TFO Inc v. Vantiv, Inc

Filing 25

MEMORANDUM OPINION AND ORDER- Vantiv's partial motion to dismiss (Doc #11 ) is GRANTED in its entirety and TFO's claims from breach of contract are DISMISSED; Vantiv's motion for protective order (Doc #22 ) is DENIED as MOOT in light of this memorandum opinion and order; The parties are REMINDED that any future motions regarding discovery disputes must comply with the undersigned's discovery dispute procedure (Doc #18 at 2-3). Signed by Magistrate Judge Staci G Cornelius on 3/31/17. (MRR, )

FILED
2017 Mar-31 AM 09:01
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
TFO, INC.,

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Plaintiff,
v.
VANTIV, INC.,
Defendant.

Case No.: 1:16-cv-00971-SGC

MEMORANDUM OPINION AND ORDER1
Presently pending is the partial motion to dismiss filed by defendant, Vantiv,
Inc. (Doc. 11). The motion has been fully briefed and is ripe for adjudication.
(See Docs. 15-16). For the reasons that follow, the motion is due to be granted,
and aside from TFO's claim for breach of contract, all claims asserted in the
complaint are due to be dismissed.
I.

STANDARD OF REVIEW
"Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain

statement of the claim showing that the pleader is entitled to relief,' in order to
'give the defendant fair notice of what the … claim is and the grounds upon which
it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). Rule 8 "does not require 'detailed
1

The parties have consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c).
(Doc. 17).

factual allegations,' but it demands more than an unadorned, the defendantunlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 555).

"A pleading that offers 'labels and

conclusions' or 'a formulaic recitation of the elements of a cause of action will not
do.'" Id. at 678 (quoting Twombly, 550 U.S. at 555, 557) (internal quotation marks
omitted).
To survive a motion to dismiss for failure to state a claim on which relief
may be granted brought pursuant to Rule 12(b)(6), "a complaint must contain
sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible
on its face.'"

Id. (quoting Twombly, 550 U.S. at 570).

"A claim has facial

plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged."
Id. (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a
'probability requirement,' but it asks for more than a sheer possibility that a
defendant has acted unlawfully." Id. "Where a complaint pleads facts that are
'merely consistent with' a defendant's liability, it 'stops short of the line between
possibility and plausibility of 'entitlement to relief.'" Id. (quoting Twombly, 550
U.S. at 557).

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II.

DISCUSSION
TFO is a business that entered into a contractual agreement with Vantiv,

whereby Vantiv agreed to process credit and debit card payments made by TFO's
customers. (Doc. 1 at 2). The complaint alleges that, beginning in April 2016,
Vantiv "failed to properly process credit or debit card transactions." (Id.). Slightly
more specifically, the complaint alleges Vantiv has failed to credit TFO with
money from its customers' purchases. (Id.). TFO also contends Vantiv began and
continues to "re-run" its customers' card transactions, causing TFO's customers to
be double charged for purchases. (Id. at 2-3). As a result, TFO alleges it has
suffered, both because its customers blame it for double charging and because TFO
has lost business as a result of its decision to cease accepting credit card payments.
(Id. at 3).
On these facts, the complaint asserts claims for breach of contract, fraud,
money had and received, unjust enrichment, negligence, and wantonness. (Id. at 36). Vantiv's motion seeks dismissal of all claims except breach of contract. (Doc.
11). In response, TFO concedes dismissal is appropriate regarding its claims for
money had and received, unjust enrichment, and negligence; however, TFO
opposes dismissal as to its other claims. (Doc. 15 at 1). Accordingly, the only
claims at issue are TFO's claims for fraud and wantonness.
addressed in turn.
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Each claim is

A.

Fraud

Vantiv moves to dismiss TFO's fraud claim on two grounds. First, Vantiv
contends TFO has merely attempted to re-cast its breach of contract claim as a
fraud claim. (Doc. 11-1 at 3). Next, Vantiv argues TFO has failed to plead its
fraud claim with the particularity required under Rule 9(b) of the Federal Rules of
Civil Procedure. (Id. at 4).
Under Alabama law:
The elements of fraud are (1) a false representation (2) of a material
existing fact (3) relied upon the plaintiff (4) who was damaged as a
proximate result of the alleged misrepresentation. Earnest v.
Pritchett-Moore, Inc., 401 So. 2d 752 (Ala. 1981). If the fraud is
based upon a promise to perform or abstain from performing some act
in the future, two additional elements must be proved: (1) the
defendant's intention, at the time of the alleged misrepresentation, not
to do the act promised, coupled with (2) an intent to deceive. Clanton
v. Bains Oil Co., 417 So. 2d 149 (Ala. 1982).
P & S Bus., Inc. v. S. Cent. Bell Tel. Co., 466 So. 2d 928, 930 (Ala. 1985).
Additionally, a "mere breach of [] contract is not sufficient to support a charge of
fraud" under Alabama law. McAdory v. Jones, 71 So. 2d 526, 528 (Ala. 1954).
Courts sitting in this district have held that, in order to state a cognizable fraud
claim under Alabama law, the conduct alleged must be independent from a breach
of contract. Stone v. Koch Farms of Gadsden, LLC, No. 12-3777-RBP, 2013 WL
121477, at *2–3 (N.D. Ala. Jan. 8, 2013); Townson v. Koch Farms, LLC, No. 131703-VEH, 2014 WL 1618376, at *2 (N.D. Ala. Apr. 22, 2014) (quoting Justice
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Houston's concurring opinion in Hunt Petroleum Corp. v. State, 901 So. 2d 1, 11
(Ala. 2004)); see also Brown-Marx Assocs., Ltd. v. Emigrant Sav. Bank, 703 F.2d
1361, 1370-71 (11th Cir. 1983) ("Failure to perform a promise is not of itself
adequate evidence of intent to support an action for fraud. A mere breach of a
contractual provision is not sufficient to support a charge of fraud.") (citations
omitted).
Additionally, at the motion to dismiss stage, the Eleventh Circuit has held
that the heightened pleading standard under Rule 9(b) requires a plaintiff to allege
"(1) the precise statements, documents, or misrepresentations made; (2) the time,
place, and person responsible for the statement; (3) the content and manner in
which these statements misled the Plaintiffs; and (4) what the defendants gained by
the alleged fraud." Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291 (11th
Cir. 2010).
Here, regarding fraud, TFO alleges: (1) TFO and Vantiv were parties to a
contract under which Vantiv promised to process credit and debit card payments;
(2) Vantiv's promise was false and made with intent to deceive TFO; (3) TFO
relied on Vantiv's promise; and (4) Vantiv suffered damage as a result. (Doc. 1 at
4-5). These allegations fail to state a claim for fraud under both of the rationales
advanced by Vantiv's motion to dismiss. First, these allegations are completely
dependent on TFO's breach of contract claim; the breach of contract is the only
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"fraudulent" act alleged. Moreover, even if a breach of contract could constitute
fraud, the claim is not pled with the particularity required under Rule 9(b).2
Rather, TFO's fraud claim is stated in a conclusory fashion and lacks factual detail.
Entirely absent are allegations regarding dates, specific statements, identities of
individuals making fraudulent statements, or any fraudulent representations aside
from the terms of the contract allegedly breached. Accordingly, TFO's fraud claim
will be dismissed for failure to state a claim.
B.

Wantonness

In its motion, Vantiv contends TFO cannot maintain a claim for wantonness
because Alabama law does not recognize a tort-like claim for a breach of contract.
(Doc. 11-1 at 4-6).3 In response, TFO contends the cases on which Vantiv's
motion relies pertain to negligence claims but not wantonness claims. (Doc. 15 at
5-6). However, TFO does not cite any law suggesting the facts alleged here would
support a claim for wantonness.
The issues presented here have been persuasively addressed by a court
sitting in this district. In Buckentin v. SunTrust Mortg. Corp., 928 F. Supp. 2d
1273, 1289-90 (N.D. Ala. 2013), a case cited in Vantiv's motion to dismiss (see
2

In response to Vantiv's motion to dismiss, TFO neither addressed Vantiv's Rule 9(b) arguments
nor moved for leave to file an amended complaint alleging fraud with greater particularity.
3

Vantiv also advanced this argument to support dismissal of TFO's negligence claim. (Doc. 111 at 4-5). Interestingly, TFO conceded that its claim for negligence is due to be dismissed but
resisted the motion as to wantonness. (Doc. 15 at 1, 5-6).
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Doc. 11-1 at 5-6), the court dismissed a plaintiff's wantonness claim where the
defendant's duty arose solely via a contract with the plaintiff. In doing so, the court
explained:
Alabama law "does not recognize a tort-like cause of action for the
breach of a duty created by a contract." McClung, 2012 WL 1642209,
at *7, citing Blake, 845 F. Supp. 2d at 1210. "[A] negligent failure to
perform a contract . . . is but a breach of the contract." McClung,
2012 WL 1642209, at *7, quoting Blake, 845 F. Supp. 2d at 1210; see
also Barber v. Bus. Prods. Ctr., Inc., 677 So. 2d 223, 228 (Ala. 1996),
overruled on other grounds by White Sands Grp., LLC v. PRS II, LLC,
32 So. 3d 5 (Ala. 2009) ("a mere failure to perform a contractual
obligation is not a tort"). "A tort claim can only be asserted when the
duty of reasonable care, which one owes to another in the course of
day-to-day affairs, has been breached and causes personal injury or
property damages." McClung, 2012 WL 1642209, at *7 (citing Blake,
845 F. Supp. 2d at 1209-10).
Buckentin, 928 F. Supp. 2d at 1290. The undersigned finds the reasoning in
Buckentin persuasive. Accordingly, TFO's claim for wantonness is due to be
dismissed because: (1) the complaint's only allegations of wrong doing concern
Vantiv's breach of contract; and (2) the only duty alleged in the complaint arose
because of the contract between the parties.
III.

CONCLUSION
For all of the foregoing reasons, even accepting the allegations in the

complaint as true, TFO has failed to state a claim for wantonness or fraud. TFO
further concedes its claims for money had and received, unjust enrichment, and
negligence are due to be dismissed.

Accordingly, Vantiv's partial motion to
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dismiss (Doc. 11) is GRANTED in its entirety and TFO's claims—aside from
breach of contract—are DISMISSED.
Finally, Vantiv's pending motion for protective order (Doc. 22), which rests
entirely on the pendency of the motion to dismiss, is DENIED as MOOT in light
of this memorandum opinion and order. The parties are REMINDED that any
future motions regarding discovery disputes must comply with the undersigned's
discovery dispute procedure. (See Doc. 18 at 2-3).
DONE this 31st day of March, 2017.

____________________________
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE

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