Dixie v. Jarwin et al

Motion to Dismiss for Failure to State a Claim

W.D. Tex.July 10, 2017

Page 1 of 11 MIDLAND\014849\000001\1989174.1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS MIDLAND DIVISION DIXIE ELECTRIC, LLC Plaintiff, § § § v. § CAUSE NO. 7:17-CV-00066-RAJ § JAMES JARWIN AND § MMR CONSTRUCTORS, INC. Defendants. § § DEFENDANT MMR CONSTRUCTORS, INC.’S MOTION TO DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) TO THE HONORABLE UNITED STATES DISTRICT COURT JUDGE: COMES NOW, Defendant MMR Constructors, Inc. (“MMR”) and moves to dismiss Plaintiff Dixie Electric, LLC’s (“Dixie” or “Plaintiff”) causes of action for tortious interference and civil conspiracy pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief may be granted, and in support thereof would respectfully show unto the court as follows: I. BASIS OF MOTION 1. On April 4, 2017, Plaintiff filed its Original Complaint and Request for Declaratory Relief and Permanent Injunction (the “Complaint”) [Doc. 1] against MMR and former Dixie employee James Jarwin (“Jarwin”). The Complaint attempts to assert claims against MMR for: (1) tortious interference with existing contracts; (2) tortious interference with prospective relations; and (3) civil conspiracy. 2. MMR previously filed an Opposed Motion for More Definite Statement pursuant to Rule 12(e) of the Federal Rules of Civil Procedure. Dixie refused to provide a more definite Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 1 of 11 Page 2 of 11 MIDLAND\014849\000001\1989174.1 statement, instead electing to rely on the pleadings in its Complaint.1 A court should generally afford a plaintiff at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiff advises the court that it is unwilling or unable to amend in a manner that will avoid dismissal.2 As a result, Dixie has been given an opportunity to replead and has refused to do so, therefore dismissal is appropriate at this stage. 3. Plaintiff’s claims for tortious interference with existing contracts should be dismissed because Plaintiff fails to identify the purported contracts, agreements, customers, or relationships with one exception, wholly fails to identify any willful and intentional act of interference by MMR, and wholly fails to provide any factual support for proximate cause and actual damages. 4. Plaintiff’s claims for tortious interference with prospective relations should be dismissed because Plaintiff wholly fails to identify the prospective relations by failing to identify a single agreement, contract, relationship, customer, or employee, wholly fails to provide factual support that a reasonable probability existed that Dixie would have entered into a business relationship with any of the foregoing, wholly fails to provide factual support that MMR intentionally interfered with a conscious desire to prevent the relationship from occurring, wholly fails to provide factual support that MMR lacked privilege or justification for its unidentified acts, and wholly fails to identify actual harm or damages suffered by Dixie as a result of those acts. 5. Plaintiff’s claims for civil conspiracy should be dismissed because Plaintiff fails to set forth factual allegations that address the period of the conspiracy, the specific object of the conspiracy, or any of the certain actions of the alleged conspirators taken to achieve that purpose. 1 See Plaintiff Dixie Electric, LLC’s Response to Defendant MMR Constructors, Inc.’s Motion for More Definite Statement Pursuant to Federal Rule of Civil Procedure 12(e) [Doc. 15]. 2 Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir.2002). Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 2 of 11 Page 3 of 11 MIDLAND\014849\000001\1989174.1 6. Plaintiff’s Complaint consists of vague and conclusory allegations, nearly completely void of factual support, particularly as it pertains to MMR. A pleading must contain something more than a statement of facts that merely creates a suspicion of a legally cognizable right of action.3 In this case, Plaintiff’s Complaint wholly fails to do so and must be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. II. RULE 12(b)(6) MOTION TO DISMISS STANDARD 7. A party may move to dismiss an action for “failure to state a claim upon which relief may be granted.”4 While a complaint need not contain detailed factual allegations to survive a 12(b)(6) motion, a plaintiff is obligated to provide more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.5 Further, a plaintiff is required to plead more than “unadorned, the-defendant-unlawfully-harmed-me” accusations.6 Specifically, the Supreme Court has articulated a “two-pronged approach” to determine whether a complaint states a plausible claim for relief.7 8. First, the district court is to identify those pleadings that are conclusory. “[B]ecause they are no more than conclusions, [they] are not entitled to the assumption of truth.”8 Legal conclusions must be supported by factual allegations.9 Second, upon identifying the acceptably-pleaded factual allegations, the trial court assumes they are true and determines whether they plausibly give rise to an entitlement to relief.10 Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has 3 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). 4 Fed. R. Civ. P. 12(b)(6). 5 Bell Atlantic Corp., 550 U.S. at 555. 6 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 7 Id. at 679. 8 Ashcroft, 556 U.S. at 678. 9 Id. 10 Id. Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 3 of 11 Page 4 of 11 MIDLAND\014849\000001\1989174.1 alleged, but it has not shown, that the pleader is entitled to relief.11 As shown below, Plaintiff has not plead sufficient facts to state any plausible claim for relief and has failed to state claims upon which relief can be granted. III. ARGUMENT AND AUTHORITIES A. The Complaint Fails to State a Plausible Claim for Tortious Interference with Existing Contracts 9. Plaintiff’s Complaint contains a vague and conclusory recitation of the elements of a cause of action for tortious interference with existing contracts and fails to plead sufficient facts to support the claim. Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, these claims should be dismissed for failure to state a claim. 10. In Texas, the elements of tortious interference with an existing contract are: (1) that a contract subject to interference exists; (2) a willful and intentional act of interference; (3) such act was a proximate cause of damage; and (4) actual damage or loss.12 To maintain a claim for tortious interference with existing contract, a plaintiff must establish that the defendant knowingly induced one of the contracting parties to breach its obligations under a contract.13 11. Plaintiff’s Complaint references the Employment Agreement between it and Jarwin but makes no reference to any other contracts purportedly subject to interference. However, despite identifying this single contract, Plaintiff fails entirely to satisfy, or even address with any factual support, the remaining elements of the claim. Plaintiff fails to allege facts that establish or even suggest that MMR willfully and intentionally interfered with the Employment Agreement or that it knowingly induced a breach by Jarwin. Lastly, Plaintiff has entirely failed to allege facts concerning proximate cause or actual damages, instead continuing 11 Ashcroft, 556 U.S. at 678 (quoting Fed. R. Civ. P. 8(a)(2)). 12 Guerra & Moore Ltd., LLP v. Cantu (In re Cantu), 389 Fed. Appx. 342, 346 (5th Cir. 2010). 13 Cuba v. Pylant, 814 F.3d 701, 717 (5th Cir. 2016). Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 4 of 11 Page 5 of 11 MIDLAND\014849\000001\1989174.1 to rely on conclusory and generic statements and a formulaic recitation of the elements of those claims, devoid of any factual enhancement as required by Twombly. Plaintiff’s Complaint consists of precisely the kind of bare, conclusory allegations that were insufficient under Twombly and Iqbal. Plaintiff’s Complaint provides no factual allegations to support the majority of the required elements for this cause of action and therefore should be dismissed pursuant to Rule 12(b)(6) 12. As to the remainder of the tortious interference with existing contracts claim(s), Plaintiff has utterly failed to meet each and every one of the required elements of the cause of action. Instead, Plaintiff generically asserts that it “would have continued its contracts and business relations with certain customers” and that Defendants tortiously interfered with Plaintiff’s employment relationships “by soliciting its employees”.14 The Complaint does not identify a single contract or agreement (aside from the Employment Agreement discussed herein previously), nor does it identify a single relationship, employee, or customer with which either Defendant purportedly interfered. Plaintiff has not alleged facts that establish that multiple contracts subject to interference exist, nor has it alleged facts to establish or even suggest that MMR had knowledge of those unidentified contracts, let alone willfully and intentionally interfered with them. 13. Likewise, Plaintiff has not alleged facts that identify a single business relationship subject to interference, nor has it alleged facts to establish or even suggest that MMR had knowledge of such business relationship(s), let alone willfully and intentionally interfered with them. Lastly, Plaintiff has entirely failed to allege facts concerning proximate cause or actual damages, instead continuing to rely on conclusory and generic statements and a formulaic recitation of the elements of those claims, devoid of any factual enhancement as required by 14 See Plaintiff’s Complaint at ¶ 49. Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 5 of 11 Page 6 of 11 MIDLAND\014849\000001\1989174.1 Twombly. Plaintiff’s Complaint consists of precisely the kind of bare, conclusory allegations that were insufficient under Twombly and Iqbal. 14. MMR recognizes that the granting of dismissals pursuant to Rule 12(b)(6) are rare. However, where a plaintiff’s allegations are entirely conclusory and purely conjectural, as is the case before this Court, that rare opportunity presents itself. For example, the Court in Bioquell dismissed similarly vague claims because the Plaintiff failed to identify the business relationships and customers beyond the averment that “[Plaintiff] has critical ongoing relationships…”15 In dismissing the claims, the Court focused on the fact that the plaintiff failed to identify a single contract or client lost as a result of the defendant(s) actions in the case.16 Likewise, Plaintiff has failed and refused to identify a single contract17, customer, employee, or other relationship, let alone that MMR intentionally or willfully interfered with same or that Plaintiff was damaged thereby. Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, these claims should be dismissed for failure to state a claim. B. The Complaint Fails to State a Plausible Claim for Tortious Interference with Prospective Relation(s) 15. In Texas, the elements for tortious interference with a prospective business relation or contract are: (1) a reasonable probability that the parties would have entered into a business relationship; (2) an intentional, malicious intervention or an independently tortious or unlawful act performed by the defendant with a conscious desire to prevent the relationship from occurring or with knowledge that the interference was certain or substantially likely to occur as a 15 See Bioquell, Inc. v. Feinstein, No. 10-2205, 2010 WL 4751709, at *7-8 (E.D. Pa. Nov. 23, 2010). 16 Id. 17 Other than the Employment Agreement with Jarwin identified and addressed previously herein. Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 6 of 11 Page 7 of 11 MIDLAND\014849\000001\1989174.1 result of its conduct; (3) a lack of privilege or justification for the defendant’s actions; and (4) actual harm or damages suffered by the plaintiff as a result of the defendant’s interference.18 16. Much like the discussion supra regarding the claims for alleged tortious interference with existing contracts, Plaintiff’s Complaint fails to plead sufficient facts to state a claim for tortious interference with prospective relations. Rather, Plaintiff relies upon a rote recitation and unsupported conclusory averments regarding these claims: 19 17. Plaintiff’s Complaint fails to identify a single, specific prospective contract or business relationship. Likewise, Plaintiff has wholly failed to allege facts to establish or even suggest that MMR interfered, unlawfully or otherwise, with any of them. Naturally, without identifying any relation or interference with same, Plaintiff has wholly failed to establish that MMR was not privileged or justified in its unidentified actions. Further, Plaintiff has entirely failed to allege facts concerning proximate cause or actual damages, instead continuing to rely on conclusory and generic statements and a formulaic recitation of the elements of those claims, devoid of any factual enhancement as required by Twombly. 18 Texas Disposal Systems Landfill, Inc. v. Waste Management Holdings, Inc., 219 S.W.3d 563, 590-91 (Tex.App.- Austin 2007, pet. denied). 19 See Plaintiff’s Complaint at ¶ 50. Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 7 of 11 Page 8 of 11 MIDLAND\014849\000001\1989174.1 18. In Pension Advisory Group the Court found that a claim for tortious interference with a prospective contract was not sufficient wherein although the plaintiff identified specific business relationships, it failed to: (1) identify what conduct prevented those relationship from developing; (2) that defendants had knowledge as to the effects of their conduct; or (3) that plaintiff was damaged by same.20 Plaintiff’s Complaint in this case not only fails to meet those three elements, it also fails to identify any prospective contract or relationship. Therefore, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, these claims should be dismissed for failure to state a claim. C. The Complaint Fails to State a Plausible Claim for Civil Conspiracy 19. As to the civil conspiracy claim, it cannot even be said that Plaintiff’s Complaint contains a vague and conclusory recitation of the elements of the cause of action. Rather, it appears to touch on multiple independent torts, many of which are not plead at all elsewhere in the Complaint and others of which, as discussed infra, fail to state a claim. Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, these claims should be dismissed for failure to state a claim. 20. Under Texas law, a claim for civil conspiracy requires: (1) a combination of two or more persons; (2) the object of the combination was to accomplish an unlawful purpose or a lawful purpose by unlawful means; (3) the members had a meeting of the minds on the object or course of action; (4) one of the members committed an unlawful, overt act to further the object or course of action; and (5) the plaintiff suffered injury as a proximate result of the wrongful act.21 The plaintiff must show that at least one of the named defendants was liable for an underlying 20 See Pension Advisory Grp., Ltd. v. Country Life Ins. Co., 771 F.Supp. 2d 680, 704 (S.D. Tex. 2011). 21 First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 222 (Tex. 2017). Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 8 of 11 Page 9 of 11 MIDLAND\014849\000001\1989174.1 tort.22 The basis of a conspiracy claim is the damage resulting from the commission of the tort, not the conspiracy itself.23 21. Plaintiff’s Complaint contains generic and conclusory allegations concerning elements 1, 2, 3, and 5. Terms like ‘conspiracy,’ or even ‘agreement,’ are borderline: they might well be sufficient in conjunction with a more specific allegation, such as identifying a written agreement, but a court is not required to accept such terms as a sufficient basis for a complaint.24 Plaintiff’s Complaint fails to include any specific allegations in conjunction with the conspiracy claims. 22. Plaintiff’s Complaint almost entirely omits factual support for the underlying torts required by element 4. To the extent Plaintiff’s Complaint attempts to establish tortious interference claims, as stated above, those claims also fail. Plaintiff fails to identify any customers or employees of Plaintiff which were solicited, any confidential information, any trade secrets, any contracts, any prospective business relationships, and any damages with any specificity.25 A properly plead conspiracy claim “must set forth allegations that address the period of the conspiracy, the object of the conspiracy, and the certain actions of the alleged conspirators taken to achieve that purpose.”26 24. Because Plaintiff’s Complaint fails to allege sufficient facts to support any of the alleged underlying torts, the claim for civil conspiracy fails on the same basis and should be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 22 Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.1996). 23 Schlumberger Well Surv. Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 856 (Tex.1986). 24 Twombly, 550 U.S. at 557. 25 See Confidential information and trade secrets must be identified. See Pension Advisory Grp., Ltd., 771 F.Supp. 2d at 701; See also Clearline Techs. Ltd. v. Cooper B-Line, Inc., No. H-11-1420, 2012 WL 43366, at *11 (S.D. Tex. Jan. 9, 2012)(dismissing misappropriation of trade secrets claim because plaintiff “failed to identify the specific trade secret information it claims has been misappropriated”)(citing Pension Advisory Grp., 771 F.Supp. 2d at 701). 26 See also Bioquell, Inc., 2010 WL 4751709, at *8(citing Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 179 (3rd Cir.2010)). Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 9 of 11 Page 10 of 11 MIDLAND\014849\000001\1989174.1 PRAYER FOR RELIEF WHEREFORE, PREMISES CONSIDERED, MMR respectfully requests that Plaintiff’s claims for: (1) tortious interference with existing contracts; (2) tortious interference with prospective relations; and (3) civil conspiracy be dismissed with prejudice pursuant to Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6). Respectfully submitted, /s/ Nate Brignon Nate Brignon State Bar No. 24055214 nbrignon@cbtd.com Bradley H. Bains State Bar No. 01553980 bbains@cbtd.com Stephanie D. Lee State Bar No. 24081002 slee@cbtd.com COTTON, BLEDSOE, TIGHE & DAWSON A Professional Corporation P. O. Box 2776 Midland, Texas 79702 (432) 684-5782 (432) 682-3672 (Fax) ATTORNEYS FOR MMR CONSTRUCTORS, INC. Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 10 of 11 Page 11 of 11 MIDLAND\014849\000001\1989174.1 CERTIFICATE OF SERVICE I hereby certify that on this the 10th day of July, 2017, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following attorneys of record: Martin Ellis Thornthwaite Strasburger & Price, LLP 2801 Network Blvd., Suite 600 Frisco, TX 75034 Philip R. Russ Law Offices of Philip R. Russ 2700 S. Western Street, Suite 1200 Amarillo, TX 79109 /s/ Nate Brignon Nate Brignon Case 7:17-cv-00066-RAJ Document 24 Filed 07/10/17 Page 11 of 11 Page 1 of 1 MIDLAND\014849\000001\1990778.1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS MIDLAND DIVISION DIXIE ELECTRIC, LLC Plaintiff, § § § v. § CAUSE NO. 7:17-CV-00066-RAJ § JAMES JARWIN AND § MMR CONSTRUCTORS, INC. Defendants. § § ORDER GRANTING MMR CONSTRUCTORS, INC.’S MOTION TO DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) Before this Court is Defendant MMR Constructors, Inc.’s Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6). After consideration, the Court GRANTS the Defendant’s Motion along with all relief requested therein, including that Plaintiff’s claims for: (1) tortious interference with existing contracts; (2) tortious interference with prospective relations; and (3) civil conspiracy be dismissed with prejudice pursuant to Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6). IT IS SO ORDERED. SIGNED this the ____ day of _________________, 2017 ___________________________ Robert Junell United States District Judge Western District of Texas Case 7:17-cv-00066-RAJ Document 24-1 Filed 07/10/17 Page 1 of 1