Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-00964/USCOURTS-cand-3_07-cv-00964-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1446 Breach of Contract- Insurance

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CAL-AGREX, Inc., a California

Corporation,

Plaintiff,

v.

DEE VAN TASSELL, JERRY GOODWIN, and

DOES 1 through 20, inclusive, 

Defendants. 

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No. C-07-0964 SC

ORDER GRANTING

DEFENDANT JERRY

GOODWIN'S MOTION TO

DISMISS DEFENDANT DEE

VAN TASSELL'S CROSSCLAIM

I. INTRODUCTION

Plaintiff Cal-Agrex, Inc. ("Cal-Agrex"), filed its Amended

Complaint against Defendants Dee Van Tassell ("Van Tassell") and

Jerry Goodwin ("Goodwin") on March 28, 2007. See Am. Compl.,

Docket No. 16. Van Tassell filed an Answer and Counterclaim on

July 6, 2007, asserting a counterclaim against Cal-Agrex and a

cross-claim against Goodwin. See Docket No. 38 ("Counterclaim"). 

Before the Court is Goodwin's Motion to Dismiss Van Tassell's

Cross-Claim. See Docket No. 40. Van Tassell did not oppose the

motion.

For the reasons stated herein, the Court GRANTS Goodwin's

motion and DISMISSES Van Tassell's cross-claim without prejudice.

II. BACKGROUND

The underlying facts of this case are described in detail in

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1

Neither LaBudde nor the O Bar Cattle Company is a party to

this suit.

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the Court's recent Order Granting in Part and Denying in Part

Goodwin's Motion to Dismiss Claims 2, 3, and 4 of the First

Amended Complaint. See Docket No. 43 ("First Order") 1-3. The

Court assumes the parties' familiarity with those facts and

addresses here only the facts relevant to the cross-claim.

Cal-Agrex entered into a written agreement to purchase 10,000

metric tons of non-fat dry milk powder ("NFDM") from Goodwin and

Van Tassell. See Am. Compl. ¶ 8; Ex. A ("Agreement"). Pursuant

to the Agreement, Cal-Agrex was to deposit $2,000,000 with Van

Tassell in December 2004, and in return Goodwin and Van Tassell

would commence monthly shipments of NFDM to Cal-Agrex beginning in

January 2005, totaling 10,000 metric tons of NFDM between January

and April of 2005. Id. ¶¶ 9, 10. Van Tassell admits that the

parties made the Agreement, and that Cal-Agrex deposited

$1,000,000 with him by a series of wire transfers in December 2004

and January 2005. See Counterclaim ¶ 6. 

Van Tassell alleges that after receiving the wire transfers

from Cal-Agrex, he wired $1,000,000 to LaBudde to purchase NFDM,

and $250,000 to the O Bar Cattle Company "pursuant to directives

by Goodwin" under the Agreement.1

 See id. ¶¶ 7-9. Van Tassell

further alleges that in January 2005, he entered into an oral

agreement with Cal-Agrex, pursuant to which he would purchase an

additional 3400 metric tons of NFDM from LaBudde on behalf of CalAgrex, for which he would receive 2 1/2 cents per pound of NFDM

for the 10,000 metric tons included in the Agreement. See id. ¶

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2

Van Tassell never specifies the legal theory under which he

believes he is entitled to relief. However, like Goodwin, the

Court cannot discern any possible claim other than breach of

contract from the facts alleged. See Mot. 2 n.4. The Court

therefore will proceed as though Van Tassell brought a contract

claim. If Van Tassell intended to bring a claim other than breach

of contract, the Counterclaim is so vague and ambiguous it is

impossible to determine what that claim might have been. The Court

would therefore grant Goodwin's alternative request for relief and

order Van Tassell to provide a more definite statement of the claim

pursuant to Federal Rule of Civil Procedure 12(e). As discussed

below, the outcome would be the same.

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11. Van Tassell states that this 2 1/2 cents per pound was "in

and above his 1/4 of profits he should've received on the original

transaction." Id. Van Tassell alleges that he purchased 3400

metric tons of NFDM from LaBudde and shipped it to Cal-Agrex. Id.

Finally, Van Tassell claims that he did not retain any of the

money he initially received from Cal-Agrex, and that neither CalAgrex nor Goodwin paid him the 2 1/2 cents per pound of NFDM he

was due. Id. ¶¶ 15-17.

III. LEGAL STANDARD

The Court will treat Van Tassell's cross-claim as an action

for breach of contract.2 California law governs the contract. 

See First Order 4 n.3. "A cause of action for damages for breach

of contract is comprised of the following elements: (1) the

contract, (2) plaintiff's performance or excuse for

nonperformance, (3) defendant's breach, and (4) the resulting

damages to plaintiff." Careau & Co. v. Sec. Pac. Bus. Credit,

Inc., 272 Cal. Rptr. 387, 395 (Ct. App. 1990). 

Pursuant to Federal Rule of Civil Procedure 12(b)(6), the

court will grant a motion to dismiss if the plaintiff fails "to

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state a claim upon which relief can be granted." Fed. R. Civ. P.

12(b)(6). When evaluating a motion to dismiss, the court accepts

the facts as stated by the nonmoving party and draws all

inferences in its favor. See Everest & Jennings, Inc. v. Am.

Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994). 

Furthermore, the court must assume that all general allegations

"embrace whatever specific facts might be necessary to support

them." Peloza v. Capistrano Unified Sch. Dist., 37 F.3d 517, 521

(9th Cir. 1994). At the pleading stage, the plaintiff "need only

show that the facts alleged, if proved, would confer standing upon

him." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1140

(9th Cir. 2003). Finally, if the court dismisses a claim under

Rule 12(b)(6), "leave to amend should be granted unless the court

determines that the allegation of other facts consistent with the

challenged pleading could not possibly cure the deficiency." 

Schreiber Distrib. Co. v. Serv-Well Furniture Corp., 806 F.2d

1393, 1401 (9th Cir. 1986). 

IV. DISCUSSION

Van Tassell has failed to state a claim for breach of

contract. In the Counterclaim, Van Tassell never alleges the

existence of a contract between himself and Goodwin, the purported

breach of which would be the foundation of his claim. Van Tassell

discusses two contracts: 1) the Agreement to which Cal-Agrex,

Goodwin, and Van Tassell are all parties, and 2) an oral contract

between himself and Cal-Agrex. See Counterlcaim ¶¶ 6, 11. 

Neither provides any basis for a claim against Goodwin for breach.

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3When considering a motion to dismiss, the court is generally

limited to the allegations in the complaint, without extrinsic

evidence. See, e.g., Hal Roach Studios, Inc. v. Richard Feiner &

Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989). However, the

Agreement was attached to and incorporated into the Complaint, see

Amended Complaint ¶ 8, and subsequently incorporated into the

Counterclaim. See Counterclaim ¶ 6. The Court may therefore

consider the Agreement when deciding a motion to dismiss. See Hal

Roach Studios, 896 F.2d at 1555 n.19; Fed. R. Civ. P. 10(c).

4For the purposes of resolving this motion, the Court assumes

the validity of the Agreement as a contract between Cal-Agrex on

the one hand and Van Tassell and Goodwin on the other. Goodwin may

still challenge the validity and construction of the Agreement at a

later time.

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Although Cal-Agrex, Goodwin, and Van Tassell are all parties

to the Agreement, it is not a contract between Goodwin and Van

Tassell.3 For a contract to exist, the parties must reach a

mutual agreement that one party will do something in exchange for

consideration from the other. See Cal. Civ. Code §§ 1550, 1595. 

The Agreement does not appear to create any obligation between

Goodwin and Van Tassell. That is, Goodwin and Van Tassell are

both on the same side of the Agreement as sellers, each obligated

to deliver NFDM to Cal-Agrex, with Cal-Agrex on the opposite side

of the Agreement as the buyer, obligated to deposit money with

Goodwin and Van Tassell. See Agreement.4 Van Tassell claims that

he was entitled to one quarter of the profits generated by the

Agreement. See Counterclaim ¶ 14. The Agreement makes no

reference to any payment from Goodwin to Van Tassell. See

Agreement. Nor does the Agreement appear to require either

Goodwin or Van Tassell to provide the other with any goods or

services. See id.

The second contract Van Tassell alleges in the Counterclaim

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is an oral agreement between himself and Cal-Agrex. See

Counterclaim ¶ 11. The oral agreement apparently required Van

Tassell to purchase 3400 metric tons of NFDM, for which Cal-Agrex

was to increase by 2 1/2 cents per pound the price it paid Van

Tassell under the Agreement. Id. However, this 3400 metric tons

of NFDM was in addition to the 10,000 metric tons contracted for

in the Agreement. The oral agreement did not require anything of

Goodwin, and did not offer him any consideration. In short,

Goodwin was not a party to the oral agreement, and Van Tassell

does not allege the contrary. 

Van Tassell's Counterclaim references two agreements to which

he was a party. However, neither was a contract between Van

Tassell and Goodwin. Where there is no contract, there can be no

breach. Van Tassell has therefore failed to state a claim on

which relief may be granted. Van Tassell may cure this deficiency

by pleading additional facts consistent with those already

alleged.

V. CONCLUSION

Because Van Tassell did not allege a contract between himself

and Goodwin, he has not stated a claim for breach of contract. 

The Court therefore GRANTS Goodwin's motion and DISMISSES Van

Tassell's Counterclaim without prejudice. Because the Court

recently granted Cal-Agrex leave to amend its complaint, see First

Order at 8, the Court now ORDERS as follows:

1. If Cal-Agrex files a Second Amended Complaint, Van

Tassell may amend his Counterclaim when his response to

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the Second Amended Complaint is due.

2. If Cal-Agrex does not amend its complaint, Van Tassell

may file an amended Counterclaim no later than 30

(thirty) days from the date of this order.

IT IS SO ORDERED.

Dated: September 25, 2007

 UNITED STATES DISTRICT JUDGE

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