Geadau v. Evans

• Court: District Court, S.D. California
• Decided: May 21, 2025
• Docket: 3:25-cv-00335
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 RAUL GEADAU, Case No. 25-cv-0335-MMA-JLB

12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANTS’ MOTION TO DISMISS 14 NATHAN B. EVANS, et al., 15 Defendants. [Doc. No. 5] 16 17 18 19 20 21 Defendants Nathan B. Evans, Michael Hindi, and Big Fish Studios, LLC 22 (collectively, “Defendants”) filed a motion to dismiss Plaintiff Raul Geadau’s 23 (“Plaintiff”) complaint on March 13, 2025. Doc. No. 5. Plaintiff filed a response in 24 opposition, to which Defendants replied. Doc. Nos. 6, 8. On April 15, 2025, the Court 25 found this matter suitable for determination on the papers and without oral argument and 26 took the matter under submission pursuant to Federal Rule of Civil Procedure 78(b) and 27 Civil Local Rule 7.1.d.1. Doc. No. 9. For the reasons below, the Court GRANTS IN 28 PART and DENIES IN PART Defendants’ motion to dismiss. 1 I. BACKGROUND 2 Plaintiff is an experienced Fortnite map creator.2 Doc. No. 1 (“Compl.”) ¶ 1. 3 Within the Fortnite game “ecosystem,” “[i]ndependent developers can create custom 4 MAPs,3 games, and experiences . . . [and] design unique gameplay mechanics . . . . 5 These developers can publish their creations within Fortnite’s ecosystem and earn 6 monetary compensation . . . based on player engagement . . . .” Id. ¶ 13. “Creators retain 7 rights to any original assets they import, such as custom 3D models or sounds, but they 8 cannot export or independently sell their Fortnite MAPs outside of [the] platform.” Id. 9 The developers “do not own the underlying game code or platform infrastructure . . .” and 10 agree to “a broad license to use, modify, and monetize their work.” Id. 11 12 Plaintiff . . . and Defendants . . . Evans and . . . Hindi were friends for many years. On February 4, 2024, the parties negotiated an agreement wherein 13 [Plaintiff] would contribute his technical skills . . . to create unique game 14 environments, design interactive elements, and develop assets for the partnership’s projects [(MAPs)] . . . . In exchange, [D]efendants agreed to 15 provide [Plaintiff] with 10% equity in the partnership and a monthly payment 16 of $3,000 with a pay raise.

17 Id. ¶ 14. “The parties memorialized their agreement through written text message 18 communications.” Id. “That same day, [D]efendant . . . Evans unilaterally filed with the 19 Secretary of State an Article of Organization for Big Fish Studio LLC to effectuate the 20 agreement.” Id. “Without consulting with an attorney, [Defendants] Evans and Hindi 21 drafted an agreement . . . that purported to reflect the terms of their arrangement.” Id. 22 23 24 25 1 Reviewing Defendant’s motion to dismiss, the Court accepts as true all facts alleged in the complaint 26 and construes them in the light most favorable to Plaintiff. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). 27 2 Fortnite is a popular electronic game. Compl. ¶ 13. 3 Plaintiff describes MAPs as projects including “unique game environments . . , interactive elements, 28 1 ¶ 15; Doc. No. 1 at 21–22 (“Ex. 1”). Plaintiff, however, alleges that the document is 2 “ambiguous and conflicting” as to several terms and conditions. Compl. ¶ 15. 3 4 On May 8, 2024, [D]efendant . . . Hindi informed Plaintiff . . . that the company needed to preserve funds and, as a result, could not fulfill its prior 5 promise to provide [Plaintiff] with a pay raise. Instead, [Defendant] Hindi 6 offered an alternative arrangement in which [Plaintiff] would receive 15% equity in the company, a continued monthly payment of $3,000, and a 7 monthly bonus structure tied to the company’s revenue performance. 8 9 Id. ¶ 16. “The parties mutually agreed to these revised terms through written text 10 message communications.” Id. “Without consulting with an attorney, [D]efendants . . . 11 Evans and . . . Hindi unilaterally drafted an amended agreement . . . which purported to 12 reflect the modified terms of their arrangement.” Id. ¶ 17; Doc. No. 1 at 24–25 (“Ex. 2”). 13 Plaintiff found this iteration “ambiguous and conflicting” as to several terms and 14 conditions, like the first. Compl. ¶ 17. 15 In total, Plaintiff developed approximately 14 different Fortnite MAPs, of which he 16 was the “sole creator and designer.” Id. ¶¶ 18, 27. This includes the now-popular 17 “Pillars” MAP. Id. at ¶¶ 21, 27. The MAPs “generated less than $50,000 per month in 18 revenue for the partnership up to October 2024. However, in November 2024, the[ir] 19 revenue . . . surged to $168,735, and in December 2024, [they] generated . . . $680,571 20 for the partnership.” Id. ¶ 19. 21 At some point prior to the action’s filing, “[D]efendants . . . Evans and . . . Hindi 22 unilaterally terminated their relationship with [Plaintiff] . . . claiming that he had no 23 ownership interest in the company.” Id. ¶ 20. Despite this, “Defendants . . . Evans . . , 24 Hindi, and Big Fish Studio LLC . . . continued to use, publish, and profit from the MAPs 25 without Plaintiff’s consent . . . .” Id. ¶ 29. Defendants now deny Plaintiff a revenue 26 share or a 15% equity interest in Big Fish Studios LLC, terms to which they allegedly 27 agreed. See id. ¶ 45–47. Additionally, for the duration of Plaintiff’s time working with 28 Defendants, Defendants paid him in cryptocurrency, rather than U.S. dollars. Id. ¶ 73. 1 Plaintiff filed this action on February 14, 2025, bringing claims for: (1) violation of 2 intellectual property rights; (2) breach of contract; (3) breach of the implied covenant of 3 good faith and fair dealing; (4) declaratory relief; (5) accounting and constructive trust; 4 (6) violation of federal and Arizona minimum wage and unpaid wage laws; and 5 (7) breach of fiduciary duty. Compl. ¶¶ 26–83. 6 II. LEGAL STANDARD 7 A Rule 12(b)(6)4 motion to dismiss tests a complaint’s sufficiency. Navarro v. 8 Block, 250 F.3d 729, 732 (9th Cir. 2001). “While a complaint . . . does not need detailed 9 factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to 10 relief requires more than labels and conclusions, and a formulaic recitation of the 11 elements of a cause of action will not do. Factual allegations must be enough to raise a 12 right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 13 (2007) (internal quotations, brackets, and citations omitted). Rule 12(b)(6) requires that 14 the complaint “contain sufficient factual matter, accepted as true, to ‘state a claim to 15 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 16 Twombly, 550 U.S. at 570). 17 Upon review, the Court must assume the truth of all factual allegations and must 18 construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. 19 Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). Legal conclusions, however, need not be 20 taken as true merely because they are cast in the form of factual allegations. W. Mining 21 Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Similarly, “conclusory allegations of 22 law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto 23 v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998). In determining the 24 propriety of dismissal, generally, a court generally may not look beyond the complaint 25 for additional facts. Id.; Parrino v. FHP, Inc., 146 F.3d 699, 705–06 (9th Cir. 1998). 26 27 28 1 When granting dismissal, the Court must also decide whether to grant leave to 2 amend. The Ninth Circuit has a liberal policy favoring amendments, and thus leave to 3 amend should be freely granted. See, e.g., DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 4 655, 658 (9th Cir. 1992). However, a court need not grant leave to amend when 5 permitting a plaintiff to amend would be futile. Rutman Wine Co. v. E. & J. Gallo 6 Winery, 829 F.2d 729, 738 (9th Cir. 1987) (“Denial of leave to amend is not an abuse of 7 discretion where the pleadings before the court demonstrate that further amendment 8 would be futile.”). 9 III. DISCUSSION 10 Defendants seek dismissal on the grounds that: (1) Plaintiff engages in “shotgun 11 pleading” by “lump[ing] multiple allegations concerning multiple defendants and 12 multiple violations into one claim or cause of action[,]” making it “impossible for 13 [Defendants] to discern what claims are . . . asserted against [whom]”; (2) Plaintiff’s 14 second and third causes of action (collectively, “the Contract Claims”) are barred by the 15 Statute of Frauds; (3) Plaintiff’s fourth cause of action is properly a remedy, rather than a 16 cause of action; (4) Plaintiff’s fifth cause of action is also properly a remedy, rather than 17 a cause of action; (5) Plaintiff’s requests punitive damages are improper; and (6) Plaintiff 18 “requests injunctive relief but has not made any allegations sufficient to establish 19 irreparable harm and lack of an adequate remedy at law.” Doc. No. 5-1 at 2–3.5 Plaintiff 20 disagrees. Doc. No. 6. 21 As a preliminary matter, the parties cite to California law in their Contract Claims 22 arguments. See, e.g., Doc. No. 5-1 at 4–5; Doc. No. 6-1 at 2–3. Plaintiff also cites 23 California law to defend his remaining claims, to which Defendants articulate no 24 disagreement in their reply. Doc. No. 6-1 at 6–8; see generally Doc. No. 8-1. In his 25 complaint, however, Plaintiff refers to Arizona law in the Contract Claim allegations. 26 27 28 1 See, e.g., Compl. ¶ 48. Because the parties argue as such, the Court will presume for the 2 purposes of this motion that California law applies to the challenged state-law claims. 3 A. Shotgun Pleading 4 First, the Court addresses Defendants’ argument that Plaintiff’s complaint is a 5 “shotgun pleading”—one that violates Federal Rules of Civil Procedure 8 and 10. Doc. 6 No. 5-1 at 7–9. Defendants assert that Plaintiff violates Rules 8 and 10 because he 7 “lumps multiple allegations concerning multiple defendants and multiple violations into 8 one claim or cause of action[,]” making it “impossible for [D]efendants to discern what 9 claims are . . . asserted against [whom].” Id. at 8. 10 Rule 8 requires “a short and plain statement of the claim showing that the pleader 11 is entitled to relief. Fed. R. Civ. P. 8(a)(2). “The term ‘shotgun pleading’ refers to 12 pleading practices that violate Rule 8(a)(2)’s ‘short and plain statement’ requirement” 13 and thus do not give a defendant proper notice of the nature of the claims asserted against 14 it. Nitschke v. Cnty. of San Diego, No. 23CV1206-LL-VET, 2024 WL 3094635 *4 (S.D. 15 Cal. June 21, 2024) (citing Weiland v. Palm Beach Cnty. Sheriff’s Off., 792 F.3d 1313, 16 1320 (11th Cir. 2015)); George v. Grossmont Cuyamaca Cmty. Coll. Dist. Bd. of 17 Governors, No. 22-CV-0424-BAS-DDL, 2022 WL 17330467 *15 (S.D. Cal. Nov. 29, 18 2022) (citing Weiland, 792 F.3d at 1321–23). Courts have identified four basic 19 categories of improper shotgun pleadings: 20 21 The most common type . . . is a complaint containing multiple counts where each count adopts the allegations of all preceding counts, causing each 22 successive count to carry all that came before and the last count to be a 23 combination of the entire complaint. The next . . . is a complaint that . . . is . . . replete with conclusory, vague, and immaterial facts not obviously 24 connected to any particular cause of action. The third type . . . is one that . . . 25 [does] not separate[e] into a different count each cause of action or claim for relief. Fourth . . . [are complaints that] assert[] multiple claims against 26 multiple defendants without specifying which of the defendants are 27 responsible for which acts or omissions, or which of the defendants the claim is brought against. 28 1 2 Weiland, 792 F.3d at 1321–24. 3 Turning to the complaint, Plaintiff clearly separates each claim—each legal basis 4 for which he seeks relief—into a different cause of action, each containing its own 5 restatement of facts. Compl. ¶¶ 26–83. This separation clarifies the specific facts 6 underpinning each cause of action. See Bautista v. Los Angeles Cnty., 216 F.3d 837, 7 840–41 (9th Cir. 2000) (“Courts have required separate counts where multiple claims are 8 asserted, where they arise out of separate transactions or occurrences, and where separate 9 statements will facilitate a clear presentation.”); see Fed. R. Civ. P. 10(b). 10 Plaintiff also specifically names each relevant defendant in the title of each cause 11 of action. Compl. at 7–16. Finally, he alleges the specific actions Defendants took that 12 violate the law. See, e.g., Compl. ¶¶ 14–17, 20, 22–23, 29, 35–36, 38, 47, 55, 59, 61–62, 13 71–73, 75, 81–82. Where Plaintiff refers to them collectively as “Defendants,” given the 14 context of the claims—and because Plaintiff, at times, separates out the individual 15 Defendants’ acts when not done together—the Court can reasonably infer that Plaintiff 16 alleges each Defendant participated in the act or that the Defendants acted collectively. 17 See, e.g., ¶¶ 35, 39–41. To the extent that Defendants’ argue Plaintiff “appear[s] to . . . 18 generally allege[] [claims] against all defendants but also refer[s] to specific defendants 19 concerning specific claims,” Doc. No. 5-1 at 8, Plaintiff’s allegation that “Defendants . . . 20 Evans and . . . Hindi are the alter egos of Defendant Big Fish Studio LLC, and there 21 exists such a unity of interest and ownership that the separate personalities of the 22 individual Defendants and the LLC no longer exist[,]” provides sufficient clarity as to 23 their interconnection. Compl. ¶ 22. Though “[g]roup pleading is generally violative of 24 Rule 8(a)(2) because it [prevents] each [d]efendant from discerning what it, specifically, 25 did wrong[,]” George, 2022 WL 17330467 at *16, this action contains only three 26 defendants, who Plaintiff alleges acted together, and the complaint includes specific 27 details as to the acts of each, except where Plaintiff alleges they acted together. 28 1 Therefore, the Court finds the pleadings sufficiently put the respective Defendants 2 on notice as to the claims against them. Insofar as Defendants take special issue with 3 Plaintiff’s second cause of action, Doc. No. 5-1 at 2, considering the above discussion the 4 Court detects no specific offense differentiating it from the other claims. Thus, the Court 5 determines the complaint is not a “shotgun pleading” and DENIES Defendants’ motion 6 on that basis. 7 B. Contract Claims (Claims 2 & 3) 8 Defendants argue that Plaintiff’s second and third causes of action must fail 9 because the agreement Plaintiff alleges is subject to the Statute of Frauds and Plaintiff 10 does not sufficiently plead compliance with its requirements. Doc. No. 5-1 at 4–5. 11 Specifically, Defendants argue that the claim is barred because it is “[a]n agreement that 12 by its terms is not to be performed within a year” and Plaintiff has not pleaded that it was 13 reduced to “writing and subscribed by the party to be charged or by the party's agent.” 14 Id. at 4 (citing Cal. Civ. Code § 1624(a)). Plaintiff disagrees, arguing that he sufficiently 15 pleads a contract’s existence, and that the “agreement with Defendants was confirmed via 16 text messages and other electronic means, which satisfies the writing requirement” under 17 the Statute of Frauds. Doc. No. 6-1 at 2, 4. Plaintiff also argues that the parties’ actions 18 establish the existence of a contract. Id. at 3. 19 California’s general Statute of Frauds provides that “[a]n agreement that by its 20 terms is not to be performed within a year from the making thereof” is invalid unless it, 21 “or some note or memorandum thereof, are in writing and subscribed by the party to be 22 charged or by the party’s agent.” Cal. Civ. Code § 1624(a)(1). Relevant here, “only 23 those contracts which expressly preclude performance within one year are 24 unenforceable.” Multifamily Captive Grp., LLC v. Assurance Risk Managers, Inc., 578 F. 25 Supp. 2d 1242, 1248 (E.D. Cal. 2008); Plumlee v. Poag, 198 Cal. Rptr. 66, 71 (Cal. Ct. 26 App. 1984). That requirement is construed “literally and narrowly.” Plumlee, 198 Cal. 27 Rptr. at 71. “Accordingly, if by its terms performance of a contract is possible within one 28 1 year, the contract does not fall within the statute even though it is probable that it will 2 extend beyond one year.” Id. 3 Reviewing the pleadings, nothing suggests that the agreement Plaintiff alleges 4 could not, by its terms, be performed within one year. See Compl. ¶¶ 14, 16. Indeed, the 5 agreement and subsequent modification set no mandatory timeframe at all, as far as 6 alleged, and thus fall outside the Statute of Frauds. See Foley v. Interactive Data Corp., 7 765 P.2d 373, 381–82 (Cal. 1988) (“[A]lthough the agreement contemplated employment 8 on a ‘permanent’ basis, the [S]tatute does not apply to an employment contract of 9 indefinite duration ‘unless its terms foreclose the employee’s completion of the 10 performance of the contract within one year . . . .’”) (quoting White Lighting Co. v. 11 Wolfson 438 P.2d 345, 348–50 (Cal. 1968) (itself holding that “the inclusion of the 12 provision for a bonus ascertainable only after one year does not invalidate the oral 13 agreement under the [S]tatute of [F]rauds.”)). Thus, taking the facts in the complaint as 14 true, the Statute does not apply. 15 Moreover, the Statute of Frauds is traditionally an affirmative defense. See Fed. R. 16 Civ. P. 8(c)(1); Crystal Springs Upland Sch. v. Fieldturf USA, Inc., 219 F. Supp. 3d 962, 17 966–67 (N.D. Cal. 2016). Where a Plaintiff pleads a contract that, on its face, is barred 18 by the Statute of Frauds, courts may address it when raised in a Rule 12(b)(6) motion. 19 See Crystal Springs Upland Sch., 219 F. Supp. 3d at 967; Elkay Int’l Ltd. v. Color Image 20 Apparel, Inc., No. CV1408028MMMVBKX, 2015 WL 13917734 *6 (C.D. Cal. Feb. 4, 21 2015). However, if the complaint is silent as to whether the contract was oral or written, 22 the Court will not imply that it is oral, as “a plaintiff need not allege the existence of a 23 written instrument in its complaint in order to state a claim.” Crystal Springs Upland 24 Sch., 219 F. Supp. 3d at 966 (discussing warranty claims). Even had the Statute of 25 Frauds applied, Plaintiff does not plead a facially deficient contract. In addition to the 26 discussion above, Plaintiff does not allege that the contract was oral and states that the 27 parties confirmed the terms through text messages. Compl. ¶¶ 14, 16. In these 28 circumstances, adequate evidence of a contract includes “evidence of an electronic 1 communication (including, without limitation . . . tangible written text produced by 2 computer retrieval) . . . sufficient to indicate that in the communication a contract was 3 made between the parties.” Cal. Civ. Code § 1624(b)(3)(A); cf. Cal. Civ. Code § 1624(d) 4 (excepting text messages from acceptable mediums for real property conveyances). 5 Though Plaintiff’s pleadings are imprecise, the facts therein do not obviously allege an 6 invalid contract. Absent that, “a plaintiff is not required to plead that [their] claim is not 7 barred by the statute of frauds.” Crystal Springs Upland Sch., 219 F. Supp. 3d at 967. 8 For this reason as well, Defendants are not entitled to dismissal. 9 Accordingly, the Court determines that Plaintiff’s Contract Claims are not subject 10 to dismissal under the Statute of Frauds and DENIES Defendants’ motion on this basis. 11 C. Declaratory Relief (Claim 4) 12 Defendants move to dismiss Plaintiff’s fourth cause of action on grounds that 13 “declaratory relief is not an independent cause of action but a remedy.” Doc. No. 5-1 at 14 5. Plaintiff does not directly address this concept, but argues that he is entitled to 15 declaratory relief. Doc. No. 6-1 at 6. 16 Plaintiff states in his fourth cause of action that he “seeks a judicial declaration 17 pursuant to 28 U.S.C. § 2201 and applicable California law . . . .” Compl. ¶ 56. The 18 federal Declaratory Judgment Act (“DJA”) “permits a federal court to ‘declare the rights 19 and other legal relations’ of parties to ‘a case of actual controversy.’” Societe de 20 Conditionnement en Aluminium v. Hunter Eng’g Co., 655 F.2d 938, 942 (9th Cir. 1981) 21 (quoting 28 U.S.C. § 2201). Though it creates a remedy, it does not provide an 22 independent cause of action. See City of Reno v. Netflix, Inc., 52 F.4th 874, 878–79 (9th 23 Cir. 2022); Leigh-Pink v. Rio Props., LLC, 849 F. App’x 628, 630 (9th Cir. 2021). Thus, 24 the Court GRANTS IN PART Defendants’ motion to the extent Plaintiff pleads a cause 25 of action, rather than prays for relief, under the DJA, and DISMISSES WITH 26 PREJUDICE Plaintiff’s claim for declaratory relief under it. However, this does not 27 preclude Plaintiff’s ability to seek declaratory judgment as a remedy under the DJA, 28 rather than an independent claim, upon repleading. 1 As to the “applicable California law” Plaintiff references, the Court infers that he 2 refers to declaratory judgment under California Code of Civil Procedure § 1060. Doc. 3 No. 6-1 at 6 (citing Meyer v. Sprint Spectrum L.P., which discusses that statute. 200 P.3d 4 295, 303 (Cal. 2009)). Unlike the DJA, California courts generally treat this provision as 5 providing an independent right of action, though its scope and applicability as such are 6 not fully resolved.6 Cal. Code Civ. Proc. § 1060 (“Any person . . . under a contract . . . 7 may, in cases of actual controversy relating to the legal rights and duties of the respective 8 parties, bring an original action or cross-complaint. . . .”); see Columbia Pictures Corp. v. 9 De Toth, 161 P.2d 217, 220–21 (Cal. 1945); Mycogen Corp. v. Monsanto Co., 51 P.3d 10 297, 302–03 (Cal. 2002); See, e.g., Country Side Villas Homeowners Assn. v. Ivie, 123 11 Cal. Rptr. 3d 251, 258–59 (Cal. Ct. App. 2011); Mkt. Lofts Cmty. Assn. v. 9th St. Mkt. 12 Lofts, LLC, 166 Cal. Rptr. 3d 469, 474–75 (Cal. Cr. App. 2014), as modified on denial of 13 reh’g (Feb. 4, 2014); cf. Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation 14 Tr. for S. Cal., 463 U.S. 1, 13 (1983); Cal. Code Civ. Proc. § 1062.3(a); but see A.B. 15 Concrete Coating Inc. v. Wells Fargo Bank, Nat’l Ass’n, 491 F. Supp. 3d 727, 737 (E.D. 16 Cal. 2020) (“[D]eclaratory relief is a remedy, not an independent cause of action”); In re 17 Adobe Sys., Inc. Priv. Litig., 66 F. Supp. 3d 1197, 1219–20 (N.D. Cal. 2014) (declining to 18 apply the California law, and applying the DJA instead). Because California courts 19 generally treat is as an independent claim, the Court will allow Plaintiff to proceed on it. 20 The Court thus DENIES Defendants’ motions insofar as Plaintiff brings a cause of action 21 under California Code of Civil Procedure § 1060.7 22 23 24

25 26 6 The law does still require “‘actual controversy relating to the legal rights and duties of the respective parties[,]’” as required for Article III standing. Mkt. Lofts Cmty. Assn., 166 Cal. Rptr. 3d 469 at 474–75. 27 7 As a final point, the Court notes that in this case, where several non-declaratory causes of action remain, whether Plaintiff pleads his declaratory requests as relief or independent causes of action has 28 1 D. Accounting and Constructive Trust (Claim 5) 2 Next, Defendant asks the Court to dismiss Plaintiff’s fifth cause of action because 3 a constructive trust is a remedy, and not a cause of action. Doc. No. 5-1 at 5–6. Plaintiff 4 disagrees, arguing that he states a claim under California law. Doc. No. 6-1 at 6–7. 5 Though traditionally considered remedies, California courts generally allow for 6 both state law accounting and constructive trust causes of action. See Teselle v. 7 McLoughlin, 92 Cal. Rptr. 3d 696, 714–15 (Cal. Ct. App. 2009); Higgins v. Higgins, 217 8 Cal. Rptr. 3d 691, 699 (Cal. Ct. App. 2017) (“An action to impose a constructive trust is a 9 suit in equity to compel a person holding property wrongfully to transfer the property 10 interest to the person to whom it rightfully belongs.”); cf. In re Advent Mgmt. Corp., 104 11 F.3d 293, 295 (9th Cir. 1997) (discussing the plaintiff’s “Constructive Trust Claims” 12 (emphasis added)); but see A.B. Concrete Coating Inc., 491 F. Supp. 3d at 736 (A 13 “plaintiff may seek a constructive trust as a form of relief . . . but that remedy is not an 14 independent cause of action.”); Yagman v. Galipo, No. CV L2-7908-GW SHX, 2013 WL 15 1287409 *4 (C.D. Cal. Mar. 25, 2013); but cf. Mattel, Inc. v. MGA Ent., Inc., 616 F.3d 16 904, 908–09 (9th Cir. 2010), as amended on denial of reh’g (Oct. 21, 2010) (“A 17 constructive trust is an equitable remedy that compels the transfer of wrongfully held 18 property to its rightful owner.”) (citing Communist Party v. 522 Valencia, Inc., 41 Cal. 19 Rptr. 2d 618, 623 (Cal. Ct. App 1995)). This Court has found no state court decision 20 explicitly holding that either is improper when pleaded as an independent action, though 21 at least two federal district courts have. A.B. Concrete Coating Inc., 491 F. Supp. 3d at 22 736; Yagman, 2013 WL 1287409 at *4. The issue, then, is somewhat unresolved. 23 Regardless, as with Plaintiff’s declaratory judgment claims, the difference between 24 pleading it as a remedy or a cause of action here is largely academic, as other viable 25 claims remain. Defendants are on notice of Plaintiff’s claims and the relief he seeks. 26 Therefore, the Court DENIES Defendant’s motion on this basis. 27 28 1 E. Punitive Damages 2 Defendants seek to dismiss Plaintiff’s prayer for punitive damages on the grounds 3 that he cannot recover punitive damages for the Contract Claims and because a plaintiff 4 “is not eligible for punitive damages unless the underlying claims for fraud, oppression or 5 malice are proven by clear and convincing evidence,” which Defendants argue Plaintiff 6 has not pleaded. Doc. No. 5-1 at 6. Plaintiff responds that punitive damages are 7 available because he pleads that Defendants acted in fraudulent and malicious conduct by 8 “knowingly misrepresenting his ownership rights, falsely denying his equity interest, and 9 unjustly enriching themselves through his creative work . . .” and that California Civil 10 Code § 3294(a) provides for punitive damages on those grounds. Doc. No. 6-1 at 8. 11 As to the Contract Claims (breach of contract and breach of the implied covenant 12 of good faith and fair dealing), under California law, “[i]n an action for the breach of an 13 obligation not arising from contract, where it is proven by clear and convincing evidence 14 that the defendant has been guilty of oppression, fraud, or malice, the plaintiff . . . may 15 recover damages . . . by way of punishing the defendant.” Cal. Civ. Code § 3294(a). It is 16 well established that under California law “[p]unitive damages are not available in an 17 action based solely upon breach of a contractual obligation, even where the breach is 18 intentional, wil[l]ful, or in bad faith.” Miller v. Nat’l Am. Life Ins. Co., 126 Cal. Rptr. 19 731, 733 (Cal. Ct. App. 1976); see Consol. Data Terminals v. Applied Digital Data Sys., 20 Inc., 708 F.2d 385, 399 (9th Cir. 1983) (same). “However, if the action is also in tort, 21 ‘exemplary damages may be recovered upon a proper showing of malice, fraud or 22 oppression even though the tort incidentally involves a breach of contract.’” Miller, 126 23 Cal. Rptr. at 733 (quoting Schroeder v. Auto Driveaway Co., 523 P.2d 662, 671 (Cal. 24 1974)). Except for insurance cases—which are treated separately under California law— 25 punitive damages are not available for claims that a party breached the implied covenant 26 of good faith and fair dealing. In re Yahoo! Inc. Customer Data Sec. Breach Litig., 313 27 F. Supp. 3d 1113, 1149 (N.D. Cal. 2018); Copesky v. Superior Ct., 280 Cal. Rptr. 338, 28 344–45 (Cal. Ct. App. 1991) (“[I]n the usual case only contract remedies are available for 1 breach of the contractual implied covenant.” “The [California Supreme Court] . . . 2 concluded that there was insufficient basis for extending the special tort relief available in 3 insurance cases to the employment field . . . .”) (citing Foley, 765 P.2d at 389–401). 4 Thus, punitive damages are not available for Plaintiff’s Contract Claims: breach of 5 contract and breach of the implied covenant of good faith and fair dealing. Because 6 Plaintiff cannot recover punitive damages for them, the Court GRANTS IN PART 7 Defendants’ motion and DISMISSES WITH PREJUDICE Plaintiff’s prayer for 8 punitive damages as to only those two claims. 9 As to Plaintiff’s other claims, Defendant argues broadly that Plaintiff fails to plead 10 actions amounting to “fraud, oppression or malice” by clear and convincing evidence. 11 Doc. No. 5-1 at 6 (citing Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285, 1308–10 (S.D. 12 Cal. 2003) (discussing California law)). Plaintiff responds that he “sufficiently allege[s] 13 that Defendants engaged in fraudulent and malicious conduct by knowingly 14 misrepresenting his ownership rights, falsely denying his equity interest, and unjustly 15 enriching themselves through his creative work . . .” among other reasons to sustain 16 punitive damages. Doc. No. 6-1 at 8. 17 California law, to which the parties both apparently refer here, see id.; Doc. No. 5- 18 1 at 6, provides that “malice,” as used to assess punitive damages, is “conduct . . . 19 intended . . . to cause injury to the plaintiff or despicable conduct . . . carried on . . . with 20 a willful and conscious disregard of the rights . . . of others.” Cal. Civ. Code 21 § 3294(c)(1). “Fraud,” meanwhile, is “an intentional misrepresentation, deceit, or 22 concealment of a material fact known to the defendant with the intention . . . of thereby 23 depriving a person of property or legal rights or otherwise causing injury.” Id. at 24 § 3294(c)(3) 25 Plaintiff pleads in multiple places that Defendants acted in bad faith when they 26 terminated the relationship and took the adjacent actions for which he seeks redress. See, 27 e.g., Compl. ¶ 20 (“In a deliberate . . . conspiracy to exclude [Plaintiff] from the financial 28 benefits of his work, [D]efendants . . . Evans and . . . Hindi unilaterally terminated their 1 relationship . . . falsely claiming that he had no ownership interest in the company. This . 2 . . was carried out with the intent to deprive [Plaintiff] of his . . . equity share, 3 compensation, and . . . proceeds . . . .”); Compl. ¶ 82 (“e. Terminating Plaintiff in bad 4 faith to prevent him from receiving his agreed-upon share of profits.”). These allegations 5 and facts are not wholly restricted to events underpinning the Contract Claims. At this 6 stage in proceedings and making all inferences in Plaintiff’s favor as it must, the Court 7 finds that Plaintiff sufficiently pleads facts that could support punitive damages, 8 assuming they are otherwise available by law. 9 Plaintiff pleads claims under federal law, California law (ostensibly), and Arizona 10 law. Compl. ¶¶ 26–83. These include intellectual property, tort, and wage and hour 11 claims. Id. at ¶¶26–33, 69–78. Thus, Defendants’ main rationale for seeking dismissal of 12 Plaintiff’s prayer for punitive damages—that “the gravamen of the Complaint arises from 13 an alleged breach of contract[]”—is not entirely correct. Plaintiff’s prayer for punitive 14 damages does not specify for which claims he seeks them. Id. at 17–18. Further, the 15 parties address only the California state law standard for punitive damages and provide 16 no clear arguments as to any specific cause of action beyond the Contract Claims. Doc. 17 No. 5-1 at 6–7; Doc. No. 6-1 at 8. As such, the Court declines to make individual 18 findings as whether punitive damages may be ultimately recoverable as to the other 19 claims. Accordingly, the Court DENIES Defendants’ motion as to the non-contract 20 claims. 21 F. Injunctive Relief 22 Finally, Defendants peripherally ask the Court to dismiss Plaintiff’s prayer for 23 injunctive relief because he has not “made any allegations sufficient to establish 24 irreparable harm and lack of an adequate remedy at law.” Doc. No. 5-1 at 3. While 25 Plaintiff, in listing reasons the motion should be denied, states that he “properly stated 26 claims for . . . injunctive relief[,]” he does not respond to Defendants’ arguments further. 27 Doc. No. 6-1 at 1. 28 1 As Defendants correctly note, “the basis for injunctive relief in the federal courts 2 has always been irreparable injury and the inadequacy of legal remedies.” Weinberger v. 3 Romero-Barcelo, 456 U.S. 305, 312 (1982). This principle applies even where a plaintiff 4 could have brough claims for both legal and equitable remedies in state court, and where 5 the relief sought is an injunction. Guzman v. Polaris Indus. Inc., 49 F.4th 1308, 1312–13 6 (9th Cir. 2022), cert. denied sub nom. Polaris Indus. Inc. v. Albright, 143 S. Ct. 2612 7 (2023). Thus, in federal court, a “plaintiff must, at a minimum, plead that [they] lack[] 8 adequate remedies at law if [they] seek[] equitable relief.” Guthrie v. Transamerica Life 9 Ins. Co., 561 F. Supp. 3d 869, 875 (N.D. Cal. 2021) (emphasis in original); see Guzman, 10 49 F.4th at 1313–15. 11 Because Plaintiff offers no specific response to Defendants’ arguments concerning 12 injunctive relief, and seeing no obvious reason to the contrary, the Court agrees with 13 Defendants that dismissal is proper. See Walsh v. Nevada Dep’t of Hum. Res., 471 F.3d 14 1033, 1037 (9th Cir. 2006) (“A plaintiff who makes a claim for injunctive relief in his 15 complaint[] but fails to raise the issue in response to a defendant’s motion to dismiss . . . 16 has effectively abandoned his claim.”) (discussing appeals); Toranto v. Jaffurs, 297 F. 17 Supp. 3d 1073, 1104 (S.D. Cal. 2018) (“Plaintiff fails to address [a claim] in his 18 opposition. Accordingly, the court finds Plaintiff abandons [it].”). Thus, the Court 19 GRANTS Defendants’ motion and DISMISSES WITHOUT PREJUDICE Plaintiff’s 20 prayer for injunctive relief.8 21 IV. CONCLUSION 22 For the reasons above, the Court GRANTS IN PART and DENIES IN PART 23 Defendants’ motion to dismiss. Dismissal is without prejudice and with leave to 24 amend, except where otherwise stated. Any new amended complaint will be the 25 operative pleading and must be filed on or before June 11, 2025. 26

27 8 Defendants do not move to dismiss Plaintiff’s other equitable requests on this basis, and thus the Court 28 1 Defendants must then respond within the time prescribed by Federal Rule of Civil 2 || Procedure 15. Any claim not re-alleged and any defendant not named in the new 3 ||amended complaint will be considered waived. See CivLR 15.1; Hal Roach Studios, Inc. 4 ||v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1546 (9th Cir. 1989); Lacey v. Maricopa 5 || Cnty., 693 F.3d 896, 928 (9th Cir. 2012) (noting that after dismissal with leave to amend, 6 claims may be “considered waived if not repled”’). 7 The new amended complaint must be accompanied by a version of that pleading 8 || that shows—through redlining or similar method—how that pleading differs from the 9 || previously dismissed pleading. See CivLR 15.1.c. 10 IT IS SO ORDERED. 11 ||Dated: May 21, 2025 Wath / hiphlr 12 HON. MICHAEL M. ANELLO 13 United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28