Alex Khadavi v. Stalgi, Inc.

Opinion

CV 20-7948-RSWL-E x ALEX KHADAVI, an individual, ORDER re: Motion to Dismiss Complaint [9] Plaintiff, v. STALGI, INC., a Florida corporation; ALDO BERNARDI, an individual; and DOES 1 through 10, inclusive, Defendants. Presently before the Court is Defendants Aldo Bernardi and Stalgi, Inc.’s (“Defendants”) Motion to Dismiss Complaint (the “Motion”) [9]. Having reviewed all papers submitted pertaining to the Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS the Motion. ///

A. Factual Background

1. Current Action Plaintiff Alex Khadavi (“Plaintiff”) alleges the following in his Complaint: Plaintiff is a California citizen and the owner of real property located at 777 Sarbonne Road, Los Angeles, California 90077 (the “Property”). Compl. ¶ 1, ECF No. 1. Defendant Stalgi, Inc. (“Defendant Stalgi”) is a Florida corporation, and its president, Defendant Aldo Bernardi (“Defendant Bernardi”), is a Florida resident. Id. ¶ 2. Defendant Stalgi does not maintain a qualified status with the California Secretary of State or the California Franchise Tax Board. Id. ¶ 10(B). Defendant Stalgi is not licensed with the California Contractors State License Board. Id. On or about January 11, 2018, and August 25, 2018, Plaintiff entered into two written contracts with Defendants for the supply, fabrication, and installation of Italian marble and natural stone for the total amounts of $1,813,530.82 and $236,909.76, respectively. Id. ¶ 10(C)-(D). Defendants’ negligent, defective work caused delays, created additional work, and resulted in reordering of replacement materials. Id. ¶ 10(F)-(G). In January 2020, Plaintiff had to refinance the Property because notes were coming due, and Plaintiff was required to pay for an extension. Id. ¶ 10(F). Defendants knew Plaintiff was refinancing the Property and approached Plaintiff to execute deeds of trust,

dated November 1, 2018, and February 15, 2019, for

$1,735,562.00 and $768,931.00, respectively. Id. ¶ 10(H)-(I). Defendants convinced Plaintiff that these deeds of trust would be as effective as mechanic’s liens while not interfering with the sale of the Property once the Property is completed. Id. ¶ 10(I). But Defendants knew that they had no ability to effectuate a mechanic’s lien on the Property because they are unlicensed and did not provide Plaintiff with any of the notices required by law. Id. ¶ 10(J). Defendants failed to indicate on any of the contracts, bids, or solicitations that Defendants were not licensed contractors in the state of California. Id. ¶ 10(L). In January and February 2020, Defendants knowingly filed four false mechanic’s liens on the Property so that Plaintiff would be forced to pay any outstanding invoices and liens. Id. ¶ 10(P)-(Q). On or about March 11, 2020, Defendants extorted Plaintiff into entering into a settlement agreement and issuing a promissory note and deed of trust on the Property for the outstanding amounts Defendants claimed Plaintiff owed for the supply, fabrication, and installation of marble and natural stone. Id. ¶ 10(S). In exchange, Defendants agreed to rescind the mechanic’s liens. Id. Defendants purposefully delayed the project and failed to cure any defects, and Plaintiff was forced to sign a settlement agreement in order to refinance the Property. Id. Plaintiff seeks relief based on rescission of the

contracts. Id. ¶ 10(Z). Defendants knowingly made the

following fraudulent representations to Plaintiff to induce him into entering the contracts: (1) Defendants were licensed contractors; (2) they were qualified to do business in California; (3) the contract complied with statutory requirements; and (4) they would provide proper materials, labor, and services. Id. The settlement agreement is unenforceable because it compromises disputes over the compensation for services performed by an unlicensed construction professional, was not fairly made, and is in contravention of California law or public policy. Id. ¶ 11. In his prayer for relief, Plaintiff seeks special and compensatory damages; an order declaring the settlement agreement null and void, rescinded, and unenforceable, and any and all instruments relating to the Property that Defendants hold to be rescinded and declared null and void and unenforceable; costs and attorneys’ fees; any other appropriate relief; and an order preliminarily and permanently enjoining Defendants from advertising in California and representing themselves as licensed contractors in the state of California. Id. at 18:13-19:3. 2. Superior Court Action On January 13, 2020, Plaintiff filed a complaint against Defendant Bernardi, Defendant Stalgi, and Agata Limited, Inc. in the Superior Court of California, County of Los Angeles, in Khadavi v. Bernardi, et al.,

No. 20STCV01575 (the “Superior Court Action”). See Req.

for Judicial Notice in Supp. of Mot. (“RJN”) Ex. A, ECF No. 10. The Superior Court Action was based on a dispute concerning three contracts for the provision of labor, services, and materials in connection with the installation of marble and stone at the Property. Id. ¶¶ 1, 7-9. Plaintiff asserted fourteen claims for relief in the Superior Court Action, which he stated as: rescission of the contracts; cancellation of deeds of trust; breach of each building contract based on delay in performance; breach of each building contract based on negligent work and defective materials; and temporary restraining orders and preliminary and permanent injunctions sought under California Business and Professions Code § 7028.4. Id. ¶¶ 11-97. On March 11, 2020, the parties executed a settlement agreement. See Compl. Ex. 6. On April 21, 2020, Plaintiff filed a request for dismissal of the Superior Court Action with prejudice, which was entered on April 24, 2020. See RJN Ex. K. B. Procedural Background On August 31, 2020, Plaintiff filed his Complaint [1] in this Action, alleging: (1) breach of contracts; (2) violations of Cal. Bus. & Prof. Code § 17500; (3) aiding and abetting violations of Cal. Bus. & Prof. Code § 17500; (4) negligence; and (5) unjust enrichment and imposition of constructive trust. See generally Compl.

Defendants filed the instant Motion [9] on October

2, 2020. On October 20, 2020, Defendants filed a Reply [12] in which they argue that the Motion should be granted because Plaintiff failed to timely oppose. See Reply in Supp. of Mot. to Dismiss Compl. 2:12-14, ECF No. 13. Plaintiff subsequently filed his untimely Opposition [13] on October 25, 2020. A. Legal Standard Federal Rule of Civil Procedure (“Rule”) 12(b)(6) allows a party to move for dismissal on one or more claims if a pleading fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Under Rule 8(a), a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” to give the defendant “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Fed. R. Civ. P. 8(a). Dismissal is proper “where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008) (citing Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(quoting Twombly, 550 U.S. at 570). While a complaint

need not contain detailed factual allegations, it must provide more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. The plaintiff must allege enough facts “to raise a right to relief above the speculative level.” Id. In evaluating a Rule 12(b)(6) motion, a court must take all well-pleaded allegations of material fact as true and construe them in the light most favorable to the nonmovant. Great Minds v. Off. Depot, Inc., 945 F.3d 1106, 1109 (9th Cir. 2019). A court may generally consider only “the complaint itself and its attached exhibits, documents incorporated by reference, and matters properly subject to judicial notice.” In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046, 1051 (9th Cir. 2014). B. Discussion 1. Request for Judicial Notice Defendants request that the Court take judicial notice of eleven filed documents from Plaintiff’s previous state case in the Superior Court of California, County of Los Angeles, Alex Khadavi v. Aldo Bernardi, et al., No. 20STCV01575. See RJN 2:2-4:9, Exs. A-K. Because the Court may take judicial notice of court filings and other matters of public record, judicial notice is proper. See Fed. R. Evid. 201; Harris v. County of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012) (stating that courts “may take judicial notice of

undisputed matters of public record, including documents

on file in federal or state courts”). Accordingly, the Court GRANTS Defendants’ requests for judicial notice. 2. Motion to Dismiss Local Rule 7-9 requires an opposing party to file an opposition or statement of non-opposition to a motion no later than twenty-one days before the designated hearing date. L.R. 7-9. Here, Plaintiff’s Opposition was due by October 13, 2020. But Plaintiff did not file his Opposition until October 25, 2020—just nine days before the scheduled hearing on November 3, 2020—without seeking leave of court or offering any explanation for his tardy response. “The failure to file any required document, or the failure to file it within the deadline, may be deemed consent to the granting or denial of the motion . . . .” L.R. 7-12; see Irvin v. Madrid, 749 F. App’x 546, 547 (9th Cir. 2019) (affirming the district court’s dismissal pursuant to Local Rule 7-12). Accordingly, the Court deems Plaintiff’s failure to timely oppose as consent to grant Defendants’ Motion. While the Court may grant Defendants’ Motion based on Plaintiff’s late-filed Opposition, the Court proceeds to analyze the Motion on the merits. Defendants argue that the Complaint should be dismissed because: (1) all of Plaintiff’s claims are barred by res judicata; (2) all of Plaintiff’s claims are barred by the settlement agreement and release entered into by the parties; and (3) Plaintiff fails to state a claim for rescission of

the settlement agreement. Mot. to Dismiss Compl.

(“Mot.”) 3:3-14, ECF No. 9. Pursuant to the Full Faith and Credit Act, “a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 80-81 (1984); see 28 U.S.C. § 1738. The Court thus applies California law to determine the effect of the judgment issued in Plaintiff’s Superior Court Action. “Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.” Mycogen Corp. v. Monsanto Co., 28 Cal. 4th 888, 896, 51 P.3d 297, 301 (2002). Under California law, res judicata applies “if a second suit involves: (1) the same cause of action (2) between the same parties (3) after a final judgment on the merits in the first suit.” DKN Holdings LLC v. Faerber, 61 Cal. 4th 813, 824 (2015). If those requirements are met, res judicata bars not only issues that were actually litigated in the first suit but also those issues that could have been litigated in that suit. SLPR, L.L.C. v. San Diego Unified Port Dist., 49 Cal. App. 5th 284, 298 (2020). There is no question that the present Action involves the same parties, as Plaintiff and Defendants were all parties in the Superior Court Action. See RJN

Ex. A. Nor is there any doubt that a dismissal with

prejudice, which concluded the Superior Court Action, see RJN Ex. K, “is the equivalent of a final judgment on the merits” for purposes of applying res judicata. Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788, 793 (2010); see also Kim v. Reins Int’l Cal., Inc., 9 Cal. 5th 73, 91 (2020) (“A dismissal with prejudice is considered a judgment on the merits preventing subsequent litigation between the parties on the dismissed claim.”). Accordingly, res judicata arises if the present Action involves the same cause of action. To determine what constitutes the same cause of action, California courts employ the “primary rights” theory. Boeken, 48 Cal. 4th at 797. “[I]f two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” Gonzales v. Cal. Dep’t of Corr., 739 F.3d 1226, 1233 (9th Cir. 2014) (quoting Eichman v. Fotomat Corp., 147 Cal. App. 3d 1170, 1174 (1983)). Under this theory, “the determinative factor is the harm suffered. When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right.” Id. (quoting Boeken, 48 Cal. 4th at 798). Defendants argue, and the Court agrees, that the

claims alleged here involve the same primary right at

issue in the Superior Court Action. Mot. 10:4-17. The Superior Court Action, like this Action, concerned claims arising out of contracts between the parties for the supply, fabrication, and installation of marble and natural stone at the Property. See Compl. ¶ 10(C)-(E); RJN Ex. A ¶¶ 7-10. The substance of Plaintiff’s allegations in both actions is essentially the same: Defendants fraudulently induced Plaintiff to enter into contracts and to later execute deeds of trust, and Defendants performed negligent or otherwise inadequate work, which caused Plaintiff to suffer injury and damages. See Compl. ¶¶ 6, 10(E), 13, 17-19, 32-34; RJN Ex. A ¶¶ 10, 13, 55-57, 73. Plaintiff alleges in both complaints that Defendants made the same false representations: Defendants were licensed contractors; Defendants were qualified to do business in California; the contracts complied with all statutory requirements; and Defendants would provide proper materials, labor, and services. Compl. ¶ 10(Z); RJN Ex. A ¶¶ 13, 43. In both actions, the harm alleged was economic injury caused by the same wrongful conduct by Defendants, which allegedly amounted to false representations, fraudulent inducement, and breach of contracts in connection with the Property. Although the Complaint here may “add new theories of recovery and greater detail[,]” the present Action raises the same causes of action as did the Superior

Court Action. Eichman, 147 Cal. App. 3d at 1175 (1983);

see also Hi-Desert Med. Ctr. v. Douglas, 239 Cal. App. 4th 717, 734 (2015) (“[T]he hospitals sought a different remedy in [the first suit] as opposed to what they later sought, but that was their litigation choice. The same primary right is at stake in both cases.”). To the extent Plaintiff’s claims are premised on these allegations, Plaintiffs’ claims are precluded by res judicata. The Court notes, however, that res judicata “may not apply when there are changed conditions and new facts which were not in existence at the time the action was filed upon which the prior judgment is based.” Plan. & Conservation League v. Castaic Lake Water Agency, 180 Cal. App. 4th 210, 227 (2009) (internal quotation marks and citation omitted). Res judicata does not bar claims “that arise after the filing of the complaint in the first action, but before judgment is entered.” Id. Although the bulk of the factual allegations in the Complaint predate the filing of the Superior Court Action on January 13, 2020, some are based on events that occurred afterwards. Specifically, Plaintiff alleges that Defendants filed four false mechanic’s liens on the Property on January 31 and February 6, 2020, and in February to July 2020, Plaintiff incurred costs for removing and replacing materials as a result of Defendants’ negligent installation. See Compl. ¶

10(P), (X).

Claims arising from these facts are nonetheless barred by the terms of the settlement agreement. Defendants assert, and Plaintiff does not deny, that the settlement agreement resolved any and all claims between the parties, including those related to the Property, the contracts, the mechanic’s liens, and the Superior Court Action. See Mot. 5:9-12; Compl. ¶ 10(S), Ex. 6, Recitals. The parties mutually released all claims, known or unknown, accruing or arising at any time prior to the effective date of the settlement agreement. See Compl. Ex. 6, ¶ 9. The parties also waived the provisions of California Civil Code § 1542 and other such laws. Id. ¶ 10. Further, the parties acknowledged that they were advised of the effect of this waiver, and each of the parties “has been or had the opportunity to be represented by legal counsel with respect to the negotiation of [the settlement agreement].” Id. ¶¶ 10, 22. In light of the broad language in the settlement agreement, any claims Plaintiff may have had against Defendants based on the facts alleged in the Complaint are barred by the settlement agreement, if not by res judicata. In his Opposition, Plaintiff does not directly address Defendants’ res judicata argument or dispute the contents of the settlement agreement. Instead, Plaintiff appears to suggest that his claims are not barred by res judicata or the settlement agreement

because he alleges a basis for rescission of the

settlement agreement—namely, economic duress.1 See Pl.’s Opp’n to Defs.’ Mot. to Dismiss (“Opp’n”) 5:7-10, 6:25-9:11, ECF No. 13. Under California law, economic duress can serve as a basis for rescission of a settlement agreement. See, e.g., In re Outlaw Lab’ys, LP Litig., 352 F. Supp. 3d 992, 1007 (S.D. Cal. 2018); Lanigan v. City of Los Angeles, 199 Cal. App. 4th 1020, 1034 (2011). The doctrine of economic duress “may come into play upon the doing of a wrongful act which is sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator’s pressure.” Rich & Whillock, Inc. v. Ashton Dev., Inc., 157 Cal. App. 3d 1154, 1158 (1984). The party seeking relief “must have had no ‘reasonable alternative’ to the action it now seeks to avoid (generally, agreeing to contract).” Lanigan, 199 Cal. App. 4th at 1034

1 Indeed, “[i]f the settlement agreement is subject to rescission,” then Defendants’ arguments based on res judicata and express release “should not stand in the way of a revival of [Plaintiff’s] claims” because they “both assume the validity of the settlement.” Kelly v. Provident Life & Acc. Ins., 245 F. App’x 637, 640 (9th Cir. 2007); see Leeper v. Beltrami, 53 Cal. 2d 195, 205 (1959) (citations omitted) (“[A] party may attack any judgment by showing that it was secured by the extrinsic fraud of the other party. . . . Duress is a species of fraud. [Where the plaintiff pleads duress against the defendants,] any consent judgment or judgment of dismissal that may have been entered pursuant to a settlement agreement would not act as a bar to the present action.”). (internal quotation marks and citation omitted). “No

reasonable alternative may exist ‘when the only other

alternative is bankruptcy or financial ruin.’” Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1119 (9th Cir. 2018) (quoting Rich & Whillock, Inc., 157 Cal. App. 3d at 1159). “If a reasonable alternative was available, and there hence was no compelling necessity to submit to the coercive demands, economic duress cannot be established.” Id. (quoting CrossTalk Prods., Inc. v. Jacobson, 65 Cal. App. 4th 631, 644 (1998)). Here, Plaintiff fails to allege “a wrongful act which [was] sufficiently coercive” such that he faced “no reasonable alternative [but] to succumb” to Defendants’ pressure. Rich & Whillock, Inc., 157 Cal. App. 3d at 1158. Although Plaintiff offers additional allegations to support his economic duress argument in his Opposition, see Opp’n 8:17-28, the Court does not consider allegations that are not pleaded in the Complaint. Moreover, Plaintiff’s Complaint makes no mention of economic duress whatsoever. Accordingly, Plaintiff fails to plead sufficient facts showing the settlement agreement was procured under economic duress. Plaintiff next argues, albeit confusingly, that the Court should recognize a tort action for damages to remedy a constitutional violation because Plaintiff is an injured member of a protected class of persons, citing California Penal Code § 519, Monex Deposit Co. v. Gilliam, 666 F. Supp. 2d 1135 (C.D. Cal. 2009), and the Restatement (Second) of Torts § 874A. See Opp’n 9:12-

10:22. This argument is similarly rejected.

Plaintiff’s argument does not appear to be directed to any of the claims actually pleaded in the Complaint. Plaintiff contends that he is a victim of extortion in his Opposition, but he does not explicitly assert a claim for extortion in the Complaint. Nonetheless, the Court construes the following allegations regarding the settlement agreement as one for civil extortion:

On or about March 11, 2020, Defendants extorted Plaintiff into entering into a settlement agreement and issuing a promissory note and deed of trust on the Property for the outstanding amounts Defendant claimed Plaintiff owed for the supply, fabrication and installation of marble and natural stone at the Property. In exchange for the issuance of a settlement agreement, deed of trust and promissory note, Defendants agreed to rescind the mechanics liens. Plaintiff was forced to issue a deed of trust and promissory note and sign a settlement agreement so that a refinance of the Property could finalize. Purposefully delaying the project and failing to cure any defects Defendants knowingly extorted Plaintiff to comply with Defendants’ demands so that Plaintiff could refinance the Property. Compl. ¶ 10(S). “Extortion is the obtaining of property or other consideration from another, with his or her consent, . . . induced by a wrongful use of force or fear . . . .” Cal. Penal Code § 518. California recognizes “a civil cause of action for the recovery of money obtained by the wrongful threat of criminal or civil prosecution, whether the claim is denominated by ‘extortion, menace, or duress.’” Monex Deposit Co. v. Gilliam, 666 F. Supp. 2d 1135, 1136 (C.D. Cal. 2009) (citing Fuhrman v. Cal.

Satellite Sys., Inc., 179 Cal. App. 3d 408, 426 (1986)).

The definition of a civil extortion claim is derived from the crime of extortion. Id. at 1137; see also Lutfi v. Al Naimi, No. CV 17-08208 SJO (JPRx), 2018 WL 6265082, at *3 (C.D. Cal. Jan. 17, 2018). “Fear, such as will constitute extortion, may be induced by a threat . . . [t]o do an unlawful injury to the person or property of the individual threatened or of a third person.” Cal. Penal Code § 519. Here, the Complaint fails to adequately allege a threat. Any additional allegations proffered in Plaintiff’s Opposition are not entitled to the presumption of truth. Plaintiff’s conclusory allegations that he was “extorted” into entering the settlement agreement are insufficient and fail “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The Complaint, as currently pleaded, does not provide enough factual support to allow the Court “to draw the reasonable inference that [Defendants are] liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). Plaintiff therefore fails to state a claim for civil extortion. Further, even if the Court were to consider Plaintiff’s allegations in his Opposition—that Defendants’ filing of the mechanic’s liens was “in fact done with the intent to extort Plaintiff into acquiescing to their demands,” see Opp’n 9:24-28, those claims are barred by the broad language of the

settlement agreement, which contemplated and resolved

any disputes related to the mechanic’s liens. The Court next considers Plaintiff’s contentions as to the unenforceability of the settlement agreement. In the Complaint, Plaintiff alleges that the settlement agreement is unenforceable “because it compromises disputes over compensation for services performed by an unlicensed construction professional,” it is “not fairly made,” and “the legislator has a clear policy of invalidating contracts made by unlicensed construction professionals.” Compl. ¶ 11. Under California law, an unlicensed contractor may not “bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required.” Cal. Bus. & Prof. Code § 7031(a). But the statute “does not automatically void all contracts entered by unlicensed contractors.” Nash v. Taylor, 327 F. App’x 718, 720 (9th Cir. 2009) (quoting MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., 36 Cal. 4th 412, 435 (2005)).2 2 Further, section 7031 prohibits “judicial aid” to an unlicensed contractor seeking compensation, but “nothing in the statute precludes the satisfied beneficiary of such work from paying for it voluntarily.” MW Erectors, Inc., 36 Cal. 4th at 430 n.10 (noting that section 7031 withholds “judicial aid from those who seek compensation for unlicensed contract work” (quoting Hydrotech Sys., Ltd. v. Oasis Waterpark, 52 Cal. 3d 988, Contrary to Plaintiff’s assertion, the settlement

agreement is not rendered unenforceable simply by virtue

of Defendants’ status as unlicensed contractors. Defendants did not “bring or maintain” either this Action or the Superior Court Action. Plaintiff initiated both actions. And, under the present facts, the Court cannot conclude that the settlement agreement was not voluntarily made. Plaintiff’s allegation that the settlement agreement was “not fairly made,” without more, merely indicates buyer’s remorse, which does not constitute a basis for rescinding a settlement agreement. Therefore, the settlement agreement remains a bar to Plaintiff’s claims. See Tarpy v. County of San Diego, 110 Cal. App. 4th 267, 279 (2003) (“[N]o public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party . . . .”). In sum, because Plaintiff cannot avoid the preclusive effect of res judicata and the settlement agreement, all of his claims are barred. Accordingly, the Court GRANTS Defendants’ Motion. 3. Leave to Amend Leave to amend should be granted with “extreme liberality.” Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009); see Fed. R. Civ. P. 15(a)(2) (“The

995 (1991))). court should freely give leave when justice so requires.”). Where a court grants a motion to dismiss, it should generally provide leave to amend “unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc). Plaintiff requests leave to amend should the Court grant Defendants’ Motion. Opp’n 10:25-26. It appears that amendment would not necessarily be futile, as Defendants’ prevailing arguments are premised on the validity of the settlement agreement. Therefore, the Court GRANTS leave to amend, provided that Plaintiff can allege, in good faith, additional facts to support a basis for rescission. Based on the foregoing, the Court GRANTS the Motion without prejudice. Plaintiff may file a first amended complaint, if desired, by no later than March 31, 2021. Failure to timely amend the Complaint will result in the dismissal of all claims with prejudice. DATED: March 10, 2021 _/s_/_ R_o_n_al_d_ S_.W__. _Le_w_____________ HONORABLE RONALD S.W. LEW Senior U.S. District Judge