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Sun City Pet Market LLC v. Honest Kitchen Inc.

United States District Court, D. Arizona

May 23, 2017

Sun City Pet Market LLC, Plaintiff,
v.
Honest Kitchen Incorporated, Defendant.

          ORDER

          DAVID G. CAMPBELL, UNITED STATES DISTRICT JUDGE

         Plaintiff Sun City Pet Market, LLC filed a complaint against Defendant Honest Kitchen, Inc. seeking monetary relief for an alleged breach of contract and the implied covenant of good faith and fair dealing. Doc. 1-2. Defendant has filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. 21. The motion is fully briefed (Docs. 21, 24, 28), and the Court concludes that oral argument is not necessary. For the reasons that follow, the Court will grant Defendant's motion to dismiss with leave to amend.

         I. Background.

         Plaintiff is an Arizona company with its principal place of business in Arizona. Doc. 1-2, ¶ 1. Defendant is a Delaware corporation registered to do business in Arizona. Id., ¶¶ 2-3. Plaintiff's complaint was originally filed in Arizona state court (Doc. 1-2), but was removed to this Court by Defendant on January 13, 2017 (Doc. 1).

         According to Plaintiff's complaint, Defendant is a family-owned business that makes healthy pet food and was a vendor at the Animal Supply Company West Area Buying Show (“Buying Show”) held in Los Angeles, CA from May 22 to May 23, 2016. Doc. 1-2, ¶¶ 10-11.[1] Plaintiff is a family-owned company that primarily sells dog and cat food. Id., ¶ 9. One of its agents attended the Buying Show and visited Defendant's booth. Id., ¶¶ 12, 15. Plaintiff placed an order for $90, 653.09 worth of goods (the “Order”). Id., ¶ 16. Plaintiff placed a second order for $62.69 which was filled by Animal Supply Company (“ASC”) on behalf of Defendant. Id., ¶ 17. The parties engaged in correspondence after the Order, but Defendant did not ship the goods listed in the Order. Id., ¶¶ 20-21.

         II. Legal Standard.

         A successful motion to dismiss under Rule 12(b)(6) must show either that the complaint lacks a cognizable legal theory or fails to allege facts sufficient to support its theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A complaint that sets forth a cognizable legal theory will survive a motion to dismiss as long as it contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 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.” Id. (citing Twombly, 550 U.S. at 556). “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.” Id. (citing Twombly, 550 U.S. at 556).

         III. Analysis.

         Plaintiff contends that the “Order was submitted in acceptance [of] the terms offered by [Defendant] and within the time constraints required by [Defendant]” and that a “valid and enforceable contract was formed between [the parties].” Doc. 1-2, ¶¶ 18-19. Defendant contends that (1) Plaintiff has failed to plead facts sufficient to establish the essential elements of contract formation; (2) Plaintiff's claim is barred by the statute of frauds; and (3) even if not barred, any contract would be between Plaintiff and ACS rather than Defendant. Doc. 21 at 4-6. Additionally, Defendant argues that Plaintiff has not asserted facts that could support a claim for breach of the implied covenant of good faith and fair dealing. Id. at 6-7.

         A. Choice of Law.

         Plaintiff bases its claims on Arizona law. Doc. 1-2. Defendant argues that California has a more significant relationship than Arizona to the alleged transaction and the parties, and that California law should apply to this dispute. Doc. 21 at 3.[2]Regardless, Defendant argues, Plaintiff's claims would fail under both California and Arizona law. Id. at 1. Plaintiff contends that Arizona law applies as the goods at issue were to be delivered in Arizona. Doc. 24 at 5-6. Like Defendant, Plaintiff appears to argue that the result would be the same under the law of either state because both “Arizona and California have adopted the Uniform Commercial Code (“UCC”), enacting nearly identical statutes governing commercial transaction” and resulting in no “conflict of law” in this case. Id. at 7. Because the Court concludes that Plaintiff's claims fail under Arizona law and the parties appear to agree that there are no material differences between the relevant laws of the two states, the Court need not decide which law applies.

         B. Contract Formation.

         Defendant argues that Plaintiff's complaint “fails to plead factual content sufficient to find that an agreement was reached between the parties[.]” Doc. 21 at 4. Specifically, Plaintiff does not provide facts supporting “the essential elements of contract formation - namely, offer, acceptance, or consideration.” Id.

         To prevail on a breach of contract claim, Plaintiff “must prove the existence of a contract, a breach of that contract, and resulting damages.” Aubuchon v. Maricopa Cty., No. CV-14-01706-PHX-SPL, 2016 WL 7130942, at *4 (D. Ariz. Feb. 29, 2016) (citing Graham v. Asbury, 540 P.2d 656, 657 (Ariz. 1975)); Thomas v. Montelucia Villas, LLC, 302 P.3d 617, 621 (Ariz. 2013). If no valid contract exists, there can be no breach. “It is elementary that for an enforceable contract to exist there must be an offer, an acceptance, consideration, and sufficient specification of terms so that the obligations involved can be ascertained.” Savoca Masonry Co. v. Homes & Son Const. Co., 542 P.2d 817, 819 (Ariz. 1975); Regal Homes, Inc. v. CNA Ins., 171 P.3d 610, 617 (Ariz.Ct.App. ...


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