GE Capital Information Technology Solutions Inc v. Campbell Ads LLC et al
Filing
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OPINION AND ORDER: Court GRANTS 49 Motion to Dismiss Third Party Complaint. The claims against Ikon Office Solution are DISMISSED WITHOUT PREJUDICE, and Campbell has 30 days to file an Amended Third Party Complaint. Signed by Chief Judge Philip P Simon on 5/14/2012. (tc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
GE CAPITAL INFORMATION
TECHNOLOGY SOLUTIONS, INC.,
Plaintiff,
v.
CAMPBELL ADS LLC and
DEBRA CAMPBELL
Defendants.
_________________________________
CAMPBELL ADS LLC and
DEBRA L. CAMPBELL,
Third Party
Plaintiffs,
v.
IKON OFFICE SOLUTIONS, INC.,
Third Party
Defendant.
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2:11-cv-82 PPS-APR
OPINION AND ORDER
Defendants Campbell Ads LLC and Debra Campbell entered into a finance agreement to
lease a photocopier. GE Capital, through it subsidiary IKON Financial Services, provided the
financing for the lease. After Campbell stopped making payments on the copier lease, GE
Capital filed a complaint against both Campbell and her company Campbell Ads LLC. Campbell
responded with a Third Party Complaint against IKON Office Solutions, Inc., a company that is
separate and apart from IKON Financial Services. IKON Office now moves to dismiss the Third
Party Complaint [DE 49], and for the following reasons the motion to dismiss is GRANTED.
Background
Debra Campbell is the sole member of Campbell Ads LLC, an advertising and printing
company. [DE 23, at 1-2.] In May 2006, Campbell leased an IKON photocopier. To finance it,
Campbell Ads LLC entered into an agreement with IKON Financial Services that Debra
Campbell personally guaranteed. [DE 23, at 3.] IKON Financial is a subsidiary of GE Capital,
which filed this lawsuit after Campbell failed to make payments under the agreement. [DE 10, at
3.] GE Capital brought a claim for breach of contract against Campbell Ads LLC, and a claim
for breach of personal guaranty against Debra Campbell. [DE 10.] Campbell filed a counterclaim
against GE Capital, and I dismissed the counterclaim but granted Campbell’s request to file a
Third Party Complaint against IKON Office. [DE 39.]
Campbell’s Third Party Complaint against IKON Office Solutions, Inc., brings claims for
breach of contract, breach of warranty, and contribution. [DE 42.] The breach of contract claim
alleges that Campbell entered into a finance agreement with IKON Office to lease the copier,
that the copier never worked, and that IKON Office failed to repair it or supply a fully
functioning copier as required by the agreement. [Id. ¶¶ 8-9.] In the breach of warranty claim,
Campbell alleges that IKON Office breached the implied warranty of merchantability. [Id. ¶ 12.]
And in the contribution claim, Campbell alleges that if Campbell is obligated to pay GE Capital
on the underlying complaint, IKON Office should contribute due to its own negligence. [Id. ¶
15.] IKON Office now seeks dismissal of those claims.
Discussion
The minimum requirements for pleading a claim for relief are contained in Federal Rule
of Civil Procedure 8. That rule requires “a short and plain statement of the claim showing that
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the pleader is entitled to relief.” Fed. R. Civ. P. 8. But to survive a motion to dismiss under
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.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009); Bell
Atlantic Corp. v. Twombley, 550 U.S. 544, 555 (2007). And although at this stage I must accept
all allegations as true and draw all reasonable inferences in the complainant’s favor, I don’t need
to accept threadbare legal conclusions supported by mere conclusory statements. Iqbal, 129
S.Ct. at 1949-50. So, under Iqbal, I must first identify allegations in the complaint that are not
entitled to the assumption of truth by, for example, disregarding legal conclusions. Id. at 1951.
Then I must look at the remaining allegations to determine whether they plausibly suggest an
entitlement to relief. Id. Determining whether a complaint states a plausible claim for relief
requires me to draw on my judicial experience and common sense. Id. at 1950.
Campbell’s breach of contract claim must be dismissed because a breach of contract
claim may only be maintained against a party to the contract. Perry v. Unum Life Inc. Co. of
Am., 353 F. Supp. 2d 1237, 1239 (N.D. Ga. 2005).1 This claim against IKON Office can’t go
forward because Campbell isn’t in privity with IKON Office under the contract she is suing
under. Campbell named IKON Office as the Third Party Defendant, refers to IKON Office as
“Ikon” throughout the Third Party Complaint, and alleges that it “entered into a finance
agreement with Ikon.” [DE 42 ¶ 2.] But the actual agreement provides that Campbell entered
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Campbell’s Third Party Complaint references the finance agreement with Ikon Financial Services, and
states that it’s “attached as A,” but didn’t actually attach it to its filing. That appears to have been a mistake, so
IKON Office attached it in its response. As the agreement is referenced in the Third Party Complaint, I’ll consider it
without converting the motion to dismiss to a motion for summary judgment. McCready v. eBay, Inc., 453 F.3d 882,
891-82 (7th Cir. 2006) (“documents attached to a motion to dismiss are considered part of the pleadings if they are
referred to in the plaintiff’s complaint and are central to his claim.” (citations omitted)). The agreement provides that
the law of the State of Georgia applies. [DE 50-1 ¶ 12.]
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into the agreement with IKON Financial Services, not IKON Office. [DE 50-1.]
Perhaps there is a second agreement that Campbell entered into with IKON Office. If that
is so she will be given leave to file an amended Third Party Complaint. But the contract that she
has referred to in her existing third party complaint cannot form the basis for a claim for the
simple reason that IKON Office Solutions is not a party to the agreement.
To get around this problem, Campbell attempts to argue that IKON Office should be
treated as an alter ego of IKON Financial. This argument lacks both a legal and factual basis,
but more importantly, it’s irrelevant. The conclusion that a corporation is an alter ego of another
entity – usually a person – is a fact-intensive conclusion a court makes in deciding whether to
pierce the corporate veil. Graham v. Palmtop Prop., Inc., 645 S.E.2d 343, 346 (Ga. App. 2007).
Campbell’s Third Party Complaint hasn’t included any allegations related to piercing the
corporate veil, so at this point the alter ego argument is a nonstarter. Since IKON Office is not a
party to the agreement, and there are no facts alleged in the Third Party Complaint showing that
IKON Office is affiliated with IKON Financial, the breach of contract claim against IKON
Office must be dismissed but Campbell will be given an opportunity file an amended third party
complaint.
As for the breach of warranty claim, IKON argues that this claim is barred by Indiana’s
four year statute of limitations for warranty claims. See I.C. 26-1-2.1-605(1). Since the copier
was leased in 2006 and the third party complaint was brought in 2011, this argument is correct.
And while the statute of limitations is an affirmative defense and cannot ordinarily be raised in a
motion to dismiss, one may plead themselves out of court by making allegations in the complaint
that make it plain that the claim is barred by the statute of limitations. Perry v. Sullivan, 207
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F.3d 379, 382 (7th Cir. 2000). That appears to be the case here. Indeed, Campbell’s response
appears to concede as much. [DE 61-1, at 5.]
What Campbell says in her response to the statute of limitations argument is that she
really intended to bring a fraud claim and because a fraud claim has a longer statute of
limitations – six years under Indiana law, see Ind. Code § 34-11-2-7(4) – the claim is therefore
timely. I would agree with Campbell that a fraud claim would likely be timely, but the fact of
the matter is that the third party complaint doesn’t state such a claim. Campbell will be given
the opportunity to amend the third party complaint, but when she does so Campbell would be
wise to consider the more exacting pleading standard for fraud claims. Fed. R. Civ. P. 9(b) (“In
alleging fraud or mistake, a party must state with particularity the circumstances constituting
fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be
alleged generally.”).
Finally, the contribution claim is dismissed. Under both Georgia and Indiana law, a party
isn’t entitled to contribution unless it “has been compelled to discharge a liability for which he
or the other party were equally bound.” Klausman v. Klausman, 186 Ga. App. 669, 670 (Ga. Ct.
App. 1988) (citation omitted); Small v. Rogers, 938 N.E.2d 18, 22 (Ind. Ct. App. 2010). But
without a common burden, there’s no claim for contribution. In re Whitacre Sunbelt, Inc., 206
B.R. 1010, 1018-19 (N.D. Ga. 1997); Small, 938 N.E.2d at 23. Campbell’s Third Party
Complaint makes no claim that IKON Office is somehow also liable for the lease payments, and
so it doesn’t state a claim for contribution. Campbell doesn’t disagree. Instead, Campbell once
again switches gears in her response, stating that the Third Party Complaint mistakenly made a
claim for contribution when the intended claims were for indemnification and fraudulent
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misrepresentation. Yet Campbell doesn’t allege facts as to either one of these claims. One
cannot amend a complaint in a response to a motion to dismiss. The proper course is to file an
amended complaint with all the proper allegations.
For the foregoing reasons, IKON Office Solution’s Motion to Dismiss Third Party
Complaint [DE 49] is GRANTED, the claims against Ikon Office Solution are dismissed
without prejudice, and Campbell has 30 days to file an Amended Third Party Complaint.
SO ORDERED.
ENTERED: May 14, 2012
s/ Philip P. Simon
PHILIP P. SIMON, CHIEF JUDGE
UNITED STATES DISTRICT COURT
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