Indian Hills Holdings, LLC v. Frye

Decision Date15 December 2021
Docket Number3:20-cv-00461-BEN-AHG
CourtU.S. District Court — Southern District of California
PartiesINDIAN HILLS HOLDINGS, LLC, a California limited liability company, Plaintiff, v. CHRISTOPHER FRYE, an individual; CONSTRUCTION & DESIGN PROFESSIONALS, CORP., an Arizona domestic for profit business corporation, Defendant.

INDIAN HILLS HOLDINGS, LLC, a California limited liability company, Plaintiff,

CHRISTOPHER FRYE, an individual; CONSTRUCTION & DESIGN PROFESSIONALS, CORP., an Arizona domestic for profit business corporation, Defendant.

No. 3:20-cv-00461-BEN-AHG

United States District Court, S.D. California

December 15, 2021


[ECF Nos. 19, 23, 24]



Plaintiff INDIAN HILLS HOLDINGS, LLC, a California limited liability company ("Plaintiff or "IHH") alleges that Defendants CONSTRUCTION & DESIGN PROFESSIONALS CORP., an Arizona corporation ("CDP"), and CHRISTOPHER FRYE, an individual and the owner of CDP ("Mr. Frye") (collectively, "Defendants") took Plaintiffs money in exchange for promising to provide Plaintiff with goods. See generally Complaint, ECF No. 1 ("Compl."). However, even though Plaintiff sent Defendants the money, Plaintiff never received the goods, and Defendants have not refunded Plaintiffs money. Id.

Before the Court is Mr. Frye's Motion to Dismiss (the "Motion"). ECF No. 19. The


Motion was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 24. After considering the papers submitted, supporting documentation, and applicable law, the Court DENIES-IN-PART Mr. Frye's Motion.


This case involves a tripartite relationship pursuant to which IHH paid Defendants to purchase Cultivation "Adult" Extreme Cubes (the "Cubes"), [1] and Defendants, in turn, contracted with ICT Centurion Investments, LLC, a suspended Colorado limited liability company ("ICT")[2], to sell Defendants the Cubes it planned to sell to Plaintiff. Motion, ECF No. 15 ("Mot.") at 2:4-14. When ICT rescinded its contract with Defendants and sold the Cubes to another party, Defendants were unable to deliver the Cubes to Plaintiff but refused to refund the amount Plaintiff had already paid. Id.

A more detailed factual history was included in the Court's most recent order on Plaintiffs Motion for Default Judgment and is incorporated herein. See Indian Hills Holdings, LLC v. Christopher Frye, No. 3:20-cv-00461-BEN-AHG, 2021 WL 5360956, at *2-5 (S.D. Cal. Nov. 17, 2021).

As pertains to the instant Motion, on August 5, 2021, Plaintiff filed a Request to Enter CDP's Default on the basis that CDP failed to file a responsive pleading within twenty-one (21) days. ECF No. 11; see also Fed. R. Civ. P. 12(a)(1), 55. On August 6, 2021, the Clerk of the Court entered CDP's default accordingly. ECF No. 12.

On August 18, 2021, Mr. Frye signed a Waiver of Service, meaning he had sixty (60) days from signing the waiver, or until Monday, October 18, 2021, to respond to the


Complaint. ECF No. 13; see also Fed. R. Civ. P. 4(d)(3).

On September 8, 2021, Plaintiff filed a Motion for Default Judgment against CDP, which was scheduled to be heard on Monday, October 18, 2021, which was also the deadline for Mr. Frye to respond to the Complaint. ECF No. 15. On October 6, 2021, before the hearing date and deadline, Plaintiff filed a Request for Entry of Default as to Mr. Frye. ECF No. 16. However, because Mr. Frye had until October 18, 2021 to respond, the Court did not enter Mr. Frye's default.

On October 15, 2021, the Friday before the hearing on Plaintiffs Motion for Default Judgment against CDP, Mr. Frye filed the instant "Answer to Complaint and Motion to Dismiss." ECF Nos. 18, 19. This document was deficient in a number' of respects[3]; however, the Court issued a Discrepancy Order, accepting it Nunc Pro Tunc and setting a hearing date of Monday, November 15, 2021, at 10:30 a.m. ECF No. 18. On October 27, 2021, Plaintiff timely opposed Mr. Frye's Motion. ECF No. 23. To date, no reply brief has been submitted.

On November 17, 2021, the Court granted Plaintiffs Motion for Default Judgment against CDP. ECF No. 25. That same day, the Clerk of the Court entered judgment in favor of Plaintiff and against CDP as to Plaintiffs claims for breach of contract and unjust enrichment in the following amounts:



Compensatory Damages:

$47, 000.00

Attorney's Fees:

$8, 070.00


$2, 646.05


$57, 716.05



Mr. Frye moves to dismiss the Complaint by arguing that (1) the Court lacks subject matter jurisdiction and (2) Plaintiffs claims fail to state a claim for relief.

A. Motion to Dismiss for Lack of Subject Matter Jurisdiction

Rule 12(b)(1) of the Federal Rules of Civil Procedure ("FRCP") allows a defendant to seek dismissal of a claim or lawsuit by asserting the defense of lack of subject matter jurisdiction. Federal courts are courts of limited jurisdiction; thus, district courts only possess "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Consequently, district courts are presumed to lack jurisdiction unless the Constitution or a statute expressly provides otherwise. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). Article III of the United States Constitution limits the subject matter jurisdiction of federal courts to (1) legal and equitable cases "arising under this Constitution, the Laws of the United States, and Treaties made" and (2) controversies, inter alia, to which the United States is a party, between two or more states, and citizens of different states. U.S. Const. Art, III, § 2. The "case or controversy" requirement of Article III requires courts to find that a case presents a "justiciable" controversy by determining that (1) the plaintiff has demonstrated standing, "including 'an injury that is concrete, particularized, and imminent rather than conjectural or hypothetical, "' and (2) the case is "ripe," or in order words, "not dependent on 'contingent future events that may not occur as anticipated, or indeed may not occur at all."' Trump v. New York, 14 S.Ct. 530, 534-35 (2020); see also Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 128 n.8 (2007) (noting that standing and ripeness become the same question when a licensee seeks a declaration of invalidity).

As to the requirement that a case arises under a law of the United States, generally, federal subject matter jurisdiction exists due to statutory authorization resulting from the presence of a federal question, see 28 U.S.C. § 1331, or complete diversity between the parties, see 28 U.S.C. § 1332,


If a court determines at any time it lacks subject matter-jurisdiction under Article III or a federal statute, it "must dismiss the action." Fed.R.Civ.P. 12(h)(3). "Dismissal for lack of subject matter jurisdiction is appropriate if the complaint, considered in its entirety, on its face fails to allege facts sufficient to establish subject matter jurisdiction." In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984-85 (9th Cir. 2008). The party seeking to establish federal jurisdiction bears the burden of establishing it. McNutt v. Gen. Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189 (1936).

B. Motion to Dismiss for Failure to State a Claim

Under FRCP 12(b)(6), a complaint must be dismissed when a plaintiffs allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to dismiss, a court accepts as true a plaintiffs well-pleaded factual allegations and construes all factual inferences in the light most favorable to the plaintiff. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519F.3d 1025, 1031 (9th Cir. 2008). However, a court is not required to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with it. Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, under the incorporation by reference doctrine, the court may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading" without converting a motion to dismiss to a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds


by Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119, 1121 (9th Cir. 2002). The 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)." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). "Plaintiffs may plead themselves out of court by attaching exhibits inconsistent with their claims because the court may disregard contradictory allegations." Phillips & Stevenson, California Practice Guide: Federal Civil Procedure Before Trial § 9:212a (The Rutter Group April 2020); Johnson v. Fed. Home Loan Mortg. Corp., 793 F.3d 1005, 1007-08 (9th Cir. 2015) (noting that courts "need not accept as true allegations contradicting documents that are referenced in the complaint"). Courts may also consider any statements made in a pleading or motion, including concessions...

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