DIRECTV LLC v. WELLS et al

Filing 50

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)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ALBANY DIVISION
DIRECTV, LLC, a California limited
Liability company,
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
JAZZMIN WELLS, d/b/a DIGITAL
CONNECTIONS,
Defendants.

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CASE NO.: 1:13-CV-28 (WLS)

ORDER
On June 24, 2013, Plaintiff DIRECTV, LLC filed a Second Motion to Dismiss
Defendants’ Counterclaims Or, In the Alternative for a More Definite Statement (Doc.
28), requesting that Defendants’ negligent-misrepresentation counterclaims be
dismissed for failure to meet the heightened pleading requirement applicable to fraud
claims under Federal Rule of Civil Procedure 9(b). Rather than substantively respond to
Plaintiff’s Motion, on July 16, 2013, Defendants requested that the Court allow them to
submit a more definite statement of their counterclaims. (Doc. 31.)
On September 30, 2013, the Court directed Defendants to provide another more
definite statement of their counterclaims.1 (Doc. 44.) This time, the Court specifically
outlined Federal Rule of Civil Procedure 9(b)’s fraud pleading requirements and a
The Court granted a previous request to submit a more definite statement on May 20, 2013. (Doc. 21.)
Defendants submitted their more definite statement on June 4, 2013 (Doc. 23), and the instant Motion to
Dismiss (Doc. 28) followed shortly thereafter.

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party’s burden thereunder for Defendants. (See id.) On October 15, 2013, citing a lack of
understanding of the federal pleading requirements, Defendants requested “additional
time” to comply with the Court’s September 30, 2013 Order. (Doc. 46.) Defendants went
on to reiterate that they are innocent of DIRECTV’s claims against them. (See id. at 2.)
After reviewing DIRECTV’s Second Motion to Dismiss (Doc. 28), Defendants’
Counterclaim (Doc. 23) and Defendants’ “Response” in Opposition to DIRECTV’s
Second Motion to Dismiss (Doc. 46), the Court finds that Defendants will be permitted
no further opportunities to provide a more definite statement of their counterclaims. To
the extent there has been a fraud via a negligent misrepresentation, Defendants have
been given ample opportunity to submit a statement of their counterclaims that outlines
these allegations. Thus, the Court will consider Defendants’ counterclaims as currently
articulated.
DISCUSSION
Federal Rule of Civil Procedure 12(b)(6) permits a party to assert by motion the
defense of failure to state a claim upon which relief can be granted. A motion to dismiss
a plaintiff’s complaint 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 merely just
conceivable, on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
“Dismissal 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.’” Edwards v. Prime, Inc., 602 F.3d
1276, 1291 (11th Cir. 2010) (quoting Rivell v. Private Health Care Sys., Inc., 520 F.3d
1308, 1309 (11th Cir. 2008)). “Stated differently, the factual allegations in the complaint
must ‘possess enough heft’ to set forth ‘a plausible entitlement to relief.’” Edwards, 602
F.3d at 1291 (quoting Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282

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(11th Cir. 2007)).
While the Court must conduct its analysis “accepting the allegations in the
complaint as true and construing them in the light most favorable to the Plaintiff,” Hill
v. White, 321 F.3d 1334, 1335 (11th Cir. 2003), in evaluating the sufficiency of a
Plaintiff’s pleadings the Court must “make 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. 2009) (quoting Aldana v. Del Monte Fresh Produce, N.A.,
Inc., 416 F.3d 1242, 1248 (11th Cir. 2005)). The Supreme Court instructs that while on a
Motion to Dismiss “a court must accept as true all of the allegations contained in a
Complaint,” this principle “is inapplicable to legal conclusions,” which “must be
supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 194954 (2009) (citing Twombly, 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
complaint). In the post-Twombly era, “[d]etermining whether a complaint states a
plausible claim for relief . . . [is] a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
According to Federal Rule of Civil Procedure 8(a), to state a claim, a pleading
must contain a “short and plain statement of the claim showing that the pleader is
entitled to relief.” When a pleading seeks to allege fraud (a category that includes
negligent misrepresentation), the pleading standard is more rigorous and requires that a
party alleging fraud “must state with particularity the circumstances constituting fraud
or mistake.” Fed. R. Civ. P. 9(b). As the Court stated in its September 30, 2013 Order, to
establish a claim of negligent misrepresentation, a party must allege three essential
elements: (1) opposing party negligently supplied false information to foreseeable

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persons, known or unknown; (2) such persons' reliance on that information was
reasonable; and (3) economic injury proximately resulted from that reliance. Arch Ins.
Co. v. Clements, Purvis & Stewart, P.C., 850 F. Supp. 2d 1371, 1373 (S.D. Ga. 2011)
(citations omitted). Here, Defendants have alleged five counts of negligent
misrepresentation. The Court finds that none of these counts satisfy Rule 9(b)’s pleading
requirements or even Rule 8’s more lax notice pleading requirement.2
In Count I, Defendants allege that DIRECTV never notified them that the
accounts being created were illegal. (Doc. 23 ¶¶ 6-12.) The gravamen of DIRECTV’s
complaint against Defendants is that Defendants created fraudulent commercial
subscriber accounts and used those accounts to activate DIRECTV satellite receiving
equipment 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,
District courts in the Eleventh Circuit differ over whether Rule 9(b)’s heightened pleading standard
should apply to actions alleging a negligent misrepresentation. See Atwater v. Nat’l Football League
Players Ass’n, No. 1:06-cv-1510, 2007 WL 1020848, at *13 (N.D. Ga. Mar. 29, 2007) (collecting cases).
While the Eleventh Circuit has not expressly ruled on this issue, in both Inman v. American Paramount
Financial, 517 F. App’x 744, 748 (11th Cir. 2013) and Smith v. Ocwen Fin., 488 F. App’x 426, 428 (11th
Cir. 2012), the Eleventh Circuit affirmed district courts’ dismissals of negligent-misrepresentation claims
for failure to meet Rule 9(b)’s pleading requirements. 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 Smith, the Eleventh Circuit stated that the “district court properly dismissed” fraud claims that
included a negligent-misrepresentation claim because the plaintiff failed to plead the claims with
particularity as required by Rule 9(b). Smith, 488 F. App’x at 428 (emphasis added). Therefore, because
DIRECTV asserts that Rule 9(b) applies and Defendants have not challenged this contention, the Court
will assess Defendants’ counterclaims under Rule 9(b). See, e.g., Purchasing Power, LLC v. Bluestem
Brands, Inc., No. 1:12-cv-258, 2012 WL 3065419, at *7 n.4 (N.D. Ga. July 27, 2012) (assuming that a
claim for negligent misrepresentation must be pleaded in conformity 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-misrepresentation claims still fail under Rule 8 because Defendants fail to identify any
negligent misrepresentations made by DIRECTV. See, e.g., Foxworthy, Inc. v. CMG Life Servs., Inc., No.
1:11-cv-2682, 2012 WL 1269127, at *6 (N.D. Ga. Apr. 16, 2012) (applying Rule (b) but alternatively
dismissing plaintiff’s negligent misrepresentation 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 (2007) (citing Twombly, 550 U.S. at 555))).
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Defendants’ argument, as embodied in Count I, is a defense to DIRECTV’s allegations,
not an allegation that DIRECTV “negligently supplied false information” to Defendants.
Additionally, even if Defendants’ arguments can be construed as alleging a claim for
negligent misrepresentation, Defendants have not provided any factual support for their
allegation that DIRECTV made any “misrepresentations” regarding the fraudulent
accounts aside from their conclusory allegations that DIRECTV must have been
providing them with false information since they (Defendants) believe that their
conduct was lawful. Such conclusory allegations do not pass muster under
Twombly/Iqbal. Therefore, Count I is dismissed.
In Count II, Defendants allege that DIRECTV negligently misrepresented that it
was “legal and appropriate” to put consumer accounts in Tripolie Scott Wells’ name.
Defendants state, however, that it was “Direct Star, acting on behalf of DirecTV” that
represented that the manner by which Defendants were creating accounts was legal.
Defendants make no direct allegation against DIRECTV. Nevertheless, where multiple
parties are involved, a complaint must “contain specific allegations with respect to each
defendant; generalized allegations ‘lumping’ multiple defendants together are
insufficient.”3 West Coast Roofing & Waterproofing, Inc., 287 F. App’x 81, 86 (11th Cir.
July 24, 2008) (citation omitted); 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 most
basic consideration” underlying Rule 9(b), . . . the plaintiff who pleads fraud must
“reasonably notify the defendants of their purported role in the scheme.”) Thus, because
Count II fails to contain a specific allegation of a negligent misrepresentation made by
DIRECTV, the only defendant named in this case, Count II is dismissed. The Court also
Though Direct Star is not a defendant in this case, the rationale behind not permitting generalized
allegations against multiple parties nevertheless applies here with equal force.
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finds that Count IV suffers the same deficiency as Count II. In Count IV, Defendants
allege that Don Cowling, an authorized dealer for DIRECTV, misrepresented the
equipment-installation process to Defendants. Because Cowling is not a defendant in
this case, and Count IV contains no specific allegation of a negligent misrepresentation
against DIRECTV, Count IV is dismissed as well.
Finally, the Court finds that Counts III and V should be dismissed because they
fail to identify any negligent misrepresentation made by DIRECTV. From this Court’s
reading of Counts III and V, these counts merely recount the chain of events following
DIRECTV’s discovery that Defendants may have engaged in fraud. Thus, although
Defendants have set forth their dispute with the way DIRECTV may have handled the
breakdown in the business relationship, Defendants have not alleged fraud via negligent
misrepresentation. Therefore, Counts III and V are also dismissed.
The Defendants have also requested that the Court “revisit the request for legal
representation.” (Doc. 46 at 2.) In its September 30, 2013 Order, the Court informed
Defendants that appointment of counsel in a civil case is only done in “exceptional
circumstances” and that their status as business owners makes them sufficiently able to
defend themselves against allegations involving their business practices. (Doc. 44.)
Nothing submitted by Defendants to date causes the Court to disturb this finding. As the
Court noted to Defendants, should “exceptional circumstances” materialize that make
the appointment of counsel appropriate, the Court will sua sponte reexamine
Defendants’ request for counsel.
CONCLUSION
For the foregoing reasons, DIRECTV, LLC’s Second Motion to Dismiss
Defendants’ Counterclaims (Doc. 28) is GRANTED. Defendants’ “Counter Claim to

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Plaintiff[’]s Complaint for Compensation, and Relief” (Doc. 23) is DISMISSED for
failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).
SO ORDERED, this

13th

day of November 2013.

/s/ W. Louis Sands
W. LOUIS SANDS, UNITED STATES
DISTRICT JUDGE

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