Mountain F. Enterprises, Inc. v. WiarCom, Inc.

District Court, E.D. California·Decided April 1, 2020·No. 2:19-cv-02023·Unknown

Opinion

MOUNTAIN F. ENTERPRISES, No. 2:19-cv-02023-JAM-CKD INC., a California corporation, Plaintiff, ORDER DENYING WIARCOM’S MOTION TO TRANSFER VENUE AND GRANTING v. WIARCOM’S MOTION TO DISMISS WIARCOM, INC., a Texas corporation; and DOES 1 through 50, inclusive, Defendants. Mountain F. Enterprises, Inc. (“MFE”) brings this action against WiarCom, Inc., alleging breach of contract and fraud. Compl., ECF No. 1. In response, WiarCom filed a motion to dismiss and a motion to transfer venue. Mot. to Dismiss, ECF No. 14; Mot. to Transfer, ECF No. 18.1 WiarCom argues the Court should transfer this case because WiarCom’s contracts with MFE designated the Southern District of Texas as the proper venue.

1 These motions were determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for February 25, 2020. Mot. to Transfer at 6-8. Moreover, WireCom maintains whichever court retains jurisdiction over the suit should dismiss MFE’s fraud claim under Rule 12(b)(6). Mot. to Dismiss at 3-11. MFE disagrees on both fronts. Opp’n, ECF No. 24. It contends the parties’ contracts did not properly incorporate the forum selection clause contained in WiarCom’s terms and conditions. Id. at 17-23. MFE also argues it properly pled each of the five elements of fraud. Id. at 14-17. The Court agrees with MFE that the Service Rate Plans failed to clearly and unequivocally incorporate WiarCom’s online terms and conditions. The forum-selection clause contained in those terms therefore does not apply; WiarCom’s motion to transfer venue is denied. But the Court agrees with WiarCom that MFE’s complaint fails to allege a claim of fraud. The Court dismisses this claim without prejudice. WiarCom and its sister company, Advanced Tracking Technologies, Inc. (“Advanced Tracking”) supply their customers with wireless GPS vehicle tracking units and provide related services. Compl. ¶ 5. In 2009, Advanced Tracking first contacted MFE to sell its GPS devices. Compl. ¶ 7. They reached an agreement four years later. Compl. ¶ 8. In the six years that followed, Advanced Tracking and MFE executed between 21 and 25 more “Service Rate Plans.” Id.; see also Gomez Decl. ¶ 4, ECF No. 24-3. In 2019, MFE became increasingly dissatisfied with the tracking units Advanced Tracking Technologies provided. Compl. ¶ 19. In March, MFE reported that, nearly 20% of the tracking units were inoperable. Id. Replacing these units forced MFE to incur additional expenses—specifically, the cost of removing non- functioning units, returning those units, and installing replacement units. Id. Moreover, MFE maintains it received two charges for each of these expenses: one from Advanced Tracking and one from WiarCom. Id. Unable to resolve the issues surrounding the additional fees and dysfunctional units, MFE returned all its units to Advanced Tracking Technologies. Compl. ¶ 20. Advance Tracking Technologies responded, directing MFE to contact WiarCom directly if it wished to terminate its Service Rate Plans. Compl. ¶ 23. WiarCom then emailed MFE, notifying the company that it would be subject to the early termination fees and equipment return fees contained in the contract’s terms and conditions. Compl. ¶ 24. MFE filed suit, alleging WiarCom (1) breached the Services Rate Plans by overcharging MFE and providing inoperable units, and (2) committed fraud by intentionally obscuring material terms of the Service Rate Plans. Compl. ¶¶ 26-29, 35-40. A. Evidentiary Objections WiarCom argues MFE “inappropriately offers purported factual evidence” in the declarations it filed alongside its opposition. Reply at 5, ECF No. 27. It is true that, generally, “a district court may not consider any material beyond the pleadings in a ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). The two exceptions to this rule are materials that a plaintiff incorporates by reference into its complaint and those that are proper subjects of judicial notice. Id. The declarations included with MFE’s opposition do not fall under either exception; the Court has not considered them in deciding WiarCom’s motion to dismiss. But Rule 12(b)(6)’s evidentiary restrictions do not apply when a court adjudicates a motion to transfer venue. Cf. S & J Rentals, Inc. v. Hilti, Inc., 294 F. Supp. 3d 978, 983 (E.D. Cal. 2018); Anza Tech., Inc. v. Mushkin, Inc., No. 2:17-cv- 00656, 2017 WL 6538981, at *1 (E.D. Cal. Dec. 21, 2017). In resolving motions for improper venue or motions to transfer venue, “the court need not accept the pleadings as true and may consider supplemental written materials and facts outside the pleadings.” Anza Tech., Inc., 2017 WL 6538981, at *1. The Court therefore has looked beyond the four corners of MFE’s complaint in resolving WiarCom’s motion to transfer venue. B. Request for Judicial Notice WiarCom requests the Court take judicial notice of the webpage containing its “General Terms and Conditions of Services.” Def.’s RJN ISO Mot. to Dismiss, ECF No. 17; Def.’s RJN ISO Mot. to Transfer, ECF No. 21. Federal Rule of Evidence 201 permits a court to “judicially notice a fact that is not subject to reasonable dispute because it (1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” FRE 201(b). Moreover, it is well-established that courts may take judicial notice of matters of public record. Finder v. Leprino Foods Co., No. 1:13-cv- 02059-AWI-BAM, 2019 WL 6894468, at *3 n.1 (E.D. Cal. Dec. 18, 2019). The web page that lists WiarCom’s terms and conditions is a matter of public record and, therefore, a proper subject of judicial notice. See Trudeau v. Google LLC, 349 F. Supp. 3d 869, 876 (N.D. Cal. 2018). The page is not, however, found at the hyperlink WiarCom includes in its request for judicial notice. The Court, instead, takes judicial notice that WiarCom’s terms and conditions web page is available at https://www.wiarcom.com/TermsAndConditionsOfService.pdf. By judicially noticing this page, the Court takes as true that the web page exists and makes certain representations about the company’s policies. The Court does not, however, presume that all or any of MFE’s agreements with WiarCom properly incorporated those terms. Subject to this caveat, Defendant’s request is granted. C. Motion to Transfer Venue Venue is proper (1) in a judicial district in which any defendant resides; (2) in a judicial district in which a substantial part of the events giving rise to the claim occurred; or (3) if no judicial district is otherwise appropriate, in any judicial district in which any defendant is subject to the court’s personal jurisdiction. 28 U.S.C. § 1391(b). But even when a plaintiff has filed suit in a venue deemed proper under Section 1391(b), a defendant may still move to transfer “any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404. Section 1404 is the proper mechanism for enforcing a forum- selection clause that points to another federal district. Atlantic Marine Constr. Co. v. U.W. Dist. Court for Western Dist. Of Texas, 571 U.S. 49, 59 (2013). Normally, section 1404 requires district courts to “evaluate both the convenience of the parties and various public-interest conside

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Mountain F. Enterprises, Inc. v. WiarCom, Inc., (E.D. Cal. 2020).

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