Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-04218/USCOURTS-cand-3_07-cv-04218-1/pdf.json

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

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ELIZABETH GREWAL, an individual,

Plaintiff,

 v.

AMIT CHOUDHURY, an individual;

AMISIL HOLDINGS, LTD., a Cyprus

corporation; and DOES ONE to FORTY,

Defendants. /

No. C 07-04218 CRB

ORDER

This is a state law breach of contract and fraud action arising from Defendant Amit

Choudhury’s (“Choudhury”) alleged failure to pay Plaintiff Elizabeth Grewal $1 million

under the terms of a Promissory Note executed by the parties. See Complaint ¶ 6. Plaintiff

also names Amisil Holdings, LTD (“Amisil”) as a defendant, claiming Choudhury

fraudulently transferred money that he owes Plaintiff to Amisil. See Complaint ¶ 28-39. 

Defendants successfully removed this case to federal court on the ground of diversity

jurisdiction pursuant to 28 U.S.C. 1332 on August 16, 2007. Defendants have moved to

dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants base

their motion on Plaintiff’s alleged failure to satisfy notice pleading standards under Rule 8(a)

for the “common counts” against Amisil, and under Rule 9(b) for the fraud claim against

Choudhury and the fraudulent transfer claims against both defendants. Defendants have also

moved to strike several allegations in the complaint as they relate to Choudhury pursuant to

Case 3:07-cv-04218-CRB Document 16 Filed 10/25/07 Page 1 of 4
United States District Court

For the Northern District of California

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Federal Rule of Civil Procedure 12(f). For the reasons stated herein, the motion to dismiss is

GRANTED with leave to amend, and the motion to strike is DENIED.

The hearing scheduled for 10:00 a.m. on Friday, October 26 is VACATED.

STANDARD OF REVIEW

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) will be

granted if the pleading fails to state a cognizable legal theory or if it fails to allege sufficient

facts under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699

(9th Cir. 1990). For purposes of a motion to dismiss, the court will “presume all reasonable

inferences in favor of the non-moving party.” Usher v. City of Los Angeles, 828 F.2d 556,

561 (9th Cir. 1987). However, mere conclusions couched as factual allegations are not

sufficient to state a cause of action. Papasan v. Allain, 478 U.S. 265, 286 (1986). If the

plaintiff is unable to cure the defect by amendment, then courts may dismiss a complaint

without leave to amend. Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000).

Federal Rule of Civil Procedure 12(f) provides that a court may strike from a pleading

“any redundant, immaterial, impertinent, or scandalous matter.” “[T]he function of a 12(f)

motion to strike is to avoid the expenditure of time and money that must arise from litigating

spurious issues by dispensing with those issues prior to trial . . . .” Sidney-Vinstein v. A.H.

Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Such motions are disfavored and rarely

granted. See, e.g., Sapiro v. Encompass Ins., 221 F.R.D. 513, 516-17 (N.D. Cal. 2004). 

DISCUSSION

A. Counts Two, Three, Four & Five: Common Counts

Counts Two, Three, Four and Five against Defendant Amisil are dismissed with leave

to amend pursuant to Federal Rule of Civil Procedure 8(a). The basic requirement for a

proper complaint is that the complaint set forth a “short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The pleadings need only

give fair notice of the pleader’s claims so that opposing parties can respond, undertake

discovery, and prepare for trial. Conley v. Gibson, 355 U.S. 41, 47-48 (1957). In California,

the essential elements for a common count are (1) a statement of indebtedness in a certain

Case 3:07-cv-04218-CRB Document 16 Filed 10/25/07 Page 2 of 4
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For the Northern District of California

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sum; (2) consideration (i.e., goods sold); and (3) non-payment. Farmers Ins. Exchange v.

Zerin, 53 Cal. App. 4th 445, 460 (1997). Because the common counts against Amisil do not

specify what, if any, direct consideration Plaintiff gave Amisil, those counts are dismissed

with leave to amend. 

B. Counts Six, Seven & Eight: Fraud and Fraudulent Transfer

Counts Six, Seven and Eight are dismissed with leave to amend pursuant to Federal

Rule of Civil Procedure 9(b). Under Rule 9(b), an averment of fraud should state with

particularity the circumstances constituting the fraud. Fed. R. Civ. P. 9(b). “Under

California law, the elements needed to establish fraud are (1) misrepresentation (false

representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3)

intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damages.” 

G. Hirsch & Co., Inc. v. Amerisourcebergen Corp., 2006 WL 1348568 (N.D. Cal. May 17,

2006) (citing Lazar v. Superior Court, 12 Cal. 4th 631, 638 (1996)). The Ninth Circuit has

interpreted Rule 9(b) to require that “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) (citations

and quotations omitted). “The complaint must specify such facts as the times, dates, places,

benefits received, and other details of the alleged fraudulent activity.” Neubronner v.

Milken, 6 F.3d 666, 671-72 (9th Cir. 1993). Plaintiff has failed to adequately place

Defendants on notice of the “particular misconduct” which is alleged to constitute the fraud

and the fraudulent transfer. Accordingly, Counts Six, Seven and Eight are dismissed with

leave to amend.

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Case 3:07-cv-04218-CRB Document 16 Filed 10/25/07 Page 3 of 4
United States District Court

For the Northern District of California

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C. Motion to Strike

The allegations in the complaint as they relate to Choudhury’s ethnicity, martial status

and alleged attempts to borrow money from others fail to rise to the level required to grant a

Rule 12(f) motion. Accordingly, the motion to strike is DENIED.

IT IS SO ORDERED.

Dated: October 25, 2007 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-04218-CRB Document 16 Filed 10/25/07 Page 4 of 4