cause of Action for Breach of Contract Fails as a Matter of Law. Where the “pleadings establish facts compelling a decision one way, that is as good as if depositions and other expensively obtained evidence on summary judgment establishes the identical facts.” Weisbuch, 119 F.3d at 783, n. 1. As explained above, AMG affirmatively establishes in its complaint that no contract exists requiring the sale of the property. Accordingly, AMG’s claim for breach of contract fails as a matter of law. See, e.g., McKell, 142 Cal. App. 4th at 1489 (a claim for breach of contract under California law requires a plaintiff to prove, inter alia, the existence of a contract); Alcalde, 316 F. App’x at 662 (same); Swany, 720 F. Supp. at 782 (finding for defendants on plaintiff’s breach of contract claim where no contract existed). Thus, AMG’s third cause of action should be dismissed without leave to amend. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 18 of 21 Page ID #:142 -11 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. Specific Performance is a Remedy – Not a Cause of Action. “Specific performance is a form of contractual relief, not an independent claim.” Harara v. ConocoPhillips Co., 377 F. Supp. 2d 779, 796 (N.D. Cal. 2005); accord Inkster v. Fed. Home Loan Mortgage Corp., 2012 WL 5933034, at *4 (E.D. Cal. Nov. 27, 2012). “Specific performance is not itself a cause of action, but rather ‘a remedy for breach of contract.’” LOL Finance Company v. Mebane, 2011 U.S. Dist. LEXIS 3337, at * 9 (E.D. Cal. Jan. 12, 2011) (citing Golden West Baseball Co. v. City of Anaheim, 25 Cal. App. 4th 11, 49 (1994) (italics in original)). Here, AMG brings a cause of action for specific performance. (Dkt. No. 1- 1, ¶¶ 11–17.) But the foregoing authorities make it clear that specific performance is a remedy and not an independent claim. Accordingly, AMG’s cause of action for specific performance fails as a matter of law. See, e.g., Riese v. Chase Home Fin., LLC, 2011 U.S. Dist. LEXIS 103011, at *8–9 (N.D. Cal. Sept. 13, 2011) (dismissing with prejudice claim for specific performance because it is a remedy, not separate a claim); see also Saldana v. Bank of Am., N.A., 2015 U.S. Dist. LEXIS 57665, at *4–5 (N.D. Cal. May 1, 2015). Thus, the first cause of action should be dismissed without leave to amend. As an independent basis, in the parties’ Local Rule 7-3 conference, AMG’s counsel admitted that specific performance is a remedy for AMG’s cause of action for breach of contract. Thus, for the additional reason that AMG’s cause of action for breach of contract fails (as explained above), AMG’s claim for the remedy of specific performance must also fail. See, e.g., Inamed Corp. v. Kuzmak, 275 F. Supp. 2d 1100, 1130 (citing Golden West Baseball, 25 Cal. App. 4th at 49, for its holding that plaintiff was not entitled to specific performance because “there was no breach on which to predicate it,” the court stated that “. . . specific performance is a remedy for breach of contract, a cause of action which requires proof the contract was breached”). Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 19 of 21 Page ID #:143 -12 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D. Declaratory Relief is a Remedy – Not a Cause of Action. “Declaratory and injunctive relief are not causes of action; rather, they are remedies.” Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 975 (N.D. Cal. 2010); accord Saldana, 2015 U.S. Dist. LEXIS 57665, at *4–5 (dismissing claim for declaratory relief because it is a remedy, not separate a claim). Here, AMG brings a cause of action for declaratory relief. (Dkt. No. 1-1, ¶¶ 18–21.) But the foregoing authorities make it clear that declaratory relief is a remedy and not an independent claim. Accordingly, AMG’s cause of action for declaratory relief fails as a matter of law. Thus, the second cause of action should be dismissed without leave to amend. As an independent basis, in the parties’ Local Rule 7-3 conference, AMG’s counsel admitted that declaratory relief is a remedy for AMG’s cause of action for breach of contract. Thus, for the additional reason that AMG’s cause of action for breach of contract fails (as explained above), AMG’s claim for the remedy of declaratory relief must also fail. Progeny Ventures, Inc. v. W. Union Fin. Servs., Inc., 752 F. Supp. 2d 1127; 1135 (C.D. Cal. 2010) (“Given the failure of Plaintiff’s breach of contract claim, it follows that Plaintiff also fails to establish a basis for declaratory relief.”); Shaterian v. Wells Fargo Bank, N.A., 829 F. Supp. 2d 873, 888 (N.D. Cal. 2011) (a declaratory relief “claim is ultimately a request for relief, and [the plaintiff] is not entitled to such relief absent a viable underlying claim.”). Even if the Court were to find that AMG’s cause of action for breach of contract were valid and that a cause of action for declaratory relief is an independent claim, the Court should still dismiss this claim because it is redundant of the claim for breach of contract. When claims for declaratory relief are duplicative of other claims, then declaratory relief is therefore unnecessary and redundant. See Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990, 1003 Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 20 of 21 Page ID #:144 -13 - FIRM:37625231v1 AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (N.D. Cal. 2010). Similarly, “[d]eclaratory relief should be denied when it will neither serve a useful purpose in clarifying and settling the legal relations in issue nor terminate the proceedings and afford relief from the uncertainty and controversy faced by the parties.” United States v. Washington, 759 F.2d 1353, 1356-57 (9th Cir. 1985) (en banc). Here, AMG’s request for declaratory relief is identical to its claim for breach of contract, and the resolution of the latter would provide AMG the same relief as its cause of action for declaratory relief. Thus, AMG’s cause of action for declaratory relief should be dismissed. See, e.g., Concorde Equity II, 732 F. Supp. 2d at 1003 (dismissing claim for declaratory relief where “Plaintiff’s request for declaratory relief is redundant and duplicative of Plaintiff’s other claims. Plaintiff’s request is identical to the relief sought in the other viable causes of action, and the resolution of those causes of action would afford Plaintiff the exact relief sought in the cause of action for declaratory relief.). IV. CONCLUSION For these reasons, AmeriPride prays that the first, second, and third causes of action for specific performance, declaratory relief, and breach of contract, respectively, be dismissed without leave to amend. Respectfully submitted, DATED: July 25, 2016 EPSTEIN BECKER & GREEN, P.C. By: /s/ Kevin D. Sullivan David Jacobs Kevin D. Sullivan Attorneys for Defendant AMERIPRIDE SERVICES INC. Case 2:16-cv-05146-RGK-AFM Document 10 Filed 07/25/16 Page 21 of 21 Page ID #:145 FIRM:37997439v1 [PROPOSED] ORDER GRANTING AMERIPRIDE SERVICES, INC.’S MOTION TO DISMISS COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA AMG & ASSOCIATES, LLC, a California limited liability company, CASE NO. 2:16-cv-05146-RGK-AFM DEFENDANT AMERIPRIDE SERVICES INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT DATE: August 22, 2016 TIME: 9:00 a.m. CTRM: 850 JUDGE: Hon. R. Gary Klausner Plaintiff, v. AMERIPRIDE SERVICES, INC. a Delaware corporation; CYRIL W. WELCHS; DOES 1 through 25, inclusive, and All Persons Claiming Any Right, Title, Estate, Lien or Interest in the Real Property Described Herein or Any Part Thereof, Defendants. Case 2:16-cv-05146-RGK-AFM Document 10-1 Filed 07/25/16 Page 1 of 2 Page ID #:146 - 2 - FIRM:37997439v1 [PROPOSED] ORDER GRANTING AMERIPRIDE SERVICES, INC.’S MOTION TO DISMISS COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT having considered the parties’ briefing and oral argument on defendant AmeriPride Services, Inc.’s (“AmeriPride”) motion to dismiss the first, second, and third causes of action of plaintiff AMG & Associates, LLC’s (“AMG”) complaint, the Court hereby ORDERS: (1) AmeriPride’s motion to dismiss is GRANTED; and (2) AMG’s first, second, and third causes of action for specific performance, declaratory relief, and breach of contract, respectively, in the complaint are hereby DISMISSED WITHOUT LEAVE TO AMEND. IT IS SO ORDERED. Dated: ___________________ _____________________________ Hon. R. Gary Klausner United States District Court Judge Case 2:16-cv-05146-RGK-AFM Document 10-1 Filed 07/25/16 Page 2 of 2 Page ID #:147