Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LOOP GLOBAL, INC, a Nevada Case No.: 3:26-CV-01086-GPC-MSB Company, 12 ORDER DENYING IN PART AND Plaintiff, 13 GRANTING IN PART PLAINTIFF’S v. MOTION TO DISMISS AND STRIKE 14 EVERGED LLC, a Delaware company, 15 [ECF No. 30] Defendant. 16 EVERGED LLC, 17 Counter-Complainant, 18 v. 19 LOOP GLOBAL, INC.; and ZACK 20 MARTIN 21 Counter-Defendants. 22 23 On May 5, 2026, Plaintiff Loop Global, Inc. filed a motion to dismiss for failure to 24 state a claim under Federal Rules of Civil Procedure 12(b)(6) and 9(b) and a motion to 25 strike under Rule 12(f). ECF No. 30. The motion has been fully briefed. ECF Nos. 38, 39. 26 27 1 Based on the reasoning below, the Court DENIES in part and GRANTS in part Plaintiff’s 2 motion to dismiss and strike. 3 FACTUAL BACKGROUND 4 Defendant and Counter-Complainant EVerged LLC (“EVerged”) is an energy 5 technology company focused on developing and integrating renewable energy and 6 advanced technology. ECF No. 20 (“A&C”) at 38.1 Plaintiff and Counter-Defendant 7 Loop Global, Inc. (“Loop”) is a leading provider of turnkey EV charging solutions in 8 several countries. ECF No. 1 (“Compl.”) ¶ 21. 9 In September 2022, EVerged and Loop first met through their respective 10 representatives. A&C at 38. On October 5, 2022, the two parties entered into a mutual 11 non-disclosure agreement to protect confidential information shared in connection with 12 exploring potential business opportunities in the energy efficiency sector. Id. 13 On March 21, 2023, The City of San Diego (the “City”) issued a Request for 14 Proposal (“RFP”) for an as-needed Electric Vehicle Supply Equipment (“EVSE”) 15 contractor. Id. The RFP offered the selected contractor the exclusive rights to install as- 16 needed EVSE in the City’s public spaces and parking lots. Id. The RFP contained specific 17 requirements, including (1) use of a multi-channel payment method and (2) charger 18 uptime in excess of 97%. Id. at 38-39. The RFP also included a “No Third Party 19 Beneficiaries” provision that states the following: 20 “No Third Party Beneficiaries. Except as may be specifically set forth in this 21 Contract, none of the provisions of this Contract are intended to benefit any third 22 party not specifically referenced herein. No party other than City and Contractor 23 shall have the right to enforce any of the provisions of this Contract.” 24 25 26 1 Throughout the order, the pagination for docketed documents is derived from the numbering generated by the ECF system. 27 1 Id. at 40. 2 During and throughout this time, “EVerged never entered into any form of subcontractor 3 agreement with Loop.” Id. 4 On July 6, 2023, EVerged submitted a timely proposal to the City in response to 5 the RFP (the “Proposal”). Id. The Proposal contained information provided by Loop, 6 including representations of “99% uptime performance” and marketing slides that 7 displayed Loop’s chargers having “tap-to-pay functionality.” Id. The Proposal 8 additionally stated, “Loop Global has approved this project to be 100% funded through 9 their Impact Fund which is currently funded over $60 MM with more funding sources 10 pending.” Id. at 41. Moreover, the Proposal explained the “Roles and Responsibilities” of 11 the “core team.” Compl., ¶ 35; id. at 7. EVerged labeled itself as “Prime Contractor,” 12 where it would be responsible for, inter alia, “secur[ing] fund[s] for the Project.” Compl., 13 ¶ 36; A&C at 7. The Proposal also labeled Loop as a “Strategic” and “Major” 14 subcontractor, where it would be responsible for providing compliant charging stations, 15 end user software, and data services. Compl., ¶ 37; A&C at 7. Further, Section K of the 16 Proposal listed Loop as a subcontractor and noted “subcontractors may not be substituted 17 without the written consent of the City.” Compl., ¶ 41; A&C at 8. The Proposal was later 18 incorporated into the Project’s governing contract. Compl., ¶ 32; A&C at 7. 19 On October 11, 2023, the City informed EVerged that based on its initial 20 evaluation criteria in the RFP, it rated EVerged’s Proposal within 7 points of another 21 competing proposal, resulting in the City issuing an additional set of supplemental 22 criteria for further evaluation and requiring a mandatory interview and supplemental 23 submission. A&C at 41. On October 20, 2023, in preparation for the new evaluation and 24 interview, then Vice President of Operations at Loop, Christopher Becker (“Becker”), 25 sent an email to EVerged with attachments providing written statements, images, and 26 comments with “the intent that EVerged would include and rely upon them in providing 27 1 its written response and oral interview presentation responses to the City.” Id. 2 Additionally, Eric Hodonsky, Loop’s then Chief Software Officer, and Zack Martin, 3 Loop’s then Chief Executive Officer and Chief Financial Officer, were copied on that 4 email. Id. 5 Loop allegedly made the following representations in the October 20, 2023 email 6 to EVerged: 7 (a) “EVC Product Roadmap . . . EV Kiosk: Multi-Payment Options: The chip and 8 tap reader on our EV kiosk accepts a wide range of payment methods . . . [u]sers 9 can simply tap their payment card or smartphone on the reader to initiate the 10 charging process, eliminating the need for cumbersome cables and cards.”; 11 (b) “99% Uptime Commitment: Loop’s commitment to providing services where 12 customers can charge their electric vehicles without disruption. Loop stands behind 13 a 100% Uptime Guarantee and will reimburse Site Hosts for disruption to charging 14 service connectivity.”; 15 (c) "Loop Global is fully committed to 100% financing EVerged for all Capital 16 requirements for this contract over the 10-year period of performance."; and 17 (d) indicated that Mr. Martin would be the speaker attesting to these points at the 18 interview with the City. 19 Id. at 42-44. 20 EVerged incorporated these representations into the slide deck for the oral interview 21 presentation to the City, and Loop representatives reviewed and approved the slide deck 22 presentation prior to the interview. Id. at 44. 23 On October 23, 2023, EVerged provided its supplemental submission and 24 presented its Proposal to the City with Loop and Baker Electric representatives present. 25 Id. at 44-45. The supplemental submission itself labeled Loop as a team member with the 26 role of “EV Charging OEM.” Compl., ¶ 53; id. at 9. Martin, Hodonsky, and Becker 27 1 allegedly spoke on behalf of Loop during the interview and made the following 2 representations to EVerged and the City: (a) Becker stated the Loop chargers would have 3 multiple payment options including tap-to-pay functions, reflected in slides 5 and 6 in the 4 slide deck; and (b) Martin represented that Loop would provide full financing to EVerged 5 for all capital requirements for the Project over its ten-year term, reflected in slide 12 of 6 the slide deck. A&C at 45. However, when the City asked for further clarification and 7 details on capital funds and funding options, EVerged responded with potential funding 8 options beyond just Loop, including options with Bluestar, DLL Group, and other 9 potential sources. Compl. ¶ 55; id. at 10. The supplemental submission was incorporated 10 into the Project’s governing contract. Compl., ¶ 52; A&C at 9. 11 In November 2023, based on the oral presentation, the City accepted EVerged’s 12 Proposal and executed a formal contract with EVerged for the Project (the “Contract”). 13 A&C at 45. 14 After the Contract with the City was formalized, EVerged alleges Loop did not 15 provide the 100% financing commitment it promised. Id. Loop, instead, disputed it ever 16 agreed to provide such financing, and later “strung” EVerged along by repeatedly 17 assuring EVerged that funding was imminent. Id. After not providing funding, Loop 18 presented several alternative third-party funding arrangements, but EVerged rejected 19 these options because they did not provide the 100% financing promised. Id. at 46. In late 20 April 2025, EVerged eventually secured a “50 million dollar strategic investment” from 21 Leonid Capital Partners, however, at “significant delay and materially adverse cost.” 22 Compl., ¶ 103; id. at 46. 23 At the same time, EVerged stated in a press release, “we firmly believe this 24 [Leonid Capital] partnership places EVerged at the forefront of the EV charging 25 industry.” Compl., ¶ 105; A&C at 17. Anne Lowe, city representative and Zero 26 Emissions Vehicles Program Manager, was also quoted in an Inside San Diego article 27 1 titled “First Round of New Electric Vehicle Chargers Has been Installed,” where she 2 stated “EVerged is contractually responsible for financing, permitting, constructing, 3 operating, and maintaining the EV chargers for the duration of the contract.” Compl. ¶¶ 4 115-116; A&C at 18. 5 In March 2025, EVerged communicated to Loop that Loop was removed from the 6 Project and that it should no longer communicate with the City about the Project. See 7 Compl. ¶¶ 97-102; A&C at 16. On May 6, 2025, EVerged posted about the first EV 8 chargers installed in the city, which displayed Loop EV charging stations, and in July 9 2025, EVerged’s press release and LinkedIn post displayed Loop Level 2 EV charging 10 stations being set up around the city. Compl. ¶¶ 127-31; A&C at 20. This press release 11 and the posts do not mention Loop. Id. EVerged had acquired the Loop chargers via 12 BlueStar, a third-party distributor. A&C at 40. 13 After installing the acquired Loop chargers, EVerged discovered the chargers did 14 not have the uptime in excess of 97% nor was the tap-to-pay functionality active across 15 Loop’s network, requiring manufacturer involvement to resolve the issues. Id. at 46. As a 16 result, EVerged alleges they incurred significant time and expense to replace Loop’s 17 noncompliant chargers, causing further Project delays. Id. 18 EVerged also asserts it learned of Loop contacting various City employees without 19 EVerged’s knowledge and “made false and/or misleading statements regarding 20 EVerged…to undermine and/or disrupt EVerged’s relationship with the City and its 21 position as the prime contractor for the Project.” Id. 22 EVerged claims it had “spent two years working to overcome and recover from 23 [Loop’s misrepresentations]” and such misrepresentations were a direct and proximate 24 cause of EVerged’s damages. Id. at 46-47. 25 / / / 26 / / / 27 1 PROCEDURAL HISTORY 2 On February 19, 2026, Plaintiff Loop Global, Inc. filed a complaint against 3 Defendant EVerged LLC alleging: 1) violation of California Subletting and 4 Subcontracting Fair Practices Act, Cal. Pub. Cont. Code. §§ 4100-14; 2) Breach of 5 Contract as a third-party beneficiary; 3) Intentional Interference with Prospective 6 Economic Advantage; and 4) Violation of Lanham Act, 15 U.S.C. § 1125(s). Compl. at 7 46-58. On April 10, 2026, EVerged filed an answer to the complaint and asserted three 8 counterclaims, a request for declaratory judgment, and twenty-six affirmative defenses. 9 A&C at 47-52. The causes of action include: (1) intentional misrepresentation; (2) 10 negligent misrepresentation; and (3) intentional interference of contract. Id. 11 On May 5, 2026, Loop filed a motion to dismiss EVerged’s counterclaims pursuant 12 to Federal Rules of Civil Procedure 12(b)(6) and 9(b) and a motion to strike EVerged’s 13 request for declaratory judgement and asserted affirmative defenses pursuant to Federal 14 Rule of Civil Procedure 12(f). ECF No. 30 (“Mot.”). On June 2, 2026, EVerged filed a 15 response in opposition. ECF No. 38 (“Opp.”). On June 16, 2026, Loop filed a reply. ECF 16 No. 39 (“Rep.”). 17 LEGAL STANDARD 18 1. Federal Rule of Civil Procedure 12(b)(6) 19 Federal Rule of Civil Procedure12(b)(6) permits dismissal for “failure to state a 20 claim for which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under 12(b)(6) 21 is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to 22 support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 23 699 (9th Cir. 1990). Under Federal Rule of Civil Procedure 8(a)(2) the plaintiff is 24 required only to set forth a “short and plain statement of the claim showing that the 25 pleader is entitled to relief,” and “give the defendant fair notice of what the . . . claim is 26 27 1 and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 2 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). 3 A complaint may survive a motion to dismiss only if, taking all well pleaded 4 factual allegations as true, it contains enough facts to “state a claim to relief that is 5 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 6 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “A claim has facial 7 plausibility when the plaintiff pleads factual content that allows the court to draw 8 reasonable inference that the defendant is liable for the misconduct alleged.” Id. 9 “Threadbare recitals of the elements of a cause of action, supported by mere conclusory 10 statements, do not suffice.” Id. “In sum, for a complaint to survive a motion to dismiss, 11 the non-conclusory factual content, and reasonable inferences from that content, must be 12 plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 13 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted). In reviewing a Rule 12(b)(6) 14 motion, the Court accepts as true all facts alleged in the complaint and draws all 15 reasonable inferences in favor of the non-movant. al-Kidd v. Ashcroft, 580 F.3d 949, 956 16 (9th Cir. 2009). 17 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless 18 the court determines that the allegation of other facts consistent with the challenged 19 pleading could not possible cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 20 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture 21 Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would 22 be futile, the Court may deny leave to amend. See DeSoto, 957 F.2d at 658; Schreiber, 23 806 F.2d at 1401. 24 2. Federal Rule of Civil Procedure 9(b) 25 Where a claim alleges fraud or is grounded in fraud, Rule 9(b) requires a plaintiff 26 to “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. 27 1 P. 9(b). However, “[m]alice, intent, knowledge, and other conditions of a person’s mind 2 may be alleged generally.” Id. A party must set forth “the time, place, and specific 3 content of the false representations as well as the identities of the parties to the 4 misrepresentations.” Odom v. Microsoft Corp., 486 F.3d 541, 553 (9th Cir. 2007) 5 (internal quotation marks omitted). 6 Allegations of fraud must be “specific enough to give defendants notice of the 7 particular misconduct which is alleged to constitute the fraud charged so that they can 8 defend against the charge and not just deny that they have done anything wrong.” 9 Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985); see also Cooper v. Pickett, 137 10 F.3d 616, 627 (9th Cir. 1997) (noting that particularity requires plaintiff to allege the 11 “who, what, when, where, and how” of the alleged fraudulent conduct). In addition, the 12 complaint must state “what is false or misleading about a statement, and why it is false.” 13 In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc) superseded 14 by statute on other grounds, Private Sec. Litig. Reform Act of 1995, 15 U.S.C. § 78u– 15 4(b)(1), as recognized in Ronconi v. Larkin, 253 F.3d 423, 429 n.6 (9th Cir. 2001). 16 3. Federal Rule of Civil Procedure 12(f) 17 Rule 12(f) provides that the court “may strike from a pleading an insufficient 18 defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 19 12(f). “The function of a 12(f) motion to strike is to avoid the expenditure of time and 20 money that must arise from litigating spurious issues by dispensing with those issues 21 prior to trial . . . .” Whittlestone, Inc. v. Handi–Craft Co., 618 F.3d 970, 973 (9th Cir. 22 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on 23 other grounds 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)). As such, “motions 24 to strike should not be granted unless it is clear that the matter to be stricken could have 25 no possible bearing on the subject matter of the litigation.” Colaprico v. Sun Microsys., 26 Inc., 758 F. Supp. 1335, 1339 (N.D. Cal. 1991). “Courts will not grant motions to strike 27 1 unless ‘convinced that there are no questions of fact, that any questions of law are clear 2 and not in dispute, and that under no set of circumstances could the claim or defense 3 succeed.’” Novick v. UNUM Life Ins. Co. of America, 570 F. Supp. 2d 1207, 1208 (C.D. 4 Cal. 2008) (quoting RDF Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556, 561 (C.D. 5 Cal. 2005)). “When ruling on a motion to strike, this Court ‘must view the pleading under 6 attack under the light most favorable to the pleader.’” Id. (citing RDF Media Ltd., 372 F. 7 Supp. 2d at 561). 8 DISCUSSION 9 Loop brings the instant motion and argues the following: (1) EVerged’s first and 10 second counterclaims do not sufficiently allege either intentional or negligent 11 misrepresentation; (2) EVerged does not sufficiently allege its third counterclaim of 12 intentional interference; (3) the declaratory judgment claim should be dismissed or 13 stricken; and (4) several of EVerged’s affirmative defenses should be stricken. Mot. at 14 10-11. 15 1. First & Second Causes of Action – Intentional & Negligent Misrepresentation 16 A party must plead five elements for intentional misrepresentation: (1) 17 misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable 18 reliance; and (5) resulting damage. Robinson Helicopter Co. v. Dana Corp., 34 Cal. 4th 19 979, 990, 102 P.3d 268, 274 (2004); Collins v. eMachines, Inc., 202 Cal. App. 4th 249, 20 259, 134 Cal. Rptr. 3d 588, 596 (2011), as modified (Dec. 28, 2011). The elements of a 21 claim for negligent misrepresentation are: “(1) a misrepresentation of a past or existing 22 material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to 23 induce another's reliance on the fact misrepresented, (4) ignorance of the truth and 24 justifiable reliance thereon by the party to whom the misrepresentation was directed, and 25 (5) damages.” Fox v. Pollack, 181 Cal. App.3d 954, 962 (1986); see Marroquin v. Pfizer, 26 Inc., 367 F. Supp. 3d 1152, 1166 (E.D. Cal. 2019). 27 1 Loop argues that these alleged intentional and negligent misrepresentations are not 2 adequately pled because they fail to meet the particularity requirement of Rule 9(b) and 3 the latter three elements of an intentional or negligent misrepresentation claim. Mot. at 4 17-27. 5 a. Particularity 6 To plead fraud with the particularity required by Rule 9(b), a complaint “must 7 identify the who, what, when, where, and how of the misconduct charged, as well as what 8 is false or misleading about the purportedly fraudulent statement, and why it is 9 false.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 964 (9th Cir. 2018). When the 10 defendant is an entity, a complaint generally must also identify the person who made the 11 false representations on behalf of the entity. See United States ex rel. Lee v. SmithKline 12 Beecham, 245 F.3d 1048, 1051 (9th Cir. 2001); White v. J.P. Morgan Chase, Inc., 167 13 F.Supp.3d 1108, 1115 (E.D. Cal. 2018); Griffin v. Green Tree Servicing, LLC, 166 14 F.Supp.3d 1030, 1057-58 (C.D. Cal. 2015). Rule 9(b) only requires that “allegations of 15 fraud ... be ‘specific enough to give defendants notice of the particular misconduct which 16 is alleged to constitute the fraud charged so that they can defend against the charge and 17 not just deny that they have done anything wrong.’ ” Bly-Magee v. Calif., 236 F.3d 1014, 18 1019 (9th Cir. 2001) (quoting Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993)) 19 EVerged’s counterclaims rest on representations Loop made through three 20 channels: (i) Loop’s October 20, 2023 email and attachments from Christopher Becker, 21 (ii) direct oral statements by Becker, Hodonsky, and Martin to EVerged during the 22 October 23, 2023 interview, and (iii) the information Loop provided to EVerged to 23 include in its July 2023 proposal response to the RFP. Opp. at 8. 24 The first two channels meet the particularity requirement, while the last channel 25 does not. As to the first channel, EVerged alleges that on October 20, 2023 (when), 26 Becker on behalf of Loop, with Hodonsky and Martin copied, (who) sent EVerged an 27 1 email with attachments (where and how) with written statements, images, and comments 2 that EVerged was to rely upon and include in its oral response and oral interview 3 presentation to the City (what). A&C at 41. EVerged quotes the written statements (i.e., 4 the 99% uptime commitment, the ability for the stations to complete contactless 5 payments, and the 100% financing commitment) and alleges they are false. Id. at 42-44, 6 47. As to the second channel, EVerged separately alleges that on October 23, 2023 7 (when), Martin, Becker, and Hodonsky (who) spoke on behalf of Loop during the City 8 interview (where and how) and made false representations about the Loop charger having 9 contactless capabilities and Loop committing to 100% financing (what). EVerged also 10 alleged that Loop never provided any portion of the 100% project financing and that 11 Loop’s chargers did not comply with project requirements (why). Id. at 46-47. Thus, 12 EVerged has met the requirements of Rule 9(b) particularity for these two channels. 13 The third channel, however, only alleges that on July 6, 2023 EVerged submitted a 14 proposal to the City that contained information provided by Loop, listing a 99% uptime 15 performance, tap-to-pay functionality, and 100% funding through Loop’s impact fund. 16 A&C at 40-41. This allegation does not specify when Loop made representation to 17 EVerged, who from Loop made that representation, where or how that representation was 18 made, and what Loop represented in that communication. Details from a representation 19 made by EVerged to the City cannot be substituted to meet this heightened pleading 20 requirement. The factual allegations must specify the details of Loop’s specific instance 21 of misrepresentation. 22 In sum, Rule 9(b) particularity is met for the first two channels but not for the third 23 identified channel. 24 b. Intent to Induce Reliance 25 Intent to induce reliance requires that the defendant made the false statement with 26 the purpose of inducing the plaintiff to act or refrain from acting in reliance upon 27 1 it. Ferreira v. Quik Stop Markets, Inc., 141 Cal. App. 3d 1023, 1032 (Ct. App. 1983). 2 However, “[m]alice, intent, knowledge, and other conditions of a person’s mind may be 3 alleged generally.” Fed. R. Civ. P. 9(b). 4 For this element, Loop narrowly targets EVerged’s second identified channel of 5 misrepresentation, specifically the direct oral statements by Becker, Hodonsky, and 6 Martin to EVerged during the October 23, 2023 interview. Loop argues that EVerged 7 cannot rely on representations to the City because any representations made to the City 8 were with the intention to win a contract with the City, not to induce EVerged’s reliance. 9 Mot., at 18. 10 Loop’s argument is unpersuasive. While the interview setting and the presence of 11 the City indicates that Loop likely made the representations with the intent to win the 12 contract with the City, EVerged was also present at the interview and an alleged recipient 13 of the representations. The proposition that Loop had an intent to win the contract does 14 not defeat the allegation that Loop also intended to induce EVerged’s reliance on that 15 representation. Thus, this element is met. 16 c. Justifiable Reliance 17 Justifiable reliance requires that the plaintiff (1) actually and (2) reasonably relied 18 upon the defendant’s misrepresentation. Dey v. Robinhood Markets, Inc., 780 F.Supp.3d 19 882, 891 (N.D. Cal. 2025). Loop contends that EVerged fails on both counts. Mot. at 22. 20 i. Actual Reliance 21 Actual reliance occurs when “the misrepresentation was an immediate cause of the 22 injury-producing conduct.” In re Tobacco II Cases, 46 Cal. 4th 298, 326 (2009); see 23 Watson v. Crumbl LLC, 736 F. Supp. 3d 827, 847 (E.D. Cal. 2024). “[A]bsent such 24 representation, [the party] would not, in all reasonable probability, have entered into the 25 contract or other transaction. It is not ... necessary that [a plaintiff's] reliance upon the 26 truth of the fraudulent misrepresentation be the sole or even the predominant or decisive 27 1 factor in influencing his conduct .... It is enough that the representation has played a 2 substantial part, and so has been a substantial factor, in influencing his decision.” Engalla 3 v. Permanente Medical Group, Inc., 15 Cal. 4th 951, 976–77 (1997) (quotations and 4 citations omitted). 5 In its Counterclaims, EVerged alleges EVerged actually relied on Loop’s 6 representations and would not have included or promoted Loop in connection with the 7 Project without such representations. A&C at 48. Loop, however, maintains that this 8 allegation fails to plead actual reliance because EVerged did not show that it changed its 9 behavior based on any of the alleged representations. Rep. at 4. In Loop’s view, “Loop 10 and EVerged had already been working together for months, having collaborated on a 11 proposal that was submitted in early July,” so EVerged was only continuing that behavior 12 rather than making any change. Id. 13 However, Loop’s argument misstates the law for this element. California law does 14 not require a plaintiff to prove a discrete pre-and-post behavioral shift. The standard asks 15 whether the misrepresentation was an immediate cause of the plaintiff’s conduct and 16 whether the plaintiff would not have entered the transaction absent the representation. 17 Watson, 736 F.Supp.3d at 847. EVerged’s allegation that it would not have included or 18 promoted Loop in connection with the Project but for Loop’s representations directly 19 tracks with this standard. Therefore, the Court finds that this element is met. 20 ii. Reasonable Reliance 21 Loop argues that EVerged’s reliance on the statement of “100% financing” is 22 unreasonable as a matter of law because it would contradict EVerged’s statements to the 23 City, the parties’ entire course of dealing, and the sophistication of EVerged as a 24 company. Mot. at 22-24. 25 The reasonableness of the plaintiff's reliance is judged by the plaintiff's knowledge 26 and experience. Watson, 736 F.Supp.3d at 847. Thus, “[e]xcept in the rare case where the 27 1 undisputed facts leave no room for a reasonable difference of opinion, the question of 2 whether a plaintiff’s reliance is reasonable is a question of fact.” All. Mortg. Co. v. 3 Rothwell, 10 Cal.4th 1226, 1239 (1995). 4 Here, EVerged has alleged that Loop represented that it was “fully committed to 5 100% financing” in its written October 2023 email and that the representation was 6 repeated in an oral statement made by Martin during the interview with the City. Based 7 on these representations, EVerged continued to include and promote Loop as a partner. 8 Construing the facts in the light most favorable to EVerged, EVerged has plausibly 9 alleged justifiable reliance. Loop’s arguments about contract contradictions and course of 10 dealing are precisely the type of factual disputes that cannot be resolved at the motion to 11 dismiss stage. 12 Therefore, the Court finds that EVerged has sufficiently pled reasonable reliance. 13 b. Resulting Damages 14 To meet this element, “it is not enough for the complaint to allege damage was 15 suffered.” Beckwith v. Dahl, 205 Cal. App. 4th 1039, 1064 (2012). Resulting damage 16 requires “a complete causal relationship between the fraud or deceit and the plaintiff's 17 damages.” City Sols., Inc. v. Clear Channel Commc'ns, 365 F.3d 835, 840 (9th Cir. 18 2004) (brackets omitted). “If the defrauded plaintiff would have suffered the alleged 19 damage even in the absence of the fraudulent inducement, causation cannot be alleged 20 and a fraud cause of action cannot be sustained.” Beckwith, 205 Cal. App. 4th at 1064. 21 Additionally, in California, a party “must suffer actual monetary loss to recover on 22 a fraud claim.” All. Mortg. Co. v. Rothwell, 10 Cal. 4th 1226, 1240, 44 Cal.Rptr.2d 352, 23 900 P.2d 601 (1995); accord Abbot v. Stevens, 133 Cal. App. 2d 242, 247, 284 P.2d 159 24 (1955) (“Fraudulent representations which work no damage cannot give rise to an action 25 at law, and an allegation of a definite amount of damage is essential to stating a cause of 26 action.” (internal citation omitted)). At the motion to dismiss stage, a specific amount of 27 1 damages is not required as long as the alleged facts entitle the plaintiff to relief. Furia v. 2 Helm, 111 Cal. App. 4th 945, 957 (2003), as modified (Sept. 10, 2003). 3 Here, EVerged alleges relying on Loop’s 100% financing representation resulted in 4 funding delays and unforeseen costs to secure alternative financing. A&C at 46. In terms 5 of the chargers, EVerged alleges relying on Loop’s representations about tap-to-pay 6 capabilities and 99% uptime resulted in them using and replacing non-compliant chargers 7 and experiencing further project delays. Id. These alleged damages are sufficient; 8 EVerged does not have to include specific amounts in its pleading. 9 As a result, Loop’s motion to dismiss the intentional misrepresentation claim is 10 DENIED. 11 2. Second Cause of Action –Negligent Misrepresentation 12 Beyond the above arguments, Loop also contends that EVerged’s negligent 13 misrepresentation claim fails because it relies on promises of future conduct. Mot. at 27. 14 The first element for a negligent misrepresentation claim is a misrepresentation of 15 past or existing material fact. Fox v. Pollack, 181 Cal. App.3d 954, 962 (1986); see 16 Marroquin v. Pfizer, Inc., 367 F. Supp. 3d 1152, 1166 (E.D. Cal. 2019). “Although a 17 false promise to perform in the future can support an intentional misrepresentation claim, 18 it does not support a claim for negligent misrepresentation.” Stockton Mortg., Inc. v. 19 Tope, 233 Cal.App.4th 437, 458 (Cal. Ct. App. 2014) (citing Tarmann v. State Farm Mut. 20 Auto. Ins. Co., 2 Cal.App.4th 153, 158–59 (Cal. Ct. App. 1991)). For example, 21 in Tarmann, a promise to “pay for [the insured's] repairs immediately upon completion” 22 was a promise of future performance, not actionable under a negligent misrepresentation 23 claim. Tarmann, 2 Cal.App.4th at 158. Similarly, in Stockton Mortgage, a promise to 24 “obtain a release of the notice of abatement action prior to the close of escrow ... was a 25 promise of future performance, and thus [could not] be the basis for a negligent 26 misrepresentation cause of action.” Stockton Mortg., 233 Cal.App.4th at 458. 27 1 There is, however, an exception to future predictions “(1) where a party holds 2 himself out to be specially qualified and the other party is so situated that he may 3 reasonably rely upon the former's superior knowledge; (2) where the opinion is by a 4 fiduciary or other trusted person; [and] (3) where a party states his opinion as an existing 5 fact or as implying facts which justify a belief in the truth of the opinion.” Borba v. 6 Thomas, 70 Cal. App. 3d 144, 152 (Ct. App. 1977). “Examples of actionable statements 7 under these exceptions include a sales agent's representation that a condominium with 8 structural defects was nevertheless luxurious and an outstanding investment and a 9 realtor's opinion that the purchaser of a particular lot would have an enforceable access 10 easement.” Cohen v. S & S Constr. Co., 151 Cal. App. 3d 941, 946 (Ct. App. 1983) 11 (citations omitted). 12 First, EVerged alleges that Loop represented that the chargers have contactless 13 payment options and 99% uptime. A&C at 42. This is a representation about the 14 charger’s existing capabilities and, thus, meets this element. 15 Second, EVerged alleges that Loop represented its full commitment to 100% 16 financing. Id. at 44-45. While EVerged argues that this describes a then-existing 17 capability, this, at bottom, is a future promise to provide financing. The future promise 18 also does not meet the exception requirements. Martin did not hold himself out to be an 19 expert in financing but only the CEO of Loop. He also did not state his opinion as an 20 existing fact when he represented a commitment to 100% financing. Thus, this element is 21 not met, and negligent misrepresentation is not sufficiently pled for this 100% financing 22 allegation. 23 In sum, Loop’s motion to dismiss the negligent misrepresentation claim is 24 DENIED as to the contactless payment and 99% uptime allegations but GRANTED as to 25 the 100% financing allegation. 26 / / / 27 1 3. Third Cause of Action – Intentional Interference of Contract 2 Under California law, an intentional interference of contract claim requires a party 3 to show “(1) a valid contract between plaintiff and a third party; (2) defendant's 4 knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or 5 disruption of the contractual relationship; (4) actual breach or disruption of the 6 contractual relationship; and (5) resulting damage.” Pac. Gas & Elec. Co. v. Bear Stearns 7 & Co., 50 Cal. 3d 1118, 1126 (1990). 8 Loop maintains EVerged does not sufficiently allege the third, fourth, and fifth 9 elements of this counterclaim. Mot. 28. Loop further argues, they are precluded from 10 liability because they are not a stranger to the contract. Id. at 29-30. 11 a. Intentional Act 12 For the third intentional element to be satisfied, it is not necessary that a party’s 13 “primary purpose be disruption of the contract.” Quelimane Co. v. Stewart Title Guar. 14 Co., 19 Cal. 4th 26, 77 (1998). Instead, the party need only show “interference is certain 15 or substantially certain to occur as a result of [the party’s] action.” Korea Supply Co. v. 16 Lockheed Martin Corp., 29 Cal. 4th 1134, 1155-56 (2003). The third element 17 incorporates a causation requirement that these intentional acts were a substantial factor 18 in causing a breach. See Bank of New York v. Fremont Gen. Corp., 523 F.3d 902, 909 19 (9th Cir.2008) (applying California law). 20 Loop argues EVerged fails to allege facts that plausibly show that Loop intended to 21 disrupt EVerged’s contract with the City. Mot. at 28. Essentially, in Loop’s view, 22 EVerged did not plead that Loop was intentional because it cannot show that Loop 23 knowingly disrupted its own chargers’ uptime or tap-to-pay functionality post-contract 24 formation. Rep. at 7-8. 25 However, the Court finds this argument unavailing. EVerged need not show that 26 Loop “knowingly disrupted” its chargers’ uptime or tap-to-pay function functionality. All 27 1 that is needed at this stage are allegations that Loop knew their chargers were non- 2 compliant and that Loop knew with substantial certainty that their misrepresentation 3 would result in interference. 4 In its Counterclaims, EVerged alleges Loop had knowledge of the non-compliance 5 of its chargers and its unwillingness and inability to provide the “100% financing.” A&C 6 at 49. EVerged also alleged that Loop had knowledge with substantial certainty that 7 disruption of contract performance would occur based on these misrepresentations. Id. at 8 50. Accordingly, EVerged properly pled the intent element. 9 b. Actual Disruption 10 For the fourth element, actual breach, California law does not require an actual 11 breach of contract, rather, disruption of performance is sufficient for a claim of 12 intentional interference of contractual relations where “performance is made more costly 13 or burdensome.” Pac. Gas & Elec. Co., 50 Cal. 3d 1118, 1129 (C.D. Cal. 2001); see 14 Nestle USA, Inc. v. Best Foods LLC, 562 F. Supp. 3d 626, 633 (C.D. Cal. 2021) (“ Mere 15 ‘disruption of the contractual relationship’ is all Plaintiffs must show to demonstrate the 16 disruption element.”). 17 Here, EVerged alleges its performance was disrupted by the misrepresentations, 18 resulting in EVerged needing to expend time working to secure alternative funding at a 19 “materially adverse cost” and to replace noncompliant chargers at “significant time and 20 expense,” causing “project delays.” A&C at 46-47. While EVerged and the City of San 21 Diego still performed their contractual duties and no breach resulted, that consideration is 22 not relevant for this element. Thus, the Court finds EVerged sufficiently pled the actual 23 disruption element. 24 c. Resulting Damages 25 Loop contends EVerged cannot plead any resulting damage. First, EVerged’s 26 assertion that performance was made more expensive or difficult is merely conclusory 27 1 and unsupported by well-pled facts. Mot. at 29. Further, EVerged could not have been 2 damaged because (1) EVerged secured funding with Leonid Capital Partners after 3 rejecting third-party funding sources provided by Loop, (2) EVerged could not have been 4 harmed by misrepresentation of EV chargers because it was discovered after EVerged 5 had unlawfully terminated Loop, and (3) any delay or expense from the non-compliance 6 of EV chargers was due to EVerged unlawfully terminating Loop from the project and 7 operating without Loop’s supporting network. Id. 8 This Court disagrees. EVerged alleges it sustained damages in the form of a 9 significant delay in obtaining financing and EVerged eventually obtained financing from 10 Leonid capital at a “materially adverse cost.” A&C at 46-47. Further, EVerged took 11 “significant time, expense, . . . [and] delays” to replace Loop’s non-compliant chargers 12 and “spent two years working to overcome and recover from [Loop’s 13 misrepresentations].” Id. EVerged’s assertions are not merely recitations of elements or 14 conclusory allegations, rather, EVerged is identifying specific costs and damages 15 imposed on them. Accordingly, the damages element is met. 16 d. Stranger Requirement 17 Under California law, only strangers—interlopers who have “no legitimate interest 18 in the scope or course of the contract’s performance”—may be liable for intentional 19 interference of contract. Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 20 869 P.2d 454 (1994); see Lennar Mare Island, LLC v. Steadfast Ins. Co., 139 F. Supp. 3d 21 1141, 1163 (E.D. Cal. 2015). Only contracting parties can have a “direct interest and 22 involvement” in the contract, and therefore any non-contracting party is a stranger to the 23 contract. United Nat. Maint., Inc. v. San Diego Convention Ctr., Inc., 766 F.3d 1002, 24 1006-07 (9th Cir. 2014); see Caliber Paving Co. v. Rexford Indus. Realty & Mgmt., Inc., 25 54 Cal. App. 5th 175, 182 (2020) (“[T]he Supreme Court did not confer immunity for 26 that tort on noncontracting parties with a social or economic interest in the contract.”). 27 1 Loop argues they are precluded from liability because EVerged’s Proposal and 2 supplemental submission (both integrated into the contract with the City) feature Loop as 3 a “Major” and “Strategic” subcontractor, making Loop a third-party beneficiary with a 4 “direct involvement and interest” with the contract and are therefore not strangers. Mot. 5 at 30. 6 EVerged’s counter-complaint sufficiently pleads that Loop is a stranger. While the 7 Proposal and the supplemental submission labeled Loop as a “Major” and “Strategic” 8 subcontractor, EVerged denies that Loop was a third-party beneficiary, citing an express 9 “No Third Party Beneficiaries” clause in the Contract. A&C at 40. EVerged also asserts 10 no subcontract agreement was ever executed between Loop and EVerged. Id. Though 11 Loop does have an economic interest in the Contract, this alone doesn’t establish Loop as 12 a contracting party. Accordingly, the Court finds Loop can be liable for intentional 13 interference of contract. Loop’s motion to dismiss this claim is DENIED. 14 4. Declaratory Judgment 15 Loop argues that the declaratory judgment claim should be dismissed or stricken 16 because (1) all of EVerged’s counterclaims warrant dismissal and (2) the claim is a 17 mirror image of claims that Loop already filed. Mot. at 30-31. As the Court finds that not 18 all of EVerged’s counterclaims warrant dismissal, Loop’s first argument fails. The Court 19 will thus turn to Loop’s second argument. 20 “Declaratory relief is available at the discretion of the district court.” 21 Chesebrough-Pond's, Inc. v. Faberge, Inc., 666 F.2d 393, 396 (9th Cir. 1982); see 28 22 U.S.C. § 2201(a); Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 533 (9th 23 Cir.2008). Additionally, the Declaratory Judgement Act’s purpose is “to relieve potential 24 defendants from the Damoclean threat of impending litigation which a harassing 25 adversary might brandish, while initiating suit at his leisure—or never.” Societe de 26 Conditionnement v. Hunter Engineering Co., 655 F.2d 938, 943 (9th Cir.1981). Thus, if a 27 1 party is already obliged to defend against a suit, that party does not live in fear of a 2 potential suit in accordance with the Act’s purpose. Englewood Lending Inc. v. G & G 3 Coachella Invs., LLC, 651 F. Supp. 2d 1141, 1145 (C.D. Cal. 2009). Declaratory relief is 4 also appropriate “when the judgment will serve a useful purpose in clarifying and settling 5 the legal relations in issue.” Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co. of Reading, 6 Pa., 873 F.2d 229, 231 (9th Cir. 1989) (quoting Bilbrey by Bilbrey v. Brown, 738 F.2d 7 1462, 1470 (9th Cir. 1984)). 8 Within that line of thought, “[n]umerous courts have used that discretion to dismiss 9 counterclaims under [Rule] 12(f) where they are either the ‘mirror image’ of claims in the 10 complaint or redundant of affirmative defenses.” Stickrath v. Globalstar, Inc., No. 07- 11 CV-1941-TEH, 2008 WL 2050990, at *3 (N.D. Cal. May 13, 2008); see Hyundai Motor 12 Am., Inc. v. Yahala Trading Co., No. 19-CV-1413-JVS-DFMX, 2020 WL 3963875, at *3 13 (C.D. Cal. May 1, 2020); Guardant Health, Inc. v. Natera, Inc., 580 F. Supp. 3d 691, 713 14 (N.D. Cal. 2022); Kahlenberg v. Bamboo Ins. Servs. Inc., No. 22-CV-06805-VAP-PDX, 15 2020 WL 13336569, at *7 (C.D. Cal. Dec. 14, 2020). 16 Here, EVerged seeks declarations that Loop is not a third-party beneficiary of the 17 Contract, that Loop has no right to enforce any aspect of the Contract, and that Loop was 18 incapable of complying with the requirements of the Project and the Contract. A&C at 19 51. Loop, however, alleges the mirror image of the relief sought in its second claim 20 where it argues it is a third-party beneficiary and can enforce the Contract. Compl. ¶¶ 21 164-178. EVerged also argues Loop is not a third-party beneficiary in its sixth affirmative 22 defense and argues that Plaintiff’s chargers were deficient in its fourth affirmative 23 defense. A&C at 30-31. Accordingly, the declaratory judgment claim is duplicative, and 24 the court GRANTS the motion to strike this claim. 25 / / / 26 / / / 27 1 5. Affirmative Defenses 2 Finally, Loop moves to strike eleven of EVerged’s twenty five affirmative 3 || defenses, including the First, Third, Eighth, Eleventh, Sixteenth, Seventeenth, Eighteenth, 4 || Twenty-First, Twenty-Second, Twenty-Fourth, and Twenty-Fifth affirmative defenses. 5 || Mot. at 32-34. EVerged concedes that “the defenses challenging the sufficiency of a 6 || plaintiff's pleading or proof are not properly framed as affirmative defenses” and, thus, 7 ||do not oppose the motion here. Accordingly, the court GRANTS the motion to strike the 8 ||eleven affirmative defenses. 9 CONCLUSION 10 For the foregoing reasons, the Court DENIES the motion as to the first and third 11 causes of action and GRANTS IN PART AND DENIES IN PART the motion as to the 12 second cause of action. The Court also GRANTS the Plaintiffs motion to strike the 13 || declaratory judgment claim and the First, Third, Eighth, Eleventh, Sixteenth, 14 || Seventeenth, Eighteenth, Twenty-First, Twenty-Second, Twenty-Fourth, and Twenty- 15 || Fifth affirmative defenses. Plaintiff shall file an amended complaint within 21 days of the 16 || Court’s Order. 17 IT IS SO ORDERED. 18 || Dated: August 6, 2026 72 19 Hon. athe Cee 20 United States District Judge 21 22 23 24 25 26 27 23 28 3:26-CV-01086-GPC-MSB