Silver v. Group
| Decision Date | 19 May 2011 |
| Docket Number | CV 10-4 961 RSWL (AJWx) |
| Court | U.S. District Court — Central District of California |
| Parties | Joel Silver; Silver Pictures, Inc.; and Silver Slate, LLC, Plaintiffs, v. The Goldman Sachs Group, Inc.; Alliance Films Inc.; and Momentum Pictures USA, Inc., Defendants. |
On May 10, 2011, Defendants The Goldman Sachs Group, Inc., Alliance Films Inc. and Momentum Pictures USA, Inc.'s Motion to Dismiss the First Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) came on for regular calendar before this Court [23]. The Court, having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:
The Court hereby DENIES Defendants' Motion to Dismiss the First Amended Complaint.
In a Rule 12(b)(6) motion to dismiss, the Court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the non-moving party. Klarfeld v. United States, 944 F.2d 583, 585 (9th Cir. 1991). A dismissal can be based on the lack of cognizable legal theory or the lack of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). However, a party need not state the legal basis for his claim, only the facts underlying it. McCalden v. California Library Ass'n, 955 F.2d 1214, 1223 (9th Cir. 1990).
Federal Rule of Civil Procedure 9(b) demands that, when averments of fraud are made, the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct, such that they can defend against the charge and not just deny having done anything wrong. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). As such, averments of fraud must be accompanied by "the who, what, when, where, and how" of the misconduct charged. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997).
Defendants The Goldman Sachs Group, Inc., Alliance Films Inc. and Momentum Pictures USA, Inc. (collectively, "Defendants") move to dismiss PlaintiffsJoel Silver, Silver Pictures, Inc., and Silver Slate, LLC's (collectively, "Plaintiffs") First Amended Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6).
Specifically, Defendants argue that Plaintiffs have failed to allege plausible claims with regard to the seven causes of action asserted by Plaintiffs in the First Amended Complaint: (1) Breach of Written Contract against Defendants Alliance Films Inc. ("Alliance") and Momentum Pictures USA, Inc. ("Momentum"); (2) Breach of Oral Contract against Defendant The Goldman Sachs Group, Inc. ("Goldman"); (3) Breach of Oral Contracts against Defendant Goldman; (4) Breach of Fee Agreement against Defendants Goldman and Alliance; (5) Quantum Meruit against Defendants Goldman and Alliance; (6) Promissory Fraud against Defendants Goldman and Alliance; and (7) Negligent Misrepresentation against Defendants Goldman and Alliance.
As a preliminary matter, the Court hereby DENIES Defendants' Request for Judicial Notice. Fed. R. Evid. 201.
The Court DENIES Defendants' Motion to Dismiss as to Plaintiffs' claims for Breach of Written Contract against Defendants Alliance and Momentum.
To withstand a Motion to Dismiss under Rule 12(b)(6), Plaintiffs need only plead the underlyingfacts to support a claim upon which relief may be granted. See McCalden v. California Library Ass'n, 955 F.2d 1214, 1223 (9th Cir. 1990). In California, in order to state a claim for breach of contract a plaintiff must plead: (1) the existence of the contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. First Commercial Mortgage Co. v. Reece, 8 9 Cal. App. 4th 731, 745 (2001).
The Court finds that Plaintiffs have plead sufficient facts here to state a claim for Breach of Written Contract against Defendants Alliance and Momentum. Plaintiffs adequately set forth facts alleging the existence of a contract between Plaintiffs Silver Pictures, Inc. ("Silver Pictures") and Silver Slate, LLC ("Silver Slate") and these two Defendants, the Written Agreement, that Plaintiffs Silver Pictures and Silver Slate performed said Agreement, that Defendants Alliance and Momentum breached this Agreement due to the failure to use "commercially reasonable efforts" to arrange for the funds necessary to make the payment due pursuant to this Agreement, and that Plaintiffs have suffered damages resulting from this breach. See id.
As the Court must presume all factual allegations to be true and draw all reasonable inferences in favor of the non-moving party, Klarfeld, 944 F.2d at 585, the Court finds that Plaintiffs have pled sufficient factsto support this claim for Breach of Written Contract.
The Court DENIES Defendants' Motion to Dismiss Plaintiffs' Second and Third Causes of Action for Breach of Oral Contracts against Defendant Goldman.
The Court finds that Plaintiffs have plead sufficient facts here to state claims for Breach of Oral Contracts against Defendant Goldman. Plaintiffs adequately set forth facts alleging the existence of these oral contracts, the Silver Deal, the Forbearance Agreement and the Performance Agreement, as the First Amended Complaint sufficiently sets forth that the Parties entered into these agreements and that Defendant Goldman manifested an intent to be bound. In addition, the Court finds that the First Amended Complaint sufficiently pleads that Plaintiffs performed these oral contracts, that Defendant Goldman breached these contracts, and that Plaintiffs have suffered damages resulting from this breach. See First Commercial Mortgage Co., 89 Cal. App. 4th at 745.
Defendants argue Plaintiffs' claims here should be dismissed due to the presence of the Written Agreement. Specifically, Defendants cite to the parol evidence rule, and argue that because Plaintiffs' Breach of Oral Contracts claims arise from previous oral agreements that concern the same subject matter as that of thefinal, integrated Written Agreement, these claims effectively contradict the terms of the Written Agreement and should therefore be dismissed.
California law presumes that a written contract supersedes all prior or contemporaneous oral agreements. See Cal. Civ. Code §§ 1625, 1856. As such, the parol evidence rule prevents parties from presenting evidence of "previous negotiations and agreements" between the parties that would contradict, defeat, modify or otherwise vary the meaning or legal effect of an integrated, written agreement. Cal. Civ. Code § 1856(a). See Kett v. Graeser, 241 Cal. App. 2d 571, 574 (1966).
The Court finds that Plaintiffs' sufficiently allege claims for Breach of Oral Contracts at this motion to dismiss stage. While the Written Agreement does contain an express integration clause,1 this clause specifically refers solely to prior agreements between the parties to the Written Agreement: Plaintiffs Silver Pictures and Silver Slate, and Defendants Alliance and Momentum. Here, Plaintiffs bring these claims forBreach of Oral Contracts against Defendant Goldman based on prior oral agreements between Plaintiffs and this Defendant, who is not a party to the Written Agreement. As such, taking the allegations in the First Amended Complaint as true, the Court finds that Plaintiffs' claims here are not based on prior oral negotiations and agreements between the collective parties to the Written Agreement, and therefore Defendants have not met their burden to show that these claims should be dismissed because they are based on oral agreements that contradict the terms of the Written Agreement. Cal. Civ. Code § 1856(a).
Therefore, the Court finds that Plaintiffs' claims for Breach of Oral Contracts are sufficient to withstand a Rule 12(b)(6) Motion at this time.
The Court DENIES Defendants' Motion to Dismiss the Fourth Cause of Action for Breach of Fee Agreement.
In order to state a claim for breach of contract, Plaintiffs must allege the existence of a valid contract, that is, a contract supported by proper consideration. See Jinsoo Kim v. Son, 2009 WL 597232, at *2 (Cal. App. March 9, 2009). The general rule is that past consideration cannot support a contract. See Passante v. McWilliam, 53 Cal. App. 4th 1240, 1247 (1997).
The Court finds that Plaintiffs plead sufficientfacts here to state a claim for Breach of Fee Agreement. Specifically, the Court finds that the First Amended Complaint sufficiently sets forth facts to support the Plaintiffs' claim that there was a valid contract here between the Parties, the Fee Agreement, as the First Amended Complaint sufficiently sets forth that the Fee Agreement is supported by proper consideration. The Court also finds that Defendants have not met their burden to establish that the Fee Agreement is an improper and unenforceable modification of the Written Agreement, as the First Amended Complaint states the Fee Agreement involves different parties than those party to the Written Agreement and concerns a different subject matter than that encompassed by the Written Agreement.
As such, taking the allegations in the First Amended Complaint as true, the Court finds that Plaintiffs have sufficiently alleged facts here to state a claim for Breach of Fee Agreement.
The Court DENIES Defendants' Motion to Dismiss as to Plaintiffs' Fifth Cause of Action for Quantum Meruit.
Defendants argue this claim is barred under California law because of the Written Agreement, and that it is also time-barred under California's two-year statute of limitations for obligations...
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