NOBLE ROMAN'S INC. v. B & MP, LLC et al

Filing 99

ORDER denying Defendants' 71 Amended Motion to Dismiss. SEE ORDER. Signed by Judge William T. Lawrence on 4/3/2015. (BGT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
NOBLE ROMAN’S, INC.,

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) CAUSE NO. 1:14-cv-206-WTL-MJD
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Plaintiff,
vs.
B & MP, LLC, et al.,
Defendants.

ENTRY ON AMENDED MOTION TO DISMISS
This cause is before the Court on the Defendants’ Amended Motion to Dismiss (Dkt. No.
71). The Plaintiff has responded to the motion (Dkt. No. 78). The Court DENIES the motion
for the following reasons.
I.

APPLICABLE STANDARD

The Defendants move to dismiss the Plaintiff’s Amended Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6), arguing that the Amended Complaint fails to state a claim for
which relief can be granted. In reviewing a Rule 12(b)(6) motion, the Court “must accept all
well pled facts as true and draw all permissible inferences in favor of the plaintiff.” Agnew v.
National Collegiate Athletic Ass’n, 683 F.3d 328, 334 (7th Cir. 2012). For a claim to survive a
motion to dismiss for failure to state a claim, it must provide the defendant with “fair notice of
what the . . . claim is and the grounds upon which it rests.” Brooks v. Ross, 578 F.3d 574, 581
(7th Cir. 2009) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)) (omission in original). A
complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” Agnew, 683 F.3d at 334 (citations omitted). A complaint’s factual

allegations are plausible if they “raise the right to relief above the speculative level.” Bell
Atlantic Corp v. Twombly, 550 U.S. 544, 556 (2007).
II.

BACKGROUND

The facts set forth in the Plaintiff’s Amended Complaint (Dkt. No. 68) are as follow.
The Plaintiff, Noble Roman’s, Inc. (“Noble Roman’s”) is in the business of franchising
pizza outlets that feature pizza, breadsticks, Tuscano’s submarine sandwiches and wraps, and
other food items. Noble Roman’s has registered various word marks, design marks, and service
marks on the Principal Register of the United States Patent and Trademark Office.
On or about March 16, 2010, Noble Roman’s and Defendant B & MP, LLC (“B & MP”)
entered into two franchise agreements for the operation of a Noble Roman’s franchise and a
Tuscano’s franchise in Bloomingdale, Illinois. Under the franchise agreements, B & MP agreed
to the following: 1) to provide weekly reports of sales to Noble Roman’s; 2) to pay a weekly
royalty fee; 3) to obtain all products from Noble Roman’s-approved suppliers; and 4) to use the
marks only in connection with the operation of the franchises. B & MP also agreed to certain
non-compete provisions.
In its Amended Complaint, Noble Roman’s alleges that B & MP failed to pay certain
royalty fees, underreported its sales in the weekly reports, sold non-approved food items, and
violated the non-compete provisions. It thus filed suit alleging breach of contract (Count I), false
or misleading representation of fact (Count II), and deception (Count III). It requests injunctive
relief (Count IV) and damages.
III.

DISCUSSION

The Defendants move to dismiss Noble Roman’s Amended Complaint in its entirety.
Their arguments are addressed below.

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A. Breach of Contract
The Defendants argue that “Plaintiffs’ [sic] allegations fall far short of avoiding a Rule
12(b)(6) dismissal, as Plaintiff fails to provide most of the details necessary to state a claim for
breach of contract.” Defs.’ Br. at 3. The Court disagrees. The elements of a breach of contract
claim are “the existence of a contract, the defendant’s breach of that contract, and damages
resulting from the breach.” Metro Holdings One, LLC v. Flynn Creek Partner, LLC, 25 N.E.3d
141, 157 (Ind. Ct. App. 2014). Noble Roman’s Amended Complaint sets forth two contracts—
the franchise agreements—that are attached to the Amended Complaint. It also sets forth
specific allegations regarding B & MP’s breach of that contract: its failure to pay royalty fees;
its submission of underreported weekly sales reports; its unauthorized use of Noble Roman’s
ingredients; and its violations of non-competition covenants. See Amend. Compl. ¶¶ 32-40.
Finally, Noble Roman’s has alleged that it suffered damages as a result of the breaches. See id. ¶
50 (“As a direct and proximate result of B & MP’s breach of the Agreements, Noble Roman’s
has suffered damages.”).
The Defendants protest that Noble Roman’s “fails to state in detail” certain facts. Defs.’
Br. at 3. However, “[s]pecific facts are not necessary; the statement need only ‘give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Erickson,
551 U.S. at 93 (citing Twombly, 550 U.S. at 555). Discovery will indubitably shed more light on
the details. For now, the Court determines that the Defendants, who cite no case law or legal
authority in support of their argument that more detail is needed at this phase in the litigation,
have not met their burden of establishing that Noble Roman’s has failed to state a breach of
contract claim. Therefore, the Court DENIES the Defendants’ motion to dismiss, as it pertains
to Count I.

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B. False or Misleading Representation of Fact
The Defendants next argue that “Count II is also meritless because Plaintiff provides no
further details in support of its claim for false or misleading representation of fact under 15
U.S.C. § 1125(a).” Defs.’ Br at 3. Again, the Court disagrees. Title 15 U.S.C. § 1125(a)(1)(A)
provides the following:
Any person who, on or in connection with any goods or services, or any container
for goods, uses in commerce any word, term, name, symbol, or device, or any
combination thereof, or any false designation of origin, false or misleading
description of fact, or false or misleading representation of fact, which—is likely
to cause confusion, or to cause mistake, or to deceive as to the affiliation,
connection, or association of such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or commercial activities by
another person . . . shall be liable in a civil action by any person who believes that
he or she is or is likely to be damaged by the act.
Thus, to state a claim under this provision, Noble Roman’s must allege that: 1) B & MP made a
false or misleading representation of fact; (2) in interstate commerce; (3) in connection with
goods or services; (4) the misleading representation is likely to cause confusion, cause mistake,
or to deceive as to the origin of its goods; and (5) this conduct has harmed or will harm Noble
Roman’s.
The Court finds that Noble Roman’s has plausibly alleged the elements of a claim under
section 1125(a)(1)(A). As Noble Roman’s notes, its Amended Complaint alleges
that B & MP was selling non-Noble Roman’s pizza, breadsticks, and/or deli sub
sandwiches at its franchise location, and attempted to pass off those “unaffiliated
products” as Noble Roman’s and Tuscano’s products using Noble Roman’s Marks.
Additionally, Noble Roman’s alleged that B & MP’s distribution of un-affiliated
pizza products and deli-sub sandwiches using Noble Roman’s Marks was likely to
cause confusion with the general public because it falsely implied that the
unaffiliated products were Noble Roman’s and Tuscano’s products, or that Noble
Roman’s had approved of the unaffiliated products being sold by B & MP.
Pl.’s Resp. at 9; see also Amend. Compl. ¶¶ 37-38, 52-54. Not only do these allegations satisfy
the elements of section 1125(a)(1)(A), they also “provide[] specifics as to how the Defendants’
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actions were false or misleading that caused confusion, mistake, or deceived customers as to the
origin, sponsorship, or approval of Defendants’ goods by Noble Roman’s.” Defs.’ Br. at 3-4.
The Defendants’ motion to dismiss Count II is DENIED.
C. Deception
The Defendants argue, with respect to Noble Roman’s deception claim, that “Plaintiffs’
allegations fall far short of avoiding a Rule 12(b)(6) dismissal, as Plaintiff fails to provide most
of the details necessary to state a claim for deception.” Defs.’ Br. at 4. Once again, the Court
disagrees.
Noble Roman’s alleges that the Defendants violated Indiana Code section 35-43-5-3, the
provision for criminal deception. This provision defines deception, in relevant part, as one who
“knowingly or intentionally makes a false or misleading written statement with intent to obtain
property, employment, or an educational opportunity[.]” Ind. Code § 35-43-5-3(a); see also Am.
Heritage Banco, Inc. v. McNaughton, 879 N.E.2d 1110, 1118 (Ind. Ct. App. 2008) (noting that to
prove deception “[the plaintiff] is therefore required to prove by a preponderance of evidence
that [the defendant] knowingly or intentionally made a false or misleading written statement to
obtain money from [the plaintiff]”). As Noble Roman’s notes, its Amended Complaint alleges
“that B & MP knowingly or intentionally included false gross sales figures on its weekly gross
sales reports, which were written statements, and that B & MP did so in order to keep for itself
Royalty Fees (money) that belonged to Noble Roman’s.” Pl.’s Br. at 10; see also Amend. Compl.
¶¶ 32-33, 35, 56-59. This is certainly sufficient to state a plausible claim and, accordingly, the
Defendants’ motion to dismiss Count III is DENIED.

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D. Injunctive Relief
Finally, the Defendants argue that the Plaintiffs’ Amended Complaint “fails to state any
details or enough information necessary to state a claim for any injunctive relief.” Defs.’ Br. at 5.
Noble Roman’s—in its prayer for relief—requests the following:
[a] preliminary and permanent injunction enjoining B & MP, its agents,
subsidiaries, and employees, and all those controlled by or acting on behalf of B &
MP, from: [m]isrepresenting the source of origin of Noble Roman’s products; [and]
[s]elling non-Noble Roman’s pizza and breadsticks, and non-Tuscano’s deli sub
sandwich products at the Location.
Amend. Compl. at 11-12. Noble Roman’s Amended Complaint alleges that it “is being
irreparably harmed by B & MP’s” actions, that B & MP’s actions “are causing irreparable
injury,” that it “has no remedy at law as effective and efficient as an injunction,” and that “the
balance of equities and public interest favor the entry of an injunction[.]” Id. ¶¶ 61-65. At this
phase in the litigation, these allegations are sufficient to state a plausible claim for injunctive
relief. The Defendants’ motion to dismiss Count IV is DENIED.
IV.

CONCLUSION

For the foregoing reasons, the Defendants’ Amended Motion to Dismiss (Dkt. No. 71) is
DENIED.
SO ORDERED: 4/3/15

_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Copies to all counsel of record via electronic notification

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