1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LAURA LYNN HAMMETT, Case No.: 19cv605-LL-AHG
12 Plaintiff, ORDER DISMISSING THIRD 13 v. AMENDED COMPLAINT AND DENYING MOTION TO 14 MARY E. SHERMAN, et al. WITHDRAW AMENDED 15 Defendants. COMPLAINT
16 [ECF Nos. 238, 239, 240, 241, 242, 17 257, 258] 18 19 This matter is before the Court on the following motions: (1) the Motions to Dismiss 20 filed by (a) Defendants Mary E. Sherman and Jeffrey M. Sherman in all capacities (“the 21 Sherman Defendants”) (“Sherman Motion”) [ECF No. 239]; (b) Defendant Diane Dennis 22 (“Dennis Motion”) [ECF No. 240]; (c) Defendants Linda R. Kramer and Erik Von 23 Pressintin Hunsaker in all capacities (“Kramer Motion”) [ECF No. 241]; and (d) Defendant 24 Silver Strand Plaza, LLC (“SSP”) (“SSP Motion”) [ECF No. 242]; (2) Plaintiff Laura Lynn 25 Hammett’s Motion to Withdraw Third Amended Complaint (“Motion to Withdraw”) [ECF 26 No. 257]; and (3) Plaintiff’s Amended Motion to Withdraw Third Amended Complaint 27 (“Amended Motion to Withdraw”) [ECF No. 258]. The Court finds the above matters 28 suitable for determination on the papers and without oral argument pursuant to Federal 1 Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. Upon review of the parties’ 2 submissions and the applicable law, the Court DENIES the Sherman Motion, GRANTS 3 the remaining Motions to Dismiss [ECF Nos. 240, 241, 242] and DENIES the Motion to 4 Withdraw and Amended Motion to Withdraw [ECF Nos. 257-58] for the reasons discussed 5 below. 6 I. MOTIONS TO DISMISS 7 A. Background 8 The Court incorporates the facts of this case as recited in its previous orders. See 9 ECF Nos. 111, 238. Briefly, this case revolves around disputes about the management of 10 SSP, a California limited liability company of which Plaintiff and the Defendants are 11 members. Id. ¶¶ 15-29. As relevant to the instant Motions to Dismiss, SSP’s members 12 entered into an operating agreement (“Operating Agreement”) in 2009, which Plaintiff 13 incorporated into the TAC by reference. Id. ¶ 48; ECF No. 238-1. Silver Strand Plaza, a 14 multi-tenant retail shopping center located in Imperial Beach California, was SSP’s 15 “principal asset” and was sold in 2017. ECF No. 238 ¶ 17. This action arises from events 16 following the sale of Silver Strand Plaza and from disputes between Plaintiff, and the 17 Defendants, who are Plaintiff’s sisters and extended family members with ownership 18 interests in SSP. 19 1. Plaintiff’s Original and First Amended Complaint 20 Plaintiff’s original complaint, filed on April 2, 2019, brought the following four 21 causes of action against the Mary Sherman in her individual and other capacities (including 22 as trustee of the “Grandchildren Trusts”), Kramer, Dennis, and SSP for: (1) breach of 23 fiduciary duty; (2) aiding and abetting breach of fiduciary duty; (3) defamation per se; and 24 (4) conversion. ECF No. 1. On May 29, 2019, Plaintiff filed a first amended complaint 25 (“FAC”) which added Jeffrey Sherman as co-trustee of the J&M Sherman Family Trust; 26 Kramer and Erik Hunsaker as co-trustees of the Lynn and Erik’s Trust (the “J&M Trust 27 Defendants”); Ellis Stern, Alan Goldberg, Stern and Goldberg (together, the “S&G 28 Defendants”); and Patrick McGarrigle, McGarrigle, Kenney & Zampiello (together, the 1 “MKZ Defendants”) (the S&G Defendants and MKZ Defendants are together referred to 2 as the “Attorney Defendants”). ECF No 3. The FAC asserted the following causes of 3 action: (1) breach of fiduciary duty against all defendants other than SSP, the Attorney 4 Defendants, and Sherman in her capacity as manager of SSP; (2) aiding and abetting breach 5 of fiduciary duty; (3) defamation per se against Sherman and Dennis; (4) civil conspiracy 6 to defame against Sherman and Dennis; (5) conversion against all defendants; and (6) legal 7 malpractice against the Attorney Defendants. See ECF No. 3. On August 20, 2019, Plaintiff 8 voluntarily dismissed the entire action as to the Attorney Defendants, leaving five causes 9 of action for the Court to consider. ECF No. 38. 10 On March 23, 2020, the Court—ruling on four separate motions to dismiss by 11 defendants [ECF Nos. 18, 19, 37, 40]—dismissed all claims in the FAC, noting the specific 12 deficiencies to each claim as to each Defendant, and granting Plaintiff leave to file an 13 amended complaint. ECF No. 111 at 15-40, 54. In its analysis of SSP’s motion to dismiss 14 the FAC, the Court considered SSP’s challenge to Plaintiff’s demand for an accounting. 15 Id. at 34-35. 16 2. Second Amended Complaint 17 After receiving a three-month continuance of her deadline to file a second amended 18 complaint [ECF No. 132], Plaintiff timely filed her second amended complaint (“SAC”) 19 on August 7, 2020. ECF No. 145. The SAC asserted the following causes of action: 20 (1) fraud; (2) fraudulent conveyance; (3) dissolution; (4) appointment of receiver; (5) 21 accounting; (6) constructive trust; (7) conversion; (8) breach of fiduciary duty against 22 Sherman in her capacity as manager and against SSP; (9) breach of fiduciary duty against 23 all member defendants, alternatively breach of the covenant of good faith and fair dealing; 24 (10) aiding and abetting breach of fiduciary duty; (11) defamation per se or per quod 25 against Sherman in her capacity as manager and as trustee of the Grandchildren Trusts, and 26 the J&M Trust Defendants; (12) false light invasion of privacy against Sherman in her 27 capacity as manager and as trustee of the Grandchildren Trusts, and the J&M Trust 28 1 Defendants; (13) defamation per se or per quod against Dennis; (14) false light invasion of 2 privacy against Dennis; and (15) unjust enrichment against all Defendants. See id. 3 On October 7, 2021, the Court—again ruling on four separate motions to dismiss by 4 Defendants [ECF Nos. 162, 164, 166, 167]—dismissed all claims in the SAC, noting the 5 specific deficiencies to each claim as to each Defendants, and granted Plaintiff leave to file 6 an amended complaint. ECF No. 237. In its analysis of Defendant Dennis’s motion to 7 dismiss the SAC, the Court considered Plaintiff’s claim for judicial dissolution. Id.at 10- 8 11. 9 B. Plaintiff’s Third Amended Complaint 10 Plaintiff’s TAC states two causes of action: (1) specific performance of Plaintiff’s 11 right to inspect company records and (2) dissolution of SSP. ECF No. 238 ¶¶ 341-374. She 12 seeks declaratory and injunctive relief from this Court for an inspection of financial records 13 of SSP since 2013, dissolution of SSP, as well as costs and attorney’s fees. Id. Plaintiff 14 notes that while she retains most of the allegations from her SAC, the TAC “limit[s] the 15 causes of action to a request for declaratory relief.” ECF No. 238 ¶ 1. Yet, Plaintiff also 16 states in her response to the Motions to Dismiss that she “retained facts from the SAC 17 because she anticipates she will be able to withstand a MTD on some other causes of action 18 after finally being given access to the complete records since 2013” and that she “believes 19 she has enough evidence of fraud and breach of fiduciary duty to withstand dismissal on 20 ‘Iqbal/Twombly[.]’” ECF No. 247 at 7. 21 Only the claims alleged in her TAC are before this Court. See S.D. Cal. CivLR 15.1.a 22 (“Every pleading to which an amendment . . . has been allowed by court order, must be 23 complete in itself without reference to the superseded pleading.”); Hal Roach Studios, Inc. 24 v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1546 (9th Cir. 1989) (“[A]n amended 25 pleading supersedes the original.”); see also Lacey v. Maricopa Cnty., 693 F.3d 896, 928 26 (9th Cir. 2012) (en banc) (claims dismissed with leave to amend which are not re-alleged 27 in an amended pleading may be considered waived if not repled). As such, to the extent 28 that Plaintiff “believes the Court overlooked or played down in its Order Granting the 1 Motion To Dismiss” certain “[i]mportant facts” [ECF No. 238 ¶ 1], the Court notes that 2 Plaintiff did not file a motion for reconsideration of the Court’s prior order dismissing the 3 SAC, the time to file a motion for reconsideration has passed, S.D. Cal. CivLR 7.1.i, and 4 the Court has no basis to consider Plaintiff’s prior arguments related to Plaintiff’s 5 previously dismissed causes of action.1 Similarly, in her opposition to the Motions to 6 Dismiss, Plaintiff asks this Court to “make the simple change in form, calling this a breach 7 of contact and asking for specific performance of the right to inspect the books and records 8 and mandate to dissolve remedies.” ECF No. 247 at 5. However, the Court “may not look 9 beyond the complaint to a plaintiff’s moving papers, such as a memorandum in opposition 10 to a defendant’s motion to dismiss.” Schneider v. Cal. Dep’t of Corr., 151 F.3d 1194, 1197 11 n.1 (9th Cir. 1998).2 Accordingly, the Court does not consider any of Plaintiff’s arguments 12 regarding causes of actions not pleaded in the TAC. 13 C. Legal Standard 14 Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss based 15 on the Court’s lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Plaintiff has the 16 burden of establishing that this Court has subject matter jurisdiction. Kokkonen v. Guardian 17 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Challenges to subject matter jurisdiction 18 may be facial or factual. Edison v. United States, 822 F.3d 510, 517 (9th Cir. 2016). Facial 19 20 1 “It is a long-recognized principle that federal courts sitting in diversity ‘apply state 21 substantive law and federal procedural law.’” Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 417 (2010) (quoting Hanna v. Plumer, 380 U.S. 460, 465 22 (1965)). Because this Court’s authority in this case is premised on diversity jurisdiction 23 [ECF No. 238 ¶ 41], the Court applies the relevant state law to substantive issues, and federal law to procedural issues. See Cnty. of Orange v. United States Dist. Ct., 784 F.3d 24 520, 524 (9th Cir. 2015). 25 2 Consideration of Plaintiff’s cause of action for breach of contract asserted for the first 26 time in opposition to the motions to dismiss would plainly contradict the minimal notice 27 pleading requirements of Rule 8 of the Federal Rules of Civil Procedure. See Starr v. Baca, 633 F.3d 1191, 1204 (9th Cir. 2011). 28 1 challenges assert that the allegations are insufficient to invoke federal jurisdiction, while 2 factual challenges dispute the truth of legally sufficient allegations. Id. (citing Safe Air for 3 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). In a facial challenge, the Court 4 accepts a plaintiff’s allegations as true and draws all reasonable inferences in their favor. 5 Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (citing Pride v. Correa, 719 F.3d 6 1130, 1133 (9th Cir. 2013)) (noting that facial attacks are resolved using the same standard 7 as a Rule 12(b)(6) motion to dismiss). 8 If the Court has jurisdiction to address the merits, a complaint may be dismissed 9 under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Fed. R. 10 Civ. P. 12(b)(6). The Court evaluates whether a complaint states a cognizable legal theory 11 and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short 12 and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. 13 P. 8(a)(2). To survive a Rule 12(b)(6) motion, a complaint must plead “enough facts to 14 state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 15 544, 570 (2007). In reviewing the plausibility of a complaint, courts “accept factual 16 allegations in the complaint as true and construe the pleadings in the light most favorable 17 to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 18 1031 (9th Cir. 2008) (citation omitted). Nonetheless, courts are not required to “accept as 19 true allegations that are merely conclusory, unwarranted deductions of fact, or 20 unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 21 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). 22 Courts may, but are not required, to consider extrinsic evidence in the context of a Rule 23 12(b)(6) motion to dismiss. Davis v. HSBC Bank, 691 F.3d 1152, 1159-60 (9th Cir. 2012) 24 (collecting cases) (noting that documents may be incorporated by reference or taken under 25 judicial notice). 26 \\\ 27 \\\ 28 \\\ 1 D. Discussion 2 1. Subject Matter Jurisdiction – Amount in Controversy 3 “Federal courts are courts of limited jurisdiction. They possess only that power 4 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 5 511 U.S. 375, 377 (1994). “It is presumed that a cause lies outside this limited jurisdiction, 6 and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Id. 7 (citations omitted); see also Lake v. Ohana Military Cmtys., LLC, 14 F.4th 993, 1000 (9th 8 Cir. 2021) (“Removal and subject matter jurisdiction statutes are strictly construed.”). 9 When a case is originally filed in federal court, “the amount in controversy is determined 10 from the face of the pleadings.” Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th 11 Cir. 2000) (citing Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 363 (9th 12 Cir. 1986)). And “[t]he sum claimed by the plaintiff controls so long as the claim is made 13 in good faith.” Id. (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 14 (1938)). To justify dismissal of a claim originally filed in federal court on the basis that the 15 alleged amount in controversy is insufficient to confer jurisdiction, the Court applies the 16 “legal certainty” test, which requires that it appears to a legal certainty that the claim is 17 really for less than the jurisdictional amount. See Geographic Expeditions, Inc. v. Estate of 18 Lhotka, 599 F.3d 1102, 1106 (9th Cir. 2010) (citing Crum, 231 F.3d at 1131; St. Paul 19 Mercury Indem. Co., 303 U.S. at 292). 20 The Sherman Motion argues that Plaintiff’s TAC should be dismissed for lack of 21 subject matter jurisdiction because “Plaintiff has no monetary demand, and although 22 diversity of citizenship may exist, Plaintiff has not satisfied the $75,000 amount in 23 controversy requirement.” ECF No. 239-1 at 2. More specifically, the Sherman Motion 24 asserts that the TAC does not include any claim for monetary relief, and that “the very 25 nature of the two remaining causes of action—inspection of books and records and the 26 dissolution of SSP—do not result in any monetary payment to Plaintiff.” Id. at 4. The 27 Sherman Defendants additionally argue that value of recovery from Plaintiff’s stated 28 1 causes of actions could be no more than the alleged amount of the distribution of Plaintiff’s 2 capital account, which is less than the $75,000 threshold for diversity jurisdiction. Id. at 5. 3 Plaintiff responds that she “believes that amount in dispute still exceeds $75,000” 4 and that “[i]f the amount in dispute only includes the stated capital in Plaintiff’s capital 5 account and that amount has fallen below $75,000, the Plaintiff’s costs and attorney fees 6 thus far should be added.” ECF No. 247 at 11. Plaintiff argues that Barefield v. HSBC 7 Holdings PLC, 356 F. Supp. 3d 977 (E.D. Cal. 2018), supports the retention of jurisdiction 8 over her claims even “if the claims are narrowed to those with damages less than $75,000.” 9 Id. at 10. Plaintiff further asserts that she has paid $11,000 in attorney’s fees to date and 10 incurred costs of more than $1,000. ECF No. 247 at 7. 11 The Sherman Defendants argue in response that Barefield is inapposite because it 12 addresses a case that was removed from state court rather than being filed in federal court. 13 ECF No. 254 at 3. They further assert that the amount in controversy must be exclusive of 14 interests as costs under 28 U.S.C. § 1332(a), and that her claim for attorney’s fees cannot 15 be included in the amount in controversy. Id. at 3-4. 16 The amount in controversy calculation may include “damages, costs of compliance 17 with injunctions, [] attorneys’ fees awarded under contract or fee shifting statutes . . . [and] 18 future attorneys’ fees recoverable by statute or contract[.]” Fritsch v. Swift Transp. Co. of 19 Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018). Furthermore, a complaint seeking only 20 declaratory or injunctive relief may meet the amount in controversy requirement by 21 alleging that the value of the litigation reaches the $75,000 threshold. See Hunt v. Wash. 22 State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977) (“In actions seeking declaratory or 23 injunctive relief, it is well established that the amount in controversy is measured by the 24 value of the object of the litigation”). “The amount in controversy is not what might have 25 been recovered in money, but rather the value of the right to be protected or the extent of 26 the injury to be prevented.” Jackson v. Am. Bar Ass’n, 538 F.2d 829, 831 (9th Cir. 1976). 27 Plaintiff has not cited any legal authority that her costs and fees are recoverable 28 under contract or statute. Therefore, the Court proceeds to consider whether the alleged 1 claims meet the amount in controversy requirement exclusive of attorney’s fees and costs. 2 See Blanchard v. Morton Sch. Dist., 509 F.3d 934, 938 (9th Cir. 2007) (“Pro se 3 plaintiffs . . . are not entitled to attorney’s fees”) (citation omitted). 4 Plaintiff asserts, and the Sherman defendants concede, that the face of that TAC 5 alleges that dissolution of SSP would result in a distribution of at least $70,000 from 6 Plaintiff’s capital account. See ECF Nos. 238 ¶ 200; 239-1 at 5. Plaintiff further alleges 7 that although the number is likely to have diminished, in 2017, the amount in Plaintiff’s 8 capital account in SSP was $78,489. Id. ¶ 360. Furthermore, while Plaintiff concedes that 9 she does not know the total assets and liabilities of SSP, she asserts that SSP’s assets 10 include at least one commercial property and that she is entitled to $100,000 that may be 11 shown by a “true and full accounting” of “Plaintiff’s share of the capital and net profits” of 12 SSP, and that upon dissolution of SSP, she is entitled to her “fair share of the account 13 balances.” Id. ¶¶ 192, 200, 201, 204. Defendants do not refute that the Operating 14 Agreement provides for a distribution of assets after the dissolution of SSP or that SSP 15 holds other assets, not have they provided this Court with reason to believe that dissolution 16 of SSP would result in a sum less than the amount in controversy being distributed to 17 Plaintiff under the Operating Agreement. Because it does not appear to a legal certainty 18 that the value of the action would be less than the jurisdictional amount in controversy, the 19 Court cannot find that it lacks subject matter jurisdiction in this action on that basis. 20 Geographic Expeditions, 599 F.3d at 1106. Accordingly, the Sherman Defendants’ Motion 21 to Dismiss for Lack of Subject Matter Jurisdiction is DENIED. 22 2. Dissolution of SSP 23 Defendants jointly argue that judicial dissolution of SSP is not warranted under the 24 Operating Agreement because Plaintiff has failed to allege that all members of the 25 partnership have agreed to dissolution in writing or that SSP has sold all or substantially 26 all of its assets, the two conditions for dissolution provided by the Operating Agreement. 27 See ECF Nos. 240-1 at 2-4; 241-1 at 3-4; 242 at 5-6; 252 at 1-2; 253 at 1-2; 255 at 3-4. 28 1 Plaintiff asserts that the Operating Agreement reflects that Silver Strand Plaza would 2 be the sole property of SSP and that all other property of SSP is incidental. ECF No. 238 3 ¶ 6. Plaintiff further asserts that, the sale of Silver Strand Plaza “should have triggered the 4 dissolution of SSP.” Id. ¶ 203. Plaintiff also states that she “desires the sale of all or 5 substantially all of the assets of SSP and distributions made according to the percentage 6 owned by each shareholder” [Id. ¶ 363] and further submits that she “is now seeking the 7 sale of what remains of [SSP]” [ECF No. 247 at 3]. Plaintiff contends that section 1.4 of 8 the Operating Agreement forbids SSP from purchasing other property. ECF No. 247 at 4. 9 However, Plaintiff alleges that, while she does not know the exact extent of SSP’s assets, 10 she believes that it continues to hold real estate and other capital. ECF No. 238 ¶¶ 181-201. 11 In relevant parts, the Operating Agreement sets out that: 12 1.4 Purpose. The purposes of the Company shall be to acquire, develop, own, lease and manage real estate, and to engage in related or incidental 13 activities, including owning interests in other entities that either directly 14 or indirectly engage in such activities. Notwithstanding the foregoing, the purpose of the Company shall be limited to those activities that are 15 permitted by the Articles of Organization (as amended from time to 16 time). The Company’s primary activities will be limited to owning, leasing and managing the retail shopping center known as Silver Strand 17 Plaza, which is located at 600 Palm Avenue, Imperial Beach, California 18 91932 (the “Property”).
19 1.5 Term. The term of the Company . . . shall continue until dissolved, 20 liquidated and terminated pursuant to the provisions of Article VIII.
21 ARTICLE VIII - Dissolution 22 8.2 The Company shall be dissolved upon the first to occur of the following 23 events: 24 (a) The sale of all or substantially all of the Company assets 25 . . . 26 (b) The written consent of all of the Members.
27 ECF No. 238-1 at 6, 16, 17. 28 1 As pointed out in Defendants’ pending Motions to Dismiss, the Court’s prior order 2 dismissing Plaintiff’s SAC specifically addressed Plaintiff’s nearly identical argument 3 requesting judicial dissolution of SSP. ECF No. 237 at 10-11. The Court found that neither 4 of the two conditions required for dissolution of SSP, as defined by the Operating 5 Agreement, had occurred, and that Plaintiff’s own statements contradicted the notion that 6 “all or substantially all” of SSP’s assets have been sold. Id. at 11. Examining Plaintiff’s 7 renewed allegations that dissolution is required by the Operating Agreement, the Court 8 again finds that there is no basis for her claim that section 1.4 limits SSP’s activities solely 9 to ownership of Silver Strand Plaza, or that all or substantially all of SSP’s assets have been 10 sold. The phrasing of “primary” as used in the Operating Agreement, and “principal” as 11 referenced in Plaintiff’s TAC do not imply exclusivity, and the plain language of section 12 1.4 indicates that SSP’s activities may include acquiring, developing, owning, leasing and 13 managing real estate, and to engage in related or incidental activities. As before, the Court 14 finds that Plaintiff’s allegations that SSP continues to hold various assets contradicts the 15 assertion that sale of Silver Strand Plaza constitutes the sale of “all or substantially all” of 16 SSP’s assets as required for section 8.2 to apply. Accordingly, the Court GRANTS the 17 pending Motions to Dismiss with respect to Plaintiff’s claim for judicial dissolution. ECF 18 Nos. 240; 241; 242. 19 3. Specific Performance 20 Defendant SSP argues that Plaintiff’s claim for specific performance in the form of 21 inspecting SSP’s books and records should be denied because specific performance is an 22 equitable remedy rather than a cause of action. ECF No. 242 at 3.3 SSP further argues that 23 Plaintiff may have properly brought a cause of action for inspection of a limited liability 24 company’s records under California Corporations Code section 17704.10, and that 25 26 27 3 SSP’s Motion to Dismiss was joined by Dennis [ECF No. 244], the Shermans [ECF No. 28 1 Plaintiff’s allegations fail to show that she met the requirements to assert enforcement of 2 an accounting under that statute. Id. at 4-5. 3 "[U]nder California law, specific performance is a remedy for breach of contract, 4 not an independent claim." Griffin v. Green Tree Serv., LLC, 166 F. Supp. 3d 1030, 1055 5 (C.D. Cal. 2015); see also Wong v. Tai Jing, 117 Cal. Rptr. 3d 747, 755 n.2 (Ct. App. 2010) 6 ("specific performance and injunctive relief are equitable remedies and not causes of action 7 for injuries."). More specifically, “[a]n accounting cause of action is equitable and may be 8 sought where the accounts are so complicated that an ordinary legal action demanding a 9 fixed sum is impracticable.” Herrejon v. Ocwen Loan Servicing, LLC, 980 F. Supp. 2d 10 1186, 1207 (E.D. Cal. 2013) (citing Civic Western Corp. v. Zila Indus., Inc., 135 Cal. Rptr. 11 915, 923 (Ct. App. 1977)). Moreover, as explained in this Court’s prior order, “[a] right to 12 an accounting is derivative; it must be based on other claims.” Janis v. Cal. State. Lottery 13 Comm’n, 80 Cal. Rptr. 2d 549, 554 (1998) (citing Union Bank v. Superior Ct., 37 Cal. Rptr. 14 2d 653, 666 (1995)); see ECF No. 111 at 34-35. 15 Plaintiff admits in her opposition that specific performance is a remedy rather than 16 a cause of action. ECF No. 247 at 4. Additionally, as with Plaintiff’s claim for dissolution 17 of SSP, the Court previously considered and dismissed Plaintiff’s arguments with respect 18 to an accounting. See ECF No. 111 at 34-35. The Court noted that because a cause of action 19 for accounting was a claim that must be based on other claims, it could not be sustained 20 without another cause of action against SSP. Id. at 34. Plaintiff’s TAC brings only one 21 other claim for judicial dissolution, which this Court has now dismissed as articulated 22 above. As such, Plaintiff’s request for accounting cannot be sustained. Although Plaintiff 23 makes several conclusory allegations in her opposition that SSP failed to comply with 24 section 11704.10 of the California Corporations Code [ECF No. 247 at 5-6], no cause of 25 action for breach of that section is before this Court. Accordingly, the Court GRANTS 26 Defendants’ Motions to Dismiss with respect to Plaintiff’s claim for specific performance 27 of right to inspect company records. ECF Nos. 240; 241; 242. 28 1 E. Leave to Amend 2 Although requests for leave to amend are generally granted with “extreme 3 liberality,” the Court considers the factors laid out in Foman v. Davis, 371 U.S. 178, 182 4 (1962) when considering whether to grant leave to amend: undue delay, bad faith or 5 dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, 6 undue prejudice to the opposing party, and futility. See Brown v. Stored Value Cards, Inc., 7 953 F.3d 567, 574 (9th Cir. 2020). “Of the Foman factors, prejudice to the opposing party 8 carries the most weight.” Id. (citing Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 9 1052 (9th Cir. 2003). The Court has “particularly broad” discretion to deny leave to amend 10 “where plaintiff has previously amended the complaint.” Ascon Props., Inc. v. Mobil Oil 11 Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (citing DCD Programs, Ltd. v. Leighton, 833 12 F.2d 183, 186 n.3 (9th Cir. 1987)). 13 Plaintiff requests that the Court grant her leave to amend her complaint in order to: 14 (1) rephrase her argument that she believes that sale of the Silver Strand Plaza constitutes 15 the sale of all or substantially all of SSP’s assets and seeks the sale of SSP’s remaining 16 assets as well as its dissolution [ECF No. 247 at 3]; and (2) to ask for an opportunity to 17 further supplement her allegations regarding breach of contract [Id. at 9]. 18 Defendants oppose granting Plaintiff leave to amend her complaint for reasons of 19 judicial economy, and because Plaintiff has repeatedly failed to cure deficiencies despite 20 multiple chances to amend, further leave would be futile, and continued litigation on 21 Plaintiff’s claims would prejudice Defendants. See ECF Nos. 239-1 at 5; 240-1 at 5-6; 241- 22 1 at 6; 242 at 11; 252 at 2-4; 253 at 2; 254 at 4; 255 at 4. 23 As articulated in the Court’s discussion of the causes of action asserted in Plaintiff’s 24 TAC, Plaintiff has repeatedly failed to address deficiencies which were addressed by this 25 Court’s prior orders granting leave to amend her complaint. Plaintiff even states that the 26 27 28 1 TAC is substantially similar to the SAC, and the Court’s review of the TAC reveals that 2 to be an accurate admission. The reasoning put forth by Plaintiff in support of her request 3 for leave to amend her complaint further reinforces her failure to cure deficiencies in her 4 complaint despite prior opportunities to amend. Plaintiff’s proposed restatement does not 5 cure the Court’s finding that she has failed to allege sufficient facts to show that the sale of 6 Silver Strand Plaza constitutes the sale of all or substantially all of SSP, especially in light 7 of Plaintiff’s assertions that SSP continues to hold assets in the form of capital and real 8 estate. See ECF No. 238 at ¶¶ 181-201. In a similar vein, Plaintiff’s conclusory assertion 9 that the allegations of the TAC “prove a breach of at least two provisions of the [Operating 10 Agreement]” belie this Court’s previous analysis of her claims against SSP and findings 11 that Plaintiff’s allegations could not sustain either a direct or derivative suit against SSP. 12 See ECF Nos. 111 at 28-34; 238 at 22-24 (noting that Plaintiff re-asserted the same 13 argument that the Court had already considered and rejected). Accordingly, the Court finds 14 that further leave to amend would be futile, given Plaintiff’s inability to cure her deficient 15 allegations and previously identified. Furthermore, the Court finds that Defendants would 16 be unduly prejudiced if they are compelled to continue to litigate this action in light of 17 Plaintiff’s repeated failures to bring plausible claims for relief. Accordingly, Plaintiff’s 18 request for leave to amend her complaint is DENIED for failure to cure deficiencies by 19 previous amendment, futility, and undue prejudice to the Defendants. 20 \\\ 21 \\\ 22 \\\ 23 \\\ 24 25 26 4 See ECF No. 238 ¶ 1 (“This Third Amended Complaint leave most of the Second 27 Amended Complaint Allegations intact, while limiting the causes of action to a request for declaratory relief. . . “). 28 1 II. AMENDED MOTION TO WITHDRAW 2 Plaintiff requests that the Court grant her leave to withdraw her TAC “to allow for a 3 final appealable order based on the Second Amended Complaint.” ECF No. 258 at 1. 4 Plaintiff provides no legal basis in support of her request other than Tunstall v. Bick, a case 5 which is not binding on this Court. No. 2:16-cv-2604-KJM-DMC-P, 2021 WL 4951722, 6 at *1-2 (E.D. Cal. Oct. 25, 2021). Plaintiff also states that “she believes she should have 7 been allowed to proceed to discovery on the Second Amended Complaint,” “that the 8 Appellate Court will reverse and remand at least some of her claims based on the Second 9 Amended Complaint,” and that she “will file a new complaint in State Court based on 10 breach of contract after the second amended complaint was filed[.]” ECF No. 258 at 2. 11 In Tunstall, the court granted a pro se plaintiff’s motion to withdraw his fourth 12 amended complaint and proceed on his third amended complaint where the fourth amended 13 complaint failed to address deficiencies previously identified by the court and the third 14 amended complaint had stated several cognizable claims. 2021 WL 4951722, at *1-2. In 15 that case, the court had granted the plaintiff leave to amend after its own sua sponte 16 screening of the complaint under 28 U.S.C. § 1915A and without dismissing the claims 17 brought in the third amended complaint. See generally Tunstall v. Bick, No. 2:16-cv-2604- 18 KJM-DMC-P, 2019 WL 4392414 (E.D. Cal. Sept. 13, 2019). After allowing the plaintiff 19 to proceed on his third amended complaint, the court immediately dismissed the claims 20 and defendants to which it had previously found the third amended complaint was 21 deficient. Tunstall v. Bick, No. 2:16-cv-2604-KJM-DMC-P, 2022 WL 493117, at *1 (E.D. 22 Cal. Feb. 17, 2022). 23 Plaintiff’s reliance on Tunstall is unavailing. Unlike in Tunstall, this Court 24 considered motions to dismiss submitted by various defendants, assessed Plaintiff’s claims 25
26 27 5 The Court evaluates Plaintiff’s Motion to Withdraw only on the Amended Motion to Withdraw, which states that it “was amended to include a hearing date” and “corrected to 28 1 as asserted in the SAC, and explicitly dismissed all of Plaintiff’s claims. As discussed in 2 the preceding sections, although Plaintiff’s TAC failed to address the deficiencies of her 3 SAC as identified by the Court, similar to the fourth amended complaint in Tunstall, the 4 circumstances in this case are distinguishable because the Court actually dismissed 5 Plaintiff’s prior claims, finding that Plaintiff had not stated any cognizable claims. To the 6 extent that Plaintiff wishes to appeal the Court’s earlier order dismissing her SAC, such 7 disposition is not supported by the case law. See Weston Family P’ship LLLP v. Twitter, 8 29 F.4th 611, 618 (9th Cir. 2022) (explaining that a plaintiff who has been given leave to 9 amend must obtain a further district court determination, in the form of a final order, 10 dismissing the case in order to appeal); WMX Techs. v. Miller, 104 F.3d 1133, 1136-37 11 (9th Cir. 1997) (“[W]hen a district court expressly grants leave to amend, it is plain that 12 the order is not final. Something more is both anticipated and required.”). 13 Accordingly, Plaintiff’s Amended Motion to Withdraw [ECF No. 258] is DENIED 14 and her initial Motion to Withdraw [ECF No. 257] is therefore DENIED AS MOOT. As 15 this Order dismisses Plaintiff’s remaining causes of action without leave to amend, Plaintiff 16 may appeal this Order when a final judgment issues. 17 III. CONCLUSION 18 In accordance with the above, the Court hereby: 19 1. DENIES the Sherman Defendants’ Motion to Dismiss for lack of subject 20 matter jurisdiction [ECF No. 239]; 21 2. GRANTS the Motions to Dismiss of Defendants Diane Dennis [ECF No. 22 240]; Defendants Linda R. Kramer and Erik Hunsaker [ECF No. 241]; and Defendant 23 Silver Strange Plaza, LLC [ECF No. 242]; 24 3. DENIES Plaintiff Laura Lynn Hammett’s Amended Motion to Withdraw 25 Third Amended Complaint [ECF No. 258]; 26 4. DENIES AS MOOT Plaintiff Laura Lynn Hammett’s Motion to Withdraw 27 Third Amended Complaint [ECF No. 257]; 28 1 5. DISMISSES WITH PREJUDICE Plaintiffs Third Amended Complaint 2 [ECF No. 238]; and 3 6. DENIES leave to amend the Third Amended Complaint. 4 7. The Clerk of Court is DIRECTED to close this case. 5 IT IS SO ORDERED. 6 ||Dated: September 30, 2022 NO
g Honorable Linda Lopez 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28