Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01790/USCOURTS-caed-2_07-cv-01790-1/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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The court notes that this motion was filed in case number

2:07-cv-00653-LKK-EFB prior to the consolidation of that case with

the present case. References to the parties in this order refer to

their statuses vis-a-vis one another in case number 2:07-cv-00653-

LKK-EFB, in which Corrections USA was the plaintiff and counterdefendant and Gary Harkins was the defendant and counter-plaintiff.

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

BRIAN DAWE, individually

and d/b/a FLAT IRON

MOUNTAIN ASSOCIATES,

NO. CIV. S-07-1790 LKK/EFB 

Plaintiff,

v.

O R D E R

CORRECTIONS USA, a California

Corporation; CALIFORNIA

CORRECTIONAL PEACE OFFICERS

ASSOCIATION, a California

Corporation; JAMES BAIARDI,

an individual; DONALD JOSEPH

BAUMANN, an individual,

Defendants.

AND RELATED COUNTERCLAIM

 /

The plaintiff and counter-defendant, Corrections USA, has

filed this motion against counter-plaintiff Gary Harkins.1

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The allegations are derived from the plaintiff’s first

amended complaint and defendant Harkins’ counterclaims. The court

described the factual allegations of the plaintiff’s complaint in

its May 29, 2007 order for case number 2:07-cv-00653 (consolidated

with this case). 

2

Corrections USA moves to dismiss, moves for a more definite

statement, and moves to strike assertedly improper matters from

Harkins’ counterclaims. For the reasons stated herein, the court

grants the motion to dismiss in part. The court denies the motion

for a more definite statement and motion to strike. 

I. ALLEGATIONS OF THE COMPLAINT2

Plaintiff Corrections USA (“CUSA”) is a mutual benefit company

representing publically employed corrections officers. It brought

suit against defendant Harkins and others, who are former officers

of CUSA, alleging breach of fiduciary duties, interference with

business relations, interference with prospective business

relations and economic advantage, unauthorized use of another’s

name, prohibited use of a membership list, fraud, conversion, and

accounting. 

With his answer, defendant Harkins asserted five counterclaims

against CUSA. In his first counterclaim, defendant Harkins alleged

that CUSA violated the California Labor Code by failing to pay him

wages to which he was entitled. Specifically, on August 11, 2006,

he alleges that he was appointed to the position of interim

administrator of CUSA with a monthly salary of $3,000. Beginning

on that date, he performed the duties of an interim administrator,

but he was never compensated in the agreed-upon amount. He seeks

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back wages from August 11, 2006 to the date of his termination,

penalty wages, and attorney’s fees, pursuant to California Labor

Code sections 201, 203, and 218.5.

In his second counterclaim, Harkins alleged that his

appointment to interim administrator constituted an employment

contract between himself and CUSA. From August 11, 2006 until the

date of his termination, Harkins claims he performed the duties of

the CUSA interim administrator. He asserted that by failing to pay

him the $3000 monthly salary, the defendant breached this contract.

Harkins seeks damages in the amount of his unpaid wages during this

period and attorney’s fees, costs, and expenses.

In his third counterclaim, Harkins alleged that he was falsely

imprisoned on September 7, 2006 by individuals appointed by the

CUSA Board of Directors. As he was leaving the Board of Directors

meeting on that date, he asserts that he was detained and searched

for items believed to be in his possession. He was held without his

consent, for more than a brief period of time. He alleged that “he

did not feel free to leave and was thus restrained due to either

a threat of force, a showing of force, the implied threat of force,

and/or the inability for [Harkins] to escape.” Those persons who

detained him did so without lawful privilege. While he was

detained, his belongings were searched and, after he was detained,

he was questioned about the incident by observers, which furthered

his embarrassment. He seeks damages and attorneys fees, costs, and

expenses. 

In his fourth and fifth claims, Harkins alleged that CUSA and

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a third-party defendant defamed him via a “campaign of published

and unpublished statements.” Mr. Harkins described the statements

as “clear attempts to hold Mr. Harkins in disrepute.” In his fifth

counterclaim, he specifies that the statements accused him of

mismanaging CUSA and misappropriating assets. These statements were

communicated to and received by third parties, were false, and were

not protected by privilege. Finally, he alleged that the statements

have caused him injury to his reputation, for which he is entitled

to damages and attorneys fees, costs, and expenses. 

II. STANDARDS

A. Standard for Dismissal Pursuant to Federal Rule of Civil

Procedure 12(b)(6)

On a motion to dismiss, the allegations of the complaint must

be accepted as true. See Cruz v. Beto, 405 U.S. 319, 322 (1972).

The court is bound to give the plaintiff the benefit of every

reasonable inference to be drawn from the "well-pleaded"

allegations of the complaint. See Retail Clerks Intern. Ass'n,

Local 1625, AFL-CIO v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963).

Thus, the plaintiff need not necessarily plead a particular fact

if that fact is a reasonable inference from facts properly alleged.

See id.; see also Wheeldin v. Wheeler, 373 U.S. 647, 648 (1963)

(inferring fact from allegations of complaint).

In general, the complaint is construed favorably to the

pleader. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The

court may not dismiss the complaint if there is a reasonably

founded hope that the plaintiff may show a set of facts consistent

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with the allegations. Bell Atlantic Corp. v. Twombly, 127 S.Ct.

1955, 1967-69 (2007). In spite of the deference the court is bound

to pay to the plaintiff's allegations, however, it is not proper

for the court to assume that "the [plaintiff] can prove facts which

[he or she] has not alleged, or that the defendants have violated

the . . . laws in ways that have not been alleged." Associated

General Contractors of California, Inc. v. California State Council

of Carpenters, 459 U.S. 519, 526 (1983).

B. Standard for a More Definite Statement Pursuant to Federal

Rule of Civil Procedure 12(e)

"If a pleading to which a responsive pleading is permitted is

so vague or ambiguous that a party cannot reasonably be required

to frame a responsive pleading, the party may move for a more

definite statement before interposing a responsive pleading." Fed.

R. Civ. Proc. 12(e). "The situations in which a Rule 12(e) motion

is appropriate are very limited." 5A Charles A. Wright & Arthur R.

Miller, Federal Practice and Procedure § 1377 (1990). Furthermore,

absent special circumstances, a Rule 12(e) motion cannot be used

to require the pleader to set forth "the statutory or

constitutional basis for his claim, only the facts underlying it."

McCalden v. California Library Ass'n, 955 F.2d 1214, 1223 (9th

Cir.1990). However, "even though a complaint is not defective for

failure to designate the statute or other provision of law

violated, the judge may in his discretion . . . require such detail

as may be appropriate in the particular case." McHenry v. Renne,

84 F.3d 1172, 1179 (9th Cir. 1996). 

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C. Standard to Strike Matter from a Pleading Pursuant to Federal

Rule of Civil Procedure 12(f)

Rule 12(f) authorizes the court to order stricken from any

pleading "any redundant, immaterial, impertinent, or scandalous

matter." A party may bring on a motion to strike within 20 days

after the filing of the pleading under attack. The court, however,

may make appropriate orders to strike under the rule at any time

on its own initiative. Thus, the court may consider and grant an

untimely motion to strike where it seems proper to do so. See 5A

Wright and Miller, Federal Practice and Procedure: Civil 2d ' 1380.

Motions to strike are generally viewed with disfavor, and will

usually be denied unless the allegations in the pleading have no

possible relation to the controversy, and may cause prejudice to

one of the parties. See 5A C. Wright & A. Miller, Federal Practice

and Procedure: Civil 2d ' 1380; see also Hanna v. Lane, 610 F.

Supp. 32, 34 (N.D. Ill. 1985). If the court is in doubt as to

whether the challenged matter may raise an issue of fact or law,

the motion to strike should be denied, leaving an assessment of the

sufficiency of the allegations for adjudication on the merits.

See 5A Wright & Miller, supra, at § 1380.

III. ANALYSIS

Counter-defendant CUSA moves to dismiss defendant Harkins’

counterclaims or, alternatively, moves for a more definite

statement for all of the counterclaims. CUSA also moves to

strike portions of the counterclaims that it alleges are

improper. For the reasons set forth below, the court grants the

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motion to dismiss in part and denies it in part. The court

denies the motion to strike and motion for a more definite

statement.

A. Motion to Dismiss

1. Claim One: Failure to Pay Wages

Under section 201 of the California Labor Code, “[i]f an

employer discharges an employee, the wages earned and unpaid at

the time of discharge are due and payable immediately.” A claim

brought under this section need only allege that “the employer

failed to pay wages that had accrued at the time the employeremployee relationship terminated and the amount of the accrued

wages.” Oppenheimer v. Robinson, 150 Cal. App. 2d 420, 422 (Cal.

Ct. App. 1957). An employer must pay an employee accrued wages

within seventy-two hours of the termination of employment,

unless the employment was for a specified duration as described

in a written contract. Cal. Lab. Code § 202. If an employer

wilfully fails to comply with the requirements of sections 201

or 202, the employer is required to pay a penalty to the former

employee equaling no more than the sum of the employee’s wage

for thirty days. Id. § 203. A plaintiff who is successful in his

wage claim action may also recover reasonable attorney’s fees

and court costs. Id. § 218.5.

Here, Harkins has adequately stated a claim under

California Labor Code section 201 upon which relief may be

granted. He has alleged that an employment relationship existed

between himself and CUSA, that he had accrued wages from August

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11, 2006 to the date of his termination, and that CUSA failed to

pay him the wages that had accrued. He also has alleged the

amount of accrued wages, and explains that this is based on his

alleged monthly wage of $3,000. These factual allegations

suffice to state a claim under California Labor Code section

201, and to give the defendant notice of the factual basis of

the claim. See Oppenheimer, 150 Cal. App. 2d at 422.

Necessarily, then, Harkins has adequately stated a claim under

section 218.5, as well. 

Harkins’ claim under section 203 is fatally flawed,

however. That section awards a penalty for an employer’s willful

failure to pay wages under sections 201 or 202. Counterclaimant

has not alleged that CUSA’s conduct was wilful, nor has he

alleged facts from which the court may reasonably infer that

CUSA’s conduct was wilful. See Retail Clerks Intern. Ass’n., 373

U.S. at 753 n. 6. Consequently, CUSA’s motion must be granted as

to this claim. Dismissal will be with leave to amend.

2. Claim Two: Breach of Contract

A cause of action for breach of contract includes four

elements: that there was a contract between the parties, that

the plaintiff performed his contractual duties or was excused

from performing them, that the defendant breached his

contractual duties, and that the breach caused the plaintiff

damages. Reichert v. General Ins. Co. of America, 69 Cal. 2d

822, 830 (Cal. 1968). Defendant’s reliance on Malmsteen v.

Berdon LLP, 477 F. Supp 2d 655 (S.D.N.Y. 2007), is misplaced.

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There, the court held that the plaintiff had failed to state a

claim for breach of contract because he had not “specif[ied] any

of its terms and the way in which [the defendant] breached those

terms.” Malmsteed, 477 F. Supp. 2d at 666. Leaving aside any

differences between New York’s and California’s causes of action

for breach of an employment contract, the claim does not suffer

from the deficiencies that the Malmsteed complaint possessed. 

Harkins has alleged that an employment contract was created

between himself and CUSA when he was appointed interim

administrator. He has alleged that one of the terms of the

contract was that he would receive a $3000 monthly salary. He

has alleged that he performed the duties of an interim

administrator, but that CUSA breached its duty by failing to pay

him this salary. Finally, he has alleged that “as a result of”

CUSA’s breach, he is entitled to damages in the amount of $3000

per month for the amount of time he was employed as interim

administrator. Counterclaimant has plainly met the pleading

requirements for this cause of action, see Reichert, 69 Cal. 2d

at 830, and the CUSA’s motion is denied as to this claim.

3. Claim Three: False Imprisonment

The tort of false imprisonment is “the non-consensual,

intentional confinement of a person, without lawful privilege,

for an appreciable length of time.” Molko v. Holy Spirit Assn.,

46 Cal. 3d 1092, 1123 (Cal. 1988). A person is falsely

imprisoned if he is wrongfully deprived of his freedom to leave

by the conduct of another. Id. Detention may occur by means of

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physical force, threat of force, confinement by physical

barriers, or by any other form of unreasonable duress. Scofield

v. Critical Air Medicine, Inc., 45 Cal. App. 4th 990, 1001 (Cal.

Ct. App. 1996). Although CUSA cites Scofield as describing a

four-part test for the tort of false imprisonment, CUSA fails to

mention that the Scofield court itself rejected the defendant’s

reliance on this test, describing the test as “of limited

application.” Id. at 1002.

The countercomplaint has sufficiently pled the tort of

false imprisonment. It is alleged that defendant’s agents

detained Harkins without his consent as he attempted to leave a

September 7, 2006 Board of Directors meeting, that he was

“stopped,” “restrained,” and that he did not feel free to leave

due to his detainors’ actions. He has alleged further that his

detainors were not acting under lawful privilege. Finally, he

has alleged that he was held “for more than a brief period of

time.” Although Harkins does not specifically allege that his

detainors acted intentionally, such an allegation can be

inferred from the allegations that Harkins was detained for the

purpose of searching his possessions. Therefore, giving the

pleader the benefit of every reasonable inference drawn from the

allegations of the counterclaim, see Retail Clerks Intern.

Ass’n, 373 U.S. at 753 n. 6, the court concludes that all

elements of the tort of false imprisonment have been pled.

CUSA’s motion is denied as to this claim.

////

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4. Claims Four and Five: Defamation

Defamation is a reputational injury that occurs by means of

libel or slander. Cal. Civ. Code § 44. Generally, libel is a

written communication that is false, not protected by privilege,

and exposes a person to ridicule or other reputational injury.

Id. § 45. Slander is a false and unprivileged oral statement

that attributes certain misconduct or unfavorable

characteristics to a person, which causes damage. Id. § 46.

Statements that implicate a person’s “office, profession, trade

or business” may be slanderous. Id. Both libel and slander

require that the defamatory statements be communicated to the

third person who understands the defamatory meaning of the words

and the way in which they are meant to describe the defamee.

Smith v. Maldonado, 72 Cal. App. 4th 637, 645 (Cal. Ct. App.

1999). A claim for slander need not include the exact words

alleged to be slanderous, but must at least describe the

substance of the defamatory statement. Okun v. Superior Court

(Maple Properties), 29 Cal. 3d 442, 458 (Cal. 1981). The

heightened pleading requirements of New York Times Co. v.

Sullivan, 376 U.S. 254 (1964), only apply where the person

defamed is a public figure, which is defined as a person for

whom there is “clear evidence of general fame or notoriety in

the community, and pervasive involvement in the affairs of

society.” Gertz v. Robert Welch, 418 U.S. 323, 351-52 (1974).

Here, the fifth claim sufficient pleads the factual basis

for a claim for defamation. It alleges all of the elements of

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slander and libel, alleging that the defamatory statements were

written or oral. Although it does not recite the actual words

that the CUSA and the third-party defendant are alleged to have

used, he has described the substance of the defamatory

statements. Because there is no indication, let alone clear

evidence, that Mr. Harkins is a “public figure,” he was required

to plead no more than that described in the California statute.

Therefore, CUSA’s motion must be denied as to the fifth

counterclaim.

The fourth claim, however, is not adequately pled. Although

it pleads most of the elements of slander and libel, it does not

contain an allegation of the substance of the defamatory

statements published by CUSA. This defect is fatal to the claim.

See Okun, 29 Cal. 3d at 458. Consequently, CUSA’s motion will be

granted as to Harkins’ fourth claim, with leave to amend.

B. Motion for a More Definite Statement

Federal Rule of Civil Procedure 12(e) provides: “If a

pleading to which a responsive pleading is permitted is so vague

or ambiguous that a party cannot reasonably be required to frame

a responsive pleading, the party may move for a more definite

statement before interposing a responsive pleading.” Fed. R.

Civ. P. 12(e). “The situations in which a Rule 12(e) motion is

appropriate are very limited.” See 5A C. Wright & A. Miller,

Federal Practice and Procedure, § 1377 (3d ed. 2004).

CUSA moves for a more definite statement as to all of the

counterclaims. As explained above, the first and fourth

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counterclaims are dismissed. With respect to the other causes of

action, the court finds that they allege sufficient facts to

provide notice to CUSA of the grounds for his alleged

entitlement for relief. See Bell Atlantic, 127 S. Ct. at 1964-

65. A more definite statement is not necessary in order for CUSA

to frame a responsive pleading. See Fed. R. Civ. Proc. 12(e). 

C. Motion to Strike

CUSA moves to strike three portions of the counterclaims.

First, it seeks to strike the fifth cause of action as being

redundant with the fourth. Second, it seeks to strike the words

“and unpublished” in the fourth and fifth causes of action. As

explained below, this motion is denied.

Federal Rule of Civil Procedure 12(f) authorizes the court

to strike from any pleading “any redundant, immaterial,

impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). 

Motions to strike are viewed with disfavor, and will usually be

denied unless the allegations in the pleading have no possible

relation to the controversy, and may cause prejudice to one of

the parties. See 5A C. Wright & A. Miller, Federal Practice and

Procedure, § 1380 (3d ed. 2004). CUSA has failed to show that

the portions of the counterclaims that it seeks to strike have

no possible relation to the controversy and may prejudice the

parties. In his opposition, counterclaimant argues that his

fourth and fifth claims, both of which allege defamation, refer

to separate defamatory statements. Because the fourth

counterclaim is dismissed with leave to amend, it is premature

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to strike this claim without having permitted a pleading that

sets out the distinct basis for this claim. 

Moreover, CUSA’s motion to strike the words “and

unpublished” from the defamation claims must be denied. Although

CUSA is correct that defamatory statements that are

“unpublished,” in the legal sense of the word, are irrelevant to

defamation actions, CUSA has not shown that such statements have

no possible relation to this controversy. Additionally, CUSA has

not shown that it will suffer any prejudice from the inclusion

of these words in Mr. Harkins’s counterclaims. Accordingly, the

motion to strike is denied.

IV. CONCLUSION

For the reasons described herein, the court orders:

1. Plaintiff and counter-defendant CUSA’s motion to dismiss is

GRANTED as to defendant and counter-plaintiff Harkins’

first and fourth counterclaims. CUSA’s motion to dismiss is

DENIED as to Harkins’ second, third, and fifth

counterclaims.

2. Plaintiff and counter-defendant CUSA’s motion for a more

definite statement is DENIED.

3. Plaintiff and counter-defendant CUSA’s motion to strike is

DENIED.

4. Defendant and counter-plaintiff Harkins is granted thirty

days from the date of this order to file an amended

countercomplaint.

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5. The Clerk is directed to copy the removal notice (docket

number 1), attachments to removal notice (docket number 2-

4), answers (docket number 7 and 43), first amended

complaint (docket number 35), answer, third-party complaint

and counterclaim (docket number 38), and motion to dismiss

(docket number 52 and 53) in case number 2:07-cv-00653-LKKEFB and to place those copies in the “master file,” which

has been designated to be case number 2:07-cv-1790-LKK-EFB

IT IS SO ORDERED.

DATED: October 24 2007.

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