Meadow

MEMORANDUM **

Plaintiffs Stephen H. Meadow (“Meadow”) and Walford Investments, Inc. (“Wal-ford”), appeal the district court’s grant of summary judgment in favor of defendant SunTrust Bank (“SunTrust”). The district court granted summary judgment in favor of SunTrust on all claims, holding that (1) plaintiffs do not have standing to maintain their fraud claim and (2) SunTrust is entitled to relief on its breach of contract counterclaims. As part of the latter determination, the court determined that plaintiffs’ affirmative defenses are without merit. We affirm.

Under California law, a shareholder does not have standing to bring a direct action for damages if the action is derivative, that is, on the corporation’s behalf. Schuster v. Gardner, 127 Cal.App.4th 305 , 25 Cal.Rptr.3d 468, 473 (2005). An action is derivative “if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock or property.” Jones v. H.F. Ahmanson & Co., 1 Cal.3d 93 , 81 Cal.Rptr. 592 , 460 P.2d 464, 470 (1969) (internal quotation marks omitted).

The gravamen of plaintiffs’ complaint in this case is injury to Teddi of California (“Teddi”), an apparel business that is…