Sultan Hameed v. Ihop Franchising Llc

FILED
NOT FOR PUBLICATION MAR 28 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
SULTAN HAMEED, No. 11-15953
Plaintiff - Appellant, D.C. No. 2:10-cv-02276-MCE-
CMK
v.
IHOP FRANCHISING LLC; IHOP MEMORANDUM *
PROPERTIES LLC; INTERNATIONAL
HOUSE OF PANCAKES INC.; IHOP
RESTAURANTS INC.; IHOP
PROPERTIES, INC; DINEEQUITY INC.,
Defendants - Appellees.
Appeal from the United States District Court
for the Eastern District of California
Morrison C. England, Chief District Judge, Presiding
Argued and Submitted February 14, 2013
San Francisco, California
Before: SCHROEDER, NOONAN, and MURGUIA, Circuit Judges.
Sultan Hameed appeals the district court’s order dismissing his claims for
unjust enrichment, violations of California’s Unfair Competition Law (“UCL”),
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Cal. Bus. & Prof. Code § 17200 , et seq., accounting, and breach of contract against
International House of Pancakes, LLC, IHOP Franchising, LLC, IHOP Properties, LLC,
and DineEquity, Inc. (collectively, “IHOP”). Hameed’s allegations stem from three
contracts he entered into as an IHOP franchisee. We affirm.
The district court dismissed Hameed’s claims pursuant to Fed. R. Civ. Proc.
41(b) for failure to prosecute. Because Hameed indicated his willingness to forgo
his accounting claim to obtain immediate appellate review, we construe the
dismissal as a Rule 41(a)(2) voluntary dismissal. Omstead v. Dell, Inc., 594 F.3d
1081, 1085 (9th Cir. 2010).
The district court did not err in dismissing Hameed’s UCL claims related to
the Development Impact Assistance Program (“DIAP”) or the increases in the
property taxes he owed. Hameed did not plead a plausible cause of action with
regard to these claims. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009 ). He did not allege
that he suffered the losses necessary to trigger application of DIAP. Hameed
further had no cognizable interest in avoiding contractually required payments of
property taxes, and IHOP’s requirement of continued payments does not run afoul
of any constitutional, statutory, or regulatory scheme. Walker v. Countrywide
Home Loans, Inc., 121 Cal. Rptr. 2d 79, 87 (Cal. Ct. App. 2002); Gregory v.
Albertson’s, Inc., 128 Cal. Rptr. 2d 389, 395 (Cal. Ct. App. 2002).
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The district court dismissed Hameed’s breach of contract claim related to his
increased property tax because Hameed failed to plead the existence of a “New
Lease,” which is a prerequisite to a breach under his theory of the claim. We
affirm the dismissal because even if Hameed did plead the existence of a “New
Lease,” the “New Lease” did not cause the increase in Hameed’s property tax.
Instead, as Hameed’s counsel conceded during oral argument, the sale of the
property, which allowed a new valuation under California law, caused the increase
in Hameed’s property tax obligations.
The district court properly dismissed Hameed’s unjust enrichment claim
because under California law, unjust enrichment claims cannot proceed when the
parties have a valid contract regarding the same subject matter. Klein v. Chevron
U.S.A., Inc., 137 Cal. Rptr. 3d 293, 330 (Cal. Ct. App. 2012). The Equipment
Lease here was a valid contract that was performed according to its terms. The
contract is valid and not unconscionable, because Hameed has pointed to no
procedural defect in its formation. Davis v. O’Melveny & Myers, 485 F.3d 1066,
1072 (9th Cir. 2007) (procedural and substantive unconscionability required to
invalidate a contract).
Hameed contends that the district court erred in dismissing as time-barred
his UCL claim related to the Equipment Lease. The district court correctly found
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that the claim accrued in 1998 when the contracts were formed. Aryeh v. Canon
Bus. Solutions, Inc., 55 Cal. 4th 1185, 1196 (2013). The theory of continuous
accrual does not apply because there is no allegation of a recurring wrongful act.
Unlike Aryeh, where the plaintiff alleged that each individual payment included an
unfair charge, see id. at 1200, here, Hameed’s contention is that the contractual
terms are unfair. The discovery rule also does not excuse Hameed’s untimeliness
because a reasonable person in his position would have discovered the alleged
unfairness of the contract’s terms at the inception of the contract. Norgart v.
Upjohn Co., 981 P.2d 79, 88 (Cal. 1999). Hameed has also not alleged a
continuous violation because the alleged unfairness stems not from a course of
conduct, but from the terms of the initial contract. Aryeh, 55 Cal. 4th at 1198. The
UCL claim is therefore time-barred.
The district court did not abuse its discretion in dismissing Hameed’s
accounting claim with prejudice under Rule 41(a)(2) because Hameed,
understanding and accepting the risks involved, sought dismissal of his entire case
to pursue this appeal. See Omstead, 594 F.3d at 1085.
AFFIRMED.
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