1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 TCR HOLDINGS, LLC, Case No.: 3:21-cv-1027-L-RBB

10 Plaintiff,

11 v.

ORDER ON DEFENDANT’S

12

AXXCESS CAPITAL PARTNERS, LLC, MOTION TO DISMISS

13 Defendant. 14 15 Pending before the Court is Defendant’s motion to dismiss for failure to state a 16 claim. Fed. R. Civ. P. 12. Plaintiff opposed, and Defendant responded. The Court decides 17 the matter on the papers submitted without oral argument. See Civ. L. R. 7.1. For the 18 reasons stated below, the Court DENIES the motion. 19 Legal Standard 20 A complaint must contain a “short and plain statement of the claim showing that 21 the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (internal 22 quotation marks and citation omitted). “A pleading that offers ‘labels and conclusions’ or 23 ‘a formulaic recitation of the elements of a cause of action will not do.’” Id. at 678 24 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The allegations “must be 25 enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. 26 The Court must accept as true all factual allegations in the complaint and draw 27 reasonable inferences from those allegations in the light most favorable to the plaintiff. 28 See Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir. 2012). 1 Factual Background 2 AIM Brands, LLC (“AIM”) received $9,500,000 in loans from Plaintiff TCR 3 Holdings, LLC (“Plaintiff”) to purchase 15 million masks (or respirators). (ECF 1, 4 Complaint at ¶¶ 5-7). 5 AIM later entered into an irrevocable corporate purchase order (“ICPO”) with 6 Ravenswood Group, LLC (“Ravenswood”). (Id. at ¶ 8). The ICPO obligated Ravenswood 7 to purchase the masks at $2.05 per unit. Id. 8 Defendant Axxcess Capital Partners, LLC (“Defendant”), in coordination with 9 Ravenswood, sent a purchase order for all the masks at $2.05 per unit ($30,750,000 total 10 purchase price). (Id. at Exhibit B). The pick-up location was set as Arkansas. Id. 11 Defendant’s alleged managing director, Ron Gabaldon, signed it and requested 12 Ravenswood send the order to the seller (AIM). Id. The order was on Defendant’s 13 letterhead. Id. 14 AIM accepted the purchase order and sent Defendant an invoice with the same unit 15 and price amount (15 million masks at $2.05 per unit). (Id. at Exhibit C) (Defendant’s 16 “executed Purchase Order . . . was . . . signed and accepted.”) The invoice also contained 17 the order number from Defendant’s purchase order. Id. 18 Defendant had access to the units, it inspected and approved them. (Id. at ¶¶ 23- 19 24). But Defendant has not paid the amount due under its purchase order or satisfied its 20 obligations. (Id. at ¶ 26). 21 AIM entered into an assignment agreement with Plaintiff as to the rights under the 22 alleged agreement. Plaintiff thereafter initiated this action, asserting a breach of contract 23 claim. Defendant now moves to dismiss it without leave, arguing Plaintiff failed to set 24 forth a plausible claim. 25 Discussion 26 To plead a breach of contract claim, a plaintiff must set forth plausible allegations 27 as to (1) an enforceable contract, (2) plaintiff’s performance, (3) defendant’s material 28 1 breach, and (4) resulting damages. See, e.g., First Comm. Mort. Co. v. Reece, 89 Cal. 2 App. 4th 731, 745 (2001).1 3 Here, Plaintiff alleges Defendant sent AIM a purchase order for 15 million masks 4 at $2.05 per unit. Plaintiff also alleges AIM accepted that offer and sent Defendant an 5 invoice for that amount ($30,750,000). The invoice referenced the same product, 6 quantity, price, pick-up location, and order number. Defendant inspected the units and 7 approved them. Yet it has not paid the amount owed under the agreement or satisfied its 8 obligations. These allegations set forth a plausible claim against Defendant. 9 The Court rejects Defendant’s argument that the complaint fails to show Mr. 10 Gabaldon was authorized to enter into the agreement. He is alleged to be Defendant’s 11 managing director. And the purchase order – which he signed – was on Defendant’s 12 letterhead. He also sent it via an email address associated with Defendant’s domain name. 13 The Court likewise rejects Defendant’s argument as to the ICPO between AIM and 14 Ravenswood. Plaintiff’s claim is plausible without reference to that arrangement. 15 Regardless, it is plausible to infer from the allegations that Defendant assumed the 16 obligations under that arrangement. The ICPO indicated Ravenswood intended to transfer 17 its rights to Defendant. (Compl. at Exhibit A). And Defendant sent its purchase order – in 18 coordination with Ravenswood – to AIM on the same date as the ICPO. (Id. at Exhibit 19 B). 20 Defendant also failed to set forth legal support for its argument that AIM did not 21 accept the purchase order (or at least the essential terms: product, price, quantity, and 22 pick-up location, etc.) because AIM’s invoice stated, “offer valid until . . .” And again, 23

24 25 1 The parties dispute what state law applies to the alleged contract (and thus this action). Plaintiff argues Arkansas law applies; Defendant relies on California law in its 26 memorandum. Because Plaintiff relies on factual allegations to support its contention 27 (e.g., where the parties entered into the agreement), it is more appropriate to rule on this issue at a later stage. The Court is nevertheless able to decide the motion to dismiss as 28 1 || the invoice stated Defendant’s “executed Purchase Order... was... signed and 2 ||accepted.” (Compl. at Exhibit C). Defendant’s remaining arguments do not change the 3 || plausibility of the claim. 4 The motion to dismiss stage 1s not where factual disputes are resolved. The issue is 5 || whether Plaintiff set forth a plausible claim and provided Defendant with adequate notice 6 || as to the allegations asserted against it. Because Plaintiff did that, the Court DENIES 7 || Defendant’s motion. 8 IT IS SO ORDERED. 9 Dated: December 17, 2021 pee ep? 11 H . James Lorenz, United States District Judge

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