Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-00821/USCOURTS-casd-3_06-cv-00821-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

J. MICHAEL SCHAEFER,

Plaintiff,

CASE NO. 06CV821-H (BLM)

ORDER GRANTING WITH

PREJUDICE IN PART AND

GRANTING WITHOUT

PREJUDICE IN PART

DEFENDANTS’ MOTION TO

DISMISS PLAINTIFF’S

FIRST AMENDED

COMPLAINT

vs.

ROBBINS & KEEHN, LLP, and L.

SCOTT KEEHN

Defendants. _______________________________

ROBBINS & KEEHN, LLP,

Counterclaimant,

 vs.

J. MICHAEL SCHAEFER,

Counter-Defendant.

On April 7, 2006, pro se Plaintiff J. Michael Schaefer (“Plaintiff”) filed a

complaint alleging breach of contract, negligence, breach of the implied covenant of

good faith and fair dealing, and intentional misrepresentation against Defendant

Robbins & Keehn, APC (“Robbins”), named “Robbins & Keehn, LLP.” (Doc. No. 1.)

On August 29, 2006, the Court granted Robbins’ motion to dismiss the claims of breach

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of contract, breach of the implied covenant of good faith and fair dealing, and

negligence, with prejudice, for being time barred by California’s statute of limitations.

(Doc. No. 33.) The Court also granted Robbins’ motion to dismiss the claim for

intentional misrepresentation, without prejudice, for failure of Plaintiff to plead with

particularity the elements of the claim, and granted Plaintiff 30 days to file an amended

complaint. (Id.) On September 28, 2006, Plaintiff filed a first amended complaint

(“FAC”) alleging intentional misrepresentation against Robbins and L. Scott Keehn

(collectively “Defendants”). (Doc. No. 35.) On October 18, 2006, Defendants filed a

motion to dismiss the FAC pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of

Civil Procedure. (Doc. No. 36.) On October 19, 2006, Defendants filed an amended

motion to dismiss the FAC. (Doc. No. 37.) On November 14, 2006, Plaintiff filed an

opposition to the motion to dismiss, which contained a proposed Second Amended

Complaint (“SAC”). (Doc. No. 42.) Defendants filed a reply to Plaintiff’s opposition

on November 16, 2006. (Doc. No. 39.) 

On November 27, 2006, the Court held a hearing on the motion to dismiss.

Plaintiff was represented at the hearing by Mr. Schaefer, and Defendants were

represented by Mr. Keehn and Leslie Keehn. For the following reasons, the Court

GRANTS WITHOUT PREJUDICE Defendants’ motion to dismiss Plaintiff’s claim

for intentional misrepresentation. 

Background

On December 10, 2001, Plaintiff hired Defendants to represent him in his appeal

from a civil judgment entered against him in California Superior Court, Lauer v.

Schaefer, Case No. GIC 762340 (“the appellate case”). (Compl. ¶¶ 3-4; FAC ¶ 4; Def’s

First Amended Mem. P’s & A’s in Support of Mot. to Dismiss FAC, Exh. 1, at 1

(“Def’s Mem.”)). Plaintiff hired Defendants upon the endorsement of Sandor Shapery.

(FAC ¶ 15.) During oral argument, Plaintiff stated that he had represented himself

during the Lauer trial, and that he had called Shapery as a witness during the trial. 

The California Court of Appeal denied Plaintiff’s appeal on November 20, 2003.

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(Request for Judicial Notice, Exh. 2, at 3. (Doc. No. 5.)) Plaintiff terminated his

relationship with Defendants on December 31, 2003. (Id.) He then pursued a petition

for review in the California Supreme Court through new counsel. (Id.) The California

Supreme Court denied his appeal on February 18, 2004. (Id.) 

Plaintiff brought this action for negligence, breach of contract, breach of the

implied covenant of good faith and fair dealing, and intentional misrepresentation on

April 7, 2006. (Compl. ¶¶ 1-15.) The Court granted Robbins’ motion to dismiss the

claims of breach of contract, breach of the implied covenant of good faith and fair

dealing, and negligence, with prejudice, and Robbins’ motion to dismiss the claim for

intentional misrepresentation, without prejudice, on August 29, 2006. Plaintiff filed a

FAC alleging intentional misrepresentation against Defendants on September 28, 2006.

(FAC ¶¶ 1-17.) The intentional misrepresentation claim is based on two alleged

misrepresentations: (1) that Defendants intentionally misrepresented Mr. Keehn’s

intended association with the appellate case; and (2) that Defendants intentionally

misrepresented an alleged conflict of interest in representing Schaeffer.

Discussion

A. Legal Standards 

1. Fed. R. Civ. P. 12(b)(6)

 A motion to dismiss for failure to state a claim pursuant to section 12(b)(6) of the

Federal Rules of Civil Procedure tests the legal sufficiency of the claims in the

complaint. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Rule 12(b)(6) permits

dismissal of a claim either where that claim lacks a cognizable legal theory, or where

insufficient facts are alleged to support plaintiff's theory. See Balistreri v. Pacifica

Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering the sufficiency of a

complaint under Rule 12(b)(6), courts cannot grant a motion to dismiss “unless it

appears beyond doubt that the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.” Id. (citing Conley v. Gibson, 355 U.S. 41, 45-46

(1957)). In resolving a Rule 12(b)(6) motion, the court must: (1) construe the

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complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual

allegations as true; and (3) determine whether plaintiff can prove any set of facts to

support a claim that would merit relief. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d

336, 337–338 (9th Cir. 1996). A court should be particularly liberal in construing

“inartful pleading” by parties appearing pro se. See Hughes v. Rowe, 449 U.S. 5, 9

(1980). 

Dismissal is proper, however, if a complaint is vague, conclusory, and fails to set

forth any material facts in support of the allegation. See North Star Intern. v. Arizona

Corp. Com'n, 720 F.2d 578, 583 (9th Cir. 1983). Furthermore, a court may not “supply

essential elements of the claim that were not initially pled.” Ivey v. Bd. of Regents of

the Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). If a complaint is found to fail

to state a claim, the court should grant leave to amend unless it determines that the

pleading could not possibly be cured by the allegation of other facts, or if plaintiff has

failed to plead with particularity after repeated opportunities. See Vess v. Ciba-Geigy

Corp. USA, 317 F.3d 1097, 1108 (9th Cir. 2003); Doe v. United States, 58 F.3d 494,

497 (9th Cir.1995). 

As a general matter, a court may only consider the pleadings and judicially

noticed facts in deciding a 12(b)(6) motion. See Hal Roach Studios, Inc. v. Richard

Feiner & Co., 896 F.2d 1542, 1555 (9th Cir. 1990). Material that is properly attached

to the complaint may properly be considered for purposes of the motion to dismiss

without converting the motion into one for summary judgment. See Hal Roach Studios,

Inc., 896 F.2d at 1555 n.19. Also, a court may consider documents whose contents are

alleged in a complaint and whose authenticity no party questions, but which are not

physically attached to the plaintiff's pleading. See Knievel v. ESPN, 393 F.3d 1068,

1076 (9th Cir. 2005). This doctrine extends to situations in which the plaintiff's claim

depends on the contents of a document and the defendant attaches the document to its

motion to dismiss, even though the plaintiff does not explicitly allege the contents of

that document in the complaint. See id.

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2. Fed. R. Civ. P. 9(b)

Federal Rule of Civil Procedure 9(b) requires that in allegations of fraud, the

circumstances constituting fraud are to be stated with particularity, although intent,

knowledge, and other conditions of mind may be alleged generally. Rule 9(b)’s

specificity requirement applies to state law causes of action brought in a federal court

under diversity jurisdiction. See Vess, 317 F.3d at 1103. 

To meet the particularity requirement of Rule 9(b), allegations of fraud must be

“specific enough to give defendants notice of the particular misconduct which is alleged

to constitute the fraud charged so that they can defend against the charge and not just

deny that they have done anything wrong.” Bly-Magee v. California, 236 F.3d 1014,

1019 (9th Cir. 2001). “While statements of the time, place and nature of the alleged

fraudulent activities are sufficient, mere conclusory allegations of fraud are

insufficient.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir.

1989). 

B. Analysis

1. Alleged Misrepresentation Regarding Mr. Keehn’s Association With

The Appellate Case

In diversity cases, the substantive elements of fraud are determined by state law,

but those elements must be pleaded with particularity as required by Federal Rule of

Civil Procedure 9(b). See Vess, 317 F.3d at 1103. To survive a motion to dismiss, a

plaintiff must plead intentional misrepresentation with particularity, although intent,

knowledge, and other conditions of mind may be averred generally. See Fed. R. Civ.

P. 9(b); see also 389 Orange Street Partners v. Arnold, 179 F.3d 656, 662-63 & 663 n.2

(9th Cir. 1999) (requiring party to plead each state law element of fraud with

particularity under Rule 9(b)). The allegations of fraud must be accompanied by the

who, what, when, where, and how of the misconduct charged. See Vess, 317 F.3d at

1106. The allegations must be specific enough to give Defendants notice of the

particular misconduct which is alleged to constitute the fraud so that they can defend

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against the charge and not just deny that they have done anything wrong. See id.

The elements of intentional misrepresentation in California are:

(a) misrepresentation (false representation, concealment or nondisclosure);

(b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance;

(d) justifiable reliance; and (e) resulting damage. See Agosta v. Astor, 15 Cal. Rptr. 3d

565, 569 (Cal. Ct. App. 2004). Although Plaintiff alleges that Mr. Keehn falsely

represented his intended association with the case, his allegation falls short of the

particularity requirement of Rule 9(b). Plaintiff’s complaint fails to explain with

particularity what Mr. Keehn stated to Plaintiff that led him to believe that Mr. Keehn

would have a more prominent role in conducting the appellate case than Mr. Keehn

actually planned on performing, and fails to explain when and where that

misrepresentation occurred. Therefore, Plaintiff has failed to meet the particularity

requirement of Rule 9(b) regarding his claim that Defendants intentionally

misrepresented Mr. Keehn’s intended association with the appellate case.

Although a court ordinarily will grant leave to amend a dismissal for failure to

comply with Rule 9(b), dismissal with prejudice is proper where the defect is not

curable by amendment or if plaintiff has failed to plead with particularity after repeated

opportunities. See Vess, 317 F.3d at 1108. The Court concludes that both justifications

are present in this case, and therefore dismisses Plaintiff’s intentional misrepresentation

claim based on the alleged misrepresentation regarding Mr. Keehn’s intended

association with the appellate case with prejudice. Plaintiff has failed to particularly

plead his allegation that Defendants misrepresented that Mr. Keehn would personally

have more input on the appellate case in the original complaint, the FAC, and the

proposed SAC. 

 In addition, the Court concludes that the defect regarding Plaintiff’s failure to

particularly allege the circumstances constituting the alleged fraud regarding Mr.

Keehn’s intended association with the appellate case is not curable by amendment.

Defendants appropriately attached the engagement letter between Robbins and Plaintiff

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to their motion to dismiss. See Knievel, 393 F.3d at 1076. That letter, signed by

Plaintiff, states, “The hourly billing rate for the attorneys within this office varies, and

is based primarily on the experience level of the attorney. . . . It is our policy to have

the legal services performed in each case by attorneys at the lowest hourly rate

consistent with a high quality of legal services.” (Def’s Mem., Exh. 1, at 2-3.) This

does not fall outside of the reasonable expectation of the parties, nor is it unduly

oppressive or unconscionable. See American Bankers Mortg. Corp. v. Federal Home

Loan Mortg. Corp., 75 F.3d 1401, 1412 (9th Cir. 1996). Therefore, the Court grants

Defendants’ motion to dismiss Plaintiff’s intentional misrepresentation claim based on

Mr. Keehn’s association with the appellate case with prejudice. 

2. Alleged Misrepresentation Regarding Defendants Conflict Of Interest

Defendants argue that: (1) the gravamen of Plaintiff’s allegation of intentional

misrepresentation based on the misrepresentation of Defendants’ conflict of interest in

representing Plaintiff is a claim for malpractice, and therefore should be barred by

California’s one-year statute of limitations; and (2) Plaintiff fails to allege this

intentional misrepresentation claim with particularity, in violation of Rule 9(b). The

Court concludes that Plaintiff has merely alleged in a conclusory fashion that his

attorney had a client relationship with Shapery and that Shapery had an interest in

Plaintiff losing the appeal of the Lauer case. Plaintiff has not alleged any particular

facts that demonstrate that Shapery, who Plaintiff, representing himself, chose to use

as a witness during the Lauer trial, had an interest in Plaintiff losing the appeal.

Therefore, Plaintiff has failed to allege particular facts to demonstrate that Defendants

had a conflict of interest in representing Plaintiff. Furthermore, the Court concludes

that Plaintiff has failed to allege the other required elements of his claim for intentional

misrepresentation with particularity. Accordingly, the Court agrees that Plaintiff has

failed to allege the circumstances constituting the alleged fraud with particularity, both

in the FAC and the proposed SAC, and that the gravamen of the claim, as currently

construed, is a claim for malpractice. In order to satisfy Rule 9(b)’s particularity

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1 In their reply brief, Defendants request the Court conduct a proceeding to determine Schaefer’s entitlement to proceed as a plaintiff and/or to allow Defendants to file a motion requiring Plaintiff to furnish a security before allowing him to file an amended complaint, based on Plaintiff’s classification as a “vexatious litigant” by the Municipal Court in San Diego County in 1996. The Court declines Defendants request, without prejudice, and notes that any request to declare a vexatious litigant would have to meet federal procedural law.

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requirement, Plaintiff must plead specific facts regarding the circumstances surrounding

Defendants’ alleged misrepresentation of the fact that a conflict of interest existed

regarding Defendants’ representation of Plaintiff based on their alleged former

representation of Sandor Shapery. 

Accordingly, the Court grants Plaintiff’s motion to dismiss the claim for

intentional misrepresentation based on the alleged misrepresentation regarding

Defendants’ conflict of interest without prejudice. The Court grants Plaintiff 30 days

from the date this order is stamped “filed” to file an amended complaint.1

Conclusion

For the reasons discussed, the Court GRANTS WITH PREJUDICE

Defendants’ motion to dismiss Plaintiff’s claim for intentional misrepresentation based

on Defendants’ alleged misrepresentation regarding Mr. Keehn’s intended association

with the appellate case, and GRANTS WITHOUT PREJUDICE Defendants’ motion

to dismiss Plaintiff’s claim for intentional misrepresentation based on Defendants’

alleged misrepresentation regarding Defendants’ conflict of interest in representing

Plaintiff. The Court further GRANTS Plaintiff 30 days from the date this order is

stamped “filed” to file an amended complaint correcting the deficiencies in his

/ / /

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/ / /

/ / /

/ / /

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intentional misrepresentation claim based on Defendants’ alleged misrepresentation

regarding Defendants’ conflict of interest in representing Plaintiff.

IT IS SO ORDERED. 

DATED: November 28, 2006

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

COPIES TO:

J. Michael Schaefer

1101 Saint Paul Street, Suite 1605

Baltimore, MD 21202

L. Scott Keehn

Leslie Faye Keehn

Keehn and Associates 

402 West Broadway 

Suite 1210 

San Diego, CA 92101 

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