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Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 1 of 29 Page ID #:192

1 SAUL D. BRENNER (SBN 130909)


sbrenner@loeb.com
2 LOEB & LOEB LLP
10100 Santa Monica Blvd., Suite 2200
3 Los Angeles, CA 90067
Telephone: 310.282.2000
4 Facsimile: 310.282.2200
5 Attorneys for Defendants
ANIMAL LOGIC ENTERTAINMENT, LLC,
6 and ZAREH NALBANDIAN
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
10
11 JASON LUST, an individual, ) Case No.: 2:17-CV-00308-JAK
) (AFMx)
12 Plaintiff, )
) Assigned to Hon. John A. Kronstadt
13 v. )
) MEMORANDUM OF POINTS
14 ANIMAL LOGIC ENTERTAINMENT ) AND AUTHORITIES IN
US, d/b/a ANIMAL LOGIC ) SUPPORT OF DEFENDANTS
15 ENTERTAINMENT, LLC, a California ) MOTION:
limited liability corporation; ZAREH )
16 NALBANDIAN, an individual; and ) (1) TO DISMISS THE SECOND,
DOES 1 through 20, inclusive, ) THIRD, FOURTH AND SIXTH
17 ) CAUSES OF ACTION IN
Defendants. ) PLAINTIFFS COMPLAINT;
18 )
) AND
19 )
) (2) FOR A MORE DEFINITE
20 ) STATEMENT OF THE FIFTH
) CAUSE OF ACTION IN
21 ) PLAINTIFFS COMPLAINT
)
22 ) Date: May 8, 2017
) Time: 8:30 a.m.
23 ) Place: Courtroom 10B
) First Street Courthouse
24 ) 350 W. First Street
) Los Angeles, CA 90012
25 )
)
26
27
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership
AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 2 of 29 Page ID #:193

1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ........................................................................................1
4 II. STATEMENT OF FACTS ...........................................................................2
5 A. PROCEDURAL HISTORY ................................................................2
6 B. PERTINENT ALLEGATIONS IN COMPLAINT ..............................2
7 III. DISCUSSION ...............................................................................................4
8 A. OVERVIEW OF RELEVANT STANDARDS FOR
MOTIONS TO DISMISS ...................................................................4
9
B. PLAINTIFFS SECOND, THIRD, FOURTH AND SIXTH
10 CAUSES OF ACTION SHOULD BE DISMISSED ...........................6
11 1. Plaintiffs Second Cause of Action, for Breach of the
Covenant of Good Faith and Fair Dealing, Fails to State
12 a Viable Claim ..........................................................................6
13 2. The Third Cause of Action in the Complaint, for Breach
of Fiduciary Duty, Fails to State a Claim on Which
14 Relief Can Be Granted ..............................................................9
15 3. Plaintiffs Fourth Cause of Action Fails to Satisfy the
Heightened Pleading Requirements of a Fraud Claim ............. 13
16
4. Plaintiffs Sixth Cause of Action Fails Because Plaintiff
17 Has Pled Insufficient Facts to Sustain an Accounting
Claim ...................................................................................... 18
18
C. PLAINTIFF SHOULD BE ORDERED TO PROVIDE A
19 MORE DEFINITE STATEMENT OF HIS FIFTH CAUSE
OF ACTION, PURSUANT TO FED. R. CIV. P. 12(E) .................... 19
20
IV. CONCLUSION .......................................................................................... 21
21
22
23
24
25
26
27
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership i AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 3 of 29 Page ID #:194

1
TABLE OF AUTHORITIES
2
Page(s)
3
4 Cases

5 Alliance Mortgage Co. v. Rothwell,


10 Cal. 4th 1226 (1995) ..................................................................................... 17
6
7 Alvarez v. Chevron Corp.,
656 F.3d 925 (9th Cir. 2011) ................................................................................6
8
Aragon-Haas v. Family Sec. Ins. Servs., Inc.,
9 231 Cal. App. 3d 232 (1991) ............................................................................ 7, 8
10
Ashcroft v. Iqbal,
11 556 U.S. 662 (2009) ......................................................................................... 4, 5
12 Atlantique Prods. v. Ion Media Networks,
13 644 F. Appx 800 (9th Cir. 2016) ....................................................................... 17
14 Autry v. Republic Productions,
15 30 Cal. 2d 144 (1947) ........................................................................................ 12

16 Avidity Partners, LLC v. State of Calif.,


221 Cal. App. 4th 1180 (2013) .............................................................................7
17
18 Balistreri v. Pacifica Police Dept,
901 F.2d 696 (9th Cir. 1990) ................................................................................5
19
Bank of California v. Connolly,
20
36 Cal. App. 3d 350 (1973) ................................................................................ 12
21
Bell Atl. Corp. v. Twombly,
22 550 U.S. 544 (2007) ....................................................................................... 5, 18
23
Bibiji Inderjit Kaur Puri v. Sopurkh Kaur Khalsa,
24 2017 U.S. App. LEXIS 287 (9th Cir. Jan. 6, 2017) ............................................ 15
25 Billups v. Tiernan,
26 11 Cal. App. 3d 372 (1970) ................................................................................ 12
27 Bionghi v. Metro. Water Dist.,
70 Cal. App. 4th 1358 (1999) ........................................................................... 7, 8
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership ii AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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TABLE OF AUTHORITIES
1
Page(s)
2
3 Bly-Magee v. Calif.,
236 F.3d 1014 (9th Cir. 2001) ...................................................................... 13, 14
4
5 Bustamante v. Intuit, Inc.,
141 Cal. App. 4th 199 (2006) ............................................................................. 12
6
Cafasso v. Gen. Dynamics C4 Sys.,
7
637 F.3d 1047 (9th Cir. 2011) .................................................................. 5, 16, 18
8
Careau & Co. v. Security Pac. Bus. Credit, Inc.,
9 222 Cal. App. 3d 1371 (1990) .......................................................................... 7, 8
10
City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith,
11 68 Cal. App. 4th 445 (1998)............................................................................... 14
12 City of Hope Natl Med. Ctr. v. Genentech, Inc.,
13 43 Cal. 4th 375 (2008) .........................................................................................9
14 Civic Western v. Zilla Indus., Inc.,
15 66 Cal. App. 3d 1, 14 (1977) .............................................................................. 19

16 Comm. on Childrens Television, Inc. v. General Foods Corp.,


35 Cal. 3d 197 (1983) .............................................................................. 9, 10, 13
17
18 Cooper v. Pickett,
137 F.3d 616 (9th Cir. 1997) .............................................................................. 14
19
Cusano v. Klein,
20 280 F. Supp. 2d 1035 (C.D. Cal. 2003) .............................................................. 11
21
Daniels v. Select Portfolio Servicing, Inc.,
22 246 Cal. App. 4th 1150 (2016) ..................................................................... 12, 17
23 Edwards v. Marin Park, Inc.,
24 356 F.3d 1058 (9th Cir. 2004) ............................................................................ 14
25 Envt Furniture, Inc. v. Bina,
26 2010 U.S. Dist. LEXIS 133272 (C.D. Cal. Dec. 6, 2010) ................................. 6, 7

27 Evenfe v. Esalen Inst.,


2016 U.S. Dist. LEXIS 96843 (N.D. Cal. July 24, 2016) ................................... 10
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership iii AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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TABLE OF AUTHORITIES
1
Page(s)
2
3 In re Facebook PPC Advert. Litig.,
709 F. Supp. 2d 762 (N.D. Cal. 2010) ..................................................................7
4
5 Glen Holly Entertainment, Inc. v. Tektronix, Inc.,
100 F. Supp. 2d 1086 (C.D. Cal. 1999) .............................................................. 13
6
In re GlenFed, Inc. Sec. Litig.,
7
42 F.3d 1541 (9th Cir. 1994) (en banc) ................................................................5
8
Griffin v. Green Tree Servicing, LLC,
9 166 F. Supp. 3d 1030, 1056 (C.D. Cal. 2015) .................................................... 13
10
People ex rel. Harris v. Rizzo,
11 214 Cal. App. 4th 921 (2013) ...............................................................................9
12 Hills Transp. Co. v. Southwest Forest Indus., Inc.,
13 266 Cal. App. 2d 702 (1968) .............................................................................. 17
14 Hubbs v. County of San Bernardino,
15 538 F. Supp. 2d 1254 (C.D. Cal. 2008) .............................................................. 19

16 In re Independent Serv. Orgs. Antitrust Litig.,


114 F. Supp. 2d 1070 (D. Kan. 2000)................................................................. 20
17
18 J2 Cloud Servs. v. Fax87,
2016 U.S. Dist. LEXIS 161132 (C.D. Cal. Nov. 18, 2016) ................................ 16
19
Janis v. California State Lottery Com.,
20 68 Cal. App. 4th 824 (1998)............................................................................... 18
21
Jhaveri v. ADT Sec. Serv.,
22 2012 U.S. Dist. LEXIS 38100 (C.D. Cal. Mar. 6, 2012) .................................... 10
23 Kabushiki Kaisha Megahouse v. Anjar Co. LLC,
24 2014 U.S. Dist. LEXIS 152059 (C.D. Cal. Oct. 20, 2014) ................................. 10
25 Kliff v. Hewlett Packard Co.,
26 318 F. Appx 472 (9th Cir. 2008) ................................................................. 14, 16

27 Los Defensores, Inc. v. Gomez,


223 Cal. App. 4th 377, 400 (2014) ..................................................................... 19
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership iv AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 6 of 29 Page ID #:197

TABLE OF AUTHORITIES
1
Page(s)
2
3 Moore v. Brewster,
96 F.3d 1240 (9th Cir. 1996) .............................................................................. 14
4
5 Moss v. U.S. Secret Serv.,
572 F.3d 962 (9th Cir. 2009) ................................................................................5
6
Nelson v. Abraham,
7
29 Cal. 2d 745 (1947) ........................................................................................ 11
8
Neubronner v. Milken,
9 6 F.3d 666 (9th Cir. 1993).................................................................................. 14
10
Palmtree Acquisition Corp. v. Neely,
11 2011 U.S. Dist. LEXIS 85982 (N.D. Cal. Aug. 4, 2011) .................................... 19
12 Papasan v. Allain,
13 478 U.S. 265 (1986) .............................................................................................5
14 Rennick v. O.P.T.I.O.N. Care,
15 77 F.3d 309 (9th Cir. 1996) .......................................................................... 12, 17

16 Richelle L. v. Roman Catholic Archbishop,


106 Cal. App. 4th 257 (2003) ............................................................................. 10
17
18 Rickel v. Schwinn Bicycle Co.,
144 Cal. App. 3d 648 (1983) .............................................................................. 11
19
Roberts v. UBS AG,
20 2013 U.S. Dist. LEXIS 12779 ...................................................................... 18, 19
21
Ryan v. Microsoft Corp.,
22 2015 U.S. Dist. LEXIS 47753 (N.D. Cal. Apr. 10, 2015) ................................... 11
23 Sacramento E.D.M., Inc. v. Hynes Aviation Indus.,
24 965 F. Supp. 2d 1141 (E.D. Cal. 2013) .............................................................. 12
25 Salsgiver v. Am. Online, Inc.,
26 32 F. Appx 894 (9th Cir. 2002) ......................................................................... 11

27 Schreiber Distrib. Co. v. Serv-Well Furniture Co.,


806 F.2d 1393 (9th Cir. 1986) ..............................................................................6
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership v AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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TABLE OF AUTHORITIES
1
Page(s)
2
3 Schulken v. Wash. Mut. Bank,
2009 U.S. Dist. LEXIS 114030 (N.D. Cal. Nov. 19, 2009) .............................. 6, 8
4
5 Sci. of Skincare, LLC v. Phytoceuticals, Inc.,
2009 U.S. Dist. LEXIS 58241 (C.D. Cal. July 7, 2009) ..................................... 11
6
Semegen v. Weidner,
7
780 F.2d 727 (9th Cir. 1985) .............................................................................. 14
8
In re Stac Elec. Sec. Litig.,
9 89 F.3d 1399 (9th Cir. 1996) .............................................................................. 14
10
Sumotext Corp. v. Zoove, Inc.,
11 2016 U.S. Dist. LEXIS 152927 (N.D. Cal. Nov. 3, 2016) ....................................7
12 Swartz v. KPMG LLP,
13 476 F.3d 756 (9th Cir. 2007) .............................................................................. 13
14 Talbot v. Sentinel Ins. Co., LTD.,
15 2012 U.S. Dist. LEXIS 43340, at *10
(D. Nev. Mar. 29, 2012) .......................................................................................3
16
Tenzer v. Superscope, Inc.,
17 39 Cal. 3d 18 (1985) .............................................................................. 14, 15, 16
18
Tomek v. Apple Inc.,
19 636 F. Appx 712 (9th Cir. 2016) ....................................................................... 14
20 UMG Recordings, Inc. v. Glob. Eagle Entmt, Inc.,
21 117 F. Supp. 3d 1092 (C.D. Cal. 2015) .............................................................. 16
22 Ebeid ex rel. United States v. Lungwitz,
23 616 F.3d 993 (9th Cir. 2010) .............................................................................. 16

24 Velasquez v. HSBC Fin. Corp.,


2009 U.S. Dist. LEXIS 5428 (N.D. Cal. Jan. 16, 2009)........................................6
25
26 Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097 (9th Cir. 2003) ........................................................................ 6, 14
27
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership vi AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 8 of 29 Page ID #:199

TABLE OF AUTHORITIES
1
Page(s)
2
3 Wiltsee v. Calif. Emp. Com.,
69 Cal. App. 2d 120 (1945) ................................................................................ 11
4
5 Wolf v. Sup. Ct.,
107 Cal. App. 4th 25 (2003)..................................................................... 9, 10, 11
6
Wool v. Tandem Computers, Inc.,
7
818 F.2d 1433 (9th Cir. 1987) ............................................................................ 15
8
Yourish v. Cal. Amplifier,
9 191 F.3d 983 (9th Cir. 1999) ................................................................................5
10
Zejing Shen v. Gotham Corporate Grp., Inc.,
11 2015 U.S. Dist. LEXIS 136433 (C.D. Cal. Oct. 6, 2015) ................................... 10
12 Statutes
13
CAL. CORP. CODE 16202(a) .................................................................................. 11
14
CAL. CORP. CODE 16404 ...................................................................................... 11
15
16 Other Authorities

17 Fed. R. Civ. P. 8(a) ................................................................................................. 13


18 Fed. R. Civ. P. 8(a)(2) ............................................................................... 1, 5, 13, 18
19 Fed. R. Civ. P. 9(b) .......................................................................................... passim
20
Fed. R. Civ. P. 12(a)(4)(A) .......................................................................................3
21
Fed. R. Civ. P. 12(b)(6).................................................................................... passim
22
23 Fed. R. Civ. P. 12(e) ................................................................................. 2, 6, 19, 20

24 Local Rule 7-3 ..........................................................................................................2


25 Local Rule 8-3 ..........................................................................................................2
26
27
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership vii AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 9 of 29 Page ID #:200

1 I. INTRODUCTION
2 The Complaint in this case embodies a misplaced, though increasingly
3 common, attempt to transmute a basic contractual claim (and a meritless one at that)
4 into a complex tort action. Plaintiff Jason Lust (Plaintiff) is suing defendants
5 Animal Logic Entertainment, LLC (ALE) (incorrectly sued as Animal Logic
6 Entertainment US, d/b/a Animal Logic Entertainment, LLC), and Zareh Nalbandian
7 (collectively, Defendants), for supposed fraud, breach of fiduciary duty, and other
8 unsupported claims, based on little more than his own disgruntlement that ALE
9 exercised its contractual right not to extend its arms length, services agreement with
10 Plaintiff. In the wake of this professional disappointment, Plaintiff now seeks to
11 transfer blame to Defendants for his own failure to perform his duties in a
12 sufficiently skillful manner to persuade ALE to extend its agreement with Plaintiff.
13 Most of Plaintiffs legal theories are untenable, however, and his Complaint fails to
14 set forth sufficient facts to permit him to maintain several of the alleged causes of
15 action that he is attempting to assert.
16 Accordingly, Defendants are moving for dismissal of certain claims in
17 Plaintiffs Complaint (Complaint), on the following grounds:
18 The second cause of action in the Complaint is deficient because this claim
19 for breach of the covenant of good faith and fair dealing substantially restates
20 Plaintiffs breach of contract claim and therefore fails to state an independent and
21 sustainable cause of action.
22 Plaintiffs third cause of action, for alleged breach of fiduciary duty,
23 should be dismissed pursuant to FED. R. CIV. P. 12(b)(6), for failure to allege facts
24 sufficient to plead the existence of a fiduciary obligation.
25 The fourth cause of action in Plaintiffs Complaint should be dismissed
26 under FED. R. CIV. P. 8(a)(2), 9(b) and 12(b)(6), on the grounds, inter alia, that the
27 allegations in the Complaint are insufficient to meet the heightened pleading
28 requirements applicable to this claim for fraud under California law.

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership 1 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
Case 2:17-cv-00308-JAK-AFM Document 11-1 Filed 02/17/17 Page 10 of 29 Page ID
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1 Plaintiffs sixth cause of action, which seeks an accounting, fails to allege


2 facts sufficient to plead an adequate factual basis for the existence of an obligation
3 on the part of ALE to provide Plaintiff with accountings.
4 Additionally, Defendants seek a more definite statement of Plaintiffs fifth
5 cause of action pursuant to FED. R. CIV. P. 12(e), because this claim for declaratory
6 relief is excessively vague and ambiguous.
7 II. STATEMENT OF FACTS
8 A. PROCEDURAL HISTORY
9 Plaintiff filed his Complaint in Superior Court for the County of Los Angeles
10 on October 31, 2016, in the action styled Jason Lust v. Animal Logic Entertainment
11 US, Zareh Nalbandian, and DOES 1 through 20, inclusive, Case No. BC 639223.1
12 On January 13, 2017, Defendants filed a Notice of Removal. Dkt. 1. Plaintiff and
13 Defendants thereafter stipulated to extend the deadline for Defendants to respond to
14 the Complaint to February 17, 2017. 2 This motion is timely, and Defendants have
15 complied with Local Rule 7-3.
16 B. PERTINENT ALLEGATIONS IN COMPLAINT
17 Plaintiffs Complaint purports to state the following causes of action: (1)
18 breach of written contract (against ALE); (2) breach of implied covenant of good
19 faith and fair dealing (against ALE); (3) breach of fiduciary duty (against both
20 Defendants); (4) fraud (against both Defendants); (5) declaratory relief (against
21
1
22 On or about November 21, 2016, Plaintiff filed an amendment to the Complaint
that purported to change the name of defendant Animal Logic Entertainment US
23 to Animal Logic Entertainment US d/b/a Animal Logic Entertainment, LLC.
2
The Complaint was served on ALE on December 15, 2016. The Complaint was
24 not served on Mr. Nalbandian, but Defendants counsel agreed to accept service of
the Complaint on December 22, 2016. Before the case was removed to federal
25 court, Plaintiff and Defendants agreed to extend Defendants response date to
February 1, 2017; thus, Defendants had not been required to respond to the
26 Complaint prior to filing their notice of removal. After removal, Defendants
response date in this Court was initially set for January 20, 2017. Plaintiff and
27 Defendants then entered into two stipulations, pursuant to Local Rule 8-3, to extend
Defendants response by a total of 28 days first to February 7, 2017, and
28 ultimately through and including February 17, 2017. Dkt. 9, 10.
MEMORANDUM OF POINTS AND
Loeb & Loeb
A Limited Liability Partnership 2 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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1 ALE); and (6) an accounting (against ALE). Complaint 57-106. The Complaint
2 makes the following allegations, among others3:
3 In early 2013, Plaintiff entered into a written agreement with ALE, dated as of
4 February 28, 2013, which the Complaint calls the short form agreement (the
5 Agreement).4 Complaint 20. The Agreement provided, among other things,
6 that, commencing on February 1, 2013, Plaintiff was engaged by ALE as a
7 Producer for an initial term of two years on an at will basis. See Agreement, p.
8 1 (Exhibit 1 to Complaint).
9 According to the Complaint, in late 2012 or early 2013, Plaintiff discussed a
10 potential partnership with Defendants. See, e.g., Complaint 15,19, 21.
11 Plaintiff claims that Defendants sought out a prospective partnership in order to
12 exploit Plaintiffs purported intellectual property rights in various film projects and
13 his industry connections. Id. 18. The Complaint alleges that the parties
14 discussed the possibility of entering into a written partnership agreement, but
15 concedes that Plaintiff never reviewed a draft of any such agreement, and no written
16 partnership agreement was ever executed. Id. 21-22. Plaintiff nevertheless
17 asserts that a partnership was formed, though the Complaint nowhere alleges the
18 terms of any partnership agreement. Id. 23-24, 30.
19
3
20 Although Defendants are presenting the allegations of the Complaint in the light
most favorable to Plaintiff for purposes of this motion, Defendants do not admit the
21 accuracy of any of Plaintiffs allegations. Defendants reserve their rights to
challenge Plaintiffs actual allegations and, at the appropriate time, to answer any of
22 Plaintiffs purported causes of action that are not dismissed. See FED. R. CIV. P.
12(a)(4)(A); Talbot v. Sentinel Ins. Co., LTD., 2012 U.S. Dist. LEXIS 43340, at *10
23 (D. Nev. Mar. 29, 2012) (Here, Defendants filed a timely Rule 12(b)(6) motion that
does not challenge all of the claims raised by Plaintiff. Pursuant to FED. R. CIV. P.
24 12(a)(4)(A), Defendants are not required to file a responsive pleading on the
unchallenged claims until 14 days after the court has rendered its decision on the
25 motion.).
4
A copy of that Agreement is attached as an exhibit to Plaintiffs Complaint. It is
26 unclear what Plaintiff designated as the exhibit number of the Agreement.
Paragraph 20 of Plaintiffs Complaint states that the Agreement is attached as
27 Exhibit 1 to the Complaint. However, the cover sheet that is inserted before the
copy of the Agreement refers to it as Exhibit A to the Complaint. The Agreement
28 will be cited herein as Exhibit 1 to the Complaint.
MEMORANDUM OF POINTS AND
Loeb & Loeb
A Limited Liability Partnership 3 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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#:203

1 According to Plaintiff, Defendants defrauded him by telling him that they


2 planned to submit to him a proposed long form agreement setting forth the terms of
3 a prospective partnership, and then failing to follow through on such statements.
4 Complaint 22, 29. Although the Complaint elsewhere claims that an alleged
5 partnership was formed, Plaintiffs fraud claim asserts that Defendants falsely
6 misrepresented to Plaintiff that Defendant ALE would enter into a partnership
7 with Plaintiff. Id. 76.
8 The Complaint also asserts that Defendants sought to appropriate Plaintiffs
9 intellectual property rights in lucrative family and animated feature films that
10 Plaintiff developed and controlled. Complaint 9. Plaintiff alleges that he had
11 lucrative intellectual property rights in various feature film concepts and treatments
12 in the family film and animation genre, including wholly owned property rights in
13 [motion picture projects entitled] Monkeys, Betty Boop, The Life and Adventures of
14 Santa Claus, Spy v. Spy, Astro Boy, The Animated Princess Movie and Fortunately
15 the Milk. Id. 99; see also id. 55 (referring to Plaintiffs alleged intellectual
16 property rights in various film projects). The Complaint asserts that Plaintiff
17 owns and controls intellectual property rights in these projects and Defendants have
18 no ownership interest of any kind in Plaintiffs intellectual property rights in this
19 projects. Id. 99. However, the Complaint nowhere specifies the intellectual
20 property rights or wholly owned property rights that Plaintiff is claiming.
21 III. DISCUSSION
22 A. OVERVIEW OF RELEVANT STANDARDS FOR MOTIONS TO
23 DISMISS
24 To survive a motion to dismiss under FED. R. CIV. P. 12(b)(6), a complaint
25 must contain[] enough facts to state a claim to relief that is plausible on its face.
26 Ashcroft v. Iqbal, 556 U.S. 662, 697 (2009) (internal quotation and citations
27 omitted). A claim has facial plausibility when a plaintiff pleads factual content that
28 allows the court to draw the reasonable inference that the defendant is liable for the

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership 4 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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#:204

1 misconduct alleged. Id. Additionally, a pleading must contain a short and plain
2 statement of the claim showing that the pleader is entitled to relief. FED. R. CIV. P.
3 8(a)(2); see also Cafasso v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1055 (9th Cir.
4 2011) (Rule 8(a) requires the pleading of a plausible claim) (citing, inter alia,
5 Iqbal, 556 U.S. at 679-80).
6 In ruling on motions to dismiss, courts need only accept well-pleaded
7 allegations as true, and are not bound to accept as true a legal conclusion couched
8 as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986); see Iqbal, 556
9 U.S. at 678-79. [F]or a complaint to survive a motion to dismiss, the non-
10 conclusory factual content, and reasonable inferences from that content, must be
11 plausibly suggestive of a claim entitling the plaintiff to relief. Moss v. U.S. Secret
12 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citation omitted). Dismissal may be based
13 on a lack of a cognizable legal theory or on the absence of facts that would support a
14 valid theory. Balistreri v. Pacifica Police Dept, 901 F.2d 696, 699 (9th Cir. 1990).
15 A complaint must contain either direct or inferential allegations respecting all the
16 material elements necessary to sustain recovery under some viable legal theory.
17 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007) (citation omitted). A
18 pleading that offers labels and conclusions or a formulaic recitation of the
19 elements of a cause of action will not do. Iqbal, 556 U.S. at 678 (quoting
20 Twombly, 550 U.S. at 555).
21 To meet the heightened pleading requirements of FED. R. CIV. P. 9(b), a
22 plaintiff must set forth, among other things, an explanation as to why the disputed
23 statement was untrue or misleading when made. In re GlenFed, Inc. Sec. Litig., 42
24 F.3d 1541, 1548-49 (9th Cir. 1994) (en banc) (emphasis in original); see also Yourish
25 v. Cal. Amplifier, 191 F.3d 983, 993 (9th Cir. 1999). A claim required to satisfy
26 Rule 9(b) also must allege the who, what, when, where, and how of the alleged
27
28

MEMORANDUM OF POINTS AND


Loeb & Loeb
A Limited Liability Partnership 5 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
Corporations
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1 misconduct.5 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).
2 FED. R. CIV. P. 12(e) states that a party may move for a more definite
3 statement of a pleading too vague or ambiguous to enable the responding party to
4 reasonably prepare a response. FED. R. CIV. P. 12(e); see, e.g., Velasquez v. HSBC
5 Fin. Corp., 2009 U.S. Dist. LEXIS 5428, at *20-21 (N.D. Cal. Jan. 16, 2009).
6 B. PLAINTIFFS SECOND, THIRD, FOURTH AND SIXTH CAUSES OF
7 ACTION SHOULD BE DISMISSED
8 1. Plaintiffs Second Cause of Action, for Breach of the Covenant of
9 Good Faith and Fair Dealing, Fails to State a Viable Claim
10 Plaintiffs second cause of action, for breach of the implied covenant of good
11 faith and fair dealing, fails to plead a valid cause of action because it is
12 impermissibly duplicative of Plaintiffs breach of contract claim.
13 California law requires that a claim for breach of the implied covenant of
14 good faith and fair dealing go beyond the statement of a mere contract breach and
15 not rel[y] on the same alleged acts [or] simply seek the same damages or other
16 relief already claimed in a companion contract cause of action. Envt Furniture,
17 Inc. v. Bina, 2010 U.S. Dist. LEXIS 133272, at *7 (C.D. Cal. Dec. 6, 2010) (quoting
18 Careau & Co. v. Security Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1395
19 (1990)). If the allegations in a breach of implied covenant claim do not go beyond
20 the statement of a mere contract breach and, relying on the same alleged acts, simply
21 seek the same damages or other relief already claimed in a companion contract
22 cause of action, they may be disregarded as superfluous as no additional claim is
23 actually stated. Schulken v. Wash. Mut. Bank, 2009 U.S. Dist. LEXIS 114030, at
24 *16-17 (N.D. Cal. Nov. 19, 2009) (quoting Careau & Co., 222 Cal. App. 3d at
25 1395); see also Alvarez v. Chevron Corp., 656 F.3d 925, 931 n.6 (9th Cir. 2011)
26
5
This means, among other things, that the pleader must state the time, place, and
27 specific content of the false representations as well as the identities of the parties to
the misrepresentation. Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d
28 1393, 1401 (9th Cir. 1986).
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1 (We do not address Plaintiffs claim for breach of the duties of good faith and fair
2 dealing fails because it is duplicative of Plaintiffs breach of contract claim.); In re
3 Facebook PPC Advert. Litig., 709 F. Supp. 2d 762, 770 (N.D. Cal. 2010)
4 (dismissing implied covenant claim that relie[d] upon essentially the same
5 allegations as [plaintiffs] breach of contract claim). Further, when a claim for
6 breach of the covenant of good faith and fair dealing relies on the same contractual
7 provision and seeks the same damages or other relief claimed in a companion
8 contract cause of action, the implied covenant claim is superfluous and subject to
9 dismissal without leave to amend. Careau & Co., 222 Cal. App. 3d at 1392
10 (affirming dismissal of implied covenant claim and reasoning, in part, that plaintiffs
11 had not even attempted to plead a basis for a recovery of anything other than
12 ordinary contract damages and their claim is simply duplicative of their two contract
13 causes of action .).6
14 When the foregoing standards are applied to Plaintiffs claim for breach of the
15 covenant of good faith and fair dealing, it is clear that this purported cause of action
16 should be dismissed. Contrary to the requirements of California law, Plaintiffs
17 second cause of action relies on the same alleged conduct and seeks the same relief
18 as his breach of contract claim. See Sumotext Corp. v. Zoove, Inc., 2016 U.S. Dist.
19 LEXIS 152927, at *7 (N.D. Cal. Nov. 3, 2016); In re Facebook PPC Advert. Litig.,
20 709 F. Supp. 2d at 770; Envt Furniture, Inc., 2010 U.S. Dist. LEXIS 133272, at
21
22
23 6
See also Avidity Partners, LLC v. State of Calif., 221 Cal. App. 4th 1180, 1203
(2013) (To the extent Avidity argues the State breached the implied covenant of
24 good faith and fair dealing , we may disregard the claim as superfluous since it
relies on the same alleged acts and seeks the same relief claimed in Aviditys breach
25 of contract cause of action.) (citation omitted); Bionghi v. Metro. Water Dist., 70
Cal. App. 4th 1358, 1370 (1999) (holding that the cause of action for breach of the
26 implied covenant is duplicative of the cause of action for breach of contract, and
may be disregarded) (citation omitted); Aragon-Haas v. Family Sec. Ins. Servs.,
27 Inc., 231 Cal. App. 3d 232, 240 (1991) (dismissing implied covenant claim because
the same conduct on defendants part is alleged to constitute breach of both the
28 employment contract and the covenant).
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A Limited Liability Partnership 7 AUTHORITIES IN SUPPORT
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1 *8-9. In pertinent part, both claims allege, in substantially similar language, that
2 ALE engaged in the same conduct:
3 First Cause of Action Second Cause of Action
4 Defendants have materially Defendants breached the implied covenant
5 breached the attachments term by not of good faith and fair dealing by not
6 allowing Plaintiff to be attached as protecting Plaintiffs producer role and,
7 defined in Paragraph 59(b) and instead, actively taking steps to ensure that
8 taking actions to prevent Plaintiff Plaintiff is not attached to projects in
9 from being attached to the projects. accordance with the Attachment term of the
10 Complaint 61. SFA. Complaint 65.
11 Additionally, each of these supposed causes of action alleges (conclusorily)
12 that Plaintiff suffered damages in an amount to be proven at trial, including without
13 limitation the sums Plaintiff would have received if Defendants had fully performed
14 under the Agreement plus an additional amount to compensate for the damage to
15 Plaintiffs reputation and marketability as a result of Defendants breaches.
16 Complaint 62, 67.
17 Because the allegations upon which Plaintiffs implied covenant claim are
18 based do not go beyond the statement of a mere contract breach and, relying on the
19 same alleged acts, simply seek the same damages or other relief already claimed in a
20 companion contract cause of action, they may be disregarded as superfluous as no
21 additional claim is actually stated. Careau & Co., 222 Cal. App. 3d at 1392-93
22 (emphasis added); see also Schulken, 2009 U.S. Dist. LEXIS 114030, at *18 (Since
23 Plaintiffs breach of implied covenants claim essentially is the same as their breach
24 of contract claim, the Court dismisses Plaintiffs breach of implied covenants claim
25 as superfluous.).7 Because Plaintiff has failed to allege facts sufficient to plead a
26
7
See also Bionghi, 70 Cal. App. 4th at 1370; Aragon-Haas, 231 Cal. App. 3d at
27 240 (dismissing implied covenant claim because the same conduct on defendants
part is alleged to constitute breach of both the employment contract and the
28 covenant).
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A Limited Liability Partnership 8 AUTHORITIES IN SUPPORT
Including Professional OF MOTION TO DISMISS
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1 valid, independent claim for breach of the implied covenant of good faith and fair
2 dealing, his second cause of action should be dismissed.
3 2. The Third Cause of Action in the Complaint, for Breach of
4 Fiduciary Duty, Fails to State a Claim on Which Relief Can Be
5 Granted
6 Plaintiffs allegations are likewise insufficient to sustain a cause of action for
7 breach of fiduciary duty under California law. In particular, the Complaint fails to
8 allege facts that, if proven, would suffice to establish the existence of a fiduciary
9 duty on the part of Defendants.
10 The elements of a claim for breach of fiduciary duty under California law are
11 (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage
12 proximately caused by the breach. People ex rel. Harris v. Rizzo, 214 Cal. App.
13 4th 921, 950 (2013) (quotation omitted). [B]efore a person can be charged with a
14 fiduciary obligation, he must either knowingly undertake to act on behalf and for the
15 benefit of another, or must enter into a relationship which imposes that undertaking
16 as a matter of law. Comm. on Childrens Television, Inc. v. General Foods Corp.,
17 35 Cal. 3d 197, 221 (1983); see also City of Hope Natl Med. Ctr. v. Genentech,
18 Inc., 43 Cal. 4th 375, 389 (2008) (. . . a fiduciary relationship is not necessarily
19 created simply when one party, in exchange for royalty payments, entrusts a secret
20 invention to another party to develop, patent, and market the eventual product); id.
21 at 391 (fiduciary obligations are not necessarily created when one party entrusts
22 valuable intellectual property to another for commercial development in exchange
23 for the payment of compensation contingent on commercial success); Wolf v. Sup.
24 Ct., 107 Cal. App. 4th 25, 28-36 (2003) (holding that there was no fiduciary
25 relationship between the author of a novel and a film studio to which the author had
26 assigned his rights to commercial development in return for percentage of future
27 revenues). To plead the existence of a fiduciary relationship, a plaintiff must allege
28 facts sufficient to demonstrate a relationship wherein one of the parties is duty

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1 bound to act with the utmost good faith for the benefit of the other party. Such a
2 relation ordinarily arises only where a confidence is reposed by one person in the
3 integrity of another. Wolf, 107 Cal. App. 4th at 29 (internal quotation marks
4 omitted). The essence of a fiduciary . . . relationship is that the parties do not deal
5 on equal terms, because the person in whom trust and confidence is reposed . . . is in
6 a position to exert unique influence over the dependent party. Richelle L. v. Roman
7 Catholic Archbishop, 106 Cal. App. 4th 257, 271 (2003). [B]efore a person can be
8 charged with a fiduciary obligation [to another], he [or she] must either knowingly
9 undertake to act on behalf and for the benefit of another, or must enter into a
10 relationship which imposes that undertaking as a matter of law. Comm. On
11 Childrens Television, Inc., 35 Cal. 3d at 221; see, e.g., Evenfe v. Esalen Inst., 2016
12 U.S. Dist. LEXIS 96843, at *20-21 (N.D. Cal. July 24, 2016) (granting motion to
13 dismiss cause of action for breach of fiduciary duty under California law based on
14 plaintiffs failure to allege sufficient facts to establish existence of fiduciary
15 relationship).
16 Traditional examples of fiduciary relationships in the commercial context
17 include trustee/beneficiary, directors and majority shareholders of a corporation,
18 business partners, joint adventurers, and agent/principal. Wolf, 107 Cal. App. 4th
19 at 30; see Zejing Shen v. Gotham Corporate Grp., Inc., 2015 U.S. Dist. LEXIS
20 136433, at *9 (C.D. Cal. Oct. 6, 2015). California law rejects the idea that a
21 contractual relationship gives rise to a fiduciary duty. Jhaveri v. ADT Sec. Serv.,
22 2012 U.S. Dist. LEXIS 38100, at *12 (C.D. Cal. Mar. 6, 2012) (citing Wolf, 107
23 Cal. App. 4th at 31); see also Kabushiki Kaisha Megahouse v. Anjar Co. LLC, 2014
24 U.S. Dist. LEXIS 152059, at *27 (C.D. Cal. Oct. 20, 2014) (California law
25 generally does not impose fiduciary duties on commercial parties in arms length
26 relationships.). Although [e]very contract requires one party to repose an
27 element of trust and confidence in the other to perform, Wolf, 107 Cal. App. 4th at
28 31, California law is that parties to a contract, by that fact alone, have no fiduciary

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1 duties toward one another. Rickel v. Schwinn Bicycle Co., 144 Cal. App. 3d 648,
2 655 (1983); see also Wolf, 107 Cal. App. 4th at 31. The only contractual
3 relationships that give rise to fiduciary obligations are those wherein one of the
4 parties is [] duty bound to act with the utmost good faith for the benefit of the other
5 party. Id. at 30 (internal quotation marks omitted); see also Cusano v. Klein, 280
6 F. Supp. 2d 1035, 1042 (C.D. Cal. 2003) (holding that contractual duty to collect
7 royalties, account for them and pass them on to [other party] did not create a
8 fiduciary relationship).
9 Likewise, as a general matter, the fact of an employer-employee relationship
10 alone is insufficient to create a fiduciary relationship. Ryan v. Microsoft Corp.,
11 2015 U.S. Dist. LEXIS 47753, at *46-47 (N.D. Cal. Apr. 10, 2015) (citing Salsgiver
12 v. Am. Online, Inc., 32 F. Appx 894, (9th Cir. 2002)); see also Sci. of Skincare, LLC
13 v. Phytoceuticals, Inc., 2009 U.S. Dist. LEXIS 58241, at *8 (C.D. Cal. July 7, 2009)
14 (An employer-employee relationship, without more, is not a fiduciary
15 relationship.); Wiltsee v. Calif. Emp. Com., 69 Cal. App. 2d 120, 125-28 (1945)
16 (employment contract entitling employee to 25% of future profits did not give rise
17 to joint venture or fiduciary relationship). Moreover, none of the following gives
18 rise to a fiduciary duty: (1) a contingent entitlement to future compensation; (2) a
19 profit-sharing arrangement; (3) a contractual right to an accounting; or (4) the bare
20 allegation that the plaintiff reposed trust and confidence. Wolf, 107 Cal. App. 4th
21 at 30-34.
22 A fiduciary relationship does exist among partners in a business partnership.
23 CAL. CORP. CODE 16404; see id. 16202(a) (defining partnership as an
24 association of two or more persons to carry on as co-owners a business for profit).
25 However, an agreement to share profits is not necessarily evidence of the existence
26 of a partnership, since it may merely provide a measure of compensation for
27 services or for the use of money. Nelson v. Abraham, 29 Cal. 2d 745, 750
28 (1947). Whether or not two parties have entered into a partnership relationship

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1 generally depends on whether they intended to share not only in the profits, but also
2 in the losses, management, and control of the enterprise. Sacramento E.D.M., Inc.
3 v. Hynes Aviation Indus., 965 F. Supp. 2d 1141, 1150 (E.D. Cal. 2013) (citations
4 omitted); see also Billups v. Tiernan, 11 Cal. App. 3d 372, 379 (1970) (participation
5 in management and control of business is requisite element of partnership).
6 Here, Plaintiffs third cause of action should be dismissed because, among
7 other reasons, the Complaint fails to allege facts sufficient to establish that
8 Plaintiffs relationship with Defendants differed from an ordinary commercial
9 relationship that did not impose fiduciary obligations. Notably, although Plaintiff
10 asserts in conclusory fashion that he purportedly entered into an undocumented
11 partnership with Defendants, the Complaint nowhere alleges the terms of such an
12 alleged partnership, nor does the Complaint allege anywhere that Plaintiff shared in
13 the losses, management and control of the purported enterprise. Sacramento
14 E.D.M., Inc., 965 F. Supp. 2d at 1150; see also Bank of California v. Connolly, 36
15 Cal. App. 3d 350, 364 (1973) ([T]he right of joint participation in the management
16 and control of the business is [a]n essential element of a partnership or joint
17 venture) (emphasis added; citations omitted). At most, the allegations in the
18 Complaint concerning a purported partnership, even when viewed in the light most
19 favorable to Plaintiff, seem to allege that there may have been an agreement to agree
20 on the terms of a potential partnership; under California law, such a prospective
21 arrangement is unenforceable. See, e.g., Rennick v. O.P.T.I.O.N. Care, 77 F.3d
22 309, 315 (9th Cir. 1996) (declining to enforce letter of intent and reasoning, in part,
23 An agreement to make an agreement, without more, is not a binding contract.)
24 (citing Autry v. Republic Productions, 30 Cal. 2d 144, 151 (1947)); see also Daniels
25 v. Select Portfolio Servicing, Inc. , 246 Cal. App. 4th 1150, 1174 (2016)
26 (Preliminary negotiations or agreements for future negotiations so-called
27 agreements to agree are not enforceable contracts.) (citing Bustamante v. Intuit,
28 Inc., 141 Cal. App. 4th 199, 213-214 (2006)); Bustamante, 141 Cal. App. 4th at 213

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1 (Because essential terms were only sketched out, with their final form to be agreed
2 upon in the future (and contingent upon third party approval), the parties had at best
3 an agreement to agree, which is unenforceable under California law.).
4 Plaintiffs relationship with Defendants, as alleged in the Complaint, does not
5 bear the characteristics of any traditional fiduciary relationship, including that of a
6 principal and an agent, a trustee and a beneficiary, or (as discussed) a business
7 partnership. At most, Plaintiff has alleged that the parties entered into an arms
8 length agreement and discussed the possibility of a future partnership that was never
9 formed. Plaintiffs allegations are simply insufficient to sustain a cause of action for
10 breach of fiduciary duty under California law.
11 3. Plaintiffs Fourth Cause of Action Fails to Satisfy the Heightened
12 Pleading Requirements of a Fraud Claim
13 Plaintiffs alleged cause of action for fraud should be dismissed for failure to
14 meet the pleading requirements of FED. R. CIV. P. 8(a), 9(b) and 12(b)(6).
15 Claims for fraud and negligent misrepresentation must meet the heightened
16 pleading requirements of Rule 9(b). Griffin v. Green Tree Servicing, LLC, 166 F.
17 Supp. 3d 1030, 1056 (C.D. Cal. 2015) (quoting Glen Holly Entertainment, Inc. v.
18 Tektronix, Inc., 100 F. Supp. 2d 1086, 1093 (C.D. Cal. 1999)). This heightened
19 pleading requirement represents an exception to the rule of FED. R. CIV. P. 8(a)(2)
20 that most claims need only contain a short and plain statement of the claim. Bly-
21 Magee v. Calif., 236 F.3d 1014, 1018 (9th Cir. 2001); see also Comm. on
22 Childrens Television, Inc., 35 Cal. 3d at 216 (fraud claims are subject to strict
23 pleading requirement because they involve a serious attack on character, and
24 fairness to the defendant demands that he should receive the fullest possible details
25 of the charge in order to prepare his defense) (citation omitted). Rule 9(b)
26 requires more specificity including an account of the time, place, and specific
27 content of the false representations as well as the identities of the parties to the
28 misrepresentations. Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)

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1 (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)); see
2 also Vess, 317 F.3d at 1106 (Averments of fraud must be accompanied by the
3 who, what, when, where, and how of the misconduct charged.) (quoting Cooper v.
4 Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). All claims grounded in fraud are
5 subject to Rule 9(b)s pleading requirements. Vess, 317 F.3d at 1103-04; see also
6 Tomek v. Apple Inc., 636 F. Appx 712, 713-14 (9th Cir. 2016). Broad allegations
7 that lack particularized supporting detail do not suffice. Bly-Magee, 236 F.3d at
8 1018; see also Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir. 1993) (allegations of
9 fraud must be specific enough to give defendants notice of the particular
10 misconduct which is alleged to constitute the fraud charged so that they can defend
11 against the charge and not just deny that they have done anything wrong); Semegen
12 v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985) (insufficient to set forth conclusory
13 allegations of fraud . . . punctuated by a handful of neutral facts).8
14 Under California law, the indispensable elements of a fraud claim include a
15 false representation, knowledge of its falsity, intent to defraud, justifiable reliance,
16 and damages. Vess, 317 F.3d at 1105 (quoting Moore v. Brewster, 96 F.3d 1240,
17 1245 (9th Cir. 1996)); see also City of Atascadero v. Merrill Lynch, Pierce, Fenner
18 & Smith, 68 Cal. App. 4th 445, 481 (1998). The mere breach of a contract or
19 nonperformance of an oral promise is insufficient to infer fraud under California
20 law. Kliff v. Hewlett Packard Co., 318 F. Appx 472, 476 (9th Cir. 2008) (citing
21 Tenzer v. Superscope, Inc., 39 Cal. 3d 18, 30-31 (1985)).
22 Here, Plaintiff fails to meet the pleading requirements with respect to various
23 elements of a fraud claim. Regarding the required element of false representation,
24
8
As the Ninth Circuit has explained: Rule 9(b) serves not only to give notice to
25 defendants of the specific fraudulent conduct against which they must defend, but
also to deter the filing of complaints as a pretext for the discovery of unknown
26 wrongs, to protect [defendants ] from the harm that comes from being subject to
fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court,
27 the parties and society enormous social and economic costs absent some factual
basis. Bly-Magee, 236 F.3d at 1018 (quoting In re Stac Elec. Sec. Litig., 89 F.3d
28 1399, 1405 (9th Cir. 1996)).
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1 Plaintiff has not pled particularized facts sufficient to raise an inference that any
2 purported representations were false when made; rather, the Complaint merely relies
3 on the unsupported conclusion that Defendants had no intention of performing
4 because they are alleged to have later failed to fulfill the purported promises alleged
5 in the Complaint. Complaint 21, 43-44; see Tenzer, 39 Cal. 3d at 30 (something
6 more than nonperformance is required to prove the defendants intent not to perform
7 his promise) (internal quotation and citations omitted). Although Plaintiff
8 generally asserts that Defendants represented that they would present a draft long
9 form agreement to Plaintiff for his review, the only allegations that the
10 Complaint offers in support of the conclusory assertion that such representations
11 were knowingly false when made are either conclusory or improperly alleged on
12 information and belief, without any accompanying detail setting forth the basis, if
13 any, for Plaintiffs supposed belief. Complaint 20, 22, 48. As a matter of law,
14 those allegations that are unsupported and/or based on information and belief should
15 be disregarded. Bibiji Inderjit Kaur Puri v. Sopurkh Kaur Khalsa, 2017 U.S. App.
16 LEXIS 287, at *18 (9th Cir. Jan. 6, 2017) (holding that fraud claim failed to satisfy
17 Rule 9(b) because, among other reasons, the complaint included include[d] a
18 number of allegations made on information and belief without stating the basis for
19 such information and belief; court reasoned: Such allegations are appropriate
20 regarding matters known only to the defendants, but only insofar as the complaint
21 also explains the basis for the belief.); Wool v. Tandem Computers, Inc., 818 F.2d
22 1433, 1439 (9th Cir. 1987) (to satisfy particularity requirement of Rule 9(b),
23 allegations of fraud based on information and belief must relate to matters peculiarly
24 within other partys knowledge, and even as to those matters, the allegations must
25 be accompanied by a statement of the facts upon which the belief is founded)
26 (citations omitted). The Complaint is simply devoid of adequately pled, specific
27 facts sufficient to support a showing that Defendants made promises or
28

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1 representations that they knew to be false when they made them, or knowingly and
2 intentionally concealed material facts from Plaintiff. 9 See Complaint 76-93.
3 For some of the same reasons, Plaintiff has failed to plead the element of
4 fraudulent intent with the necessary particularity. Just as the Complaint does not
5 plead specific facts sufficient to raise an inference that any purported representations
6 were knowingly false when made, it fails to plead particularized facts that, if proven,
7 would demonstrate that Defendants had no intention of performing at the time the
8 alleged representations or promises were made. See UMG Recordings, Inc. v. Glob.
9 Eagle Entmt, Inc., 117 F. Supp. 3d 1092, 1108 (C.D. Cal. 2015). The mere
10 assertion that ALE later failed to abide by an alleged representation that it would
11 submit a draft long form to [Plaintiff] for his review is insufficient to plead the
12 element of fraudulent intent. Complaint 29; see Kliff, 318 F. Appx at 476 (in
13 order to establish the intent element, one must offer evidence that tends to establish
14 something greater than the mere non-performance of an oral promise) (citing
15 Tenzer, 39 Cal. 3d at 30-31); J2 Cloud Servs. v. Fax87, 2016 U.S. Dist. LEXIS
16 161132, at *10 (C.D. Cal. Nov. 18, 2016) (mere nonperformance of a promise is
17 typically inadequate to demonstrate fraudulent intent) (citation omitted); Tenzer, 39
18 Cal. 3d at 30 (something more than nonperformance is required to prove the
19 defendants intent not to perform) (internal quotation and citation omitted).
20 Additionally, the Complaint fails to meet the pleading requirements for the
21 fraud element of justifiable reliance. While Plaintiff makes conclusory statements
22 concerning his purported reliance on Defendants alleged promises to form a future
23 partnership and to prepare a written long form agreement setting forth the terms of
24 the prospective partnership for Plaintiffs review, the Complaint fails to set forth
25
26 9
Furthermore, in certain instances, the Complaint fails to allege with the requisite
particularity the what, when, where, and how of the misconduct charged, what is
27 false or misleading about [the purportedly fraudulent] statement, and why it is
false. Cafasso, 637 F.3d at 1055 (quoting Ebeid ex rel. United States v. Lungwitz,
28 616 F.3d 993, 998 (9th Cir. 2010)).
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1 specific factual allegations concerning the particular circumstances that allegedly


2 justified Plaintiffs purported reliance on those claimed promises. This omission is
3 particularly glaring in view of the Complaints express admission that the parties
4 never signed any partnership agreement, its failure to allege the terms of any alleged
5 partnership agreement, and its utter lack of any nonconclusory allegations that the
6 parties ever reached a meeting of minds on the terms of any prospective partnership
7 agreement. Moreover, according to Plaintiffs own allegations, if a draft partnership
8 agreement or draft long form agreement had ever been presented to Plaintiff for
9 consideration, Plaintiff would have had an opportunity to review any such draft
10 and presumably to reject it or insist on changes. See, e.g., Complaint 29 (. . . no
11 draft long form was ever given to [Plaintiff] for his review and none was ever
12 executed ) (emphasis added). Thus, even if Plaintiffs allegations were assumed
13 to be true, there is no way to know whether the parties would have reached a
14 meeting of minds on the terms of a prospective partnership agreement; as such, any
15 purported reliance by Plaintiff on the alleged representations upon which his fraud
16 claim relies was unjustifiable and unreasonable. See Complaint 22, 29; see also
17 Atlantique Prods. v. Ion Media Networks, 644 F. Appx 800, 801 (9th Cir. 2016)
18 (The district court did not err in concluding that Atlantiques claims of promissory
19 estoppel and fraud also fail. It was unreasonable as a matter of law for Atlantique to
20 rely on the contract before ION signed it.) (citing Rennick, 77 F.3d at 317).
21 Accordingly, the allegations of the Complaint are wholly inadequate to satisfy the
22 requirements of Rule 9(b) and 12(b)(6) with respect to the requisite fraud element of
23 justifiable reliance. See Rennick, 77 F.3d at 317; Atlantique Prods., 644 F. Appx at
24 801; Hills Transp. Co. v. Southwest Forest Indus., Inc., 266 Cal. App. 2d 702, 707
25 (1968).10 Moreover, Plaintiffs wholly inadequate attempt to plead justifiable
26
27 10
See also Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239 (1995)
(whether a party's reliance was justified may be decided as a matter of law if
28 reasonable minds can come to only one conclusion based on the facts); Daniels v.
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1 reliance is so unsupported and far-fetched that it falls short of meeting the Rule
2 8(a)(2) standard of plausibility as well. Cafasso, 637 F.3d at 1055 (Because Rule
3 8(a) requires the pleading of a plausible claim, . . . we hold that claims of fraud or
4 mistake must, in addition to pleading with particularity, also plead plausible
5 allegations. That is, the pleading must state enough fact[s] to raise a reasonable
6 expectation that discovery will reveal evidence of [the misconduct alleged].)
7 (quoting Twombly, 550 U.S. at 556) (internal citation omitted).
8 In summary, Plaintiff has failed to satisfy the pleading requirements of FED.
9 R. CIV. P. 9(b) and 12(b)(6) with respect to several necessary elements of his fraud
10 claim. His allegations that Defendants, at the time they made the purportedly
11 fraudulent representations or promises alleged in the Complaint, knew of their
12 falsity and harbored an intent not to fulfill them, are not supported with specifically
13 pled facts; indeed, in a number of instances, Plaintiffs allegations are conclusory or
14 improperly based on information and belief without accompanying detail setting
15 forth the basis for Plaintiffs alleged belief that Defendants, at the time they made
16 the allegedly false representations or promises, knew of their falsity and harbored an
17 intent not to fulfill them. Furthermore, the Complaint has wholly failed to plead the
18 element of justifiable reliance, and his attempt to plead such reliance does not even
19 satisfy the plausibility standard of FED. R. CIV. P. 8(a).
20 4. Plaintiffs Sixth Cause of Action Fails Because Plaintiff Has Pled
21 Insufficient Facts to Sustain an Accounting Claim
22 The sixth cause of action likewise fails to plead an actionable claim because
23 the Complaint fails to allege sufficient facts to establish a basis for Plaintiff to be
24 entitled to an accounting.
25 A right to an accounting is derivative; it must be based on other claims.
26 Roberts v. UBS AG, 2013 U.S. Dist. LEXIS 12779, at *45 (citing Janis v. California
27
Select Portfolio Servicing, Inc., 246 Cal. App. 4th 1150, 1179 (2016)
28 (reasonableness of reliance can be decided on demurrer).
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1 State Lottery Com., 68 Cal. App. 4th 824, 833-834 (1998)). Under California law,
2 An action for an accounting . . . may be brought to compel the defendant to account
3 to the plaintiff for money or property, (1) where a fiduciary relationship exists
4 between the parties, or (2) where, even though no fiduciary relationship exists, the
5 accounts are so complicated that an ordinary legal action demanding a fixed sum is
6 impracticable. Los Defensores, Inc. v. Gomez, 223 Cal. App. 4th 377, 400 (2014)
7 (citations omitted); see also Roberts, 2013 U.S. Dist. LEXIS 12779, at *45 (E.D.
8 Cal. Jan. 30, 2013) (A suit for an accounting will not lie where it appears from the
9 complaint that none is necessary or that there is an adequate remedy at law.) (citing
10 Civic Western v. Zila Indus., Inc., 66 Cal. App. 3d 1, 14 (1977)).
11 In this case, the Complaint fails to allege facts that, if proven, would suffice to
12 establish that Plaintiff has a right to an accounting from Defendants. The Complaint
13 alleges no facts sufficient to demonstrate that the accounts are so complicated that
14 an ordinary legal action demanding a fixed sum is impracticable. Los Defensores,
15 Inc., 223 Cal. App. 4th at 400. Likewise, as discussed above, Plaintiff has failed to
16 plead facts sufficient to establish the existence of a fiduciary relationship. See Part
17 III.B.2, supra. Nor does the Complaint allege facts sufficient to support a showing
18 that a remedy at law would not address the matters raised by Plaintiffs deficient
19 accounting claim. For all of these reasons, the sixth cause of action in the
20 Complaint should be dismissed.
21 C. PLAINTIFF SHOULD BE ORDERED TO PROVIDE A MORE
22 DEFINITE STATEMENT OF HIS FIFTH CAUSE OF ACTION,
23 PURSUANT TO FED. R. CIV. P. 12(E)
24 Plaintiff also should be ordered to provide a more definite statement of his
25 fifth cause of action, pursuant to FED. R. CIV. P. 12(e). See, e.g., Hubbs v. County
26 of San Bernardino, 538 F. Supp. 2d 1254, 1262 (C.D. Cal. 2008); see also Palmtree
27 Acquisition Corp. v. Neely, 2011 U.S. Dist. LEXIS 85982, at *9 (N.D. Cal. Aug. 4,
28 2011) (granting Rule 12(e) motion for more definite statement of claim for

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1 declaratory relief under state law and reasoning that the complaint is ambiguous
2 because it asks for a declaration of the parties rights and obligations under State
3 laws, without providing any additional information as to what those state laws
4 are or even might be. Without that information, the scope of the claim is ill defined,
5 and as a result the Trustee would not be able to prepare an adequately informed
6 response.); In re Independent Serv. Orgs. Antitrust Litig., 114 F. Supp. 2d 1070,
7 1107 (D. Kan. 2000) (noting that party could have filed a motion for a more
8 definite statement under Rule 12(e) of the Federal Rules of Civil Procedure in
9 order to clarify scope of patent claims).
10 Here, the Complaint repeatedly makes reference to Plaintiffs alleged
11 intellectual property rights or wholly owned property rights with respect to
12 various motion picture projects. See Complaint 55, 99. Plaintiffs fifth cause of
13 action further asserts that Defendants have no ownership interest of any kind in
14 Plaintiffs intellectual property rights in such projects. Id. 99. However, the
15 Complaint nowhere specifies the alleged intellectual property rights that Plaintiff is
16 claiming, nor does it specify the precise rights with respect to which Plaintiffs fifth
17 cause of action seeks a declaration of rights.
18 This ambiguity make it unreasonable for Defendants to be required to prepare
19 an answer including to formulate appropriate affirmative defenses to Plaintiffs
20 fifth cause of action, which seeks a declaration with respect to Plaintiffs claimed
21 intellectual property rights. Accordingly, Defendants request that the Court
22 require Plaintiff to amend his Complaint to set forth a clear and specific statement of
23 each of the precise intellectual property rights with respect to which Plaintiff is
24 seeking declaratory relief, pursuant to FED. R. CIV. P. 12(e).
25 /////
26 /////
27 /////
28 /////

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1 IV. CONCLUSION
2 Based on the foregoing, Defendants respectfully request that this Court
3 dismiss the second, third, fourth and sixth causes of action in Plaintiffs Complaint.
4 Additionally, Defendants request that the Court order Plaintiff to provide a more
5 definite statement of his fifth cause of action.
6
7 Dated: February 17, 2017 SAUL D. BRENNER
8 LOEB & LOEB LLP

9
By: /s/ Saul D. Brenner
10 Saul D. Brenner
11 Attorneys for Defendants
ANIMAL LOGIC ENTERTAINMENT,
12 LLC, and ZAREH NALBANDIAN
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