DIRECTV LLC v. WELLS et al, No. 1:2013cv00028 - Document 50 (M.D. Ga. 2013)
Court Description: ORDER granting 28 Motion to Dismiss for Failure to State a Claim. Ordered by U.S. District Judge W. Louis Sands on 11/13/2013. (bcl)
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DIRECTV LLC v. WELLS et al Doc. 50 IN TH E U N ITED STATES D ISTRICT COU RT FOR TH E MID D LE D ISTRICT OF GEORGIA ALBAN Y D IVISION DIRECTV, LLC, a California lim ited Liability com pany, Plaintiff, v. STANLEY WELLS d/ b/ a WELLS ENTERPRISES and CHATTAHOOCHEEONLINE.COM; TRIPOLIE S. WELLS, a/ k/ a TRIPOLI SCOTT and d/ b/ a DIGITAL CONNECTIONS and J AZZMIN WELLS, d/ b/ a DIGITAL CONNECTIONS, Defendants. : : : : : : : : : : : : : : : : : : CASE NO.: 1:13-CV-28 (WLS) ORD ER On J une 24, 20 13, Plaintiff DIRECTV, LLC filed a Second Motion to Dism iss Defendants’ Counterclaim s Or, In the Alternative for a More Definite Statem ent (Doc. 28), requesting that Defendants’ negligent-m isrepresentation counterclaim s be dism issed for failure to m eet the heightened pleading requirem ent applicable to fraud claim s under Federal Rule of Civil Procedure 9(b). Rather than substantively respond to Plaintiff’s Motion, on J uly 16, 20 13, Defendants requested that the Court allow them to subm it a m ore definite statem ent of their counterclaim s. (Doc. 31.) On Septem ber 30 , 20 13, the Court directed Defendants to provide another more definite statem ent of their counterclaim s.1 (Doc. 44.) This tim e, the Court specifically outlined Federal Rule of Civil Procedure 9(b)’s fraud pleading requirements and a 1 The Court granted a previous request to subm it a more definite statem ent on May 20 , 20 13. (Doc. 21.) Defendants subm itted their m ore definite statem ent on J une 4, 20 13 (Doc. 23), and the instant Motion to Dism iss (Doc. 28) followed shortly thereafter. Dockets.Justia.com party’s burden thereunder for Defendants. (See id.) On October 15, 20 13, citing a lack of understanding of the federal pleading requirem ents, Defendants requested “additional tim e” to com ply with the Court’s Septem ber 30 , 20 13 Order. (Doc. 46.) Defendants went on to reiterate that they are innocent of DIRECTV’s claim s against them . (See id. at 2.) After reviewing DIRECTV’s Second Motion to Dism iss (Doc. 28), Defendants’ Counterclaim (Doc. 23) and Defendants’ “Response” in Opposition to DIRECTV’s Second Motion to Dism iss (Doc. 46), the Court finds that Defendants will be perm itted no further opportunities to provide a m ore definite statem ent of their counterclaim s. To the extent there has been a fraud via a negligent m isrepresentation, Defendants have been given am ple opportunity to subm it a statem ent of their counterclaim s that outlines these allegations. Thus, the Court will consider Defendants’ counterclaim s as currently articulated. D ISCU SSION Federal Rule of Civil Procedure 12(b)(6) perm its a party to assert by m otion the defense of failure to state a claim upon which relief can be granted. A m otion to dism iss a plaintiff’s com plaint under Rule 12(b)(6) should not be granted unless the plaintiff fails to plead enough facts to state a claim to relief that is plausible, and not m erely just conceivable, on its face. Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7). “Dism issal for failure to state a claim is proper if the factual allegations are not ‘enough to raise a right to relief above the speculative level.’” Edw ards v. Prim e, Inc., 60 2 F.3d 1276, 1291 (11th Cir. 20 10 ) (quoting Rivell v. Private Health Care Sy s., Inc., 520 F.3d 130 8, 130 9 (11th Cir. 20 0 8)). “Stated differently, the factual allegations in the com plaint m ust ‘possess enough heft’ to set forth ‘a plausible entitlem ent to relief.’” Edw ards, 60 2 F.3d at 1291 (quoting Fin. Sec. Assurance, Inc. v. Stephens, Inc., 50 0 F.3d 1276, 1282 2 (11th Cir. 20 0 7)). While the Court m ust conduct its analysis “accepting the allegations in the com plaint as true and construing them in the light m ost favorable to the Plaintiff,” Hill v. W hite, 321 F.3d 1334, 1335 (11th Cir. 20 0 3), in evaluating the sufficiency of a Plaintiff’s pleadings the Court m ust “m ake reasonable inferences in [p]laintiff’s favor, ‘but we are not required to draw Plaintiff’s inference.’” Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 20 0 9) (quoting Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 20 0 5)). The Suprem e Court instructs that while on a Motion to Dism iss “a court m ust accept as true all of the allegations contained in a Com plaint,” this principle “is inapplicable to legal conclusions,” which “m ust be supported by factual allegations.” Ashcroft v . Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 194954 (20 0 9) (citing Tw om bly , 550 U.S. at 555, for the proposition that courts “are not bound to accept as true a legal conclusion couched as a factual allegation” in a com plaint). In the post-Tw om bly era, “[d]eterm ining whether a com plaint states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial experience and com m on sense.” Iqbal, 556 U.S. at 679. According to Federal Rule of Civil Procedure 8(a), to state a claim , a pleading m ust contain a “short and plain statem ent of the claim showing that the pleader is entitled to relief.” When a pleading seeks to allege fraud (a category that includes negligent m isrepresentation), the pleading standard is m ore rigorous and requires that a party alleging fraud “m ust state with particularity the circum stances constituting fraud or m istake.” Fed. R. Civ. P. 9(b). As the Court stated in its Septem ber 30 , 20 13 Order, to establish a claim of negligent m isrepresentation, a party m ust allege three essential elem ents: (1) opposing party negligently supplied false inform ation to foreseeable 3 persons, known or unknown; (2) such persons' reliance on that inform ation was reasonable; and (3) econom ic injury proxim ately resulted from that reliance. Arch Ins. Co. v. Clem ents, Purvis & Stew art, P.C., 850 F. Supp. 2d 1371, 1373 (S.D. Ga. 20 11) (citations om itted). Here, Defendants have alleged five counts of negligent m isrepresentation. The Court finds that none of these counts satisfy Rule 9(b)’s pleading requirem ents or even Rule 8’s m ore lax notice pleading requirem ent.2 In Count I, Defendants allege that DIRECTV never notified them that the accounts being created were illegal. (Doc. 23 ¶¶ 6-12.) The gravam en of DIRECTV’s com plaint against Defendants is that Defendants created fraudulent com m ercial subscriber accounts and used those accounts to activate DIRECTV satellite receiving equipm ent that Defendants distributed and sold to unauthorized individuals. Defendants contend that the accounts were opened in accordance with the proper procedures for opening accounts and that DIRECTV never stated that the accounts opened were illegally created or against DIRECTV’s policies. In the Court’s view, 2 District courts in the Eleventh Circuit differ over whether Rule 9(b)’s heightened pleading standard should apply to actions alleging a negligent m isrepresentation. See Atw ater v. N at’l Football League Play ers Ass’n, No. 1:0 6-cv-1510 , 20 0 7 WL 10 20 848, at *13 (N.D. Ga. Mar. 29, 20 0 7) (collecting cases). While the Eleventh Circuit has not expressly ruled on this issue, in both Inm an v. Am erican Param ount Financial, 517 F. App’x 744, 748 (11th Cir. 20 13) and Sm ith v. Ocw en Fin., 488 F. App’x 426, 428 (11th Cir. 20 12), the Eleventh Circuit affirm ed district courts’ dism issals of negligent-m isrepresentation claim s for failure to m eet Rule 9(b)’s pleading requirem ents. In neither of these cases did the Eleventh Circuit raise concerns about the propriety of applying Rule 9(b) to a claim for negligent misrepresentation. In fact, in Sm ith, the Eleventh Circuit stated that the “district court properly dism issed” fraud claim s that included a negligent-m isrepresentation claim because the plaintiff failed to plead the claim s with particularity as required by Rule 9(b). Sm ith, 488 F. App’x at 428 (em phasis added). Therefore, because DIRECTV asserts that Rule 9(b) applies and Defendan ts have not challenged this contention, the Court will assess Defendants’ counterclaim s under Rule 9(b). See, e.g., Purchasing Pow er, LLC v. Bluestem Brands, Inc., No. 1:12-cv-258, 20 12 WL 30 65419, at *7 n.4 (N.D. Ga. J uly 27, 20 12) (assum ing that a claim for negligent m isrepresentation m ust be pleaded in conform ity with Rule 9(b) where plaintiff did not challenge Rule 9(b)’s applicability). Even if Rule 9(b) does not apply, as shown below, Defendants negligent-m isrepresentation claim s still fail under Rule 8 because Defendants fail to identify any negligent m isrepresentations m ade by DIRECTV. See, e.g., Foxw orthy , Inc. v. CMG Life Servs., Inc., No. 1:11-cv-2682, 20 12 WL 1269127, at *6 (N.D. Ga. Apr. 16, 20 12) (applying Rule (b) but alternatively dism issing plaintiff’s negligent m isrepresentation claim under Rule 8 for failure to give defendants “fair notice of the [p]laintiff’s claim and the grounds upon which it rests”) (citing Erickson v. Pardus, 551 U.S. 89, 93 (20 0 7) (citing Tw om bly , 550 U.S. at 555))). 4 Defendants’ argum ent, as em bodied in Count I, is a defense to DIRECTV’s allegations, not an allegation that DIRECTV “negligently supplied false inform ation” to Defendants. Additionally, even if Defendants’ argum ents can be construed as alleging a claim for negligent m isrepresentation, Defendants have not provided any factual support for their allegation that DIRECTV m ade any “m isrepresentations” regarding the fraudulent accounts aside from their conclusory allegations that DIRECTV m ust have been providing them with false inform ation since they (Defendants) believe that their conduct was lawful. Such conclusory allegations do not pass m uster under Tw om bly / Iqbal. Therefore, Count I is dism issed. In Count II, Defendants allege that DIRECTV negligently m isrepresented that it was “legal and appropriate” to put consum er accounts in Tripolie Scott Wells’ nam e. Defendants state, however, that it was “Direct Star, acting on behalf of DirecTV” that represented that the m anner by which Defendants were creating accounts was legal. Defendants m ake no direct allegation against DIRECTV. Nevertheless, where m ultiple parties are involved, a com plaint m ust “contain specific allegations with respect to each defendant; generalized allegations ‘lum ping’ m ultiple defendants together are insufficient.”3 W est Coast Roofing & W aterproofing, Inc., 287 F. App’x 81, 86 (11th Cir. J uly 24, 20 0 8) (citation om itted); see also Brooks v . Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1381 (11th Cir. 1997) (“Because fair notice is “[p]erhaps the m ost basic consideration” underlying Rule 9(b), . . . the plaintiff who pleads fraud m ust “reasonably notify the defendants of their purported role in the schem e.”) Thus, because Count II fails to contain a specific allegation of a negligent m isrepresentation m ade by DIRECTV, the only defendant nam ed in this case, Count II is dism issed. The Court also 3 Though Direct Star is not a defendant in this case, the rationale behind not perm itting generalized allegations against m ultiple parties nevertheless applies here with equal force. 5 finds that Count IV suffers the sam e deficiency as Count II. In Count IV, Defendants allege that Don Cowling, an authorized dealer for DIRECTV, m isrepresented the equipm ent-installation process to Defendants. Because Cowling is not a defendant in this case, and Count IV contains no specific allegation of a negligent m isrepresentation against DIRECTV, Count IV is dism issed as well. Finally, the Court finds that Counts III and V should be dism issed because they fail to identify any negligent m isrepresentation m ade by DIRECTV. From this Court’s reading of Counts III and V, these counts m erely recount the chain of events following DIRECTV’s discovery that Defendants m ay have engaged in fraud. Thus, although Defendants have set forth their dispute with the way DIRECTV m ay have handled the breakdown in the business relationship, Defendants have not alleged fraud via negligent m isrepresentation. Therefore, Counts III and V are also dism issed. The Defendants have also requested that the Court “revisit the request for legal representation.” (Doc. 46 at 2.) In its Septem ber 30 , 20 13 Order, the Court inform ed Defendants that appointm ent of counsel in a civil case is only done in “exceptional circum stances” and that their status as business owners m akes them sufficiently able to defend them selves against allegations involving their business practices. (Doc. 44.) Nothing subm itted by Defendants to date causes the Court to disturb this finding. As the Court noted to Defendants, should “exceptional circum stances” m aterialize that m ake the appointm ent of counsel appropriate, the Court will sua sponte reexam ine Defendants’ request for counsel. CON CLU SION For the foregoing reasons, DIRECTV, LLC’s Second Motion to Dism iss Defendants’ Counterclaim s (Doc. 28) is GRAN TED . Defendants’ “Counter Claim to 6 Plaintiff[’]s Com plaint for Com pensation, and Relief” (Doc. 23) is D ISMISSED for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). SO ORD ERED , this 13 th day of Novem ber 20 13. / s/ W. Louis Sands W . LOU IS SAN D S, U N ITED STATES D ISTRICT JU D GE 7
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