Intent Brands, Inc. v. Calnutri, Inc.
2:24-cv-02499
| E.D. Cal. | Aug 22, 2025Background
- Intent Brands hired CalNutri as a supply‑chain/production manager, and CalNutri engaged Wildpack to manufacture Intent’s nonalcoholic beverage (Sly); Plaintiff alleges it was a third‑party beneficiary of those manufacturing agreements.
- Wildpack’s initial run allegedly produced "squishy" cans, missing/shifted lot codes, and improperly sealed cans; Plaintiff claims Wildpack and CalNutri concealed the true causes and released product for distribution.
- Plaintiff discovered thousands of defective cans during repackaging and promotional activity; CalNutri managed remediation efforts but allegedly failed to hold Wildpack accountable.
- CalNutri later contracted Common Collabs to run additional production; Common Collabs’ runs allegedly became contaminated with heat‑resistant mold spores, forcing recalls and halting sales.
- Plaintiff filed a second amended complaint asserting breach of contract, negligence, negligent and intentional misrepresentation, and fiduciary‑duty claims; Defendants moved to dismiss.
- The court granted Wildpack’s and CalNutri’s motions in full (with leave to amend for many claims), denied Common Collabs’ motion only as to the breach of contract claim, and dismissed punitive damages and certain fee claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of fiduciary duty (CalNutri) | CalNutri’s services agreement and control over communications created a fiduciary/confidential relationship. | The services agreement was a standard services contract and did not create a fiduciary duty. | Dismissed with leave to amend — plaintiff failed to plead existence of a fiduciary duty. |
| Breach of contract (Wildpack: third‑party beneficiary) | Plaintiff alleges it was a third‑party beneficiary of the CalNutri–Wildpack Services Agreement. | No signed contract or third‑party beneficiary provision; form contract attached is unsigned and disclaims third‑party beneficiaries. | Dismissed with leave to amend — plaintiff didn’t adequately allege contractual relationship/third‑party beneficiary. |
| Breach of contract (Common Collabs: third‑party beneficiary) | CalNutri–Common Collabs agreement was for Plaintiff’s benefit; contract exhibits and conduct show intent to benefit Plaintiff. | Common Collabs contends no direct contract with Plaintiff. | Denied — plaintiff adequately alleged third‑party beneficiary status as to Common Collabs. |
| Negligence (all defendants) | Defendants failed to manufacture per specifications, failed to inspect, concealed defects, causing product damage and business harm. | Defendants argue no legal duty to plaintiff beyond contract; economic loss rule bars tort recovery for purely economic damages. | Dismissed with leave to amend — plaintiff failed to allege a legal duty independent of contract or adequate “physical/property damage” to avoid economic loss rule. |
| Fraud / Intentional misrepresentation (Wildpack & Common Collabs) | Defendants knowingly misrepresented product fitness and insurance/claims handling, inducing reliance. | Allegations lack the who/what/when/where/how required by Rule 9(b); no particularized facts of intent or specific statements. | Dismissed with leave to amend — Rule 9(b) pleading deficiencies. |
| Negligent misrepresentation (all defendants) | Defendants negligently made false statements on which plaintiff relied. | Claims are inadequately pleaded under Rule 9(b) and may be barred by the economic loss rule. | Dismissed with leave to amend — failure to plead particularized misrepresentations and unresolved economic loss issues. |
| Punitive damages | Plaintiff seeks punitive damages for fraud and misrepresentation. | Punitive damages unavailable for negligent misrepresentation; intentional fraud claims not pleaded with required particularity. | Request for punitive damages dismissed; leave to amend limited to potential intentional misrepresentation claims. |
| Attorney's fees (CalNutri) | Plaintiff cites indemnity clause and §1717 as basis for reciprocal fees. | The contract’s indemnity provision is not a contractual attorney‑fee clause triggering §1717 reciprocity. | Dismissed without leave to amend as to breach‑of‑contract fees against CalNutri. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard governs Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (courts need not accept legal conclusions as true on a motion to dismiss)
- Vess v. Ciba‑Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud claims must plead the who/what/when/where/how under Rule 9(b))
- Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979 (Cal. 2004) (articulating the economic loss rule in California)
- Aas v. Superior Court, 24 Cal.4th 627 (California law on tort claims intertwined with contract expectations)
- Seely v. White Motor Co., 63 Cal.2d 9 (California economic‑loss principles distinguishing property damage from contractual loss)
- Rattagan v. Uber Techs., Inc., 17 Cal.5th 1 (clarifying recovery limits for economic loss under California law)
- Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (leave to amend should be granted unless amendment would be futile)