# Sarkhan Nabiyev v. Closet World, Inc.

> District Court, C.D. California · November 16, 2023

URL: https://www.frixlaw.com/law-library/cases/9985089

## Case

- **Court:** District Court, C.D. California
- **Decided:** November 16, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9985089

## How later opinions describe it (automated extraction)

- holding that well-pleaded factual allegations are accepted 4 as true for purposes of a motion to dismiss

## Opinion text

O
1

2
3
4

5
6
7
8 United States District Court
9 Central District of California

10

11 SARKHAN NABIYEV et al., Case № 2:23-cv-02218-ODW (PDx)

12 Plaintiffs,
ORDER DENYING
13 v.
14 C LOSET WORLD, INC. et al., MOTION TO DISMISS [25]

15 Defendants.

16
I. INTRODUCTION
17
Plaintiffs Sarkhan Nabiyev and Sevinj Mirzatagi bring this putative class action
18
against Defendants Closet World, Inc. and Home Organizers Inc. for allegedly
19
violating California false advertising laws by misleading consumers with deceptive
20
advertisements featuring falsely discounted home organization products. (First Am.
21
Compl. (“FAC”), ECF No. 19.) Defendants now move to dismiss Plaintiffs’ FAC for
22
failure to state a claim under Federal Rule of Civil Procedure (“Rule”) 12(b)(6). (Mot.
23
Dismiss FAC (“Motion” or “Mot.”), ECF No. 25.) For the following reasons, the
24
Court DENIES Defendants’ Motion in its entirety.1
25
26
27

28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the
matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.
1 II. BACKGROUND
2 The following facts are taken from Plaintiffs’ FAC. See Ashcroft v. Iqbal,
3 556 U.S. 662, 678 (2009) (holding that well-pleaded factual allegations are accepted
4 as true for purposes of a motion to dismiss).
5 A. Defendants’ Business Model and Operations
6 Closet World, Inc. and Home Organizers, Inc. own and operate a nationwide
7 home organization business where they “make, sell, and market home organizing
8 products including, but not limited to, custom closets, garages, storage solutions, and
9 home offices” (the “Products”). (FAC ¶ 8.) To market their Products, Defendants
10 engage in various advertising techniques such as online advertisements and mailing
11 physical paper advertisements directly to consumers. (Id. ¶¶ 10–12.) The
12 advertisements promote Defendants’ product line and simultaneously offer apparent
13 “limited-time” discount sales to consumers who elect to contract with and purchase
14 Defendants’ Products. (Id.) These online and paper advertisements typically offer
15 “40%” or “50%” discounts on the quoted price, as well as other incentives such as free
16 installation and financing plans. (Id. ¶¶ 26, 32.)
17 B. Plaintiffs Contract with Defendants
18 In or around July 2022, Nabiyev and his mother, Mirzatagi, received a mailed
19 advertisement promoting discounts for 50% off Defendants’ Products. (Id. ¶ 51.) At
20 the time of receipt, Nabiyev and Mirzatagi lived in the same Los Angeles residence.
21 (Id.) Upon receiving the mailed advertisement, Nabiyev scheduled an in-home
22 consultation with Defendant Closet World, resulting in an initial quote promising 50%
23 off all quoted products. (Id. ¶¶ 53–55.)
24 On July 17, 2022, Nabiyev and Mirzatagi contracted with Defendants to
25 purchase two closets, a custom office, and various other home organizer products for
26 their Los Angeles residence. (Id. ¶ 56.) Nabiyev paid the initial deposit with his
27 credit card and the remaining balance was financed using Mirzatagi’s approved credit.
28
1 (Id. ¶ 57.) Payments toward the balance were drawn from a joint bank account shared
2 by Nabiyev and Mirzatagi, with Nabiyev as the first listed account holder. (Id.)
3 C. Plaintiffs’ Allegations
4 On May 1, 2023, Plaintiffs filed the FAC. (Id.) Plaintiffs allege the advertised
5 “limited-time” sales and discounts are, in reality, fake promotions offered
6 continuously throughout the year. (Id. ¶¶ 12, 25–30, 40.) Additionally, Plaintiffs
7 contend the regular list prices of Defendants’ products are fabricated, because the
8 purported list prices are always discounted. (Id. ¶¶ 31–35.) Furthermore, Plaintiffs
9 assert the fake discounts and falsely inflated list prices are designed to induce
10 consumers to purchase products that consumers would not normally be inclined to
11 purchase. (Id. ¶¶ 12–14, 59.) Plaintiffs allege that they relied on the false
12 representations described above and would not have contracted with Defendants had
13 Plaintiffs known the representations were untrue. (Id. ¶¶ 58–59.)
14 Plaintiffs bring nine causes of action individually and on behalf of a proposed
15 class, for: (1) Violation of California’s False Advertising Law; (2) Violation of
16 California’s Consumer Legal Remedies Act; (3) Violation of California’s Unfair
17 Competition Law; (4) Breach of Contract; (5) Breach of Express Warranty; (6) Breach
18 of Implied Warranty; (7) Breach of Quasi-Contracts; (8) Negligent
19 Misrepresentations; and (9) Intentional Misrepresentations with regard to falsely
20 discounted home organization product prices. (Id. ¶¶ 76–165.)
21 Defendants now move this Court to dismiss certain claims in the FAC pursuant
22 to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
23 III. LEGAL STANDARD
24 A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable
25 legal theory or insufficient facts pleaded to support an otherwise cognizable legal
26 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). To
27 survive a dismissal motion, a complaint need only satisfy the minimal notice pleading
28 requirements of Rule 8(a)(2)—a short and plain statement of the claim. Porter v.
1 Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual “allegations must be enough to
2 raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,
3 550 U.S. 544, 555 (2007). That is, the complaint must “contain sufficient factual
4 matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal,
5 556 U.S. at 678 (internal quotation marks omitted).
6 The determination of whether a complaint satisfies the plausibility standard is a
7 “context-specific task that requires the reviewing court to draw on its judicial
8 experience and common sense.” Id. at 679. A court is generally limited to the
9 pleadings and must construe all “factual allegations set forth in the complaint . . . as
10 true and . . . in the light most favorable” to the plaintiff. Lee v. City of Los Angeles,
11 250 F.3d 668, 679 (9th Cir. 2001). However, a court need not blindly accept
12 conclusory allegations, unwarranted deductions of fact, and unreasonable inferences.
13 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
14 IV. DISCUSSION
15 Defendants seek to dismiss Plaintiffs’ causes of action one through five, eight,
16 and nine, asserting: (A) Plaintiffs have not pleaded these causes of action with the
17 required particularity; (B) Plaintiffs lack Article III and statutory standing;
18 (C) Defendants’ advertisements are not deceptive on their face; (D) Plaintiff failed to
19 meet specific procedural requirements under California false advertising laws;
20 (E) Plaintiffs either were not damaged or are not party to the contract, and Plaintiff did
21 not rely on the alleged advertisements when purchasing Defendants’ products. (See
22 generally Mot.) The Court addresses each of Defendants’ arguments in turn.
23 A. Rule 9(b) Required Particularity
24 Defendants’ assert that Plaintiffs fail to plead the first, second, third and ninth
25 causes of action with the required particularity under Rule 9(b). The Court finds
26 Plaintiffs’ fraud-based claims meet the requisite Rule 9(b) threshold for particularity.
27 Rule 9(b) provides: “In alleging fraud or mistake, a party must state with
28 particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
1 The heightened pleading requirements of Rule 9(b) are designed “to give defendants
2 notice of the particular misconduct which is alleged to constitute the fraud charged so
3 that they can defend against the charge and not just deny that they have done anything
4 wrong.” Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir. 1993). “A pleading satisfies
5 Rule 9(b) if it identifies ‘the who, what, when, where, and how’ of the misconduct
6 charged.” MetroPCS v. SD Phone Trader, 187 F. Supp. 3d 1147, 1150 (S.D. Cal.
7 2016) (citing Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)).
8 The plaintiff must “set forth more than the neutral facts necessary to identify the
9 transaction. The plaintiff must set forth what is false or misleading about a statement,
10 and why it is false.” Vess, 317 F.3d at 1106.
11 Here, Plaintiffs need only provide the preliminary Vess factors to meet the
12 Rule 9(b) threshold requirement for particularity. Id. (“‘[T]he who, what, when,
13 where, and how’ of the misconduct charged.”). Plaintiffs do just that in their FAC.
14 Plaintiffs identify “who” committed the alleged misconduct: Closet World and Home
15 Organizers. (FAC ¶¶ 8, 19, 20.) Plaintiffs state “what” the misconduct was:
16 advertisements representing alleged “limited-time” sales. (FAC ¶¶ 25–29, 31–32.)
17 Plaintiffs explain “where” the misconduct occurred: on Defendants’ mailed
18 advertisements and website. Id. Plaintiffs provide “when” the misconduct occurred
19 using digitally archived images of Defendants’ websites showing multiple dates and
20 demonstrating the possibility of continuous sales online. (FAC ¶ 30.) Lastly,
21 Plaintiffs describe “how” Defendants’ purported fake discounts and misconduct led
22 Plaintiffs and other consumers to purchase Defendants’ Products. (FAC ¶¶ 12, 26–28,
23 34–35.) Accordingly, the Court finds Plaintiffs meet the Rule 9(b) heightened
24 requirements for particularity.
25 For the aforementioned reasons, the Court finds Plaintiffs’ first, second, third,
26 and ninth causes of action meet the heightened threshold pleading requirement set
27 forth by Rule 9(b). Accordingly, the Court denies Defendants’ motion to dismiss
28 Plaintiffs’ first, second, third, and ninth causes of action.
1 B. Standing
2 Defendants assert the Court should dismiss the entire action because Plaintiffs
3 lack Article III and California statutory standing. (Mot. 9.) For the reasons set forth
4 below, the Court concludes Plaintiffs meet the minimum requirements for Article III
5 and California statutory standing.
6 1. Article III Standing
7 To establish Article III standing, “the plaintiff must have (1) suffered an injury
8 in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and
9 (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v.
10 Robins, 578 U.S. 330, 338 (2016). In lawsuits involving California false advertising
11 laws, consumers suffer an injury-in-fact for Article III purposes “when the consumer
12 alleges that he would not have made the purchase but for the misrepresentation. . . .”
13 Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1107 (9th Cir. 2013) (“[W]hen a consumer
14 purchases merchandise on the basis of false price information, and when the consumer
15 alleges that he would not have made the purchase but for the misrepresentation, he has
16 standing to sue . . . .”). With regard to the proposed class Article III standing, “only
17 one Plaintiff needs to have standing for a class action to proceed.” Battle v. Taylor
18 James, LLC, 607 F. Supp. 3d 1025, 1042 (C.D. Cal. 2022) (quoting In re Zappos.com,
19 Inc., 888 F.3d 1020, 1028 n.11 (9th Cir. 2018)).
20 In the present case, Defendants maintain Plaintiffs do not have Article III
21 standing because Plaintiffs received the “benefit of the bargain" and therefore have
22 not suffered an injury in fact. (Mot. 10.) It is true Plaintiffs received the purchased
23 Products outlined in the July 17, 2022 contract. (See generally FAC.) Similarly, the
24 Court agrees that, by nature of receiving the home organization Products, Plaintiffs
25 enjoyed some degree of benefit from the purchase. However, Plaintiffs claim they
26 would not have purchased Defendants’ Products absent Defendants’ alleged false
27 advertisements and promotions. (FAC ¶¶ 14, 44–46.) Under Hinojos, Plaintiffs
28 sufficiently allege an injury-in-fact for the purpose of Article III standing. Thus, the
1 first element of Article III standing is satisfied. The second element and third
2 elements to establish Article III standing have not been raised as issues by the parties.
3 Nevertheless, the Court confirms that they are satisfied. The second element is clearly
4 met as the alleged injury-in-fact is directly traceable to Defendants and their
5 advertising and promotional discounts. The third element is also fulfilled because the
6 injuries-in-fact alleged by Plaintiffs could be redressed by a favorable judicial
7 decision.
8 The Court concludes Plaintiffs have Article III standing, which means the
9 proposed class in this action also has Article III standing. In light of this conclusion,
10 the Court declines to address the immaterial secondary arguments Defendants raise
11 challenging Plaintiffs’ Article III standing.
12 2. Statutory Standing
13 When a plaintiff brings claims under California Unfair Competition Law
14 (“UCL”), Consumer Legal Remedies Act (“CLRA”), and False Advertising Law
15 (“FAL”), the plaintiff must establish additional statutory standing requirements.
16 Battle, 607 F. Supp. 3d at 1042; see also Cal. Bus. & Prof. Code §§ 17200, 17500;
17 Cal. Civ. Code § 1782. The UCL and FAL require a plaintiff to “(1) establish a loss
18 or deprivation of money or property sufficient to qualify as an injury in fact, i.e.,
19 economic injury, and (2) show that economic injury was the result of, i.e., caused by,
20 the unfair business practice or false advertising that is the gravamen of the claim.”
21 Battle, 607 F. Supp. 3d at 1042 (quoting Kwikset Corp. v. Superior Ct., 51 Cal. 4th
22 310, 322 (2011)). Similarly, the CLRA necessitates that a plaintiff “must not only be
23 exposed to an unlawful practice but also have suffered some kind of damage.” Id.
24 (quoting Bower v. AT&T Mobility, LLC, 196 Cal. App. 4th 1545, 1556 (2011)). In
25 sum, for a plaintiff to establish standing under the UCL, CLRA, and FAL, a plaintiff
26 must sufficiently allege he: (1) suffered an economic injury; and (2) relied on the
27 purported material misrepresentation. In re Ferrero Litig., 794 F. Supp. 2d 1107,
28 1111–12 (S.D. Cal. 2011) (citing Kwikset, 51 Cal. 4th at 326–27).
1 In the case at hand, Defendants recycle the same arguments used to attack
2 Plaintiffs’ Article III standing. (Mot. 11.) Defendants claim Plaintiffs do not have
3 statutory standing because Plaintiffs did not suffer any injuries or rely on any
4 advertisements when purchasing Defendants’ Products. (Id. at 12.) However,
5 Plaintiffs specifically allege that, “due to Defendants’ misrepresentations, Plaintiffs
6 and the class paid more for the Products they bought than they otherwise would have.”
7 (FAC ¶ 46.) Additionally, Plaintiffs reiterate throughout the FAC that, shortly after
8 receiving Defendants’ advertisements in the mail, Plaintiffs contacted Defendants to
9 schedule a consultation based on the mailed advertisement’s alleged promotional
10 discounts, which eventually resulted in a contract. (FAC ¶¶ 52–54.) These allegations
11 satisfy the threshold requirements of an economic injury and reliance on purported
12 material misrepresentations in Defendants’ promotional advertisements. The Court
13 therefore finds that Plaintiffs establish statutory standing under the UCL, CLRA, and
14 FAL.
15 In conclusion, Plaintiffs satisfy the requirements to establish Article III and
16 California statutory standing. Accordingly, the Court denies Defendants’ motion to
17 mismiss Plaintiffs’ FAC for lack of standing.
18 C. CLRA Notice Requirement
19 Defendants next argue the Court should dismiss Plaintiffs’ second cause of
20 action for violations of the CLRA because Plaintiffs failed to serve the required
21 thirty-day notice letter required by the statute at least thirty days prior to commencing
22 the instant action. (Mot. 12.) The Court finds that the CLRA thirty-day notice letter is
23 not required in the present case because Plaintiffs seek only injunctive relief under the
24 CLRA.
25 Under the CLRA, plaintiffs are required to provide notice to a defendant of any
26 alleged CLRA violations by certified or registered mail “thirty days or more prior to
27 the commencement of an action for damages.” Cal. Civ. Code. § 1782(a). The notice
28 must also specify the “particular alleged violations” of the CLRA and demand that the
1 defendant “correct, repair, replace, or otherwise rectify” the alleged violations. Id. If
2 the defendant corrects the alleged wrongs or indicates it will make corrections within
3 a reasonable time, the plaintiff cannot file a suit seeking damages. Id. § 1782(c).
4 However, a thirty-day notice letter is not required where a plaintiff seeks only
5 injunctive relief under “specific provisions of Section 1770” of the CLRA. Id.
6 § 1782(d).
7 In the instant action, Plaintiffs assert a cause of action for CLRA violations
8 seeking—exclusively—injunctive relief under the CLRA. (Compl. ¶¶ 87–88, ECF
9 No. 1; FAC ¶ 104.) Thus, Plaintiffs are not required under the CLRA to send
10 Defendants a thirty-day notice letter because Plaintiffs do not seek CLRA-specific
11 damages. (See Compl. ¶¶ 87–88; FAC ¶ 104.) Furthermore, Plaintiffs properly plead
12 their request for injunctive relief, citing valid and applicable provisions of
13 Section 1770 of the CLRA. (FAC ¶¶ 94–104.)
14 Accordingly, the Court denies Defendants’ motion to dismiss as to Plaintiffs’
15 CLRA cause of action on this basis.
16 D. Deceptive Advertising
17 Defendants’ move to dismiss Plaintiffs’ FAC on the grounds that the
18 advertisements at-issue are not deceptive as a matter of law. (Mot. 13, 17.) The Court
19 finds this issue to be more appropriately resolved on a motion for summary judgment
20 once all discovery matters have been exhausted. As such, the Court denies
21 Defendants’ motion to dismiss on this basis.
22 E. FTC Regulations & Statutory Safe Harbor Doctrine
23 Defendants argue Plaintiffs’ UCL, CLRA, and FAL causes of action fail and
24 should be dismissed because Defendants’ conduct and advertisements are permitted
25 by Federal Trade Commission (“FTC”) regulation guidelines and therefore
26 Defendants’ advertisements are protected from legal claims under a statutory “safe
27 harbor” doctrine. (Mot. 17, 19.) In California, UCL, CLRA, and FAL “claims are
28 subject to the safe harbor doctrine, which precludes plaintiffs from bringing claims
1 based on ‘actions the Legislature permits.’” Ebner v. Fresh, Inc., 838 F.3d 958, 963
2 (9th Cir. 2016). Upon review of the asserted FTC regulations, the Court determines
3 Defendants’ alleged conduct is not expressly permitted by regulation and is therefore
4 not protected by the safe harbor doctrine. As such, Plaintiffs’ UCL, CLRA, and FAL
5 causes of action do not fail on this basis.
6 First, to contextualize the “safe harbor” doctrine in relation to UCL, CLRA, and
7 FAL statutory claims, the Court turns to the Ninth Circuit and California Supreme
8 Court. The California Supreme Court has explained, “[s]pecific legislation may limit
9 the judiciary’s power to declare conduct unfair[,] and [i]f the Legislature has
10 permitted certain conduct or considered a situation and concluded no action should lie,
11 courts may not override that determination.” Davis v. HSBC Bank, 691 F.3d 1152,
12 1164 (9th Cir. 2012) (quoting Cel-Tech Commc’ns Inc. v. L.A. Cellular Tel. Co.,
13 20 Cal. 4th 163, 182 (1999)). Thus, “[w]hen specific legislation provides a ‘safe
14 harbor,’ plaintiffs may not use the general unfair competition law to assault that
15 harbor.” Cel-Tech Commc’ns Inc., 20 Cal. 4th at 182. “To fall within the safe harbor,
16 the challenged conduct must be affirmatively permitted by statute—the doctrine does
17 not immunize from liability conduct that is merely not unlawful.” Ebner, 838 F.3d
18 at 963.
19 Defendants argue their alleged marketing conduct is permitted by 16 C.F.R
20 § 233.4 and contend their advertisements are therefore protected from UCL, CLRA,
21 and FAL claims under the safe harbor doctrine. (Mot. 15 (citing 16 C.F.R. § 233.4
22 (“Bargain offers based upon the purchase of other merchandise”)).) Section 233.4
23 addresses advertisement offers where a buyer must first purchase a regular priced item
24 to trigger a discount bargain on an additional, secondary item. 16 C.F.R. § 233.4.
25 More specifically, the types of offers discussed in § 233.4 are “‘Free,’ ‘Buy One-Get
26 One Free,’ ‘2-For-1 Sale,’ ‘Half Price Sale,’ ‘1¢ Sale,’ ‘50% Off,’ etc.,” where the
27 buyer must first purchase an article at full price to receive the advertised benefit. Id.
28 § 233.4(a). Section 233.4 does not encompass the type of discount bargain Plaintiffs
1 allege Defendants deceptively offer, nor is it the type of discount offered in
2 Defendants’ advertisements.
3 Instead, Plaintiffs allege Defendants display fictitious regular list prices and
4 continuously advertise “purported time-limited, ‘__%’ off’ sales off of those prices.”
5 (FAC ¶¶ 25, 31.) Plaintiffs further allege Defendants’ conduct leads reasonable
6 consumers to believe Defendants’ advertising means the Products are “regularly and
7 formerly retailed at the list price, and are being sold at a ‘__% off’ discount for a
8 limited time.” (Id. ¶ 42.) Plaintiffs argue that Defendants’ alleged conduct leads
9 consumers to believe they are receiving a product “worth more at a bargain price
10 because a time-limited sale is running, when in fact they are paying full price for a
11 product with a lower value than advertised.” (Opp’n Mot. (“Opp’n”) 14, ECF
12 No. 39.)
13 In light of Plaintiffs’ allegations, the relevant FTC regulation for a safe harbor
14 analysis is § 233.1, addressing former price comparisons for products and bargain
15 offers. See 16 C.F.R. § 233.1 (“Former price comparisons”). The language in this
16 section expressly outlines various scenarios where a seller’s former price will be
17 construed as “fictitious” and likely in violation of unfair competition laws:
18 If, on the other hand, the former price being advertised is not bona fide
but fictitious—for example, where an artificial, inflated price was
19
established for the purpose of enabling the subsequent offer of a large
20 reduction—the “bargain” being advertised is a false one; the purchaser is
21 not receiving the unusual value he expects. In such a case, the “reduced”
price is, in reality, probably just the seller’s regular price.
22
23 Id. § 233.1(a). In this case, Plaintiffs allege Defendants’ advertisements display
24 fictious list prices, promote fake discounts, and lead consumers to believe they are
25 getting a “limited-time” bargain price—when, in reality, the alleged bargain price is
26 the just the regularly sold price. (FAC ¶¶ 36–40.) The above language in § 233.1
27 directly addresses the core issues of Plaintiffs’ claims in the FAC and is the proper
28 FTC regulation section for a safe harbor analysis. The Court the does not find any
1 indication that Defendants’ discount scheme contained the type of offers in § 233.4,
2 such as “Buy One-Get One Free,” or “2-For-1 Sale.” (See generally FAC); see also
3 16 C.F.R. § 233.4. Accordingly, any reliance on § 233.4 for the purpose of a safe
4 harbor analysis is decidedly misplaced. Upon reviewing all facts in light of § 233.1,
5 the Court finds Defendants’ conduct is not permitted by the language of §233.1.
6 As such, Defendants’ alleged conduct is not protected by the FTC safe harbor
7 doctrine and the Court denies Defendants’ challenge to Plaintiffs’ UCL, CLRA, and
8 FAL causes of action.
9 F. Breach of Contract
10 Defendants seek to dismiss Plaintiffs’ fourth cause of action for breach of
11 contract2 on the grounds that: (1) Mirzatagi was not damaged as a result of
12 Defendants’ alleged breach of the July 17, 2023 contract; and (2) Nabiyev is a
13 third-party incidental beneficiary and thus has no right to enforce the contract.
14 (Mot. 20–21.) The Court finds Plaintiffs sufficiently allege their fourth cause of
15 action for breach of contract.
16 1. Mirzatagi’s Breach of Contract Claim
17 Neither party disputes that Mirzatagi entered into a contract with Closet World.
18 (Mot. 20; Opp’n 17.) Instead, Defendants argue Mirzatagi cannot bring a breach of
19 contract claim because she did not pay any personal money toward the purchase of the
20 Products or pay any money to Closet World. (Mot. 20.) The crux of this dispute is
21 whether the funds paid to Closet World from Plaintiffs’ joint account are considered
22 both Mirzatagi and Nabiyev’s money, or solely Nabiyev’s. In California, each owner
23 of a joint bank account is entitled to all funds in the joint account. Lee v. Yang,
24 111 Cal. App. 4th 481, 490 (2003). Plaintiffs have made clear that the funds Nabiyev
25 used to purchase the Products were taken from a joint bank account held by Nabiyev
26
2 Under California state law, “[a] cause of action for breach of contract requires proof of four
27 elements: (1) existence of a contract; (2) plaintiff’s performance or excuse for nonperformance;
(3) defendant’s breach; and (4) damages to plaintiff as a result of the breach.” CDF Firefighters v.
28 Maldonado, 158 Cal. App. 4th 1226, 1239 (2008).
1 and Mirzatagi. (FAC ¶ 57.) Therefore, Nabiyev and Mirzatagi jointly owned the
2 money used to pay Closet World and Mirzatagi’s alleged economic damages resulting
3 from Defendants’ conduct are sufficient to state a breach of contract claim. The Court
4 denies Defendants’ motion to dismiss Mirzatagi’s fourth cause of action for breach of
5 contract.
6 2. Nabiyev’s Breach of Contract Claim
7 The Ninth Circuit instructs that, “[b]efore a third party can recover under a
8 contract, it must show that . . . it is an intended beneficiary of the contract.” Klamath
9 Water Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999).
10 “Whether a third party is an intended beneficiary or merely an incidental beneficiary
11 to the contract involves construction of the parties’ intent, gleaned from reading the
12 contract as a whole in light of the circumstances under which it was entered.”
13 Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 402 F. Supp. 3d 615,
14 662 (N.D. Cal. 2019).
15 In the case at bar, Nabiyev alleges he contacted Closet World for the July 2022
16 in-home consultation after receiving Defendants’ mailed advertisement. (FAC ¶ 52.)
17 The in-home consultation was for and occurred in the shared residence of Nabiyev
18 and Mirzatagi. Id. The initial quote listed two separate closet orders labeled “Yours”
19 in reference to the closet for Nabiyev’s room and “Mom’s” in reference to the closet
20 for Mirzatagi’s room. (Id. ¶ 54.) Nabiyev’s email and phone number are listed as the
21 primary contact information on the invoice Plaintiffs used to contract with Defendants
22 for their Products. (Id. ¶ 57.) Thus, it is clear Plaintiffs purchased Closet World’s
23 Products for a home in which Nabiyev resided. At the very least, Plaintiffs purchased
24 a closet specifically for Nabiyev’s room, i.e. “Yours,” which indicates they intended
25 Nabiyev to benefit from the July 17, 2022 contract. The Court finds Plaintiffs
26 sufficiently allege facts establishing Nabiyev is an intended third-party beneficiary
27 with a right to enforce the contract.
28 As such, Nabiyev has a right to bring this initial breach of contract claim
1 against the Defendants and the Court denies Defendants’ motion to dismiss Nabiyev’s
2 fourth cause of action for breach of contract
3 G. Express Warranty
4 Defendants next move to dismiss Plaintiffs’ fifth cause of action, for breach of
5 express warranty, arguing that Plaintiffs did not rely on the representations in Closet
6 World’s advertisements to make the July 17, 2022 purchase. (Mot. 22.) Upon review
7 of the pleadings, the Court determines Plaintiffs sufficiently state a cause of action for
8 breach of express warranty.
9 To successfully plead a cause of action for breach of express warranty, “a
10 plaintiff must prove that the seller (1) made an affirmation of fact or promise or
11 provided a description of its goods; (2) the promise or description formed part of the
12 basis of the bargain; (3) the express warranty was breached; and (4) the breach caused
13 injury to the plaintiff.” Cho v. Hyundai Motor Co., Ltd., 636 F. Supp. 3d 1149, 1173
14 (C.D. Cal. 2022) (citing Asghari v. Volkswagen Grp. of Am., Inc., 42 F. Supp. 3d 1306,
15 1333 (C.D. Cal. 2013)). “Product advertisements, brochures, or packaging can serve
16 to create part of an express warranty.” Rosales v. FitFlop USA, LLC, 882 F. Supp. 2d
17 1168, 1178 (S.D. Cal. 2012) (citing Cal. Comm. Code § 2313(1)(b)). When
18 advertisements create an express warranty, courts do not require that a plaintiff rely on
19 an individual advertisement to form the basis of the bargain. Id. (citing In re Toyota
20 Motor Corp. Unintended Acceleration Mktg., Sales Pracs., & Prods. Liab. Litig.,
21 754 F. Supp. 2d 1145, 1183 (C.D. Cal. 2010)). Instead, plaintiffs need allege only that
22 they were “actually exposed to the advertising.” Id.
23 In the present case, Defendants argue that Plaintiffs’ breach of express warranty
24 claim fails because, first, Nabiyev did not rely on Closet World’s advertisement to
25 make the July 17, 2022 purchase; and, second, Plaintiffs “failed to allege that Closet
26 World did not fulfill any obligations set forth in the offer.” (Mot. 21–22.)
27 As to Defendants’ first argument, Plaintiffs have clearly articulated in the FAC
28 that they received Defendants’ advertisements in the mail and shortly thereafter
1 | contacted Defendant to schedule a consultation, ultimately leading to a contract.
(FAC 9952-54.) Thus, Plaintiffs allege they were exposed to Defendants’
3 || advertisements as well as the representations and express warranties therein. This is
4|| sufficient at this stage to establish Defendants’ advertisements formed part of the
5 | “basis of the bargain.” Cho, 636 F. Supp. 3d at 1173.
6 Regarding Defendants’ second argument, Plaintiffs distinctly allege that Closet
7|| World did not fulfill obligations set forth in the offer. (FAC {[§ 65, 136.) More
8 | specifically, Plaintiffs claim Defendants did not fulfill their promise to “provide
9 || Plaintiffs with a discounted price, as advertised.” (d.) Thus, Plaintiffs identify the
10 || specific obligations they allege Defendants failed to fulfill.
11 Therefore, the Court finds Plaintiffs sufficiently state a cause of action for
12 || breach of express warranty. Accordingly, the Court denies Defendants’ motion to
13 || dismiss Plaintiffs’ fifth cause of action.
14 Vv. CONCLUSION
15 For the reasons discussed above, the Court DENIES Defendants’ Motion to
16 || Dismiss Plaintiffs’ FAC. (ECF No. 25.)
17
18
19 IT IS SO ORDERED.
20 “See Oa
21 November 15, 2023 bedi
22 oe
23
4 OTIS D. WRIGHT, I
05 UNITED STATES DISTRICT JUDGE

26
27
28

15

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9985089. Public record. Not legal advice.