Valley National Bank v. Aman Truck Lines LLC ( 2022 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 VALLEY NATIONAL BANK, 11 Plaintiff No. 2:21-cv-01279-TLN-JDP 12 v. 13 AMAN TRUCK LINES LLC, ORDER 14 Defendant, 15 16 AMAN TRUCK LINES LLC, 17 Counterclaimant, 18 v. 19 VALLEY NATIONAL BANK, 20 Counter-Defendant, 21 AMAN TRUCK LINES LLC, 22 23 Third-Party Plaintiff, 24 v. 25 MST INSURANCE SERVICES INC. and GLOBAL CENTURY INSURANCE 26 BROKERS, INC., 27 Third-Party Defendant. 28 1 This matter is before the Court on Counter-Defendant Valley National Bank’s (“Counter- 2 Defendant”) Motion to Dismiss. (ECF No. 15.) Counterclaimant Aman Truck Lines LLC 3 (“Counterclaimant”) filed an opposition. (ECF No. 18.) Counter-Defendant filed a reply. (ECF 4 No. 20.) For the reasons set forth below, the Court GRANTS Counter-Defendant’s motion with 5 leave to amend. 6 I. FACTUAL AND PROCEDURAL BACKGROUND 7 The instant case arises from a dispute over a Premium Financing Agreement (“PFA”) 8 between the parties, under which Counterclaimant sought financing from Counter-Defendant1 for 9 its premium payments to Global Hawk Insurance Company (“Global Hawk”) for a commercial 10 insurance policy. (See ECF No. 13; see also ECF No. 15-1 at 7.) On or around June 2020, 11 Global Hawk became insolvent and ceased operations, thus cancelling Counterclaimant’s policy. 12 (ECF No. 13 at 4.) On July 21, 2021, Counter-Defendant filed suit against Counterclaimant to 13 collect debt as Counterclaimant was no longer making payments. (ECF No. 1 at 3.) On 14 December 13, 2021, Counterclaimant filed an Answer and Counterclaim against Counter- 15 Defendant. (ECF Nos. 11, 13.) Counterclaimant also filed suit against MST Insurance Services 16 Inc. and Global Century Insurance Brokers (collectively, “Third-Party Defendants”).2 (ECF No. 17 13.) In short, Counterclaimant alleges Third-Party Defendants breached the PFA “by identifying 18 and obtaining a policy from a company that was insolvent and on the verge of liquidation” and 19 failing “to do the least amount of due diligence.” (Id. at 4.) Counterclaimant alleges Counter- 20 Defendant breached the PFA through the actions of its agents — Third-Party Defendants. (Id. at 21 5.) On January 13, 2022, Counter-Defendant filed the instant motion to dismiss. (ECF No. 15.) 22 II. STANDARD OF LAW 23 Rule 8(a) requires a pleading to contain “a short and plain statement of the claim showing 24 that the pleader is entitled to relief.” See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). Under 25 1 Pursuant to the PFA, financing was provided through Agile Premium Finance (“Agile”), a 26 division of Counter-Defendant. (ECF No. 13 at 9.) 27 2 The parties refer to Third-Party Defendants as “Brokers.” (See ECF Nos. 13, 15-1, 18, 28 20.) 1 notice pleading in federal court, the complaint must “give the defendant fair notice of what the 2 claim . . . is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 3 (2007) (internal quotations omitted). “This simplified notice pleading standard relies on liberal 4 discovery rules and summary judgment motions to define disputed facts and issues and to dispose 5 of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). 6 On a motion to dismiss, the factual allegations of the complaint must be accepted as true. 7 Cruz v. Beto, 405 U.S. 319, 322 (1972). A court must give the plaintiff the benefit of every 8 reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail 9 Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege 10 “‘specific facts’ beyond those necessary to state his claim and the grounds showing entitlement to 11 relief.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads 12 factual content that allows the court to draw the reasonable inference that the defendant is liable 13 for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). 14 Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of 15 factual allegations.” United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 16 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an 17 unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A 18 pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the 19 elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 20 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 21 statements, do not suffice.”). Moreover, it is inappropriate to assume the plaintiff “can prove 22 facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not 23 been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 24 U.S. 519, 526 (1983). 25 Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough 26 facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697 (quoting 27 Twombly, 550 U.S. at 570). Only where a plaintiff fails to “nudge [his or her] claims . . . across 28 the line from conceivable to plausible[,]” is the complaint properly dismissed. Id. at 680. While 1 the plausibility requirement is not akin to a probability requirement, it demands more than “a 2 sheer possibility that a defendant has acted unlawfully.” Id. at 678. This plausibility inquiry is “a 3 context-specific task that requires the reviewing court to draw on its judicial experience and 4 common sense.” Id. at 679. 5 In ruling upon a motion to dismiss, the district court may consider only the complaint, any 6 exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of 7 Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu 8 Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 9 1998). 10 If a complaint fails to state a plausible claim, “[a] district court should grant leave to 11 amend even if no request to amend the pleading was made, unless it determines that the pleading 12 could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 13 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)); see 14 also Gardner v. Marino, 563 F.3d 981, 990 (9th Cir. 2009) (finding no abuse of discretion in 15 denying leave to amend when amendment would be futile). Although a district court should 16 freely give leave to amend when justice so requires under Rule 15(a)(2), “the court’s discretion to 17 deny such leave is ‘particularly broad’ where the plaintiff has previously amended its 18 complaint[.]” Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 520 (9th Cir. 19 2013) (quoting Miller v. Yokohama Tire Corp., 358 F.3d 616, 622 (9th Cir. 2004)). 20 III. ANALYSIS 21 Counterclaimant asserts the following counterclaims against Counter-Defendant: (1) 22 breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) 23 breach of implied contract. (See ECF No. 13.) Counter-Defendant moves to dismiss all three 24 counterclaims, arguing that they fail as a matter of law. (ECF No. 15-1 at 12–17.) 25 A. Counterclaim One: Breach of Contract 26 Counterclaimant alleges Counter-Defendant “breached the [PFA] through the actions of 27 its agents, [Third-Party Defendants], and their failure to conduct due diligence in investigating, 28 identifying, and obtaining reputable and solvent insurance policy for [Counterclaimant].” (ECF 1 No. 13 at 5.) Counter-Defendant argues Counterclaimant alleges no facts to support the assertion 2 that Third-Party Defendants are Counter-Defendant’s agents.3 (ECF No. 15-1 at 12–13.) 3 Counter-Defendant also argues that Counterclaimant’s boilerplate assertions of agency, 4 conspiracy, aiding and abetting, and alter ego are inadequately pleaded. (Id. at 19–22.) In 5 opposition, Counterclaimant asserts that if its allegations are accepted as true — specifically, that 6 Counter-Defendant and Third-Party Defendants “acted in concert to fraudulently assign a 7 worthless insurance policy to [Counterclaimant], then the provisions of the [PFA] which 8 [Counter-Defendant] relies upon could be revoked under varying legal doctrines, such as 9 unconscionability or fraud.” (ECF No. 18 at 5.) The Court will address each of the theories of 10 secondary liability in turn to ascertain whether they are adequately pleaded against Counter- 11 Defendant. 12 i. Agency 13 Counter-Defendant argues Counterclaimant fails to meet any of the pleading requirements 14 for agency. (ECF No. 15-1 at 20.) Counterclaimant clarifies in opposition that it “is claiming an 15 agency relationship exists between [Counter-Defendant] and [Third-Party Defendants], and 16 together they fraudulently led [Counterclaimant] to purchase insurance from a company on the 17 brink of bankruptcy.” (ECF No. 18 at 8.) Counterclaimant otherwise does not address Counter- 18 Defendant’s argument. (See id.) 19 The essential elements of an agency relationship are: “(1) that the agent or apparent agent 20 holds the power to alter legal relations between the principal and third persons and between the 21 principal and himself; (2) that the agent is a fiduciary with respect to matters within the scope of 22 23 3 Counter-Defendants also argue: (1) the PFA does not place on Counter-Defendant or Third-Party Defendants a duty to investigate, so Third-Party Defendants could not have breached 24 a duty found in the PFA even if they were Counter-Defendant’s agents; (2) the PFA states explicitly that Third-Party Defendants are not Counter-Defendant’s agents; (3) the PFA does not 25 state Counter-Defendant has the duty to conduct due diligence or to ensure the policy selected by Counterclaimant is from a “reputable and solvent company”; and (4) two provisions of the PFA 26 expressly address cancellation of a financed policy and agree Counter-Defendant would not have 27 liability for the cancellation. (ECF No. 15-1 at 12–13, 18–19.) This matter is at the pleadings stage and most of these arguments go to the merits of this claim. The Court therefore need not 28 and does not address the parties’ arguments with respect to these issues. 1 the agency; and (3) that the principal has the right to control the conduct of the agent with respect 2 to matters entrusted to him.” Kreiser v. Asset Mgmt. Grp., Inc., No. SACV 20- 3 01794JVS(DFMx), 2021 WL 3579414, at *3 (C.D. Cal. Apr. 23, 2021). For there to be an 4 adequate claim, the principal must have made a request, instruction, or command to the agent. Id. 5 Mere passive permission from the principal does not suffice. Id. 6 In the instant case, Counterclaimant has not alleged sufficient facts to establish an agency 7 relationship existed despite alleging multiple times in a conclusory fashion that Third-Party 8 Defendants were Counter-Defendant’s agents. (See ECF No. 13.) Instead, Counterclaimant’s 9 own pleadings seem to provide a reasonable inference that Third-Party Defendants are not 10 Counter-Defendant’s agents. The PFA attached as Exhibit A of the Counterclaim states: “[Third- 11 Party Defendants] [are] not the Agent of [Counter-Defendant] with the exception of any action 12 taken on behalf of [Counter-Defendant]. [Counter-Defendant] is not bound by anything written 13 or verbally conveyed to Insured and is not liable for any acts or omissions by the Agent, Broker 14 or Insurance Carrier.” (Id. at 17.) Counterclaimant has alleged no facts demonstrating Third- 15 Party Defendants performed any acts on behalf of Counter-Defendant. (See id.) Claims require 16 more than “unadorned, the [Counter-Defendant]-unlawfully-harmed-me accusation[s],” and 17 Counterclaimant fails to meet this burden. Iqbal, 556 U.S. at 678. Thus, the Court finds 18 Counterclaimant has failed to adequately allege an agency relationship between Counter- 19 Defendant and Third-Party Defendants. 20 ii. Conspiracy 21 Counter-Defendant argues Counterclaimant “has not alleged any facts evidencing an 22 agreement between [Counter-Defendant] and [Third-Party Defendants] concerning the selection 23 of insurance.” (ECF No. 15-1 at 21.) Counterclaimant does not address this argument in its 24 opposition. (See ECF No. 18.) 25 Conspiracy claims must allege facts demonstrating: “(1) the formation and operation of 26 the conspiracy[;] (2) wrongful conduct in furtherance of the conspiracy[;] and (3) damages arising 27 from the wrongful conduct.” AREI II Cases, 216 Cal. App. 4th 1004, 1022 (2013) (citing Kidron 28 v. Movie Acquisition Corp., 40 Cal. App. 4th 1571, 1581 (1995)). As it pertains to the formation 1 and operation of the conspiracy, a plaintiff must allege an agreement to commit the wrongful acts. 2 Cisco Sys., Inc. v. STMicroelectronics, Inc., 77 F. Supp. 3d 887, 893–94 (N.D. Cal. 2014). 3 “[W]hen a plaintiff alleges that a defendant is liable for intentional misrepresentation under a civil 4 conspiracy theory, Rule 9(b) requires that the plaintiff allege with particularity facts that support 5 the existence of a civil conspiracy.” Id. at 894. 6 The Court finds that Counter-Defendant is correct. Counterclaimant only alleges in 7 conclusory fashion that “[e]ach Counter-Defendant and Third-Party Defendant sued herein was 8 the co-conspirator of the other and was acting within the course and scope of a conspiracy formed 9 amongst each of them.” (ECF No. 13 at 2.) Counterclaimant does not allege an agreement to 10 commit the wrongful acts by Counter-Defendant and Third-Party Defendants, nor does it set forth 11 factual allegations regarding the wrongful conduct in furtherance of the conspiracy. (See id.) 12 iii. Aiding and Abetting 13 Counter-Defendant argues that Counterclaimant does not allege Third-Party Defendants 14 committed an initial tort or that Counter-Defendant had knowledge of alleged wrongdoing by 15 Third-Party Defendants, and therefore liability on this theory is not adequately pleaded. (ECF 16 No. 15-1 at 21.) Counterclaimant does not address this argument in its opposition. (See ECF No. 17 18.) 18 “Liability may . . . be imposed on one who aids and abets the commission of an 19 intentional tort if the person (a) knows the other’s conduct constitutes a breach of duty and gives 20 substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to 21 the other in accomplishing the tortious result and the person’s own conduct, separately 22 considered, constitutes a breach of duty to the third person.” Casey v. U.S. Bank Nat’l Ass’n, 127 23 Cal. App. 4th 1138, 1144 (2005) (internal quotation marks and citations omitted). 24 Counterclaimant again alleges in only a conclusory fashion that “[e]ach Counter- 25 Defendant and Third-Party Defendant sued herein aided and abetted the other with the intent that 26 each would be successful in their mutual endeavors.” (ECF No. 13 at 2.) Counterclaimant does 27 not allege knowledge by Counter-Defendant that Third-Party Defendants’ conduct constitutes a 28 breach of duty, nor substantial assistance by Counter-Defendant to Third-Party Defendants in 1 accomplishing a breach of the PFA. (See id.) 2 iv. Alter Ego 3 Counter-Defendant argues that Counterclaimant does not allege any facts that there is a 4 unity of interest or ownership between Counter-Defendant and Third-Party Defendants, nor does 5 it allege any facts that Counter-Defendant is misusing its corporate form. (ECF No. 15-1 at 22.) 6 Counterclaimant does not address this argument in its opposition. (See ECF No. 18.) 7 For the alter ego doctrine to be invoked, there must be: (1) “such a unity of interest and 8 ownership between the corporation and its equitable owner that the separate personalities of the 9 corporation and the shareholder do not in reality exist”; and (2) “an inequitable result if the acts in 10 question are treated as those of the corporation alone.” Sonora Diamond Corp. v. Superior Ct., 11 83 Cal. App. 4th 523, 538 (2000). “Among the factors to be considered in applying the doctrine 12 are commingling of funds and other assets of the two entities, the holding out by one entity that it 13 is liable for the debts of the other, identical equitable ownership in the two entities, use of the 14 same offices and employees, and use of one as a mere shell or conduit for the affairs of the other.” 15 Id. at 538–39 (internal citations omitted). 16 Counterclaimant yet again alleges in only a conclusory fashion that “[e]ach entity 17 Counter-Defendant and Third-Party Defendant sued herein is a shell organization and is actually 18 the alter ego of the other entity sued herein and due to the commingling and laundering of assets 19 and personal use thereof and use for wrongful and illegal purposes Counterclaimant . . . hereby 20 alleges that these individuals and entities are one and have a unity of interest and therefore the 21 corporate structure must be disregarded.” (ECF No. 13 at 2.) Counterclaimant does not provide 22 any further allegations regarding alter ego liability. (See id.) Nor does Counterclaimant actually 23 provide any specific factual allegations regarding the aforementioned factors to be considered in 24 applying the alter ego doctrine. See Sonora Diamond Corp., 83 Cal. App. 4th at 538. 25 In sum, the Court finds that Counterclaimant fails to adequately allege a theory of 26 secondary liability that would make Counter-Defendant liable for its breach of contract claim. 27 However, the Court at this juncture cannot determine “that the pleading could not possibly be 28 cured by the allegation of other facts.” Lopez, 203 F.3d at 1130. Accordingly, Counter- 1 Defendant’s motion as to this counterclaim is GRANTED with leave to amend. 2 B. Counterclaim Two: Breach of the Implied Covenant of Good Faith and Fair 3 Dealing 4 Counter-Defendant argues a breach of the implied covenant of good faith and fair dealing 5 claim “involves something beyond [a] breach of a contractual duty itself” and this counterclaim 6 fails to do that because it is based on the same conduct and damages as its breach of contract 7 counterclaim. (ECF No. 15-1 at 14 (citing Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. 8 App. 3d 1371, 1392 (1990)).) Counter-Defendant maintains the redundancy of this claim “is 9 highlighted by [Counterclaimant’s] admission that [Counter-Defendant] ‘unfairly interfered with 10 its rights to receive the benefits of the [PFA] by failing to perform their obligations under the 11 [PFA], because [Third-Party Defendants] failed to conduct due diligence . . . .’”4 (Id. at 15 (citing 12 ECF No. 13 ¶ 22).) In opposition, Counterclaimant asserts this counterclaim does not seek the 13 same damages as its first counterclaim for breach of contract, as it “seeks what was bargained for, 14 in this case an insurance policy for coverage of a full term of 12 months,” whereas the first 15 counterclaim “seeks monetary damages due to [Counter-Defendant] and [Third-Party 16 Defendants’] failure to conduct due diligence in obtaining an insurance policy for 17 [Counterclaimant].” (ECF No. 18 at 6.) 18 “Under California law, all contracts contain an implied covenant of good faith and fair 19 dealing. This covenant requires each contracting party to refrain from doing anything to injure 20 the right of the other to receive the benefits of the agreement.” San Jose Prod. Credit Ass’n v. 21 Old Republic Life Ins. Co., 723 F.2d 700, 703 (9th Cir. 1984) (citing Egan v. Mutual of Omaha 22 Insurance Company, 24 Cal. 3d 809, 818 (1979)). “It is universally recognized [that] the scope of 23 conduct prohibited by the covenant of good faith is circumscribed by the purposes and express 24 terms of the contract.” Gardner v. Nationstar Mortg. LLC, No. 2:14-cv-1583-TLN-CKD, 2015 25 4 Counter-Defendant also argues an express provision of the PFA contradicts the implied 26 covenant counterclaim and therefore it fails for this additional reason. (ECF No. 15-1 at 15.) 27 This argument goes to the merits of this counterclaim. Because this matter is in the pleadings stage, the Court therefore need not and does not address the parties’ arguments with respect to 28 this issue. 1 WL 1405539, at *6 (E.D. Cal. March 26, 2015). Indeed, California courts have also held that if 2 the allegations in this claim “do not go beyond the statement of a mere contract breach and, 3 relying on the same alleged acts, simply seek the same damages or other relief already claimed in 4 a companion cause of action, they may be disregarded as superfluous as no additional claim is 5 actually stated.” Careau & Co., 222 Cal. App. 3d at 1397. 6 The Court agrees with Counter-Defendant. Counterclaimant’s allegations with respect to 7 this counterclaim are merely repetitive of its first counterclaim. (See ECF No. 13 at 5–6.) 8 Counterclaimant alleges that Counter-Defendant has “unfairly interfered” with its “right to 9 receive the benefits of the [PFA] by failing to perform their obligations . . . because [Third-Party 10 Defendants] failed to conduct due diligence to investigate and ensure that they obtain reputable 11 and solvent commercial insurance for [Counterclaimant’s] business for the full policy term of 12 12 months.” (Id. at 6.) Counterclaimant further alleges “Counter-Defendant breached the [PFA] 13 through the actions of its agents, the [Third-Party Defendants], and their failure to conduct due 14 diligence in investigation, identifying, and obtaining reputable and solvent insurance policy for 15 [Counterclaimant].” (Id.) Counterclaimant finally alleges that it has suffered damages “in an 16 amount to be proven at trial, but not less than $657,603.83.” (Id.) These allegations and damages 17 are nearly identical to the factual allegations presented in the first counterclaim and they “do not 18 go beyond the statement of a mere contract breach.” Careau & Co., 222 Cal. App. 3d at 1397. 19 The Court therefore finds that these allegations “may be disregarded as superfluous as no 20 additional claim is actually stated.” Id. 21 Again, the Court at this juncture cannot determine “that the pleading could not possibly be 22 cured by the allegation of other facts.” Lopez, 203 F.3d at 1130. Accordingly, Counter- 23 Defendant’s motion as to this counterclaim is GRANTED with leave to amend. 24 C. Counterclaim Three: Breach of Implied Contract 25 Counter-Defendant argues Counterclaimant “fails to describe any conduct giving rise to a 26 contract other than entering into the PFA” and therefore this counterclaim is deficient as a matter 27 of law. (ECF No. 15-1 at 16 (emphasis in original).) Counter-Defendant also argues that this 28 claim is deficient because it is duplicative of the breach of contract counterclaim and derives from 1 the same subject matter — namely, Counterclaimant “alleges an implied contract under which 2 [Counter-Defendant] purportedly had a duty to obtain coverage from a solvent insurance 3 company, which is the same duty allegedly imposed on [Counter-Defendant] under the PFA.”5 4 (Id. at 16–17.) In opposition, Counterclaimant maintains this counterclaim is not duplicative, as it 5 has pleaded that Third-Party Defendants, acting as agents for Counter-Defendant, “entered into an 6 agreement to obtain a commercial insurance policy for [Counterclaimant] but breached an 7 implied contract by failing to obtain the policy from a financially solvent insurance company.” 8 (ECF No. 18 at 7.) 9 California courts have found that an implied in fact contract “consists of obligations 10 arising from a mutual agreement and intent to promise where the agreement and promise have not 11 been expressed in words.” O’Connor v. Uber Techs., Inc., 58 F. Supp. 3d 989, 999 (N.D. Cal. 12 2014) (citing Retired Employees Ass’n of Orange Cnty., Inc. v. Cnty. of Orange, 52 Cal. 4th 1171, 13 1178 (2011); Silva v. Providence Hosp. of Oakland, 14 Cal. 2d 762, 773 (1939)). It is also “well 14 settled that an action based on an implied-in-fact or quasi-contract cannot lie where there exists 15 between the parties a valid express contract covering the same subject matter.” Id. at 999–1000 16 (citing Lance Camper Mfg. Corp. v. Republic Indem. Co., 44 Cal. App. 4th 194, 203 (1996)). 17 In the instant case, the Counterclaim does not contain factual allegations to suggest that 18 there was another agreement and intent to promise besides the PFA. (See ECF No. 13 at 7–8.) 19 Additionally, Counterclaimant’s allegations with respect to this counterclaim are again near- 20 identical to the allegations in its first counterclaim for breach of contract. (See id.) The Court 21 therefore concludes that there cannot be a breach of implied-in-fact contract claim “where there 22 exists between [Counterclaimant and Counter-Defendant] a valid express contract covering the 23 same subject matter.” O’Connor, 58 F. Supp. 3d at 999–1000. 24 Again, the Court at this juncture cannot determine “that the pleading could not possibly be 25 5 Counterclaimant also argues that his counterclaim derives from the conduct of Third-Party 26 Defendants as agents of Counter-Defendant, which is contrary to a specific provision of the PFA. 27 (ECF No. 15-1 at 17.) As stated previously, the Court is at the pleadings stage and this argument goes to the merits of the claim. The Court therefore need not and does not consider arguments 28 related to this issue. 1 | cured by the allegation of other facts.” Lopez, 203 F.3d at 1130. Accordingly, Counter- 2 | Defendant’s motion as to this counterclaim is GRANTED with leave to amend. 3 IV. CONCLUSION 4 For the aforementioned reasons, the Court GRANTS Counter-Defendant’s Motion to 5 | Dismiss with leave to amend. (ECF No. 15.) Counterclaimant has thirty (30) days from the 6 | electronic filing date of this Order to file an amended counterclaim. Counter-Defendant’s 7 | responsive pleading is due twenty-one (21) days after the electronic filing date of the amended 8 | counterclaim. 9 IT IS SO ORDERED. 10 DATED: August 23, 2022 ll /) 12 “ □□ hha 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12