SCP Tuscaloosa LLC v. University House Tuscaloosa LLC et al
Filing
34
MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 4/5/2018. (PSM)
FILED
2018 Apr-05 AM 10:03
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
SCP TUSCALOOSA, LLC,
Plaintiff,
vs.
UNIVERSITY HOUSE
TUSCALOOSA, LLC, et al.,
Defendants.
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7:17-cv-00228-LSC
MEMORANDUM OF OPINION
Before the Court is Defendants’ Motion to Dismiss Plaintiff’s Amended
Complaint. (Doc. 28.) Defendants have challenged the sufficiency of the allegations
in Plaintiff’s Amended Complaint under Federal Rules of Civil Procedure 9(b) and
12(b)(6). This Motion has been fully briefed and is now ripe for decision. For the
reasons stated below, Defendants’ Motion to Dismiss Plaintiff’s Amended
Complaint (doc. 28) is due to be GRANTED. As Defendants’ Motion to Dismiss is
only partial in nature, (see id. at 2-3), SCP’s breach of contract claim continues
against University House Tuscaloosa, LLC (“UHT”) and the Scion Group, LLC
(“Scion”), and its fraudulent suppression claim continues against UHT. (See Doc.
23 at 25.)
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I.
BACKGROUND 1
This case arises from an agreement between SCP Tuscaloosa, LLC (“SCP”)
and University House Communities Acquisitions, LLC (“UHC”) for the sale of a
mixed residential and retail housing project known as “South 10” in Tuscaloosa,
Alabama. Also allegedly involved were a number of other entities related to UHC
who are named Defendants in this action, including University House
Communities Group, LLC (“UHC Group”), InvenTrust Property Management,
LLC (“InvenTrust”), and Scion. On March 23, 2017, Defendants filed their first
Motion to Dismiss (doc. 10) arguing that Plaintiff’s Complaint failed to state a
claim for breach of contract or fraudulent suppression under Federal Rules of Civil
Procedure 9(b) and 12(b)(6). The Court addressed Defendants’ arguments in a
Memorandum of Opinion (doc. 23), in which it granted Defendants’ Motion in
part and denied it in part. In its Memorandum, the Court additionally gave leave to
Plaintiff to correct the deficiencies in its factual allegations in relation to three
issues:
1. SCP failed to state a claim for breach of contract against UHC
Group and InvenTrust, because it stated no facts “specific to how
UHC Group and InvenTrust are bound by the [Purchase and Sale
1
The Court solely recounts the facts pertinent to the present, renewed Motion to Dismiss. The
Court has given a general summary of the factual basis for this action in its previous
Memorandum of Opinion.
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Agreement (the “PSA”)] or Earn-Out Agreement and how they
breached that duty.”
2. SCP failed to state a claim for breach of contract against UHC, as it
appeared to allege in its Complaint that SCP consented to the
assignment of the duties and obligations contained in the PSA from
UHC to UHT, and in doing so relieved UHC from liability under the
PSA. SCP also failed to show how UHC is liable under the Earn-Out
Agreement as it included no factual allegations showing that UHC was
a party to that agreement.
3. SCP failed to state a claim against UHC, UHC Group, University
House Communities Acquisitions Sub., LLC (“UHC Acquisitions”),
InvenTrust, and Scion for fraudulent suppression, because it only
included generalized allegations against “all defendants” that did not
suffice under Rule 9(b)’s heightened pleading requirements.
(See Id. at 11-13, 23-24.)
On December 13, 2017, SCP filed its Amended Complaint, which sought to
correct the deficiencies noted above. In the Amended Complaint, SCP has
removed any request for relief in the “Counts” section against Defendants UHC
and UHC Acquisitions; although the Amended Complaint contains passing
references to the two entities, SCP does not appear to seek relief from them.
Defendants InvenTrust, Scion, and UHC Group responded to the allegation in
SCP’s Amended Complaint with a renewed Motion to Dismiss, arguing that the
changes made by SCP were still insufficient to state a claim under Rules 9(b) and
12(b)(6).
I.
STANDARD OF REVIEW
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A pleading that states a claim for relief must contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.
P. 8(a)(2). However, the facts alleged in the complaint must be specific enough that
the claim raised is “plausible.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To
survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim for relief that is plausible on its face.”) (emphasis
added). A claim for relief is plausible on its face when the complaint’s “factual
content . . . allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Resnick v. AvMed, Inc., 693 F.3d 1317, 1325 (11th
Cir. 2012) (quoting Iqbal, 556 U.S. at 678). Conclusory statements of law may
“provide the framework of a complaint,” but the plaintiff is required to support
them with “factual allegations.” Iqbal, 556 U.S. at 679.
The process for evaluating the sufficiency of a complaint has two steps. This
Court “begin[s] by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Id. Conclusory
statements and recitations of a claim’s elements are thus disregarded for purposes
of determining whether a plaintiff is entitled to survive a motion to dismiss. Iqbal,
556 U.S. at 678. Next, this Court “assume[s] [the] veracity” of “well-pleaded
factual allegations” and “determine[s] whether they plausibly give rise to an
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entitlement to relief.” Iqbal, 556 U.S. at 679. A complaint’s factual matter need not
be detailed, but it “must . . . raise a right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
In reviewing the complaint, this Court “draw[s] on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679. Nonetheless, “[a] well-pleaded
complaint may proceed even if it strikes a savvy judge that actual proof of [the facts
alleged] is improbable.” Twombly, 550 U.S. at 556. This Court considers only “the
face of the complaint and attachments thereto” in order to determine whether
plaintiff states a claim for relief. Starship Enters. of Atlanta, Inc. v. Coweta Cty., 708
F.3d 1243, 1252 n.13 (11th Cir. 2013). Generally, the complaint should include
“enough information regarding the material elements of a cause of action to
support recovery under some ‘viable legal theory.’” Am. Fed’n of Labor & Cong. of
Indus. Orgs v. City of Miami, 637 F.3d 1178, 1186 (11th Cir. 2011) (quoting Roe v.
Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683-84 (11th Cir. 2001)).
II.
Discussion
As in their first Motion to Dismiss, Defendants challenge the sufficiency of
the changes wrought by SCP in its Amended Complaint in regards to SCP’s breach
of contract claim (Count I) and fraudulent suppression claim (Count II). After
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review of the amendments made by SCP, the Court concludes that Defendants’
Motion to Dismiss is due to be granted.
A. SCP’S BREACH OF CONTRACT CLAIM
As stated by the Court in its prior Memorandum of Opinion, SCP’s
Complaint failed to state a claim against UHC Group and InvenTrust for breach of
contract because it did not show how these Defendants were bound by either the
PSA or Earn-Out Agreement. In its original Complaint SCP alleged that UHC
Group and InvenTrust owned South 10 during the Earn-Out Period; SCP appeared
to argue that UHC Group and InvenTrust’s ownership of South 10 made them
liable under the Earn-Out Agreement’s clause that purports to bind “successors
and permitted assigns.” (Doc. 1 Ex. 2 ¶ 12.) Missing from SCP’s original
Complaint were any allegations of fact showing that UHC Group and InvenTrust
were assignees or successors to UHT who had executed the Earn-Out Agreement
with SCP.
SCP’s First Amended Complaint modified the Complaint’s allegations by
removing any reference to UHC Group and InvenTrust’s ownership of South 10,
and instead alleged:
26. On information and belief, Plaintiff alleges that during the 18
month earn-out period, and before November 1, 2016, [UHC] Group
and InvenTrust each contracted to assume the same obligations as UHT
under the [Earn-Out Agreement].
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27. The [Earn-Out Agreement] contained no provision for the
obligations and duties of UHT to be transferred or assigned, and it
contained no exculpatory clause relieving UHT of its obligations
under the [Earn-Out Agreement] upon an assignment of the contract.
However, the [Earn-Out Agreement] provided that its provisions would “be
binding upon the parties hereto and their successors and permitted assigns.”
Both [UHC] Group and InvenTrust became successors under the terms of
the [Earn-Out Agreement]. As such, each became obligated to adhere to the
[Earn-Out Agreement’s] provisions.
28. On information and belief, on or before Nov. 1, 2016, during the 18
month earn-out period, Scion entered into a contract to purchase
UHT and or South 10. Scion held itself out as having an ownership
interest in UHT and or South 10. Additionally, Scion was the agent
for UHT. UHC Group, through its Executive V.P., Troy Manson,
acted as agent for UHT by signing the [Earn-Out Agreement].
...
38. Under the [Earn-Out Agreement], and because they were assigned
the duties and obligations of the [Earn-Out Agreement] and or became
a successor to UHT, Defendants UHT, [UHC] Group, InvenTrust,
and Scion were obligated to accept all compliant retail space leases.
(Doc. 27 at ¶¶ 26-28, 38 (emphasis added) (citations omitted).) SCP thus modified
its original allegations by stating that UHC Group and InvenTrust both assumed
the Earn-Out Agreement and became successors to UHT. The Court further notes
that in its Response to Defendants’ Motion to Dismiss, SCP claims the Amended
Complaint alleged UHC Group and InvenTrust, “agreed to purchase UHT or its
assets, specifically South 10.” (Doc. 32 at 14.) But after thorough review of the
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Amended Complaint the Court has been unable to find where SCP has made any
allegations about the purchase of UHT by UHC Group or InvenTrust.
The modifications in SCP’s Amended Complaint are still insufficient for it
to state a claim for breach of contract against UHC Group and InvenTrust. SCP
has included no factual allegations about how UHC Group and InvenTrust
assumed UHT’s obligations or became its successors—instead SCP has made the
sort of conclusory statements and recitations of a claim’s elements that Iqbal
cautions a court to disregard. 556 U.S. at 678. Removing the legal conclusions—
that UHC Group and InvenTrust assumed the Earn-Out Agreement and became
successors to UHT—from the above paragraphs removes the backbone from
SCP’s breach of contract claim against UHC Group and InvenTrust. (See Doc. 27
¶¶ 26, 27, 38.) No facts remain to prop up SCP’s theory that UHC Group and
InvenTrust are somehow bound by the Earn-Out Agreement.
SCP argues that discovery will show that UHC Group and InvenTrust were
liable under the Earn-Out Agreement. SCP is not entitled to discovery on this issue
where it can offer no factual allegations at all to back up the legal conclusion that
UHC Group and InvenTrust assumed the Earn-Out Agreement and became
successors to UHT. Iqbal, 556 U.S. at 678-79 (“Rule 8 . . . does not unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.”).
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SCP’s claims in Count I against UHC Group and InvenTrust are due to be
dismissed as SCP has failed to state a claim for breach of contract against these
Defendants. (See also Doc. 23 at 9-11.) The Court will enter a separate Order
consistent with its above discussion of the breach of contract claim.
B. SCP’S FRAUDULENT SUPPRESSION CLAIM
UHC Group, InvenTrust, and Scion also contend SCP has failed to satisfy
the heightened pleading standard of Federal Rule of Civil Procedure 9(b) necessary
to state a claim for fraudulent suppression. In addition to the general plausibility
requirements established by Twombly and Iqbal, Rule 9(b) provides that for a claim
“alleging fraud or mistake, a party must state with particularity the circumstances
constituting fraud or mistake.” Fed. R. Civ. P. 9(b). The particularity requirement
in Rule 9(b) is satisfied when a complaint sets forth:
(1) precisely what statements were made in what documents or oral
representations or what omissions were made, and (2) the time and
place of each such statement and the person responsible for making
(or, in the case of omissions, not making) same, and (3) the content of
such statements and the manner in which they misled the plaintiff,
and (4) what the defendants obtained as a consequence of the fraud.
Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (quotation
omitted). “Rule 9(b) must not be read to abrogate rule 8, however, and a court
considering a motion to dismiss for failure to plead fraud with particularity should
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always be careful to harmonize the directives of rule 9(b) with the broader policy of
notice pleading.” Friedlander v. Nims, 755 F.2d 810, 813 n.3 (11th Cir. 1985).
As in SCP’s Complaint, SCP’s Amended Complaint contains contradictory,
shotgun-style allegations filled with conclusory statements in its fraudulent
suppression claim. The Court cannot determine who is responsible for what act or
omission under SCP’s allegations. SCP claims in shotgun-form that:
47. Defendants UHT, Group, InvenTrust and Scion had a duty to
timely disclose the following material facts to the Plaintiff: 1) there was
an agreement for Scion to purchase UHT and or South 10, and later
that Group and InvenTrust each entered into an agreement to
purchase UHT and or South 10; 2) that [UHC] Group and
InvenTrust were assigned the obligations and duties under the [EarnOut Agreement] and or became a successor to UHT; 3) that those
Defendants, [UHC] Group, InvenTrust, and Scion, would each
require its approval of any tenant and lease, notwithstanding UHT’s
previous approval; 4) that those three Defendants had criteria
different from UHT and or the [Earn-Out Agreement] for approving
prospective tenants and lease terms; 5) that executing the lease would
require Scion’s stockholder approval; 6) that the lease form submitted
for approval to Scion, later presented to UHT, [UHC] Group, and
InvenTrust, which had been previously approved by SCP and UHT
and met the criteria attached to the [Earn-Out Agreement], was
deficient in their view, and would not be approved in its existing form.
48. SCP relied on the facts known to it when it spent $450,000 for the
build out and negotiated the lease with BOBA. Had SCP timely known
any of the material facts set out in paragraph 47 above, and that UHT,
[UHC] Group, InvenTrust and or Scion would intentionally delay
signing the BOBA lease for months, it would not have spent $450,000
for the build-out, making the premises habitable for tenants, and
would not have incurred time and expense obtaining a form lease,
negotiating the BOBA lease, and pursuing other possible tenants.
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(Doc. 27 at 47-48.) Rather than correcting the shotgun pleadings the Court
identified in SCP’s Complaint, SCP has substituted the individual Defendants’
names—UHT, UHC Group, InvenTrust and Scion—in place of “Defendant” and
has used otherwise indistinguishable paragraphs from the original Complaint. 2
Whether SCP listed each Defendant’s name separately or used the moniker
“Defendants” does not matter. Terminology was not among the Complaint’s
defects identified by the Court. It was the shotgun-style of SCP’s pleadings which
lumped together all Defendants’ actions and omissions that rendered SCP’s
2
Paragraphs 44-45 of SCP’s original Complaint (doc. 1) state:
44. Defendants had a duty to timely disclose the following material facts to the
Plaintiff: 1) there was an agreement for Scion to purchase UHT; 2) the purchaser
would require its approval of any tenant and lease, notwithstanding UHT’s
previous approval; 3) that the purchaser had criteria different from UHT for
approving prospective tenants and lease terms; 4) that executing the lease would
require Scion stockholder approval; 5) that the lease form submitted for approval
to Scion, and or any other Defendant that owned some or all of UHT after July 2,
2015 and prior to Nov. 1, 2016, which had been worked out and approved by SCP
and UHT before title to UHT was transferred, was deficient and would not be
approved in its existing form by the purchaser.
45. SCP relied on the facts known to it when it spent $450,000 for the build out
and negotiated the lease with BOBA. Had SCP timely known the material facts set
out in paragraph 44 above, and that the Defendants would intentionally delay
signing the BOBA lease for approximately seven months, it would not have spent
$450,000 for the build-out, making the premises habitable for tenants, and would
not have wasted time and money obtaining a form lease, negotiating the BOBA
lease, and pursuing other possible tenants.
(Doc. 1 at 44-45.) Outside of the allegation that UHC Group and InvenTrust were assigned the
obligations and duties under the Earn-Out Agreement and/or became a successor to UHT, the
only additional change that SCP made in its Amended Complaint is listing out the Defendants by
name.
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fraudulent suppression claim subject to dismissal. The Court made this clear in the
Memorandum of Opinion. (Doc. 23 at 15 (“Review of SCP’s Complaint shows that
it contains . . . general shotgun pleadings that make no distinction between all six of
the Defendants.”); id at 21 (“As in Count I, SCP has made generalized allegations
against all six Defendants without distinguishing between the Defendants’
actions.”); id. at 23 (“SCP’s fraudulent suppression count also includes
generalized allegations against all Defendants that do not distinguish which
Defendant is responsible for which act or omission. Such generalized allegations
are not sufficient under Federal Rule of Civil Procedure 9(b).”).)
Shotgun pleading and the “lumping together” defendants should be
discouraged under all circumstances, but in the Rule 9(b) context it often blurs the
actions of defendants to the extent that the complaint no longer states “the
circumstances constituting fraud or mistake . . . with particularity.” Fed. R. Civ. P.
9(b). The Eleventh Circuit has explained that, “Because fair notice is perhaps the
most basic consideration underlying Rule 9(b), the plaintiff who pleads fraud must
reasonably notify the defendants of their purported role in the scheme.” Brooks v.
Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1381 (11th Cir. 1997) (citations
and quotation marks omitted). “Therefore, in a case involving multiple defendants
. . . ‘the complaint should inform each defendant of the nature of his alleged
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participation in the fraud.’” Id. (quoting Vicom, Inc. v. Harbridge Merchant Servs.,
Inc., 20 F.3d 771, 777-78 (7th Cir. 1994)). Shotgun-style pleadings “render[] the
factual underpinnings of the Complaint practically incomprehensible” and create a
conflicting description of events. Centrifugal Air Pumps Australia v. TCS Obsolete,
LLC, No. 610-CV-820-ORL-31DAB, 2010 WL 3584948, at *2 (M.D. Fla. Sept. 9,
2010).
SCP’s shotgun-style pleadings do not comply with Rule 9(b)’s particularity
requirements and create plainly contradictory allegations. For example, by lumping
together all Defendants, SCP has alleged that UHT, UHC Group, and InvenTrust
(and Scion) should have disclosed to SCP “that executing the lease would require
Scion’s stockholder approval,” (doc. 27 ¶ 47), and that Scion (as well as the other
Defendants) had a duty to disclose that “[UHC Group] and InvenTrust were
assigned the obligations and duties under the Earn-Out Agreement.” (Id.) In
addition to their shotgun nature, these same pleadings are also deficient because
they include conclusory statements that are to be struck under Twombly and Iqbal.
See, e.g., Doc. 27 ¶ 47 (“Defendants UHT, Group, InvenTrust and Scion had a
duty to timely disclose the following material facts to the Plaintiff”); id. (“[UHC]
Group and InvenTrust were assigned the obligations and duties under the [Earn-
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Out Agreement] and or became a successor to UHT.”).) Those statements are
thus due to be disregarded for their conclusory nature as well. (See supra at 6-8.)
Given that SCP has reified the same deficient factual allegations against
UHC Group, InvenTrust, and Scion that have already been dismissed once, the
Court only briefly summarizes why they are due to be dismissed from the Amended
Complaint and references the discussion in its prior Memorandum of Opinion
which digests SCP’s almost identical allegations in greater detail. (See Doc. 27 at
18-24.) “The question of whether a party had a duty to disclose is a question of law
to be determined by the trial court.” CNH Am., LLC v. Ligon Capital, LLC, 160
So. 3d 1195, 1210 (Ala. 2013) (citations omitted). A duty to disclose can arise from
either “the confidential relations of the parties or from the particular
circumstances of the case.” Ala. Code § 6-5-102 (1975). As there are still no
allegations of confidential relationship between SCP and the Defendants, the Court
yet again conducts the “particular circumstances” inquiry. See State Farm Fire &
Cas. Co. v. Owen, 729 So. 2d 834, 843 (Ala. 1998) (listing six factors under the
particular circumstances inquiry as “(1) the relationship of the parties; (2) the
relative knowledge of the parties; (3) the value of the particular fact; (4) the
plaintiffs’ opportunity to ascertain the fact; (5) the customs of the trade; and (6)
other relevant circumstances.”).
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In regards to the relationship of the parties, “[w]hen the parties to a
transaction deal with each other at arm’s length, with no confidential relationship,
no obligation to disclose information arises when the information is not requested.”
Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So. 2d 883, 892 (Ala.
2005). As stated in the breach-of-contract discussion above, SCP has only alleged
that UHC Group and InvenTrust have any contractual obligation to SCP “upon
information and belief,” and without any accompanying factual allegations of how
either Defendant actually has an obligation under the Earn-Out Agreement. SCP
has included no specific factual allegations concerning UHC Group or
InvenTrust’s contractual relationship to SCP, but only legal conclusions. The lack
of factual allegations is fatal to SCP’s suppression claim against these two
Defendants, although the Court continues its inquiry with the remaining factors.
Even in the course of an arms-length transaction, “once a party elects to
speak, he or she assumes a duty not to suppress or conceal those facts that
materially qualify the facts already stated.” CNH America, LLC v. Ligon Capital,
LLC, 160 So. 3d 1195, 1202 (Ala. 2013) (quoting Freightliner, L.L.C., 932 So. 2d at
895). The Court previously found that SCP adequately alleged UHT’s
representative Jeff Lohmann created a duty to not suppress facts when he stated
that the BOBA lease was approved to SCP, but did not disclose that it would take
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months before UHT actually executed the lease. (Doc. 27 at 23.) SCP has not
alleged that UHC Group or InvenTrust have made any such affirmative
statements.
SCP has attached to its Amended Complaint copies of an email exchange
between representatives of Scion and SCP, but this exchange differs materially
from Lohmann’s approval of the BOBA lease that required qualification. On July
15, 2016, Mitchell Smith, the Chief Operating Officer of Scion, asked Charles
Welch, SCP’s president, to send Smith “the lease you have from [BOBA] and I
will have our counsel review. This should go pretty quickly.” (Doc. 27 at Ex. C.)
Welch sent Smith the lease on the same day, while reminding Smith that BOBA
had become “very anxious[] for this lease to be approved.” (Id.)3 Unlike Lohmann,
who should have clarified his statement about the approval of the BOBA lease,
Smith never said he would approve the lease at all, just that he would have his
counsel review the lease and that the process would be quick. Regardless of Smith’s
statement, SCP states that it is not seeking to rely on the e-mail exchange between
Smith and Welch to show fraudulent suppression, rather it is only to show
“Scion’s continued method of delay.” (Doc. 32 at 23.)
3
The Court notes that Scion approved the lease on August 11, 2016. (Doc. 27 ¶ 29.)
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Turning to the remaining two factors argued by the parties, while the value
of the facts allegedly the remaining Defendants suppressed was great (although the
Court cannot tell which facts were suppressed by which Defendant due to the
shotgun nature of paragraph 47) and SCP’s ability to find out about those facts was
low, the issue still remains that the Earn-Out Agreement involved regular, armslength transactions that imposed no duty upon the Defendants. “Superior
knowledge of a fact, without more, does not impose upon a party a legal duty to
disclose such information.” State Farm Fire & Cas. Co., 729 So. 2d at 843 (citation
omitted).
SCP also raises a second argument for why Defendants had a duty to disclose
based on the “foreseeability” of harm that would befall SCP if Defendants did not
approve the BOBA lease or tell SCP about the facts in paragraph 47 of the
Amended Complaint. SCP bases this foreseeability argument on its reading of
Taylor v. Smith, 892 So.2d 887 (Ala. 2004) and Ex parte BASF Construction
Chemicals, Inc., 153 So.3d 793 (Ala. 2014) and argues that “[a]s the [Alabama
Supreme] Court stated in the [Ex parte] BASF case, the principles of whether a
duty arises from the facts are the same whether the cause of action is negligence or
fraud.” (Doc. 32 at 18.) Taylor and Ex parte BASF dealt with negligence, not
fraudulent suppression. Further, Ex parte BASF in no way announced that the
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standard to determine duty to a victim was the same for negligence and fraudulent
suppression. 153 So.3d at 802. Instead, that case dealt with whether determination
of the existence of duty is a question of law or fact. Id.at 802-03.
Review of Alabama case law only reinforces that the comparison of the six
factors from State Farm Fire & Cas. Co, and not some generalized foreseeability
inquiry as advanced by SCP, is the correct test to determine duty to disclose for
fraudulent suppression under Alabama law. See State Farm Fire & Cas. Co, 729
So.2d at 842-43; Davis v. Sterne, Agee & Leach, Inc., 965 So.2d 1076, 1091 (Ala.
2007) (“A duty to speak depends on the relation of the parties, the value of the
particular fact, the relative knowledge of the parties, and other circumstances.”
(citations omitted)). As SCP has not shown how UHC Group, InvenTrust, and
Scion had a duty to disclose to SCP, its claims against those Defendants are due to
be dismissed.
III.
CONCLUSION
For the above reasons, Defendants’ Motion to Dismiss is GRANTED. SCP
has failed to state a claim for breach of contract against UHC Group and
InvenTrust; it has failed to state a claim for fraudulent suppression against UHC
Group, InvenTrust, and Scion. All other claims not disposed of in this
Memorandum of Opinion or the Court’s prior Memorandum of Opinion (doc. 23)
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remain pending. Specifically, SCP’s breach of contract claim continues only against
Defendants UHT and Scion; its fraudulent suppression claim continues only
against Defendant UHT. An Order consistent with this Opinion will be entered
separately.
DONE and ORDERED on April 5, 2018.
_____________________________
L. Scott Coogler
United States District Judge
190485
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