The opinion
1
2
3
4
5
6
7
8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10
11 CP HOWE & ARDEN LLC, a No. 2:25-cv-02637-JAM-JDP
Delaware limited liability
12 company,
13 Plaintiff, ORDER DENYING DEFENDANT
STARBUCKS CORPORATION’S MOTION
14 v. TO DISMISS
15 STARBUCKS CORPORATION, a
Washington corporation; and
16 DOES 1-25, inclusive,
17 Defendants.
18
19 This matter is before the Court on Defendant Starbucks
20 Corporation’s Motion to Dismiss Plaintiff CP Howe & Arden LLC’s
21 Complaint. ECF No. 8-1, Defendant’s Memorandum of Points and
22 Authorities (“Mot.”). Plaintiff filed an opposition to
23 Defendant’s motion (ECF No. 11 “Opp’n”), and Defendant filed a
24 reply (ECF No. 12 (“Reply”). For the reasons detailed below,
25 Defendant’s motion is denied.1
26
27
1 This motion was determined to be suitable for decision without
28 oral argument. See ECF No. 13; E.D. Cal. L.R. 230(g).
1 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
2 Plaintiff originally filed its complaint in Sacramento
3 Superior Court. See ECF No. 1. Defendant timely removed the
4 matter to federal court pursuant to 28 U.S.C. §§ 1332, 1441, and
5 1446, then filed the pending motion to dismiss. ECF Nos. 1, 8.
6 This case stems from a commercial lease involving Defendant
7 renting and renovating what had been an unoccupied building owned
8 by Plaintiff (the “premises”). See Compl., ECF No. 1-1, Mot. and
9 Opp’n. The parties executed the lease in June 2024, but in
10 September 2024, a fire destroyed the premises. Id. Plaintiff
11 alleges Defendant failed to secure the premises as required by
12 the lease, which resulted in “a homeless person” entering the
13 premises through a large hole in the fence and starting a fire.
14 Compl. ¶ 16. Although the lease required Plaintiff to maintain
15 fire insurance for the premises, Plaintiff “did not have fire
16 insurance at the time of the [f]ire . . . .” Id. ¶ 35.
17 According to Plaintiff, the parties “[p]romptly” discussed
18 and agreed on how they were going to address the fire damage,
19 with Defendant assuming responsibility for obtaining permits and
20 reconstructing a new store, and by October 2024, the parties
21 “began performance of their respective obligations[,] consistent
22 with their agreement[.]” Compl. ¶ 18. The parties also worked
23 to memorialize their agreement in a First Amendment to the Lease;
24 although it was not executed, the parties performed the terms
25 included in the Amendment until late July 2025 and Plaintiff paid
26 consideration in connection with the Amendment. Id. ¶¶ 19-33.
27 At the end of July 2025, Plaintiff issued a Demand for
28 Performance, and within a week, Defendant delivered a Notice of
1 Default of Lease. Id. ¶¶ 34-35. Approximately one week later,
2 Plaintiff initiated a lawsuit for breach of contract, seeking
3 damages, fees, costs, and declaratory relief. See ECF No. 1.
4 II. OPINION
5 A. Legal Standard
6 A Rule 12(b)(6) motion challenges the sufficiency of a
7 complaint for “failure to state a claim upon which relief can be
8 granted.” Fed. R. Civ. P. 12(b)(6). The motion may be granted
9 only if “the complaint lacks a cognizable legal theory or
10 sufficient facts to support a cognizable legal theory.”
11 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th
12 Cir. 2008). The court assumes all factual allegations are true
13 and “construe[s] them in the light most favorable to the
14 nonmoving party.” Parks Sch. of Bus., Inc. v. Symington, 51
15 F.3d 1480, 1484 (9th Cir. 1995) (citing Everest & Jennings, Inc.
16 v. Am. Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994)).
17 That said, if the complaint’s allegations do not “plausibly give
18 rise to an entitlement to relief,” the motion must be granted.
19 Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
20 A complaint need contain only a “short and plain statement
21 of the claim showing that the pleader is entitled to relief,”
22 Fed. R. Civ. P. 8(a)(2), not “detailed factual allegations.”
23 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations
24 omitted). However, this rule demands more than unadorned
25 accusations; “sufficient factual matter” must make the claim at
26 least plausible. Iqbal, 556 U.S. at 678. In the same vein,
27 conclusory or “formulaic recitation[s] of the elements” do not
28 alone suffice. Id. (internal quotations and citations removed).
1 “A claim has facial plausibility when the plaintiff pleads
2 factual content that allows the court to draw the reasonable
3 inference that the defendant is liable for the misconduct
4 alleged.” Id.
5 B. Analysis
6 Defendant argues Plaintiff’s complaint should be dismissed
7 with prejudice because: (1) Plaintiff committed the first
8 material breach of the lease; (2) It is barred by the Statue of
9 Frauds; (3) Promissory Estoppel and Consequential Damages are
10 not adequately pled; and (4) Plaintiff’s second cause of action
11 is fatally duplicative. The Court addresses each of these
12 arguments below under California law, which governs Plaintiff’s
13 claims here.
14 1. Material Breach
15 Defendant, primarily relying on Brown v. Grimes, 192
16 Cal.App.4th 265 (2d Dist. Ct. App. 2011), takes the position
17 that Plaintiff’s failure to maintain fire insurance is a
18 material breach of the parties’ contract, requiring the Court to
19 dismiss Plaintiff’s complaint. See Mot. at pg. 7-8; Reply at
20 pg. 1-2. Defendant’s reliance on Brown is misplaced. Indeed,
21 the sentence from the Brown opinion quoted by Defendant in its
22 brief is preceded by a sentence which includes critical language
23 supporting the denial of Defendant’s motion to dismiss. As
24 stated in Brown, “[n]ormally the question of whether a breach of
25 an obligation is a material breach, so as to excuse its
26 performance by the other party, is a question of fact.” Brown,
27 192 Cal.App.4th at 277; see also Whitney Inv. Co. v. Westview
28 Dev. Co., 273 Cal.App.2d 594, 601 (4th Dist. Ct. App. 1969)
1 (“Whether a breach is so material as to constitute cause for the
2 injured party to terminate a contract is ordinarily a question
3 for the trier of fact”.); Smith v. Empire Sanitary District, 127
4 Cal.App.2d 63, 73 (3d Dist. Ct. App. 1954) (“The materiality of
5 a breach is in the main a matter for the trial court to
6 determine from all the facts and circumstances shown in
7 evidence.”). Tellingly, the cases relied on by Defendant in its
8 motion and reply are almost all post-trial cases. Defendant
9 does not cite any case supporting its argument that the Court
10 may determine there was a material breach from the face of the
11 complaint, and from that, preclude Plaintiff’s breach of
12 contract claims.
13 Instead, the Court must assume the allegations in
14 Plaintiff’s complaint are true and view “them in the light most
15 favorable to the nonmoving party.” Parks Sch. of Bus., 51 F.3d
16 at 1484. In doing so, the Court agrees with Plaintiff – there
17 is a dispute regarding whether there was a material breach that
18 cannot be resolved at this procedural stage, and Plaintiff’s
19 claims are not barred given the facts included in Plaintiff’s
20 complaint. See Opp’n at pg. 13-15. Accordingly, Defendant’s
21 motion to dismiss based on Plaintiff’s alleged material breach
22 is denied.
23 2. Statute of Frauds
24 Defendant next argues the parties’ original contract falls
25 within the Statue of Frauds (Cal. Civ. Code section 1624),
26 requiring a dismissal of Plaintiff’s complaint. Mot. at pg. 10-
27 12; Reply at pg. 2-3. Defendant argues the Ninth Circuit case
28 Fanucchi & Limi Farms v. United Agri Products, 414 F.3d 1075
1 (9th Cir. 2005) forecloses Plaintiff’s claims here because, in
2 that case, the court found an alleged oral amendment to a
3 written loan agreement was unenforceable.
4 Fanucchi involved the adjudication of a summary judgment
5 motion. 414 F.3d at 1077-1080. Significantly, the Ninth
6 Circuit reversed the trial court’s ruling as to the plaintiff’s
7 claimed exception to the Statute of Frauds under a theory of
8 novation, allowing plaintiff’s breach of contract claim to
9 proceed to trial based on an alleged oral modification of the
10 parties’ contract. Id. at 1081-85. As with Defendant’s
11 material breach arguments, Defendant relies on cases where
12 courts needed to review and rely on evidence submitted by the
13 parties in order to rule as a matter of law on some of the
14 parties’ claims and defenses, either at the summary judgment or
15 trial phases, unlike the procedural posture here. See Mot. at
16 12 (citing Davidson v. ConocoPhillips Co., No. C08–1756 BZ, 2009
17 WL 2136535 (N.D. Cal. July 10, 2009) (motion for summary
18 judgment) and Marani v. Jackson, 183 Cal. App. 3d 695, 705 (1st
19 Dist. Ct. App. 1986) (appeal after trial)). The findings or
20 conclusions Defendant requests this Court to make involve
21 questions of fact and disputed evidence. Plaintiff argues it has
22 adequately pled exceptions to the Statute of Frauds, including
23 partial performance. The Court agrees. Defendant’s motion
24 improperly asks this Court to disregard those factual
25 allegations and instead make findings as a matter of law based
26 on Defendant’s interpretation of the evidence. See Gerritsen v.
27 Warner Bros. Entertainment, Inc., 116 F.Supp.3d 1104, 1118 (C.D.
28 Cal. June 12, 2015) (“A court must normally convert a Rule
1 12(b)(6) motion into a Rule 56 motion for summary judgment if it
2 considers evidence outside the pleadings.”) (internal quotations
3 omitted). Defendant’s motion to dismiss based on the Statute of
4 Frauds is denied because Plaintiff’s complaint contains a “short
5 and plain statement of the claim showing that the pleader is
6 entitled to relief,” and the Court declines to engage in a
7 summary judgment-type analysis at this juncture. Fed. R. Civ.
8 P. 8(a)(2).
9 3. Promissory Estoppel and Consequential Damages
10 Defendant argues Plaintiff failed to plead sufficient facts
11 supporting theories of promissory estoppel and consequential
12 damages, relying exclusively on cases involving mortgages or
13 lenders. See Mot. at pg. 12-15.
14 Defendant’s reliance on this precedent is misplaced. Cases
15 involving mortgage loans and the relationship between a lender
16 and a home buyer have well-developed rules surrounding the
17 Statute of Frauds and oral amendments to loan contracts,
18 exemplified by the Khan case Defendant cites. Defendant has not
19 demonstrated these rules and precedent apply to a commercial
20 lease agreement and the relationship between the parties as
21 exists in this case. See Khan v. CitiMortgage, Inc., 975
22 F.Supp.2d 1127, 1136-37 (E.D. Cal. Sept. 30, 2013) (collecting
23 cases related to mortgages and statute or frauds; “[a]s a
24 general rule, a gratuitous oral promise to postpone a
25 foreclosure sale or to allow a borrower to delay monthly
26 mortgage payments in unenforceable. . . . Mortgages and deeds
27 of trust are subject to the statute of frauds.”) (internal
28 quotations and citations omitted).
1 The elements of promissory estoppel are: “(1) a promise
2 clear and unambiguous in its terms; (2) reliance by the party to
3 whom the promise is made; (3) his reliance must be both
4 reasonable and foreseeable; and (4) the party asserting the
5 estoppel must be injured by his reliance.” Laks v. Coast Fed.
6 Sav. & Loan Assn., 60 Cal.App.3d 885, 891 (2d Dist. Ct. App.
7 1976) (citing Thomson v. Int’l Alliance of Stage Employes, 232
8 Cal.App.2d 446 (2d Dist. Ct. App. 1965)). As detailed in its
9 opposition, Plaintiff has satisfied the low pleading threshold
10 to overcome Defendant’s motion to dismiss, given Plaintiff’s
11 allegations regarding a promise, reliance, the parties’
12 negotiations and timing of the alleged breach, and Plaintiff’s
13 damages. See Opp’n at pg. 17-19; Ashcroft v. Iqbal, 556 U.S.
14 662, 678-79 (2009) (a motion to dismiss may be denied if the
15 complaint’s allegations “plausibly give rise to an entitlement
16 to relief . . . .”).
17 4. Declaratory Relief
18 Defendant moves to dismiss Plaintiff’s second cause of
19 action, claiming it is wholly duplicative of Count One;
20 Plaintiff counters that it has satisfied the liberal pleading
21 standards. See Mot. at pg. 15, Opp’n at 19. Defendant does not
22 provide any response in its Reply, which the Court views as a
23 concession. Moreover, Plaintiff’s second cause of action seeks
24 a finding specific to the Amendment, and the case cited by
25 Defendant is inapposite, including because it applies
26 Pennsylvania state law, although it contains language helpful to
27 the Plaintiff. See United Safeguard Distributors Association,
28 Inc. v. Safeguard Business Systems, Inc., 145 F.Supp.3d 392
eee IEEE mE III RO EERIE I ED EE
1 (C.D. Cal. Nov. 17, 2015) (“Although ‘the existence of another
2 adequate remedy does not preclude a judgment for declaratory
3 relief in cases where it is appropriate,’ [] ‘the availability
4 of other adequate remedies may make declaratory relief
5 inappropriate.’”) (internal citations omitted). Accordingly,
6 | Defendant’s motion to dismiss Count Two is denied.
7 Based on its findings above, the Court need not address
8 Defendant’s periphery arguments regarding Plaintiff’s
9 | allegations that contradict the lease terms, including whether
10 the parameters of the lease included a requirement to secure the
11 fence. See Mot. at pg. 8-10; Reply at pg. 2.
12 Til. ORDER
13 For the reasons set forth above, the Court DENIES
14 Defendant’s Motion to Dismiss. Defendant shall file its Answer to
15 the Complaint withing twenty days of the date of this Order.
16 IT IS SO ORDERED.
17 Dated: March 3, 2026
19 OHN A. MENDEZ,
SENIOR UNITED STATES DISTRICT JUDGE
20
21
22
23
24
25
26
27
28