Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01982/USCOURTS-casd-3_13-cv-01982-2/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1964 Civil Remedies: Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TRICIA VARRASSO, et al.,

Plaintiffs,

Case No. 13-cv-1982-BAS-JLB

ORDER:

(1) GRANTING IN PART AND 

DENYING IN PART

VARRASSO’S MOTION TO 

DISMISS [ECF NO. 123]; AND 

(2) DENYING RUSSIAN RIVER, 

LTD.’S MOTION TO DISMISS

[ECF No. 125]

v.

ARLEN BARKSDALE, et al.,

Defendants.

AND RELATED CROSS AND 

COUNTERCLAIMS.

Defendants Arlen Barksdale, Global Renewable Energy LLC, Sun West Solar 

Inc. and Barksdale as Trustee for the Barksdale Family Trust (“counter-claimants”) 

file counter-claims against Tricia Varrasso and Russian River, Ltd. (“Russian River”) 

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

intentional and negligent interference with prospective economic relations and 

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intentional interference with contract.

1

(ECF No. 112). Varrasso has moved to 

dismiss the counter-claims arguing the Court lacks jurisdiction over these state law 

claims, and that the allegations for each alleged cause of action fail to state a claim.

2

(ECF No. 123.) Russian River moves to dismiss the counter-claims arguing the 

claims are barred by the statute of limitations. (ECF No. 125.) 

The Court finds this motion suitable for determination on the papers 

submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the reasons 

discussed below, Varrasso’s Motion to Dismiss (ECF No. 123) is GRANTED IN 

PART and DENIED IN PART, and Russian River’s Motion to Dismiss (ECF No. 

125) is DENIED.

I. BACKGROUND

A. The Fourth Amended Complaint

In the Fourth Amended Complaint, Plaintiffs allege Defendant Arlen 

Barksdale converted approximately $650,000 of the Varrassos’ money by making 

misrepresentations about his company, Sun West Solar. (ECF No. 103 (“4AC”) ¶2.) 

He encouraged Tricia Varrasso to invest in Sun West Solar, which was “the lead 

investment vehicle” for the Vaya Con Dios Solar Park Project. (4AC ¶¶2, 38, 97.) 

The plan was to harvest solar energy at a site being developed outside of Joshua 

Tree and then sell the energy back to Southern California Edison (“SCE”) and San 

Diego Gas and Electric (“SDGE”) for a substantial profit. (4AC ¶¶92-95, 97.) 

Barksdale represented that he was working on this Vaya Con Dios Solar Park in 

collaboration with a host of other affiliates and partners including Desmon Energy 

LLC, Global Renewable, Desmon Properties, Hawk Energy, Hawk Solar Farms and 

other Con Dios solar parks. (4AC ¶98.) 

 

1 Although counter-claimants label these “counter-claim and cross-claim,” there is, in fact, no 

cross-claim alleged. To the extent Russian River is a completely separate entity, counter-claimants 

would be alleging a third party complaint against Russian River. However, for the sake of 

simplicity, the court will simply refer to the allegations as counter-claims.

2 Russian River joins in all the arguments raised by Varrasso. (ECF No. 124.)

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In October 2011, Barksdale delivered a prospectus to Varrasso about the 

Vaya Con Dios Solar Park Project which contained various representations,

including that Desmon Properties had twenty acres of land near Joshua Tree ripe for 

the collection of solar energy (4AC ¶¶97, 101.) Barksdale told Plaintiffs the project 

was nearly completed and just needed financial backing. (4AC ¶106.) When 

Varrasso expressed reluctance to invest, Barksdale offered her a “first position” in a 

deed of trust in the Texan Resort as extra security. (4AC ¶108.) Barksdale and 

Mabbett took Varrasso to the Texan Resort to show her what she would own if her 

investment did not bear fruit. (4AC ¶108.) 

In reliance on these representations, in November 2011, Plaintiffs gave 

$652,017.22 to Sun West Solar through Barksdale. (4AC ¶117.) After investing the 

money, Varrasso learned the Vaya Con Dios Solar Park project was a sham (4AC 

¶2) and Sun West Solar was a façade. (4AC ¶3.) Varrasso further learned: (1) 

Desmon Properties did not own or control land near Joshua Tree; (2) the other 

affiliates and partners were just entities owned or controlled by Barksdale, his 

significant other Mabbett, or both; (3) the project was not even close to completion; 

(4) Sun West Solar was not authorized to do business in California; and (5) the 

Texan Resort was heavily encumbered and Varrasso did not have a “first position” 

deed of trust in this property. (4AC ¶¶ 40, 98, 130, 133.) The 4AC alleges that 

Barksdale and Mabbett immediately took the money invested and converted it for 

their own personal use. (4AC ¶ 128.)

B. The Counter-claims

The counter-claims paint an alternative end to the story. (ECF No. 112

(“CoCl”)). According to the counter-claims, on or about November 17, 2011, 

“Tricia Varrasso converted her shares of Sun West Solar, Inc. into a loan.”3(CoCl 

 

3 Although the counter-claims allege that Varrasso converted shares into the loan “to help counterdefendants in the acquisition and development of solar projects,” the court assumes this is in error 

and that the allegation is that Varrasso converted the shares into a loan to help counter-claimants, 

not counter-defendants.

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¶13.) Varrasso and Russian River thereafter entered into an agreement with 

Barksdale, Global Renewable Energy LLC and Sun West Solar, Inc. “that was 

partly oral and partly written” in which Varrasso and Russian River “agreed to 

provide good will, financial and endorsement support to [the above defendants] in 

their effort to develop properties for solar energy collection and sale.” (CoCl ¶¶11-

12.) Counter-claimants allege Russian River Ltd. is an entity dissolved in 2013 in 

which Tricia Varrasso was “the sole owner . . . and its sole officer and/or director.” 

(CoCl ¶5.)

In keeping with the agreement “to provide good will, financial and 

endorsement support,” Russian River and the Barksdale Family Trust entered into 

an agreement covering the Varrassos’ $650,000. (CoCl ¶¶11-12.) The agreement 

included a Promissory Note in which the Barksdale Family Trust agreed to pay 

back $645,000 over a twenty year period beginning May 20, 2012. (CoCl ¶14.) The 

Promissory Note stipulated to a 12% interest and was secured by a Deed of Trust, 

both of which are attached to the counterclaim. (Id.)

Counter-claimants allege that on or about July 30, 2013, Varrasso and 

Russian River breached the agreements by “anticipatorily repudiating and 

prematurely cancelling the Promissory Note and demanding any amount due that 

was inconsistent with the intent of the parties to the contract and inconsistent with 

the terms of the contract.” (CoCl ¶¶20-21.) According to the counter-claims, this 

undermined the solar projects that were currently in the bid process. (CoCl ¶21.) 

In addition, the counter-claimants allege Tricia Varrasso “took equipment and 

records necessary for the operation of the solar projects without authorization” and 

“further made defamatory remarks about counter-claimants.” (CoCl ¶21.) Counterclaimants allege this is what led to the downfall of the various solar park projects. 

(Id.) 

II. ANALYSIS

A. Compulsory Counter-claims

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Varrasso and Russian River argue first that this Court has no jurisdiction over 

these state law claims. Under 28 U.S.C. §1367(a), “in any civil action of which the 

district courts have original jurisdiction, the district courts shall have supplemental 

jurisdiction over all other claims that are so related to claims in the action within

such original jurisdiction that they form part of the same case or controversy.” If a 

counter-claim is compulsory, then “the federal court will have jurisdiction over it 

even though ordinarily it would be a matter for a state court.” Baker v. Gold Seal 

Liquors, Inc., 417 U.S. 467, 469 n.1 (1974).

For a counter-claim to be compulsory, it must “‘arise[] out of the transaction 

or occurrence that is the subject matter of the opposing party’s claim.’” Mattel, Inc. 

v. MGA Entertainment, Inc., 705 F.3d 1108, 1110 (9th Cir. 2013), quoting Fed. R. 

Civ. P. 13(a)(1)(A). “‘[T]ransaction’ is a word of flexible meaning which may 

comprehend a series of occurrences if they have a logical connection.” Baker, 417 

U.S. at 469 n.1, citing Moore v., New York Cotton Exchange, 270 U.S. 593 (1926). 

Thus, the court applies a “logical relationship test” analyzing “whether the essential 

facts of the various claims are so logically connected that considerations of judicial 

economy and fairness dictate that all the issues be resolved in one lawsuit.” 

Hydranautics v. FilmTec Corp., 70 F.3d 533, 536 (9th Cir. 1995) (quotation 

omitted). “What matters is not the legal theory but the facts.” Mattel, 705 F.3d at 

1110 (emphasis original). 

In this case, the facts alleged in both the 4AC and the counter-claims revolve 

around the characterization of Varrasso’s $650,000. The 4AC says it was used to 

purchase securities in a sham solar energy company and then converted to 

defendants’ personal use. The counter-claims say it was loaned to counter-claimants 

in exchange for a promissory note to assist defendants in their solar energy 

company and that the valid solar energy company failed largely because of the 

actions of Varrasso and Russian River. The facts are so logically connected that 

they must be construed as compulsory and thus joining these claims is proper under 

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18 U.S.C. §1367(a) and Fed. R. Civ. P. 13(a). The Court finds none of the 

exceptions listed in 28 U.S.C. §1367(c) applicable to this case. 

B. Failure to State a Claim Under Rule 12(b)(6)

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. 

Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court 

must accept all factual allegations pleaded in the complaint as true and must 

construe them and draw all reasonable inferences from them in favor of the 

nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 

1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed 

factual allegations, rather, it must plead “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). A 

claim has “facial plausibility when the plaintiff pleads factual content that allows 

the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombley, 

550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with’ 

a defendant’s liability, it stops short of the line between possibility and plausibility 

of ‘entitlement to relief.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 

557).

“[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to 

relief’ requires more than labels and conclusions, and a formulaic recitation of the 

elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (quoting 

Papasan v. Allain, 478 U.S. 265, 286 (1986) (alteration in original)). A court need 

not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Despite the

deference the court must pay to the plaintiff’s allegations, it is not proper for the 

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

or that defendants have violated the . . . laws in ways that have not been alleged.” 

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

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U.S. 519, 526 (1983).

Varrasso and Russian River claim none of the causes of action are 

sufficiently alleged and, therefore, must be dismissed under Rule 12(b)(6). 

Alternatively, they ask for a more definite statement under Rule 12(e).

1. Breach of Contract and Breach of Implied Covenant of Good Faith 

and Fair Dealing

In order to allege a breach of contract, counter-claimants must allege: (1) the 

existence of a contract, (2) counter-claimants’ performance under the contract, (3) 

Varrasso and Russian River’s breach of the terms of the contract, and (4) damages 

that counter-claimants suffered as a result of Varrasso and Russian River’s breach. 

See McKell v. Washington Mut., Inc., 142 Cal.App.4th 1457, 1489 (2006). 

Varrasso and Russian River claim the allegations supporting the existence of 

a contract are too nebulous and vague to adequately be considered a contract. 

Counter-claimants allege Varrasso and Russian River “agreed to provide good will, 

financial and endorsement support to [counter-claimants] in their effort to develop 

properties for solar energy collection and sale” (Co-Cl ¶¶11-12). Although the 

Court agrees “good will” and “endorsement support” are vague, counter-claimants 

go on to allege that the financial support aspect of this agreement was later 

formalized with a Promissory Note, a copy of which they attach. (CoCl ¶14.) 

Counter-claimants assert that the agreement to provide financial and other support 

was breached when Varrasso and Russian River: (1) “anticipatorily repudiate[ed] 

and prematurely cancel[ed] the Promissory Note and demand[ed] any amount due 

that was inconsistent with the intent of the parties to the contract and inconsistent 

with the terms of the contract” (CoCl ¶¶20-21), and (2) Varrasso “took equipment 

and records necessary for the operation of the solar projects without authorization”

and “further made defamatory remarks about counter-claimants.” (CoCl ¶21). As a 

result, the counter-claimants state they “lost over $3,000,000 due to lost and 

disrupted solar projects.” (CoCl ¶23.) Construing these allegations in favor of the 

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counter-claimants and drawing all reasonable inferences from them in their favor, 

the Court finds these allegations sufficiently allege a breach of contract cause of 

action.

In California, there is implied in every contract a covenant of good faith and 

fair dealing “so that neither party may do anything that will injure or destroy the 

rights or interests of the other party to the agreement.” Corrigan v. Cox, 254 

Cal.App.2d 919 (1967). Since counter-complainants have adequately alleged a 

breach of contract cause of action, so too must their cause of action for breach of 

the implied covenant of good faith and fair dealing stand.

In the alternative, Varrasso and Russian River seek a more definite statement 

under Rule 12(e). “A Rule 12(e) motion will be granted if a complaint ‘is so vague 

or ambiguous that a party cannot reasonably be required to frame a responsive 

pleading.’” Hsu v. OZ Optics, Ltd., 211 F.R.D. 615, 619 (N.D. Cal. 2002), quoting

Fed. R. Civ. P., Rule 12(e). Neither counter-claimants’ breach of contract nor their 

breach of the implied covenant of good faith and fair dealing claim is so vague or 

ambiguous that Varrasso and Russian River cannot frame a response. “To the extent 

[they] seek[] clarification of [counter-claimants’] specific contentions, discovery, 

rather than a Rule 12(e) motion, is the proper tool.” Id. Therefore, Varrasso and 

Russian River’s Motion to Dismiss the first and second causes of action in the 

counter-claims is DENIED.

2. Intentional and Negligent Interference with Prospective Economic 

Relations

A party “seeking to recover for alleged interference with prospective 

economic relations has the burden of pleading and proving that the defendant’s 

interference was wrongful by some measure beyond the fact of the interference 

itself.” Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal.4th 376, 392-3 

(1995) (quotation omitted). Simply alleging that a party knowingly interfered with a 

prospective contract is insufficient. Id. This rule is equally applicable to a cause of 

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action for negligence interference with prospective economic relations. Lange v. 

TIG Ins. Co., 68 Cal.App.4th 1179, 1187 (1998). 

The tort of negligence interference with prospective economic relations also 

requires the alleging party to plead and prove that the offending party owed the 

alleging party a duty of care. Id.; J’Aire Corp., v. Gregory, 24 Cal.3d 799, 803 

(1979). “A duty of care may arise through statute or by contract. Alternatively, a 

duty may be premised upon the general character of the activity in which the 

defendant engaged, the relationship between the parties or even the interdependent 

nature of human society.” Id. 

Counter-claimants’ causes of action for intentional and negligent interference 

with prospective economic relations must be dismissed for two reasons. First, 

counter-claimants fail to allege any conduct that was wrongful beyond the 

interference itself. Basically, counter-claimants allege no more than a breach of 

contract that led to the loss of business relationships that “probably would have 

resulted in economic benefits.” (CoCl ¶¶42, 52.) Because counter-claimants fail to 

plead wrongfulness under Della Penna, these causes of action must be dismissed.

Additionally, counter-claimants fail to allege any duty of care owed by 

Varrasso or Russian River to counter-claimants. Hence, Varrasso’s Motion to 

Dismiss the third and fourth counts in the counter-claims for intentional and 

negligent interference with prospective economic advantage is GRANTED.

3. Intentional Interference with Contract

To plead a cause of action for intentional interference with contract, counterclaimants must allege: (1) it had a contract with a third party, (2) Varrasso and 

Russian River knew of this contract, (3) Varrasso and Russian River intentionally 

acted in ways designed to induce the breach or disruption of this contractual 

relationship, (4) the contractual relationship was actually breached or disrupted, and 

(5) counter-claimants suffered resulting damage. Pacific Gas & Electric Co., v. 

Bear Stearns & Co., 50 Cal. 3d 1118, 1125 (1990).

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In this case, counter-claimants adequately allege that they had contracts with 

third parties and that Varrasso and Russian River knew of these contracts. (CoCl 

¶¶16, 17, 64-65.) However, counter-claimants then allege that Varrasso and Russian 

River “engaged in wrongful conduct by, directly or indirectly, soliciting, inducing,

or engaging, with current and/or former clients and contractual relations of counterclaimants and in direct conflict with the purpose of the agreement between counterclaimants and counter-defendants and among other ways of which counterclaimants are not presently aware, according to proof at trial.” (CoCl ¶66.) 

The court agrees that this language is hopelessly vague and ambiguous, 

warranting, if not outright dismissal, a more definite statement. Counter-claimants 

must allege sufficient facts to state a claim that is plausible on its face. See Bell Atl., 

550 U.S. at 578. The Court cannot evaluate from the face of this counter-claim 

whether counter-claimants have a plausible cause of action or not because 

confusing, conclusory language is substituted for any factual allegations. Therefore, 

Varrasso and Russian River’s Motion to Dismiss the fifth cause of action is 

GRANTED.

C. Statute of Limitations

Russian River moves to dismiss the claims against it arguing that the claims 

are all barred by two-year statutes of limitation. “Although the statute-of-limitations 

defense is usually raised in a responsive pleading . . . the defense may be raised in a 

motion to dismiss if the running of the statue is apparent from the face of the 

complaint.” Ledesma v. Jack Stewart Produce, Inc., 816 F.2d 482, 483 n.1 (9th Cir. 

1987). A motion to dismiss based on the statute of limitations should be granted 

“only if the assertions of the complaint, read with required liberality, would not 

permit the plaintiff to prove that the statute was tolled.” Conerly v. Westinghouse 

Elec. Corp., 623 F.2d 117, 119 (9th Cir. 1980).

The Court agrees that the two-year statute of limitations applies to all five 

causes of action in this case. See Cal. C.C.P. §339(1) (statute of limitations for 

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breach of oral contract is two years); Krieger v. Nick Alexander Imports, Inc., 234 

Cal.App.3d 205, 220-21 (1991) (statute of limitations for breach of implied 

covenant of good faith and fair dealing, when it is based on a contractual theory, is 

the same as that for breach of the underlying contract); Murphy v. Hartford Acc. & 

Indem. Co., 177 Cal.App.2d 539, 543-4 (1960) (two-year statute of limitations in 

Cal. C.C.P. §339(1) is applicable in a tort action where the limitations period is not 

specifically provided). Furthermore, the Court agrees that, since Russian River is a 

new party, the fact that the original complaint was filed within the statute of 

limitations is of no import. See Trindade v. Superior Court, 29 Cal. App. 3d 857, 

859 (1973) (“As to cross-actions against . . . new parties, it has regularly been held 

that the statute of limitations is not tolled by the commencement of the plaintiff’s 

action.”).

Counter-complainants argue first that Russian River is an alter-ego of 

Varrasso and thus the separate entity should be ignored. Since the statute of 

limitations was tolled for Varrasso, they argue, so should it be for Russian River. 

However, the allegations in the counter-claims are insufficient to establish alter-ego 

liability.

“Disregarding the corporate form . . . is an extreme remedy [to be] sparingly 

used.” Pac. Mar. Freight, Inc. v. Foster, No. 10-cv-578-BRM-BLM, 2010 U.S. 

Dist. LEXIS 87205 at *16 (S.D. Cal. Aug. 24, 2010). To properly plead an alterego theory of liability, counter-complainants must plead first that there is such a 

“unity of interests and ownership that the separate personalities of the corporation 

and individual no longer exist” and second that “if the acts are treated as those of 

the corporation alone, an inequitable result will follow.” Id. at *17. 

In this case, counter-complainants merely allege that Varrasso is the sole 

owner and sole officer and director of Russian River. (CoCl ¶5.) There are no 

allegations of commingling of funds, failure to maintain minutes or corporate 

records, use of corporation as a mere shell, failure to adequately capitalize the 

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corporation, or any other inequities that would militate in favor of piercing the 

corporate veil. “An allegation that a person owns all of the corporate stock and 

makes all of the management decisions is insufficient to cause the court to disregard 

the corporate entity.” See Leek v. Cooper, 194 Cal.App.4th 399, 415 (2011).

However, counter-complainants also argue that there is insufficient 

information on the face of the counter-claim that would allow the Court to 

determine when the statute of limitations began to run. The Court agrees. A statute 

of limitations begins to run when the cause of action accrues. Thomson v. Canyon, 

198 Cal.App.4th 594, 604 (2011). “Generally speaking, a cause of action accrues at 

the time when the cause of action is complete with all of its elements.” Id. (internal 

quotations omitted.) Where “damages are an element of a cause of action, the cause 

of action does not accrue until damages have been sustained.” Id. (internal 

quotations omitted.) “Therefore, when the wrongful act does not result in 

immediate damage, the cause of action does not accrue prior to the maturation of 

perceptible harm.” Id. 

All five causes of action alleged in the counter-claims include an element that 

damages be sustained. See McKell, 142 Cal.App.4th at 1489 (breach of contract); 

Merced Irr. Dist. v. County of Mariposa, 941 F. Supp. 2d 1237, 1280 (E.D. Cal. 

2013) (breach of implied covenant of good faith and fair dealing); Korea Supply 

Co., v. Lockheed Martin Corp., 29 Cal.4th 1134, 1153 (2003) (interference with 

prospective economic relationship); Pac. Gas & Elec., 50 Cal. 3d at 1125 

(interference with contract). Although the counter-claims allege Russian River and 

Varrasso breached the agreement on or about July 30, 2013, nothing in the counterclaims allege when damages were incurred. The Court is limited to the face of the 

counter-claims. Because the Court cannot tell from the face of the counter-claims

when the statute of limitations began to run, the Motion to Dismiss on this ground 

is DENIED.

III. CONCLUSION

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For the foregoing reasons, the Court GRANTS IN PART and DENIES IN 

PART Varrasso’s Motion to Dismiss (ECF No. 123.) The Court denies the Motion 

with respect to the first and second causes of action in the counter-claim for breach 

of contract and breach of the implied covenant of good faith and fair dealing. The 

Court grants the Motion and dismisses the third through fifth causes of action in the 

counter-claims for intentional and negligent interference with prospective economic 

relations, and for interference with contract. As a general rule, a court freely grants

leave to amend a complaint which has been dismissed. Fed. R. Civ. P. 15(a). Since 

the Court believes it is possible counter-claimants may be able to amend these 

causes of action to state a claim, the Court GRANTS LEAVE TO AMEND these 

causes of action. Any amended counter-claims must be filed by April 25, 2016.

The Court DENIES Russian River’s Motion to Dismiss (ECF No. 125) based 

on the statute of limitations. The issue may be raised as an affirmative defense once 

the facts surrounding damages are developed.

 IT IS SO ORDERED.

DATED: April 5, 2016

Case 3:13-cv-01982-BAS-JLB Document 142 Filed 04/05/16 Page 13 of 13