N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
STERE OSC OPE, LLC , a C a lifornia lim i te d lia bility c om pa ny ; C R O NKITE & KISSELL, LLC , a C a l ifornia lim ite d lia bility c om pa ny ; C LINT C R ONKITE; DAVID KISSELL,

Pla i ntiffs-Appe lla

nts,
v. U.S. B ANK NATIONAL ASSOC IATION, a

nat iona l ba

nking a ssoc i a tion; KIMGALB R A ITH, a n individual; PAULA OSW ALD, a n individual; OLALEYE FADAHUNSI, a n individual, De fe nda

n ts-Appe lle e s. No. 15-55370 D.C . No. 2:14-c v-05593-DDP-SS
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia De a n D. Pre ge rson, Distric t

Judge , Pre siding Argue d an d Subm i tte d De c e m be r 9, 2016 Pa sa de n a , C a l ifornia B e fore : C ALLAHAN, B EA, a nd IKUTA, C irc uit Judge s. 

# FIL ED
JAN 12 2017 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.Appe lla nts Ste re osc ope , LLC , C ronkite & Kisse ll, LLC , C lint C ronkite , a nd David Kisse ll (c olle c t ive ly , “ Ste re osc ope ” ) a ppe a l from the distric t

c o urt’ s dism issa l of the ir c om

pla int a ga inst Appe lle e s U.S. B ank Na tiona l Assoc i ation, Kim Ga lbra ith, a

nd Ola e y e Fa da

hunsi (c olle c tive ly , “ US B ank” ) arising from US B ank’ s ha

ndling of a

n e s c row a c c o unt. The distric t c ourt dismisse d Ste re osc ope ’ s c la im s without le ave to a m e nd. W e have jurisdic tion pursua nt to 28 U.S.C . § 1291, a

n d we a ffirm
. 1 1. “ W e re vie w de novo thedistric t c o urt’ s de c ision to gra

nt [a ] m otion to dism iss unde r Fe de ra l R

u le of C ivil Proc e dure 12(b)(6).” M anzare k v . St. Paul Fire& Marine

Ins. C o. , 519 F.3d 1025, 1030 (9th C ir. 2008) (c i ting Outdoor Me d ia Grp., Inc . v . C

ity of Be aumont , 506 F.3d 895, 899 (9th C ir. 2007)). “ W e
a c c e pt fa c tua l a lle gations in the c om pla int a s true and c o n strue the ple a dings in the light m ost fa

v ora b le to the nonm oving pa

rty .” Id. at 1031. “ C o nc lusory
a lle gations of la

w, howe ve r, a

re insuffic ie nt to de fe at a

m otion to dism

iss.” Le e v . C ity of Los Ange le

s , 250 F.3d 668, 679 (9th C ir. 2001) (c iting Epste in v . W ash. Ene rgy C o. , 83 F.3d 1136, 1140 (9th C ir. 1996)). The de nia l of le ave to a m e nd is
re vie we d for an a b u se of disc re tion, but the que stion of futility

of am e ndm e nt is

1 US B ank’ s m otion to strike portions of Ste re o sc ope ’ s re ply brie f is de nie d, a nd US B ank’ s re que s t to file a supple m e nta l brie f is gra nte d . US B ank’ s supple m e nta l brie f is de e m e d file d. 2re vie we d

de novo. Unite d State

s v . Unite d He althc a reIns. C o . , – F.3d –, 2016 W L7378731, a

t *6 (9th C ir. 2016). 2. Ste re osc ope ’ s c la im for inte ntiona l inte rfe re nc e with c ontra c tua l
re lations fa ils to sta

te a c la im upon whic h re l ie f c an be grante d. Eve n a ssum ing that Ste re osc ope a de quate ly

a lle ge d tha

t it ha d va l id c ontra c ts with third pa rtie s,
and tha t US B ank ha d knowle dge of the se c ontra c ts a t the tim e of its a lle ge d inte rfe re nc e , Ste re osc ope did not a de quate ly a lle ge c a usation. Se e Unite d

N at’l Maint., Inc . v . San Die

go C o nv e ntion C

tr., Inc
. , 766 F.3d 1002, 1006 (9th C ir. 2014) (re c iting e le m e nts of c la i m ), c e rt. de nie d , 135 S. C t. 980 (2015). “ It ha s be e n re pe a te dly he l d tha

t a pla i ntiff, se e king to hold one lia ble for unjustifia

bly induc i ng a

nothe r to bre a c h a

c ontra c t, m

ust a lle ge . . . tha

t the c o n tra c t would othe rwise have be e n pe rform e d.” Hahn v . Diaz-Barba , 194 C a l. App. 4th 1177, 1196 (2011) (e m

pha sis om itte d) (quoting Dry de n v . Tri-Valle y Grow e rs , 65 C a l. App. 3d 990, 997 (1977)). Ste re osc ope ’ s c om

p la int doe s not inc lude suc h a n
a lle gation. Thec o m

pla i nt inste a d m ake s c le a

r tha t Ste re o sc o pe ’ s re lationship with The R e se rve Ente rta inm e nt Group (“ TREG” ) soure d m onths be fore US B ank
a c c e pte d the de posit of $500,000 into the C he c km ate Esc row Ac c ount in April 2013, a nd inde e d be fore any

of the a lle g e d

fra u d or m isc onduc t by US B ank
oc c urre d.
33. Ste re osc ope ’ s c la im for inte ntiona l inte rfe re nc e with prospe c tive
e c onom ic a dva

nta ge fa ils for simila

r re a sons. This c la im

ha s e s se ntia l ly

the sa m e
e le m e nts a s a

c la im for inte ntiona l inte rfe re nc e with c ontra c tua l re l ations, but
a dditiona lly

“ re quire s proof tha

t the de fe nda

nt ‘ not only

inte rfe re d with the pla i ntiff’ s e xpe c ta

nc y , but e nga ge d in c onduc t tha t wa s wrongful by

som e le ga l
m e a sure othe r tha

n the fa c t of inte rfe re nc e itse lf.’ ” Fre sno Motors, LLC

v . Me rc e de s Be nz USA, LLC, 771 F.3d 1119, 1125 (9th C ir. 2014) (quoting D e lla Pe nna v . Toy o ta Motor Sale s, USA, Inc

. , 11 C a l. 4th 376, 393 (1995)). Not only do Ste re osc ope ’ s own a lle gations de fe at the c a usation e le m e nt, Ste re o sc ope ’ s
a lle gations do not indic a t e tha t US B ank’ s c onduc t “ wa s wrongful by som e le ga l
m e a sure othe r tha

n the fa c t of inte rfe re nc e itse lf.” Id. 4. Ste re osc ope ’ s ne glige nc e c la im fa ils to sta te a c la im upon whic h re lie f
c an be grante d. C a l ifornia c ourts ha ve c onsiste ntly

re c ogniz e d tha

t e sc row holde rs do not owedutie s to third pa rtie s to the e sc row, e v e n

whe n those pa rtie s ha ve an inte re s t in thee sc row tha

t is known to the e sc row holde r. Se e Summit Fin. Holdings, Ltd. v. C

o n t’l Law y e rs Title C o. , 27 C a l. 4th 705, 715–16 (2002), as modifie d on de nial of re h’g (M ay 15, 2002); Mark

ow i tz v . Fid. N

at’l Title C o. , 142 C a l. App. 4th 508, 525–29 (2006). To de t e rm ine whe the r US B ank owe d Ste re osc ope a

duty of c are , we a sse ss:
4the e xte nt to whic h the transa c tion wa s inte nde d to a ffe c t [Ste re o sc ope ] , the fore s e e a bility of ha rm to [it] , the de gre e of c e rta inty that [Ste re osc ope ] suffe re d injury , the c lose n e ss of the c onne c tion be twe e n [US B ank’ s] c onduc t a nd the injury

suffe re d, the m ora l bla m e atta c he d to [US B ank’ s] c onduc t, a n d the polic y

of pre ve nting future ha rm . Summit , 27 C a l. 4th a t 715 (quoting Biak anja v
. Irv ing , 49 C a l. 2d 647, 650 (1958)). Apply ing the se fa c tors to Ste re osc ope ’ s c om pla i nt re ve a ls no duty

owe d by US B ank to Ste re o sc ope . M ore ove r, Ste re osc ope ’ s c om pla int c onta ins no
a lle gations sugge sting tha t de pa rture from

this ruleis a

ppropria t e in this c a se . 2 5. Ste re osc ope did not a lle ge tha t US B a nk m a de an

a ffirm at ive
m isre pre se ntation, a

nd thus c annot sta

te a c la i m for fra ud by m isre p re se ntation. Robinson He lic opte r C

o., Inc . v . Dana C

o rp. , 34 C a l. 4th 979, 990 (2004) (re c iting
e le m e nts of fra

ud c l a im ). As for fra

udule n t c onc e a lm e nt, C a lifornia la w
re c o gniz e s tha

t a duty to disc l ose c an a

rise from a fiduc ia ry re lationship or from othe r ty pe s of re lationships. Hoffman v

. 162 N

. W olfe LLC , 228 C a l. App. 4th

2 The c a se s re lie d upon by Ste re osc ope are not to thec o ntra ry . Se e Tribe c a C os., LLC v . First Am. Title

Ins. C o. , 239 C a l. App. 4th 1088, 1114–15 (2015) (finding tha

t e sc row a ge nt did not bre a c h its duty to the single pa

rty to the e sc row whe n it re turne d

funds to thede p ositor); Lov e v . W hite , 56 C a l. 2d 192, 194 (1961) (holding tha

t whe re the pla intiff a

nd de fe n da

nt e n te re d a

n e sc row a gre e m e nt, a

nd titleto funds pla c e d in e sc row by the de fe nda

nt ne ve r pa sse d

to the pla i ntiff, the de fe nda

nt should re c ove r funds from e s c row holde r a

nd not the pla i ntiff); Todd v . Ve

ste rmark , 145 C a l. App. 2d 374, 380 (1956) (sugge sting tha t a third pa rty ’ s de m and to thee sc row holde r is not pa y a ble a bse nt a n instruc tion from a prope r party

to the e sc row). 51178, 1186–87 (2014), as modified on de nial of re h’g (Aug. 13, 2014), re v ie w de nie d (Nov. 25, 2014). B ut a

“ c o m m e rc ia l re lationship . . . without m ore ” will not suffic e . L.A. Me m’l C olise um C

omm’n v . Insomniac

, Inc
. , 233 C a l. App. 4th 803, 832 (2015). Stere osc ope c onc e de d tha t US B ank did not owe

it a fiduc ia ry duty to disc lose any

a lle ge dly c onc e a le d fa c t s, a

nd ha s not a lle ge d fa c ts de m onstra

ting tha t its re lat ionship with US B ank othe rwise im pose d a duty

of disc losure upon US B ank. 6. Ste re osc ope c ha lle nge s the distric t c ourt’ s sum

m a ry de nia l of le ave to
am e nd, but a

“ thorough re vie wof the re c ord” re ve a ls tha t “ granting le ave to a

m e nd would ha ve be e n futile .” Think

e t Ink Info. Re s., Inc . v . Sun Mic rosy

s., Inc
. , 368 F.3d 1053, 1061 (9th C ir. 2004); se ealso Foman v . Dav i s , 371 U.S. 178, 182 (1962) (sta

ting whe n de nia l of le ave to a

m e nd is wa

rrante d). At ora l a

rgum e nt, Ste re osc ope did not identify any a dditiona l fa c ts it c ould ple a d in orde r to sta te via b le c la im s. AFFIRM E D.

6