Noah's Ark Processors, LLC v. Cmbg Advisors, Inc. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 9 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NOAH’S ARK PROCESSORS, LLC, No. 19-55945
Plaintiff-Appellant, D.C. No.
2:19-cv-01057-CAS-JDE
v.
CMBG ADVISORS, INC., MEMORANDUM*
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Submitted August 13, 2020**
Pasadena, California
Before: WARDLAW and VANDYKE, Circuit Judges, and CHOE-GROVES,***
Judge.
Noah’s Ark Processors, LLC (“Noah’s Ark”) appeals the dismissal with
prejudice of its First Amended Complaint in its breach of fiduciary duty action
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Jennifer Choe-Groves, Judge for the United States
Court of International Trade, sitting by designation.
against CMBG Advisors, Inc. (“CMBG”).
We have jurisdiction under 28 U.S.C. § 1291. We review de novo the
dismissal of a complaint for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6), Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005), and
review for abuse of discretion the denial of a motion to amend a complaint,
Ventress v. Japan Airlines, 603 F.3d 676, 680 (9th Cir. 2010). We affirm.
1. First, the district court did not err in dismissing the breach of fiduciary
duty claim as alleged in the First Amended Complaint. To state a claim for breach
of fiduciary duty under California law, a plaintiff must show: (1) the existence of a
fiduciary relationship, (2) a breach of that relationship, and (3) damage
proximately caused by that breach. See Roberts v. Lomanto, 112 Cal. App. 4th
1553, 1562 (2003). The parties do not dispute that CMBG owes Noah’s Ark a
fiduciary duty. We conclude that the First Amended Complaint does not support
the second element and thus do not reach the third. When granted leave to amend,
Noah’s Ark did not add factual allegations showing a breach of fiduciary duty. To
the contrary, Noah’s Ark’s arguments that CMBG’s alleged emails to Noah’s Ark
“clearly implied” CMBG’s intent to prioritize payment to other unsecured creditors
do not support a reasonable inference to make the breach claim plausible. It is not
reasonable to infer that CMBG’s responses in its emails allegedly show a plan to
compensate other unsecured creditors ahead of Noah’s Ark.
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2. Second, the district court did not abuse its discretion in denying Noah’s
Ark leave to amend the First Amended Complaint. “[W]hen the district court has
already afforded a plaintiff an opportunity to amend the complaint, it has wide
discretion in granting or refusing leave to amend after the first amendment, and
only [] gross abuse” will disturb its rulings. Rich v. Shrader, 823 F.3d 1205, 1209
(9th Cir. 2016) (citation and internal quotation marks omitted). Here, the district
court found further amendment would be futile. Having already been given leave
to replead, Noah’s Ark failed to allege sufficient additional facts to support its
breach claim. The district court acted within its discretion in denying leave to
amend because Noah’s Ark was provided ample opportunity to state a plausible
breach claim and failed to do so.
3. We have considered Noah’s Ark’s remaining arguments and find them
unavailing.
AFFIRMED.
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