Chaquico v. Jefferson Starship, Inc. ( 2022 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 CRAIG CHAQUICO, 10 Case No. 22-cv-04907-RS Plaintiff, 11 v. ORDER DENYING MOTION TO 12 DISMISS AND MOTION TO STRIKE JEFFERSON STARSHIP, INC., et al., 13 Defendants. 14 15 16 I. INTRODUCTION 17 Plaintiff Craig Chaquico was a member of the band Jefferson Starship and its successor 18 Starship between 1976 and 1991. By this action, Chaquico seeks to recover artist royalties, 19 merchandising royalties, and other income he contends is due to him under a written termination 20 agreement (the “1991 Termination Agreement”) he executed in connection with leaving Starship. 21 Although the complaint originally named a host of individuals and entities as defendants, 22 Chaquico has now voluntarily dismissed all of them except Jefferson Starship, Inc. and Shiprats, 23 Inc., the other parties to the 1991 Termination Agreement. 24 Jefferson Starship and Shiprats (“defendants”) move to dismiss, arguing the complaint fails 25 to state a claim. Defendants also move to strike the complaint’s allegation that Chaquico is owed 26 in excess of $20 million and averments they contend are barred by the statute of limitations. 27 Pursuant to Civil Local Rule 7-1(b), the motions are suitable for disposition without oral 1 II. BACKGROUND 2 As noted, the complaint originally named a large number of defendants, apparently under 3 the theory that those individuals and entities would have knowledge and records pertinent to 4 conducting an accounting of the amounts owed under the 1991 Termination Agreement. As those 5 other parties have now been dismissed, the allegations regarding them are not relevant to the 6 issues at hand, and will not be discussed further. 7 The germane allegations of the complaint include the following. As an “equal member” of 8 the bands from 1976 until 1991, Chaquico signed band agreements with record companies, 9 participated in business meetings, and paid his share of royalties towards band and corporate 10 expenses. Chaquico wrote and/or co-wrote hit songs and “signature” guitar licks and riffs (and 11 often other instrumental parts, melodies, and lyrics) for both bands, contributing to multiple gold, 12 platinum, and double-platinum albums and dozens of hit singles. Chaquico often served as a band 13 co-producer and background singer, and never missed a song, album, video, tour, or promotional 14 opportunity during his time with the bands. 15 In 1991, as the last original member of Jefferson Starship, Chaquico terminated his 16 relationship with defendants in return for his continuing equal pro-rata shares of artist royalties, 17 merchandising royalties, and any other income, royalties, or advances payable in connection with 18 any, album, single, or other material or project in which he participated. The 1991 Termination 19 Agreement provided Chaquico would receive direct payment of all such royalties, both domestic 20 and foreign, and advances and publishing royalties without being subject to fees, commissions, or 21 any other charges. 22 Under section 6 of the agreement, Chaquico is entitled to an audit of defendants’ books 23 and records that relate to him. The complaint alleges the annual ability to audit records and to 24 receive accountings was contractually guaranteed, without a statute of limitations.1 25 26 1 The complaint does not attach a copy of the 1991 Termination Agreement. Defendants assert 27 they are permitted to attach it to their motion and have it considered. While that likely is correct, defendants failed to attach it. Defendants do not challenge, however, the complaint’s descriptions 1 The complaint asserts defendants have failed to make required payments or to provide 2 accountings. Chaquico alleges he does not know the amount that is owed to him under the 3 agreement, and that an accounting will be required to determine the exact figure. Chaquico asserts, 4 however, that more than $20 million is owed to him. The single claim for relief advanced in the 5 complaint is entitled “Accounting.” 6 7 III. LEGAL STANDARDS 8 A complaint must contain “a short and plain statement of the claim showing that the 9 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While “detailed factual allegations” are not 10 required, a complaint must have sufficient factual allegations to state a claim that is “plausible on 11 its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. v. Twombly, 550 U.S. 544, 12 555, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that 13 allows the court to draw the reasonable inference that the defendant is liable for the misconduct 14 alleged.” Id. (citing Twombly, 550 U.S. at 556). This standard asks for “more than a sheer 15 possibility that a defendant has acted unlawfully.” Id. The determination is a context-specific task 16 requiring the court “to draw on its judicial experience and common sense.” Id. at 679. 17 A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil 18 Procedure tests the legal sufficiency of the claims alleged in the complaint. See Conservation 19 Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011). Dismissal under Rule 12(b)(6) may be 20 based on either the “lack of a cognizable legal theory” or on “the absence of sufficient facts 21 alleged under a cognizable legal theory.” Id. at 1242 (internal quotation marks and citation 22 omitted). When evaluating such a motion, the court must accept all material allegations in the 23 complaint as true and construe them in the light most favorable to the non-moving party. In re 24 Quality Sys., Inc. Sec. Litig., 865 F.3d 1130, 1140 (9th Cir. 2017). 25 Under Rule 12(f), a court may strike from a pleading “an insufficient defense or any 26 27 of the terms of the agreement. 1 redundant, immaterial, impertinent, or scandalous matter.” “[T]he function of a 12(f) motion to 2 strike is to avoid the expenditure of time and money that must arise from litigating spurious issues 3 by dispensing with those issues prior to trial . . . .” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 4 880, 885 (9th Cir. 1983). “‘Immaterial’ matter is that which has no essential or important 5 relationship to the claim for relief or the defenses being pleaded.” 5 Charles A. Wright Arthur R. 6 Miller, Federal Practice and Procedure, § 1382, at 706-07 (1990). Granting or denying a motion to 7 strike lies within the discretion of the court. See Federal Sav. & Loan Ins. Corp. v. Gemini Mgmt., 8 921 F.2d 241, 244 (9th Cir. 1990). 9 10 IV. DISCUSSION 11 Defendants argue the complaint should be dismissed because, they insist, an “accounting” 12 is a remedy, not an independent claim for relief, and even if such a stand-alone claim is proper, the 13 complaint does not adequately plead its elements. Numerous cases have described accounting as a 14 potential remedy for, and/or derivative of, some other valid claim for relief. See, e.g., Paparella v. 15 Plume Design, Inc., No. 22-CV-01295-WHO, 2022 WL 2915706, at *8 (N.D. Cal. July 25, 2022) 16 (finding “request for an accounting is more accurately understood as a remedy, not an independent 17 cause of action.”) 18 As Paparella observed, however, “courts in California have gone both ways” as to whether 19 a claim for accounting is viable as an independent cause of action or if it is instead an equitable 20 remedy. Id., citing LeGarie v. Nurse, No. 21-cv-04739-JCS, 2021 WL 5771144, at *12 (N.D. Cal. 21 Dec. 6, 2021) (collecting authorities); see also Civic Western Corp. v. Zila Industries, 22 Inc., 66 Cal. App. 3d 1, 14 (1977) (“An accounting cause of action is equitable in nature, and may 23 be sought ‘where . . . the accounts are so complicated that an ordinary legal action demanding a 24 fixed sum is impracticable.’” (quoting 3 Witkin, Cal. Procedure (2d ed. 1971) Pleading, § 674, pp. 25 2300-2301.)) 26 Whether or not “accounting” should or may be pleaded as a separate claim, defendants are 27 correct that there must be some underlying basis giving rise to the right. That is not a basis for 1 dismissal of the complaint in this case, however, because Chaquico has pleaded facts sufficient to 2 support a claim for breach of contract, with a potential right to an accounting flowing from that. 3 While the complaint is not a model of pleading for a breach of contract claim, it alleges the 4 existence of the contract, material terms, and breach. Indeed, defendants expressly acknowledge 5 this, stating,“[t]his case is based upon an alleged breach of contract . . . . although Plaintiff does 6 not allege a separate cause of action for breach of contract, it can easily be inferred that that is the 7 basis for this action.” Motion to Strike at 6:1-5. 8 The complaint also sufficiently alleges why the accounts are sufficiently complicated to 9 warrant an accounting.2 Moreover, it alleges that defendants are contractually obligated to provide 10 accountings. Accordingly, whether the complaint is seen as seeking an accounting as a general 11 equitable remedy or as a request for specific performance of a contract term, it is adequately 12 grounded. It may turn out as this case progresses that there is little functional difference between 13 an “accounting” and the discovery to which Chaquico would be entitled had he cast his complaint 14 simply as one for breach of the 1991 Termination Agreement, but there is no basis to dismiss the 15 complaint based on how the claim for relief is labeled.3 16 The motion to strike also fails. It may be that the statute of limitations or the doctrine of 17 laches ultimately will limit Chaquico’s ability to recover for any amounts that should have been 18 paid to him before some point in time. Whether and when the statute ran, or laches attached, 19 however, turns on factual questions that cannot be resolved at the pleading stage. Defendants’ 20 request to strike the reference to $20 million allegedly owed is denied. See notes 2 and 3 above. 21 22 23 2 Defendants argue the complaint is contradictory in that it alleges both that the amount owed 24 cannot be ascertained absent an accounting and that the amount exceeds $20 million. Chaquico’s effort to estimate the amount owed does not undermine his assertion that calculating the actual 25 amount requires an accounting. 26 3 Ultimately, of course, Chaquico will not be able to recover in equity if his legal remedies are 27 adequate. No election need be made at this juncture, however. 1 V. CONCLUSION 2 The motion to dismiss and the motion to strike are denied. Defendants shall file an answer 3 || within 20 days of the date of this order. 4 5 IT IS SO ORDERED. 6 7 Dated: December 8, 2022 8 RICHARD SEEBORG 9 Chief United States District Judge 10 11 a 12 13 14 © 15 16 Zz 18 19 20 21 22 23 24 25 26 27 28 CASE No. 22-cv-04907-RS