Ha v. New Cingular Wireless PCS, LLC

Background

Sally Ha, representing herself, sued New Cingular Wireless PCS, LLC, doing business as AT&T Mobility, for breach of contract. Ha alleged that she entered into a consumer service agreement with AT&T in 2017 and an installment agreement to finance a new phone in 2023.

In August and September 2023, Ha sent AT&T bills of exchange, documents labeled as tenders of payment, a power of attorney, and references to provisions of the Federal Reserve Act. She alleged that these materials required AT&T to transfer credits to her account and accept the documents as payment. AT&T disputed her claims and later sent a notice stating that her account had a total amount due of $1,341.96. Ha then made two payments totaling those amounts.

Ha’s complaint alleged that AT&T breached its agreements by refusing to transfer credits and by refusing to use the bills of exchange and related documents as payment. She requested an order requiring AT&T to correct and balance her account, actual damages, daily penalties under the Federal Reserve Act, and attorneys’ fees. In her opposition, Ha clarified that she was asserting only a breach-of-contract claim.

Motion and Analysis

AT&T moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. Under California law, a breach-of-contract claim requires allegations showing a contract, the plaintiff’s performance or an excuse for nonperformance, the defendant’s breach, and resulting damages.

The court found that Ha identified two agreements but did not make clear which agreement formed the basis of her claim. The court also found that she did not plausibly allege the other required elements. In particular, Ha identified no contract provision requiring AT&T to accept the bills of exchange or accompanying documents as payment. The court stated that the materials attached to the complaint did not appear to constitute or show payment, apart from the payments Ha made in December 2023.

The court further found that Ha did not plausibly allege a basis for contractual damages or penalties under the Federal Reserve Act. Because the complaint did not support a cognizable legal theory under which AT&T could be liable for breach of contract, it failed to state a claim.

Ruling and Next Steps

Judge Virginia K. Demarchi granted AT&T’s motion to dismiss and dismissed Ha’s complaint, with leave to amend. The court permitted Ha to file an amended complaint by April 5, 2024, because it was not clear that amendment would be futile.

The court required any amended complaint to identify the contract or contracts at issue and plausibly allege the other elements of a breach-of-contract claim. It also required the amended complaint to use the case caption and civil case number in the order and to include the words “AMENDED COMPLAINT” on its first page. The court stated that the amended complaint would replace the original complaint and that failure to timely amend, or failure to correct all identified defects, could lead to dismissal of the case in whole or in part for failure to state a claim.