Darrough v. SOC LLC

• Court: District Court, D. Nevada
• Decided: July 29, 2024
• Docket: 2:20-cv-01951
• Status: Unknown

Opinion

1 2 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 3 4 Gene Darrough, individually and on behalf of all Case No. 2:20-cv-01951-CDS-BNW others similarly situated, 5 Order Granting in Part Defendants’ Plaintiff Motion for Summary Judgment 6 v. [ECF No. 40] 7 SOC LLC, et al.,

8 Defendants ____________________________________________________ 9

10 Nicholas DeFiore, individually and on behalf of Case No. 2:20-cv-01981-CDS-DJA all others similarly situated, et al., 11 Order Granting in Part Defendants’ Plaintiffs Motion for Summary Judgment 12 v. [ECF No. 48] 13 SOC LLC, et al.,

14 Defendants

15 16 This matter comes before the court on defendants SOC LLC (“SOC”), SOC-SMG, Inc. 17 (“SOC-SMG”), and Day & Zimmermann, Inc.’s (“Day & Zimmermann”) (collectively, 18 “defendants”) consolidated motion to dismiss. ECF No. 40 (Darrough); ECF No. 48 (DeFiore).1 19 Plaintiffs, who were employed by defendants to provide war-zone security services to the 20 Department of Defense (DOD) in Iraq, raise numerous claims against defendants, centered 21 around allegations of false promises and representations regarding work conditions. Plaintiffs 22 Gene Darrough and Nicholas DeFiore2 oppose the consolidated motion to dismiss. ECF No. 42 23 1 Because the consolidated motions filed in Darrough and DeFiore are identical, the court refers to the 24 motion to dismiss filed in Darrough (ECF No. 40) throughout this order. 2 As well as plaintiffs Arnold Alexander, Dustin Boyle, Allen Cain, Alfredo Luis Cruz, Babatunda Douglas, 25 Todd Dupont, Christopher Fields, Robert Herring, Jaquelyn Joubert-Young, Abdelrahim Khamis, Richard Landry, Daniel Mercanton, Paul Mills, Jr., Jerome Mundy, George Munn, Rene Perez, Keith 26 Quick, Neil Robinson, Joseph Scott, Christopher Warren, Curtis Watson, Shawn Whitehead, Houston Willams, Christopher Williams, Benton Williams Jr., David Wolderzak, Warren Woods, and Eduardo Zuniga. 1 (Darrough); ECF No. 50 (DeFiore).3 For the reasons set forth herein, defendants’ consolidated 2 motion to dismiss is granted in part and denied in part. 3 I. Background 4 Plaintiff Gene Darrough filed his complaint against defendants and Does 1–20 in the 5 Eighth Judicial District Court of Nevada in September 2020. Darrough Compl., ECF No. 1-2. 6 Plaintiffs Nicholas DeFiore, along with twenty-eight other plaintiffs,4 filed their complaint 7 against defendants and Does 1–20 in the Eighth Judicial District Court of Nevada in October 8 2020. DeFiore Compl., ECF No. 1-2. The complaints are substantially similar.5 Compare DeFiore 9 Compl., ECF No. 1-2, with Darrough Compl., ECF No. 1-2. 10 Plaintiffs were employed as armed guards by SOC, providing security to DOD bases in 11 Iraq. DeFiore Compl., ECF No. 1-2 at ¶ 1; see also Darrough Compl., ECF No. 1-2 at ¶ 1. SOC, 12 which stands for “Securing Our Country,” provides worldwide security services for individuals, 13 domestic facilities, nuclear power plants, and military bases. DeFiore Compl., ECF No. 1-2 at ¶ 5; 14 see also Darrough Compl., ECF No. 1-2 at ¶ 5. SOC is owned by SOC-SMG and Day & 15 Zimmermann. DeFiore Compl., ECF No. 1-2 at ¶ 2; see also Darrough Compl., ECF No. 1-2 at ¶ 2. 16 Plaintiffs brought this action alleging that SOC recruited them under false promises 17 “with respect to the schedule [they] would work.” DeFiore Compl., ECF No. 1-2 at ¶ 1; see also 18 Darrough Compl., ECF No. 1-2 at ¶ 1. Plaintiffs allege that the working conditions were “not 19 3 Because the oppositions filed in filed in Darrough and DeFiore are identical, the court only refers to the 20 opposition filed in Darrough (ECF No. 42) throughout this order. 4 The other DeFiore plaintiffs are: Keith Quick, Neil Robinson, Christopher Williams, Shawn 21 Whitehead, Paul Mills, Jr., Rene Perez, Robert Herring, Houston Williams, Allen Cain, Richard Landry, 22 Warren Woods, Arnold Alexander, Daniel Mercanton, David Wolderzak, Jaquelyn Joubert-Young, Abdelrahim Khamis, Curtis Watson, Joseph Scott, Babatunda Douglas, Dustin Boyle, Alfredo Luis Cruz, 23 George Munn, Todd Dupont, Jerome Mundy, Benton Williams Jr., Eduardo Zuniga, Christopher Warren, and Christopher Fields. 24 5 All plaintiffs in the present actions were also members of the putative Risinger class action. See Risinger v. SOC LLC, No. 2:12-cv-00063-MMD-PAL (D. Nev.). The class consisted of 1,298 of defendants’ employees 25 who worked across 22 bases in Iraq. The class was certified on September 30, 2015, but ultimately, decertified on July 26, 2019, with reconsideration of that order denied on September 30, 2019. Risinger, 26 ECF No. 374. 1 revealed” to them “until after they had agreed to overseas employment” and “had been physically 2 transported to Iraq.” DeFiore Compl., ECF No. 1-2 at ¶ 1; see also Darrough Compl., ECF No. 1-2 3 at ¶ 1. Once in Iraq, they were forced to “work in ultra-hazardous conditions in excess of 12 4 hours per day without meals or rest periods, seven days per week.” DeFiore Compl., ECF No. 1-2 5 at ¶ 1; see also Darrough Compl., ECF No. 1-2 at ¶ 1. According to the complaints, this “directly 6 violated not only the representations made by SOC to secure Plaintiffs’ employment, but its 7 [DOD] contract[.]” DeFiore Compl., ECF No. 1-2 at ¶ 1; see also Darrough Compl., ECF No. 1-2 at 8 ¶ 1. That contract mandated that SOC would not require any guard to work longer than one 12- 9 hour shift per 24-hour period, and not more than 72 hours per week (i.e., the “6/12 schedule”). 10 DeFiore Compl., ECF No. 1-2 at ¶ 1; see also Darrough Compl., ECF No. 1-2 at ¶ 1. Plaintiffs allege 11 that “SOC thus subjected Plaintiffs and SOC’s clients, including the United States of America, to 12 undue risk by jeopardizing the physical and psychological condition of Plaintiffs in the course of 13 ultra-hazardous activities.” DeFiore Compl., ECF No. 1-2 at ¶ 1; see also Darrough Compl., ECF 14 No. 1-2 at ¶ 1. 15 The complaints assert eight claims for relief: (1) promissory fraud; (2) negligent 16 misrepresentation; (3) unjust enrichment-fraud; (4) money had and received; (5) breach of 17 contract; (6) breach of covenant of good faith and fair dealing; (7) quantum meruit; and (8) 18 unjust enrichment-breach of contract. See generally DeFiore Compl., ECF No. 1-2; see also 19 Darrough Compl., ECF No. 1-2. Defendants move to dismiss all eight claims. Specifically, they 20 move to dismiss counts one through four and eight for failure to plead with specificity as 21 required by Rule 9(b), and counts five through seven for failure to state a claim for relief. See 22 generally ECF No. 40. Defendants also argue that plaintiffs’ alter ego allegations are insufficient 23 so they move to dismiss the 20 Doe defendants. Id. 24 II. Legal standard 25 The Federal Rules of Civil Procedure require a plaintiff to plead “a short and plain 26 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). 1 Dismissal is appropriate under Fed. R. Civ. P. 12(b)(6) where a pleader fails to state a claim upon 2 which relief can be granted. Id. (b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A 3 pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, 4 and although a court must take all factual allegations as true, legal conclusions couched as 5 factual allegations are insufficient. Id. at 555. 6 Accordingly, Fed. R. Civ. P. 12(b)(6) requires “more than labels and conclusions, and a 7 formulaic recitation of the elements of a cause of action will not do.” Id. To survive a motion to 8 dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to 9 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting id. at 570). 10 “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to 11 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This 12 standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. 13 If the court grants a motion to dismiss for failure to state a claim, leave to amend should 14 be granted unless it is clear that the deficiencies of the complaint cannot be cured by 15 amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Under Fed. R. Civ. 16 P. 15(a), a court should “freely” give leave to amend “when justice so requires,” and in the 17 absence of a reason such as “undue delay, bad faith or dilatory motive of the part of the movant, 18 repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the 19 opposing party by virtue of allowance of the amendment, futility of the amendment, etc.” Foman 20 v. Davis, 371 U.S. 178 (1962). 21 III. Discussion 22 A. Federal Rule of Civil Procedure 9(b) (counts one through four, and count eight) 23 Allegations based in fraud must be pled with particularity in accordance with Federal 24 Rule of Civil Procedure 9(b). A plaintiff alleging fraud must “state with particularity the 25 circumstances constituting fraud . . . , [although] [m]alice, intent, knowledge, and other 26 conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). The allegations of 1 fraud must be “specific enough to give defendants notice of the particular misconduct. . . so that 2 they can defend against the charge and not just deny that they have done anything wrong. . . . 3 Averments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the 4 misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). 5 This requires an account of the “time, place, and specific content of the false representations as 6 well as the identities of the parties to the misrepresentations.” Edwards v. Marin Park, Inc., 356 F.3d 7 1058, 1066 (9th Cir. 2004) (citation omitted). The plaintiff must also explain what is false or 8 misleading about the purportedly fraudulent statement, and why it is false. In re GlenFed, Inc. Sec. 9 Litig., 42 F.3d 1541 (9th Cir. 1994). A claim that is “grounded in fraud” or “sounds in fraud” must 10 satisfy Rule 9(b). Vess, 317 F.3d at 1106. 11 The complaints allege that defendants orchestrated a broad-based scheme that included 12 false representations about employees’ future salary and work conditions in Iraq. DeFiore 13 Compl., ECF No. 1-2 at ¶¶ 41–49; see also Darrough Compl., ECF No. 1-2 at ¶¶ 13–24. The 14 complaints also allege SOC knew these representations were false but made them as part of its 15 recruitment push for security guards and intended to rescind these guarantees once the guards 16 were deployed to Iraq. DeFiore Compl., ECF No. 1-2 at ¶ 52; see also Darrough Compl., ECF No. 1- 17 2 at ¶ 54. As a result, plaintiffs raise a number of fraud claims: promissory fraud, negligent 18 misrepresentation, tortious and contractual unjust enrichment,6 and money had and received. 19 See generally DeFiore Compl., ECF No. 1-2; see also Darrough Compl., ECF No. 1-2. 20 Defendants move to dismiss plaintiffs’ fraud claims for failure to meet the heightened 21 pleading standards of Federal Rule of Civil Procedure 9(b). ECF No. 40 at 8. Defendants argue 22 that the fraud claims should be dismissed because they do not satisfy Rule 9(b)’s pleading 23

24 6 Plaintiffs bring two claims for unjust enrichment: “unjust enrichment-promissory fraud” claim (count three), and “unjust enrichment-breach of contract” (count eight). Defendants argue that counts three and 25 eight should be treated as a single quasi-contract theory of recovery because there is “no material difference between these two claims.” ECF No. 40 n.3. Plaintiffs do not address this argument or 26 demonstrate any meaningful difference between counts three and eight. See ECF No. 42 at 17–18. Thus, counts three and eight will be treated as one quasi-contract theory of recovery. 1 requirements. Id. at 16–20. Plaintiffs aver that their allegations are sufficiently pled under Rule 2 9(b) because the “allegations make clear that false promises [ ] made by Defendants [during] 3 telephone calls and when they traveled to Nevada (the where) before their departure to Iraq on 4 the dates alleged in paragraphs 6 through 34 as to each individual plaintiff (the when), that the 5 false promises were also made both telephonically and in writing (the how), and that the 6 misrepresentations related to Plaintiffs’ salary, work schedule, vacation, and other working 7 conditions (the what).” ECF No. 42 at 13. 8 While the complaints describe actions which very well may be fraudulent behavior, 9 plaintiffs’ allegations are general rather than specific. In Cafasso v. Gen. Dynamics C4 Sys., the Ninth 10 Circuit found that general allegations do not suffice to pass Rule 9(b) scrutiny. 637 F.3d 1047, 11 1055 (9th Cir. 2011). There, the Ninth Circuit rejected the plaintiff’s allegation under Rule 12 9(b) because “[t]his type of allegation, which identifies a general sort of fraudulent conduct but 13 specifies no particular circumstances of any discrete fraudulent statement, is precisely 14 what Rule 9(b) aims to preclude.” Id. at 1057. Likewise, here, as defendants argue, the complaints 15 do not satisfy Rule 9(b) because they fail to specifically identify upon what misrepresentations 16 plaintiffs allegedly relied upon. For example, the DeFiore plaintiffs allege that they were 17 approached by SOC recruiters or answered a job posting on an online board which informed 18 them about the employment opportunity. See DeFiore Compl., ECF No. 1-2 at ¶ 45; see also 19 Darrough Compl., ECF No. 1-2 at ¶ 19. In DeFiore, it is unclear which of the 29 DeFiore plaintiffs 20 were approached by SOC recruiters or which plaintiffs answered the job posting, or what was 21 conveyed by either. To satisfy Rule 9(b), a complaint must be more specific. See Sanford . 22 MemberWorks, Inc., 625 F.3d 550, 558 (9th Cir. 2010) (holding plaintiffs failed to satisfy Rule 23 9(b) because they “failed to allege which of them made any of the telephone calls” or the 24 “mailings they received”); Moore . Kayport Package Express, 885 F.2d 531, 540 (9th Cir. 25 1989) (holding that a complaint did not satisfy Rule 9(b) because it “d[id] not specify which 26 plaintiff received which prospectus, or which plaintiff(s) made purchases through the stockbroker 1 defendants” (emphases added)); see also Bisson v. Bank of Am., N.A., 919 F. Supp. 2d 1130, 1137–38 2 (W.D. Wash. 2013) (dismissing fraud claims on grounds that “Plaintiffs have failed to 3 distinguish between the 55 plaintiffs in this action”). 4 The complaints also allege that SOC, through group recruiting calls using a universal call 5 script, made false promises regarding the 6/12 schedule.7 DeFiore Compl., ECF No. 1-2 at ¶ 46; see 6 also Darrough Compl., ECF No. 1-2 at ¶ 20. However, it is not clear whether any plaintiff 7 participated in a group recruiting call or even heard the alleged universal call script. Plaintiffs 8 argue that SOC recruiters in Nevada made false representations about the 6/12 schedule. ECF 9 No. 42 at 14. However, Darrough alleges that “[u]pon arrival in Iraq, Plaintiff and other Class 10 Members were informed of the 6/12 Schedule and the fact that they would not be expected to work 11 more than six days per week at 12 hours per day.” Darrough Compl., ECF No. 1-2 at ¶ 22 12 (emphasis added). So, contrary to plaintiffs’ argument, it appears that at least some plaintiffs 13 became informed of the 6/12 schedule while in Iraq and not prior to deployment.8 This further 14 demonstrates the lack of specificity set forth in the complaint. Because plaintiffs have not 15 alleged fraud with the requisite level of particularity to satisfy Rule 9(b), counts one through 16 four, and eight of the DeFiore and Darrough complaints are dismissed without prejudice. 17 B. Breach of contract (count five) 18 A claim for breach of contract requires: (1) the existence of a valid contract; (2) a breach 19 by the defendant; and (3) damage as a result of the breach. Brown v. Kinross Gold U.S.A., Inc., 531 F. 20 Supp. 2d 1234, 1240 (D. Nev. 2008) (citations and quotation marks omitted). In the complaints, 21 plaintiffs allege that SOC breached the terms of its employment agreement with plaintiffs by 22 “requir[ing] Plaintiffs to work more than 12 hours a day, and more than 72 hours a week” 23 without rest periods or overtime compensation. DeFiore Compl., ECF No. 1-2 at ¶¶ 49, 76; see also

24 7 The 6/12 schedule means a schedule of one 12-hour shift per 24-hour period, resulting in no more than 25 72 hours worked per week. 8 While not considered in the court’s decision here, the court notes that in the Risinger action, Darrough 26 confirmed that he “first received information from SOC about how many hours a day [he was] permitted to work or how many days a week [he was] permitted to work when [he] arrived in Iraq.” Excerpt from Darrough Dep. Tr., Defs.’ Ex. D, ECF No. 41-4 at 4. 1 Darrough Compl., ECF No. 1-2 at ¶¶ 23, 79. Plaintiffs also allege that their employment 2 agreements stated that they would “perform duties and responsibilities that are customary for 3 the Employee’s position” including working a 6/12 schedule. DeFiore Compl., ECF No. 1-2 at ¶ 4 75; see also Darrough Compl., ECF No. 1-2 at ¶ 40. The complaints further allege that “SOC was 5 contractually obligated by its own contract with the United States Government to limit its 6 guards to work no more than 12 hours in a day and 72 hours a week” and that this “obligation 7 was incorporated into the Agreements between Plaintiffs and SOC as it was expressly for their 8 benefit.” DeFiore Compl., ECF No. 1-2 at ¶ 75; see also Darrough Compl., ECF No. 1-2 at ¶ 78. The 9 complaints further allege that SOC required plaintiffs to work more than 12 hours a day, 72 10 hours a week. DeFiore Compl., ECF No. 1-2 at ¶ 76; see also Darrough Compl., ECF No. 1-2 at ¶ 79. 11 And that as “a direct result of SOC’s failure and refusal to perform its obligations under the 12 terms and provisions of the Agreements, Plaintiffs have sustained damages in an amount 13 according to proof at trial.” DeFiore Compl., ECF No. 1-2 at ¶ 77; see also Darrough Compl., ECF 14 No. 1-2 at ¶ 80. 15 Defendants argue that plaintiffs’ breach of contract claim should be dismissed because 16 the employment agreement does not contain express language limiting plaintiffs’ work schedule 17 to 12 hours per day, 72 hours per week. ECF No. 40 at 26. Defendants concede that the 18 employment agreement defines duties and responsibilities as what is “customary,” to allow for 19 flexibility in the unpredictable warzone environment but argue that the employment agreement 20 also requires employees to perform additional duties as the company directs. Id. 21 I agree that the complaints do not allege that plaintiffs’ employment agreements contain 22 express language limiting plaintiffs’ work schedules. However, the complaints do allege the 23 employment agreements state that employees would perform “customary” duties and 24 responsibilities which specifically included a schedule of working no more than 12 hours in a 25 day and 72 hours a week, and that SOC required plaintiffs to work in excess of that schedule, 26 1 resulting in damages. See DeFiore Compl., ECF No. 1-2 at ¶¶ 75–77; see also Darrough Compl., 2 ECF No. 1-2 at ¶¶ 7, 78–80. Thus, plaintiffs have properly pled their breach of contract claim. 3 C. Breach of the implied covenant of good faith and fair dealing (count six) 4 Nevada law implies a covenant of good faith and fair dealing in every contract. Hilton 5 Hotels Corp. v. Butch Lewis Prods., Inc., 808 P.2d 919, 922–23 (Nev. 1991). “Where the terms of a 6 contract are literally complied with but one party to the contract deliberately contravenes the 7 intention and the spirit of the contract, that party can incur liability for breach of the implied 8 covenant of good faith and fair dealing.” Id. “This cause of action is different from one for breach 9 of contract because it requires literal compliance with the terms of the contract.” Stebbins v. Geico 10 Ins. Agency, 2019 WL 281281, at *2 (D. Nev. Jan. 22, 2019). “It is well established that a claim 11 alleging breach of the implied covenants of good faith and fair dealing cannot be based on the 12 same conduct establishing a separately pled breach of contract claim.” Id. (quotation omitted) 13 (finding a breach of the implied covenant of good faith and fair dealing claim may not be plead as 14 an alternative theory of liability when based on the same allegations as the breach of contract 15 claim). 16 Defendants argue that plaintiffs’ breach of the implied covenant of good faith and fair 17 dealing claim should be dismissed because it is duplicative of plaintiffs’ breach of contract claim. 18 ECF No. 40 at 29. Plaintiffs argue that the claim is not duplicative, and unlike their breach of 19 contract claim, focuses on defendants’ interference with plaintiffs’ right to receive their salary 20 and benefits of the contract. ECF No. 42 at 22. 21 In support of their breach of contract claim, plaintiffs allege that they “entered into 22 written contracts with SOC”; “SOC was contractually obligated . . . to limit its guards to work 23 no more than 12 hours in a day and 72 hours a week”; and SOC breached that obligation by 24 requiring plaintiffs “to work more than 12 hours a day, and more than 72 hours a week.” DeFiore 25 Compl., ECF No. 1-2 at ¶¶ 73–76; see also Darrough Compl., ECF No. 1-2 at ¶¶ 76–79. Similarly, in 26 support of their breach of the implied covenant of good faith and fair dealing claim, plaintiffs 1 allege that they “entered into written contracts with SOC”; “SOC was contractually obligated . . 2 . to limit its guards to work no more than 12 hours in a day and 72 hours a week”; and SOC 3 breached that obligation “by failing to abide by the requirement that Armed Guards not work 4 more than 6 days a week, 12 hours per day.” DeFiore Compl., ECF No. 1-2 at ¶¶ 80, 82–83; see also 5 Darrough Compl., ECF No. 1-2 at ¶¶ 83, 85–86. As plaintiffs argue, their breach of the implied 6 covenant of good faith and fair dealing claim also alleges that SOC “unfairly interfered with 7 Plaintiffs’ right to receive benefits of the contract”—however, it is made in the context of not 8 working over the 6/12 schedule—not salary. DeFiore Compl., ECF No. 1-2 at ¶ 83; see also 9 Darrough Compl., ECF No. 1-2 at ¶ 86. Because plaintiffs’ implied covenant claim is identical to 10 their contract claim, it cannot survive, so count six of the DeFiore and Darrough complaints is 11 dismissed without prejudice. 12 D. Quantum meruit (count seven) 13 In Nevada, quantum meruit recovery is not permitted when the parties have an express 14 contract covering the matter. See Leasepartners Corp. v. Robert L. Brooks Trust Dated Nov. 12, 1975, 942 15 P.2d 182, 187 (Nev. 1997) (“An action based on a theory of unjust enrichment is not available 16 when there is an express, written contract, because no agreement can be implied when there is 17 an express agreement.”); Ewing v. Sargent, 482 P.2d 819, 823 (Nev. 1971) (“Numerous authorities 18 tend to support respondent’s view that an action does not lie on an implied contract where there 19 exists between the parties an express contract covering the same subject matter.”); see also Mobius 20 Connections Grp., Inc. v. TechSkills, LLC, , 2012 WL 194434, at *8 (D. Nev. Jan. 23, 2102) (“Nevada 21 treats quantum meruit claims and unjust enrichment claims very similar. If there is no express 22 agreement as to compensation, then one can recover the reasonable value of their services under 23 a quantum meruit claim.” (emphasis added)). However, despite a written contract, quantum 24 meruit claims may proceed when the party seeking equitable recovery was specifically directed 25 to perform work outside the contract. See, e.g., Udevco, Inc. v. Wagner, 678 P.2d 679, 682 (Nev. 26 1 1984) (discussing quantum meruit recovery when contractor performed extra work at the 2 direction the other party to the contract). 3 Defendants argue that plaintiffs’ quantum meruit claim should be dismissed because it is 4 based on an express contract that governs the subject matter at issue, namely that plaintiffs’ 5 quantum meruit claim is based on and arises from their employment contract with SOC, which, 6 they claim, limited their work schedules to 72 hours per week in violation of their employment 7 agreements. ECF No. 40 at 24. While I agree that plaintiffs’ quantum meruit claim is based on 8 the contract, plaintiffs allege that they had to work beyond the contracted hours. See DeFiore 9 Compl., ECF No. 1-2 at ¶¶ 87–88; see also Darrough Compl., ECF No. 1-2 at ¶¶ 90–91. Indeed, 10 plaintiffs allege that SOC directed plaintiffs to work extra hours and received substantial benefit 11 from plaintiffs’ extra work, but did not compensate plaintiffs for the extra work, which was 12 beyond the agreed to 6/12 schedule. DeFiore Compl., ECF No. 1-2 at ¶ 89; see also Darrough 13 Compl., ECF No. 1-2 at ¶ 92–93. Thus, plaintiffs’ quantum meruit claim concerns payment for 14 hours work outside of the contract so it survives dismissal. 15 E. Alter ego 16 “Nevada has long recognized that although corporations are generally to be treated as 17 separate legal entities, the equitable remedy of ‘piercing the corporate veil’ may be available to 18 a plaintiff in circumstances where it appears that the corporation is acting as the alter ego of a 19 controlling individual.” LFC Mktg. Grp., Inc. v. Loomis, 8 P.3d 841, 845 (Nev. 2000) (emphasis 20 added) (citing Frank McCleary Cattle Co. v. Sewell, 317 P.2d 957 (Nev. 1957)). To establish alter ego 21 liability in Nevada, plaintiffs must demonstrate: (1) the corporation is “influenced and governed 22 by the person asserted to be its alter ego”; (2) there is a “unity of interest and ownership that one 23 is inseparable from the other”; and (3) “adherence to the fiction of a separate entity would under 24 the circumstances, sanction fraud or promote injustice.” Aetna Cas. & Sur. Co. v. Rasa Mgmt. Co., 621 25 F. Supp. 892, 893 (D. Nev. 1985). “Each of these requirements must be present before the alter 26 1 ego doctrine can be applied.” N. Arlington Med. Bldg., Inc. v. Sanchez Constr. Co., 471 P.2d 240 (Nev. 2 1970). 3 Defendants argue that claims against SOC-SMG and Day & Zimmerman must be 4 dismissed because plaintiffs did not satisfy the alter ego standard. ECF No. 40 at 31. In 5 opposition, plaintiffs argue “the thrust” of their allegations is that SOC-SMG and Day & 6 Zimmerman “participated in the wrongdoing.” ECF No. 42 at 23–24. However, the allegations 7 plaintiffs point to in the complaint are conclusory allegations that are broad scope against 8 “defendants” generally. See e.g. id. (citing ECF No. 1-2 at 5–6 (“On information and belief, at all 9 times herein material, each Defendant was completely dominated and controlled by its co- 10 Defendants and each was the alter ego of the other.”)) Such conclusory allegations unsupported 11 by factual assertions will not withstand a motion to dismiss. See Mann v. City of Tucson, 782 F.2d 12 790, 793 (9th Cir. 1986) (per curiam). Plaintiffs failed to pair those conclusory allegations with 13 factual assertions such as allegations of commingling of funds, undercapitalization, 14 unauthorized diversion of funds, treatment of corporate assets as the entity’s own, or failure to 15 observe corporate formalities.9 Thus, the conclusory allegations alone are not sufficient to allege 16 alter ego in order to withstand a motion to dismiss. See Mann, 782 F.2d at 793 (“Although 17 [courts] must, in general, accept the facts alleged in the complaint as true, wholly vague and 18 conclusory allegations are not sufficient to withstand a motion to dismiss.”) 19 Plaintiffs also argue that alter ego liability may be found in “judicially noticeable facts” 20 which show that Day & Zimmerman sued SOC-SMG for their “bidding to the man” approach, 21 and later ratified the conduct and continued to support the approach, which resulted in this 22 litigation. Id. However, this is the first-time plaintiffs make such allegations and the “court 23

24 9 “[T]he following factors, though not conclusive, may indicate the existence of an alter ego relationship: (1) commingling of funds; (2) undercapitalization; (3) unauthorized diversion of funds; (4) treatment of 25 corporate assets as the individual’s own; and (5) failure to observe corporate formalities.” LFC Mktg. Grp., Inc., 8 P.3d at 847 (internal quotation marks omitted). However, “[t]here is no litmus test for determining 26 when the corporate fiction should be disregarded; the result depends on the circumstances of each case.” Id. (quoting Polaris Indus. Corp. v. Kaplan, 747 P.2d 884, 887 (Nev. 1987)). cannot consider new facts alleged in [an] opposition to a motion to dismiss.” Sabina v. James River 2|| Ins. Co., 2020 U.S. Dist. LEXIS 208156, at *4 (D. Nev. Nov. 6, 2020). 3 Thus, having failed to demonstrate that their complaints have pleaded any facts allowing 4|| for alter ego liability, plaintiffs’ claims against SOC-SMG and Day & Zimmermann are dismissed without prejudice. See Green Solutions Recycling, LLC v. Refuse, Inc., 2017 U.S. Dist. LEXIS 44481, at *5-6 (D. Nev. Mar. 27, 2017) (dismissing all claims against corporate entities related to 7|| party to relevant contract because “these Defendants have their own corporate identity, and the Complaint does not assert any allegations to support proceeding on an alter ego theory”). 9 F. Dismissal of the Doe defendants 10 Defendants move to dismiss the 20 unnamed Doe defendants with prejudice. ECF No. 40 at 31. Plaintiffs do not oppose the dismissal. ECF No. 42 at 23. Accordingly, the 20 Doe defendants are dismissed with prejudice. Conclusion 14 The court GRANTS IN PART and DENIES IN PART defendants’ consolidated motion 15]| to dismiss [ECF No. 40 (Darrough); ECF No. 48 (DeFiore)]. The court GRANTS the motion, 16|| dismissing counts one through four, six, and eight without prejudice; claims against SOC-SMG 17} and Day & Zimmerman without prejudice; and the 20 Doe defendants with prejudice. The court 18|| DENIES the motion to dismiss count five and count seven. 19 Plaintiffs may file an amended complaint correcting the identified deficiencies by August 13, 2024. /) 21 Dated: July 29, 2024 Lf 2 Cristing D. Silva 23 Unie States District Judge 24 (

25 26