Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-05644/USCOURTS-cand-4_06-cv-05644-4/pdf.json

Parties Involved:
Bill Eagan
Plaintiff
Wendi Eckardt
Defendant
Dan Golesh
Plaintiff
Morgan Stanley DW Inc.
Defendant

Document Text:

United States District Court

For the Northern District of California

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The court finds the motion to be appropriate for decision without oral argument. See

Lake at Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 729 (9th

Cir. 1991) (court's consideration of moving and opposition papers is deemed adequate

substitute for formal hearing). The date for the hearing on the motion, previously set for

February 28, 2007, is VACATED.

United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

DAN GOLESH and BILL EAGAN,

Plaintiffs, No. C 06-5644 PJH

v. ORDER DENYING 

MOTION TO AMEND

MORGAN STANLEY DW INC., WENDI 

ECKARDT, and DOES 1 through 50, 

inclusive,

Defendants.

_______________________________/

Before the court is plaintiffs’ motion to amend the complaint which has been noticed 

for hearing on February 28, 2007. The matter has been fully briefed and given the

similarity of the issues raised with those previously considered by the court on plaintiffs’

motion for remand, the court finds that no hearing is necessary.1

Following the court’s denial of their motion to remand based on a finding that

defendant Eckardt, a California resident, was fraudulently joined in order to destroy

diversity, plaintiffs seek to amend their complaint to add a cause of action for intentional

misrepresentation against both Morgan Stanley and Eckardt. Plaintiffs had previously

characterized their fraud claim as one sounding in both promissory fraud and intentional

misrepresentation. The promissory fraud claim was based on Eckardt’s promise that if

plaintiffs sold at least $38,000/month, they would have continued employment; the

intentional misrepresentation claim was based on Eckardt’s representation that

Case 4:06-cv-05644-PJH Document 36 Filed 02/21/07 Page 1 of 3
United States District Court

For the Northern District of California

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$38,000/month was the minimum sales quota that defendants considered satisfactory. The

court previously found that the fraud claim was not viable under either characterization

because plaintiffs were unable to plead at least three of the five elements of both types of

fraud. 

Despite this finding, plaintiffs now seek to add a separate claim of intentional

misrepresentation (in addition to the previously pleaded fraud claim), based on the fact that

in addition to falsely promising them continued employment if they met a particular sales

goal, Eckardt also falsely represented that their performance would be considered

satisfactory if they met that same goal. The semantical difference between these

allegations, is slight at best and once again, the court finds that this distinction is without a

difference because the alleged additional representation could only be seen as false in light

of their termination despite meeting the sales goal. Although the complaint refers to

damage to their reputation as the damage sought to be redressed, the complaint also

states that defendant Morgan Stanley claimed that plaintiffs were “under performers” as

justification for their termination. Moreover, Morgan Stanley, not Eckardt, is accused of

causing this damage to plaintiffs. 

Because both alleged misrepresentations continue to be inextricably intertwined with

the termination of their employment, the court’s conclusion remains unchanged – as at-will

employees plaintiffs cannot show justifiable reliance under prevailing California law. 

Because the court set forth the law upon which this conclusion rests in the order denying

plaintiffs’ motion to remand, it is not repeated here. See November 29, 2006 Order. 

Moreover, plaintiffs have not even attempted to rebut evidence submitted by defendant in

opposition to plaintiffs’ motion to remand that the court previously found persuasive on

plaintiffs’ inability to establish the other elements of knowledge of falsity or intent to defraud.

While it appears to the court, as well as to defendant, that plaintiffs are attempting to

amend the complaint in order to destroy diversity jurisdiction, it is clear that the attempted

amendment would be futile as a cause of action for intentional misrepresentation, like

Case 4:06-cv-05644-PJH Document 36 Filed 02/21/07 Page 2 of 3
United States District Court

For the Northern District of California

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fraud, will not lie as to defendant Eckardt. Sorosky v. Burroughs Corp., 826 F.2d 794, 805

(9th Cir. 1987) (although leave to amend should be freely granted, leave may be denied for

reasons such as undue delay, bad faith motive, futility of amendment, or prejudice to

opposing party.)

For the above reasons, plaintiffs’ motion to amend is DENIED.

IT IS SO ORDERED.

Dated: February 21, 2007

 ___________________________ PHYLLIS J. HAMILTON

United States District Judge

Case 4:06-cv-05644-PJH Document 36 Filed 02/21/07 Page 3 of 3