1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ALCON 3PL, INC. a CV 20-02523-RSWL-PVCx 12 California corporation,

13 Plaintiff, 14 ORDER re: MOTION TO

DISMISS [34]

v. 15 16 SUN GROUP PARTNERS LLC, a California limited 17 liability company; GLENN SANDS, an individual; 18 BRENT SANDS, an 19 individual; DOES 1 THROUGH 10, INCLUSIVE 20 Defendants. 21 22 23 Plaintiff Alcon 3PL, Inc. (“Plaintiff”) brought the 24 instant Action against Defendants Sun Group Partners, 25 LLC (“Defendant Sun Group”), and Glenn and Brent Sands 26 (“Individual Defendants”) alleging breach of contract, 27 open book account, account stated, and quantum meruit 28 for services rendered. Currently before the Court is 1 Defendant’s Motion to Dismiss for Lack of Personal

2 Jurisdiction and Failure to State a Claim. [34]

3 (“Motion”). 4 Having reviewed all papers submitted pertaining to 5 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: 6 the Court GRANTS Defendants’ Motion to Dismiss claims 7 against Individual Defendants and DENY Defendants’ 8 Motion to Dismiss claims against Defendant Sun Group 9 I. BACKGROUND 10 A. Factual Background 11 Plaintiff is a corporation with its principal place 12 of business in, and incorporated under the laws of, 13 California. First Am. Compl. (“FAC”) ¶ 2, ECF No. 1. 14 Defendant Sun Group is a limited liability company with 15 its principal place of business in Palm Beach Gardens, 16 Florida. Id. ¶ 3. Individual Defendants are citizens 17 of Florida, who are, and at all times mentioned were, 18 the directors, managers, and/or members of Defendant Sun 19 Group. Id. ¶ 6. 20 Plaintiff alleges that each Individual Defendant 21 was the agent, joint venture, and/or employee of every 22 other Defendant, and acted within the course and scope 23 of such agency, with the permission and consent of each 24 of the other Defendants. Id. ¶ 8. Plaintiff claims 25 that Defendant Sun Group was a mere shell, 26 instrumentality, and conduit through which Individual 27 Defendants carried on business. Id. ¶ 3. Plaintiff 28 states that Defendant Sun Group is controlled, 1 dominated, and operated by such Defendants. Id. ¶ 4.

2 Indeed, Plaintiff claims that the activities and

3 business of Defendant Sun Group were carried out without 4 abiding by corporate formalities, including “[not] 5 holding annual meetings, and without keeping records or 6 minutes of any proceedings, or maintain[ing] written 7 solutions.” Id. 8 In late 2020 and early 2021, Individual Defendants 9 contacted Plaintiff about providing warehousing services 10 to Defendant Sun Group. Id. ¶ 14. The Parties executed 11 a contract and agreed that Plaintiff would receive the 12 sum of $38,592.00 per month for its warehousing 13 services. Id. Starting on May 4, 2021, Defendants 14 allegedly stopped paying the monthly sum and have not 15 paid since. Id. ¶ 15. Plaintiff contends that 16 Defendants now owe Plaintiff a principal balance of at 17 least $452,992. Id. Plaintiff has performed all the 18 terms and conditions of the contract, except for 19 provisions that have been excused by Defendants’ 20 conduct. Id. ¶ 17. 21 B. Procedural Background 22 Plaintiff filed its Complaint [1] on April 14, 2022. 23 Defendant then filed a Motion to Dismiss [23] on 24 September 1, 2022, which the Court granted on 25 November 17, 2022. Defendants filed their First Amended 26 Complaint [33] on December 14, 2022, and Defendants 27 filed the instant Motion [34] on December 28, 2022. 28 Plaintiff opposed [41] the Motion on January 17, 2023. 1 II. DISCUSSION

2 A. Legal Standard

3 1. 12(b)(2) Motion 4 Federal Rule of Civil Procedure 12(b)(2) authorizes 5 dismissal of an action for lack of personal 6 jurisdiction. Fed. R. Civ. P. 12(b)(2). Once a 7 defendant moves to dismiss for lack of personal 8 jurisdiction, the plaintiff bears the burden of 9 demonstrating that jurisdiction is appropriate. 10 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 11 800 (9th Cir. 2004). 12 Where the motion is “based on written materials 13 rather than an evidentiary hearing, the plaintiff need 14 only make a prima facie showing of jurisdictional facts” 15 to survive dismissal. Id. (internal quotation marks 16 omitted). Absent an evidentiary hearing this court 17 “only inquire[s] into whether [the plaintiff’s] 18 pleadings and affidavits make a prima facie showing of 19 personal jurisdiction.” Caruth v. Int’l Psychoanalytical 20 Ass’n, 59 F.3d 126, 127-28 (9th Cir. 1995); Boschetto v. 21 Hansing, 539 F.3d 1011 (9th Cir. 2008). To make a prima 22 facie showing, the plaintiff must allege facts that, if 23 true, would support a finding of jurisdiction. Ballard 24 v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). Although 25 the plaintiff cannot rely on the bare allegations of the 26 complaint, uncontroverted allegations in the complaint 27 must be taken as true and conflicts between statements 28 contained in the parties’ affidavits must be resolved in 1 the plaintiff’s favor. Schwarzenegger, 374 F.3d at 800.

2 2. 12(b)(6) Motion

3 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 4 allows a party to move for dismissal of one or more 5 claims if the pleading fails to state a claim upon which 6 relief can be granted. A complaint must “contain 7 sufficient factual matter, accepted as true, to state a 8 claim to relief that is plausible on its face.” 9 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation 10 omitted). Dismissal is warranted for a “lack of a 11 cognizable legal theory or the absence of sufficient 12 facts alleged under a cognizable legal theory.” 13 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 14 (9th Cir. 1988) (citation omitted). 15 In ruling on a 12(b)(6) motion, a court may 16 generally consider only allegations contained in the 17 pleadings, exhibits attached to the complaint, and 18 matters properly subject to judicial notice. Swartz v. 19 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court 20 must presume all factual allegations of the complaint to 21 be true and draw all reasonable inferences in favor of 22 the non-moving party. Klarfeld v. United States, 23 944 F.2d 583, 585 (9th Cir. 1991). “[T]he issue is not 24 whether a plaintiff will ultimately prevail but whether 25 the claimant is entitled to offer evidence to support 26 the claims.” Jackson v. Birmingham Bd. of Educ., 27 544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 28 416 U.S. 232, 236 (1974)). While a complaint need not 1 contain detailed factual allegations, a plaintiff must

2 provide more than “labels and conclusions” or “a

3 formulaic recitation of the elements of a cause of 4 action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 5 (2007). However, “a well-pleaded complaint may proceed 6 even if it strikes a savvy judge that actual proof of 7 those facts is improbable, and ‘that a recovery is very 8 remote and unlikely.’” Id. at 556 (quoting Scheuer v. 9 Rhodes, 416 U.S. 232, 236 (1974)). 10 3. Alter Ego 11 The alter ego doctrine “arises when a plaintiff 12 comes into court claiming that an opposing party is 13 using the corporate form unjustly and in derogation of 14 the plaintiff’s interests. In certain circumstances, 15 the court will disregard the corporate entity and will 16 hold the individual shareholders liable for the actions 17 of the corporation.” Mesler v. Bragg Management Co., 18 702 P.2d 601, 611 (Cal. 1985). The purpose of the 19 doctrine is to bypass the corporate entity in order to 20 avoid injustice. Its “essence . . . is that justice be 21 done [,] . . . [and t]hus the corporate form will be 22 disregarded only in narrowly defined circumstances and 23 only when the ends of justice so require.” Id. at 602; 24 see also Roman Cath. Archbishop of San Francisco v. 25 Superior Court, Cal. Rptr. 338, 344 (Ct. App. 1971) 26 (“The terminology ‘alter ego’ or ‘piercing the corporate 27 veil’ refers to situations where there has been an abuse 28 of corporate privilege, because of which the equitable 1 owner of a corporation will be held liable for the

2 actions of the corporation.”

3 Before the doctrine can be invoked, two elements 4 must be alleged. “First, there must be such a unity of 5 interest and ownership between the corporation and its 6 equitable owner that the separate personalities of the 7 corporation and the shareholder do not in reality 8 exist.” Sonora Diamond Corp. v. Superior Court, 99 Cal. 9 Rptr. 2d 824, 827 (Ct. App. 2000). “Second, there must 10 be an inequitable result if the acts in question are 11 treated as those of the corporation alone.” Id.; see 12 also Mesler, 702 P.2d at 601 (“There is no litmus test 13 to determine when the corporate veil will be pierced; 14 rather the result will depend on the circumstances of 15 each particular case.”). 16 A plaintiff can plead a number of different factors 17 to show unity of interest. Among the factors to be 18 considered are: (1) commingling of funds and other 19 assets of the two entities; (2) the holding out by one 20 entity that it is liable for the debts of the other; 21 (3) identical equitable ownership in the two entities; 22 (4) use of the same offices and employees; (5) and use 23 of one as a mere shell or conduit for the affairs of the 24 other. Wady v. Provident Life & Accident Ins. Co. of 25 Am., 216 F. Supp. 2d 1060, 1066 (C.D. Cal. 2002). 26 /// 27 /// 28 B. Analysis 1 1. Alter Ego Liability

2 To invoke the alter ego doctrine, a plaintiff must

3 allege that (1) there was a unity of ownership between 4 the corporation and its equitable owner that the 5 separate personalities of the corporation and the 6 shareholder do not really exist, and (2) there will be 7 an inequitable result if the acts in question are 8 treated as those of the corporation alone. Gerritsen v. 9 Warner Bros. Ent. Inc., 116 F. Supp. 3d 1104, 1136 10 (C.D. Cal. 2015). Conclusory allegations of “alter ego” 11 status are insufficient to state a claim. Id. Rather, 12 a plaintiff must allege specific facts supporting both 13 necessary elements. Id. 14 “The first prong of the alter ego test . . . has 15 alternatively been stated as requiring a showing that 16 the parent controls the subsidiary to such a degree as 17 to render the latter the mere instrumentality of the 18 former.” NetApp, Inc. v. Nimble Storage, Inc., 19 No. 5:13-CV-05058 LHK (HRL), 2015 WL 400251 (N.D. Cal. 20 Jan 29, 2015). Specifically, when a parent dictates 21 every facet of the business ranging from broad policy 22 decisions to routine day-to-day matters, it establishes 23 the first prong. Gerritsen, 116 F. Supp. 3d at 1136. 24 In Ultratech, Inc. v. Ensure NanoTech (Beijing), 25 Inc., the plaintiff was able to satisfy the unity of 26 interest element by alleging that an individual was “the 27 president, principal, and sole owner of Start Science, 28 that he controlled aspects of Start Science’s business 1 and day-to-day operations, and that he negotiated and

2 signed the sales agreement.” 108 F. Supp. 3d 816, 826

3 (N.D. Cal. 2015). 4 Conversely, in Holly v. Alta Newport Hospital, 5 Inc., the plaintiff’s allegations that a non-hospital 6 defendant was “doing business as a hospital . . . owned 7 and operated and was responsible for the administration, 8 operation and business conducted by the Hospital” were 9 “devoid of any factual allegations” that would support a 10 finding of a unity of interest. No. 2:19-CV-07496-ODW 11 (MRWX), 2020 WL 1853308, at *3 (C.D. Cal. Apr. 10, 12 2020). 13 Here, Plaintiff fails to allege sufficient factual 14 matter to satisfy the unity of ownership element. See 15 generally FAC. Instead, Plaintiff simply made vague 16 statements regarding the actions and responsibilities of 17 Individual Defendants. FAC at 3:12-5:16. For example, 18 Plaintiff stated that “[Defendant] Sun Group is . . . a 19 mere . . . instrumentality for individual manipulations 20 . . . through which such [Individual] Defendants carried 21 on business in the name of [Defendant] Sun Group while 22 exercising complete control and dominance” but failed to 23 offer any specific facts as to what activities and 24 behavior of Individual Defendants constituted “carrying 25 out business in the name of [Defendant] Sun Group while 26 exercising complete control.” Id. 27 Additionally, Plaintiff alleges that “[Defendant] 28 Sun Group was conceived, intended, and used by such 1 Defendants as a device to avoid liability” without

2 alleging any facts about what Individual Defendants did

3 to avoid liability. Id. Plaintiff states that 4 Defendant Sun Group was operated and controlled by 5 Individual Defendants and that it “didn’t abide by 6 corporate formalities,” but did not allege specific 7 facts as to how Defendant Sun Group failed to abide by 8 corporate formalities. Id. Instead, Plaintiff simply 9 claims that Defendant Sun Group was “[not] holding 10 annual meetings, not keeping minutes, not maintaining 11 written solutions, or issuance of stock” without 12 offering facts as to how Defendant Sun Group failed to 13 abide by the listed formalities. Id. 14 Plaintiff does not offer any specific facts about 15 Individual Defendants’ actions while conducting business 16 for Sun Group. Id. Instead, Plaintiff recites vague 17 statements and conclusory allegations. Id. Here, 18 unlike in Ultratech, where it was alleged that the 19 defendant was the sole owner of a corporation and 20 controlled all aspects of its business, Plaintiff fails 21 to offer any specific facts about the Individual 22 Defendants’ title or responsibilities within Defendant 23 Sun Group. Id. 24 Also, like in Holly, where the allegations were 25 “devoid of factual matter” and simply stated a 26 corporation was owned, controlled, and doing business as 27 another, Plaintiff simply states that Sun Group was 28 “controlled, dominated and operated” by Individual 1 Defendants without offering any facts to support these

2 claims. Id. In sum, Plaintiff has failed to

3 sufficiently establish a unity of ownership between 4 Defendant Sun Group and Individual Defendants. 5 Therefore, the Court concludes that Defendant Sun 6 Group is not the alter ego of Individual Defendants. 7 2. Personal Jurisdiction 8 Under Rule 12(b), once a defendant files a motion 9 to dismiss for lack of personal jurisdiction, the 10 plaintiff must bear the burden of proof to establish 11 jurisdiction. Schwarzenegger, 374 F.3d at 800. For a 12 nonresident defendant to be subject to jurisdiction 13 consistent with due process, that defendant must have 14 “minimum contacts” with the forum and those contacts 15 must be substantial enough to not offend “traditional 16 notions of fair play and substantial justice.” 17 CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 18 1073 (9th Cir. 2011) (internal citation omitted). 19 Specific jurisdiction is analyzed under a three- 20 prong test which is stated as follows: (1) the non- 21 resident defendant must purposefully direct his 22 activities to, or consummate some transaction with, the 23 forum or resident thereof, or perform such act by which 24 he purposefully avails himself of the privileges of that 25 forum; (2) the claim must arise out of the forum related 26 activities; and (3) the exercise of jurisdiction must be 27 reasonable in that it must comport with the notions of 28 fair play and substantial justice. Id. The plaintiff 1 bears the burden of satisfying the first two prongs of

2 the test and if the plaintiff fails to establish either

3 prong, then personal jurisdiction is not established. 4 Schwarzenegger, 374 F.3d at 802. However, if the 5 plaintiff succeeds in proving the first two elements of 6 the test, then the burden shifts to the defendant to 7 present a “compelling case” that the exercise of 8 jurisdiction would be unreasonable. Id. 9 a. Individual Defendants 10 Even if there was alter ego liability, there is no 11 personal jurisdiction over Individual Defendants. 12 Plaintiff alleges that Individual Defendants have 13 sufficient minimum contacts to support the Court’s 14 exercise of personal jurisdiction over them. See 15 generally FAC. However, both Individual Defendants are 16 citizens of Florida, reside in Florida, and did not 17 physically enter California in relation to this dispute. 18 Id. 19 Plaintiff points to Individual Defendants actions 20 directed towards California as evidence of minimum 21 contacts, but Individual Defendants simply arranged for 22 warehousing services on behalf of Defendant Sun Group. 23 Id. “The fiduciary shield doctrine buffers corporate 24 officers from personal jurisdiction when their official 25 duties were their only contact with a forum state.” 26 ProSource Discounts, Inc. v. Dye, No. 2:19-CV-00489-AB- 27 JC, 2019 WL 6729702 (C.D. Cal. July 23, 2019) (citation 28 omitted). As mentioned earlier, Individual Defendants 1 only directed actions towards California while acting in

2 their corporate capacity as agents for Defendant Sun

3 Group. FAC 5:21-7:16. 4 Plaintiff asserts that Defendant Sun Group is the 5 alter ego of Individual Defendants and thus, Individual 6 Defendants should be liable for Defendant Sun Group’s 7 actions directed toward California. FAC ¶¶ 3-5. 8 However, as discussed above, Plaintiff failed to 9 establish the first element necessary to invoke the 10 alter ego doctrine and therefore, the actions of 11 Defendant Sun Group cannot be imputed onto Individual 12 Defendants. Id. 13 Thus, Individual Defendants’ actions do not satisfy 14 the first prong of the Court’s specific jurisdiction 15 analysis and the Court does not exercise personal 16 jurisdiction over Individual Defendants. 17 Therefore, the Court GRANTS the motion to dismiss 18 as to the claims against Individual Defendants Glenn 19 Sands and Brett Sands. 20 b. Defendant Sun Group 21 Plaintiff asserts that the Court should exercise 22 personal jurisdiction over Defendant Sun Group because 23 it has sufficient “minimum contacts” with the state of 24 California. The same specific personal jurisdiction 25 test that the Court applied for the Individual 26 Defendants is applicable here. 27 /// 28 /// 1 i. First Prong of the Minimum Contacts

2 Analysis

3 The first prong of this test states: “the non- 4 resident defendant must purposefully direct his 5 activities or consummate some transaction with the forum 6 or resident thereof; or perform such act by which he 7 purposefully avails himself of the privileges of that 8 forum.” CollegeSource, Inc. v. AcademyOne, Inc., 9 653 F.3d 1066, 1073 (9th Cir. 2011) (internal citation 10 omitted). 11 Here, Defendant Sun Group entered into an agreement 12 with Plaintiff, a California corporation, to use 13 Plaintiff’s warehousing services. FAC ¶¶ 5-7. 14 Defendant Sun Group sent their materials for storage to 15 Plaintiff, and Defendant Sun Group directed Plaintiff to 16 take the materials for storage in Plaintiff’s warehouse 17 located in the City of Commerce, California. Id. 18 Defendant argues that because Defendant Sun Group 19 did not originally plan to use a warehouse in 20 California, its actions do not constitute “purposeful 21 availment” for the purposes of the first prong. Mot. 22 12:16-13:15. This logic fails because Defendant Sun 23 Group ultimately used a warehouse located in California 24 and owned by a California corporation. FAC ¶¶ 5-7. 25 Thus, despite its reason for doing so, Defendant Sun 26 Group purposefully availed itself of the privileges of 27 California. FAC 5:21-7:16. See Axiom Foods, Inc. v. 28 Acerchem Int’l, Inc., 874 F.3d 1064, 1068 (9th Cir. 1 2017) (To support the exercise of personal jurisdiction

2 “the relationship between the nonresident defendant,

3 forum and litigation must arise 4 ii. Second Prong of the Minimum Contacts 5 Analysis 6 The second prong of the specific personal 7 jurisdiction analysis states that the claim must arise 8 from the forum-related activities. CollegeSource, Inc. 9 v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 10 2011). Here, Plaintiff’s breach of contract claim 11 arises from Defendant Sun Group storing its materials 12 at Plaintiff’s warehouse in California. See generally 13 FAC. Plaintiff alleges that Defendant Sun Group failed 14 to continue to pay the agreed upon monthly payment for 15 the storage of Defendant Sun Group’s materials in 16 California. Id. Therefore, this Action arises from 17 Defendant Sun Group’s forum-related activities and the 18 second prong of the specific jurisdiction analysis is 19 satisfied. 20 iii. Third Prong of the Minimum Contacts 21 Analysis 22 Since the first two prongs of the specific personal 23 jurisdiction analysis have been satisfied, the burden of 24 proof shifts to Defendant Sun Group to prove that the 25 exercise of jurisdiction would be unreasonable. 26 CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 27 1073 (9th Cir. 2011). Here, Defendant Sun Group argues 28 that since it originally intended to warehouse the 1 materials in another state but was allegedly unable to

2 do so due to the COVID-19 pandemic, holding it

3 responsible for a “once in a century global economic 4 disruption [would be] unprecedented and unreasonable.” 5 Mot. 14:17-24. Defendant Sun Group contends it was 6 “pure happenstance” that it used a warehouse in 7 California to store its materials, but the unplanned 8 nature of its activities in the forum state does not 9 necessarily excuse it from facing litigation in 10 California. Id. Instead, the Court must assess the 11 following factors to determine the reasonableness of 12 exercising jurisdiction. 13 There are seven factors that guide the Court’s 14 inquiry into whether the exercise of jurisdiction is 15 reasonable and does not offend the “notions of fair 16 play.” Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th 972, 17 983–84 (9th Cir. 2021). The factors are as follows: 18 (1) the extent of the defendant’s purposeful involvement 19 with the forum state’s affairs; (2) the burden placed on 20 the defendant in order to litigate in that forum; 21 (3) the extent of any conflict with the sovereignty of 22 the defendant’s state; (4) the forum’s state interest in 23 adjudicating the dispute; (5) the most efficient 24 judicial resolution of the controversy; (6) the 25 importance of the forum to the plaintiff’s interests; 26 and (7) the existence of an alternative forum. Id. 27 Here, as noted above, the first factor (extent of 28 the defendant’s purposeful involvement with the forum 1 state’s affairs) weighs in favor of exercising personal

2 jurisdiction, as Defendant Sun Group made a conscious

3 decision and took intentional action to store its 4 material in California. See generally FAC. 5 Next, the second factor (the burden placed on the 6 defendant to litigate in the forum state) weighs in 7 favor of exercising personal jurisdiction because 8 Defendant Sun Group does not allege any specific facts 9 that demonstrate a legitimate burden would be placed on 10 it if it was required to litigate this case in 11 California. Id. Instead, Defendant Sun Group tries to 12 use a global pandemic and the spontaneous nature of its 13 decision as a reason why it should not be required to 14 litigate in California. Id. As discussed, this is an 15 insufficient basis to decline exercising personal 16 jurisdiction. 17 The third factor (conflict with the sovereignty of 18 the defendant’s state) weighs toward exercising personal 19 jurisdiction because Defendant Sun Group is based in 20 Florida and the exercise of personal jurisdiction in 21 California does not conflict with the sovereignty of 22 Florida. Panavision Int’l, L.P. v. Toeppen, 141 F.3d 23 1316, 1323 (9th Cir. 1998) (stating that the exercise of 24 jurisdiction in California does not pose a conflict with 25 the sovereignty of Illinois). 26 The fourth factor (forum state’s interest in 27 adjudicating the dispute) weighs in favor of exercising 28 personal jurisdiction over Defendant Sun Group. Here, 1 the alleged breach of contract occurred in California,

2 as the payment owed was to be sent to Plaintiff in

3 California. See generally FAC. Additionally, the 4 services procured were performed by Plaintiff, a 5 California corporation, in the state of California. Id. 6 Therefore, since California maintains an interest in 7 redressing the injuries of its citizens, this factor 8 favors exercising jurisdiction. See GemCap Lending I, 9 LLC v. Quarles & Brady, LLP, No. 2:14-CV-07937-RSWL-E, 10 2015 WL 4914399, at *10 (C.D. Cal. Aug. 13, 2015) 11 (“California has a strong interest adjudicating the 12 controversy [in question] because Plaintiff is a 13 resident of California and the alleged injury occurred 14 in California”). 15 The fifth factor (the most efficient judicial 16 resolution of the dispute) primarily focuses on the 17 location of the evidence and the witnesses. Adv. Skin & 18 Hair, Inc. v. Bancroft, 858 F. Supp. 2d 1084, 1091 19 (C.D. Cal. 2012). Since Plaintiff filed this Action in 20 California, and since Plaintiff’s warehouse located in 21 California is the source of the dispute, it is likely 22 that the evidence needed for adjudication is found in 23 this forum state. To add, both Plaintiff and Defendant 24 have been litigating this case in California since April 25 2022. Mot. 1:23-3:5. Further, the parties have not 26 discussed any potential hardship witnesses may face if 27 this action were to proceed in California. Accordingly, 28 this factor slightly favors exercising personal 1 jurisdiction, as resolving the matter in California

2 would likely be more efficient than dismissing the case

3 and forcing Plaintiff to commence a new action in 4 Florida. 5 Likewise, the sixth factor (the importance of the 6 forum to the plaintiff’s interests in convenient and 7 effective relief) also weighs in favor of exercising 8 personal jurisdiction. The injured Plaintiff has no 9 ties to Florida, as it is a corporation residing in 10 California that performed the services provided for in 11 the contract in the state of California. See generally 12 FAC; see also PHD Mktg., Inc. v. Vital Pharms., Inc., 13 No. CV 20-4417-RSWL-JCX, 2021 WL 8693518, at *5 (C.D. 14 Cal. Mar. 3, 2021) (“The sixth factor weighs in [the 15 plaintiff’s] favor, as [the plaintiff] is a California- 16 based entity with no significant presence in Florida.”). 17 Additionally, it would be unreasonable to require the 18 party alleging injury to travel across the country to 19 litigate in Defendant Sun Group’s forum state without 20 Defendant Sun Group demonstrating a “compelling case” as 21 to why the exercise of jurisdiction would “offend the 22 notions of fair play and substantial justice.” 23 Schwarzenegger, 374 F.3d at 802 24 Lastly, the seventh factor (availability of an 25 alternative forum) weighs against exercising personal 26 jurisdiction. Plaintiff carries the burden of proving 27 the unavailability of an alternative forum. Adv. Skin & 28 Hair, 858 F. Supp. 2d at 1092 (internal citation 1 omitted). Here, Plaintiff has not met its burden, as it

2 has failed to demonstrate unavailability of an

3 alternative forum. See generally FAC, Opp’n; see also 4 Adv. Skin & Hair, 858 F. Supp. 2d at 1092 (holding the 5 final factor favored the defendant because the 6 plaintiff, a California resident, had not demonstrated 7 that Texas, where the defendant was located, was not a 8 viable or available venue for litigating the case). In 9 this case, Florida could potentially be an alternative 10 forum, even though it may be more costly or 11 inconvenient. See generally FAC. Therefore, this factor 12 weighs in favor of Defendant Sun Group. 13 On balance, six factors weigh toward finding the 14 exercise of personal jurisdiction reasonable, and one 15 weighs against. Thus, the Court’s exercise of 16 jurisdiction over Defendant Sun Group is reasonable. 17 The Court therefore DENIES the Defendants’ motion 18 to dismiss for lack of personal jurisdiction over 19 Defendant Sun Group. 20 3. 12(b)(6) 21 Since the Court exercises personal jurisdiction 22 over Defendant Sun Group, the Court must next assess 23 whether Plaintiff has stated claims for relief against 24 Defendant Sun Group. 25 a. Breach of Contract 26 To plead a cause of action for breach of contract, 27 a plaintiff must show (1) the existence of a contract; 28 (2) plaintiff’s performance or excuse for 1 nonperformance; (3) defendant’s breach; and (4) that

2 plaintiff sustained damages resulting from the breach.

3 See Zamora v. Solar, No. 2:16-CV-01260-ODW-KS, 2016 WL 4 3512439, at *3 (C.D. Cal. June 27, 2016) (citing CDF 5 Firefighters v. Maldonado, 70 Cal. Rptr. 3d 667, 680 6 (2008)). 7 Plaintiff has stated a claim for breach of 8 contract. Plaintiff states that it “entered into an 9 agreement with [Defendant] Sun Group” to provide 10 warehousing services. FAC ¶ 14. Next, Plaintiff 11 explains that it received Defendant Sun Group’s 12 materials and stored the materials in its warehouse 13 pursuant to the agreement. Id. ¶ 15. Plaintiff 14 contends that Defendant Sun Group stopped paying 15 Plaintiff for their warehousing services in breach of 16 the agreement, and therefore Plaintiff sustained at 17 least $452,992.00 in damages. Id. Accordingly, the 18 Court DENIES Defendants’ Motion to Dismiss Plaintiff’s 19 breach of contract claim. 20 b. Open Book Account 21 An “open book account” is “an agreement, based on 22 prior transactions between the parties, that all items 23 of the account are true and that the balance struck is 24 due and owing from one party to the other.” S.O.S., 25 Inc. v. Payday, Inc., 886 F.2d 1081, 1091 (9th Cir. 26 1989); Trafton v. Youngblood, 69 Cal. 2d 17, 25 (1968). 27 The elements of an account stated are: “(1) previous 28 transactions between the parties establishing the 1 relationship of debtor and creditor; (2) an agreement

2 between the parties, express or implied, on the amount

3 due from the debtor to the creditor; (3) a promise by 4 the debtor, express or implied, to pay the amount due.” 5 Zinn v. Fred R. Bright Co., 271 Cal. App. 2d 597, 600 6 (1969); see Maggio, 196 Cal. App. 3d at 752–53. Both 7 parties must assent to the new amount owed in order to 8 create an account stated. See Hansen v. Fresno Jersey 9 Farm Dairy Co., 220 Cal. 402, 408 (1934). The agreement 10 necessary to establish an account stated need not be 11 express and may be implied from the circumstances. See 12 Hansen, 220 Cal. at 408. If a statement is rendered to 13 the debtor, and the debtor does not reply in a 14 reasonable time, the law implies an agreement that the 15 account is correct. Maggio, Inc. v. McNeal, 196 Cal. 16 App. 3d 745, 753 (1987); Zinn, 271 Cal.App.2d at 600. 17 “[C]ourts require that the parties expressly intend to 18 be bound because accruing debts under an express 19 contract are not normally considered the subject of an 20 open book account.” In re Roberts Farms, Inc., 980 F.2d 21 1248, 1252 n. 3 (9th Cir. 1992). The “mere incidental 22 keeping of accounts does not alone create a book 23 account.” Maggio, Inc., 196 Cal. App. 3d at 752. 24 Plaintiff has adequately stated a claim for open 25 book account. Plaintiff states that the parties entered 26 into an agreement for warehousing services wherein 27 Defendant Sun Group was obligated to pay Plaintiff a 28 monthly sum. FAC ¶¶ 14-15. Defendant Sun Group 1 initially paid Plaintiff, but later ceased paying

2 despite Plaintiff’s continued warehousing of Defendant

3 Sun Group’s materials. Id. Plaintiff provided 4 Defendant Sun Group with invoices showing payments due, 5 but Defendant Sun Group failed to pay. FAC ¶ 15; Id., 6 Ex. A, ECF No. 33-1. Accordingly, if Defendant Sun 7 Group did not expressly assent to the new amount owed, 8 it impliedly did by way of its receipt of the invoices. 9 Thus, Plaintiff has stated a claim for open book account 10 and the Court DENIES Defendants’ Motion to Dismiss this 11 claim. 12 c. Account Stated 13 The elements of an account stated are: 14 “(1) previous transactions between the parties 15 establishing the relationship of debtor and creditor; 16 (2) an agreement between the parties, express or 17 implied, on the amount due from the debtor to the 18 creditor; (3) a promise by the debtor, express or 19 implied, to pay the amount due.” Zinn v. Fred R. Bright 20 Co., 271 Cal. App. 2d 597, 600 (1969). 21 Here, Plaintiff has also stated a claim for account 22 stated. Plaintiff showed that its previous transactions 23 with Defendant Sun Group established a debtor/creditor 24 relationship because Defendant Sun Group agreed to pay 25 Plaintiff for its services and Plaintiff issued invoices 26 for those services. FAC ¶¶ 14-15; Id., Ex. A. The 27 amount due was allegedly established in the agreement, 28 and it was impliedly agreed upon by Defendant Sun 1 Group’s failure to contest the invoices. FAC ¶¶ 14-15.

2 Finally, Defendant Sun Group’s failure to contest the

3 invoices also constitutes an implied promise to pay the 4 amount due. Therefore, the Court DENIES Defendants’ 5 Motion to Dismiss this claim. 6 d. Quantum Meruit for Services Rendered 7 “To prevail on a claim for quantum meruit, 8 [plaintiff] must show: (1) that he performed certain 9 services for [defendants]; (2) that the services were 10 rendered at [defendants’] request; and (3) that they are 11 unpaid. Swafford v. Int’l Bus. Machines Corp., 408 F. 12 Supp. 3d 1131, 1149 (N.D. Cal. 2019); accord Haggerty v. 13 Warner, 475, 252 P.2d 373, 377 (Cal. Ct. App. 1953). 14 Plaintiff has pled a quantum meruit claim. 15 Plaintiff states that it received and warehoused 16 Defendant Sun Group’s materials after Defendant Sun 17 Group’s representatives contacted Plaintiff and the 18 parties entered into an agreement for such services. 19 FAC ¶¶ 14-16. Moreover, Plaintiff contends it was not 20 paid the full amount owed for its services. Id. 21 Therefore, the Court DENIES Defendants’ Motion to 22 Dismiss Plaintiff’s quantum meruit claim. 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 III. CONCLUSION 2 Based on the foregoing, the Court GRANTS

3 Defendants’ Motion to Dismiss claims against Individual 4 Defendants and DENIES Defendants’ Motion to Dismiss 5 claims Defendant Sun Group. 6 7 IT IS SO ORDERED. 8 9 DATED: April 13, 2023 _______/_S_/ R_O__N_A_LD_ _S_.W_._ L_E_W________

HONORABLE RONALD S.W. LEW

10 Senior U.S. District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28