Branzell v. Cal. Cryobank LLC
| Decision Date | 20 August 2020 |
| Docket Number | 2:19-cv-10745-VAP-Ex |
| Citation | 480 F.Supp.3d 1080 |
| Court | U.S. District Court — Central District of California |
| Parties | Bryce BRANZELL, Plaintiff, v. CALIFORNIA CRYOBANK LLC et al., Defendants. |
Alexander Gamez, Brian Mathew Bush, Mallory Whitelaw, Maria L. Weitz, Raymond Paul Boucher, Boucher LLP, Woodland Hills, CA, David S. Toy, David Toy Law Firm, Eric J. Rhine, Pro Hac Vice, Spagnoletti Law Firm, Houston, TX, for Plaintiff.
William F. Sullivan, Timothy D. Reynolds, Paul Hastings LLP, Los Angeles, CA, for Defendants California Cryobank LLC, CCB-NWC LLC.
David P. Pruett, Joseph J. Looney, Carroll Kelly Trotter Franzen and McBride, Long Beach, CA, for Defendant NW Reproductive LLC.
Order GRANTING IN PART and DENYING IN PART Defendants’ (Dkts. 46, 47).
Before the Court are Motions to Dismiss filed by Defendants California Cryobank LLC and CCB-NWC LLC (Dkt. 46) and NW Reproductive LLC1 (Dkt. 47) (together, the "Motions") on July 1, 2020. Plaintiff Bryce Branzell filed opposition on July 22, 2020 (Dkts. 51, 53), and Defendants replied on August 3, 2020 (Dkts. 54, 55). After considering all papers filed in connection with the Motions, the Court finds the matter suitable for resolution without hearing pursuant to Local Rule 7-15. The Court GRANTS IN PART and DENIES IN PART the Motions.
I. BACKGROUND
Plaintiff alleges that, in 2008, he submitted a sperm sample to NW Andrology and Cryobank Inc. ("NW Andrology")2 , doing business as NW Cryobank, as the first step in potentially becoming a donor. (Dkt. 38 ¶ 14). Before leaving NW Andrology's facility, however, Plaintiff had a change of heart and informed a staff member that he did not wish to become a donor and did not want his sperm sample to be medically screened. (Id. ). NW Andrology informed Plaintiff it would destroy his sample. (Id. ¶ 15). According to Plaintiff, however, NW Andrology failed to follow through and retained his sperm as part of its biological inventory. (Id. ¶ 16).
Over the following decade, the corporate entities involved here went through a series of reorganizations. First, in or around November 2008, Defendant NW Reproductive purchased the assets of NW Andrology, allegedly including the latter's tangible property, biological inventory, customer donor agreements, accounts receivable, licenses, and goodwill. (Id. ¶ 20). Plaintiff alleges NW Andrology transferred to NW Reproductive "all agreements and commitments connected to [NW Cryobank], including its agreements with Branzell" (id. ¶ 21) and that NW Reproductive "agreed to assume certain liabilities, including those associated with biological inventory" (id. ¶ 22). Plaintiff also contends the NW Reproductive seamlessly assumed NW Andrology's operations and continued using the same office, personnel, and business name. (Id. ¶ 20). Next, in or around August 2016, NW Reproductive allegedly sold the NW Cryobank business to CCB-NWC LLC3 ("CCB"). (Id. ¶ 30). Plaintiff alleges CCB assumed the liabilities of the NW Cryobank business, including those associated with his sperm sample. (Id. ¶¶ 30, 33).
Around the same time the 2008 asset sale occurred4 , a customer of NW Cryobank named C.C. purchased several vials of sperm and successfully conceived, giving birth to a child, T.C., in July 2009. (Id. ¶¶ 26–29). In August 2018, C.C. submitted a DNA sample from T.C. to a third-party online genetic testing company and discovered T.C. was not, in fact, the biological child of the donor C.C. believed she had chosen. (Id. ¶¶ 34–37). CCB confirmed the mix-up on November 28, 2018 but did not inform C.C. of the actual father's identity. (Id. ). Through the online genetic testing company, C.C. reached out to Plaintiff's relatives and, in January 2019, ultimately connected with Plaintiff himself, at which point it became clear T.C. was Plaintiff's biological child. (Id. ¶¶ 40–44).
In March 2019, Plaintiff's counsel contacted CCB to demand that Defendants identify Plaintiff's sperm sample and seek to discover whether any other NW Cryobank customers may have received the sample in error. (Id. ¶ 49). Plaintiff alleges Defendants refused to take any action. (Id. ). Plaintiff brought this lawsuit on December 19, 2019 (Dkt. 1) and filed the operative Second Amended Complaint (Dkt. 38, the "SAC") on June 3, 2020. The SAC alleges ten claims: (1) negligence; (2) invasion of privacy; (3) trespass to personal property; (4) conversion; (5) breach of fiduciary duty; (6) intentional infliction of emotional distress ("IIED"); (7) negligent infliction of emotional distress ("NIED"); (8) violation of California Business and Professions Code ("CBPC") § 17200 et seq. ; violation of CBPC § 17500 et seq. ; and (10) fraud. (See generally Dkt. 38). Defendants seek to dismiss the SAC in its entirety for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6). (See generally Dkts. 46, 47).
Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr. , 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a 12(b)(6) motion, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when a plaintiff pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
In reviewing the plausibility of a complaint, courts "accept factual allegations in the complaint as true and construe 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). Nonetheless, courts do not "accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig. , 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors , 266 F.3d 979, 988 (9th Cir. 2001) ).
Additionally, claims sounding in fraud are subject to the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure, which require that a plaintiff alleging fraud "state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b) ; see Kearns v. Ford Motor Co. , 567 F.3d 1120, 1124 (9th Cir. 2009). To satisfy the heightened standard under Rule 9(b), the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner , 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must allege "an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP , 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (internal quotation marks omitted); see also Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1106 (9th Cir. 2003) () (internal quotation marks omitted).
Where a motion to dismiss is granted, "leave to amend should be granted ‘unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.’ " DeSoto v. Yellow Freight Sys., Inc. , 957 F.2d 655, 658 (9th Cir. 1992) ). In other words, where leave to amend would be futile, the Court may deny leave to amend. See Desoto , 957 F.2d at 658 ; Schreiber , 806 F.2d at 1401.
Defendants first assert two grounds for dismissal that apply to the SAC broadly—successor liability and ripeness. (See generally Dkts. 46, 47). The Court considers these arguments before turning to arguments specific to each of the SAC's claims.
Defendants argue they are not liable for the alleged misconduct of NW Andrology—conduct that occurred before Defendants acquired NW Cryobank—as Plaintiff fails to plead a viable exception to the general rule of successor nonliability. (See Dkt. 46-1 at 13–16; Dkt. 47 at 15–18). Plaintiff responds that he not only alleges successor liability adequately but also that certain claims relate to events that took place after Defendants’ respective asset purchases. (See generally Dkts. 51, 53).
In California, "[t]he general rule of successor nonliability provides that where a corporation purchases, or otherwise acquires by transfer, the assets of another corporation, the acquiring corporation does not assume the selling corporation's debts and liabilities." Fisher v. Allis–Chalmers Corp. Prod. Liab. Tr. , 95 Cal. App. 4th 1182, 1188, 116 Cal.Rptr.2d 310 (2002) (citing Ray v. Alad Corp. , 19 Cal.3d 22, 28, 136 Cal.Rptr. 574, 560 P.2d 3 (1977) ). There are four exceptions to the rule: where "(1) there is an express or implied agreement of assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3) the purchasing corporation is a mere continuation of the seller, or (4) the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's debts." Ray , 19 Cal.3d at 28, 136 Cal.Rptr. 574, 560 P.2d 3. "[T]he liberal requirements of Rule 8(a)(2) apply to ... successor-in-interest...
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