Opinion
Civil No.: 10-cv-4554 (JNE/SER)
04-07-2011
Albert Ikechi, Plaintiff, v. Verizon Wireless; Verizon Wireless Cable Communications, LLC; Verizon Wireless Digital Voice; Verizon Wireless Corporation; Verizon Wireless Digital Phone; John Doe, et al., Defendants.
Albert Ikechi, pro se, 3615 McKinley Street NE, Minneapolis, MN 55418. Peter W. Wanning, Murnane Brandt, P.A., 30 East Seventh Street, Suite 3200, Saint Paul, Minnesota, 55101, on behalf of Defendants.
REPORT AND RECOMMENDATION Albert Ikechi, pro se, 3615 McKinley Street NE, Minneapolis, MN 55418. Peter W. Wanning, Murnane Brandt, P.A., 30 East Seventh Street, Suite 3200, Saint Paul, Minnesota, 55101, on behalf of Defendants. STEVEN E. RAU, United States Magistrate Judge
The above-entitled matter is before the undersigned United States Magistrate Judge on Plaintiff's Motion to Remand [Doc. No. 18], Plaintiff's Motion for Judgment on the Pleadings [Doc. No. 22], and Defendants' Motion to Dismiss [Doc. No. 5]. The Honorable Joan N. Ericksen referred the motions to this Court for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and District of Minnesota Local Rule 72.1 [Doc. No. 43]. For the reasons set forth below, the Court recommends that Defendants' motion to dismiss be granted in part and denied in part, Plaintiff's motion for judgment on the pleadings be denied, and Plaintiff's motion to remand be granted.
I. FACTUAL AND PROCEDURAL HISTORY
This litigation concerns a dispute over cellular phone service and billing. Plaintiff Albert Ikechi ("Ikechi") is representing himself pro se in this action against Defendants Verizon Wireless, Verizon Wireless Cable Communications, LLC, Verizon Wireless Digital Voice, Verizon Wireless Corporation, Verizon, Wireless Digital Phone, and John Doe et al ("Verizon"). In July 2007, Ikechi entered into a service contract with Verizon. (Compl. at 11, ¶ I). Ikechi is a travel services provider who uses his Verizon cellular phone lines in his business operations. (Compl. at 11-12, ¶ II). Around December 2009, Ikechi added two additional lines to his service plan under a "family share plan." (Compl. at 14, ¶ IV). Ikechi also purchased a cell phone protection and insurance plan from Asurion Insurance Services, Inc. ("Asurion"). Id.
The page numbers of Ikechi's complaint ("Compl.") [Doc. No. 1-1] differ from the page numbers in the ECF document. In order to ensure consistency, the Court will refer to the page numbers as they appear in the ECF headings.
After adding the two new lines, Ikechi disputed the first billing statement he received from Verizon on January 16, 2010. (Compl. at 16, ¶ VI-VII). For nine billing periods between December 17, 2009 and September 16, 2010, Ikechi received bills for amounts higher than he expected based on Verizon's advertised prices for family share plans. (Compl. at 18, ¶ IX, X; 37-38, ¶ XXIV). Ikechi's cell phone bills during this period in the aggregate exceeded $4,800.00 (Compl. at 35, ¶ XII). In addition to Verizon's monthly charges, Ikechi disputes the amount of taxes Verizon included in his billing statements. (Compl. 32-34, ¶ XIII). In his complaint, Ikechi further alleges damages in excess of $200,000 for lost profits arising out of Verizon's purported breach of his cellular phone service contract. (Compl. at 44, ¶ XXXII).
Between January 2010 and September 2010, Ikechi and Verizon had numerous telephone conversations and written communications regarding billing disputes and the handling of service charges for two cell phones that were lost. Verizon made adjustments to Ikechi's account based on a February 23, 2010 conversation. (Compl. at 17-18, ¶ IX). On June 22, 2010, Ikechi spoke with a Verizon customer service representative to adjust his service plan for the two lines that Ikechi added in December 2009. (Compl. at 24-25, ¶ XV). In his complaint, Ikechi makes numerous allegations that Verizon customer service representatives used "racial slurs" and other discriminatory language in their communications with Ikechi. (Compl. at 16-17, ¶ VII; 19-20, ¶ XI; 21-22, ¶XII; 39-40, ¶ XXVII).
On October 25, 2010, Ikechi filed the instant action against Verizon and Asurion in Hennepin County District Court. Ikechi and Asurion filed a joint Stipulation and Dismissal of the claims against Asurion on January 15, 2011 [Doc. No. 40]. Asurion is no longer a party to this action. In his complaint, Ikechi alleges twelve counts against Verizon based on several theories. Ikechi's twelve causes of action are as follows:
I. Violations of 42 U.S.C. § 1981;
II. Consumer Fraud, Minnesota Prevention of Consumer Fraud Act ("MCFA"), Minn. Stat. § 325F.68-69;
III. Breach of Contract;
IV. Common Law Fraud, Minn. Stat. § 325F.69;
V. False Statement in Advertising Statute, Minn. Stat. § 325F.67;
VI. Intentional Interference with Contractual Relations, Intentional Interference with Prospective Business and Profits, and Contractual Relations;
VII. Violations of the Deceptive Trade Practices Statute, Minn. Stat. § 325D.44 (2002);
VIII. Unlawful Conversion of Plaintiff's Property and Intentional Extortion Minnesota § 609.275;
IX. Negligent Misrepresentation and Negligent Misstatement;
X. Unjust Enrichment and Equitable Estoppel;
XI. Unlawful Extortionate Blackmail and Coercion, Minn. Stat. § 609.27;
XII. Common Law Fraud.
Verizon removed the case to this Court on November 15, 2010 and filed its motion to dismiss on November 22, 2010. On November 24, 2010, Ikechi filed a motion to remand. Ikechi then filed a motion for judgment on the pleadings on December 7, 2010.
II. DISCUSSION
A. Defendant Verizon's Motion to Dismiss
a. Fed. R. Civ. P. 12(b)(6) Motion to Dismiss Standard of Review
A complaint challenged on a motion to dismiss under Fed. R. Civ. P. 12(b)(6) need not contain detailed factual allegations, yet a "pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Complaints must be plausible as opposed to merely conceivable. Twombly, 550 U.S. at 556 (requiring that claim in complaint "raise a right to relief above the speculative level."). Pro se pleadings must be read liberally. See Estelle v. Gamble, 429 U.S. 97, 106 (1976); see also Mayard v. Siegfried, No. 08-5853, 2011 WL 579334, at *6-7 (D. Minn. Feb. 8, 2011) (evaluating the merits of pro se plaintiff's claims despite the deficiency of the pleadings).
On a motion to dismiss, courts will assume the facts alleged in the complaint to be true and draw all reasonable inferences in the plaintiff's favor. Twombly, 550 U.S. at 555-56. "Dismissal under Rule 12(b)(6) serves to eliminate actions which are fatally flawed in their legal premises and destined to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City of St. Charles, Mo., 244 F.3d 623, 627 (8th Cir. 2001) (internal citation omitted). A plaintiff cannot, however, survive a Rule 12(b)(6) motion to dismiss by relying on general and conclusory allegations. See Martin v. Sargent, 780 F.2d 1334, 1337 (8th Cir. 1985). In deciding a motion to dismiss under Rule 12(b)(6), a court may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
b. 42 U.S.C. § 1981 and § 1982 Claims (Count I)
Discriminatory conduct that "actually impairs an individual's ability to contract" is prohibited under 42 U.S.C. § 1981. Nash v. JBPM, Inc., No. 09-1437, 2010 WL 2346605, at *1 (D. Minn. Jun. 9, 2010) (citing Gregory v. Dillard's, Inc., 565 F.3d 464 (8th Cir. 2009)). While protecting contractual rights from discriminatory behavior, the statute does not "provide a general cause of action for race discrimination." Gregory, 565 F.3d at 468. Vague blanket allegations of discrimination are inadequate to support a § 1981 claim. See Gregory, 565 F.3d 468; Nash, 2010 WL 2346605, at *1. Rather, discriminatory conduct is actionable under 42 U.S.C. § 1981 only if it actually "block[s]" or "thwart[s] the creation of a contractual relationship." Gregory, 565 F.3d at 476 (holding defendant grocery store's alleged racial discrimination against plaintiff not actionable because plaintiff was not prevented from shopping at the store). Merely alleging racially offensive utterances is insufficient to support a § 1981 claim. See Nash, 2010 WL 2346605, at *1 n.2 (explaining plaintiff's generalized allegations in her pleadings did not constitute a valid § 1981 claim).
Ikechi also cites to "§ 1982" in his request for relief but does not provide any explanation or support for this additional claim. (Compl. at 40, ¶XXVII). Thus, the Court will address only Ikechi's § 1981 claims.
In this case, Ikechi alleged that Verizon's inquiries into his "foreign accent" constituted a violation of § 1981 because such references "frustrated, interfered, and continuously impaired the Plaintiff's. . . perform[ance] of the agreement of services plans." (Compl. at 40, ¶XXVII). Ikechi's complaint also fails to connect Verizon's alleged references to any actual barrier to Ikechi's ability to make payments on his Verizon account or otherwise perform his obligations under the service contract. Ikechi's § 1981 claim is not actionable because it contains indefinite, generalized allegations of discrimination rather than allegations of discriminatory interference with a contractual right as the statute prohibits. See Gregory, 565 F.3d at 468. Accordingly, the Court recommends that Count I be dismissed with prejudice.
c. Fraud Claims
Counts II, IV, V, VII, IX, and XII of Ikechi's complaint contain allegations of fraud. Fraud claims must be plead with heightened specificity under Rule 9(b). Fed. R. Civ. P. 9(b) states that "[i]n all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity." This means that a claimant must allege the "who, what, where, why, and how" of fraudulent conduct. Parnes v. Gateway 2000, Inc., 122 F.3d 539, 549-50 (8th Cir. 1997). Conclusory statements that a defendant engaged in fraud or deceptive conduct "are not sufficient to satisfy Rule 9(b)." Comm. Prop. Invs., Inc v. Quality Inns Int'l, Inc., 61 F.3d 639, 644 (8th Cir. 1995).
In conjunction with his fraud claims, Ikechi asserts Counts II, IV, V, and VII under the MCFA and Count XII under the DPTA. An individual bringing a claim under the MCFA or the DPTA must do so through the Private Attorney General Statute, Minn. Stat. § 8.31. See Behrens v. United Vaccines, Inc., Div. of Harlan Sprague Dawley, Inc., 228 F. Supp. 2d 965, 968 (D. Minn. 2002). Individuals bringing a private claim under Minn. Stat. § 8.31 must "demonstrate that their cause of action benefits the public." Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000). Ikechi's state statutory fraud claims will be analyzed based on whether they are plead with sufficient specificity under Rule 9(b) and whether Ikechi has alleged a public benefit to satisfy Minn. Stat. § 8.31.
i. Minnesota Consumer Fraud Act Claims (Counts II, IV, V, XII)
In Counts II, IV, V, and XII, Ikechi makes several claims against Verizon for violations of the Minnesota Consumer Fraud Act ("MCFA"), Minn. Stat. § 325F.67- 69 by alleging that Verizon made false statements regarding Ikechi's service charges and marketing of Asurion equipment protection insurance.
Ikechi's fraud allegations do not satisfy Rule 9(b)'s requirements that the who, what, where, why, and how, of the alleged conduct be asserted. See Masterson Personnel, Inc. v. The McClatchy Co., No. 05-1274, 2005 WL 3132349, at *3-5 (D. Minn. Nov. 22, 2005) (applying Fed. R. Civ. P. 9(b) to a claim under MCFA and concluding plaintiff had failed to state a claim for lack of specificity). Ikechi fails to provide specific dates of Verizon's alleged statements and does not identify the written or oral communications upon which his claim is based. Ikechi's assertions as to the Verizon employees who allegedly engaged in the fraud are too indefinite and imprecise to satisfy Rule 9(b).
Ikechi's MCFA claims also fail because he alleges individualized harm based on his private contract with Verizon that does not benefit the public under Minn. Stat. § 8.31. A MCFA claimant "must prove that he or she relied on the falsehood to show causation." 301 Clifton Place, LLC v. 301 Clifton Place Condo. Assoc., 783 N.W.2d 551, 563 (Minn. Ct. App. 2010) (citing Group Health Plan, Inc. v. Philip Morris, Inc., 621 N.W.2d 2, 13 (Minn. 2001). In Ly v. Nystrom, 615 N.W.2d 302 (Minn. 2000), the Minnesota Supreme Court held that the successful prosecution of a plaintiff's fraud claim involving a "single one-on-one transaction," would not benefit the public. Id. at 314. Ly is the prevailing legal standard, and under that standard, Ikechi's MCFA claims fail. The Court recommends that Counts II, IV, V, and XII be dismissed with prejudice.
Ikechi's MCFA claims fail for two reasons. First, his claims fail to comport with the heightened pleading requirements of Rule 9(b). Second, his claims involve one-on-one transactions between Verizon and Ikechi that do not satisfy the public benefit requirement of Minn. Stat. § 8.31 subd. 3a. In a footnote, Ikechi argues that his MCFA claims would meet the public benefit requirement because "Plaintiff may move to classify this case as a class action, thus Defendants cannot rule out the benefit to the public at this stage of the litigation." (Pl.'s Mem. at 9 n.2). Ikechi has not taken any steps to certify this case as a class action. Merely making reference to a class action is insufficient to meet the public benefit requirement.
ii. Minnesota Deceptive Trade Practices Act Claim (Count VII)
According to Ikechi, the charges Verizon billed in excess of the advertised monthly access fees violated Minn. Stat. § 325D.44, the Minnesota Uniform Deceptive Trade Practices Act ("DTPA"). (Compl. at 44-45). DTPA claims, like MCFA claims, must be plead with particularity under Rule 9(b). Kinetic Co. v. Medtronic, Inc., 672 F.Supp.2d 933, 944-45 (D. Minn. Dec. 4, 2009). The DTPA does not afford a private cause of action for monetary damages. See Dennis Simmons, D.D.S., P.A. v. Modern Aero, Inc., 603 N.W.2d 336, 339-40 (Minn. Ct. App. 1999) (finding that the DTPA provides only injunctive relief and does not support a private cause of action for monetary damages); see also i-Sys., Inc. v. Softwares, Inc., No. 02-1951, 2004 WL 742082 at *15 (D. Minn. Mar. 29, 2004) (concluding that the DTPA "permits a plaintiff to seek injunctive relief, but not monetary damages.") (internal citation omitted). Rather, a Minn. Stat. § 325D.44 claim must be brought under Minn. Stat. § 8.31 subd. 3a. See Kinetic, 672 F. Supp. 2d at 945. Boastful, vague statements of quality and superiority are considered "puffery," which are not actionable under Minn. Stat. § 325D.44. See Bernstein v. Extendicare Health Servs., Inc., 607 F. Supp. 2d 1027, 1031 (D. Minn. Mar. 4, 2009) (finding statements in plaintiff's pleading "so general and unspecific that they cannot serve as a basis for a claim under any of the consumer protection statutes upon which Plaintiff relies.").
Ikechi's DTPA claim is fundamentally flawed for two reasons. First, Ikechi's claim under Minn. Stat. § 325D.44 fails as a matter of law because he does not assert a public benefit. There is no indication that any members of the public would receive any tangible benefit from the outcome of this litigation given that Ikechi requests only personal relief. Second, Ikechi's complaint does not allege any misrepresentations in either the service agreement or his dealings with Verizon customer service representatives. Instead, Count VII of the complaint merely quotes § 325D.44 and summarily states "Verizon et al individually and collectively acted and/or conducts described above constitute multiple, separate violations of § 325D.44, subdivision 1 (2002)." (Compl. at 45, ¶ XXXIII). Such allegations are inadequate under Rule 9(b) and § 325D.44. See Comm. Prop. Invs., 61 F.3d at 644 (8th Cir. 1995). Thus, this Court recommends that Count VII be dismissed with prejudice.
iii. Common Law Fraud Claim (Count IX)
To state a common law fraud claim under Minnesota law, a plaintiff must prove the following elements: (1) there was a false representation by a party of a past or existing material fact; (2) that was made with knowledge of the falsity of the representation or made as of the party's own knowledge without knowing whether it was true or false; (3) with the intention to induce another to act in reliance thereon; (4) that the representation caused the other party to act in reliance thereon; and (5) that the party suffered pecuniary damage as a result of his or her reliance. See Specialized Tours, Inc. v. Hagen, 392 N.W. 2d 520, 532 (Minn. 1986). Rule 9(b) requires fraud claims to be plead with "particularity." Here, Ikechi cites statements that amount only to inactionable puffery. See Bernstein v. Extendicare Health Servs., Inc., 607 F. Supp. 2d at 1031. Ikechi's complaint recounts many of the conversations Ikechi had with Verizon customer service representatives, yet he does not assert that Verizon intentionally made misleading or false statements. Thus, the scienter element of Ikechi's fraud claim is missing. See Semanko v. Minn. Mut. Life Ins. Co., 168 F. Supp. 2d 997, 1000 (D. Minn. 2000); Specialized Tours, 392 N.W. 2d at 532. Accordingly, this Court recommends that Count IX be dismissed with prejudice both because his fraud allegations not stated with sufficient particularity under Rule 9(b) and because of the absence of a showing of Verizon's alleged scienter.
For instance, Ikechi states in his complaint, "Verizon also represents that 'they are not happy unless the Plaintiff is' a euphemism for an orchestrated extortion and coercion. Furthermore, Verizon et al misrepresents and/or misstates that: 'it is the most reliable network' 'or the #1' among other providers. . . ." (Compl. at 46, ¶ XXXV).
Ikechi seems to argue that his damages are based on future fraud in the form of continued misrepresentations as to its billing practices and services regarding Ikechi's on-going contract with Verizon. (Compl. at 46); see infra note 12 (recounting Ikechi's statements regarding current and future damages if Ikechi continues payments to Verizon). Such allegations as to future fraudulent conduct are speculative and do not give rise to a valid fraud claim. See generally Specialized Tours, 392 N.W. 2d 520.
Ordinarily, the Court would recommend dismissal of a claim that is insufficiently pled without prejudice to allow the plaintiff to remedy the deficiencies upon re-pleading. A Court may, however, dismiss claims with prejudice if re-pleading would be futile. See Bernstein, 607 F. Supp. 2d at 1032 (dismissing plaintiff's fraud claims with prejudice because "another attempt to amend would likely not be fruitful"). In Bernstein v. Extendicare Health Servs., Inc., 607 F. Supp. 2d 1027, 1032 (D. Minn. Mar. 4, 2009), Judge Donovan W. Frank reasoned that dismissal of the plaintiff's fraud claims was proper because the alleged fraudulent statements contained in the plaintiff's complaint were "so general and unspecific that they [could] not serve as the basis for a claim under any of the consumer protection statutes upon which Plaintiff relies." Id. Similarly, in this case, Ikechi provided a large amount of detail in his complaint yet failed to allege any of Verizon's specific statements. Furthermore, Ikechi's 52-page complaint does not demonstrate that Verizon knowingly made any false statements intended to induce Ikechi's reliance. See Specialized Tours, 392 N.W. 2d at 532. Thus, the Court finds it unlikely that Ikechi could satisfy the prima facie elements of fraud upon re-pleading.
d. Breach of Contract and Unjust Enrichment Claims (Counts III, X)
Pleading breach of contract and unjust enrichment claims in the alternative is permitted under Fed. R. Civ. P. 8(a). See Dubinsky v. Mermart, LLC, 595 F.3d 812, 815 (8th Cir. 2010) (explaining plaintiff's unjust enrichment claim was properly plead in the alternative to his breach of contract claim); Stovall v. Lakanu, No. 05-2593, 2006 WL 3350686, at *3 (D. Minn. Nov. 17, 2006) ("seeking mutually exclusive remedies in a complaint is not a basis for dismissal") (citing Fed. Civ. P. 8(a)). Fed. R. Civ. P. 8(a)(3) states in relevant part: "[a] pleading that states a claim for relief must contain . . . a demand for relief sought, which may include relief in the alternative or different types of relief."
To state a claim for breach of contract, a plaintiff must show "(1) formation of a contract; (2) performance by plaintiff of any conditions precedent to his right to demand performance by the defendant; (3) a breach of the contract by defendant." Briggs Transp. Co. v. Ranzenberger, 217 N.W.2d 198, 200 (Minn. 1970) quoted in Smith v. Am. Investors Network, No. 05-1686, 2006 WL 3491144, at *21 (D. Minn. Oct. 26, 2006). In contrast to a fraud claim, a breach of contract claim need not be plead with particularity under Rule 9(b) but rather is subject to Rule 9(a) as interpreted by Iqbal and Twombly.
Ikechi's breach of contract claim should not be dismissed. First, the parties do not dispute the validity of the 2007 and 2009 service contracts. Second, through incorporating earlier paragraphs, Ikechi describes in detail the alleged material breach of the service contract based on Verizon's billing for additional fees that were purportedly not disclosed to Ikechi when he entered into the contract. (Compl. at 15-16, ¶ V-VI; 37-38, ¶ XIV-XVI). Third, though Ikechi's prolix complaint is not artful, it contains sufficient support for Ikechi's breach of contract claim, namely, that Verizon overcharged and inaccurately billed Ikechi. (Compl. at 12-13, 16-18, 25-29, 35, 37-39).
Ikechi seems to make fraud allegations in part as a basis of his breach of contract claim. Because the Court must read a pro se plaintiff's pleadings "liberally," the Court will evaluate Ikechi's breach of contract claim under Rule 9(a) rather than the heightened 9(b) pleading standard. See Estelle, 429 U.S. at 106; see also Mayard, 2011 WL 579334 at *6-7.
Although Ikechi does not explicitly state that he pleads his unjust enrichment claim in the alternative to his breach of contract claim, Rule 8(a) clearly allows such a claim. (Compl. at 37-38). Ikechi's unjust enrichment claim would allow him to recover in equity if his remedies at law are inadequate. See Drobnak v. Anderson Corp., 561 F.3d 778, 786-87 (8th Cir. 2009) (citing ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 305 (Minn. 1996). Because Ikechi has, albeit minimally, satisfied the Rule 9(a) pleading standard for his breach of contract claim, this Court recommends that Verizon's motion to dismiss with respect to Counts III and X be denied.
e. Intentional Interference with Contractual Relations (Count VI)
A claim for tortious interference with contractual relations requires a showing of (1) the existence of a contract; (2) the alleged tortfeasor knew of the contract; (3) the alleged tortfeasor intentionally procured a breach of the contract; (4) without justification; and (5) damages were caused by the breach. See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 361-62 (Minn. 1998); Metro. Sports Facilities Comm'n v. Minn. Twins P'ship, 638 N.W.2d 214, 228 (Minn. Ct. App. 2002)). Causation is an important element of a tortious interference with contractual relations claim requiring a plaintiff to show that "but for the interference the alleged business advantage would have been obtained." Rainforest Café, Inc. v. Amazon, Inc., 86 F. Supp. 2d 886, 907-09 (D. Minn. 1999) (explaining elements of a tortious interference with prospective business advantage claim under Minnesota law following the Restatement (Second) of Torts § 776B)).
Ikechi's claim fails to meet several of the prima facie elements of an intentional interference with contractual relations or an intentional interference with business advantage claim. First, Ikechi does not challenge the validity of his service contract with Verizon. Second, aside from Ikechi's recitation of statements he made to Verizon in in 2007 regarding his business use of his cellular phone number, Ikechi does not allege that Verizon had specific knowledge of his business contacts. (Compl. at 11-12, ¶ II). Ikechi also fails to assert that Verizon ever intended to interfere with Ikechi's business relationships. Id. According to his complaint, in December 2007, Ikechi told a Verizon customer service representative that he used his Verizon phone number as part of his business as an independent travel agent. (Compl. at 11, ¶ II). Ikechi further asserts that his phone number was critical to "his independent contract business relationships." Id. The connection between these facts is speculative at best, as is Ikechi's assertion that Verizon intentionally interfered with his business. Third, Ikechi alleges that Verizon's conduct resulted in "lost business profits" "in the excess of $200,000." (Compl. at 43-44, ¶ XII). Ikechi does not substantiate these claims, which facially contradict his assertions that his monthly cell phone bills averaging around $600 exceed the monthly income of his business. Id. Such statements are too conjectural, speculative, and remote to support a claim for intentional interference with contractual relations or business advantage. See Kallok, 573 N.W.2d at 361-62; Metro. Sports Facilities Comm'n, 638 N.W.2d at 228. Accordingly, the Court recommends that Claim VI be dismissed with prejudice.
Ikechi describes himself as an "independent travel agent contractor to the Airlines and various consumers." (Pl.'s Mem. at 21).
Ikechi asserted the following with respect to Verizon's monthly billing: "Plaintiff was being unlawfully forced and intimidated into spending more than 90% of his monthly earnings to pacify and pay Verizon's coerced fraudulent billings in exchange for continued services." (Compl. at 21-22, ¶ XIII).
f. Unlawful Conversion and Extortion Claims, Minn. Stat. § 609.275 (Counts VIII, XI)
Conversion is "an act of willful interference with personal property, 'done without lawful justification by which any person entitled thereto is deprived of use and possession.'" See Microsoft Corp. v. Ion Tech. Corp., 484 F. Supp. 2d 955, 964-65 (D. Minn. 2007) (citing DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997) (quoting Larson v. Archer-Daniels-Midland Co., 32 N.W.2d 649, 650 (Minn. 1948)). A conversion claim cannot survive a motion to dismiss without an assertion of damages. See Storage Tech. Corp. v. Cisco Sys., Inc., 395 F.3d 921, 929 (8th Cir. 2005) (applying Minnesota law and holding plaintiff's failure to substantiate alleged damages was "fatal" to its conversion claim).
Ikechi combines his coercion claim with an allegation of extortion under Minn. Stat. § 609.275. (Compl. at 45-46, ¶ XXXIV). Significantly, Ikechi does not plead any facts to support his contention that Verizon "domineers and converts Plaintiff's telephone lines and makes it impossible for him to exercise control over the telephone numbers." (Compl. at 45, ¶ XXXIV). Moreover, Ikechi does not assert any direct damages as a result of Verizon's disconnection of Ikechi's phone service, which was presumably for an unpaid account balance. Ikechi does, however, reference Verizon's refusal to credit his account for errant charges. (Compl. 36-37, ¶ XXIII). Ikechi's claim does not meet the prima facie elements of conversion and should not survive Verizon's motion to dismiss.
Similarly, Ikechi's "extortion and blackmail" allegations under Minn. Stat. § 609.275 and § 609.27 in Counts VIII and IX do not give rise to a valid civil claim. Minn. Stat. § 609.275 and § 609.27 are criminal statues prohibiting coercion and do not provide a basis for civil relief. See Milavetz, Gallop & Milavetz, P.A. v. Hill, No. CX-98-140, 1998 WL 422229, at *2 (Minn. Ct. App. Jan. 14, 1998) (explaining "absent specific statutory language, a criminal violation does not create a private cause of action) (citing Larson v. Dunn, 460 N.W.2d 39, 47 (Minn. 1990)). Counts VIII and IX of Ikechi's complaint attempt to create private causes of action to recover damages from Verizon. Such claims are not statutorily allowable under Minn. Stat. § 609.275 and § 609.27. Accordingly, this Court recommends dismissal with prejudice of the extortion and blackmail claims in Counts VIII and IX of the complaint.
g. Voluntary Payment Doctrine
In their brief, Defendants argue that "to the extent Plaintiff made a voluntary payment, he cannot recover on the grounds that he was under no legal obligation to make such a payment." (Defs.' Mem. at 19) (citing Hanson v. Telecomms., Inc., No. C7-00-534, 2000 WL 1376533 (D. Minn. Sept. 26, 2000) (applying voluntary payment doctrine)). The voluntary payment doctrine prevents a party from recovering disputed funds that were paid "voluntarily with full knowledge of the facts." Id. at *4. The duress exception to the voluntary payment doctrine applies, however, "when a party makes payments under duress or compulsion" that forces the party to "choose between paying or facing loss of possession of its property." Best Buy Stores, L.P. v. Developers Diversified Realty Corp., No. 05-2310, 2010 WL 4628548, at *3 (D. Minn. Nov. 4, 2010) (citing Joannin v. Ogilvie, 52 N.W. 217, 217 (Minn. 1892)). Ikechi meets the duress or compulsion exception to the voluntary payment doctrine because if he had not paid his cellular phone bill, Verizon would have discontinued his phone service. (Compl. at 36-37, ¶ XIII). Thus, the voluntary payment doctrine does not preclude Ikechi's recovery.
B. Verizon's Rule 12(f) Request to Strike Portions of Ikechi's Complaint
Courts may strike portions of a pleading that contain an "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). Courts have "liberal discretion" to strike pleadings under Rule 12(f), though such measures are disfavored. See Nationwide Ins. Co. v. Cent. Mo. Elec. Co-op., Inc., 278 F.3d 742, 748 (8th Cir. 2001); Stanbury Law Firm, P.A. v. I.R.S., 221 F.3d 1059, 1063 (8th Cir. 2000). Verizon requests that the Court strike portions of Ikechi's complaint that "lack foundation and contain irrelevant and vulgar language." (Defs.' Mem. at 21). Specifically, Verizon asks that the Court strike the seven pages of on-line customer comments and excerpts from a newspaper article contained in the body of the complaint. Such redundant and in some instances scandalous material is precisely the type of content that falls under Rule 12(f). Thus, the Court recommends that the customer reviews (Compl. at 4-11) and the newspaper article (Compl. at 31, ¶ XIX) be stricken from the complaint.
Most of the customer comments pertain to Asurion, Inc.'s cell phone protection services. Asurion is no longer a party to this action.
The following is a representative customer review except from Ikechi's complaint: ". . . how in living h*** am I supposed to be responsible for the devious, criminal changes that they make to my phone order after I hang up the phone? It's absolute thievery!" (Compl. at 4).
Verizon also requests that the Court strike a June 22, 2010 letter from a Verizon customer service representative to Ikechi confirming a telephone conversation they had regarding his account (Compl. 25, ¶ XV). Though this letter would be more appropriate as an attachment to Ikechi's complaint rather than a section of the complaint text, the letter is particularly relevant to Ikechi's dealings with Verizon. Given that striking portions of a party's pleading is generally disfavored, the Court recommends denial of this portion of Verizon's request to strike.
C. Plaintiff Ikechi's Motion for Judgment on the Pleadings
Ikechi seeks judgment on the pleadings. "Judgment on the pleadings is appropriate when there are no material facts to resolve and the moving party is entitled to judgment as a matter of law." Mills v. City of Grand Forks, 614 F.3d 495, 497-98 (8th Cir. 2010) (citing Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002)). Under Fed. R. Civ. P. 12(c), a motion for judgment on the pleadings is not proper until "after the pleadings are closed." Rule 7(a) provides that the pleadings are not considered closed until both the complaint and the answer have been filed. See Moubry by & Through Moubry v. Indep. Sch. Dist. No. 696, 951 F. Supp. 867, 894 n. 23 (D. Minn. 1996); see also Crow Creek Sioux Tribe v. Donovan, No. 09-3021, 2009 WL 4730696, at *6-7 (D.S.D. Dec. 9, 2009) (denying motion for judgment on the pleadings because defendants had not yet filed an answer). Denial of a motion for judgment on the pleadings is warranted when the motion is "premature." Moubry, 951 F. Supp. at 894 n. 23; see also Dorgan v. Int'l Harvester Co., 585 F.2d 1380, 1381 (8th Cir. 1978) (reversing district court order allowing party to file answer under Rule 12(c) prior to ruling on motion for judgment on the pleadings).
Verizon has not yet filed an answer but instead filed a motion to dismiss under Rule 12(b)(6). Thus, the pleadings in this case are not yet closed under Rule 7(a). Pursuant to Rule 12(c), Ikechi's motion for judgment on the pleadings is premature. Accordingly, the Court recommends that Ikechi's motion for judgment on the pleadings be denied.
D. Plaintiff Ikechi's Motion to Remand
Verizon removed the instant action to United States District Court on November 15, 2010, based on diversity jurisdiction pursuant to 28 U.S.C. § 1332 and federal question jurisdiction pursuant to 28 U.S.C. § 1331 [Doc. No. 1, at 2-3]. On November 24, 2010, Ikechi filed a motion to remand the case to state court.
The Court has recommended that all but Ikechi's breach of contract (Count III) and unjust enrichment claims (Count XI) be dismissed with prejudice. At oral argument in response to questions from the Court, Ikechi admitted that the damages arising out of his breach of contract and unjust enrichment claims would not exceed $20,000. This case is before the Court on diversity jurisdiction grounds pursuant to 28 U.S.C. § 1332(a) that requires complete diversity and an amount in controversy exceeding $75,000. In light of Ikechi's admission that his maximum recovery would be $20,000 on his breach of contract claims, the case no longer meets the $75,000 case in controversy requirement. Thus, the Court no longer has subject matter jurisdiction under 28 U.S.C. § 1332(a).
The Court: Do you think any one of your damages claims would ever amount to $50,000? Mr. Ikechi: Not at all your Honor. . . . The Court: On your best day, the most that you've paid rightfully, wrongfully, or whatever to Verizon has been $10,000. . . . The worst that could happen would be that you continue to pay $20,000 unlawfully? Mr. Ikechi: Yes, if I continue that trend. The Court: . . . . If the § 1981 claim goes away, does this Court really have jurisdiction? . . . [Ikechi] just admitted that the amount in controversy does not exceed $75,000. Mr. Wanning: That's the first news I've heard of it . . . . I understand that the plaintiff did make that concession today here in court, but based upon the time of our filings, that was where we were coming from. Oral Argument, March 4, 2011, before U.S. Magistrate Judge Steven E. Rau.
The Court finds Verizon's belief that this case met the amount in controversy requirement well-justified based on Ikechi's assertion of damages "in an amount in excess of $200,000" in conjunction with his intentional interference with contractual relations claim. (Compl. at 43-44, ¶ XXXII).
Verizon also asserted federal question jurisdiction as a basis for removal based on 28 U.S.C. § 1331 based on Ikechi's 42 U.S.C. § 1981 claim [Doc. No. 1, at 2-3]. The Court has recommended dismissal of Count I, which is the only count of Ikechi's complaint involving a question of federal law. (Compl. at 30-31, ¶ XVII). Thus, the Court no longer has subject matter jurisdiction over the case based on 28 U.S.C. § 1331. Accordingly, the Court recommends that the case be remanded to state court for lack of subject matter jurisdiction.
At oral argument, Verizon admitted that the service contract contained an arbitration provision. The Court strongly urges the parties to explore the possibility of arbitration pursuant to the contract rather than continue to litigate the case.
III. RECOMMENDATION
Based upon the foregoing and all of the files, records, and proceedings herein, IT IS HEREBY RECOMMENDED that: 1. Verizon's Motion to Dismiss [Doc. No. 5] be GRANTED in part and DENIED in part as follows:
a. with respect to Count I, that Verizon's motion be GRANTED;
b. with respect to Count II, that Verizon's motion be GRANTED;
c. with respect to Count III, that Verizon's motion be DENIED;
d. with respect to Count IV, that Verizon's motion be GRANTED;
e. with respect to Count V, that Verizon's motion be GRANTED;
f. with respect to Count VI, that Verizon's motion be GRANTED;
g. with respect to Count VII, that Verizon's motion be GRANTED;
h. with respect to Count VIII, that Verizon's motion be GRANTED;
i. with respect to Count IX, that Verizon's motion be GRANTED;
j. with respect to Count X, that Verizon's motion be DENIED;
k. with respect to Count XI, that Verizon's motion be GRANTED;
l. with respect to Count XII, that Verizon's motion be GRANTED;
m. To the extent Verizon's motion seeks to strike portions of the complaint, Verizon's the request be GRANTED in part and DENIED in part as follows:
2. Ikechi's Motion for Judgment on the Pleadings [Doc. No. 22] be DENIED; and 3. Ikechi's Motion for Remand [Doc. No. 18] be GRANTED. Dated: April 7, 20111. GRANTED as to Pages 4-11 and Page 31, ¶ XIX of Ikechi's Complaint; and
2. DENIED as to Page 25, ¶ XV;
s/Steven E . Rau
STEVEN E. RAU
United States Magistrate Judge Under D. Minn. LR 72.2(b), any party may object to this Report and Recommendation by filing with the Clerk of Court, and serving all parties by April 25 , 2011 , a writing which specifically identifies those portions of this Report to which objections are made and the basis of those objections. Failure to comply with this procedure may operate as a forfeiture of the objecting party's right to seek review in the Court of Appeals. A party may respond to the objecting party's brief within ten days after service thereof. A judge shall make a de novo determination of those portions to which objection is made. This Report and Recommendation does not constitute an order or judgment of the District Court, and it is therefore not appealable to the Court of Appeals.