Electrostim Medical Services, Inc. v. Lindsey et al

Filing 86

ORDER: Defendant Zynex's Motion to Dismiss Amended Complaint 24 is DENIED as to Count II of the Amended Complaint and GRANTED as to Count III of the Amended Complaint. Signed by Judge Virginia M. Hernandez Covington on 5/2/2012. (MEB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ELECTROSTIM MEDICAL SERVICES,
INC.,
Plaintiff,
v.

Case No.: 8:11-cv-2467-T-33TBM

DAWN LINDSEY and ZYNEX MEDICAL,
INC.,
Defendants.
______________________________/
ORDER
This matter comes before the Court pursuant to Defendant
Zynex’s Motion to Dismiss Amended Complaint (Doc. # 24), filed
on December 8, 2011. Plaintiff filed a response in opposition
on December 21, 2011. (Doc. # 34).

For the reasons that

follow, the Court grants the motion in part and denies the
motion in part.
I.

Background
Plaintiff, a designer and seller of medical products,

employed Defendant Dawn Lindsey as a sales person and area
manager.

(Doc. # 14 at ¶ 14).

As part of her employment, on

or about July 1, 2004, Lindsey executed an Agreement which,
among other things, prohibited her for a period of 24 months
following her employment with Plaintiff from working for a
competitor in any state or territory in which Plaintiff sold

its products.

(Id. at ¶ 16). The Agreement also required her

to notify and provide a copy of the Agreement to any new
employers prior to accepting employment.

(Id. at ¶ 18).

Finally, the Agreement prohibited Lindsey from soliciting
Plaintiff’s customers for two years after the end of her
employment with Plaintiff.

(Id. at ¶ 17).

At some point prior to July 26, 2011, Lindsey left
Plaintiff's

employment

and

began

working

for

Zynex,

a

competitor of Plaintiff. Following Zynex’s hiring of Lindsey,
Plaintiff’s counsel sent a letter to Lindsey and Zynex on or
about July 26, 2011, reminding them of Lindsey’s obligations
under the Agreement.

(Id. at ¶ 21). Plaintiff's counsel sent

a second correspondence to Zynex on August 30, 2011, attaching
a copy of the July 26, 2011, letter. (Id. at ¶ 25).

Plaintiff

alleges that despite the Agreement, Lindsey has continued her
employment with Zynex.

(Id. at ¶ 26).

In the Amended Complaint, Plaintiff alleges one count for
breach of contract against Lindsey (Count I), claiming that
Lindsey violated the Agreement by being employed by Zynex, by
soliciting Plaintiff’s customers, and by divulging and using
Plaintiff’s confidential and proprietary information. (Id. at
¶¶ 20, 34).
tortious

Plaintiff alleges counts against Zynex for

interference

with

its
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contractual

and

business

relationships

with

Lindsey

enrichment (Count III).

(Count

II)

and

for

unjust

Zynex’s Motion to Dismiss Counts II

and III for failure to state a cause of action pursuant to
Rule 12(b)(6) is now before the Court.
II.

Legal Standard
To warrant dismissal of a complaint under Rule 12(b)(6)

of the Federal Rules of Civil Procedure, it must be “clear
that no relief could be granted under any set of facts that
could be proved consistent with the allegations.”

Blackston

v. State of Alabama, 30 F.3d 117, 120 (11th Cir. 1994)(quoting
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).
motion

to

dismiss,

this

Court

accepts

as

true

all

On a
the

allegations in the complaint and construes them in the light
most

favorable

to

the

plaintiff.

Jackson

v.

Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).

Bellsouth
Further,

this Court favors the plaintiff with all reasonable inferences
from the allegations in the complaint.

Stephens v. Dep’t of

Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990)
(“On a motion to dismiss, the facts stated in [the] complaint
and all reasonable inferences therefrom are taken as true.”).
In Bell Atlantic Corp. v. Twombly, the Supreme Court
articulated the standard by which claims should be evaluated
on a motion to dismiss:
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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 entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
550

U.S.

544,

555

(2007)(internal

citations

omitted).

Further, courts are not “bound to accept as true a legal
conclusion

couched

as

a

factual

allegation.”

Papasan

v.

Allain, 478 U.S. 265, 286 (1986).
III. Analysis
A.

Tortious Interference

Under

Florida

interference

with
a

a

existence

of

plaintiff

existing

law,1

“the

business

business
or

elements

relationship

relationship
prospective

that

legal

of
are:

tortious
(1)

the

affords

the

rights;

(2)

defendant’s knowledge of the business relationship; (3) the
defendant’s intentional and unjustified interference with the
relationship; and (4) damage to the plaintiff.” Int’l Sales &
Serv., Inc. v. Austral Insulated Prods., Inc., 262 F.3d 1152,

1

For purposes of its Motion to Dismiss, Zynex moves
to dismiss pursuant to Florida law, but in doing so, does not
concede that Florida law should govern the claims against it.
(Doc. # 24 at 3 n.3).
Accordingly, the Court will herein
analyze Plaintiff's claims under Florida law without deciding
the issue of which governing law should ultimately apply.
-4-

1154 (11th Cir. 2001) (citation omitted); see also Ethan
Allen, Inc. v. Georgetown Manor, Inc., 647 So. 2d 812 (Fla.
1994). Zynex argues that Plaintiff has failed to allege
sufficient facts to support the second and third elements of
the claim.
Regarding

the

second

element,

Zynex

asserts

that

Plaintiff has not alleged sufficient facts to show that Zynex
had knowledge of the Agreement at the time it hired Lindsey.
Zynex maintains that the Amended Complaint contains only one
allegation to support this element: “Upon information and
belief, Zynex asked Lindsey about the Agreement prior to
receiving the July 26, 2011, letter.”

Zynex argues that such

allegation is insufficient to establish that it had knowledge
of the Agreement prior to employing Lindsey.
However, Plaintiff points out that the Amended Complaint
does contain several other allegations regarding this element.
Specifically,

the

Amended

Complaint

alleges

that

Zynex

“inquired about the Agreement prior to receiving the July 26,
2011 letter, Lindsey informed Zynex about the Agreement prior
to Zynex’s receipt of the July 26, 2011 letter, and Zynex knew
about the Agreement prior to Zynex’s receipt of the July 26,
2011

letter.”

(Doc.

#

14

at

¶

39).

Accepting

these

allegations as true and construing them in the light most
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favorable to Plaintiff, the Court finds that Plaintiff has
sufficiently

alleged

the

second

element

of

a

tortious

interference claim to withstand a motion to dismiss.
Similarly, regarding the third element of the claim -intentional interference with the Agreement -- Zynex argues
that Plaintiff has alleged insufficient facts to support the
claim.

Specifically, Zynex argues that the allegation that

“Zynex

induced

Lindsey

to

breach

the

Agreement

with

[Plaintiff] by initially employing her, and by continuing to
employ her” is insufficient to satisfy the third element,
because “Plaintiff must show that Zynex acted for the specific
purpose of causing an invasion of [Plaintiff’s] interest.”
(Doc. # 24 at 6).
Zynex’s arguments to the contrary, at this stage of the
proceedings, Plaintiff need not prove its allegations, but
must only allege sufficient facts to raise a right to relief
above the speculative level. Here, Plaintiff has alleged that
Zynex induced Lindsey to breach the Agreement, and that it did
so by initially employing Lindsey and by continuing to employ
her.

Plaintiff alleges that by continuing to employ Lindsey,

despite having knowledge that she is bound by the Agreement,
Zynex has unjustifiably and intentionally interfered with its
business relationship with Lindsey.
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Such facts, taken as

true, are sufficient to allege the third element of the cause
of action at this stage of the proceedings.

Accordingly,

Zynex’s Motion to Dismiss is denied as to Count II.
B.

Unjust Enrichment

Zynex next argues that Count III for unjust enrichment
should

be

dismissed

pursuant

to

Rule

12(b)(6)

because

Plaintiff has failed to state a claim upon which relief can be
granted.

The Court agrees.

To state a claim for unjust enrichment, a plaintiff must
show

that (1)

the

plaintiff conferred a

benefit

on

the

defendant, who had knowledge of the benefit; (2) the defendant
voluntarily accepted and retained the benefit; and (3) under
the circumstances it would be inequitable for the defendant to
retain the benefit without paying for it.

Tooltrend, Inc. v.

CMT Utensil, SRL, 198 F.3d 802, 805 (11th Cir. 1999).
Zynex argues that Plaintiff has failed to allege any
conduct on its part that conferred a direct benefit on Zynex,
because

Zynex

did

not

have

a

direct

relationship

with

Plaintiff but only with Plaintiff’s former customers. It is
true that to support a claim for unjust enrichment, the
benefit conferred must be a direct benefit.

See Huntsman

Packaging Corp. v. Kerry Packaging Corp., 992 F. Supp. 1439,
1446 (M.D. Fla. 1998).

However, the Court need not reach the
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issue of whether Plaintiff conferred a direct benefit on
Zynex, because Plaintiff’s claim for unjust enrichment is
premised on Zynex’s wrongful conduct and, as such, cannot
support a claim for unjust enrichment.
“Liability in unjust enrichment has nothing to do with
fault.” Tilton v. Playboy Entm’t Grp., Inc., 8:05-cv-692-T30TGW,

2007

(citations

WL

80858,

omitted).

at

*3

Indeed,

(M.D.
an

Fla.

unjust

Jan.

8,

2007)

enrichment

claim

“should be premised on circumstances under which it would be
inequitable for the defendant to retain the benefit without
paying for it.” Id.

In other words:

[t]he law of unjust enrichment is concerned solely
with enrichments that are unjust independently of
wrongs and contracts. When the plaintiff relies on
a breach of a contract to supply the “unjustness”
of the defendant’s holdings, the right on which he
or she relies arises from the breach of the
contract,
not
from
an
unjust
enrichment;
analogously, when the plaintiff relies on a wrong
to supply the “unjust factor,” the causative event
is a wrongful enrichment rather than an unjust
enrichment.
Flint v. ABB, Inc., 337 F.3d 1326, 1330 n.2 (11th Cir. 2003).
“The paradigm examples of unjust enrichment are mistaken
transfers.” Guyana Tel. & Tel. Co., Ltd. v. Melbourne Intern.
Commc’ns, Ltd., 329 F.3d 1241, 1245 n.3 (11th Cir. 2003).
“Where a plaintiff predicates their unjust enrichment claim on
wrongful conduct of a defendant, then the plaintiff’s right of
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recovery, if any, arises from the wrong of the alleged tort
rather than unjust enrichment.” Tilton, 2007 WL 80858, at *3.
Here, Plaintiff’s claim is not based on a mistake by
which Zynex unjustifiably came to hold Plaintiff’s property
and should be required to return it.

Rather, Plaintiff’s

claim is based upon Zynex’s alleged wrongful conduct -tortious interference with Plaintiff’s contract with Lindsey
and Zynex’s subsequent employment of Lindsey in violation of
the

Agreement

--

which

allegedly

motivated

Plaintiff’s

customers to transfer their business to Zynex.

In essence,

Plaintiff has not “conferred” any benefit on Zynex, but
instead has had a benefit taken away from it by Zynex’s
alleged wrongful conduct.

“As soon as a claimant relies on a

wrong to supply the unjust factor, the right on which he
relies arises from that wrong, not from unjust enrichment.”
Guyana, 329 F.3d at 1245 n.3.

Thus, Plaintiff’s right of

recovery, if any, for the alleged wrongful conduct of Zynex
arises in tort, which, if proven, might entitle Plaintiff to
damages, rather than unjust enrichment.

Since the law of

unjust enrichment is concerned solely with enrichments that
are unjust independent of alleged wrongs, Plaintiff’s unjust
enrichment claim must be dismissed.
Accordingly, it is
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ORDERED, ADJUDGED and DECREED:
Defendant Zynex’s Motion to Dismiss Amended Complaint
(Doc. # 24) is DENIED as to Count II of the Amended Complaint
and GRANTED as to Count III of the Amended Complaint.
DONE and ORDERED in Chambers in Tampa, Florida, this 2nd
day of May, 2012.

Copies:
All Counsel of Record

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