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Chocolates By Bernard, LLC v. Chocolaterie Bernard Callebaut Ltd.

United States District Court, Ninth Circuit

July 11, 2013

CHOCOLATES BY BERNARD, LLC, et al., Plaintiffs,
v.
CHOCOLATERIE BERNARD CALLEBAUT LTD., et al., Defendants.

ORDER AND OPINION [Re: Motion at docket 50; Objection at docket 67]

JOHN W. SEDWICK, District Judge.

I. MATTERS PRESENTED

At docket 50 defendants Bernard Callebaut and Francesca Callebaut (collectively "Defendants") move for summary judgment. At docket 61, plaintiffs Chocolates by Bernard, LLC and Murray Kuzek (collectively "Plaintiffs") oppose the motion. Defendants reply at docket 66. At docket 67, Defendants object to some of the facts set out in Plaintiff's Statement of Facts at docket 62. Oral argument was heard on July 10, 2013.

II. BACKGROUND

Plaintiffs' complaint was filed in state court on March 15, 2010, and timely removed to this court based on diversity of citizenship. The original complaint named the following entities and persons as defendants: Chocolaterie Bernard Callebaut Ltd. (hereinafter "CBC"); Chocolates by Bernard Callebaut Ltd.; Bernard C. Chocolates Ltd.; The Chocolate Man; Bernard Callebaut; and Francesca Callebaut.[1] The same defendants were named in the Amended Complaint.[2] Subsequently, based on Plaintiffs' motion for voluntary dismissal, the court dismissed the claims against defendants Chocolates by Bernard Callebaut Ltd., Bernard C. Chocolates Ltd., and The Chocolate Man, [3] leaving three named defendants: CBC, Bernard Callebaut, and Francesca Callebaut. CBC is protected by a bankruptcy stay issued by a Canadian court. As a result, proceedings in this case are stayed as to CBC. The case is proceeding solely against Defendants.

Five claims are pled in the Amended Complaint. The first for breach of contract and the third for violation of certain statutes are directed solely at CBC.[4] These claims are not involved in the motion under consideration.

The second claim is directed at Defendants and asserts that they intentionally interfered with Plaintiffs' attempts to secure two separate prospective contracts with third parties.[5] The first interference was accomplished by various acts, all of which took place prior to May 1, 2007.[6] The second interference was accomplished by various other acts all of which took place prior to September 1, 2007.[7]

The fourth claim is one for intentional infliction of emotional distress suffered by plaintiff Kuzek based on the allegation that Defendants caused CBC to wrongfully refuse to ship chocolate products to plaintiff Chocolates by Bernard LLC. Refusing to ship products caused Chocolates by Bernard LLC to go out of business, resulting in Kuzek's inability to continue working in the United States.

The fifth claim alleges that Defendants, as well as CBC, are liable for CBC's violation of the covenant of good faith and fair dealing contained in the franchise agreement pursuant to which CBC licensed Chocolates by Bernard to distribute CBC products.

III. STANDARD OF REVIEW

Defendants have called their motion a motion for summary judgment. However, in their reply memo, Defendants explain that their "right to summary judgment rests entirely on the allegations in Plaintiffs' First Amended Complaint."[8] This is entirely consistent with the argument in Defendants' initial motion papers. The statement also shed light on Defendants' failure to file the separate statement of facts in support of the motion which Arizona's local rules require whenever a party moves for summary judgment.[8] The court concludes that the pending motion is actually a motion for judgment on the pleadings, rather than a motion for summary judgment. That being so, the court will not consider the plaintiff's statement of facts at docket 62 or the declaration of Murray Kuzek at docket 62-1. This decision renders the objection by Defendants at docket 67 moot.

A motion for judgment on the pleadings is the subject of Rule 12(c), not Rule 56. The court will apply the standard of review applicable to motions brought pursuant to Rule 12(c). "After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings."[9] Because "Rules 12(b)(6) and 12(c) are substantially identical, "[10] a motion for judgment on the pleadings is assessed under the standard applicable to a motion to dismiss for failure to state a claim upon which relief may be granted under Rule 12(b)(6).[11] Rule 12(b)(6) tests the legal sufficiency of a plaintiff's claims. In reviewing such a motion, "[a]ll allegations of material fact in the complaint are taken as true and construed in the light most favorable to the nonmoving party."[12] Dismissal for failure to state a claim can be based on either "the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory."[13] "Conclusory allegations of law... are insufficient to defeat a motion to dismiss."[14]

To avoid dismissal, a plaintiff must plead facts sufficient to "state a claim to relief that is plausible on its face."[15] "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."[16] "The plausibility standard is not akin to a probability requirement' but it asks for more than a sheer possibility that a defendant has acted unlawfully."[17] "Where a complaint pleads facts that are merely consistent' with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'"[18] "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief."[19]

In ruling on a Rule 12(c) motion, then, a court must "determine whether the facts alleged in the complaint, ... taken... as true, entitle the plaintiff to a legal remedy."[20] "If the complaint fails to articulate a legally sufficient claim, the complaint should be dismissed or judgment granted on the pleadings."[21] A Rule 12(c) motion is thus properly granted when, taking all ...


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