3:16-cv-03129
N.D. Cal.Mar 20, 2017Background
- In 2010 Long orally agreed with Peter Schaffer (and/or his agency) to recruit NFL players in exchange for commissions: generally 33% of 3% of net representation fees and 40% of 3% for Brandon Browner.
- Schaffer left his prior employer All Sports in 2011 and, via email, Long and Schaffer/Authentic Athletix negotiated a new agreement memorialized by email; Long alleges the emails established a written contract and that Defendants promised a formal written contract later.
- Defendants paid Long an initial check in February 2012 (for Browner) but thereafter paid less than the agreed amount and stopped providing accountings or the Browner contract despite Long’s requests; Long later obtained the contract and alleges underpayment totaling roughly $343,140 based on Browner’s earnings.
- Long sued in June 2016 asserting breach of contract, unjust enrichment, money had and received, constructive trust, conversion, misrepresentation, and fraud; after an earlier dismissal he filed a First Amended Complaint alleging the 2011 email/written agreement.
- Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6) raising subject-matter-jurisdiction (amount-in-controversy), statute of limitations, statute of frauds, failure to plead a written contract, failure to plead fraud with particularity, and that Schaffer is an improper party.
- The court denied the motions, finding (inter alia) that Long met the amount-in-controversy by a preponderance, pleaded a written agreement by its terms/legal effect, adequately alleged mutual assent, consideration, fraud with Rule 9(b) particularity, and that limitations/statute-of-frauds defenses were not dispositive at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction (amount in controversy) | Long alleges damages well over $75,000 based on commissions owed (including 2016 amounts omitted from demand letter). | Demand letter showed only $41,800 owed as of March 2016; therefore amount-in-controversy below $75,000. | Court found Long met his burden by preponderance; jurisdiction exists. |
| Existence/enforceability of written contract (emails) | Emails memorialized the 2011 agreement and Long pleaded its essential terms (percentages, duties). | Emails either not attached, not sufficiently definite, not intended to be binding, or no meeting of minds. | At pleading stage, allegations and subsequent conduct (payments, business cards, email address) plausibly show mutual assent and a valid written contract pleaded by legal effect. |
| Statute of frauds and statute of limitations (contract) | 2011 email agreement is a written memorandum removing the case from the statute of frauds; claims brought within applicable limitations. | Agreement was oral/within statute of frauds or barred by shorter limitations for oral contracts. | Court declined to dismiss: Long alleged existence of emails as memorandum; alleged written-contract claim not time-barred at this stage. |
| Fraud claim and limitations / Rule 9(b) | Schaffer misrepresented intent to pay and concealed accounting; Long relied and suffered damages; discovery rule delays accrual. | Fraud inadequately pleaded; barred by statute of limitations. | Court held fraud pleadings meet Rule 9(b) particularity and statutes-of-limitations defenses cannot be resolved against Long on the face of the FAC. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. of Am., 511 U.S. 375 (federal courts are courts of limited jurisdiction)
- NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606 (distinguishing facial and factual 12(b)(1) attacks)
- Wolfe v. Strankman, 392 F.3d 358 (resolving facial jurisdictional challenges like a 12(b)(6) motion)
- Safe Air for Everyone v. Meyer, 373 F.3d 1035 (factual attacks do not require presuming truth of pleadings)
- Leite v. Crane Co., 749 F.3d 1117 (plaintiff bears preponderance burden when jurisdictional facts are disputed)
- McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457 (contract may be pleaded by its terms or by legal effect)
- Engalla v. Permanente Med. Grp., Inc., 15 Cal. 4th 951 (elements of fraud under California law and discovery rule for accrual)
- Sterling v. Taylor, 40 Cal. 4th 757 (statute of frauds: required memorandum need only state essential terms with reasonable certainty)