United States District Court, D. Arizona
G. Campbell United States District Judge.
Revive You Media LLC filed a complaint in Maricopa County
Superior Court against Defendant Esquire Bank, alleging
various contract-related claims. Doc. 1-1 at
4-12. Defendant removed this action to federal
court (Doc. 1), and Defendant has filed a motion to dismiss
the complaint under Rule 12(b)(6) and (7) (Doc. 8). The
motion is fully briefed and oral argument will not aid the
Court's decision. Fed.R.Civ.P. 78(b); LRCiv 7.2(f). For
the reasons that follow, the Court will dismiss Counts Two
purposes of this motion, Plaintiff's factual allegations
are accepted as true. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). On January 28, 2016, Plaintiff, doing
business as LuminateSkin, SkinPerfect, TryLumaEssence,
SkinEssentials, TryRejuvaEssence, UltraCleanse, and Pure Slim
Cleanse, executed seven merchant agreements with Defendant.
Doc. 1-1 at 13-47. American Payment Solutions
(“APS”) was also a party to each agreement.
Id. These agreements require Defendant and APS to
provide certain payment processing services to Plaintiff.
agreements permit Defendant to create reserve accounts at
Defendant's bank “for all future indebtedness of
[Plaintiff] to [Defendant] or [APS] that may arise out of or
relate to the obligations of [Plaintiff] under this
Agreement, including, but not limited to, Chargebacks and
fees, in such amount as Defendant from time to time may
determine in its sole discretion.” E.g.,
id. at 16, ¶ 6. Defendant established reserve
accounts pursuant to each of the seven agreements.
Id. at 6.
agreements also permit Defendant to terminate each agreement
“upon at least 30 days' prior written notice to the
other parties.” E.g., id. at 17,
¶ 27. But Defendant could terminate an agreement
“immediately upon written notice” to Plaintiff
upon the occurrence of 11 listed events. Id.
Defendant terminated each of the seven agreements on or
before April 7, 2017, without providing proper notice to
Plaintiff of the termination. Id. at 5, ¶¶
the agreements explains the disposition of the reserve
accounts after termination:
The Reserve Account will be maintained for a minimum of six
months after the date on which this Agreement terminates or
until such time as [Defendant] determines that the release of
the funds to [Plaintiff] is prudent, in the best interest of
[Defendant], and commercially reasonable, and that
[Plaintiff's] account with [Defendant] is fully resolved.
Upon expiration of this six-month period, any balance
remaining in the Reserve Account will be paid to [Plaintiff].
[Defendant] will inform [Plaintiff] in writing of any charges
debited to the Reserve Account during this six-month period.
E.g., id. at 16, ¶ 6.
the terminations, Defendant did not inform Plaintiff in
writing of any debits to the seven reserve accounts.
Id. at 6, ¶¶ 13, 15. Yet six months after
the terminations, Defendant still retained the funds in all
seven accounts, which totaled approximately $182, 897.15 as
of October 2017. Id. at 6, ¶¶ 12, 14,
filed a complaint in January 2018 seeking damages arising
from breach of contract (Count One), breach of the covenant
of good faith and fair dealing (Count Two), unjust enrichment
(Count Four), and conversion (Count Five). Id. at
7-12. Plaintiff also seeks a declaratory judgment (Count
Three). Id. at 9-10.
Failure to Join Necessary Party.
contends that the Court must dismiss the complaint because
Plaintiff failed to join a necessary party. Doc. 8 at 7-8.
12(b)(7) allows dismissal of an action for failure to join a
necessary and indispensable party under Rule 19. Rule 19
a three-step process for determining whether the court should
dismiss an action for failure to join a purportedly
indispensable party. First, the court must determine whether
the absent party is “necessary[.]” . . . If the
absent party is “necessary, ” the court must
determine whether joinder is “feasible.” Finally,
if joinder is not “feasible, ” the court must
decide whether the absent party is “indispensable,
” i.e., whether in “equity and good
conscience” the action can continue without the party.
United States v. Bowen, 172 F.3d 682, 688 (9th Cir.
1999) (citations omitted); see also Salt River Project
Agric. Improvement and Power Dist. v. Lee, 672 F.3d
1176, 1179 (9th Cir. 2012).
entity is a required party under Rule 19 if it is subject to
service of process and its joinder will not deprive the court
of subject matter jurisdiction, and at least one of the
following conditions must be met:
(A) in that person's absence, the court cannot accord
complete relief among existing parties; or
(B) that person claims an interest relating to the subject of
the action and is so situated that disposing of the action in
the person's absence may:
(i) as a practical matter impair or impede the person's
ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
Fed. R. Civ. P. 19(a)(1).
contends that APS is a required party under Rule 19(a)(1)(A)
because Section 27 of the agreements identifies APS as a
party that could terminate the agreements or take action that
would warrant a termination. Doc. 8 at 8. For this reason,
Defendant argues, the Court “cannot accord complete
relief without the involvement of APS.” Id.
But Defendant has not explained how Section 27 renders APS
necessary in light of Plaintiff's allegations. The
complaint asserts that Defendant, not APS, breached the
agreements. Taking those allegations as true, the ...