Eiber Radiology, Inc. v. Toshiba America Medical System

Filing

Opinion issued by court as to Appellant Eiber Radiology, Inc.. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.

Case: 15-14334

Date Filed: 12/20/2016

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14334
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-23299-JLK

EIBER RADIOLOGY, INC.,
a Florida corporation,
Plaintiff - Appellant,
versus
TOSHIBA AMERICA MEDICAL SYSTEMS, INC.,
a foreign corporation,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 20, 2016)

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Before HULL, MARCUS, and JULIE CARNES, Circuit Judges.
PER CURIAM:
This appeal comes to us following the district court’s dismissal with
prejudice of Plaintiff Eiber Radiology, Inc.’s Amended Complaint against
Defendant Toshiba America Medical Systems, Inc. Upon careful review of
Plaintiff’s complaint, the procedural history below, and the parties’ briefs on
appeal, we AFFIRM the district court’s dismissal with prejudice.
BACKGROUND 1
Defendant sold Plaintiff a magnetic resonance imaging system (“MRI”) in
1998 and performed routine repairs and maintenance on the machine for several
years thereafter. Plaintiff’s claim arises from Defendant’s service of the machine
from 2010 through 2013. At several points over the course of those three years,
Plaintiff communicated to Defendant that the MRI was producing low-quality
images and sought Defendant’s assistance in diagnosing and curing the issue.
Defendant made numerous service calls to inspect the machine but failed to
properly diagnose or to effectively repair the mechanical problems that likely
contributed to the MRI’s sub-standard operation.

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We derive the pertinent facts exclusively from Plaintiff’s Amended Complaint. We assume
these facts to be true and construe them in the light most favorable to Plaintiff.

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When the MRI continued to malfunction, Plaintiff sought the assistance of
two independent MRI engineers. One engineer inspected the MRI and opined that
Defendant may not have properly diagnosed the cause of the machine’s problems.
A second engineer was able to diagnose and cure the causes of the MRI’s imagequality issues within several hours of inspecting the MRI. Following his repairs,
the MRI’s image quality improved by 75%.
Plaintiff cited these facts in its initial complaint for damages against
Defendant. In the view of the district court, this initial complaint contained only
“bare-bones factual allegations” that failed to “put Defendant on notice of whether
[Plaintiff’s claim] sounds in tort or in contract.” The district court accordingly
dismissed Plaintiff’s initial complaint for failure to state a claim on which relief
could be granted under Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”)
and offered Plaintiff leave to amend in order to clarify its theory of liability.
Plaintiff subsequently filed an Amended Complaint alleging that
Defendant’s failure to diagnose and repair the MRI’s poor image quality and other
mechanical issues over the course of three years amounted to negligence under
Florida common law. Plaintiff did not assert that any contract, written or oral,
existed between the parties and did not assert a claim for breach of contract.
Plaintiff was represented by counsel in filing both versions of the complaint.

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Defendant moved to dismiss the Amended Complaint, again for failure to
state a claim on which relief could be granted. In its opposition to Defendant’s
motion, Plaintiff requested “a further opportunity to address any [ ] deficiency or
insufficiency as may be determined” by the district court, but it did not separately
move for leave to amend.
This time, the district court granted the motion and dismissed the suit with
prejudice, declining to offer Plaintiff a second opportunity to cure the persisting
deficiency in its complaint. In dismissing the suit, the court concluded that “the
only conduct Defendant is alleged to have taken was to fail to competently make
the repairs it was hired to make. Thus, Plaintiff’s claim is merely an attempt to
recast a breach of a contractual relationship as a claim in tort.” And because
“breach of a contractual relationship cannot constitute an action in tort” under the
applicable state law, the court found that the Amended Complaint failed to state a
claim on which relief could be granted.
In response, Plaintiff moved for relief from the dismissal under Federal Rule
of Civil Procedure 60(b)(6), asking the court to modify its final order “to permit
Plaintiff to further amend to assert a claim against Defendant for breach of
contract.” The district court declined to do so. Plaintiff now appeals the district
court’s dismissal of the Amended Complaint with prejudice.

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STANDARD OF REVIEW
In general, “[w]e review de novo a district judge’s granting a motion to
dismiss for failure to state a claim under Rule 12(b)(6), accept the complaint
allegations as true, and construe them most favorably to the plaintiff.” Wiersum v.
U.S. Bank, N.A., 785 F.3d 483, 485 (11th Cir. 2015). By contrast, we review a
district court’s decision whether to dismiss a complaint with or without prejudice
for abuse of discretion. See Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir.
2001) (noting that district court’s denial of motion to amend complaint is reviewed
for abuse of discretion).
DISCUSSION
I.

Issue Presented on Appeal
In Plaintiff’s words, “[t]his appeal is not about whether the dismissal of [the]

Amended Complaint was proper” under Rule 12(b)(6). “Rather, this appeal is
about whether the court erred in dismissing the Amended complaint with
prejudice, given that the District court characterized the allegations of the
Amended Complaint as amounting to a claim for breach of contract instead of
negligence.”
Notwithstanding this straightforward statement of Plaintiff’s case, the

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parties’ presentation of the core issue on appeal is imprecise. 2 It is, therefore,
critical for us to identify at the outset which issues are before us on appeal and
which issues are not actually in dispute.
First, we observe that Plaintiff has conceded (by failing to argue otherwise)
that its Amended Complaint did not state a plausible claim of negligence—the only
theory of liability it articulated—and Plaintiff does not ask us to reverse the district
court’s finding on that ground. As such, we decline to review de novo the district
court’s assessment of the Amended Complaint’s facial sufficiency on Plaintiff’s
negligence claim.

2

In its initial statement of the issue on appeal, Plaintiff asks us to consider “[w]hether the
District Court erred in dismissing [the] Amended Complaint for negligence with prejudice” in
light of the fact that the district court “characterized [Plaintiff’s] claim as one for breach of
contract, but then denied [Plaintiff] the opportunity to seek relief under a theory of breach of
contract.” Plaintiff proceeds to state that “[t]he standard of review for an order granting a motion
to dismiss is de novo” and suggests throughout its opening brief that its Amended Complaint
should have survived Defendant’s motion to dismiss. Defendant responds in kind, arguing that
the district court did not err in finding that the Amended Complaint failed to state a plausible
claim on which relief might be granted. Defendant does not squarely address whether the district
court’s failure to offer Plaintiff an opportunity to amend was appropriate. Taken together, these
briefs suggest that our task on appeal is to determine whether the Amended Complaint was
properly dismissed under Rule 12(b)(6).
Plaintiff’s reply brief, however, retreats from Plaintiff’s earlier argumentation and reframes the
issue, stating explicitly that the appeal arises only from the district court’s failure to grant leave
to amend and does not present the question “whether the dismissal of [the] Amended Complaint
was proper” under Rule 12(b)(6).
In light of the inconsistency between the parties’ briefs, our first task is to examine the parties’
substantive arguments and thereby define the proper scope of review.

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In reviewing Plaintiff’s arguments, we also find that Plaintiff implicitly
agrees that the Amended Complaint failed on its face to allege sufficient facts to
support an alternative, breach-of-contract theory of liability—a theory the district
court referenced in both its orders of dismissal. Plaintiff’s rhetoric on this point is
somewhat misleading and, therefore, requires further examination.
At first blush, Plaintiff seems to suggest that it has, contrary to the district
court’s holding, pleaded sufficient facts to survive a motion to dismiss on the basis
of a breach-of-contract claim. Plaintiff spends considerable effort in its opening
brief establishing that, in this Circuit, a complaint that alleges facts upon which
relief can be granted survives a motion to dismiss “even if it fails to correctly
categorize the legal theory giving rise to the claim.” This principle is, indeed, well
settled: The Supreme Court recently noted in Johnson v. City of Shelby, Miss., 135
S. Ct. 346 (2014), that, where a plaintiff has pleaded “facts sufficient to show that
her claim has substantive plausibility,” federal pleading rules “do not countenance
dismissal of a complaint for imperfect statement of the legal theory supporting the
claim asserted.” Id. at 346–47. This principle would be apposite to Plaintiff’s case
if Plaintiff had demonstrated that the Amended Complaint successfully alleges
facts to support a breach-of-contract claim and that its sole error was to
accidentally omit mention of this viable theory of liability.

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But Plaintiff never explicitly asserts that its Amended Complaint is factually
sufficient—in fact, it implies quite the opposite. Plaintiff’s principal contention is
that the facts alleged in the Amended Complaint “suggest” that Plaintiff “could
plausibly state a cause of action” against Defendant on a breach-of-contract theory.
Plaintiff presumes that the district court must have conceded this point when it
characterized the Amended Complaint as a breach-of-contract claim “recast” as a
claim in tort and proceeds to argue that, “if given the opportunity” to amend its
complaint a second time, it “would be able to state a cause of action” for breach of
contract by alleging additional facts regarding its contractual relationship with
Defendant and the nature of the breach. These additional facts, Plaintiff maintains,
would be sufficient to nudge its complaint across the line from merely
“suggesting” that it “could plausibly state a cause of action” to actually stating a
plausible cause of action, as Rule 12(b)(6) requires. Indeed, as Plaintiff seems to
recognize, it is the breach of contract itself—and not the mere possibility that
Plaintiff could plead breach of contract—that must be “plausible” to survive a
motion to dismiss under Rule 12(b)(6). See Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009) (“[O]nly a complaint that states a plausible claim for relief survives a
motion to dismiss.”) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556
(2007)).

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While Plaintiff orients much of its analysis toward the topic of Rule 12(b)(6)
dismissal and repeatedly invokes the language of Twombly’s “plausibility”
pleading standard, what Plaintiff seeks is not a second look at its Amended
Complaint but a second chance to deliver a pleading that successfully meets the
Twombly standard. We therefore do not interpret Plaintiff’s position to be that the
district court’s dismissal of the Amended Complaint was error. Instead, we take
Plaintiff at its word that this appeal asks only “whether the court erred in
dismissing the Amended complaint with prejudice.”
As such, we do not consider de novo whether the Amended Complaint stated
a plausible claim for relief under Rule 12(b)(6) on any potential theory of liability.
We consider only the question whether the district court abused its discretion in
declining to offer Plaintiff an opportunity to amend its pleading a second time.
II.

Dismissal with Prejudice
A “dismissal for failure to state a claim under [Rule 12(b)(6)] is a ‘judgment

on the merits.’” N.A.A.C.P. v. Hunt, 891 F.2d 1555, 1560 (11th Cir. 1990)
(quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 399 n.3 (1981)). An
adjudication on the merits is, in turn, presumed to operate as a dismissal with
prejudice unless the district court specifies otherwise. See Semtek Int’l Inc. v.
Lockheed Martin Corp., 531 U.S. 497, 505 (2001) (finding that “an ‘adjudication

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upon the merits’ is the opposite of a ‘dismissal without prejudice’”); 9 Fed. Prac. &
Proc. Civ. § 2373 (3d ed.) (noting that “many federal courts have held that a
dismissal” under Rule 12(b)(6), which qualifies as an “involuntary dismissal”
under the federal rules, “would be a dismissal with prejudice”). Thus, under the
federal procedural rules, the district court need not provide specific justification for
dismissing with prejudice, as this is the default effect of a proper Rule 12(b)(6)
dismissal.
While the decision whether to deviate from the default of dismissal with
prejudice is left to the district court’s discretion, this Circuit has provided some
guidance. First, we have noted that a district court’s discretion to dismiss a
complaint without leave to amend is “severely restricted” by Federal Rule of Civil
Procedure 15(a)(2) (“Rule 15(a)(2)”), which mandates that leave to amend, when
requested by the plaintiff, “be freely given when justice so requires.” See Bryant,
252 F.3d at 1163 (applying the standard for Rule 15(a)(2) amendment to the
decision whether to dismiss with or without prejudice under Rule 12(b)(6)). In
cases where the plaintiff has acted in good faith and has not been given a first
chance to amend its initial complaint, we have treated dismissal with prejudice as a
remedy of last resort. See, e.g., Justice v. United States, 6 F.3d 1474, 1482 n.15
(11th Cir. 1993) (noting that dismissal with prejudice is appropriate “only in those

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situations where a lesser sanction would not better serve the interests of justice”)
(internal quotation marks omitted). And we have previously espoused the view
that, “where a more carefully drafted complaint might state a claim,” the district
court should grant a plaintiff at least one chance to amend its complaint before
dismissing the action with prejudice. See Bank v. Pitt, 928 F.2d 1108, 1112 (11th
Cir. 1991) (requiring district courts to grant sua sponte all plaintiffs at least one
opportunity to amend), overruled by Wagner v. Daewoo Heavy Indus. Am. Corp.,
314 F.3d 541, 542 (11th Cir. 2002).
We do not, however, require such leniency where a plaintiff has been
represented by counsel. See Wagner, 314 F.3d at 542 (severely limiting our
holding in Bank by finding that a district court is not required to grant sua sponte a
counseled plaintiff leave to amend). We have never required district courts to
grant counseled plaintiffs more than one opportunity to amend a deficient
complaint, nor have we concluded that dismissal with prejudice is inappropriate
where a counseled plaintiff has failed to cure a deficient pleading after having been
offered ample opportunity to do so.
In light of this guidance and the facts presented on appeal, we cannot
conclude that the district court abused its discretion in denying Plaintiff a second
opportunity to amend in the case before us.

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Over the course of the proceeding below, Plaintiff—and its counsel—was
offered ample opportunity to state a claim on which relief could be granted. Early
in the proceeding, the district court granted Plaintiff leave to amend its initial
complaint with specific instruction to clarify “whether Plaintiff’s complaint sounds
in tort or in contract.” Plaintiff was thus on notice of the fact that, in the eyes of
both the district court and Defendant, the alleged facts pointed to potential claims
in both tort and contract law. Nonetheless, Plaintiff returned with a minimally
augmented Amended Complaint that articulated a single negligence claim. Only
after the district court dismissed the Amended Complaint did Plaintiff first assert
that it “may well be able to state a cause of action . . . for breach of a contractual
relationship.” By then, Plaintiff had been given and had squandered an
opportunity to articulate the breach-of-contract claim it is now so confident it could
allege. Plaintiff provides no explanation for its failure to present facts stating a
claim for breach of contract in its Amended Complaint. To the contrary, Plaintiff’s
briefs suggest that Plaintiff has at all times possessed the facts and evidence that
would have been necessary to allege this claim with specificity.
We also note that Plaintiff did not formally move for leave to amend under
Rule 15(a)(2) when it realized it may have a viable breach-of-contract claim.
Instead, Plaintiff simply stated in opposing dismissal below that, “in the event the

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Court concludes that Plaintiff’s Complaint is somehow deficient or otherwise
insufficient, Plaintiff would request a further opportunity to address any such
deficiency or insufficiency as may be determined by this Court.” This statement
appears to have been intended to operate as a request for leave to amend in the
event the court found the Amended Complaint deficient. But it is worth noting that
Plaintiff never squarely pursued its right to seek leave to amend under
Rule 15(a)(2) when Defendant again moved to dismiss, nor did it explain to the
district court below why justice might require a second opportunity to amend. We
do not mean to suggest that Plaintiff would have prevailed on a motion to amend
under Rule 15(a)(2). We merely note that Plaintiff inexplicably failed to follow
the well-trodden procedural path toward amendment. As such, its claim that
dismissal with prejudice denied it “the opportunity to have its day in court” is
without merit.
We do not find that the district court abused its discretion in declining to
grant Plaintiff a second bite at this apple. Permitting another round of amendments
would have unduly protracted the proceeding below and promoted judicial
inefficiency. Preventing these outcomes by dismissing Plaintiff’s Second
Amended Complaint with prejudice was a proper exercise of the district court’s
discretion in this matter.

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CONCLUSION
In light of the foregoing, we AFFIRM the district court’s dismissal of
Plaintiff’s Amended Complaint with prejudice.

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