Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00761/USCOURTS-caed-2_06-cv-00761-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

WANG & WANG LLP, 

Plaintiff, 

v. 

BANCO DO BRASIL, S.A., et al., 

 Defendants. 

_____________________________ /

No. Civ. S-06-00761 DFL KJM 

Memorandum of Opinion

and Order

Wang & Wang LLP (“Wang”), a law firm, brings this action 

against its former client, Banco do Brazil (“Banco”), for fraud, 

breach of contract, and other causes of action related to unpaid 

legal bills. Before the court is Banco’s motion to dismiss. 

For the reasons discussed below, Wang’s fraud and California 

Business & Professions Code § 17200 (“§ 17200”) claims are 

DISMISSED with leave to amend, and Wang’s negligent 

misrepresentation claim is DISMISSED with prejudice. Banco’s 

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motion is DENIED with respect to Wang’s remaining causes of 

action. 

I. Facts and Procedural History

Wang is a San Francisco law firm. Banco is the largest 

bank in Brazil. By 2001, Francis S. L. Wang, a partner at Wang, 

had represented Banco for about thirty years in various matters. 

In December 2001, Banco asked Wang to represent it in a lawsuit 

(the “underlying litigation”) brought in the United States 

District Court for the Central District of California. 

According to Wang, “primarily through [its] general counsel for 

internal affairs, Lincoln Chaves (‘Chaves’), and Rubens Amaral 

(‘Amaral’), the General Manager of Banco’s New York branch,” 

Banco intentionally misrepresented to Wang that it would pay for 

the legal services it was asking Wang to perform. Wang claims 

that over the course of a year, Banco repeatedly promised to pay 

its bills, which eventually reached over $1.4 million. Wang 

alleges that Banco had no intention of paying for its services, 

and that Banco has not paid. In addition, Wang alleges that 

Banco owes it over $400,000 for work performed before December 

2001. 

According to Wang, Banco’s plan was to increase Wang’s 

financial exposure to the point where Banco could force Wang to 

accept a small fraction of what it was owed. 

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Banco denies Wang’s allegations of fraud. It asserts that 

Wang churned the underlying litigation, rendered incompetent and 

false advice, and increased Banco’s exposure in the underlying 

litigation from $300,000 to over $2.5 million. Banco contends 

that it is justified in refusing to pay Wang’s fee. 

II. Analysis

A. Negligent Misrepresentation Claim

Wang brings a cause of action for negligent 

misrepresentation. It alleges that Banco lacked reasonable 

grounds to tell Wang that it would pay its bills, but promised 

to do so nonetheless. Compl. ¶ 78. Banco correctly asserts, 

however, that California does not recognize a cause of action 

for a negligent false promise. Tarmann v. State Farm Mut. Auto. 

Ins. Co., 2 Cal. App. 4th 153, 159 (1991). Wang’s claim for 

negligent misrepresentation is therefore dismissed with 

prejudice. 

B. Fraud Claim

Banco moves to dismiss Wang’s fraud claim on grounds that 

it fails to meet Fed. R. Civ. P. 9(b)’s requirement that fraud 

claims be pleaded with particularity. Whether based on state or 

federal law, a cause of action for fraud brought in federal 

court must meet the requirements of Rule 9(b). Vess v. CibaGeigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003). 

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“The requirement of specificity in a fraud action against a 

corporation requires the plaintiff to allege the names of the 

persons who made the allegedly fraudulent representations, their 

authority to speak, to whom they spoke, what they said or wrote, 

and when it was said or written.” Tarmann, 2 Cal. App. 4th at 

157 (citations omitted). Wang’s complaint is vague about who 

made the allegedly fraudulent representations and when the 

statements were allegedly made. 1 Wang’s complaint alleges that 

Banco’s fraudulent representations were made “primarily through 

. . . Lincoln Chaves . . . and Rubens Amaral.” (emphasis added). 

The word “primarily” implies that other, unnamed people made 

some of the misrepresentations. This falls short of alleging 

“the names of the persons who made the allegedly fraudulent 

representations.” Tarmann, 2 Cal. App. 4th at 157. 

 

1 Banco also argues that Wang’s complaint fails to plead 

adequately why its representations were fraudulent when made. 

Wang’s complaint is not deficient on this score. Wang alleges 

that Amaral and Chaves promised that Banco would pay Wang’s fees 

when in fact they knew that it did not intend to pay. This 

alleges an actionable misrepresentation. See Tarmann, 2 Cal. 

App. 4th at 158-59 (“A false promise is actionable on the theory 

that a promise implies an intention to perform, that intention 

to perform or not to perform is a state of mind, and that 

misrepresentation of such a state of mind is a misrepresentation 

of fact. The allegation of a promise (which implies a 

representation of intention to perform) is the equivalent of the 

ordinary allegation of a representation of fact.”) (quoting 5 

Witkin, Cal. Procedure, Pleading § 670 (3d ed. 1985) (emphasis 

original)). 

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Furthermore, Wang’s complaint inadequately ties particular 

misrepresentations to particular speakers. Wang alleges that 

“Banco represented to plaintiff that it intended to pay 

plaintiff in full, and would pay plaintiff in full, for all 

legal services provided and costs incurred in the [u]nderlying 

[l]itigation, at plaintiff’s regular rates and fee structure, as 

set forth in plaintiff’s periodic invoices and statements.” The 

problem is that Wang does not specify who said this. Such vague 

pleading does not satisfy Rule 9(b). See Moore, 885 F.2d at 

540. 

Wang’s complaint is also vague about the timing of Banco’s 

alleged misrepresentations. The complaint alleges that Banco’s 

misrepresentations were made “in numerous telephone discussions 

. . . commencing in December, 2001, and repeated periodically 

during the course of the [u]nderlying [l]itigation.” But 

“[a]llegations such as ‘[d]uring the course of discussions in 

1986 and 1987,’ ‘in or about May through December 1987,’ and 

‘May 1987 and thereafter’ . . . do not make the grade” under 

Rule 9(b). U.S. Concord, Inc. v. Harris Graphics Corp., 757 

F.Supp. 1053, 1057 (N.D. Cal. 1991). Wang argues that 

“commencing in December, 2001” is sufficiently precise, and 

somehow distinguishable from the language at issue in U.S. 

Concord, because it indicates that at least one instance of 

misrepresentation occurred in December 2001. There are two 

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problems with this argument. First, “commencing in December, 

2001” is no more precise than “May 1987 and thereafter,” the 

timeframe found insufficiently precise in U.S. Concord. Second, 

Wang does not specify who said what to whom in December 2001. 

It is not good enough to allege that someone made a 

misrepresentation to someone else in a particular month, 

especially given the nature of this case and this claim. 

Surely, a law firm can be expected to have more specific records 

of telephone conversations with a major client. 

Finally, relying on Moore, Wang argues that a lesser 

pleading standard should apply here because Banco has equal 

knowledge of the alleged misrepresentations. Moore states that 

the requirements of Rule 9(b) “may be relaxed as to matters 

within the opposing party’s knowledge.” 885 F.2d at 540. It 

would be inappropriate to relax the particularity requirement 

here, however, because the necessary details Wang fails to 

include in its complaint are directly known to Wang. There is 

no excuse for Wang’s failure to plead with particularity the 

details of conversations to which it was a party. 

For these reasons, Wang’s fraud claim is dismissed with 

leave to amend. The amended complaint shall be filed within 30 

days of the date of this order. 

//// 

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C. Breach of Contract Claim

Banco moves to dismiss Wang’s claim for breach of contract 

– or, in the alternative, for a more definite statement – on 

grounds that the claim fails to state all relevant terms and is 

too uncertain and indefinite. The thrust of Banco’s argument is 

that Wang’s contract claim is defective because it purports to 

be based on a written contract, and yet Wang did not attach a 

copy of that contract to the complaint. Banco cites an 

unpublished district court opinion for the proposition that “to 

state a claim under California law for breach of written 

contract, the plaintiff must attach a copy of the contract or 

set out its terms verbatim in the complaint. Campbell v. 

Allstate Ins. Cos., No. CV-95-1171-WDK, 1995 WL 376926, at *2 

(C.D. Cal., May 17, 1995) (citing Otworth v. Southern Pacific 

Transp. Co., 212 Cal. Rptr. 743, 747 (1985)). 

But better California authority supports the contrary 

proposition. “In an action based on a written contract, a 

plaintiff may plead the legal effect of the contract rather than 

its precise language.” Constr. Protective Servs., Inc. v. TIG 

Specialty Ins. Co., 29 Cal. 4th 189, 198-99 (2002). More 

important, the relaxed pleading standard of Fed. R. Civ. P. 8(a) 

– not the California standard – applies in federal court. See

William W Schwarzer, A. Wallace Tashima & James M. Wagstaffe, 

Federal Civil Procedure Before Trial § 8:23 (“[T]he manner in 

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which [state law] claims or defenses are raised [in federal 

court] is governed by the Federal Rules.”) (citations omitted 

and emphasis original). Under that standard, Wang’s claim is 

not defective just because it does not state the contract terms 

verbatim or attach a copy of the contract. 

Nevertheless, Banco moves for a more definite statement 

under Rule 12(e) because, it claims, Wang’s contract claim “is 

so vague or ambiguous that Banco cannot reasonably be required 

to frame a responsive pleading.” The source of this vagueness 

or ambiguity, according to Banco, is that Wang’s claim adverts 

to a pre-existing agreement without describing its relationship 

to the written contract. Also, Banco finds ambiguity in Wang’s 

claim that Banco “further agreed to pay [Wang] its normal hourly 

rates for litigation services.” Banco argues that the word 

“further” here suggests that Wang is suing not only on the 

written contract, but on some unspecified additional agreement, 

as well. Finally, Banco points out that Wang is suing for 

interest on Banco’s unpaid balances, but that Wang does not 

allege any contract provision concerning interest payments. 

Banco claims to be at a loss as to where the claim for interest 

may be based. According to Banco, Wang’s contract allegations 

“are just too indefinite, vague and/or ambiguous to require a 

response.” 

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Although Banco is correct that Wang’s contract claim could 

be more detailed, it adequately apprises Banco of the substance 

of Wang’s claim. “A motion for more definite statement attacks 

unintelligibility in a pleading, not simply mere lack of detail. 

Thus, the motion fails where the complaint is specific enough to 

apprise defendant of the substance of the claim being asserted.” 

William W Schwarzer, A. Wallace Tashima & James M. Wagstaffe, 

Federal Civil Procedure Before Trial § 9:349 (citations omitted 

and emphasis original). Wang’s breach of contract claim alleges 

that Wang and Banco entered into a written contract in 2000 that 

is identical in its terms to their pre-existing contract and 

under which Banco agreed to pay for Wang’s legal services at 

Wang’s normal hourly rates; that Banco has failed to pay for 

services rendered in the course of representing Banco in the 

underlying litigation; and that Banco owes Wang at least 

$400,000 for legal services rendered before December 2001, and 

for accrued interest. This is an intelligible claim. Banco can 

obtain whatever additional information it desires, and clear up 

any ambiguities, through discovery. See Famolare, Inc. v. 

Edison Bros. Stores, Inc., 525 F.Supp. 940, 949 (E.D. Cal. 1981) 

(“[W]here the information sought by the moving party is 

available and/or properly sought through discovery the [Rule 

12(e)] motion should be denied.”). Accordingly, Banco’s motion 

to dismiss Wang’s contract claim is denied. 

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D. Common Counts (Open Book and Quantum Meruit)

Banco’s only argument for dismissing Wang’s common counts 

is premised on the defectiveness of both Wang’s fraud and 

contract claims. As just discussed, Wang’s contract claim is 

not defective. Therefore, Banco’s motion to dismiss the common 

counts is denied. 

E. Section 17200 Claim

Banco argues that Wang’s § 17200 claim should be dismissed 

because it is predicated on the same faulty pleadings as Wang’s 

fraud claim. 

A § 17200 claim can be based on any conduct that is 

“unlawful,” “unfair” or “fraudulent.” Cal. Bus. & Prof. Code § 

17200. Wang asserts that its § 17200 claim need not satisfy the 

requirements of Rule 9(b) because a fraudulent conduct claim 

under § 17200 is distinct from a claim for common-law fraud. 

Alternatively, Wang argues that if Rule 9(b) does apply to a 

fraudulent conduct claim, its § 17200 claim survives because it 

adequately alleges “unlawful” or “unfair” conduct. Wang’s 

arguments lack merit. 

A state-law claim alleging fraud brought in federal court 

must satisfy the heightened pleading requirements of Rule 9(b). 

Vess, 317 F.3d at 1103. A claim alleges fraud if it “allege[s] 

a unified course of fraudulent conduct and rel[ies] entirely on 

that course of conduct.” Id. at 1104. Wang bases its § 17200 

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claim on the allegation “that Banco had and has a pattern and 

practice of . . . inducing professional service firms . . . to 

render professional services through intentional 

misrepresentations that they would be fully and timely paid.” 

This is a fraud claim, and thus it is subject to the heightened 

pleading requirements of Rule 9(b). As already discussed, 

Wang’s allegations fail to satisfy those requirements. 

Wang’s second argument – that its allegations adequately 

support a claim for “unfair” or “unlawful” conduct under § 17200 

– also fails. “The proper route is to disregard averments of 

fraud not meeting Rule 9(b)’s standard and then ask whether a 

claim has been stated.” Vess, 317 F.3d at 1104 (emphasis 

original). Disregarding the elements of Wang’s complaint that 

allege fraudulent conduct, all that remains is a naked claim for 

breach of contract, which, standing alone, is an insufficient 

basis for a § 17200 claim. Nat’l Rural Tel. Cooperative. v. 

DirecTV, Inc., 319 F.Supp.2d 1059, 1074-75 (C.D. Cal. 2003) 

(holding that a breach-of-contract claim can support a cause of 

action under § 17200 only “provided it also constitutes conduct 

that is ‘unlawful, or unfair, or fraudulent.”) (citation and 

internal quotation marks omitted). Accordingly, Wang’s § 17200 

claim is dismissed with leave to amend. 

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CONCLUSION 

For the above stated reasons, Banco’s motion to dismiss is 

GRANTED in part and DENIED in part. 

IT IS SO ORDERED. 

Dated: March 26, 2007 

 /s/ David F. Levi___________

 DAVID F. LEVI 

United States District Judge 

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