Opinion
CIVIL ACTION NO. 3:00-CV-1801-G.
October 26, 2001.
MEMORANDUM ORDER
Before the court are the following motions: (1) the motion of the plaintiff and counter-defendant Basic Capital Management, Inc. ("BCM") to strike or dismiss the fraud claims filed against it by the defendant and counter-plaintiff Matisse Capital Partners, L.L.C. ("Matisse") for failure to meet the heightened pleading requirements of FED. R. CIV. P. 9(b), (2) the motion of the third-party defendant Cal Rossi ("Rossi") to strike, or in the alternative, for a more definite statement of the fraud claims filed against him by the defendant and counter-plaintiff Matisse Partners, L.L.C. ("Matisse") for failure to comply with FED. R. Civ. P. 9(b), and (3) motions by the third-party defendants Rossi and Gene E. Phillips ("Phillips") to strike, or in the alternative, for a more definite statement of the claims of tortious interference with contract filed against them by Matisse for failure to properly plead special damages under FED. R. CIV. P. 9(g). For the reasons discussed below, the motions are granted in part and denied in part.
I. BACKGROUND
In its first amended counterclaim, Matisse asserts claims against BCM and Rossi for fraud. Additionally, Matisse asserts claims against Rossi and Phillips for tortious interference with contract. In their motions, BCM and Rossi contend that Matisse has failed to plead its fraud claims with the specificity required by FED. R. Civ. P. 9(b). Rossi and Phillips contend that Matisse did not plead its damages for tortious interference with sufficient specificity under FED. R. CIV. P. 9(g). The issues related to Rule 9(b) and Rule 9(g) will be discussed separately.
II. ANALYSIS
When a party moves under FED. R. CIV. P. 12(e) for a more definite statement, the court is afforded discretion to determine whether the complaint is such that a party cannot reasonably be required to frame a responsive pleading. Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126, 130 (5th Cir. 1959).
A. FED. R. CIV. P. 9(b)
Federal Rule of Civil Procedure 9(b) requires a plaintiff to make averments of fraud with particularity. See FED. R. CIV. P. 9(b). The purpose of Rule 9(b) is to facilitate a defendant's ability to respond to and prepare a defense to a charge of fraud. See Guidry v. Bank of LaPlace, 740 F. Supp. 1208, 1216 (E.D. La. 1990) (stating that one purpose of Rule 9(b) is "to provide adequate notice to defendants so that they can respond to the plaintiff's claims"), aff'd, 954 F.2d 278 (5th Cir. 1992); see also Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994), cert. denied, 516 U.S. 810 (1995); Bennett v. Berg, 685 F.2d 1053, 1062 (8th Cir. 1982), cert. denied, 464 U.S. 1008 (1983).
What constitutes particularity will "necessarily differ with the facts of each case." Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir. 1992). Generally, courts have interpreted Rule 9(b) to require plaintiffs to specifically state the time, place, and contents of the alleged false representations, as well as the identity of the person making the alleged misrepresentation and what that person obtained thereby. See Williams v. WMX Technologies, Inc., 112 F.3d 175, 177 (5th Cir.) (citing Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir. 1994)), cert. denied, 522 U.S. 966 (1997); see also United States ex rel. Johnson v. Shell Oil Company, 183 F.R.D. 204, 206 (E.D. Tex. 1998) (explaining that, under Rule 9(b), the complaint must contain the "who, what, when, where, and how" of the false representation).
However, courts have never required a plaintiff to plead detailed evidence in its complaint. See Keys v. Wolfe, 540 F. Supp. 1054, 1065 (N.D. Tex. 1982), rev'd on other grounds, 709 F.2d 413 (5th Cir. 1983); see also Bailey v. Linsco/Private Ledger Corporation, 136 F.R.D. 11, 13-14 (Me. 1991) (holding that while Rule 9(b) requires allegations of fraud to contain some factual detail, it does not require plaintiffs to plead evidentiary details sufficient to prove a claim of fraud). Nor have courts required that a complaint state all the facts pertinent to the case in order to satisfy the requirements of Rule 9(b). See Frith v. Guardian Life Insurance Company of America, 9 F. Supp.2d 734, 742 (S.D. Tex. 1998) ("Although Rule 9(b) calls for fraud to be pleaded with particularity, the allegations must still be as short, plain, simple, direct, and concise as is reasonable under the circumstances.") (citing Corwin v. Marney, Orton Investments, 788 F.2d 1063, 1068 n. 4 (5th Cir. 1986)); Mitchell Energy Corporation v. Martin, 616 F. Supp. 924, 927 (S.D. Tex. 1985).
The court agrees with Rossi and BCM, however, that Matisse has failed to sufficiently plead allegations of fraud under FED. R. CIV. P. Rule 9(b). Matisse alleges that BCM, American Realty Trust, Inc. ("ART"), and Rossi committed fraud against Matisse, and that Rossi, acting on behalf of ART and BCM, affirmatively represented to Matisse that BCM's board had approved the agreement at issue, and that the representation was false. Matisse further asserts — in a conclusory manner devoid of any factual basis — that ART, BCM, and Rossi (1) knew the representation was false at the time it was made or were reckless as to its veracity and (2) intended for Matisse to rely on their false representations and to provide services under the agreement. Moreover, Matisse alleges that it detrimentally relied on the false statements and provided services under the agreement which proximately caused its damages. Defendants' Original Answer to Basic Capital Management's Original Complaint and Counterclaim Against Basic Capital Management ("Matisse Counterclaim Against BCM") at 16; Defendants' Original Answer to Plaintiffs' Second Amended Complaint and First Amended Counterclaim of Matisse Partners ("Matisse Counterclaim Against Rossi, Phillips, and ART") at 17. Matisse has provided the "who," but has completely left out any factual allegations of "when, where, and how." See Guidry, 704 F. Supp. At 1217; Shell Oil Company, 183 F.R.D. at 206; Bailey, 136 F.R.D. at 14. Thus the court grants the motions of BCM and Rossi for a more definite statement and requires Matisse to replead paragraph 40 of its counterclaim against Rossi and paragraph 28 of its counterclaim against BCM.
B. FED. R. CIV. P. 9(g)
Matisse avers that it "was a party to a contract with ART under which it would have received substantial benefits" and that "as a proximate result of [interference by Rossi and Phillips], Matisse has not received the benefits to which it was entitled under the contract between Matisse and ART." Cal Rossi's Motion for More Definite Statement and Brief in Support Thereof ("Rossi Motion") at 2. Rossi and Phillips claim that these damages are special in nature — and thus require heightened pleading under FED. R. CIV. P. 9(g) — yet they do not offer any support for that assertion. In the absence of any guidance from the movants, the court can only assume, as Matisse asserts in its responses to the motions of Rossi and Phillips, that Matisse is seeking general contract and fraud damages. See Defendant's Response to Third Party Defendant Cal Rossi's Motion to Strike or In the Alternative Motion for More Definite Statement and Brief in Support Thereof ("Response to Rossi") at 2-3; Matisse Partners, L.L.C.'s Response to Third Party Defendant Gene E. Phillips' Motion to Strike or In the Alternative Motion for More Definite Statement and Brief in Support Thereof ("Response to Phillips") at 2-3. Texas and federal courts have consistently recognized that contract and fraud damages, including benefit of the bargain and out of pocket expenses, are general damages. See NTBS Storage and Retrieval, Inc. v. Kardex Systems, Inc., 2001 WL 238110, *1 (N.D. Tex. 2001); Formosa Plastics Corporation USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998). Under Texas law, the measure of damages for tortious interference with a contract is the same as the measure of damages for breach of the contract interfered with — the benefit of the bargain. See American National Petroleum Company v. Transcontinental Gas Pipeline Corporation, 798 S.W.2d 274, 278 (Tex. 1990). Thus, damages for tortious interference are clearly general damages and subject to no particularized pleading requirement. The motions of Rossi and Phillips to strike or, in the alternative, for a more definite statement of Matisse's claims of tortious interference with contract are accordingly denied.
III. CONCLUSION
For the reasons stated above, the motions of BCM and Rossi for a more definite statement of Matisse's fraud claims against them are GRANTED. Matisse shall file an amended pleading more definitely stating those claims within ten days of this date; otherwise, those claims will be deemed dismissed. The motions of Rossi and Phillips to strike, or in the alternative, for a more definite statement of Matisse's tortious interference claims against them are DENIED.