Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01594/USCOURTS-casd-3_09-cv-01594-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1446 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ALLEN COLEMAN, et al.,

Plaintiffs,

CASE NO: 09-CV-1594 W (BGS)

 

ORDER: 

(1) SUSTAINING

COUNTERCLAIMANT’S

OBJECTION [DOC. 73],

(2) DENYING

COUNTERDEFENDANTS’

MOTION TO DISMISS

COUNTERCLAIM [DOC. 67],

AND

(3) DENYING

COUNTERDEFENDANTS’

MOTION FOR A MORE

DEFINITE STATEMENT [DOC.

67]

v.

KATHLEEN STERLING, et al.,

Defendants.

TRI-CITY HEALTHCARE

DISTRICT,

Counterclaimant,

v.

ALLEN COLEMAN, et al.,

Counterdefendants.

On October 14, 2010, Counterclaimant Tri-City Healthcare District (“District”)

filed a counterclaim for a common count against Counterdefendants Allen Coleman,

Suellyn Ellerbe, Dan Groszkruger, Terry Howell, Doreen Sanderson, and Robert

Wardwell (collectively, “Counterdefendants”). The counterclaim is based on the

Case 3:09-cv-01594-W-BGS Document 107 Filed 05/03/11 Page 1 of 8
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allegation that erroneously calculated bonus payments mistakenly paid to

Counterdefendants have not been returned. On November 4, 2010, Counterdefendants

moved to dismiss, and in the alternative, moved for a more definite statement. The

District opposes the motion and objects to Counterdefendants’ reply.

The Court decides the matter on the papers submitted and without oral

argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the Court SUSTAINS

the District’s objection (Doc. 73), DENIES Counterdefendants’ motion to dismiss (Doc.

67), and DENIES Counterdefendants’ motion for a more definite statement (Doc. 67).

I. BACKGROUND

Counterdefendants were all senior executives employed by the District under

written employment agreements. (First Am. Compl. (“FAC”) ¶¶ 11, 125 [Doc. 34].)

According to a written incentive plan, they were each “eligible to receive sizeable

bonus[es] if certain financial goals and other non-financial benchmarks were met.”

(Countercl. ¶ 23 [Doc. 54].) 

In September 2008, the District calculated the bonuses apparently owed to

Counterdefendants. (Countercl. ¶ 20.) Based on the information available at the time,

as allegedly prepared by and at the direction of Counterdefendants, the calculations and

tabulations indicated that Counterdefendants had met sufficient goals and benchmarks

to qualify them for bonuses. (Id. ¶ 21.) On December 3, 2008, the District Board of

Directors awarded bonuses to each of the counterdefendants. (Id. ¶ 12.) 

However, the District alleges that “[Counterdefendants] did not actually meet

the necessary benchmarks to trigger the bonuses that were paid.” (Countercl. ¶ 13.) It

only seemed as though the requisite benchmarks had been met through allegedly

erroneous accounting practices. (Id. ¶ 14.) Specifically, the erroneous accounting

methods and practices overstated revenue and understated liabilities. (Id. ¶ 25.) As a

result, bonuses were improperly paid based on flawed financial data. (Id.) The District

Case 3:09-cv-01594-W-BGS Document 107 Filed 05/03/11 Page 2 of 8
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1

 The specific amounts of the alleged debts owed by each counterdefendant are as

follows: Allen Coleman for $33,241; Suellyn Ellerbe for $46,301; Dan Groszkruger for $21,000;

Terry Howell for $30,349; Ondrea Labella for $15,490; Doreen Sanderson for $28,790; and

Bob Wardwell for $42,294. (Countercl. ¶ 35.)

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alleges that it demanded payment from Counterdefendants, but no payment has been

made.1

 (Id. ¶¶ 36–37.)

On December 18, 2008, Counterdefendants were each placed on administrative

leave. (FAC ¶ 47.) On April 23, 2009, they were all terminated. (Id. ¶ 57.)

On July 15, 2009, Counterdefendants filed a complaint in San Diego Superior

Court. Shortly thereafter, the lawsuit was removed to this Court. After having several

causes of action dismissed, Counterdefendants filed their First Amended Complaint on

April 16, 2010. It includes nine state-law causes of action and a tenth for an alleged

violation of 42 U.S.C. § 1983. Each cause of action relates to or arises out of

Counterdefendants’ termination from the District.

On October 14, 2010, the District filed a counterclaim for a common count along

with its answer. On November 4, 2010, Counterdefendants moved to dismiss the

counterclaim, or, in the alternative, moved for a more definite statement. The District

opposes the motion. On December 12, 2010, Counterdefendants filed a reply. The

District objects to the reply.

II. MOTION TO DISMISS - RULE 12(B)(6)

A. Legal Standard

The court must dismiss a cause of action for failure to state a claim upon which

relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6)

tests the complaint’s sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n., 720 F.2d

578, 581 (9th Cir. 1983). All material allegations in the complaint, “even if doubtful

in fact,” are assumed to be true. Id. The court must assume the truth of all factual

allegations and must “construe them in light most favorable to the nonmoving party.”

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Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed.

Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court has explained, “[w]hile a complaint attacked by a Rule

12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s

obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels

and conclusions, and a formulaic recitation of the elements of a cause of action will not

do.” Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Instead, the allegations

in the complaint “must be enough to raise a right to relief above the speculative level.”

Id. at 1964-65. A complaint may be dismissed as a matter of law either for lack of a

cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v.

Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling

on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d

1542, 1555 n.19 (9th Cir. 1990). However, courts may consider documents specifically

identified in the complaint whose authenticity is not questioned by parties. Fecht v.

Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other

grounds). Moreover, courts may consider the full text of those documents, even when

the complaint quotes only selected portions. Id. The court may also consider material

properly subject to judicial notice without converting the motion into one for summary

judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

B. Counterdefendants Raise Arguments for the First Time in Their Reply

Brief.

“The district court need not consider arguments raised for the first time in a reply

brief.” Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). In their motion,

Counterdefendants argue that the District’s claim for a common count is defective

under Rule 12(b)(6) because it fails to allege “payment for goods or services provided

by the plaintiff, received by defendant, for which the defendant has refused to make

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2

 An action for “money had and received” is one of the common counts. See Jogani v.

Superior Court, 165 Cal. App. 4th 901, 910 (2008) (“[The California] Supreme Court held

that money had and received—one of the common counts of assumpsit—is an action at law.”).

The two terms are used interchangeably here.

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payment.” (Mot. to Dismiss 6:3–5 [Doc. 67].) However, in their reply,

Counterdefendants raise new arguments for the first time. Specifically, they argue that

the District’s claim for a common count sounds in fraud and thus the heightened

pleading requirements of Rule 9(b) apply. (Reply 2:15–16 [Doc. 72].) Shifting the basis

of an argument from one rule of civil procedure to another—as Counterdefendants do

here—clearly demonstrates that Counterdefendants raise a new argument for the first

time in their reply.

Accordingly, the Court SUSTAINS the District’s objection and will not consider

the arguments Counterdefendants raise for the first time in their reply.

C. The District’s Claim for a Common Count Is Properly Pled.

The essential allegations of a common count are: “(1) the statement of

indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc.,

and (3) nonpayment.” Farmers Ins. Exch. v. Zerin, 53 Cal. App. 4th 445, 460 (1997)

(internal quotation marks omitted); see also Manneh v, Iverness Med. Innovations, Inc.,

No. 08cv653 WQH (AJB), 2009 WL 4642390, at *11 (S.D. Cal. Dec. 1, 2009) (Hayes,

J.). A cause of action for money had and received2

 is stated if it is alleged that the

defendant “is indebted to the plaintiff in a certain sum ‘for money had and received by

the defendant for the use of the plaintiff.’” Schultz v. Harney, 27 Cal. App. 4th 1611,

1623 (1994). “It makes no difference in such a case that the proof shows the original

transaction to be an express contract, a contract implied in fact, or a quasi-contract.”

Util. Audit Co., Inc. v. City of Los Angeles, 112 Cal. App. 4th 950, 957 (2003) (internal

quotations marks omitted). “A claim for money had and received can be based upon

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money paid by mistake, money paid pursuant to a void contract, or a performance by

one party of an express contract.” Id.

Here, the District seeks to recover money mistakenly paid to each of the

counterdefendants. In the counterclaim, the District alleges the specific amounts of the

debts owed by each counterdefendant to the District. It also alleges that it demanded

payment but no payment has been made. Thus, the District sufficiently alleges

indebtedness and nonpayment. 

The remaining issue is whether the District sufficiently alleges consideration.

Counterdefendants suggest that consideration in a claim for a common count is

equivalent to consideration as applied in contract law. However, this suggestion is

wrong. A claim for money had and received can be based upon money paid by mistake,

as is the case here. See Util. Audit Co., 112 Cal. App. 4th at 957. “It is well settled that

no contract is necessary to support an action for money had and received other than the

implied contract which results by operation of law where one person receives the money

of another which he has no right, conscientiously, to retain.” Stratton v. Hanning, 139

Cal. App. 2d 723, 728 (1956). “Under such circumstances, the law will imply a promise

to return the money.” Id. In its counterclaim, the District alleges that it “paid bonuses

to Counterdefendants by mistake.” (Countercl. ¶ 34.) That is, Counterdefendants

received the District’s money which it had no right to retain. See id. This allegation

alone is sufficient to satisfy the consideration element. But the District went further and

alleges facts explaining the circumstances that led to the mistaken overpayments,

including examples of some of the erroneous accounting practices.

Therefore, the District’s claim for a common count is properly pled, and the

Court DENIES Counterdefendants’ motion to dismiss.

//

//

//

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III. MOTION FOR A MORE DEFINITE STATEMENT - RULE 12(E)

“A party may move for a more definite statement of a pleading to which a

responsive pleading is allowed but which is so vague or ambiguous that the party cannot

reasonably prepare a response.” Fed. R. Civ. P. 12(e); see Bureerong v. Uvawas, 922 F.

Supp. 1450, 1461 (C.D. Cal. 1996) (“[A] motion for a more definite statement should

not be granted unless the defendant literally cannot frame a responsive pleading.”). “A

motion for a more definite statement is used to provide a remedy for an unintelligible

pleading rather than a correction for lack of detail.” N. Cnty. Commc’ns Corp. v. Sprint

Commc’ns Co., L.P., No. 09-cv-02685 BEN (WMc), 2010 WL 1499289, at *1 (S.D.

Cal. Apr. 12, 2010) (Benitez, J.). Furthermore, the motion may be denied where the

detail sought is obtainable through discovery. C.B. v. Sonora Sch. Dist., 691 F. Supp.

2d 1170, 1190-91 (E.D. Cal. 2010). Motions for a more definite statement are generally

viewed with disfavor and are rarely granted. Cellars v. Pac. Coast Packaging, Inc., 189

F.R.D. 575, 578 (N.D. Cal. 1999).

Here, Counterdefendants fail to describe any vagueness or ambiguity in the

District’s pleadings. Rather, they merely append the words “more definite

statement”—five times, to be exact (Mot. to Dismiss 1:16, 1:28, 5:1, 5:18,

6:15)—throughout their motion. Merely stating that a more definite statement is

warranted without any explanation does not make it so. Furthermore, the Court

concluded above that the District properly pled their claim for a common count. This

necessarily leads to the conclusion that the District’s claim is neither vague nor

ambiguous because a cognizable claim for relief cannot be vague or ambiguous.

Accordingly, the Court DENIES Counterdefendants’ motion for a more definite

statement.

//

//

//

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IV. CONCLUSION & ORDER

In light of the foregoing, the Court SUSTAINS the District’s objection (Doc.

73), DENIES Counterdefendants’ motion to dismiss (Doc. 67), and DENIES

Counterdefendants’ motion for a more definite statement.

IT IS SO ORDERED.

DATED: May 3, 2011

Hon. Thomas J. Whelan

United States District Judge

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