Wescott v. Crowe

Background

Pro se plaintiff Carl Wescott sued David Crowe, Mike Lyonette, Jeff Rau, Colin Ross, Brad Malcolm, and Michael Jimenez under several California state-law theories arising from an agreement to fund the purchase of a resort property in Nicaragua. The defendants filed two nearly identical motions directed at Wescott’s second amended complaint: Rau filed a motion for judgment on the pleadings under Rule 12(c), and the other defendants filed a motion to dismiss under Rule 12(b)(6). The court treated the motions together because the standards are the same.

The court expressed concern that the Judicial Council of California had declared Wescott a vexatious litigant. It declined to dismiss the case or require a bond on that basis because the record did not support making a similar federal-court declaration at that time. The court said it could revisit the issue as the litigation developed. The court also declined the defendants’ requests for judicial notice.

Rulings on the claims

The court held that the complaint plausibly alleged a breach-of-contract claim against Crowe and Lyonette concerning the Settlement Agreement dated August 11, 2018. The defendants argued that the resort’s seller had terminated the sale before any breach by them, but that fact was outside the complaint and contradicted the complaint’s allegations. At the motion-to-dismiss stage, the court accepted Wescott’s allegations as true. The breach-of-contract claim therefore could proceed against Crowe and Lyonette.

The court dismissed the breach-of-contract claim against Rau, Ross, Malcolm, and Jimenez with leave to amend. It found that Wescott had not plausibly alleged that he had a contract with those defendants. The court stated that Wescott, Crowe, and Lyonette were the parties to the Settlement Agreement and that no other contracts were at issue.

For Counts 2 through 4—promissory fraud, promissory estoppel, and negligent misrepresentation—the court indicated that Wescott needed to provide more specific factual allegations in the complaint itself. It allowed him to amend those allegations, including with attention to Rule 9(b), which requires particular detail for claims based on fraud. The court could not consider new facts supplied only in Wescott’s opposition brief.

The court dismissed with leave to amend Counts 5 through 8, which alleged tortious and negligent interference with contractual relations and intentional and negligent interference with prospective economic advantage. The court explained that the relevant facts were not included in the complaint as it then stood.

The claim for breach of the covenant of good faith and fair dealing, Count 9, and the negligent infliction of emotional distress claim, Count 10, could proceed against Crowe and Lyonette. The court dismissed those claims against the other defendants because they were not parties to the contract.

Disposition

The court granted the dismissal motions in part. Wescott could file a third amended complaint by February 18, 2021, which the court indicated would likely be his last opportunity to amend. The court stated that failure to meet that deadline would result in dismissal with prejudice under Federal Rule of Civil Procedure 41(b). The court also instructed Wescott to keep any amended complaint short and clear and asked defendants to avoid duplicative filings in any future motion practice.