Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-01187/USCOURTS-caed-1_05-cv-01187-10/pdf.json

Parties Involved:
Clean Air Products, Inc.
Defendant
Darrin Simmons
Defendant
Thomas N. Smith
Plaintiff

Document Text:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

THOMAS N. SMITH,

Plaintiff,

v.

DARRIN SIMMONS, individually

and d.b.a. CLEAN AIR PRODUCTS,

INC., and DOES 1 through 50

inclusive,

Defendants.

1:05-CV-01187-OWW-GSA

MEMORANDUM DECISION AND ORDER

RE DENYING IN PART AND

GRANTING IN PART DEFENDANTS

12(b)(1) and 12(b)(6) MOTION

TO DISMISS (DOC. 85) 

1. INTRODUCTION

Defendant Darrin Simmons (“Simmons”) and Defendant Clean Air

Products, Inc., (“Clean Air”) move to dismiss Plaintiff Thomas N.

Smith’s (“Smith”) third amended complaint pursuant to Rule

12(b)(1) of the Federal Rules of Procedure for lack of subject

matter jurisdiction because diversity jurisdiction is absent and

under 12(b)(6) for failure to state a claim for (a) insufficient

facts to support an alter ego claim under breach of contract and

(b) Defendant Simmons, individually, is not a named party in the

contracts. Oral argument was heard on March 3, 2008. 

2. PROCEDURAL BACKGROUND

Plaintiff filed his complaint on September 19, 2005. (Doc.

1, Complaint) Plaintiff filed a third amended complaint on

October 3, 2007. (Doc, 77, Third Amended Complaint, “TAC”)

Defendants filed a motion to dismiss the TAC on October 23, 2007.

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 1 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

(Doc. 85, Motion to Dismiss) Plaintiff filed their opposition to

Defendants’ Motion to Dismiss on November 21, 2007. (Doc. 89,

Opposition) Defendants filed their reply to Plaintiff’s

Opposition on December 3, 2007. (Doc. 92, Reply)

3. FACTUAL BACKGROUND

Plaintiff, pro se, filed his Complaint on September 19, 2005

against Defendant Simmons. The address listed on the Complaint

is as follows: “Thomas N. Smith, 581 Bell Road RD7, Te Puhe, New

Zealand 3271.” (Doc. 1, Complaint, header) Plaintiff did not

allege his place of domicile in the body of the Complaint, nor

any state of citizenship. Defendant Simmons is alleged in the

Complaint to be “an unknown corporation doing business in the

State of California.” (Doc. 1, Complaint, ¶ 1) Plaintiff filed

with his Complaint a declaration stating that he was “a resident

of the City of Portland, State of Oregon.” (Doc. 2, Declaration

of Thomas Smith, “Thomas Decl.,” filed on September 19, 2005, ¶

6) 

Plaintiff filed, his Third Amended Complaint, represented by

an attorney, on October 3, 2007 against Defendant Simmons and

Defendant Clean Air. (Doc. 77, TAC) Plaintiff states in his TAC:

“Plaintiff is a resident of New Zealand for six months of the

year. At the time of the filing the original complaint and for

the other six months of the year, Plaintiff was a citizen of

Nevada.” (Doc. 77, TAC, ¶ 1) Defendant Darrin Simmons is alleged

to be a resident of Tulare County, California. Defendant Clean

Air is alleged to be a California Corporation, with its principal

place of business in Tulare County. (Doc. 77, TAC, ¶¶ 2, 3) 

Plaintiff also filed a declaration with his Opposition to

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 2 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

Defendants’ Motion to Dismiss which states:

2. At the time I filed the complaint in this matter, I

maintained a residence in New Zealand about six months

of the year. I did not maintain a residence in the

United States. I spent some of my time in Nevada, where

the Help the Children Foundation I am involved in is

headquartered and some time in Oregon. To the extent I

had a residence in the United States at the time the

complaint was filed it would have been either Oregon or

Nevada. I considered my principal residence to be New

Zealand at the time the complaint was filed. I did not

reside in California at the time and did not consider

California to be my domicile.

(Doc. 90, Declaration of Thomas Smith In Opposition to Motion to

Dismiss The Third Amended Complaint, “2008 Declaration,” ¶ 2) 

Defendant provides as evidence for this motion, Plaintiff’s

driver licenses and his U.S. Passport. Plaintiff’s U.S. Passport

states his place of birth as California, U.S.A. (Id. at ¶ 4)

Plaintiff has a California driver’s license issued in his name,

with an address of 1681 Monte Vista Dr., Vista, California which

Plaintiff alleges is the property of a friend, Dave Deal, who has

permitted Plaintiff to use his address to maintain a California

driver’s license. (Id. at ¶ 3) Dave Deal states in his

declaration filed as part of Plaintiff’s Opposition to

Defendants’ Motion to Dismiss, that he has known Plaintiff for

many years and was asked by Plaintiff if he could use his address

to keep his California license and he responded affirmatively.

(Doc. 91, Declaration of Dave Deal In Opposition To Motion To

Dismiss The Third Amended Complaint, “Deal Decl.”, ¶¶ 2, 3) Mr.

Deal also states that Plaintiff does not live in Monte Vista,

California home, and never has, except for short periods as a

guest. (Id. at ¶ 4) When mail arrives for Plaintiff at Mr.

Deal’s home in Monte Vista, California, he forwards it to

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 3 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Plaintiff either in New Zealand or Washington state. (Id. at ¶ 3) 

Plaintiff also maintains a New Zealand driver’s license. (Doc.

85, Motion to Dismiss, Exhibit A and Doc. 89, Opposition, p.

3:16-17)

Plaintiff’s TAC alleges two causes of action against

Defendants Simmons and Clean Air, breach of contract and common

count. (Doc. 77, TAC) Plaintiff alleges a written agreement was

entered into on November 23, 1998 between Land O’Goshen, Inc.

(“Land O’Goshen”), Defendant Clean Air (“1998 Agreement”) and

Defendant Simmons, in his individual capacity. (Doc. 77, TAC, ¶

9) Under the terms of the 1998 Agreement, Land O’Goshen sold

inventory at an auction held by Help Smog Parts, including the

800 telephone, the customer database, the operating systems and

various other business property and services. (Id.) Plaintiff

was the sole owner of stock in Land O’Goshen and all rights in

the “agreement” were assigned to Plaintiff once the assets were

sold to Clean Air. (Id., at ¶ 11) 

The 1998 Agreement’s introductory paragraph states “This

Agreement is between Land O’Goshen, Inc., Seller and Clean Air

Products, Inc., buyer, dated November 23, 1998.” (Doc. 77, TAC,

Exhibit 1, p. 1) The 1998 Agreement was signed by Plaintiff on

the line designated “Thomas N. Smith” and Defendant Simmons

signed on the line designated as “Darrin Simmons.” (Id. at p. 2) 

Defendant Simmons signed his name and added his title “V.P.” next

to his signature. (Id.) Plaintiff incorporates by reference the

1998 Agreement into the TAC: “The terms of the agreement are set

forth in Exhibit 1 which is attached and incorporated herein.”

(Doc. 77, TAC, ¶ 9) Plaintiff also alleges that the 1998

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 4 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Agreement is “with both Defendants either because the corporation

and Simmons are alter egos of one another or because, as the

parties intended, Simmons is directly liable as a party.” (Id.)

A written agreement, an “Agreement and Contract of Sale,”

dated October, 2001, was entered between Defendant Simmons, as

“President of Clean Air Products, Inc.” and Plaintiff. (“2001

Agreement”). (Id., Exhibit 2) Under the terms of the 2001

Agreement, Plaintiff was to prepare a business plan and solicit

prospective buyers to be referred to Defendant Simmons to close

the deals. If such a buyer was secured, the sales and proceeds

would be divided among “Plaintiff and Clean Air Products, Inc.”

based upon the terms set forth in the 2001 Agreement. The 2001

Agreement is signed by Thomas N. Smith on a line designated

“Thomas N. Smith” and by Defendant Simmons, on a line designated

“Darrin K. Simmons, President, Clean Air Products, Inc. dba Help

Smog Parts.” Plaintiff alleges in his TAC that the 2001

Agreement reiterated the obligations in the 1998 Agreement and

the purpose was to reiterate the 1998 Agreement with Simmons

individually and Defendant Clean Air. (Doc. 77, TAC, ¶ 12) 

Plaintiff alleges that the “2001 agreement was with both Simmons

individually and Defendant Clean Air Products either because they

are simply alter egos of one another and because the parties

intended that Simmons individually be a party.” (Id. at ¶ 15)

Plaintiff alleges in his first cause of action that

“Defendants” were to pay Land O’Goshen $430,000 in installments

as set forth in “Exhibit ‘1.’” (Doc. 77, TAC, ¶ 10) Plaintiff

alleges Defendants breached the agreements in that Defendants

failed to make all the payments required under the agreements

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 5 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

when due. (Id. at ¶ 17) Plaintiff contends he and his

predecessor in interest, Land O’Goshen, performed all required

obligations under the two agreements. (Id. at ¶ 16) Plaintiff

contends that as a “result of the breach of agreement” he has

been damaged in the amount not less than $278,929, plus interest

under the 1998 Agreement and an unknown sum under the 2001

Amendment. (Id. at ¶ 18) Plaintiff prays for judgment of damages

not less than $278,929, interest, costs of suit and for such

other and further relief the Court deems just. (Doc. 77, TAC, p.

5:1-5)

The second claim is a common count that Defendants Clean Air

and Simmons owe Plaintiff the sum of $278,929. (Id. at ¶ 22) 

Plaintiff alleges Defendants owe him for goods, services and

money sold and delivered within the past four years for which

Defendants agreed to pay a specified sum. (Id. at ¶ 20) 

Plaintiff contends he has performed as required. (Id. at ¶ 21)

4. STANDARD OF REVIEW

A. 12(b)(1) MOTION

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows

a motion to dismiss for lack of subject matter jurisdiction. It

is a fundamental precept that federal courts are courts of

limited jurisdiction. Limits upon federal jurisdiction must not

be disregarded or evaded. Owen Equipment & Erection Co. v.

Kroger, 437 U.S. 365, 374 (1978). The U.S. Constitution, Art.

III, §2 extends federal judicial power to: “ . . . Controversies

. . . between Citizens of different States . . . and between a

State, or the Citizens thereof, and foreign States, Citizens or

Subject.” 

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 6 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

“Most federal-question jurisdiction cases are those in 1

which federal law creates a cause of action.” Wander v. Kaus, 304

F.3d 856, 858 (9th Cir. 2002) (citing Merrell Dow Pharms. Inc. v.

Thompson, 478 U.S. 804, 808 (1986)). 

7

“Federal courts have original jurisdiction over all civil

actions that ‘arise under’ the Constitution or laws of the United

States.” Wander v. Kaus, 304 F.3d 856, 858 (9th Cir. 2002)

(citing 28 U.S.C. § 1331). Federal district courts are vested 1

with original jurisdiction over matters in controversy between

“citizens of different States.” 28 U.S.C. § 1332(a)(1). 

The determination of a litigant’s state citizenship for

purposes of section 1332(a)(1) is controlled by federal common

law, not by the law of any state. Kantor v. Wellesley Galleries,

Ltd., 704 F.2d 1088, 1090 (9th Cir. 1983). “To show state

citizenship for diversity purposes under federal common law a

party must (1) be a citizen of the United States, and (2) be

domiciled in the state.” Id. Section 1332-the diversity

jurisdiction statute-“speaks of citizenship, not of residency.”

Kantor v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). 

“To be a citizen of a state, a natural person must first be a

citizen of the United States.” Id. “The natural person’s state

citizenship is then determined by her state of domicile, not her

state of residence.” Id.

 The party invoking diversity jurisdiction bears the burden

of persuasion with evidence establishing complete diversity.

McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 186-189

(1936) (“If his allegations of jurisdictional facts are

challenged by his adversary in any appropriate manner, he must

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 7 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

support them by competent proof. And where they are not so

challenged the court may still insist that the jurisdictional

facts be established or the case be dismissed, and for that

purpose the court may demand that the party alleging jurisdiction

justify his allegations by a preponderance of evidence.”); see

also Thomson v. Gaskill, 315 U.S. 442, 446 (1942) (“Accordingly,

if a plaintiff's allegations of jurisdictional facts are

challenged by the defendant, the plaintiff bears the burden of

supporting the allegations by competent proof.”); Lew v. Moss,

797 F.2d 747, 749 (9th Cir. 1986) (“[T]he party asserting

diversity jurisdiction bears the burden of proof.”)

B. 12(b)(6) MOTION

Fed. R. Civ. P. 12(b)(6) provides that a motion to dismiss

may be made if the plaintiff fails “to state a claim upon which

relief can be granted.” However, motions to dismiss under Fed.

R. Civ. P. 12(b)(6) are disfavored and rarely granted. Gilligan

v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir. 1997). 

In deciding whether to grant a motion to dismiss, the Court

“accept[s] all factual allegations of the complaint as true and

draw[s] all reasonable inferences” in the light most favorable to

the nonmoving party. TwoRivers v. Lewis, 174 F.3d 987, 991 (9th

Cir. 1999); see also Rodriguez v. Panayiotou, 314 F.3d 979, 983

(9th Cir. 2002). A court is not “required to accept as true

allegations that are merely conclusory, unwarranted deductions of

fact, or unreasonable inferences.” Sprewell v. Golden State

Warriors, 266 F.3d 979, 988 (9th Cir. 2001). 

The question before the court is not whether the plaintiff

will ultimately prevail; rather, it is whether the plaintiff

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 8 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

could prove any set of facts in support of his claim that would

entitle him to relief. “A complaint should not be dismissed

unless it appears beyond doubt that plaintiff can prove no set of

facts in support of his claim which would entitle him to relief.”

Van Buskirk v. CNN, Inc., 284 F.3d 977, 980 (9th Cir. 2002)

(citations omitted).

Documents attached pursuant to Fed. R. Civ. P. 10(c) will

not be considered outside the pleadings which would require

converting the motion to a Rule 56 summary judgment motion. Fed.

R. Civ. P. 10(c); Durning v. First Boston Corp., 815 F.2d 1265,

1267 (9th Cir. 1987) (“If a complaint is accompanied by attached

documents, the court is not limited by the allegations contained

in the complaint.”); see also Voest-Alpine Trading USA Corp. v.

Bank of China, 142 F.3d 887, 891 n.4 (5th Cir. 1998). “A

statement in a pleading may be adopted by reference elsewhere in

the same pleading or in any other pleading or motion. A copy of a

written instrument that is an exhibit to a pleading is a part of

the pleading for all purposes.” Fed. R. Civ. P. 10(c).

5. DISCUSSION

A. 12(b)(1) DIVERSITY JURISDICTION

Defendants move to dismiss Plaintiff’s TAC under Federal

Rules of Civil Procedure 12(b)(1) for lack of subject matter

jurisdiction, alleging no diversity of citizenship exists between

the parties. Defendants allege that Plaintiff is “stateless,”

based on Plaintiff’s declaration, including the statement that he

did not have a residence in the United States at the time of

filing the Complaint. Defendants also reference Plaintiff

renewing his California license on or about October 28, 2005,

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 9 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

designating a California address; his New Zealand driver’s

license; allegations of citizenship in the State of Nevada stated

in his Third Amended Complaint; and allegations of residency in

Oregon in his initial Complaint. Defendants also assert that

Plaintiff intended to return to New Zealand after the Complaint

was filed with an intention to remain there indefinitely and

therefore Plaintiff is a “stateless citizen.” 28 U.S.C. § 1332,

the basic diversity jurisdiction statute provides: 

(a) The district courts shall have original

jurisdiction of all civil actions where the matter in

controversy exceeds the sum or value of $75,000,

exclusive of interest and costs, and is between--

(1) citizens of different States;

(2) citizens of a State and citizens or subjects

of a foreign state;

(3) citizens of different States and in which

citizens or subjects of a foreign state are

additional parties; and

(4) a foreign state, defined in section 1603(a) of

this title, as plaintiff and citizens of a State

or of different States.

28 U.S.C. § 1332.

In diversity cases, Plaintiff must allege the citizenship of

each party. “In order to be a citizen of a State within the

meaning of the diversity statute, a natural person must both be a

citizen of the United States and be domiciled within the State.”

Newman-Green, Inc., 490 U.S. 826, 828 (1989). “Domicile,...

requires both physical presence at a given location and an intent

to remain there indefinitely...” Lew v. Moss, 797 F.2d 747, 752

(9th Cir. 1986)(emphasis added). 

“The existence of federal jurisdiction ordinarily depends on

the facts as they exist when the complaint is filed.”

Newman-Green, Inc., 490 U.S. at 830. “Diversity must exist at

the time the lawsuit is filed. It need not exist earlier, nor

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 10 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Plaintiff contends in his declaration filed in support of 2

his Opposition to this motion that he is currently a resident of

Washington state. There is no issue with that contention as the

point of review is at the time of filing the complaint. Any

subsequent changes in Plaintiff’s citizenship do not alter the

fact that if Plaintiff was domiciled in a State other than

California at the time of filing the complaint, diversity

jurisdiction exists for purposes of the lawsuit complying with

diversity jurisdiction. 

11

must it continue thereafter.” Judge William W. Schwarzer, Judge

A. Wallace Tashima & James M. Wagstaffe, Federal Civil Procedure

Before Trial, § 2:368 (2007); see also Grupo Dataflux v. Atlas

Global Group, L.P., 541 U.S. 567, 570-571 (2004) (“This

time-of-filing rule is hornbook law (quite literally) taught to

first-year law students in any basic course on federal civil

procedure. It measures all challenges to subject-matter

jurisdiction premised upon diversity of citizenship against the

state of facts that existed at the time of filing-whether the

challenge be brought shortly after filing, after the trial, or

even for the first time on appeal.”)2

When a defendant challenges jurisdiction facially, all

material allegations in the complaint are assumed true, and the

question for the court is whether the lack of federal

jurisdiction appears from the face of the pleading itself. See

Thornhill Publishing Co. v. General Telephone Electronics, 594

F.2d 730, 733 (9th Cir. 1979); Mortensen v. First Fed. Sav. &

Loan Ass’n, 549 F.2d 884, 891 (3rd Cir. 1977) (“The facial attack

does offer similar safeguards to the plaintiff: the court must

consider the allegations of the complaint as true.”); Cervantez

v. Sullivan, 719 F.Supp. 899, 903 (E.D. Cal. 1989), rev’d on

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 11 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

other 963 F.2d 229 (9th Cir. 1992) (“The factual allegations of

the complaint are presumed to be true, and the motion is granted

only if the plaintiff fails to allege an element necessary for

subject matter jurisdiction.”) 

A Rule 12(b)(1) jurisdictional attack may also be factual.

White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000)(citation

omitted); Thornhill Publishing Co., 594 F.2d at 733. A defendant

may attack the existence of subject matter jurisdiction apart

from the pleadings. Mortensen, 549 F. 2d at 891. In such a case,

the court may rely on evidence extrinsic to the pleadings and

resolve factual disputes relating to jurisdiction. Id. (“Where

the jurisdictional issue is separable from the merits of the

case, the judge may consider the evidence presented with respect

to the jurisdictional issue and rule on that issue, resolving

factual disputes if necessary.”) “No presumptive truthfulness

attaches to plaintiff's allegations, and the existence of

disputed material facts will not preclude the trial court from

evaluating for itself the merits of jurisdictional claims.” Id.

(quoting Mortensen, 549 F.2d at 891). In reviewing a

jurisdictional attack, the court must be aware that “the

congressional grant of diversity jurisdiction is to be strictly

construed.” Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088,

1092 (9th Cir. 1983).

On its face, Plaintiff’s TAC properly alleges diversity

jurisdiction as the court takes the allegations in the complaint

as true. In a federal action, a complaint must contain “a short

and plain statement of the grounds upon which the court’s

jurisdiction depends.” Fed. R. Civ. P. 8(a)(1). Plaintiff’s TAC

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 12 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

While Plaintiff’s original Complaint does not allege of 3

which state he is a citizen nor does he do so in the initial

declaration he filed with his original Complaint, Plaintiff does

state in his initial declaration that he was a resident of

Oregon. Again, this does not in and of itself establish his

domicile but assuming that was his purpose, Plaintiff has the

ability to amend a complaint in order to cure defective

allegations of jurisdiction. See 28 U.S.C. § 1653 (“Defective

allegations of jurisdiction may be amended, upon terms, in the

trial or appellate courts.”)

 

The Ninth Circuit recently addressed amended pleadings and

possible sham pleadings: 

At the time a complaint is filed, the parties are often

uncertain about the facts and the law; and yet, prompt

filing is encouraged and often required by a statute of

limitations, laches, the need to preserve evidence and other

such concerns. In recognition of these uncertainties, the

United States Court of Appeals for the Ninth Circuit does

not require complaints to be verified, Fed. R. Civ. P.

11(a), and the court allows pleadings in the

alternative--even if the alternatives are mutually

exclusive.

PAE Government Services, Inc. v. MPRI, Inc., 2007 U.S. App. LEXIS

29221, at *5, 2007 WL 4394427, at *2 (9th Cir. 2007).

13

alleges that Plaintiff is a resident of New Zealand for

approximately six months of the year and at the time the original

Complaint was filed, Plaintiff was a citizen of Nevada. (Doc. 77,

TAC, ¶ 1) Defendant Simmons is alleged to be a resident of 3

Tulare County, a county located in the State of California and

Defendant Clean Air is alleged to be a California Corporation.

(Id. at ¶¶ 2, 3) Even if Plaintiff’s motive for moving to Nevada

was for jurisdictional purposes, so long as Plaintiff then

intended to make Nevada his domicile and established a physical

presence with the intent to stay indefinitely and had no

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 13 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

In Safe Air, the Court on review considered the 12(b)(1) 4

motion not as a dismissal for lack of subject matter jurisdiction

but rather as a grant of summary judgment on the merits because

the question of jurisdiction was dependent on resolution of

factual issues going to the merits. The RCRA statute provided

the basis for both the subject matter jurisdiction of the federal

court and plaintiff’s substantive claim for relief. 373 F.3d at

1039-1040. The merits of the claim are not at issue in this

12(b)(1) motion.

14

intention of moving elsewhere, it is sufficient to establish

diversity jurisdiction. As stated in Peterson v. Allcity Ins.

Co., 472 F.2d 71, 74 (2nd Cir. 1972): “So long as she intended to

make North Carolina her home at the time she moved there and had

no intention then of moving elsewhere, her motive in moving, even

if for jurisdictional purposes, is not our concern.” 

Because Defendants mount a factual attack on subject matter

jurisdiction the court must examine the evidence submitted by

Defendants. Defendants submit copies of Plaintiff’s California

Driver’s license, New Zealand driver’s license and U.S. Passport. 

“[I]n a factual attack, the challenger disputes the truth of the

allegations that, by themselves, would otherwise invoke federal

jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035,

1039 (9th Cir. 2004). A jurisdictional challenge is a factual 4

attack where it, relies on extrinsic evidence and does “not

assert lack of subject matter jurisdiction solely on the basis of

the pleadings.” Morrison v. Amway Corp., 323 F.3d 920, 925 n.5

(11th Cir. 2003). “The determination of a party's domicile is a

mixed question of law and fact.” Lew v. Moss, 797 F.2d 747, 750

(9th Cir. 1986). In resolving a factual attack on jurisdiction,

the district court may review evidence beyond the complaint

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 14 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 And this motion does not involve a party changing his 5

domicile.

Plaintiff states he only retains his California Driver’s 6

license for convenience because of his extensive travels. 

15

without converting the motion to dismiss into a motion for

summary judgment. See Savage v. Glendale Union High Sch., 343

F.3d 1036, 1039 n.2 (9th Cir. 2003). “Once the moving party has

converted the motion to dismiss into a factual motion by

presenting affidavits or other evidence properly brought before

the court, the party opposing the motion must furnish affidavits

or other evidence necessary to satisfy its burden of establishing

subject matter jurisdiction.” Id. “The courts have also stated

that domicile is evaluated in terms of ‘objective facts,’ and

that ‘statements of intent are entitled to little weight when in

conflict with facts.’” Lew, 797 F.2d at 750 (citations omitted).

It undisputed that Plaintiff was not domiciled in California

when he filed the Complaint. Plaintiff’s declaration expressly

avers that he “did not reside in California at the time and did

not consider California” to be his domicile. (Doc. 90, 2008

Declaration, ¶ 2) Defendants offer no contrary evidence and do

not dispute this fact. Although he had a California driver’s 5

license listing a California address, Plaintiff’s and his friend

Mr. Deal’s declarations clarify that Plaintiff did not live nor

did he intend to live in California at the time the Complaint was

filed. Plaintiff’s failure to apply for a driver’s license in 6

Nevada or Oregon while maintaining and renewing his California

license however, does raise a question about his intent to

establish his domicile in either of these states, coupled with

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 15 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

16

Plaintiff’s statement in his declaration that he did not maintain

a residence in the United States at the time he filed his

Complaint. Defendants argue Plaintiff was “stateless” at the

time the Complaint was filed. “Federal courts are without

authority to hear suits having as their jurisdictional basis the

alienage of a person who has no nationality.” Kantor v. Wellesley

Galleries, Ltd., 704 F.2d 1088, 1092 (9th Cir. 1983). 

Plaintiff offers further in his declaration that to the

extent he had a residence, it would have been in Oregon or Nevada

but, also states that he did not maintain a residence in the

United States at the time the Complaint was filed. (Doc. 90. 2008

Declaration, ¶ 2) One cannot be domiciled in two States for

purposes of establishing diversity jurisdiction. Maintaining a

place of residence does not in and of itself establish one’s

domicile; it provides a “prima facie” case of domicile but if

challenged more must be provided. See State Farm Mut. Auto. Ins.

Co. v. Dyer, 19 F.3d 514, 520 (10th Cir. 1994) (“While there are

references in the evidence to Dyer's residence instead of his

domicile and citizenship, we feel this is not fatal to

jurisdiction. Residence alone is not the equivalent of

citizenship, but the place of residence is prima facie the

domicile.”); Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)

(“Residence alone is not the equivalent of citizenship, although

the place of residence is prima facie the domicile...”) A lack

of residence in a State for purposes of establishing a domicile

raises question because the result is a U.S. Citizen not

domiciled in any State is “stateless” for purposes of §

1332(a)(3) and thus destroys complete diversity. Newman-Green,

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 16 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

17

Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828-829 (1989) (“In order

to be a citizen of a State within the meaning of the diversity

statute, a natural person must both be a citizen of the United

States and be domiciled within the State.”) An American

domiciled abroad permanently (not domiciled in the U.S.) is not a

“citizen of State” for diversity purposes. Judge William W.

Schwarzer, Judge A. Wallace Tashima & James M. Wagstaffe, Federal

Civil Procedure Before Trial, § 2:240 (2007). 

Plaintiff states in his declaration that at the time of

filing the Complaint he considered his principal residence to be

in New Zealand and he did not maintain a residence in the United

States. (Doc. 90, Smith Decl., ¶ 2) “Residence is physical,

whereas domicile is generally a compound of physical presence

plus an intention to make a certain definite place one's

permanent abode, though, to be sure, domicile often hangs on the

slender thread of intent alone, as for instance where one is a

wanderer over the earth. Residence is not an immutable condition

of domicile.” Weible v. United States, 244 F.2d 158, 163 (9th

Cir. 1957). A person’s domicile is distinct from residency and

the diversity statute speaks of citizenship not residency: a

person’s domicile is determined by that person’s “permanent home,

where she resides with intention to remain or to which she

intends to return.” Kantor v. Warner-Lambert Co., 265 F.3d 853,

857 (9th Cir. 2001). 

Plaintiff does not clearly and unequivocally state where he

was domiciled at the time the Complaint was filed. Nor does

Plaintiff state where he intends to remain permanently for the

indefinite future. Plaintiff seems uncertain whether maintained

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 17 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

18

a residence in the United States, stating at one point he did not

maintain a residence in the United States and then stating that

it is either Nevada or Oregon. He provides little or no support

for his residence claim to either State. Plaintiff supports his

statement that he is a citizen of Nevada, as alleged in his TAC,

by stating in his 2008 declaration: “I spent some of my time in

Nevada, where the Help the Children Foundation I am involved in

is headquartered ... To the extent I had a residence in the

United States at the time the complaint was filed it would have

been either Oregon or Nevada.” This statement is equivocal as to

whether at the time of the filing Plaintiff had a residence

within the United States and Plaintiff is unable to state in

which U.S. state he resided. 

From the 2008 declaration, Plaintiff’s TAC, and Plaintiff’s

initial Complaint, it appears that Plaintiff intends his New

Zealand residence to be his indefinite permanent residence. His

initial Complaint filed in 2005 lists a New Zealand address in

the header. His Second Amended Complaint filed July 5, 2006

states that “Plaintiff is a resident of New Zealand for

approximately six months of the year. For the other six months

of the year, Plaintiff is a citizen of Nevada.” (Doc. 19, Second

Amended Complaint, ¶ 1) In his 2008 declaration filed in

opposition to this motion Plaintiff once again states that he

resides in New Zealand for six months of the year. Plaintiff

goes so far as to state “I considered my principal residence to

be New Zealand at the time the complaint was filed.” Plaintiff

also maintains a driver’s license in New Zealand. 

Plaintiff does not provide a residence address in either

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 18 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 “Courts in other jurisdictions have recognized additional 7

principles relevant to our present analysis. The courts have held

that the determination of an individual's domicile involves a

number of factors (no single factor controlling), including:

current residence, voting registration and voting practices,

location of personal and real property, location of brokerage and

bank accounts, location of spouse and family, membership in

unions and other organizations, place of employment or business,

driver's license and automobile registration, and payment of

taxes.” Lew, 797 F.2d at 750.

19

Oregon or Nevada, nor where he files taxes, maintains his assets,

where he banks, nor where he seeks medical treatment. The only

indication of ties to a state is his involvement with a charity

in Nevada and a California driver’s license. Neither is

sufficient to establish domicile. An individual’s manifestation

of intent to remain in a location is gauged by various objective

factors including where the individual resides, is employed, has

assets, is registered to vote, seeks medical treatment, has a

driver’s license, banks, and pays state taxes. Lew v. Moss, 797

F.2d 747, 750 (9th Cir. 1986) ; see also Altimore v. Mount Mercy 7

Coll., 420 F.3d 763, 769 (8th Cir. 2005). Plaintiff provides no

other facts, does not express any intent to remain indefinitely

in either Oregon, Nevada, or Washington and an individual cannot

be domiciled in two states. 

Without other evidence to establish his place of domicile

and given his varying accounts of his place of residence without

any reference to domicile, nor demonstrating his intent to remain

any place indefinitely, Plaintiff’s evidence as to his residence

is conflicting. The party invoking diversity jurisdiction bears

the burden of persuasion by evidence establishing complete

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 19 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

20

diversity. McNutt v. General Motors Acceptance Corp., 298 U.S.

178, 186-189 (1936)(“If his allegations of jurisdictional facts

are challenged by his adversary in any appropriate manner, he

must support them by competent proof. And where they are not so

challenged the court may still insist that the jurisdictional

facts be established or the case be dismissed, and for that

purpose the court may demand that the party alleging jurisdiction

justify his allegations by a preponderance of evidence.”); see

also Thomson v. Gaskill, 315 U.S. 442,446 (1942) (“Accordingly,

if a plaintiff's allegations of jurisdictional facts are

challenged by the defendant, the plaintiff bears the burden of

supporting the allegations by competent proof.”); Lew v. Moss,

797 F.2d 747, 749 (9th Cir. 1986) (“Our cases have established

several principles to guide this inquiry. First, the party

asserting diversity jurisdiction bears the burden of proof.”)

Plaintiff’s position is muddled. It appears Plaintiff may

have his domicile in New Zealand. He does not reside in

California. All parties at the hearing acknowledged that it was

unclear where in America Plaintiff resides: Oregon, Washington or

Nevada. It appears Plaintiff may be stateless, because he is not

a citizen of New Zealand. Domicile is a coupling of intent and

residence. Domicile can potentially exist without residence

when, for example, a student leaves a state of residence to

attend school in another state, but for all purposes considers

his or her domicile to be his or her original home state because

of his or her intention to return there after completing school. 

Plaintiff possibly could have overcome the diversity jurisdiction

attack by stating in his declaration that he was a citizen of

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 20 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

21

Nevada at the time of filing the Complaint and intended to stay

there indefinitely. Instead, Plaintiff states that he had no

residence in the U.S. and then states that “if he had a

residence” it would be either Nevada or Oregon. Plaintiff will

be give a final opportunity to amend his complaint. Defendants’

12(b)(1) motion to dismiss is GRANTED WITH LEAVE TO AMEND.

B. 12(b)(6) ALTER EGO

Defendants’ 12(b)(6) motion as to Plaintiff’s first cause of

action for breach of contract complains that Plaintiff alleges

only a conclusory theory of alter ego liability. Defendants

assert Plaintiff has not alleged any facts to support these

conclusory statements nor alleged what “inequitable result will

follow” if the acts are treated as those of corporation alone. 

To establish an alter ego claim, plaintiff must establish

that “(1) there is such a unity of interest and ownership between

the corporation and the individual or organization controlling it

that their separate personalities no longer exist, and (2)

failure to disregard the corporate entity would sanction a fraud

or promote injustice.” Robbins v. Blecher, 52 Cal.App.4th 886,

892, 60 Cal.Rptr.2d 815 (1997)(quoting Communist Party v. 522

Valencia, Inc., 35 Cal.App.4th 980, 993, 41 Cal.Rptr.2d 618

(1995)); see also Mesler v. Bragg Management Co., 39 Cal.3d 290,

300-01, 702 P.2d 601 (1985) (“Thus the corporate form will be

disregarded only in narrowly defined circumstances and only when

the ends of justice so require.”) “Ordinarily, a corporation is

regarded as a legal entity separate and distinct from its

stockholders, officers and directors. Under the alter ego

doctrine, however, where a corporation is used by an individual

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 21 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

22

or individuals, or by another corporation, to perpetrate fraud,

circumvent a statute, or accomplish some other wrongful or

inequitable purpose, a court may disregard the corporate entity

and treat the corporation's acts as if they were done by the

persons actually controlling the corporation.” Id. 

“The conditions under which the corporate entity may be

disregarded, or the corporation be regarded as the alter ego of

the stockholders, necessarily vary according to the circumstances

in each case inasmuch as the doctrine is essentially an equitable

one and for that reason is particularly within the province of

the trial court. Only general rules may be laid down for

guidance.” Stark v. Coker, 20 Cal.2d 839, 846, 129 P.2d 390

(1942).

Here, Plaintiff alleges in his first cause of action: 

3. ...Defendant Simmons is the sole owner of the stock

of Clean Air Products, Inc. Plaintiff is informed and

believes and thereon alleges that Defendant Clean Air

Products, Inc. is the alter ego of Defendant Darrin

Simmons and that at all times Defendant Simmons drew no

distinction between Clean Air Products and himself.

Plaintiff is informed and believes and thereon alleges

that Defendant Simmons treated Defendant Clean Air

Products as if it was not a separate entity. It would

be an injustice to adhere to the fiction of the

separate corporation as all the actions of Defendants

were as one.

9. ...The agreement [1998 Agreement] is therefore with

both Defendants either because the corporation and

Simmons are alter egos of one another or because, as

the parties intended Simmons is directly liable as a

party. 

(Doc. 77, TAC, ¶¶ 3, 9) Plaintiff also asserts in a later

paragraph regarding the 2001 Agreement the same: “The 2001

Agreement was with both Simmons individually and Defendant Clean

Air either because they are simply alter egos of one another and

because the parties intended that Simmons individually be a

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 22 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

23

party.” (Doc. 77, TAC, ¶ 15) “While it is the general rule that

a corporation is an entity separate and distinct from its

stockholders, with separate, distinct liabilities and

obligations, nevertheless there is a well-recognized and firmly

settled exception to this general rule, that, when necessary to

redress fraud, protect the rights of third persons, or prevent a

palpable injustice, the law and equity will intervene and cast

aside the legal fiction of independent corporate existence, as

distinguished from those who hold and own the corporate capital

stock, and deal with the corporation and stockholders as

identical entities with identical duties and obligations.” Wenban

Estate v. Hewlett, 193 Cal. 675, 696, 227 P.723 (1924). 

Plaintiff properly alleges that to recognize Simmons and

Clean Air as separate would, under the circumstances promote

injustice. “Conclusory allegations of ‘alter ego’ status are

insufficient to state a claim. Rather, a plaintiff must allege

specifically both of the elements of alter ego liability, as well

as facts supporting each.” Neilson v. Union Bank of California,

NA, 290 F Supp 2d 1101, 1116 (C.D. Cal. 2003). Plaintiff then

alleges: “at all times Defendant Simmons drew no distinction

between Clean Air Products and himself. Plaintiff is informed and

believes and thereon alleges that Defendant Simmons treated

Defendant Clean Air Products as if it was not a separate entity.”

(Doc. 77, TAC, ¶ 3) 

The Federal Rules of Civil Procedure require only “a short

and plain statement of the claim showing that the pleader is

entitled to relief.” Fed. R. Civ. P. 8(a)(2). This is not a Rule

9 pleading. See Fed. R. Civ. P. 9 (special matters regarding

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 23 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

24

pleadings). While, conclusory allegations of alter ego status

will not survive a motion to dismiss, Hokama, v. E.F. Hutton &

Co., Inc., 566 F.Supp. 636, 647 (N.D. Cal. 1983), at the same

time alter ego determinations are "highly fact-based, and require

considering the totality of the circumstances." Legacy Wireless

Services, Inc. v. Human Capital, LLC, 314 F.Supp.2d 1045, 1058

(D.Or. 2004). 

While Plaintiff has not factually described how Simmons

failed to treat the corporation as a distinct entity or what

inequity will result from these circumstances (other than how to 

pay the contract), Defendants are nonetheless clearly on notice

of Plaintiff’s alter ego claim and can frame a defense. 

Discovery may show different facts, but Plaintiff has

sufficiently alleged an alter ego theory of liability against

Defendant Simmons for a breach of contract claim. 

Defendants 12(b)(6) motion to dismiss the first cause

of action as to the alter ego theory of liability is DENIED.

C. EXTRINSIC EVIDENCE PERMITTED WHERE CONTRACT TERM IS DISPUTED

Defendants also move under 12(b)(6) as to the breach of

contract cause of action on the ground that the attached

contracts to the TAC, the 1998 Agreement and 2001 Agreement,

based on a reading of the plain language demonstrate that the

parties intended that the two contracts were entered into only by

Defendant Clean Air and Land O’Goshen and not with Defendant

Simmons, individually, as Plaintiff alleges. Defendants contend

that Plaintiff has not provided any factual support, other than

the allegation that it was the parties’ intent that Defendant

Simmons enter into and be bound by the contracts as an

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 24 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

25

individual. 

The September 27, 2007 Memorandum Decision and Order Re

Granting Defendant Simmons’ Judgment on the Pleadings on

Plaintiff’s Second Amended Complaint, concluded that based on a

review of the four corners of the 1998 Agreement, Defendant

Simmons was not a party in his individual capacity to the 1998

Agreement. (Doc. 72, September Order, p. 8) The decision also

held that Plaintiff did not allege any theory of alternate

liability such as alter ego theory of liability or other form of

personal liability. Plaintiff in his Third Amended Complaint,

claims Defendant Simmons is liable in his personal capacity under

the 1998 Agreement and 2001 Agreement on the basis of alter ego

theory, which this Court addressed above, and/or on the basis

that the “parties intended” that Defendant Simmons was to be a

party to the two contracts. Plaintiff claims in his TAC:

9. ...The agreement [1998 Agreement] is therefore with

both Defendants either because the corporation and

Simmons are alter egos of one another or because, as

the parties intended Simmons is directly liable as a

party. 

The 2001 Agreement was with both Simmons individually

and Defendant Clean Air Products either because they

are simply alter egos of one another and because the

parties intended that Simmons individually be a party.

(Doc. 77, TAC, ¶¶ 9, 15)(emphasis added). 

Plaintiff argues in his Opposition to Defendants’ Motion to

Dismiss the following alleged ambiguity in the two contracts: 

The 1998 agreement attached to the TAC is signed by

"Darrin Simmons" and not by Clean Air Products, Inc.

While it appears that Simmons signed it as a "VP," the

signature line identifies the signing party as "Darrin

Simmons." The allegation in the complaint is that,

based on that signature and the agreements between the

parties, the Defendants, both Clean Air Products and

Simmons, entered into the agreement and that it was the

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 25 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

26

parties' intent that Simmons be personally liable. 

The second agreement recites that it is between

"Darrin K. Simmons, President, Clean Air Products, Inc.

and Thomas N. Smith." It goes on to state that Smith

would undertake certain actions and refer people to

"Simmons." The third point in the agreement states that

this agreement "does not affect any previous Sales

Agreements or Contracts between Smith, Simmons, Land

O'Goshen, Inc or Clean Air Products." The second

agreement appears to be signed by Simmons as

"President."

---

At a bare minimum, the agreements are ambiguous as to

the intent of the

parties as to who is actually a party thereto.

(Doc. 89, Opposition, pp. 5:11-22, 6:1-2)

Generally, the parties' intent is revealed by nature and

character of the agreement. “The words used in an agreement are

a primary source from which to glean the parties' intent.”

Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas, 116

Cal.App.4th 1375, 1389, 11 Cal.Rptr.3d 412 (2004). 

However, under California’s liberal parol evidence rule,

because the parties dispute the meaning of the words in the 1998

Agreement and 2001 Agreement, extrinsic evidence must be

referenced to show whether the 1998 Agreement and 2001 Agreement

are reasonably susceptible to a particular meaning, despite what

appears to be clear and unambiguous on the face of the agreements

that the contract is between Land O’Goshen and Clean Air only.

“Where the meaning of the words used in a contract is

disputed, the trial court must provisionally receive any

proffered extrinsic evidence which is relevant to show whether

the contract is reasonably susceptible of a particular meaning.

[Citations.] Indeed, it is reversible error for a trial court to

refuse to consider such extrinsic evidence on the basis of the

trial court's own conclusion that the language of the contract

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 26 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

27

appears to be clear and unambiguous on its face. Even if a

contract appears unambiguous on its face, a latent ambiguity may

be exposed by extrinsic evidence which reveals more than one

possible meaning to which the language of the contract is yet

reasonably susceptible.” Morey v. Vannucci, 64 Cal.App.4th 904,

912, 75 Cal.Rptr.2d 573 (1998); see also Davidson v Welch, 270

Cal App 2d 220, 75 Cal Rptr 676 (1969) (In order to determine

initially whether the terms of any written instrument are clear,

definite, and free from ambiguity, the court must examine the

instrument in the light of the circumstances surrounding its

execution so as to ascertain what the parties meant by the words

used, and only then can it be determined whether the seemingly

clear language of the instrument is in fact ambiguous). Here,

the potential ambiguity is created by the form of the written

signatures of Simmons.

Defendants motion to dismiss Plaintiff’s first cause of

action for breach of contract as to Defendant Simmons is DENIED.

D. 12(b)(6) COMMON COUNT

Defendants claim under 12(b)(6) that Plaintiff’s second

cause of action for common count fails against Defendant Simmons

because the 1998 Agreement and 2001 Agreement was entered into

between Land O’Goshen and Clean Air only and Plaintiff cannot

establish that Defendant Simmons is under any contractual

obligation to perform under the terms of the 1998 Agreement and

2001 Agreement.

Under California law, which recognizes common counts, “[a]

common count is proper whenever the plaintiff claims a sum of

money due, either as an indebtedness in a sum certain, or for the

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 27 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

28

reasonable value of services, goods, etc., furnished. 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.” Kawasho Internat., U.S.A. Inc. v.

Lakewood Pipe Service, Inc., 152 Cal.App.3d 785, 793, 201

Cal.Rptr. 640 (1983)(quoting 3 Witkin, California Procedure, 2d

edition, p. 2085, Pleading § 423.) “The only 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.

Exchange v. Zerin, 53 Cal.App.4th 445, 460 (1997)(quoting 4

Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 508, p. 543);

see also Miniace v. Pacific Maritime Ass'n, 424 F.Supp.2d 1168,

1186 (N.D. Cal. 2006).

For an express contract that is no longer executory, a

common count pleading is appropriate when the only remaining

obligation is the payment of money by defendant. Ferro v.

Citizens Nat. Trust & Sav. Bank, 44 Cal.2d 401, 409, 282 P.2d 849

(1955); McBride v. Boughton, 123 Cal.App.4th 379, 394-395, 20

Cal.Rptr.3d 115 (2004). However, “[a] common count is not a

specific cause of action...rather, it is a simplified form of

pleading normally used to aver the existence of various forms of

monetary indebtedness, including that arising from an alleged

duty to make restitution under an assumpsit theory.” McBride, 123

Cal.App.4th at 394. 

Plaintiff’s asserts a cause of action for common count,

incorporating the breach of contract cause action, alleging that

Plaintiff has performed as required but Defendants have failed to

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 28 of 29
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

pay the sum due of $278,929 for goods, services and money

delivered despite demands for which Defendants agreed to pay.

(Doc. 77, TAC, ¶¶ 20-22) Plaintiff has the ability to recover for

a breach of contract under his first cause of action for breach

of contract. There is no need for the additional common count

cause of action. If the contracts are not enforceable after a

breach, there is no other basis on which Defendants owe money to

Plaintiff.

Defendants’ motion to dismiss the second cause of action for

common count as to Defendant Simmons and all Defendants is

GRANTED.

CONCLUSION

For the reasons set forth above, Defendants motion to

dismiss pursuant to Fed. R. Civ. P. 12(b)(1) is GRANTED with

leave to amend twenty (20) days from the date of service of this

decision by the clerk of the court. Defendant’s motion to

dismiss Plaintiff first cause of action for breach of contract

pursuant to Fed. R. Civ. P. 12(b)(6) as to Defendant Simmons only

is DENIED. Defendant’s motion to dismiss Plaintiff second cause

of action alleging a common count as to Defendant Simmons and all

Defendants pursuant to Fed. R. Civ. P. 12(b)(6) is GRANTED. 

IT IS SO ORDERED.

Dated: March 14, 2008 /s/ Oliver W. Wanger 

bb4ed UNITED STATES DISTRICT JUDGE

Case 1:05-cv-01187-OWW -GSA Document 97 Filed 03/18/08 Page 29 of 29