Williamson v. Reinalt-Thomas Corp., Case No.: 5:11-CV-03548-LHK

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Decision Date25 April 2012
Docket NumberCase No.: 5:11-CV-03548-LHK
PartiesGEOFF WILLIAMSON, individually and on behalf of a class of similarly situated individuals, Plaintiffs, v. THE REINALT-THOMAS CORPORATION, a Michigan corporation d/b/a DISCOUNT TIRE COMPANY/AMERICA'S TIRE CO.; SOUTHERN CALIFORNIA DISCOUNT TIRE CO., INC., a California corporation; and DOES 1 to 10 inclusive, Defendants.
ORDER GRANTING MOTION TO DISMISS

This is a putative class action brought by Plaintiff Geoff Williamson, on behalf of himself and all others similarly situated, against Defendants The Reinalt-Thomas Corporation doing business as Discount Tire Company/America's Tire Company ("Reinalt"), Southern California Discount Tire Company Inc. ("SCDT"), and an unnamed number of Doe Defendants. Plaintiff's Second Amended Complaint ("SAC") brings against Defendants claims of: (1) Conversion, Restitution, and Unjust Enrichment; (2) Breach of Oral Contract; (3) Violation of California's False Advertising Law, Business and Professions Code §§ 17500, et seq. ("FAL"); (4) Violation of California's Consumers Legal Remedies Act, Civil Code §§ 17500, et seq. ("CLRA"); (5) Violation of California's Unfair Competition Law, Business and Professions Code §§ 17200, etseq. ("UCL"); (6) Fraud; (7) Negligence; and (8) Negligent Misrepresentation. See ECF No. 33. Before the Court is Defendants' motion to dismiss ("Mot.") Plaintiff's SAC. ECF No. 40. The Court finds this matter appropriate for resolution without oral argument pursuant to Civil Local Rule 7-1(b) and VACATES the hearing and case management conference currently set for April 26, 2012. Having considered the parties' submissions and arguments, the Court grants Defendants' motion to dismiss.

I. BACKGROUND
A. Factual Background

This case arises out of Plaintiff's purchase of a set of tires from Defendants' retail store. The gravamen of Plaintiff's complaint is that he was charged an undisclosed service fee to dispose of his old tires after Defendants installed the newly purchased tires on Plaintiff's car. On January 27, 2011, Plaintiff went to Defendants' retail tire store to purchase two new tires for his vehicle. SAC ¶ 33. A clerk at Defendants' tire store "verbally quoted the per-tire price of certain tires to Plaintiff." Id. ¶ 34. Plaintiff selected the Riken Raptor tire, which the clerk quoted at the cost of "$72.00 per tire." Id. Plaintiff informed the clerk that he wanted two of the Riken Raptor tires and, in addition, purchased "tire certificates" or "road hazard insurance" at $9.50 for each certificate. Id. ¶ 35. The clerk informed Plaintiff that "the total cost of the tires and certificates, with taxes and installation, would be $216.54." Id.

At the time of the purchase, Plaintiff alleges that the clerk did not inform Plaintiff that he would also be charged an "additional [old tire] 'disposal fee' of $2.50 per tire." Id. Plaintiff further alleges that Plaintiff "was not aware of th[e] additional . . . fee . . . [and] simply assumed that what the clerk told him was true . . . that the cost total was the proper mathematical calculation for the tires and certificates, with taxes and installation." Id. This "additional fee" of $2.50 per tire was included in the total price of $216.54 quoted by Defendants' sales clerk at the time of purchase. Plaintiff in fact paid $216.54, the amount quoted by the clerk. Id. ¶ 36.

Plaintiff was not given a receipt until after Defendant installed the newly purchased tires and returned Plaintiff's car to him. Id. ¶¶ 37-38. After the new tires were installed, the clerk handed Plaintiff the receipt, which was "folded [] three ways" inside an envelope. Id. ¶ 37. Thetire disposal fee was disclosed as a line item on the receipt. See id. ¶¶ 28, 30, 38. Plaintiff alleges that the clerk did not mention the $2.50 tire disposal fee to Plaintiff at any point during either the pre-installation purchase or the post-installation discussions with the clerk. Plaintiff left Defendants' store without examining the receipt. Id. ¶ 38. Several months later, Plaintiff discovered the $2.50 disposal fee per tire and commenced this action. Id.; ECF No. 1.

B. Procedural Background

Plaintiff brings this suit on behalf of a class of similarly situated individuals, consisting of all persons who were charged a "disposal" fee in connection with any transaction with Defendants. SAC ¶ 41. Plaintiffs Geoff Williamson and Ron Ballard filed the original complaint on July 19, 2011. ECF No. 1. Defendants filed a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), ECF No. 13, but withdrew the motion on February 9, 2012. Upon the parties' stipulation and with the Court's leave, Plaintiff filed his first amended complaint ("FAC") on December 1, 2011. See ECF Nos. 21-23. Ron Ballard was not named as a Plaintiff in the FAC. Defendants filed a motion to dismiss Plaintiff's FAC on January 13, 2012. ECF No. 26. During a case management conference held on February 2, 2012, the Court granted Plaintiff leave to file a second amended complaint ("SAC"), which Plaintiff had previously filed on January 31, 2012. ECF Nos. 33, 36. On March 2, 2012, Defendants filed a motion to dismiss Plaintiff's SAC. ECF No. 40.

II. LEGAL STANDARDS
A. Motion to Dismiss Under Rule 12(b)(6)

A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal under Rule 12(b)(6) may be based on either (1) the "lack of a cognizable legal theory," or (2) "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). While "'detailed factual allegations'" are not required, a complaint must include sufficient facts to "'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007)). "A claim hasfacial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

For purposes of ruling on a Rule 12(b)(6) motion to dismiss, the Court accepts all allegations of material fact as true and construes the pleadings in the light most favorable to the plaintiffs. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The Court need not, however, accept as true pleadings that are no more than legal conclusions or the "'formulaic recitation of the elements' of a cause of action." Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); accord Iqbal, 129 S. Ct. at 1949-50.

B. Federal Rule of Civil Procedure 9(b)

Claims sounding in fraud are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Under the federal rules, a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b). To satisfy this standard, 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). In contrast, the heightened pleading requirement of Rule 9(b) does not apply to allegations regarding the defendant's state of mind. Thus, knowledge and intent need only be alleged generally to state a valid claim for fraud. See Fed. R. Civ. Pro. 9(b) ("Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.").

C. Leave to Amend

Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 to facilitate decision on the merits, rather than on the pleadings or technicalities." Lopez v. Smith, 203 F.3d1122, 1127, 1140 (9th Cir. 2000) (en banc) (internal quotation marks and alterations omitted). When dismissing a complaint for failure to state a claim, "'a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.'" Id. at 1127 (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). Generally, leave to amend shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).

III. DISCUSSION

Defendants move to dismiss Plaintiff's common law claims on grounds that: (1) Plaintiff fails to state a claim for conversion because California courts have not recognized a claim of conversion for an overcharge; (2) Plaintiff fails to state claims for restitution and unjust enrichment because there is no cause of action for restitution or unjust enrichment in California; (3) Plaintiff fails to state a claim for breach of oral contract because Plaintiff fails to allege the existence or breach of an oral contract; (4) Plaintiff fails to state a claim for fraud and negligent misrepresentation because Plaintiff fails to allege the elements of fraud and negligent misrepresentation; and...

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