Stereoscope, LLC v. U.S. Bank National Ass'n
675 F. App'x 725
| 9th Cir. | 2017Background
- Stereoscope, LLC and individual principals sued U.S. Bank and two employees over handling of a $500,000 deposit placed into the Checkmate Escrow Account in April 2013.
- Stereoscope alleged US Bank interfered with contracts and prospective economic relations, acted negligently as escrow holder, and committed fraud/fraudulent concealment.
- The district court dismissed the complaint under Rule 12(b)(6) without leave to amend; Stereoscope appealed.
- The Ninth Circuit reviews dismissal de novo and denial of leave for abuse of discretion; futility of amendment is reviewed de novo.
- The court found Stereoscope’s own allegations showed its relationship with a third party (TREG) had already deteriorated before US Bank’s actions, undermining causation for interference claims.
- The court held (1) escrow holders generally owe no duty to third parties to the escrow; (2) no affirmative misrepresentation was alleged; and (3) no facts showed a duty to disclose or other wrongful conduct by US Bank. Amendment would have been futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Intentional interference with contractual relations | Stereoscope: US Bank’s handling of escrow unjustifiably induced breaches and disrupted contracts with third parties | US Bank: Stereoscope fails to plead causation—contracts had already soured before US Bank’s conduct | Dismissed: Plaintiff did not allege the contracts would otherwise have been performed; causation lacking |
| Intentional interference with prospective economic advantage | Stereoscope: US Bank’s acts destroyed economic expectancies | US Bank: Same causation defect; conduct not wrongful apart from interference | Dismissed: No causation and no independent wrongful conduct alleged |
| Negligence against escrow holder | Stereoscope: US Bank breached duty of care in handling escrow causing loss | US Bank: Escrow holders do not owe duties to third parties; no special circumstances here | Dismissed: Under California law, no duty owed to Stereoscope; complaint lacks facts to displace rule |
| Fraud / fraudulent concealment | Stereoscope: US Bank concealed material facts and committed fraud | US Bank: No affirmative misrepresentation alleged; no fiduciary or special disclosure duty | Dismissed: No actionable misrepresentation and no duty to disclose shown |
Key Cases Cited
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (9th Cir. 2008) (standard of review on Rule 12(b)(6))
- United Nat’l Maint., Inc. v. San Diego Convention Ctr., Inc., 766 F.3d 1002 (9th Cir. 2014) (elements for intentional interference with contract)
- Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119 (9th Cir. 2014) (interference with prospective advantage requires independent wrongful conduct)
- Summit Fin. Holdings, Ltd. v. Cont’l Lawyers Title Co., 27 Cal. 4th 705 (Cal. 2002) (escrow holders generally owe no duty to third parties)
- Markowitz v. Fid. Nat’l Title Co., 142 Cal. App. 4th 508 (Cal. Ct. App. 2006) (same rule regarding escrow duties)
- Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979 (Cal. 2004) (elements of fraud claim)
- Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053 (9th Cir. 2004) (futility supports denial of leave to amend)
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (standards for granting leave to amend)