Court Opinion

ID: 856624
Source: CourtListenerOpinion
Date Created: 2013-03-28 23:27:05.872608+00
Date Added: 2024-06-11T13:11:59.542473
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             MAR 28 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

SULTAN HAMEED,                                   No. 11-15953

              Plaintiff - Appellant,             D.C. No. 2:10-cv-02276-MCE-
                                                 CMK
  v.

IHOP FRANCHISING LLC; IHOP                       MEMORANDUM *
PROPERTIES LLC; INTERNATIONAL
HOUSE OF PANCAKES INC.; IHOP
RESTAURANTS INC.; IHOP
PROPERTIES, INC; DINEEQUITY INC.,

              Defendants - Appellees.

                   Appeal from the United States District Court
                       for the Eastern District of California
                Morrison C. England, Chief District Judge, Presiding

                     Argued and Submitted February 14, 2013
                            San Francisco, California

Before: SCHROEDER, NOONAN, and MURGUIA, Circuit Judges.

       Sultan Hameed appeals the district court’s order dismissing his claims for

unjust enrichment, violations of California’s Unfair Competition Law (“UCL”),

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Cal. Bus. & Prof. Code § 17200 , et seq., accounting, and breach of contract against

International House of Pancakes, LLC, IHOP Franchising, LLC, IHOP Properties, LLC,

and DineEquity, Inc. (collectively, “IHOP”). Hameed’s allegations stem from three

contracts he entered into as an IHOP franchisee. We affirm.

      The district court dismissed Hameed’s claims pursuant to Fed. R. Civ. Proc.

41(b) for failure to prosecute. Because Hameed indicated his willingness to forgo

his accounting claim to obtain immediate appellate review, we construe the

dismissal as a Rule 41(a)(2) voluntary dismissal. Omstead v. Dell, Inc., 594 F.3d

1081, 1085 (9th Cir. 2010).

      The district court did not err in dismissing Hameed’s UCL claims related to

the Development Impact Assistance Program (“DIAP”) or the increases in the

property taxes he owed. Hameed did not plead a plausible cause of action with

regard to these claims. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009 ). He did not allege

that he suffered the losses necessary to trigger application of DIAP. Hameed

further had no cognizable interest in avoiding contractually required payments of

property taxes, and IHOP’s requirement of continued payments does not run afoul

of any constitutional, statutory, or regulatory scheme. Walker v. Countrywide

Home Loans, Inc., 121 Cal. Rptr. 2d 79, 87 (Cal. Ct. App. 2002); Gregory v.

Albertson’s, Inc., 128 Cal. Rptr. 2d 389, 395 (Cal. Ct. App. 2002).

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      The district court dismissed Hameed’s breach of contract claim related to his

increased property tax because Hameed failed to plead the existence of a “New

Lease,” which is a prerequisite to a breach under his theory of the claim. We

affirm the dismissal because even if Hameed did plead the existence of a “New

Lease,” the “New Lease” did not cause the increase in Hameed’s property tax.

Instead, as Hameed’s counsel conceded during oral argument, the sale of the

property, which allowed a new valuation under California law, caused the increase

in Hameed’s property tax obligations.

      The district court properly dismissed Hameed’s unjust enrichment claim

because under California law, unjust enrichment claims cannot proceed when the

parties have a valid contract regarding the same subject matter. Klein v. Chevron

U.S.A., Inc., 137 Cal. Rptr. 3d 293, 330 (Cal. Ct. App. 2012). The Equipment

Lease here was a valid contract that was performed according to its terms. The

contract is valid and not unconscionable, because Hameed has pointed to no

procedural defect in its formation. Davis v. O’Melveny & Myers, 485 F.3d 1066,

1072 (9th Cir. 2007) (procedural and substantive unconscionability required to

invalidate a contract).

      Hameed contends that the district court erred in dismissing as time-barred

his UCL claim related to the Equipment Lease. The district court correctly found

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that the claim accrued in 1998 when the contracts were formed. Aryeh v. Canon

Bus. Solutions, Inc., 55 Cal. 4th 1185, 1196 (2013). The theory of continuous

accrual does not apply because there is no allegation of a recurring wrongful act.

Unlike Aryeh, where the plaintiff alleged that each individual payment included an

unfair charge, see id. at 1200, here, Hameed’s contention is that the contractual

terms are unfair. The discovery rule also does not excuse Hameed’s untimeliness

because a reasonable person in his position would have discovered the alleged

unfairness of the contract’s terms at the inception of the contract. Norgart v.

Upjohn Co., 981 P.2d 79, 88 (Cal. 1999). Hameed has also not alleged a

continuous violation because the alleged unfairness stems not from a course of

conduct, but from the terms of the initial contract. Aryeh, 55 Cal. 4th at 1198. The

UCL claim is therefore time-barred.

      The district court did not abuse its discretion in dismissing Hameed’s

accounting claim with prejudice under Rule 41(a)(2) because Hameed,

understanding and accepting the risks involved, sought dismissal of his entire case

to pursue this appeal. See Omstead, 594 F.3d at 1085.

      AFFIRMED.

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