Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00603/USCOURTS-casd-3_17-cv-00603-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

1 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

ANDRE F. TOCE, an individual, THE 

TOCE FIRM, APLC, et al., 

Plaintiffs,

v. 

CAMERON RENTCH, WISE LAW 

GROUP, LLC, et al., 

Defendants.

THOMSON REUTERS (LEGAL) INC, 

 Cross-Complainant,

v. 

CAMERON RENTCH and WISE LAW 

GROUP, LLC, 

 Cross-Defendants. 

 Case No.: 17-cv-0603-AJB-BLM 

ORDER DENYING CROSSDEFENDANTS’ MOTION TO 

DISMISS THOMSON REUTER’S 

CROSSCLAIM WITHOUT 

PREJUDICE 

(Doc. No. 26) 

 Pending before the Court is Cross-Defendants Cameron Rentch and Wise Law 

Group, LLC’s (“WLG”) motion to dismiss the crossclaim filed by Thomson Reuters. (Doc. 

No. 26.) Both Thomson Reuters (“TR”) and Plaintiffs Andre F. Toce, The Toce Firm, 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 1 of 9
2 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

APLC, Gilbert H. Dozier, and Anderson & Dozier, LLP (“Plaintiffs”) filed separate 

oppositions to the motion. (Doc. Nos. 31, 32.) Pursuant to Civil Local Rule 7.1.d.1, the 

Court finds the matter suitable for determination on the papers and without oral argument. 

For the reasons explained more fully below, the Court DENIES WITHOUT 

PREJUDICE Cross-Defendants Cameron Rentch and the Wise Law Group’s motion to 

dismiss. 

BACKGROUND1

A. Complaint 

 Plaintiffs filed their complaint on March 27, 2017, alleging six causes of action: (1) 

fraudulent concealment against Defendants Cameron Rentch, WLG, Kerry Steigerwalt, 

and Ford & Associates Nationwide Legal Services (collectively referred to as 

“Solicitors”)2

; (2) breach of implied duty to perform with reasonable care against all 

Defendants3

; (3) breach of covenant of good faith and fair dealing against Solicitors; (4) 

breach of contract against Solicitors; (5) breach of contract against TR; and (6) quantum 

meruit against all Defendants. (See generally Doc. No. 1.) The events leading up to the 

institution of this action are as follows. 

 Defendant Kerry Steigerwalt and Solicitors prior to 2009 referred cases from 

Solicitors’ websites to leading lawyers and law firms across the country for a 20% referral 

fee. (Doc. No. 1 ¶ 16.) Steigerwalt is an attorney licensed to practice law in the State of 

California. (Id. ¶ 11.) In or around 2008, Steigerwalt and Jeffrey Phillips acquired an 

interest in WLG, a California limited liability company that develops websites and 

marketing to draw interest from victims of mass torts who are seeking legal representation, 

                                                                

1

 The following facts are taken from the crossclaim and construed as true for the limited 

purpose of resolving the motion to dismiss. See Brown v. Elec. Arts, Inc., 724 F.3d 1235, 

1247 (9th Cir. 2013). 

2

 Defendants Kerry Steigerwalt and Ford & Associates Nationwide Legal Services have 

been voluntarily dismissed without prejudice by Plaintiffs. (Doc. No. 22.)

3

 The current Defendants include Cameron Rentch, WLG, and TR. 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 2 of 9
3 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

for $1.4 million. (Id. ¶¶ 10, 17.) Subsequently, Defendant Rentch, the prior owner of WLG, 

negotiated a buyout of Phillips’s interest in WLG, with Rentch giving up his interest in 

case inventory to Phillips through 2009, but taking 25% interest in case inventory from 

2009 going forward. (Id. ¶¶ 9, 18.) 

 In 2011, Solicitors were approached to sell WLG to a third-party. (Id. ¶ 20.) 

However, this sale was complicated by the fact that Steigerwalt’s license to practice law in 

California had been suspended from October 2012 to October 2013. (Id.) Nonetheless, in 

an effort to close the sale, Solicitors and Steigerwalt allegedly manipulated Steigerwalt’s 

interest in WLG to make it appear as if he no longer held his 32.608% interest as it had 

been transferred on paper to Defendant Ford. (Id.) 

 Thereafter, in 2013, Solicitors petitioned Plaintiffs to accept cases from WLG’s 

inventory. (Id. ¶ 21.) Having worked successfully with Solicitors previously, Plaintiffs 

entered into a written contract with Solicitors in July of 2013—Plaintiffs agreed to pay 

Solicitors $100,000.00 in exchange for Solicitors providing Plaintiffs with forty 

transvaginal mesh (“TVM”) revision cases, consisting of those with or without the 

additional need for repair of pelvic organ prolapse (“POP”), but all either needing revision 

or having the revision already completed; and sixty cases with POP complications which 

may or may not have needed revisions (“the Campaign Agreement”). (Id. ¶ 22.) Plaintiffs 

contend that they have fully complied with the Campaign Agreement by paying Solicitors 

the $100,000.00. (Id. ¶ 23.) However, as of the date of the complaint, Solicitors have only 

forwarded to Plaintiffs twenty-six POP cases and fourteen revision cases. (Id.) 

 On or about May 1, 2014, Solicitors sold WLG’s assets to TR for $12,500,000.00 

pursuant to an Asset Purchase Agreement (the “APA”). (Id. ¶ 24.) As part of this sale, 

unknown to Plaintiffs, Rentch, Steigerwalt, and/or Ford entered into a five year noncompete provision with TR. (Id.) In March of 2016, TR informed Plaintiffs that it denied 

assuming the Campaign Agreement in its APA and thus have not delivered the remaining 

thirty-four POP cases or the remaining twenty-six revision cases due under the Campaign 

Agreement. (Id. ¶¶ 25, 26.) Consequently, Plaintiffs argue that TR has not fully performed 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 3 of 9
4 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

under the Campaign Agreement allegedly damaging Plaintiffs in excess of $3,600,000.00. 

(Id. ¶ 26.) As to the Solicitors, Plaintiffs allege that before entering into the Campaign 

Agreement, they failed to inform Plaintiffs that Steigerwalt was suspended from practicing 

law and hid the fact that they had manipulated his interest in WLG. (Id. ¶¶ 28–29.) 

Additionally, Solicitors purportedly did not apprise Plaintiffs that the Campaign 

Agreement would not be transferred to the purchaser of WLG’s assets. (Id. ¶ 30.) 

B. TR’s Crossclaim 

 On June 9, 2017, TR filed a crossclaim against Defendants Rentch and WLG 

(“Cross-Defendants”). (Doc. No. 15.) TR contends that pursuant to the APA, it purchased 

some, but not all, of the assets of WLG. (Id. ¶ 7.) Most notably, as part of the APA, CrossDefendants were required to disclose all liabilities and contracts that were to be assumed 

by TR. (Id. ¶ 9.) However, Cross-Defendants allegedly failed to disclose the existence of 

the Campaign Agreement. (Id. ¶ 11.) Thus, according to TR, the Campaign Agreement 

constitutes a “Retained Liability” for purposes of the APA. (Id. ¶ 12.) Section 6.10 of the 

APA provides that “Discharge of Retained Liabilities. Each Seller shall, and the Principal 

shall cause each Seller to pay, discharge and perform promptly, when due, any and all 

Retained Liabilities.” (Id. ¶ 13.) 

 In sum, under the APA, Cross-Defendants allegedly have the duty to discharge and 

perform their obligations under the Campaign Agreement, and have a duty to indemnify 

TR for any claims and/or damages arising from any failure to discharge or perform on the 

contract. (Id. ¶ 16.) TR contends that it submitted a formal request for indemnification on 

or around May of 2017. (Id. ¶ 18.) On June 2, 2017, Cross-Defendants declined TR’s 

request for indemnification claiming that it was untimely. (Id. ¶ 19.) 

 Consequently, TR brings this crossclaim alleging causes of action for (1) breach of 

contract; and (2) declaratory relief. (See generally Doc. No. 15.) TR’s prayer for relief 

requests damages, costs of suit, and a judicial declaration that Cross-Defendants have a 

duty to indemnify TR for all damages, costs, expenses, and other obligations that may inure 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 4 of 9
5 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to TR as a result of the underlying action. (Id. at 6.)4

 

LEGAL STANDARD 

 A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings 

and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state 

a claim upon which relief may be granted. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 

2001). The court may dismiss a complaint as a matter of law for: “(1) lack of a cognizable 

legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental 

Grp. v. Delta Dental Plan of Cal., Inc., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). 

However, a complaint survives a motion to dismiss if it contains “enough facts to state a 

claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 

(2007). 

 Notwithstanding this deference, the reviewing court need not accept legal 

conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is also improper for 

the court to assume “the [plaintiff] can prove facts that [he or she] has not alleged . . . .” 

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 

519, 526 (1983). On the other hand, “[w]hen there are well-pleaded factual allegations, a 

court should assume their veracity and then determine whether they plausibly give rise to 

an entitlement to relief.” Iqbal, 556 U.S. at 679. The court only reviews the contents of the 

complaint, accepting all factual allegations as true, and drawing all reasonable inferences 

in favor of the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). 

DISCUSSION

A. Judicial Notice 

 As an initial matter, the Court turns to Cross-Defendants’ request for judicial notice 

of the APA. (Doc. No. 26-1 at 3–4.) Cross-Defendants cite to Federal Rule of Civil 

                                                                

4

 Page numbers refer to the CM/ECF page number and not the number listed on the original 

document. 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 5 of 9
6 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Procedure 10(c) to support their request.5

 (Id.) 

 Rule 10(c) states that “[a] copy of a written instrument that is an exhibit to a pleading 

is a part of the pleading for all purposes.” Fed. R. Civ. P. 10(c). Presently, TR filed, under 

seal, the APA as Exhibit A to its crossclaim. (Doc. Nos. 15-1, 24.) Thus, the Agreement is 

part of the pleading as defined by Rule 10(c) and is incorporated by reference as TR has 

referred to the document extensively in its crossclaim. See United States v. Ritchie, 342 

F.3d 903, 908 (9th Cir. 2003). Further, judicial notice of the document is warranted as 

neither party opposes the accuracy of the APA. See Fed. R. Evid. 201(b). 

B. Cross-Defendants’ Motion to Dismiss 

 On July 3, 2017, Cross-Defendants filed the instant action, their motion to dismiss 

TR’s crossclaim. (Doc. No. 26.) The crux of Cross-Defendants’ motion is that any 

obligation they may have had to indemnify TR extinguished on November 1, 2016. (Doc. 

No. 26-1 at 2.) TR retorts in opposition that the applicable provisions of the APA 

demonstrate that it has an indefinite amount of time to seek indemnification. (Doc. No. 31 

at 2.) Additionally, Plaintiffs mount that Cross-Defendants’ motion to dismiss improperly 

challenges the intent and breadth of the APA between Solicitors and TR, which is not a 

proper Rule 12(b)(6) motion. (Doc. No. 32 at 4.) Thus, Cross-Defendants’ motion should 

be denied. (Id.) 

 Presently, the parties’ key dispute is whether the APA unambiguously holds that 

Cross-Defendants have a duty to indemnify TR for any liability and/or damages arising 

from the underlying action. If an agreement is ambiguous, then interpretation of the 

agreement becomes a fact issue that cannot be resolved on a motion to dismiss. See State 

Farm Mut. Auto. Ins. Co. v. Fernandez, 767 F.2d 1299, 1301 (9th Cir. 1985) (“The 

interpretation of a contract presents a mixed question of law and fact. The existence of an 

ambiguity must be determined as a matter of law. If an ambiguity exists, a question of fact 

                                                                

5

 The Court notes that the proper standard for judicial notice is Federal Rule of Evidence 

201. 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 6 of 9
7 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

is presented.”) (citations omitted); see also Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th 

Cir. 1984) (holding that affirmative defenses may not be asserted on a motion to dismiss if 

they raise disputed issues of fact) (per curiam). 

 TR seeks indemnity under the “Retained Liabilities” section of the APA that states 

that “[n]otwithstanding any other provision of this Agreement, each Seller shall retain, and 

Purchaser shall not assume or be responsible for or liable with respect to, any Liabilities or 

obligations of such Seller other than those specifically included in the Assumed Liabilities 

. . . .” (Doc. No. 24 at 9.) “Liability” is defined as “any liability or obligation of whatever 

kind or nature (whether known or unknown, whether asserted or unasserted, whether 

absolute or contingent, whether accrued or unaccrued . . . .” (Id. at 51.) An “obligation” is 

defined by Schedule 4.7, which is not attached to the crossclaim nor the APA provided to 

the Court. (Id. at 11.) 

 Pursuant to section 7—general indemnification, the Agreement states that: 

All representations, warranties, covenants and obligations of 

Purchaser, the Sellers, and the Principal herein, and all other

agreements or instruments contemplated hereby to which 

Purchaser or any Seller or the Principal is a party, shall survive 

the Closing Date for the duration of the Indemnification Period

except that all covenants and agreements shall survive the 

Closing indefinitely, unless specified otherwise by their terms. 

(Id. at 40.) The “Indemnification Period” represents “the period beginning the date hereof 

and ending the date that is eighteen (18) months after the Closing Date . . . All covenants 

and agreements shall survive Closing indefinitely, unless specified otherwise by their 

terms.” (Id. at 42.) Notably, the “Definitions” section of the APA fails to define the relevant 

terms and refers to “Schedules” that are not attached to the APA nor TR’s crossclaim. (Id. 

at 46–54.) Additionally, the Court notes that “Indemnification” is not listed as a 

“Covenant” under Section 6 of the APA. (Id. at 34–40.) 

 Fundamentally, this motion hinges on whether general indemnification is a 

“covenant,” “representation,” “agreement,” or an “obligation.” Under TR’s interpretation, 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 7 of 9
8 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the indemnification clause is an “agreement” or “covenant” that subjects TR to no time 

constraints in claiming indemnity from Cross-Defendants. In contrast, under CrossDefendants’ interpretation, indemnification is an “obligation” that is subject to the eighteen 

month time constraint. Thus, as the closing date of the APA was May 1, 2014, CrossDefendants’ obligation to indemnify TR expired on November 1, 2016. (Doc. No. 26-1 at 

6.) 

 Unfortunately, no clear distinction is made between the specific terms employed by 

the APA nor does the APA clearly delineate what constitutes an obligation versus an 

agreement. The Court notes that Cross-Defendants themselves state that “the critical 

question for this Court . . . [is whether] the obligation to indemnify TR [is] a covenant that 

survives indefinitely?” (Doc. No. 41 at 3.) Cross-Defendants then fervently argue that as 

“Indemnification” is not listed as a covenant that it is automatically an “obligation.” (Id.) 

The Court does not find the analysis of the APA to be so simple. Instead, at this juncture, 

the similarity of the terms—terms that provide vastly different consequences for either 

party, compels the Court to find that the foregoing interpretations provided by CrossDefendants and TR are both reasonable and plausible based off of the plain meaning of the 

contract as provided. 

 Accordingly, the Court therefore concludes that the APA is ambiguous because the 

indemnification requirement can be interpreted as either a covenant, agreement, or 

obligation. See ASARCO, LLC v. Union Pac. R.R. Co., 765 F.3d 999, 1009 (9th Cir. 2014) 

(holding that generally, “language will be deemed ambiguous when it is reasonably 

susceptible to more than one interpretation.”) (citation omitted). Thus, the issues produced 

by Cross-Defendants cannot be resolved on a motion to dismiss. See Velazquez v. GMAC 

Mortg. Corp., 605 F. Supp. 2d 1049, 1069 (C.D. Cal. 2008) (“While the resolution of 

contractual claims on a motion to dismiss may be proper if the terms of the contract are 

unambiguous, a motion to dismiss should not be granted where the contract leaves doubt 

as to the parties’ intent.”) (internal quotation marks and citation omitted); see also FT 

Travel—New York, LLC v. Your Travel Center, Inc., 112 F. Supp. 3d 1063, 1090 n.134 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 8 of 9
9 

17-cv-0603-AJB-BLM 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

(C.D. Cal. 2015) (“Although ‘[o]n a motion to dismiss, the [c]ourt may resolve issues of 

contract interpretation when the contract is properly before the court,’ ‘all ambiguities in 

the contract [must be resolved] in [p]laintiff’s favor.’”) (citation omitted); Continental 

Airlines, Inc. v. Mundo Travel Corp., 412 F. Supp. 2d 1059, 1066 (E.D. Cal. 2006) (“[T]he 

construction of ambiguous contract provisions is a factual determination that precludes 

dismissal on a motion for failure to state a claim.”) (citation omitted). 

CONCLUSION 

 As explained more fully above, the Court DENIES Cross-Defendants’ motion to 

dismiss TR’s crossclaim WITHOUT PREJUDICE. 

IT IS SO ORDERED. 

Dated: January 3, 2018 

Case 3:17-cv-00603-AJB-BLM Document 50 Filed 01/03/18 PageID.<pageID> Page 9 of 9