American Power Chassis, Inc. v. Jones et al

Filing 130

MEMORANDUM AND ORDER overruling 87 Motion to Dismiss; overruling 122 Motion to Dismiss; overruling 125 Motion to Strike. Signed by District Judge Kathryn H. Vratil on 7/25/2017. (ydm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
AMERICAN POWER CHASSIS, INC.,

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Plaintiff,
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v.
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GARY JONES, et al.
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Defendants.
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_______________________________________)

CIVIL ACTION
No. 13-4134-KHV

MEMORANDUM AND ORDER
American Power Chassis, Inc. (“American Power”) brings suit against Gary Jones for breach
of contract, fraud and negligent misrepresentation. See Amended Complaint (Doc. #7) filed
January 8, 2014.1 This matter is before the Court on Defendant Gary Jones Motion To Dismiss
(Doc. #87) filed December 21, 2015, defendant’s Second Motion To Dismiss (Doc. #122) filed
February 13, 2017 and Plaintiff’s Response And Motion To Strike Defendant Gary Jones’ Second
Motion To Dismiss (Doc. #125) filed February 16, 2017. For reasons stated below, the Court
overrules all three motions.
Legal Standards
In ruling on a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., the Court assumes as
true all well-pleaded factual allegations and determines whether they plausibly give rise to an
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Jones proceeds pro se. Plaintiff also sued Jones & Sons Chassis, Inc., and the same
counsel represented both defendants. See Entry Of Appearance (Doc. #8) filed February 3, 2014.
On August 15, 2014, the Court allowed defense counsel to withdraw from the case. See Order
(Doc. #38). After counsel withdrew, the Court found that because Jones & Sons Chassis Inc. is a
corporate entity, it must retain counsel to represent it. See Order (Doc. #55) filed April 2, 2015. It
failed to do so and the Court directed the Clerk to enter default judgment against Jones & Sons
Chassis, Inc. See Memorandum And Order (Doc. #88) filed December 23, 2015 at 3.
For background information, see Memorandum And Order (Doc. #93) filed May 25, 2016
at 1-8 and Memorandum And Order (Doc. #128) filed July 11, 2017 at 2-5.

entitlement of relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). To survive a motion to dismiss,
a complaint must contain sufficient factual matter to state a claim which is plausible – and not
merely conceivable – on its face. Id., 556 U.S. at 679-80; Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). In determining whether a complaint states a plausible claim for relief, the Court draws
on its judicial experience and common sense. Iqbal, 556 U.S. at 679. The Court need not accept
as true those allegations which state only legal conclusions. See id.; Hall, 935 F.3d at 1110.
Plaintiff bears the burden of framing its claims with enough factual matter to suggest that it
is entitled to relief; it is not enough to make threadbare recitals of a cause of action accompanied by
conclusory statements. See Twombly, 550 U.S. at 556. Plaintiff makes a facially plausible claim
by pleading factual content from which the Court can reasonably infer that defendant is liable for
the misconduct alleged. Iqbal, 556 U.S. at 678. Plaintiff must show more than a sheer possibility
that defendant has acted unlawfully – it is not enough to plead facts that are “merely consistent with”
defendant’s liability. Id. (quoting Twombly, 550 U.S. at 557). A pleading which offers labels and
conclusions, a formulaic recitation of the elements of a cause of action or naked assertions devoid
of further factual enhancement will not stand. Iqbal, 556 U.S. at 678. Similarly, where the
well-pleaded facts do not permit the Court to infer more than the mere possibility of misconduct, the
pleading has alleged – but has not “shown” – that the pleader is entitled to relief. See id. at 679.
The degree of specificity necessary to establish plausibility and fair notice depends on context,
because what constitutes fair notice under Rule 8(a)(2), Fed. R. Civ. P., depends on the type of case.
Robbins v. Okla., 519 F.3d 1242, 1248 (10th Cir. 2008) (citing Phillips v. Cty. of Allegheny, 515
F.3d 224, 232-33 (3d Cir. 2008)).
Factual Allegations
Plaintiff alleges the following facts.
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American Power is a Kansas corporation located in Russell, Kansas. First Amended
Complaint (Doc. #7) filed January 8, 2014, ¶ 1.
Jones is an individual who resides in the State of Washington. Id. ¶ 2.
Jones & Sons Chassis, Inc. is a Washington corporation. Id. ¶ 3.
On February 14 and 15, 2012, in his individual capacity and as an authorized agent of Jones
& Sons Chassis, Inc., Jones traveled to Russell, Kansas and met with officers, directors and
employees of American Power. Id. ¶ 9. During the meeting, American Power, Jones and Jones &
Sons Chassis, Inc. entered into an agreement which they later reduced to writing in a document
entitled “Project Timeline and Budget.” Id. ¶ 10. Under the agreement, Jones and Jones & Sons
Chassis, Inc. agreed that by November 12, 2012, they would design a power chassis with all
electrical systems, build a prototype and create all parts and system drawings with respect to the
power chassis and electrical systems. Id. ¶ 12. The parties agreed to the completion date of
November 12, 2012 to insure that the prototype chassis would be ready to show at the Recreational
Vehicle Industry Association convention in Louisville, Kentucky. Id. ¶ 13. Jones and Jones & Sons
Chassis, Inc. knew that American Power planned to put the power chassis into production in 2013
and produce 1,000 units in the first year. Id. ¶ 5.
Based on the parties’ agreement, between March 6, 2012 and February 19, 2013, American
Power paid $389,133.09 to Jones and Jones & Sons Chassis, Inc. Id. ¶ 15.
From March 6, 2012 to April 22, 2013, Jones and Jones & Sons Chassis, Inc. repeatedly
refused to meet and confer with American Power regarding the status and timeline of the project,
causing American Power to miss critical deadlines in its production process. Id. ¶ 17.
On November 12, 2012, Jones and Jones & Sons Chassis, Inc. were nearly three months
behind schedule. Id. ¶ 14.
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On January 15, 2013, Jones and Jones & Sons Chassis, Inc. informed American Power that
they would complete the prototype chassis on March 18, 2013. Id. ¶ 28. At the time, Jones and
Jones & Sons Chassis, Inc. knew that the information was false and knew that they could not provide
the prototype chassis by that date. Id. ¶ 30. Jones and Jones & Sons Chassis, Inc. intentionally
misrepresented the information to induce American Power to continue moving forward with
production operations and to delay taking action to have a third party complete the project. Id. ¶ 31.
American Power reasonably relied on the representation and continued to contract with outside
suppliers to produce the power chassis. Id. ¶ 32.
Jones and Jones & Sons Chassis, Inc. breached the parties’ agreement by failing to reply to
inquiries, deflecting proposed meetings to discuss key production issues, failing to provide
information to suppliers, failing to provide critical design information, failing to complete a
prototype chassis and failing to communicate in good faith regarding the status of the project. Id.
¶¶ 19-20.
Analysis
Defendant has filed two motions to dismiss plaintiff’s claims. In the first motion, defendant
asserts that because plaintiff did not respond to his requests for admissions under Rule 36,
Fed. R. C. P., no genuine issue of material fact exists to support plaintiff’s claims against him.2 See
Defendant Gary Jones Motion To Dismiss (Doc. #87) at 1-3. In the second motion, defendant

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Defendant asserts that on June 24, 2015, he served requests for admission on plaintiff
and plaintiff did not respond. See Defendant Gary Jones Motion To Dismiss (Doc. #87) at 1. Based
on plaintiff’s failure to respond, defendant asserts that the following facts are undisputed: plaintiff
has no valid claim against defendant for breach of contract or fraud; plaintiff sustained no damages
as a result of any representation, act or omission by defendant; plaintiff no longer wishes to pursue
its claims; and plaintiff requests that the Court enter an order dismissing its claims with prejudice.
See id. at 2.
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asserts that the parties agreed to an estimated timeline and budget, but plaintiff requested that
defendant cease further work on the project. Second Motion To Dismiss (Doc. #122) at 1.
Defendant asserts that plaintiff breached the agreement and therefore cannot prove its claims against
him. See id. at 2.
In support of both motions, defendant presents matters outside the pleadings.3 In ruling on
a motion to dismiss under Rule 12(b)(6), the Court generally may not look beyond the four corners
of the complaint. See Rubio ex rel. Z.R. v. Turner Unified Sch. Dist. No. 202, 475 F. Supp.2d 1092,
1097 n.3 (D. Kan. 2007). When a movant presents matters outside the pleadings, the Court has
discretion to convert the motion into one for summary judgment under Rule 56, Fed. R. Civ. P. See
id. (citing LyBrook v. Members of Farmington Mun. Sch. Bd. of Educ., 232 F.3d 1334, 1341-42
(10th Cir. 2000)); Fed. R. Civ. P. 12(d). Here, because the parties have not completed discovery and
defendant has not set forth pertinent facts in compliance with D. Kan. Rule 56.1, the Court declines
to convert the motions to dismiss into motions for summary judgment. See Rubio, 475 F. Supp.2d
at 1097 n.3. Accordingly, the Court will not consider evidence outside the pleadings.
On this record, defendant has not shown that as a matter of law, the amended complaint fails
to allege claims upon which the Court may grant relief. The Court therefore overrules defendant’s
motions to dismiss. In light of this ruling, plaintiff’s motion to strike the second motion to dismiss
is overruled as moot.
IT IS THEREFORE ORDERED that Defendant Gary Jones Motion To Dismiss (Doc. #87)

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In support of the first motion, defendant presents a copy of his requests for
admissions and a certified mail receipt which defendant contends demonstrates that he served the
document on plaintiff’s attorneys. See Exhibits A and B to Defendant Gary Jones Motion To
Dismiss (Doc. #87). In support of the second motion, defendant presents copies of a project timeline
and budget and a letter from plaintiff’s attorney dated April 23, 2013. See Exhibits A and B to
Second Motion To Dismiss (Doc. #122).
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filed December 21, 2015 is OVERRULED.
IT IS FURTHER ORDERED that defendant’s Second Motion To Dismiss (Doc. #122)
filed February 13, 2017 is OVERRULED.
IT IS FURTHER ORDERED that Plaintiff’s Response And Motion To Strike Defendant
Gary Jones’ Second Motion To Dismiss (Doc. #125) filed February 16, 2017 is OVERRULED as
moot.
Dated this 25th day of July, 2017 at Kansas City, Kansas.
s/ Kathryn H. Vratil
KATHRYN H. VRATIL
United States District Judge

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