1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ROGER TOWERS and CATHERINE aka No. 2:24-cv-2965 DC AC PS KATE TOWERS, 12 Plaintiffs, 13 ORDER and v. 14 FINDINGS AND RECOMMENDATIONS POST PROPERTIES, et al., 15 Defendants. 16
17 18 Plaintiffs are proceeding in this matter pro se, and pre-trial proceedings are accordingly 19 referred to the undersigned pursuant to Local Rule 302(c)(21). Defendants specially appeared 20 and moved to dismiss on March 7, 2025. ECF No. 27. Plaintiffs filed a motion for sanctions that 21 substantively responds to the motion to dismiss. ECF No. 33. For the reasons that follow, the 22 undersigned recommends that defendants’ motion be GRANTED and that this case be 23 DISMISSED in its entirety. The court further ORDERS that plaintiffs’ motion for sanctions 24 (ECF No. 33) is DENIED. 25 I. Background 26 A. The Complaint 27 The operative Second Amended Complaint (“SAC”) was filed on February 26, 2025 by 28 plaintiffs in pro se, following the withdrawal of their counsel. ECF No. 23. According to the 1 SAC, plaintiff Roger Towers (“Roger”) is a real estate broker who entered into an agreement with 2 Post Properties, LLC on May 1, 2000, for the purpose of obtaining tenants for a business park 3 known as PSI Corporate Campus. ECF No. 23 at 5. The agreement is attached to the SAC as 4 Exhibit A. Id. at 24-28. Pursuant to the agreement, Roger was to be paid a commission annually 5 for month-to-month tenants, and for long term tenant extensions he was to be paid at the time of 6 such extension. Id. at 27. There was no end date on the agreement regarding commissions. Id. at 7 24-28. 8 On July 31, 2001, Peter Post, on behalf of Post Properties, advised Roger by letter that 9 they would not extend the agreement for Roger to be their broker. Id. at 5. On September 6, 10 2001, Peter Post sent an email to the employees of Post Properties and certain PSI employees 11 stating that they will not sign any long-term agreement with Roger Towers to be their exclusive 12 agent. Id. Binding arbitration ensued in 2005, and findings from that arbitration, dated December 13 15, 2005, are attached to the SAC as Exhibit B. Id. at 31-37. In that decision, the question before 14 the arbitrator was “whether the plain language of the Schedule of Commission and Fees attached 15 to the Exclusive Authorization to Sell, Lease, Exchange or Option . . . was modified or 16 superseded by an executed oral agreement or by the deletion of paragraph 15 in” two lease 17 expansions issued to Tenet Health System Hospitals, Inc. and Fresno Institute of Technology 18 (“IOT”). Id. at 31, 32. The arbitrator found that Post and Towers did not orally modify the 19 contract: although Post called Towers and stated it would not pay additional commissions for 20 extensions of leases and for the taking of additional space by existing tenants under the lases 21 procured by Towers, Towers did not agree to that arrangement. Id. at 32. The arbitrator further 22 found that the deletion of a paragraph in the leases did not alter the schedule of fees or 23 commissions. Id. at 33-34. Accordingly, the arbitrator concluded that Towers was owed 24 commissions on the leases at issue. Id. 25 In June or July of 2008, Roger exchanged communications with Post’s attorney Michael 26 Rein concerning a lease originally executed by IOT to clarify the commissions owed to Towers. 27 Id. at 7. At the time, the rent for IOT exceeded $50,000. Post paid Towers for this lease 28 extension, though the payment was late and issued only after Roger’s demand. Id. On July 30 1 and August 4, 2013, Roger made several attempts to contact Post regarding the IOT lease, which 2 was set to expire on August 31, 2013. Ultimately Roger and Mr. Rein exchanged emails. Id. 3 The lease was extended to August 31, 2016. Id. 4 In November of 2016, Roger sent Lynaya Post an email requesting information on the 5 IOT lease. She forwarded the email to attorney Rein, and Roger and Rein exchanged emails in 6 November and December of 2016. Id. at 8. Rein stated that another tenant was renewing its lease 7 for three years, until August 31, 2019, and that Roger’s calculated commission amounted to 8 $59,005.52. Id. Roger agreed that the calculation was correct but stated that he was also entitled 9 to interest calculated at 10% for delay in payment between the execution of the lease and payment 10 of the commission. Id. The parties disputed whether there was any interest due. Id. Plaintiffs 11 allege that with the aid of Mr. Rein, Post is underpaying commissions. Id. 12 As of September 2016, Roger developed health problems and was engaged in another 13 lawsuit, and he “lost track of the leasing situation at Post Properties.” Post never made another 14 commission payment. Id. at 10. Plaintiffs believe there are still tenants on the campus on which 15 Post owes commissions, and that Post has been concealing at least one tenant to avoid 16 commissions. Id. Plaintiff alleges that attorney Michael Rein has been “used as a willing tool by 17 and through which Post Properties LLC, Peter Post, and Lynaya Post disseminate misinformation 18 to Roger and intend to deceive him by suggestions of fact not true, half-truths, and outright lies.” 19 Id. 20 The SAC asserts the following causes of action: (1) breach of contract; (2) breach of 21 fiduciary duty; (3) fraud at inception of contract; (4) conspiracy to commit fraud; (5) aiding and 22 abetting fraud; (6) intentional infliction of emotional distress; (7) loss of consortium; (8) violation 23 of RICO, [18 U.S.C. §] 1692(a); (9) violation of RICO, [18 U.S.C. §] 1962(b); (10) violation of 24 RICO, [18 U.S.C. §] 1962(c); and (11) violation of RICO, [18 U.S.C. §] 1962(d). Id. at 15-20. 25 B. Motion to Dismiss 26 All defendants move to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and Fed. R. Civ. P. 27 12(b)(6) for failure to state a claim. Defendants also allege they have not been properly served. 28 Because the court finds the arguments brought under Rule 12(b)(6) to be dispositive, and the 1 additional arguments for dismissal too cursory to support relief, only the Rule 12(b)(6) issues are 2 addressed. 3 II. Analysis 4 A. Legal Standards Governing Motions to Dismiss Under Rule 12(b)(6) 5 “The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 6 sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 7 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 8 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t., 901 9 F.2d 696, 699 (9th Cir. 1990). 10 In order to survive dismissal for failure to state a claim, a complaint must contain more 11 than a “formulaic recitation of the elements of a cause of action;” it must contain factual 12 allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. 13 Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to contain a statement of 14 facts that “merely creates a suspicion” that the pleader might have a legally cognizable right of 15 action. Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-35 16 (3d ed. 2004)). Rather, the complaint “must contain sufficient factual matter, accepted as true, to 17 ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ROGER TOWERS and CATHERINE aka No. 2:24-cv-2965 DC AC PS KATE TOWERS, 12 Plaintiffs, 13 ORDER and v. 14 FINDINGS AND RECOMMENDATIONS POST PROPERTIES, et al., 15 Defendants. 16
17 18 Plaintiffs are proceeding in this matter pro se, and pre-trial proceedings are accordingly 19 referred to the undersigned pursuant to Local Rule 302(c)(21). Defendants specially appeared 20 and moved to dismiss on March 7, 2025. ECF No. 27. Plaintiffs filed a motion for sanctions that 21 substantively responds to the motion to dismiss. ECF No. 33. For the reasons that follow, the 22 undersigned recommends that defendants’ motion be GRANTED and that this case be 23 DISMISSED in its entirety. The court further ORDERS that plaintiffs’ motion for sanctions 24 (ECF No. 33) is DENIED. 25 I. Background 26 A. The Complaint 27 The operative Second Amended Complaint (“SAC”) was filed on February 26, 2025 by 28 plaintiffs in pro se, following the withdrawal of their counsel. ECF No. 23. According to the 1 SAC, plaintiff Roger Towers (“Roger”) is a real estate broker who entered into an agreement with 2 Post Properties, LLC on May 1, 2000, for the purpose of obtaining tenants for a business park 3 known as PSI Corporate Campus. ECF No. 23 at 5. The agreement is attached to the SAC as 4 Exhibit A. Id. at 24-28. Pursuant to the agreement, Roger was to be paid a commission annually 5 for month-to-month tenants, and for long term tenant extensions he was to be paid at the time of 6 such extension. Id. at 27. There was no end date on the agreement regarding commissions. Id. at 7 24-28. 8 On July 31, 2001, Peter Post, on behalf of Post Properties, advised Roger by letter that 9 they would not extend the agreement for Roger to be their broker. Id. at 5. On September 6, 10 2001, Peter Post sent an email to the employees of Post Properties and certain PSI employees 11 stating that they will not sign any long-term agreement with Roger Towers to be their exclusive 12 agent. Id. Binding arbitration ensued in 2005, and findings from that arbitration, dated December 13 15, 2005, are attached to the SAC as Exhibit B. Id. at 31-37. In that decision, the question before 14 the arbitrator was “whether the plain language of the Schedule of Commission and Fees attached 15 to the Exclusive Authorization to Sell, Lease, Exchange or Option . . . was modified or 16 superseded by an executed oral agreement or by the deletion of paragraph 15 in” two lease 17 expansions issued to Tenet Health System Hospitals, Inc. and Fresno Institute of Technology 18 (“IOT”). Id. at 31, 32. The arbitrator found that Post and Towers did not orally modify the 19 contract: although Post called Towers and stated it would not pay additional commissions for 20 extensions of leases and for the taking of additional space by existing tenants under the lases 21 procured by Towers, Towers did not agree to that arrangement. Id. at 32. The arbitrator further 22 found that the deletion of a paragraph in the leases did not alter the schedule of fees or 23 commissions. Id. at 33-34. Accordingly, the arbitrator concluded that Towers was owed 24 commissions on the leases at issue. Id. 25 In June or July of 2008, Roger exchanged communications with Post’s attorney Michael 26 Rein concerning a lease originally executed by IOT to clarify the commissions owed to Towers. 27 Id. at 7. At the time, the rent for IOT exceeded $50,000. Post paid Towers for this lease 28 extension, though the payment was late and issued only after Roger’s demand. Id. On July 30 1 and August 4, 2013, Roger made several attempts to contact Post regarding the IOT lease, which 2 was set to expire on August 31, 2013. Ultimately Roger and Mr. Rein exchanged emails. Id. 3 The lease was extended to August 31, 2016. Id. 4 In November of 2016, Roger sent Lynaya Post an email requesting information on the 5 IOT lease. She forwarded the email to attorney Rein, and Roger and Rein exchanged emails in 6 November and December of 2016. Id. at 8. Rein stated that another tenant was renewing its lease 7 for three years, until August 31, 2019, and that Roger’s calculated commission amounted to 8 $59,005.52. Id. Roger agreed that the calculation was correct but stated that he was also entitled 9 to interest calculated at 10% for delay in payment between the execution of the lease and payment 10 of the commission. Id. The parties disputed whether there was any interest due. Id. Plaintiffs 11 allege that with the aid of Mr. Rein, Post is underpaying commissions. Id. 12 As of September 2016, Roger developed health problems and was engaged in another 13 lawsuit, and he “lost track of the leasing situation at Post Properties.” Post never made another 14 commission payment. Id. at 10. Plaintiffs believe there are still tenants on the campus on which 15 Post owes commissions, and that Post has been concealing at least one tenant to avoid 16 commissions. Id. Plaintiff alleges that attorney Michael Rein has been “used as a willing tool by 17 and through which Post Properties LLC, Peter Post, and Lynaya Post disseminate misinformation 18 to Roger and intend to deceive him by suggestions of fact not true, half-truths, and outright lies.” 19 Id. 20 The SAC asserts the following causes of action: (1) breach of contract; (2) breach of 21 fiduciary duty; (3) fraud at inception of contract; (4) conspiracy to commit fraud; (5) aiding and 22 abetting fraud; (6) intentional infliction of emotional distress; (7) loss of consortium; (8) violation 23 of RICO, [18 U.S.C. §] 1692(a); (9) violation of RICO, [18 U.S.C. §] 1962(b); (10) violation of 24 RICO, [18 U.S.C. §] 1962(c); and (11) violation of RICO, [18 U.S.C. §] 1962(d). Id. at 15-20. 25 B. Motion to Dismiss 26 All defendants move to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and Fed. R. Civ. P. 27 12(b)(6) for failure to state a claim. Defendants also allege they have not been properly served. 28 Because the court finds the arguments brought under Rule 12(b)(6) to be dispositive, and the 1 additional arguments for dismissal too cursory to support relief, only the Rule 12(b)(6) issues are 2 addressed. 3 II. Analysis 4 A. Legal Standards Governing Motions to Dismiss Under Rule 12(b)(6) 5 “The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 6 sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 7 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 8 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t., 901 9 F.2d 696, 699 (9th Cir. 1990). 10 In order to survive dismissal for failure to state a claim, a complaint must contain more 11 than a “formulaic recitation of the elements of a cause of action;” it must contain factual 12 allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. 13 Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to contain a statement of 14 facts that “merely creates a suspicion” that the pleader might have a legally cognizable right of 15 action. Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-35 16 (3d ed. 2004)). Rather, the complaint “must contain sufficient factual matter, accepted as true, to 17 ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 18 (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads 19 factual content that allows the court to draw the reasonable inference that the defendant is liable 20 for the misconduct alleged.” Id. 21 In reviewing a complaint under this standard, the court “must accept as true all of the 22 factual allegations contained in the complaint,” construe those allegations in the light most 23 favorable to the plaintiff and resolve all doubts in the plaintiff’s favor. See Erickson v. Pardus, 24 551 U.S. 89, 94 (2007); Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 25 960 (9th Cir. 2010), cert. denied, 564 U.S. 1037 (2011); Hebbe v. Pliler, 627 F.3d 338, 340 (9th 26 Cir. 2010). However, the court need not accept as true legal conclusions cast in the form of 27 factual allegations, or allegations that contradict matters properly subject to judicial notice. See 28 Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981); Sprewell v. Golden State 1 Warriors, 266 F.3d 979, 988 (9th Cir.), as amended, 275 F.3d 1187 (2001). 2 Pro se pleadings are held to a less stringent standard than those drafted by lawyers. 3 Haines v. Kerner, 404 U.S. 519, 520 (1972). Pro se complaints are construed liberally and may 4 only be dismissed if it appears beyond doubt that the plaintiff can prove no set of facts in support 5 of his claim which would entitle him to relief. Nordstrom v. Ryan, 762 F.3d 903, 908 (9th Cir. 6 2014). The court’s liberal interpretation of a pro se complaint, however, may not supply essential 7 elements of the claim that were not pled. Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 8 266, 268 (9th Cir. 1982); see also Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992). A pro se 9 litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, 10 unless the complaint’s deficiencies could not be cured by amendment. See Noll v. Carlson, 809 11 F.2d 1446, 1448 (9th Cir. 1987). 12 B. Failure to State a Claim 13 This case must be dismissed in its entirety because plaintiffs fail to state a claim upon 14 which relief can be granted. The complaint is premised on the validity of the underlying 15 agreement, which grants Roger Towers a commission in perpetuity on the leases of any tenants 16 procured by Towers. Defendants assert that the entire complaint fails because the underlying 17 agreement is void and unenforceable. The court agrees. 18 1. The Underlying Commissions Agreement is Void and Unenforceable, 19 Defeating Plaintiffs’ Breach of Contract Claim 20 Assuming that Mr. Towers was acting as a licensed real estate broker,1 his conduct and the 21 1 The SAC does not include licensing information for Roger Towers, though it does refer to him 22 as a real estate broker. ECF No. 23 at 5. If Mr. Towers was acting as anything other than a duly 23 licensed real estate broker, he would be barred from filing suit regarding the commission agreement. California Business and Professions Code § 10136 states that “No person engaged in 24 the business or acting in the capacity of a real estate broker or a real estate salesperson within this state shall bring or maintain any action in the courts of this state for the collection of 25 compensation for the performance of any of the acts mentioned in this article without alleging and 26 proving that he or she was a duly licensed real estate broker or real estate salesperson at the time the alleged cause of action arose.” Plaintiffs’ motion for sanctions, unlike the SAC, expressly 27 asserts that Mr. Towers was acting as a licensed real estate broker. ECF No. 33 at 13. The undersigned does not recommend dismissal for failure to plead licensure status, as such a defect is 28 theoretically curable by amendment while other defects discussed above are not. 1 broker agreement were, at all relevant times, covered by the California Business and Professions 2 Code §10176(f). This provision reads as follows: 3 The [Real Estate] commissioner may, upon his or her own motion, and shall, upon the verified complaint in writing of any person, 4 investigate the actions of any person engaged in the business or acting in the capacity of a real estate licensee within this state, and 5 he or she may temporarily suspend or permanently revoke a real estate license at any time where the licensee, while a real estate 6 licensee, in performing or attempting to perform any of the acts within the scope of this chapter has been guilty of any of the 7 following: . . . (f) Claiming, demanding, or receiving a fee, compensation, or commission under any exclusive agreement 8 authorizing a licensee to perform any acts set forth in Section 10131 for compensation or commission where the agreement does not 9 contain a definite, specified date of final and complete termination. 10 Cal. Bus. & Prof. Code § 10176. California courts have held that where the Business and 11 Professions Code “imposes a penalty for the doing of an act, even though it does not expressly 12 prohibit it or make the act void, a contract founded upon such act is void.” Dale v. Palmer, 106 13 Cal. App. 2d 663, 667 (1951) (finding in considering an agreement where a termination date 14 could only be computed by reference to the happening of a future event, that the agreement 15 violated). 16 Here, it is undisputed that the commissions agreement does not contain a definite 17 termination date, and it therefore unquestionably violates California Business and Professions 18 Code §10176(f). Under California law, the underlying agreement is therefore void. Id.; see also 19 Allcapcorp Ltd v. CHC Consulting LLC, No. SACV-19-00206 JVS (JDE), 2020 WL 3108708, at 20 *9 (2020 U.S. Dist. LEXIS 104207) (C.D. Cal. Apr. 8, 2020), aff’d sub nom., Allcapcorp Ltd. v. 21 CHC Consulting LLC, No. 20-55457, 2021 WL 3667230 (9th Cir. Aug. 18, 2021). “To be 22 entitled to damages for breach of contract, a plaintiff must plead and prove the following 23 elements: (1) the existence of a contract, (2) plaintiff’s performance or excuse for 24 nonperformance, (3) defendant’s breach, and (4) resulting damage to the plaintiff.” Reinhardt v. 25 Gemini Motor Transp., 879 F. Supp. 2d 1138, 1143 (E.D. Cal. 2012). Because plaintiffs cannot 26 show the existence of a valid contract, they cannot state a contract claim. Accordingly, plaintiffs’ 27 claim for breach of contract (First Claim) must be dismissed. 28 //// 1 2. Plaintiffs Cannot State a Breach of Fiduciary Duty Claim 2 Plaintiffs’ SAC does not demonstrate the existence of a fiduciary relationship between the 3 parties (except, perhaps, a duty owed by Roger to Post), and accordingly plaintiffs cannot state 4 any claim based on fiduciary duty. “[A] fiduciary relationship is a recognized legal relationship 5 such as guardian and ward, trustee and beneficiary, principal and agent, or attorney and client.” 6 Richelle L. v. Roman Catholic Archbishop, 106 Cal.App.4th 257, 271 (2003). A fiduciary 7 relationship is a particular legal status in which the fiduciary is required to manage the subject 8 matter of the fiduciary relationship with due care, must account to the beneficiary, and must keep 9 the beneficiary fully informed as to all matters pertinent to the beneficiary’s interest. Oakland 10 Raiders v. National Football League, 131 Cal. App. 4th 621, 631 (2005). Fiduciary duties arise 11 only through agreement or as a matter of law. Id. There is a fiduciary relationship as a matter of 12 law between a real estate agent or broker and his or her client, but the broker owes the fiduciary 13 duty to the client, not the other way around. Smith v. Zak, 20 Cal. App. 3d 785, 792 (1971) (“The 14 obligations imposed on a real estate agent are the same as those imposed on a trustee . . . Thus, 15 all transactions between a broker and his client by which the broker obtains any advantage are 16 presumed to be without sufficient consideration.” (emphasis added)). 17 It is well established in California law that a mere contract or a debt does not constitute a 18 trust or create a fiduciary relationship. Wolf v. Superior Court, 107 Cal. App. 4th 25, 33-34 19 (2003). It is plain from the allegations in the SAC that defendants were not acting as fiduciaries 20 for the plaintiffs. Even taking as true the allegation that defendants owed a commission to 21 plaintiffs pursuant to a contract, that fact does not give rise to a possible fiduciary duty owed by 22 defendants to the plaintiffs. Accordingly, claims based on fiduciary duty fail as a matter of law. 23 3. Plaintiffs’ Tort Claims are Barred by the Economic Loss Doctrine 24 Plaintiffs assert two tort claims (intentional infliction of emotional distress and loss of 25 consortium), both of which arise from defendants’ alleged breach of the agreement to pay 26 commissions. California’s economic loss rule is intended to keep the law of contract and the law 27 of tort from dissolving into one another. Multifamily Captive Group, LLC v. Assurance Risk 28 Managers, Inc., 629 F. Supp. 2d 1135, 1145 (E.D. Cal. 2009). The doctrine bars tort claims based 1 on the same facts and damages as a breach of contract claim, absent breach of an independent 2 legal duty. Id. (“In other words, ‘conduct amounting to a breach of contract becomes tortious 3 only when it also violates a duty independent of the contract arising from principles of tort law.’” 4 (citations omitted)). Here plaintiffs have not identified any legal duty owed to them by 5 defendants that would be legally independent of the asserted contractual obligation and 6 cognizable in the torts context. On the facts alleged in the SAC, the court finds no basis for any 7 such duty. Accordingly, these claims cannot survive. 8 4. Plaintiff Cannot State a Fraud Based Claim 9 Plaintiffs bring multiple claims based in fraud, including a claim for fraud at inception of 10 contract (Third Claim), conspiracy to commit fraud (Fourth Claim), and aiding and abetting fraud 11 (Fifth Claim). “The elements of fraud, which give rise to the tort action for deceit, are (a) 12 misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity 13 (or “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) 14 resulting damage.” Lazar v. Superior Court,12 Cal.4th 631, 638 (1996). Fraud claims are subject 15 to a heightened pleading standard and must be pled with specificity. Rutherford Holdings, LLC 16 v. Plaza Del Rey, 223 Cal. App. 4th 221, 234 (2014). 17 The allegations in the SAC undercut any potential fraud claim. Plaintiffs admit that Post 18 actually paid commissions under the agreement for at least sixteen years, from 2000 to 2016. 19 ECF No. 23 at 42-43. Though the agreement was challenged once before and the parties engaged 20 in arbitration in 2005, defendants’ initial payments on the agreement and ongoing payments 21 following arbitration for 16 years bely any “intent to defraud” the plaintiffs. Further, the alleged 22 fraud is predicated on an agreement that the court finds was void at its inception under California 23 law. For these reasons, plaintiffs’ fraud claims necessarily fail. 24 5. Plaintiffs Cannot State a Civil RICO Claim 25 Plaintiffs bring five civil RICO claims (Eighth, Ninth, Tenth, and Eleventh Claims). ECF 26 No. 32 at 19-20. The elements of a civil RICO claim are that 27 a defendant must participate in (1) the conduct of (2) an enterprise that affects interstate commerce (3) through a pattern (4) of 28 racketeering activity or collection of unlawful debt. In addition, the 1 conduct must be (5) the proximate cause of harm to the victim. To show the existence of an enterprise under the second element, 2 plaintiffs must plead that the enterprise has (A) a common purpose, (B) a structure or organization, and (C) longevity necessary to 3 accomplish this purpose. 4 Eclectic Properties E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 997 (9th Cir. 2014) 5 (internal citations omitted). 6 The allegations of the SAC, taken as true, do not support any civil RICO claim. First, 7 there are no allegations related to interstate commerce. Second, plaintiffs’ allegations that 8 defendants refused to honor a single contract cannot be construed as allegations that defendants 9 collectively engaged in any kind of enterprise with a common purpose, structure or organization, 10 let alone with the longevity necessary to accomplish their joint purpose. The facts underlying the 11 parties’ dispute over commissions owed simply do not amount to racketeering. The civil RICO 12 claims fail as a matter of law. 13 III. Leave to Amend Is Not Appropriate 14 Plaintiffs’ complaint is fatally flawed because it does not present any viable cause of 15 action. The agreement underlying all of the allegations of legal wrongdoing is void under 16 California law. The allegations do not support any legal claim asserted. No amendment can 17 remedy these defects. Further, plaintiffs have already been given an opportunity to amend. 18 Though pro se plaintiffs are generally entitled to an opportunity to correct defects in a complaint 19 by amendment, that step is not appropriate in cases in which the defects cannot be cured. Noll, 20 809 F.2d at 1448. 21 IV. Plaintiffs’ Motion for Sanctions 22 Plaintiff’s brief that is responsive to the motion to dismiss is also styled as a motion for 23 sanctions. ECF No. 33. Plaintiffs assert that severe sanctions are warranted due to defendants’ 24 misrepresentations to the court. The undersigned has reviewed the SAC, the motion to dismiss, 25 and all other briefing on the docket and finds no basis for sanctions. This motion is DENIED. 26 V. Pro Se Plaintiff’s Summary 27 Your motion for sanctions is denied because the court does not find that defendants 28 engaged in any sanctionable behavior. ] Further, the court is recommending that defendants’ motion to dismiss be granted because 2 || California law prohibits real estate contracts in which the broker gets commissions forever, with 3 || □□ □□□ date. The magistrate judge found that there is no basis in law for your claims against the 4 || defendants. You have 21 days to object to the findings and recommendations. The District Judge 5 || will make the final decision. 6 VI. Conclusion 7 Plaintiffs’ motion for sanctions (ECF No. 33) is DENIED. 8 Further, the undersigned RECOMMENDS that defendants’ motion to dismiss (ECF No. 9 || 27) be GRANTED and that this case be dismissed because it fails to state a claim upon which 10 || relief can be granted. 11 These findings and recommendations are submitted to the United States District Judge 12 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within twenty-one days 13 || after being served with these findings and recommendations, any party may file written 14 || objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a 15 || document should be captioned “Objections to Magistrate Judge’s Findings and 16 || Recommendations.” Failure to file objections within the specified time may waive the right to 17 || appeal the District Court’s order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez 18 | v. Yist, 951 F.2d 1153, 1156-57 (9th Cir. 1991). 19 | DATED: May 21, 2025 . 20 Hthrrn— are 1 ALLISON CLAIRE UNITED STATES MAGISTRATE JUDGE 22 23 24 25 26 27 28 10