NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

STEREOSCOPE, LLC, a California

limited liability company; CRONKITE &

KISSELL, LLC, a California limited

liability company; CLINT CRONKITE;

DAVID KISSELL, 

Plaintiffs-Appellants,

 v.

U.S. BANK NATIONAL

ASSOCIATION, a national banking

association; KIM GALBRAITH, an

individual; PAULA OSWALD, an

individual; OLALEYE FADAHUNSI, an

individual, 

Defendants-Appellees.

No. 15-55370

D.C. No. 

2:14-cv-05593-DDP-SS

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

Dean D. Pregerson, District Judge, Presiding

Argued and Submitted December 9, 2016

Pasadena, California

Before: CALLAHAN, BEA, and IKUTA, Circuit Judges.

FILED

JAN 12 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

* This disposition is not appropriate for publication and is not precedent

except as provided by Ninth Circuit Rule 36-3.
Appellants Stereoscope, LLC, Cronkite & Kissell, LLC, Clint Cronkite, and

David Kissell (collectively, “Stereoscope”) appeal from the district court’s

dismissal of their complaint against Appellees U.S. Bank National Association,

Kim Galbraith, and Olaeye Fadahunsi (collectively, “US Bank”) arising from

US Bank’s handling of an escrow account. The district court dismissed

Stereoscope’s claims without leave to amend. We have jurisdiction pursuant to

28 U.S.C. § 1291, and we affirm.

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1. “We review de novo the district court’s decision to grant [a] motion to

dismiss under Federal Rule of Civil Procedure 12(b)(6).” Manzarek v. St. Paul

Fire & Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir. 2008) (citing Outdoor

Media Grp., Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007)). “We

accept factual allegations in the complaint as true and construe the pleadings in the

light most favorable to the nonmoving party.” Id. at 1031. “Conclusory

allegations of law, however, are insufficient to defeat a motion to dismiss.” Lee v.

City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001) (citing Epstein v. Wash.

Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996)). The denial of leave to amend is

reviewed for an abuse of discretion, but the question of futility of amendment is

1 US Bank’s motion to strike portions of Stereoscope’s reply brief is

denied, and US Bank’s request to file a supplemental brief is granted. US Bank’s

supplemental brief is deemed filed.

2
reviewed de novo. United States v. United Healthcare Ins. Co., – F.3d –,

2016 WL7378731, at *6 (9th Cir. 2016).

2. Stereoscope’s claim for intentional interference with contractual

relations fails to state a claim upon which relief can be granted. Even assuming

that Stereoscope adequately alleged that it had valid contracts with third parties,

and that US Bank had knowledge of these contracts at the time of its alleged

interference, Stereoscope did not adequately allege causation. See United Nat’l

Maint., Inc. v. San Diego Convention Ctr., Inc., 766 F.3d 1002, 1006 (9th Cir.

2014) (reciting elements of claim), cert. denied, 135 S. Ct. 980 (2015). “It has

been repeatedly held that a plaintiff, seeking to hold one liable for unjustifiably

inducing another to breach a contract, must allege . . . that the contract would

otherwise have been performed.” Hahn v. Diaz-Barba, 194 Cal. App. 4th 1177,

1196 (2011) (emphasis omitted) (quoting Dryden v. Tri-Valley Growers, 65 Cal.

App. 3d 990, 997 (1977)). Stereoscope’s complaint does not include such an

allegation. The complaint instead makes clear that Stereoscope’s relationship with

The Reserve Entertainment Group (“TREG”) soured months before US Bank

accepted the deposit of $500,000 into the Checkmate Escrow Account in April

2013, and indeed before any of the alleged fraud or misconduct by US Bank

occurred. 

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3. Stereoscope’s claim for intentional interference with prospective

economic advantage fails for similar reasons. This claim has essentially the same

elements as a claim for intentional interference with contractual relations, but

additionally “requires proof that the defendant ‘not only interfered with the

plaintiff’s expectancy, but engaged in conduct that was wrongful by some legal

measure other than the fact of interference itself.’” Fresno Motors, LLC v.

Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014) (quoting Della

Penna v. Toyota Motor Sales, USA, Inc., 11 Cal. 4th 376, 393 (1995)). Not only

do Stereoscope’s own allegations defeat the causation element, Stereoscope’s

allegations do not indicate that US Bank’s conduct “was wrongful by some legal

measure other than the fact of interference itself.” Id.

4. Stereoscope’s negligence claim fails to state a claim upon which relief

can be granted. California courts have consistently recognized that escrow holders

do not owe duties to third parties to the escrow, even when those parties have an

interest in the escrow that is known to the escrow holder. See Summit Fin.

Holdings, Ltd. v. Cont’l Lawyers Title Co., 27 Cal. 4th 705, 715–16 (2002), as

modified on denial of reh’g (May 15, 2002); Markowitz v. Fid. Nat’l Title Co.,

142 Cal. App. 4th 508, 525–29 (2006). To determine whether US Bank owed

Stereoscope a duty of care, we assess: 

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the extent to which the transaction was intended to affect

[Stereoscope], the foreseeability of harm to [it], the degree of certainty

that [Stereoscope] suffered injury, the closeness of the connection

between [US Bank’s] conduct and the injury suffered, the moral

blame attached to [US Bank’s] conduct, and the policy of preventing

future harm.

Summit, 27 Cal. 4th at 715 (quoting Biakanja v. Irving, 49 Cal. 2d 647, 650

(1958)). Applying these factors to Stereoscope’s complaint reveals no duty owed

by US Bank to Stereoscope. Moreover, Stereoscope’s complaint contains no

allegations suggesting that departure from this rule is appropriate in this case.

2

 

5. Stereoscope did not allege that US Bank made an affirmative

misrepresentation, and thus cannot state a claim for fraud by misrepresentation. 

Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 990 (2004) (reciting

elements of fraud claim). As for fraudulent concealment, California law

recognizes that a duty to disclose can arise from a fiduciary relationship or from

other types of relationships. Hoffman v. 162 N. Wolfe LLC, 228 Cal. App. 4th

2 The cases relied upon by Stereoscope are not to the contrary. See

Tribeca Cos., LLC v. First Am. Title Ins. Co., 239 Cal. App. 4th 1088, 1114–15

(2015) (finding that escrow agent did not breach its duty to the single party to the

escrow when it returned funds to the depositor); Love v. White, 56 Cal. 2d 192, 194

(1961) (holding that where the plaintiff and defendant entered an escrow

agreement, and title to funds placed in escrow by the defendant never passed to the

plaintiff, the defendant should recover funds from escrow holder and not the

plaintiff); Todd v. Vestermark, 145 Cal. App. 2d 374, 380 (1956) (suggesting that a

third party’s demand to the escrow holder is not payable absent an instruction from

a proper party to the escrow).

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1178, 1186–87 (2014), as modified on denial of reh’g (Aug. 13, 2014), review

denied (Nov. 25, 2014). But a “commercial relationship . . . without more” will

not suffice. L.A. Mem’l Coliseum Comm’n v. Insomniac, Inc., 233 Cal. App. 4th

803, 832 (2015). Stereoscope conceded that US Bank did not owe it a fiduciary

duty to disclose any allegedly concealed facts, and has not alleged facts

demonstrating that its relationship with US Bank otherwise imposed a duty of

disclosure upon US Bank. 

6. Stereoscope challenges the district court’s summary denial of leave to

amend, but a “thorough review of the record” reveals that “granting leave to amend

would have been futile.” Thinket Ink Info. Res., Inc. v. Sun Microsys., Inc.,

368 F.3d 1053, 1061 (9th Cir. 2004); see also Foman v. Davis, 371 U.S. 178, 182

(1962) (stating when denial of leave to amend is warranted). At oral argument,

Stereoscope did not identify any additional facts it could plead in order to state

viable claims.

AFFIRMED.

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