Paskenta Band v. Associated Pension Consultants

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 3, 2021
• Docket: 17-15483
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION MAY 3 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

PASKENTA BAND OF NOMLAKI No. 17-15483 INDIANS; PASKENTA ENTERPRISES CORPORATION, D.C. No. 2:15-cv-00538-MCE-CMK Plaintiffs-Appellants,

v. MEMORANDUM*

ASSOCIATED PENSION CONSULTANTS, INC.,

Defendant-Appellee.

PASKENTA BAND OF NOMLAKI No. 17-15485 INDIANS; PASKENTA ENTERPRISES CORPORATION, D.C. No. 2:15-cv-00538-MCE-CMK Plaintiffs-Appellants,

v.

GARTH MOORE INSURANCE AND FINANCIAL SERVICES, INC.; GARTH MOORE,

Defendants-Appellees. Appeal from the United States District Court for the Eastern District of California Morrison C. England, Jr., District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Argued and Submitted January 26, 2021 San Francisco, California

Before: KLEINFELD, RAWLINSON, and HURWITZ, Circuit Judges.

These consolidated appeals arise from the district court’s Rule 12(b)(6)

dismissal of the complaint filed by Plaintiffs-Appellants Paskenta Band of

Nomlaki Indians and Paskenta Enterprises Corporation (collectively, Paskenta)

against Defendant-Appellee Associated Pension Consultants, Inc. (APC), and a

Rule 12(c) judgment on the pleadings in favor Defendants-Appellees Garth Moore

and Garth Moore Insurance and Financial (collectively, Moore). We have

jurisdiction under 28 U.S.C. § 1291, and review both decisions de novo. See

Northstar Fin. Advisors, Inc. v. Schwab Investments, 904 F.3d 821, 828 (9th Cir.

2018). Because the district court did not err, we affirm.

1. Professional Negligence Claims

Paskenta contends that APC, a pension consultant, breached its duty of care

by designing and managing Paskenta’s retirement plan in a manner that permitted

certain Paskenta employees, who had been appointed as trustees of the plan, to

steal millions of dollars from the plan. The allegations against Moore are similar,

except Moore is a financial advisor and Paskenta alleges that he “came up with the

idea for the Tribal Retirement Plans.” The allegations do not support viable

2 negligence claims. See In re Daisy Sys. Corp., 97 F.3d 1171, 1175 (9th Cir. 1996)

(enumerating elements for a claim of professional negligence). Paskenta did not

allege that the pension plan was improperly designed, and effectively concedes that

APC and Moore were following the directions of Paskenta’s employees who were

authorized to act on Paskenta’s behalf. Paskenta’s conclusory allegation that APC

and Moore knew that Paskenta’s employees were using the retirement plans to

perpetrate a fraud is not supported by any well-pleaded facts. See Chavez v. United

States, 683 F.3d 1102, 1108-10 (9th Cir. 2012) (discounting “the plaintiffs’ wholly

conclusory allegation that . . . defendants personally reviewed and, thus, knowingly

ordered, directed, sanctioned or permitted” misconduct).

2. Aiding and Abetting Claims

Paskenta’s complaint did not plausibly allege facts sufficient to state a claim

for aiding and abetting. When Paskenta’s conclusory allegations of knowledge are

properly discounted, Paskenta failed to allege any facts supporting the inference

that APC or Moore had actual knowledge of the asserted fraud committed by

Paskenta’s appointed trustees. See IIG Wireless, Inc. v. Yi, 22 Cal. App. 5th 630,

654 (2018) (holding that an “aiding and abetting [claim] depends on proof the

defendant had actual knowledge of the specific primary wrong the defendant

substantially assisted”) (emphasis added).

3 3. Breach of Fiduciary Duty Claims

Paskenta’s first amended complaint did not plausibly allege facts sufficient

to state a claim for breach of fiduciary duty against APC.1 Importantly, the

agreement between APC and Paskenta expressly disclaimed any fiduciary duties.

See City of Hope Nat’l Med. Ctr. v. Genentech, Inc., 181 P.3d 142, 152 (Cal. 2008)

(explaining that “enter[ing] into a contract for the very purpose of obtaining the . . .

expertise of the other party . . . would not necessarily create fiduciary

obligations”); see also Brown v. Cal. Pension Adm’rs & Consultants, Inc., 45 Cal.

App. 4th 333, 348 (1996) (affirming dismissal of claim alleging breach of fiduciary

duty against pension administrator because “the relationship was confined to

respondents’ performance of transactions selected by their customers”).

4. Restitution Claim

Paskenta’s third amended complaint merely alleged the bare elements of a

claim for restitution against Moore, and therefore failed to assert a plausible claim

for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). Specifically,

Paskenta failed to sufficiently allege facts giving rise to a plausible inference of

1 Paskenta’s fiduciary duty claim against Moore is waived because that claim in the first amended complaint was not dismissed by the district court and Paskenta did not re-plead that claim when filing subsequent amended complaints. See First Resort, Inc. v. Herrera, 860 F.3d 1263, 1274 (9th Cir. 2017). 4 wrongdoing on the part of Moore, as is necessary for a claim of restitution. See

Ghirardo v. Antonioli, 924 P.2d 996, 1003 (Cal. 1996).2

AFFIRMED.

2 Because Paskenta’s claims for relief against APC and Moore lacked merit, the district court properly rejected any claim for punitive damages. See Medical Lab’y Mgmt. Consultants v. Am. Broad. Cos., Inc., 306 F.3d 806, 826 (9th Cir. 2002) (holding that when the “claims that Plaintiffs raise on appeal lack merit, Plaintiffs are entitled to neither actual nor punitive damages”). 5