Soil Retention Prods., Inc. v. Brentwood Indus., Inc.

• Citation: 521 F.Supp.3d 929
• Decision Date: 23 February 2021
• Docket Number: Case No.: 3:20-cv-02453-BEN-WVG
• Court: U.S. District Court — Southern District of California
• Parties: SOIL RETENTION PRODUCTS, INC., a California corporation, Plaintiff, v. BRENTWOOD INDUSTRIES, INC., a Pennsylvania corporation; Does 1-25, inclusive, Defendant.

521 F.Supp.3d 929

SOIL RETENTION PRODUCTS, INC., a California corporation, Plaintiff,

v.BRENTWOOD INDUSTRIES, INC., a Pennsylvania corporation; Does 1-25, inclusive, Defendant.

Case No.: 3:20-cv-02453-BEN-WVG

United States District Court, S.D. California.

Signed February 23, 2021

Michael R. Gibson, Higgs, Fletcher and Mack, San Diego, CA, for Plaintiff.

David Wayne Corneil, Matthew Lawrence Marshall, Clark Hill LLP, San Diego, CA, for Defendant.

ORDER:

(1) GRANTING DEFENDANT'S MOTION TO DISMISS THE COMPLAINT PURSUANT TO RULE 12(b)(6) OF THE FEDERAL RULES OF CIVIL PROCEDURE

(2) DENYING DEFENDANT'S MOTION TO STRIKE PUNITIVE DAMAGES PURSUANT TO RULE 12(f) OF THE FEDERAL RULES OF CIVIL PROCEDURE

[ECF No. 3, 4, 6]

ROGER T. BENITEZ, United States District Judge

I. INTRODUCTION

Plaintiff SOIL RETENTION PRODUCTS, INC., a California corporation ("Plaintiff" or "SRP") brings this action for, inter alia , breach of contract against Defendant BRENTWOOD INDUSTRIES, INC., a Pennsylvania corporation ("Defendant" or "Brentwood"). Complaint, ECF No. 1-2 ("Compl.").

Before the Court is Defendant's Motion to Dismiss the Complaint Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Motion to Strike the Punitive Damages Pursuant to Rule 12(f) of the Federal Rules of Civil Procedure (the "Motion"). ECF No. 3. Plaintiff opposed. ECF No. 4. Defendant replied. ECF No. 6.

The motions were 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. 7. After considering the papers submitted, supporting documentation, and applicable law, the Court GRANTS Defendant's Motion to Dismiss and DENIES Defendant's Motion to Strike as moot. Plaintiff has fourteen (14) days to file an amended complaint with respect to any claims for which the Court has granted leave to amend.

II. BACKGROUND

A. Statement of Facts ¹

Plaintiff "manufactures plantable concrete systems, including Drivable Grass®, Verdura® and Enviroflex® systems." Compl. at 2,² ¶ 6. Starting in 2006, Plaintiff engaged Defendant to help in the design and manufacturing of vacuum formed molds that Plaintiff would use in the manufacturing process. Id. at 4, ¶ 7.

As time passed, Plaintiff sought to expand and streamline its manufacturing processes and distribution channels for its patented product by entering into license agreements with third parties to expand its territory throughout the United States. Compl. at 4, ¶ 7. In order to accomplish this, Plaintiff needed modifications to its production molds and turned to Defendant. Id.

In May 2018, Plaintiff and Defendant initiated discussions in which Plaintiff detailed its business plan and requested Defendant's assistance in modifying the molds so Plaintiff's plan could be executed. Compl. at 4, ¶ 8. Plaintiff alleges that Defendant "understood SRP was relying upon it to timely deliver modified production molds." Id. According to Plaintiff, these discussions transpired for several months until August 2018, when Plaintiff asked if Defendant could employ injection molding to create the molds. Id. Plaintiff pleads that "David Reinhart of Brentwood advised SRP the process would be too expensive (up to $350,000) and he was confident Brentwood could accomplish SRP's goals using Thermoforming to create the molds." Id.

On September 7, 2018, Defendant sent Plaintiff a written quote to design and make modified molds for Plaintiff at a cost of $5,656.90, which Plaintiff accepted the following day." Compl. at 4, ¶ 9. "By September 20, 2018, the parties had agreed upon terms for a sample mold, production mold, and related parts." Id. at 4, ¶ 10. On September 24, 2018, Plaintiff accepted the terms, agreeing that Defendant would supply Plaintiff with a sample redesign of the mold at a cost of $5,656.90, using thermaforming, and this agreement was confirmed by written purchase order. Id.

Plaintiff alleges that on December 11, 2018, "[a]fter multiple, unexplained delays," Defendant forwarded Plaintiff the samples. Compl. at 4, ¶ 11. "Once textures were chosen for the sample mold in January 2019, it took Brentwood until March 2019 to ship the sample molds." Id.

Plaintiff alleges that by April 2019, Defendant "committed to manufacturing the production mold and parts within 8-9 weeks." Compl. at 4-5, ¶ 12. Plaintiff further pleads that in late June 2019, it received the items and informed Defendant's representative that the features did not conform to the shop drawing Plaintiff had approved. Id. Plaintiff alleges that the next month, Defendant's representative visited Plaintiff's manufacturing plant in Perris, California to deliver new samples and to learn more about Plaintiff's needs. Id. at 5, ¶ 12. However, Plaintiff rejected Defendant's samples. Id. Plaintiff pleads that on August 14, 2019, "[f]ollowing more delays and excuses," Plaintiff received the further modified materials and immediately reported problems to Defendant. Id. at 5, ¶ 13. Plaintiff alleges that "[a]round this same time, SRP learned Brentwood was developing a product to compete with SRP's Drivable Grass®." Compl. at 5, ¶ 14.

"In September 2019, after receiving third-party feedback [Defendant] quoted [Plaintiff] for a price for injection molding." Compl. at 5, ¶ 15. "Nevertheless, Brentwood chose to continue trying Thermoforming." Id. In October 2019, "[f]ollowing additional discussions between the parties," Defendant sent Plaintiff more sample molds, which Plaintiff approved for etching. Id. In December 2019, Plaintiff received production molds, which Plaintiff alleges were (1) received over a year after placing its order and (2) of an inferior quality to the samples Plaintiff had approved because they crumbled easier than prior samples and could not be used. Id.

In January 2020, Plaintiff placed another order with Defendant for vacuum formed molds. Compl. at 5, ¶ 16. In February 2020, Plaintiff received the molds it had ordered but alleges they were inferior or weaker than the previous molds. Plaintiff alleges that prior to hiring Defendant to make the Thermoforming molds, it had relied upon and used Defendant's vacuum formed molds. Id. However, Plaintiff alleges that the vacuum formed molds Defendant provided in February 2020 were inferior (weaker) than the vacuum formed molds Defendant had been providing since 2006. Id. at 5, ¶ 17. Plaintiff alleges that "[t]his doubled the amount of time required to manufacture [its] products, which has added to [its] damages through increased production costs and additional manufacturing delays." Id. Plaintiff claims it has sustained over $1.4 million in unspecified damages. Compl. at 6, ¶ 25.

B. Procedural History

On May 26, 2020, Plaintiff filed this action against Defendant in the San Diego Superior Court, alleging nine causes of action³ for (1) breach of contract; (2) fraud; (3) negligent misrepresentation; (4) unfair business practices in violation of California Business and Professions Code, section 17200 et seq. , (the "UCL"); (5) breach of covenant of good faith and fair dealing; (6) intentional interference with contractual relations; (7) negligent interference with prospective economic relations; (8) intentional interference with prospective economic relations; and (9) misappropriation of trade secrets. ECF No. 1 at 2, ¶¶ 1-2. The prayer for relief also includes a claim for punitive damages. Compl. at 2, ¶ 3.

On December 23, 2020, Defendant filed the instant motion to dismiss and strike the complaint. Motion, ECF No. 3 ("Mot."). On January 25, 2021, Plaintiff filed its opposition. Opposition, ECF No. 4 ("Oppo."). On February 1, 2021, Defendant replied. Reply, ECF No. 6 ("Reply").

III. LEGAL STANDARD

A. Motion to Dismiss

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure (" Rule 12(b)(6)"), a complaint must be dismissed when a plaintiff's 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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (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, 127 S.Ct. 1955. On a motion to dismiss, a court accepts as true a plaintiff's well-pleaded factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek , 519 F.3d at 1031. However, a court is not required to accept as true legal conclusions couched as factual allegations. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

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). Consequently, "[p]laintiffs 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 § 9:212 a (The Rutter Group April 2020) Phillips, § 9:212a; Johnson v. Fed. Home Loan Mortg. Corp. , 793 F.3d 1005, 1007–08 (9th Cir. 2015) (not...