Edumoz, LLC v. Republic Mozambique

968 F.Supp.2d 1041

EDUMOZ, LLC, Plaintiff,

v.REPUBLIC OF MOZAMBIQUE; Ministry of Education of the Republic of Mozambique; Celio Mondlane, an individual; Zeferino Martins, an individual; Joaquim Chissano Foundation a/k/a Fundacao Joaquim Chissano, a quasi–governmental organization; Joaquim Chissano, an individual; and Does 1–50, inclusive, Defendants.

Case No. CV 13–02309 MMM (CWx).

United States District Court, C.D. California.

Sept. 10, 2013.

Seth M. Stodder, Zein E. Obagi, Jr., Obagi and Stodder LLP, Beverly Hills, CA, for Plaintiff.

Juan C. Basombrio, John S. Baker, Dorsey and Whitney LLP, Costa Mesa, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

MARGARET M. MORROW, District Judge.

On October 5, 2012, EduMoz, LLC filed this action against the Republic of Mozambique and the Ministry of Education of the Republic of Mozambique (“the government defendants”), Celio Mondlane, Joaquim Chissano Foundation, and Joaquim Chissano (“the Foundation defendants”), and Zeferino Martins.¹ On April 1, 2013, the government defendants removed the action to this court.

On May 2, 2013, the Foundation defendants and the government defendants collectively filed a motion to dismiss the complaint pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(6), and 12(b)(7).² EduMoz opposes the motion.³

I. FACTUAL BACKGROUND

A. Facts Alleged in the Complaint

1. The Parties

EduMoz, LLC (“EduMoz”) is a Delaware limited liability company.⁴ It is allegedly the successor-in-interest to Silberberg Innovations, LLC (“Silberberg Innovations”), a California limited liability company.⁵ Alan Silberberg is the principal and chief executive officer of Silberberg Innovations and EduMoz.⁶

The Republic of Mozambique (“Mozambique”) is a foreign state. Chissano Foundation (“Foundation”) is a Mozambican quasi-governmental organization purportedly dedicated to educating Mozambican children.⁷ The Foundation allegedly contracted with Mozambique's Ministry of Education and stood to benefit by receiving education grants and direct contributions from it.⁸ Celio Mondlane is a citizen of Mozambique and Project Director of the Foundation.⁹ Zeferino Martins is a citizen of Mozambique, who served as the country's Minister of Education at all relevant times. Joaquim Chissano is a citizen of Mozambique, who is a principal of the Foundation and a former president of Mozambique.

EduMoz alleges that Mondlane and Martins were agents of Mozambique and the Ministry.¹⁰ It asserts that in his dealings with EduMoz, Mondlane frequently represented that he was acting on Mozambique's behalf.¹¹ EduMoz also contends that Mondlane was an agent of the Foundation and Chissano, ¹² and allegedly signed documents as project director of the Foundation.¹³ Finally, EduMoz alleges that Martins was an agent of both the Foundation and Chissano.

2. The Contract

Beginning on or about December 19, 2010, Silberberg and Mondlane communicated concerning the launch of an educational initiative in Mozambique.¹⁴ Silberberg Innovations developed the brand “Educate Mozambique” to be used in promoting the initiative.¹⁵ The initiative was intended to highlight (1) the progress of the Ministry of Education in educating children, and (2) “the adverse consequences of world organizations' unfunded promises.” ¹⁶

In March 2011, the parties began to negotiate a contract for services related to the initiative; Silberberg sent Mondlane a written proposal.¹⁷ In April 2011, Silberberg sent Mondlane a proposed contract for Silberberg Innovation's services.¹⁸ The following month, in May 2011, Mondlane told Silberberg Mozambique required that the agreement take the form of a “Contract of Mandate” pursuant to Mozambique's protocol for procurement. ¹⁹ He also said that Silberberg Innovation's proposed contract was too complicated for Martins and needed to be simplified.²⁰ Silberberg revised the proposed agreement so that it took the form of a “Contract of Mandate” and sent it to Mondlane.²¹ He also sent Silberberg Innovations' banking information to Mondlane so that the wire transfers contemplated by the contract could be sent.²²

On May 25, 2011, Mondlane advised Silberberg by telephone that Martins, the Mozambican Minister of Education, had signed the contract.²³ Mondlane also sent Silberberg information prepared by the Ministry of Education for development of the “Education Mozambique” initiative, including information concerning the Ministry's five-year strategic plan, information about the grants promised to Mozambique, and how the Ministry planned to use those grants.²⁴ The information was provided in Portugese, so Silberberg Innovations had to have the documents translated into English.²⁵ Once Mondlane told Silberberg that Martins had signed the contract, Silberberg Innovations began to create a blog, Twitter account, and other forms of media for the “Educate Mozambique” initiative.²⁶

On May 26, 2011, Mondlane sent Silberberg an electronic copy of the contract executed by Martins. The parties to the agreement were Martins in his governmental capacity as Minister of Education of the Republic of Mozambique, as Mandator, and Silberberg Innovations, LLC, as Mandatory.²⁷ Martins signed and dated the contract “25.05.11.” ²⁸ Martins initialed, signed, and embossed each page with an official government stamp.²⁹ Weeks later, Silberberg Innovations received two hard copies of the agreement signed by Martins. Silberberg executed the contract on behalf of his company and returned it to Mondlane.³⁰

On June 15, 2011, Silberberg received an originally executed copy of the contract.³¹

Under the contract, Martins, the Ministry, and Mozambique promised to pay Silberberg Innovations for work on the “Educate Mozambique” initiative as follows:

• $175,000 upon commencement of the contemplated work;

• $175,000 upon completion of the contemplated work within six months;

• An additional 8% of the amount recovered by the “Educate Mozambique” campaign if it recovered under $10 million;

• An additional 7% if the campaign recovered between $10 and $30 million;

• An additional 6% if the campaign recovered between $30 and $5 million; and

• An additional 5 % if the campaign recovered more than $75 million. ³²

3. Silberberg Innovations' Performance and Defendants' Breach

Relying on the electronic copy of the contract signed by Martins, Silberberg Innovations began working on the “Educate Mozambique” campaign in May 2011. ³³ After Mondlane asked Silberberg to generate media attention for President Chissano's June 15, 2011 visit to Washington D.C.,³⁴ Silberberg Innovations secured television and talk radio interviews for Chissano, and publicized the “Educate Mozambique” campaign on the Internet. ³⁵ Silberberg Innovations also induced CBS News to publish a written piece on “Educate Mozambique.”

On June 13, 2011, Mondlane emailed Silberberg to advise that President Chissano could not travel to Washington D.C. due to a crisis he was negotiating in Ethiopia.³⁶ In the email, Mondlane allegedly stated: “The Minister of Education has already seen the CBS–News Post & was very excited about the media coverage.” ³⁷ Although Silberberg Innovations cancelled the press interviews it had scheduled for President Chissano, Silberberg discussed the mission of “Educate Mozambique” in an interview with Federal Talk Radio. ³⁸

Between May and December 2011, Silberberg Innovations promoted Mozambique, the Ministry, and the Foundation; due to its efforts, CBS News, Crowdsourcing.org, FederalNewsRadio.com, and AfricaAfrica.org purportedly published flattering pieces regarding these entities and the “Educate Mozambique” initiative.³⁹ On December 2011, the “Educate Mozambique” initiative allegedly obtained a $130 million grant.⁴⁰

Between June 2011 and February 2012, Mondlane offered a variety of excuses as to why Silberberg Innovations had not received the initial $175,000 retainer due under the contract.⁴¹ On April 1, 2012, Silberberg sent Mondlane a letter demanding $350,000 and at least $6.5 million in success fees. On May 1, 2012, Mondlane responded that he had been unable to locate the proper person in the Mozambican government to make the contractual payments owed to Silberberg Innovations.⁴²

EduMoz alleges claims for fraud; constructive fraud; an accounting; breach of contract; negligence; unjust enrichment; and violation of California's Unfair Competition Law, California Business & Professions Code § 17200 et seq.⁴³

B. Request for Judicial Notice

EduMoz requests that the court take judicial notice of nine facts and one document related to its claims.⁴⁴ Defendants oppose the motion. ⁴⁵

In ruling on a motion to dismiss, the court can consider material that can be judicially noticed under Rule 201 of the Federal Rules of Evidence. Fed. R.Evid. 201. Under Rule 201, the court can judicially notice “[o]fficial acts of the legislative, executive, and judicial departments of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.”

EduMoz requests that the court take judicial notice of the following facts:

1. That Manuel Chang was the Minister of Finance for the Republic of Mozambique in January 2010.

2. That Manuel Chang was the Minister of Finance for the Republic of Mozambique during May 2011.

3. That Manuel Chang was the Minister of Finance for the Republic of Mozambique as of October 17, 2012.

4. That Zeferino Martins was the Minister of Education for the Republic of Mozambique during May 2011.

5. That Manuel Chang has offered no testimony in this action.

6. That no “Minister in charge of Finances” for the Republic of Mozambique has offered any declaration in this action.

7. That Zeferino Martins has offered no testimony in this action.

8. That, on March 14, 2013, the Los Angeles Superior Court in EduMoz, LLC v. Republic of Mozambique, et al., LASC Case No. BC493314, entered Zeferino Martins' default.⁴...