Technocable Wiring Specialist, Inc. v. Genesis Networks Telecom Services, Llc

MOTION to dismiss for failure to state a claim as to Count III

M.D. Fla.April 10, 2017

19254411v1 0991063 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION CASE NO.: 16-CV-02590-MSS-MAP TECHNOCABLE WIRING SPECIALIST, INC., Plaintiff, vs. GENESIS NETWORKS TELECOM SERVICES, LLC, Defendant. _____________________________________/ MOTION TO DISMISS COUNT III OF PLAINTIFFS AMENDED COMPLAINT WITH PREJUDICE Defendant, Genesis Networks Telecom Services, LLC, respectfully moves pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss with prejudice Count III of Plaintiff's Amended Complaint for fraudulent inducement, and in support states as follows.1 1 "A pending motion to dismiss-even one that only addresses some of a plaintiff's claims-tolls the time for a responsive pleading." Webber v. Nat'l Gen. Assurance Co., No. 4:14CV490-MW/CAS, 2015 WL 11109366, at *1 (N.D. Fla. Oct. 20, 2015). "This is true even when the motion to dismiss is addressed at an amended complaint." Id; see also Jacques v. First Liberty Ins. Corp., No. 8:16-CV- 1240-T-23TBM, 2016 WL 3221082, at *1 (M.D. Fla. June 9, 2016); Ferk v. Mitchell, No. 14-CV-21916, 2014 WL 7369646, at *1 (S.D. Fla. Dec. 29, 2014) (citing Beaulieu v. Bd. of Trustees of Univ. of W. Fla., No. 3:07CV30 RVEMT, 2007 WL 2020161, at *2 (N.D. Fla. July 9, 2007) (collecting cases and noting “Defendant's motion to dismiss, therefore, automatically extends its time to answer under Rule 12(a)(4) until after the court has ruled on Defendant's motion to dismiss”)). Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 1 of 11 PageID 135 2 19254411v1 0991063 I. INTRODUCTION This lawsuit stems from Plaintiff's allegations Defendant agreed in a memorandum of understanding to acquire Plaintiff or to form a joint venture with Plaintiff for the purpose of securing and performing a contract to install Google Fiber. Plaintiff contends Defendant failed to honor the agreement after Google awarded Defendant the contract. Defendant moved to dismiss Plaintiff's original complaint as to all three counts. The Court granted in part and denied in part the motion on March 15, 2017, to the extent it dismissed Plaintiff's fraud claim "with leave to amend to more particularly allege the factual basis for the claim of fraud." [ECF No. 18]. Plaintiff filed his amended complaint on March 28, 2017, again three counts, including for fraudulent inducement. Despite the amendments, Plaintiff's Count III for fraudulent inducement still fails for two reasons. First, Plaintiff has still failed to allege the basis for this claim with enough particularity to satisfy Rule 9(b). Second, the claim is still duplicative and thus barred by the independent tort doctrine. II. STANDARD FOR A MOTION TO DISMISS In reviewing a motion to dismiss under Rule 12(b)(6), a court should take all well-pleaded facts in the plaintiff's complaint and all reasonable inferences drawn from those facts as true. Jackson v. Okaloosa Cnty., Fla., 21 F.3d 1531, 1534 (11th Defendant will therefore answer the remaining counts after this partial motion to dismiss is resolved or at such other time as ordered by the Court. Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 2 of 11 PageID 136 3 19254411v1 0991063 Cir. 994). Federal Rule of Civil Procedure 8(a)(2) requires a short and plain statement of the claim showing that the pleader is entitled to relief. Iqbal, 556 U.S. at 663 (quoting rule). Federal Rule of Civil Procedure 10(c) provides, in pertinent part, that [a] copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes." “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations . . . a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). Instead, a plaintiff must plead enough facts to state a plausible basis for the claim. Id. In other words, a plaintiff’s [f]actual allegations must be enough to raise a right to relief above the speculative level.” Id.; see also 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2013) (“it is clear that in order to satisfy the requirements of Rule 8(a) the pleading must contain something more by way of a claim for relief than a . . . statement of facts that merely creates a suspicion that the pleader might have a legally cognizable right of action.”). A complaint does not state a plausible claim where the described conduct is “‘‘merely consistent with’ a defendant’s liability.’” Ashcroft v. Iqbal 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). Courts should also not abandon common sense or ignore their experience in reviewing a complaint on a motion to dismiss. In fact, the opposite is true: Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 3 of 11 PageID 137 4 19254411v1 0991063 Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F.3d, at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not “show[n]”-“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2). Iqbal, 556 U.S. 679 (emphasis added). III. COUNT THREE OF THIS LAWSUIT SHOULD BE DISMISSED FOR FAILURE TO STATE A CLAIM The Court should dismiss Plaintiff's fraudulent inducement claim for two reasons. First, Plaintiff has still failed to allege the basis for this claim with enough particularity to satisfy Rule 9(b). Second, the claim is still duplicative and thus barred by the independent tort doctrine. Rule 9(b) provides as follows: "Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." As this Court has held previously: Rule 9(b) may be satisfied if the complaint sets forth:(1) [P]recisely what statements were made in what documents or oral representations or what omissions were made, and(2) [T]he time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) the same, and(3) [T]he content of such statements and the manner in which they misled the plaintiff, and(4) [W]hat the defendants obtained as a consequence of the fraud. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir.1997). Linville v. Ginn Real Estate Co., LLC, 697 F. Supp. 2d 1302, 1306 (M.D. Fla. 2010) (Scriven, J.). Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 4 of 11 PageID 138 5 19254411v1 0991063 The Court previously dismissed this count because it did not meet the Rule 9(b) particularity standard. [ECF No. 18]. Plaintiff's amended complaint does no better. While Plaintiff does more specifically allege the dates and times of various meetings, Plaintiff does not provide any specific detail regarding any fraudulent statement. Plaintiff instead simply repeats the following vague, conclusory allegation: that Rick Schiavinato made "specific representations" "the substance of which represented a purported intent, desire and willingness on the part of Genesis to enter into a partnership with TechnoCable for the purposes of acquiring the Google Fiber project." [ECF No. 19, ¶¶ 54(a)-(c) & (d). The fact Plaintiff included the phrase "the substance of which" is an acknowledgment that Plaintiff knows of no specific fraudulent statements.2 Simply including vague prefatory language such as "the substance of which" and general, conclusory allegations regarding a party's intentions does not satisfy Rule 9(b). See Barrett v. Scutieri, 281 F. App'x 952, 954 (11th Cir. 2008) ("Barrett's fraud claim fails procedurally and substantively. He did not set forth a specific oral or written statement or omission by Scutieri about a material fact."); Cummings v. 2 Plaintiff does allege several members of Defendant's upper management referred to the Google Fiber project as the "Billion Dollar contract" and that one such upper manager James Goodman said to "do whatever it takes to secure the Google Fiber Project." [ECF No. 19, ¶ 54(c)]. There does not appear to be anything at all fraudulent about these statements, however, and the amended complaint does not suggest how or why these statements were fraudulent. That the contract was worth a lot of money and Defendant was directed to do "whatever it takes" to obtain the contract are both completely consistent with the events alleged in the complaint, as the contract was secured, but do not suggest any misrepresentation. The only other specific statement alleged, in paragraph 58, occurred after the fact and therefore is not relevant to the Rule 9(b) analysis. Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 5 of 11 PageID 139 6 19254411v1 0991063 Nationstar Mortg. LLC, No. 1:16-CV-2000-WSD, 2017 WL 818865, at *5 (N.D. Ga. Mar. 2, 2017) ("Plaintiff's conclusory, vague allegations that Nationstar has engaged in 'a clear pattern of intentional fraudulent conduct, the fraudulent manufacturing of defaults, and the intentional demand for monies to which it was not legally entitled' (See [11] at 4) are insufficient to satisfy the special pleading requirement under Rule 9(b) of the Federal Rules of Civil Procedure for pleading fraud claims with specificity[.]") As Plaintiff has already had one opportunity to amend, and it appears it cannot plead specific enough facts to meet the heightened fraud-pleading standard, the Court should dismiss this claim with prejudice for failure to comply with Rule 9(b). Alternatively, the Court should dismiss Count III as barred by the independent tort doctrine. As noted by the Florida Supreme Court in Tiara Condominium Association, Inc. v. Marsh & McLennan Cos., Inc., 110 So. 3d 399 (Fla. 2013), under basic common law principles, “in order to bring a valid tort claim, a party [ ]must demonstrate that all of the required elements for the cause of action are satisfied, including that the tort is independent of any breach of contract claim.” Id. at 408 (Pariente, J. concurring). Osan v. Verizon Florida LLC, No. 8:15-CV-104-T-36TGW, 2016 WL 2745001, at *4 (M.D. Fla. May 11, 2016). "Fundamental contractual principles continue to bar a tort claim where the offending party has committed no breach of duty independent of a breach of its contractual obligations." Quantum Capital, LLC v. Banco De Los Trabajadores, No. 1:14-cv-231193-UU, 2014 WL 1251957, at *11 (S.D. Fla. Nov. 21, 2014). Representations about future conduct to be Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 6 of 11 PageID 140 7 19254411v1 0991063 performed pursuant to a contract merge with the breach of contract claim. See Prewitt Enters., LLC v. Tommy Constantine Racing, LLC, 185 So. 3d 566, 570 (Fla. 4th DCA 2016). It is certainly true most rationale actors would not make an agreement they knew the other side was going to breach, but it does not turn the breach into an independent tort. Here, Plaintiff's allegations in Count III amount to nothing more than a breach of the contract because all Plaintiff really complains about is a failure honor a commitment specifically embodied in the alleged contract. See Kaye v. Ingenio, Filiale De Loto-Quebec, Inc., No. 13-61687, at *5 (S.D. Fla. May 29, 2014) (dismissing a fraudulent inducement claim because "The alleged fraudulent misrepresentation-that Ingenio would allow Kaye to prosecute infringers-is a right specifically embodied in the License Agreement."). Count III of the amended complaint requests nearly identical damages (punitive damages being the only difference)3 because it is clear Plaintiff wants to be 3 "[T]he power to strike a pleading . . . is inherent in a trial court's authority to enforce its orders and ensure prompt disposition of legal actions." State Exch. Bank v. Hartline, 693 F.2d 1350, 1352 (11th Cir. 1982). For example, district courts have discretion to strike claims where an amendment exceeds the scope of the order granting leave to file it. See The Cincinnati Ins. Co. v. Cochran, No. 05-16867, 2006 WL 4495335, at *3 (11th Cir. Dec. 27, 2006) ("The district court was well within its discretion when it struck the malicious prosecution counterclaim on the basis that it exceeded to scope of the original order."). The addition of a request for punitive damages exceeds the scope of leave granted to file an amended complaint, which was granted solely "to more particularly allege the factual basis for the claim of fraud." [ECF No. 18]. Moreover, Defendant did not consent in writing to the addition of a claim for punitive damages, see Fed. R. Civ. P. 15(a)(2), and therefore respectfully requests the Court strike/dismiss Plaintiff's new punitive damages claim. The same goes for Count II, as to which Plaintiff did not have leave to amend, as Plaintiff added a claim for "costs or loss of future profits" which was not in its original Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 7 of 11 PageID 141 8 19254411v1 0991063 put into the same place as Plaintiff allegedly would have been had the alleged agreement been honored (i.e., Plaintiff wants damages for breach of contract). In response to Defendant's independent tort doctrine argument in its first motion to dismiss, Plaintiff argued that this claim did not violate the independent tort doctrine because fraud in the inducement is an exception to this doctrine. [ECF No. 16, p. 19]. The case law on which Plaintiff relies, however, does not support the conclusion Plaintiff's fraud claim falls within this exception. For example, Ferguson Transp., Inc. v. N.A. Van Lines, Inc., 687 So. 2d 821, 822-23 (Fla. 1996), merely confirms that an independent tort is necessary to generate this exception, but does not in any way support its application here. Another case on which Plaintiff relied in its original response, HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238, 1240 (Fla. 1996), actually works against application of the exception here. In that case, the Supreme Court of Florida noted its agreement with the Supreme Court of Michigan that "fraud interwoven with the breach of contract. . . relate[s] to the breaching party's performance of the contract and does not give rise to an independent cause of action in tort." The HTP court noted that, with a genuinely independent fraudulent inducement claim, the "standard of truthful representation placed upon the defendant is not derived from the contract." Id. (internal quotation marks omitted). Here, it is clear the standard of truthful representation about which Plaintiff complains is complaint and therefore this request for damages should be stricken/dismissed. [Compare ECF No. 1, "WHEREFORE CLAUSE" (containing no such request), with ECF No. 19, "WHEREFORE CLAUSE" ¶ (e)]. Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 8 of 11 PageID 142 9 19254411v1 0991063 embodied very explicitly and derived completely from the alleged contract. [ECF No. 19-2, § III] and is therefore interwoven with the alleged breach of contract. Finally, Plaintiff's reliance on Output, Inc. v. Danka Bus. Sys., Inc., 991 So. 2d 941, 944 (Fla. 4th DCA 2008) is even more misplaced. The Output court specifically noted its decision was premised on a condition not present in this lawsuit. Namely, the defendant in that lawsuit was not a party to the contract at issue: Key to this court's opinion is the fact that Canon was not a party to the contract between Output and Danka. Had Canon been a party to the contract, then Output's claim that Hoffman misrepresented the CLC 5000's ability to duplex with exact registration would not have constituted a claim for fraud in the inducement, but rather a claim for fraud in the performance. Id. Instead, Plaintiff's claim is legally indistinguishable from the fraudulent inducement claim then United States District Judge, now United States Circuit Judge, Robin S. Rosenbaum found to be barred by the independent tort doctrine in Kaye v. Ingenio, Filiale De Loto-Quebec, Inc., No. 13-61687, at *5 (S.D. Fla. May 29, 2014). In that case, Kaye had sold certain patents to Ingenio pursuant to a contract under which Kaye retained the right to prosecute infringers which Ingenio declined to prosecute, but Ingenio allegedly acted in bad faith by making unreasonable demands to prevent the plaintiff from exercising this right. Id. at *1-*3. Kaye then, among other claims, brought suit for fraudulent inducement, alleging Ingenio never intended to allow Kaye to exercise his right to prosecute infringers. While acknowledging the original promise may have been fraudulent, Judge Rosenbaum dismissed the fraudulent inducement claim anyway, finding: Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 9 of 11 PageID 143 10 19254411v1 0991063 The alleged fraudulent misrepresentation-that Ingenio would allow Kaye to prosecute infringers-is a right specifically embodied in the License Agreement. While the initial promise may have been fraudulent, the terms of the purported fraud were memorialized in the License Agreement. As a result, any failure to comply with those terms results in an action for breach of contract. Similarly, here the purported fraudulent representation is memorialized in the alleged contract and Plaintiff is complaining the promise was not kept. That is, Plaintiff's purported fraudulent inducement claim is nothing more than a claim for damages due to Defendant's alleged failure to purchase it or to establish a joint venture with it. As there is no escaping the reality of this fact, any further amendment would be futile and the Court should dismiss Count III with prejudice under the independent tort doctrine. CERTIFICATE OF SERVICE I hereby certify that on April 10, 2017, this document was served via the Court's CM/ECF system on: Chad Andrew Justice, Black Rock Trial Lawyers, 201 South Westland Ave, Tampa, FL 33606, 813-254-1777, Fax: 813-254-3999, chadjustice@blackrocklaw.com, Juan Guillermo Sanchez, Sanchez Law Firm, 2665 S. Bayshore Dr., Ste. 220, Coconut Grove, FL 33133-5402, 305-209-7282, jsanchez@sanchez-law-firm.com; Lara Michelle LaVoie, LaVoie & Kaizer, P.A., 6601 Memorial Highway, Suite 201, Tampa, FL 33615, 844-813-7246, Fax: 844- 813-7246, lara@flinjuryadvocates.com. By: s/Daniel A. Krawiec Daniel A. Krawiec Florida Bar No. 59136 Martin D. Stern Florida Bar No. 72354 Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 10 of 11 PageID 144 11 19254411v1 0991063 mstern@hinshawlaw.com dkrawiec@hinshawlaw.com Hinshaw & Culbertson LLP One East Broward Blvd., Suite 1010 Fort Lauderdale, FL 33301 Telephone: 954-467-7900 Fax: 954-467-1024 Case 8:16-cv-02590-MSS-MAP Document 21 Filed 04/10/17 Page 11 of 11 PageID 145