Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MIXTECO ENTERPRISES, INC., Case No.: 3:25-cv-02106-BTM-MMP 12 Plaintiff, ORDER GRANTING MOTION TO 13 v. DISMISS 14 [ECF NO. 12] 15 JPMORGAN CHASE BANK, NATIONAL ASSOCIATON, 16 Defendant. 17 20 21 22 Before the Court is Defendant JPMorgan Chase Bank’s motion to dismiss (ECF No. 23 12 (“MTD”)) Plaintiff Mixteco Enterprise’s first amended complaint (ECF No. 10 24 (“FAC”)). After considering the Parties’ arguments and the law, the Court GRANTS the 25 MTD without prejudice. 26 // 27 // 28 // 1 I. BACKGROUND 2 Around February 28, 2025, Mixteco deposited a check in the amount of $8,400 (the 3 “Check”) into its account with Chase (the “Account”). (FAC at ¶¶ 2–3.) The deposit was 4 returned because Chase had imposed a stop payment on the Check. (Id. at ¶ 4.) On March 5 3, 2025, Chase debited the Account for the amount of the Check. (Id. at ¶ 5.) The next 6 day, on March 4, 2025, Chase debited $8,400 from the Account a second time. (Id. at ¶ 5.) 7 Between March 4 and 7, 2025, Chase took an additional $7,521.92 from the Account via a 8 series of four transactions. (Id. at ¶¶ 6–9.) 9 After Mixteco’s principal, Jorge Morales, contacted Chase, representatives from 10 Chase informed him that the bank would return the funds to the Account on or before 11 March 11, 2025. (Id. at ¶¶ 10–14.) However, on March 14, 2025, Chase took an additional 12 $2,665.20 from the Account and did not return any funds back to the Account until March 13 17, 2025. (Id. at ¶¶ 15–16.) 14 On March 17, 2025 Chase returned $8,400 to the Account and sent a letter (the 15 “Letter”) to Mixteco. (ECF No. 15 (“Exhibit B”).) In the Letter, a representative of Chase 16 explained that it had made an adjustment to the Account to correct an error Chase had 17 previously made. (Id.) According to Chase, when the $8,400 check was returned to it by 18 the issuer’s bank, Chase erroneously subtracted $8,400 from the Account twice; once on 19 March 3 and once on March 4. (Id.) On March 11, 2025, Chase added $8,400 back to the 20 Account. (Id.) During the two-week period in March 2025, Chase maintained that the 21 Account had negative balance and charged Mixteco overdraft fees. (FAC at ¶¶ 18–19.) 22 On March 24, 2025, Mixteco filed a complaint in state court against Chase. (MTD 23 at 9.) In response, Chase filed a demurrer and then removed this action to this Court on 24 the basis of diversity jurisdiction. (Id. at 9.) 25 On September 19, 2025, Mixteco filed its FAC and pleaded five causes of action: 26 (1) civil theft under California Penal Code § 496, (2) conversion, (3) negligence, (4) 27 accounting, and (5) breach of fiduciary duty. (FAC at ¶¶ 22–145.) 28 // 1 Chase filed its MTD on October 17, 2025. In its MTD, Chase contends that the FAC 2 should be dismissed on eight grounds. First, the California Uniform Commercial Code 3 preempts the common law claims for conversion and negligence; second, the economic 4 loss doctrine bars the Mixteco’s conversion and negligence claims; third, the civil theft 5 claim fails as a matter of law; fourth, the negligence claim fails because Chase owed no 6 legal duty to Mixteco beyond its contractual obligations; fifth, the accounting claim fails 7 as a matter of law; sixth, Mixteco cannot state a claim for breach of fiduciary duty against 8 Chase; seventh, Mixteco has not properly pleaded that it is entitled to punitive damages; 9 and eighth, amendment of the FAC would be futile. 10 Mixteco filed an opposition (ECF No. 14 (“Opposition”)) to the MTD and Chase 11 filed a reply in support of the MTD (ECF No. 16 (“Reply”)). 12 II. LEGAL STANDARDS 13 Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the 14 defense that the complaint “fail[s] to state a claim upon which relief can be granted.” The 15 Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in 16 light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement 17 of the claim showing that the pleader is entitled to relief.” Although Rule 8 does not require 18 “detailed factual allegations” it does require more than “labels and conclusions, and a 19 formulaic recitation of a cause of action’s elements will not do.” Ashcroft v. Iqbal, 556 20 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “Nor 21 does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual 22 enhancement.’ ” Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. 23 at 557). 24 To survive a motion to dismiss, a complaint must contain sufficient factual matter, 25 accepted as true, to state a claim to relief that is plausible on its face.” Id. (quoting 26 Twombly, 550 U.S. at 570); see also, Fed. R. Civ. P. 12(b)(6). A claim is facially plausible 27 when the facts pleaded allow the court to draw the reasonable inference that the defendant 28 is liable for the misconduct alleged. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 1 556). There must be “more than a sheer possibility that a defendant has acted unlawfully. 2 Id. (citing Twombly, 550 U.S. at 556). 3 The Court will grant leave to amend unless the pleading ‘could not possibly be cured 4 by the allegation of other facts.’” Velez v. Cloghan Concepts LLC, 387 F. Supp. 3d 1072, 5 1078 (S.D. Cal. 2019) (quoting Ramirez v. Galaza, 334 F.3d 850, 861 (9th Cir. 2003)). 6 III. DISCUSSION 7 A. California Uniform Commercial Code and Preemption 8 First, Chase contends that Mixteco’s second (conversion) and third (negligence) 9 causes of action—which are both based on common law theories of torts—are preempted 10 by the California Uniform Commercial Code (“UCC”), which provides the exclusive 11 statutory framework for disputes involving negotiable instruments and depository banks. 12 (MTD at 10–11.) 13 The UCC does not automatically displace all other legal principles. Zengen, Inc. v. 14 Comerica Bank, 41 Cal. 4th 239, 251 (2007). Section 1103 of the UCC provides that 15 “[u]nless displaced by the particular provisions of this code, the principles of law and 16 equity, including […] fraud, misrepresentation […] shall supplement its provisions.” Cal. 17 U. Com. Code § 1103, subd. (b). Therefore, other principles of law will still apply unless 18 some particular provision of the UCC has displaced them. Zengen, 41 Cal. 4th at 251; see 19 also, Chino Commercial Bank, N.A. v. Peters, 190 Cal. App. 4th 1163, 1170 (2010) (“[T]he 20 UCC expressly displaces common law, to the extent that its ‘particular provisions’ apply.”). 21 Chase takes the position that Divisions 3 and 4 have displaced the common law and 22 provide the exclusive statutory framework for disputes involving negotiable instruments 23 and depository banks. (MTD at 11.) 24 Division 3 provides that the definition of an “instrument” includes a “check.” Cal. 25 Com. Code §§ 3104(b), (e), (f). Division 4 defines a “depository bank” as the “first bank 26 to take an item even though it is also the payor bank, unless the item is presented for 27 immediate payment over the counter” and a “collecting bank” as the “bank handling an 28 item for collection except the payor bank.” Cal. Com. Code §§ 1404(2), (5). 1 Here, Chase is a depository bank for purposes of the UCC because Mixteco 2 deposited the Check, which is an instrument under Division 3, with Chase. Nevertheless, 3 the UCC would only apply to the initial Check for $8,400, if at all, and not the other later 4 debits made by Chase from the Account, because the UCC governs the negotiation of the 5 Check and conduct related to the negotiation, not subsequent allegedly wrongful debits. 6 Even then, the UCC would only apply to claims related to the negotiation and warranties 7 of the Check, and the claims here would arise under a theory of breach of contract or a 8 claim for money had and received. The FAC here only pleaded claims related to Chase’s 9 allegedly wrongful debiting of funds from the account. Such conduct is not covered by 10 Divisions 3 or 4 and, consequently, they do not displace common law in this case. 11 B. Economic Loss Rule 12 Chase next argues that Mixteco’s claims for conversion and negligence are barred 13 by the economic loss rule as it only alleges economic damages. (MTD at 12–14.) The 14 Court finds that the economic loss rule applies to Mixteco’s conversion and negligence 15 claims and Mixteco fails to identify an applicable exception. 16 Under California law, there is generally no recovery in tort for negligently inflicted 17 purely economic losses. Sheen v. Wells Fargo Bank, N.A., 12 Cal. 5th 905, 922 (2022). 18 Not all tort claims for monetary losses between contractual parties are barred by the 19 economic loss rule. Claims are only barred when they arise from the parties’ underlying 20 contracts. Id. at 923. The purpose of the economic loss rule is to prevent “the law of 21 contract and the law of tort from dissolving into one another.” Robinson Helicopter Co. v. 22 Dana Corp., 34 Cal. 4th 979, 988 (2004). The economic loss rule requires a plaintiff “to 23 recover in contract for purely economic loss due to disappointed expectations, unless he 24 can demonstrate harm above and beyond a broken contractual promise.” Id. 25 In evaluating whether the economic loss rule bars a claim, courts must consider (1) 26 the full scope of the parties’ contractual agreement; (2) whether there is an independent 27 tort duty to refrain from the alleged conduct; and (3) if an independent duty exists, the court 28 must consider whether the plaintiff can establish all elements of the tort independently of 1 the rights and duties assumed by the parties under the contract. Rattagan v. Uber Techs., 2 Inc., 17 Cal. 5th 1, 26 (2019). 3 As a threshold matter, in its opposition, Mixteco asserts that the economic loss rule 4 factors cannot be decided on a motion to dismiss but cites no authority for this proposition. 5 (Opp. at 6–7.) Courts in this district routinely analyze whether the economic loss rule 6 applies to claims at the motion to dismiss stage. See e.g., Sahel Oncology, LLC v. STA 7 Pharmaceutical Hong Kong Ltd., No. 23-cv-1458, 2024 WL 3049851, at *4–5 (S.D. Cal. 8 Jun. 18, 2024); Lum v. Merlin Entertainments Group U.S. Holdings, Inc., No. 20-cv-1049, 9 2023 WL 2583307, at *12 (S.D. Cal. Mar. 20, 2023); Hastings v. Ford Motor Co., Case 10 No. 19-cv-2217, 2020 WL 12688367, at *4 (S.D. Cal. Oct. 2, 2020). Mixteco has offered 11 no factual reason or legal authority why this case should be any different. 12 1. Conversion 13 Chase argues that Mixteco’s conversion claim arises out of its contractual 14 relationship with Chase as a depositor. (MTD at 14.) Whether the economic loss rule bars 15 a conversion claim turns on “whether the ownership interest that formed the basis for the 16 conversion claim preexisted the contract or arises from the contract. Where the interest 17 preexisted the contract, a conversion claim will lie.” Fine v. Kansas City Life Ins. Co., 627 18 F. Supp. 3d 1153, 1161 (C.D. Cal. 2022) (citing Expedited Packages, LLC v. Beavex Inc., 19 No. 15-00721, 2015 WL 13357436, at *4 (C.D. Cal. Sept. 10, 2015)). 20 Mixteco alleges that its conversion claim arises out of the Account that it maintains 21 with Chase. (FAC at ¶ 47.) All of the allegedly tortious conduct occurred as a result of 22 the relationship between Chase and Mixteco regarding the Account. Indeed, Mixteco’s 23 relationship with Chase arises solely out of their banking contract. 24 2. Negligence 25 The FAC also alleges a negligence claim, which Chase argues is similarly barred by 26 the economic loss rule. (MTD at 14–15.) 27 // 28 // 1 As to Mixteco’s negligence claim, recovery of purely economic loss is foreclosed in 2 the absence of (1) personal injury, (2) physical damage to property, (3) a “special 3 relationship” existing between the parties, or (4) some other common law exception to the 4 rule. Kalitta Air, LLC v. Cent. Tex. Airborne Sys., Inc., 315 Fed. Appx. 603, 605 (9th Cir. 5 2008). Here, Mixteco has not alleged any facts that indicate injury other than the monetary 6 loss it allegedly suffered from Chase erroneously debiting the funds from the Account. The 7 kind of injury alleged by Mixteco related to the wrongful debts by Chase does not arise out 8 of a claim for conversion or negligence, but out of breach of contract, which has not been 9 pleaded in the FAC. Accordingly, the Court holds that the economic loss rule bars 10 Mixteco’s negligence and conversion claims. 11 C. Civil Theft 12 A claim for civil theft in California ultimately rests on whether a plaintiff establishes 13 that a defendant committed the act of theft as defined by California Penal Code § 496. Bell 14 v. Feibush, 212 Cal. App. 4th 1041, 1049 (2013). Chase moves to dismiss the civil theft 15 claim, arguing that Mixteco failed to allege the specific intent required by the statute. 16 Section 496(a) criminalizes buying or receiving “any property that has been stolen 17 or that has been obtained in any manner constituting theft” under § 484. Cal. Penal Code 18 § 496(a). Under § 496(c), an individual may bring a private cause of action for any 19 violation of § 496(a). See Cal. Pen. Code § 496(c). To establish theft for the purposes of 20 § 484, a defendant must have the specific “felonious” intent to deprive the owner of his or 21 her property. GEC US 1 LLC v. Frontier Renewables, LLC, No. 16-cv-1276, 2016 WL 22 4677585, at *9 (N.D. Cal. Sept. 7, 2016) (citing People v. Avery, 27 Cal. 4th 49, 58 (2002)). 23 The requisite intent is a specific intent to steal, and cannot be established if a defendant has 24 a “good faith claim of right” to possession. GEC US 1 LLC, 2016 WL 4677585, at *9 25 (citing People v. Davis, 19 Cal. 4th 301, 305 (1998). 26 Perhaps most fatal to Mixteco’s FAC here is that the funds allegedly stolen by Chase 27 were not Mixteco’s money. The money belonged to Chase and Mixteco had only a credit 28 which was wrongfully debited. Furthermore, the FAC does not allege the requisite specific 1 intent. The FAC alleges that Chase “failed to properly process the Check” and, generally, 2 that Chase “misappropriated and stole a deposit to the Account.” (FAC ¶¶ 26–30.) But, 3 the FAC does not allege facts that suggest Chase had a “guilty mind” or “guilty conscious” 4 such that it had the specific intent to commit theft. 5 In its opposition, Mixteco seems to suggest that the intent to permanently deprive 6 standard does not apply because a criminal conviction is not required for purposes of 7 § 496(c). (Opp. at 7–8.) Mixteco is wrong. As Mixteco itself admits, all that is required 8 for civil liability to attach under § 496(c) is that a “violation” of subdivision (a) or (b) of 9 § 496 has occurred. Bell, 212 Cal. App. 4th at 1045. But a violation of § 496(a) or (b) 10 requires that a plaintiff plead theft, which in turn, necessarily requires a minimal showing 11 that the defendant had the specific intent to commit theft. Therefore, regardless of whether 12 there is a conviction or not, the standard remains the same and a plaintiff must proffer 13 sufficient allegations evidencing specific intent. Mixteco here has failed to do so. 14 Absent adequate allegations of the requisite specific intent, the FAC does not state a 15 plausible claim for civil theft. 16 D. Negligence 17 Mixteco’s third cause of action alleges negligence. The elements of a negligence 18 claim are (1) the existence of a duty to exercise due care; (2) breach of that duty; (3) 19 causation; and (4) damages. Merrill v. Navegar, Inc., 26 Cal. 4th 465, 500 (2001). 20 Mixteco’s negligence claim here alleges three separate negligent acts. “A party may set 21 out 2 or more statements of a claim […] either in a single count […] or in separate ones.” 22 Fed. R. Civ. P. 8(d)(2). “If a party makes alternative statements, the pleading is sufficient 23 if any one of them is sufficient.” Id. Accordingly, the Court evaluates each alleged 24 negligent act and determines whether any one of those allegations is sufficient to withstand 25 the motion to dismiss. Because, as set out below, each allegedly negligent act is insufficient 26 in at least one respect, the Court dismisses the negligence claim without prejudice. 27 Duty is not universal and exists only if a plaintiff’s interests are entitled to legal 28 protection against the defendant’s conduct. Sheen v. Wells Fargo, 12 Cal. 5th 905, 920 1 (2022). Whether a duty exists is a question of law to be resolved by the court. Id. (quoting 2 Brown v. USA Taekwondo, 11 Cal. 5th 204, 213 (2021)). It is well established that a bank 3 has a “duty to act with reasonable care in its transactions with its depositors…” Chazen v. 4 Centennial Bank, 61 Cal. App. 4th 532, 543 (1998) (quoting Bullis v. Security Pac. Nat. 5 Bank, 21 Cal. 3d 801, 808 (1978)). The duty is an implied term in the contract between 6 the bank and its depositor. Chazen, 61 Cal. App. 4th at 543. The FAC alleges certain acts 7 that may have amounted to a breach of the bank’s duty of care under the deposit contract. 8 The negligence claim alleges that Chase owed a duty to Mixteco to reasonably and 9 properly maintain the Account and Chase failed to reasonably and properly maintain the 10 Account. (FAC at ¶¶ 90–92.) The negligence claim also alleges that Chase owed a duty 11 to Mixteco to exercise reasonable skill and diligence, which Chase failed to do. (FAC at 12 ¶¶ 91–93.) As pleaded in the FAC, Chase breached both the foregoing duties and, as a 13 result, Mixteco suffered damages. (FAC at ¶¶ 94–96.) Additionally, Mixteco also alleges 14 that Chase made false representations to Mixteco. (FAC at ¶ 80.) In its opposition, 15 Mixteco further states that its claim for negligence also includes Chase’s “negligent 16 misrepresentations.” (Opp. at 8.) 17 However, as a depository bank, Chase owes Mixteco no duty of reasonable care 18 independent of its contractual obligations. Chazen, 61 Cal. App. 4th at 543. In the absence 19 of an independent duty owed to Mixteco by Chase, an essential element of a negligence 20 cause of action is missing here. 21 The FAC also alleges a claim for negligent misrepresentation. Negligent 22 misrepresentation is a separate and distinct tort. Bily v. Arthur Young & Co., 3 Cal. 4th 23 370, 407 (1992). As such, Mixteco must plead negligent misrepresentation separately from 24 ordinary negligence and any such separate claim must meet the heightened pleading 25 standards of Rule 9(b), which as currently pleaded, it does not. 26 E. Accounting 27 Chase argues that Mixteco’s accounting claim fails as a matter of law because Chase 28 does not have a fiduciary relationship with Mixteco that would require equitable 1 intervention and the amount allegedly owed is capable of calculation through ordinary 2 means. (MTD at 16.) In turn, Mixteco maintains that an accounting is needed because 3 only Chase knows how much profit it made with the money it took from the Account. 4 (Opp. at 9.) 5 A cause of action for an accounting requires a showing that a relationship exists 6 between the plaintiff and defendant that requires an accounting, and that some balance is 7 due to the plaintiff that can only be ascertained by an accounting. Teselle v. McLoughlin, 8 173 Cal. App. 4th 156, 179 (2009) (citations omitted). 9 An action for accounting is not available where the plaintiff alleges the right to 10 recover a sum certain or a sum that can be made certain by calculation. Id. (citing St. James 11 Church of Christ Holiness v. Superior Court, 135 Cal. App. 352, 359 (1955)). 12 A fiduciary relationship between the parties is not required to state a cause of action 13 for an accounting; rather, all that is required is that some relationship exists that requires 14 an accounting. Id. (citing Kritzer v. Lancaster, 96 Cal. App. 2d 1, 7 (1950)). The right to 15 an accounting can arise from the possession by the defendant of money or property which, 16 because of the defendant’s relationship with the plaintiff, the defendant is obliged to 17 surrender. Id. at 179–80. 18 In its opposition, Mixteco implies that it intends to use an accounting as a discovery 19 tool. (Opp. at 9.) However, although an accounting is a species of disclosure, it is 20 predicated upon the plaintiff’s legal inability to determine how much money is due. 21 Teselle, 173 Cal. App. 4th at 180. But, here, the sums at issue are easily calculated without 22 an accounting. 23 As such, Mixteco’s cause of action for accounting is dismissed. 24 F. Breach of Fiduciary Duty 25 Mixteco contends that “Chase had a fiduciary duty to Mixteco to not embezzle the 26 money entrusted by Mixteco to Chase.” (Opp. at 9.) Chase argues that Mixteco’s claim 27 for breach of fiduciary duty fails as a matter of law because under California law, the 28 relationship between a bank and its depositor is not fiduciary in nature. (MTD at 17.) 1 California courts have long regarded “as axiomatic” that the relationship between a 2 bank and its depositor arising out of a general deposit is that of a debtor and creditor. Kim 3 v. Sumitomo Bank, 17 Cal. App. 4th 947, 980 (1993). Further, a debt is not a trust and there 4 is not a fiduciary relationship between debtor and creditor as such. Id. The relationship of 5 a bank and a depositor is founded on contract. Chazen v. Centennial Bank, 61 Cal. App. 6 4th 532, 537 (1998) (quoting Barclay Kitchen, Inc. v. California Bank, 208 Cal. App. 2d 7 347, 353 (1962)). 8 There is no indication here that Chase owed Mixteco any duties beyond its 9 contractual duties. Since there was no fiduciary relationship between Chase and Mixteco, 10 an essential element of a breach of fiduciary duty claim is missing from the FAC. 11 Therefore, Mixteco’s claim for breach of fiduciary duty is dismissed. 12 G. Punitive Damages 13 Chase also argues that Mixteco is not entitled to any punitive damages under 14 California law because it has not shown that Mixteco acted with the requisite oppression, 15 fraud or malice. (MTD at 18–19.) To this end, Mixteco argues that oppression may be 16 inferred from Chase’s conduct. (Opp. at 9–10.) 17 The availability of punitive damages is a question of state law. Central Office Tel. 18 v. AT&T Co., 108 F.3d 981, 993 (9th Cir. 1997), rev’d on other grounds, 524 U.S. 214, 19 228 (1998). To obtain punitive damages under California law, Mixteco must establish by 20 clear and convincing evidence that Chase has been guilty of oppression, fraud, or malice. 21 Cal. Civ. Code § 3294(a); see also, Basich v. Allstate Ins. Co., 87 Cal. App. 4th 1112, 1121 22 (2001). Cal. Civ. Code § 3294(b) imposes a heightened bar for obtaining punitive damages 23 against corporations. “With respect to a corporate employer, the advance knowledge and 24 conscious disregard, authorization, ratification or act of oppression, fraud, or malice must 25 be on the part of an officer, director, or managing agent of the corporation.” Id. 26 Here, Mixteco argues that Chase’s oppressive or malicious conduct can be inferred 27 from its “stealing money from a customer bank account” and that Chase acted “fraudulently 28 regarding its misrepresentations.” (Opp. at 10.) 1 Setting aside the fact that the FAC has not properly pleaded that Chase committed 2 civil theft amounting to stealing money from Mixteco, nor has the FAC properly pleaded 3 fraudulent misrepresentation, the FAC has also not alleged any facts that would give rise 4 to an inference that any officer, director, or managing agent of Chase had the advanced 5 knowledge and consciously disregarded, authorized, or ratified any oppressive or malicious 6 conduct taken by its employees. 7 Based on the foregoing, Mixteco’s request for punitive damages is stricken. 8 H. Amendment 9 Lastly, Chase argues that Mixteco should not be given leave to amend its claims 10 because not only can no amendment overcome the factual and legal deficiencies with the 11 FAC, but also because Mixteco has already had the opportunity to amend its complaint. 12 (MTD at 20.) 13 The general policy provided by Rule 15(a)(2) that a court should freely give leave 14 “when justice so requires” is “to be applied with extreme liberality.” Eminence Capital, 15 LLC, 316 F.3d 1048, 1051 (9th Cir. 2003). Accordingly, leave should be “freely given” 16 absent “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure 17 to cure deficiencies by amendments previously allowed, undue prejudice to the opposing 18 party by virtue of allowance of the amendment, futility of amendment, etc.” Forman v. 19 Davis, 371 U.S. 178, 182 (1962). “The party opposing amendment bears the burden of 20 showing prejudice.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). 21 Mixteco initially filed its complaint in Superior Court. (ECF No. 13-1 at 2.) Chase 22 filed a demurrer (ECF No. 13-2 at 2) and then removed the action to this Court. Before 23 any motion to dismiss was filed, Mixteco filed an amended complaint in this Court. Shortly 24 thereafter, Chase filed the present MTD. Prior to this order, there has been no court 25 determination—in either state court or this Court—that Mixteco’s initial complaint or the 26 FAC were insufficient. Given the nature of how the FAC came to be amended, the Court 27 finds that granting Mixteco leave to amend the FAC is appropriate. 28 // I IV. CONCLUSION 2 For the reasons discussed above, Chase’s motion to dismiss is GRANTED. 3 || Mixteco’s first (civil theft), second (conversion), third (negligence), fourth (accounting), 4 fifth (breach of fiduciary duty) claims are DISMISSED with leave to amend. 5 ||Mixteco’s request for punitive damages as to its tort claims is dismissed with leave to 6 |}amend. 7 Mixteco has leave to file an amended complaint within twenty-one (21) days from 8 ||the entry of this Order to correct the deficiencies identified above. Muixteco shall comply 9 || with Civil Local Rule 15.1 requiring the filing of a redlined version of the amended 10 ||complaint. In order to streamline further motions to dismiss, the parties shall proceed as 11 follows. No later than twenty-one (21) days after the filing of the amended complaint, 12 ||Chase may file a motion to dismiss limited to ten (10) pages of argument. Mixteco may 13 || file an opposition limited to ten (10) pages of argument no later than fourteen (14) days 14 || after the filing of the motion to dismiss. The Court will then set the motion down for oral 15 || argument. 16 IT IS SO ORDERED. 17 Dated: August 12, 2026 19 Honorable Barry Ted Mosko 0 United States District Judge 21 22 23 24 25 26 27 28 13 □ □□