Universal Administrators Service, Inc. v. Vista Marketing, LLC
Filing
11
MEMORANDUM OPINION AND ORDER by Judge Charles R. Simpson, III on 9/29/2011 7 motion to dismiss and for more definite statement GRANTED; count II of the complaint is DISMISSED ; plaintiff Universal Administrators Service, Inc. provide a more definite statement as to count III and count IV of the complaint within 21 days from date of entry of this order. cc:counsel (TLB)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
UNIVERSAL ADMINISTRATORS SERVICE, INC.
v.
PLAINTIFF
CIVIL ACTION NO. 3:11CV-32-S
VISTA MARKETING, LLC
DEFENDANT
MEMORANDUM OPINION AND ORDER
This matter is before the court on motion of the defendant, Vista Marketing, LLC, to dismiss
Count II of the Complaint alleging breach of fiduciary duty, and for a more definite statement
concerning the claims for fraud (Count III) and indemnification (Count IV)(DN 7). The defendant’s
arguments will be addressed seriatim.
On December 4, 2008, the plaintiff, Universal Administrators Service, Inc. (“Universal”), and
the defendant, Vista Marketing, LLC (“Vista”), entered into a Dealer Agreement whereby Vista was
to sell Universal’s Home Warranties in exchange for a per sign-up “bounty” fee, as described in the
Agreement. Dealer Agr., ¶ 2(b). The Complaint alleges generally in Count I, a claim for breach of
contract, that
13. Vista failed to use appropriate scripts with potential customers, misrepresented
sales and alleged customers to Universal, over-billed Universal for such
misrepresented sales and failed to provide appropriate substantiation of its purported
sales.
14. As a result of the breach of the Dealer Agreement by Vista, Universal has lost
substantial revenues in excess of the jurisdictional limitations of this Court.
I. Breach of Fiduciary Duty
Count II of the Complaint adds nothing to the substance of Count I. Count II states:
16. The contracts and the relationship between the parties created a reciprocal
fiduciary relationship between the parties herein.
17. Vista breached its fiduciary duty to Universal. As a result of Vista’s breach of
its fiduciary duties, Universal has sustained damages in excess of the jurisdictional
threshold of this Court.
18. Vista’s breach of its duty was willful, intentional and was not made in good faith.
In order to overcome a motion to dismiss, Universal’s claim must contain sufficient facts to
state a claim for relief that is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). As explained in Ashcroft v. Iqbal, ___U.S.___, 129
S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009),
A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. [Twombly, supra.] at 556, 127 S.Ct. 1955. The plausibility
standard is not akin to a “probability requirement,” but it asks for more than a sheer
possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads
facts that are “merely consistent with” a defendant’s liability, it “stops short of the
line between possibility and plausibility of ‘entitlement to relief.’” Id.., at 557, 127
S.Ct. 1955 (bracket omitted).
There is no suggestion in the Complaint of any fiduciary relationship between these parties.
The Complaint alleges nothing more than that Vista contracted to sell Universal’s home warranties
for a fee. The Dealer Agreement appended to the Complaint evidences a garden variety arms-length
business arrangement.
Universal contends that fiduciary duties can arise between contracting parties where a
relationship of trust or confidence is reposed in another in a given undertaking. The fact that, in the
abstract, fiduciary obligations may arise between contracting parties does nothing to answer the
-2-
criticism that Count II does not allege any facts which upon which to base an assertion that, in this
instance, Vista had any fiduciary obligation to Universal. Count II simply recites that a “fiduciary
relationship” existed. Under the Twombly/Iqbal standard, Count II fails to state a claim upon which
relief may be granted. Count II will be dismissed.
II. Fraud and Indemnification
In alleging fraud, “a party must state with particularity the circumstances constituting fraud
...An allegation of time or place is material when testing the sufficiency of a pleading...”
Fed.R.Civ.P. 9(b) and (f).
Fed.R.Civ.P. 9(b) requires that averments of fraud must be stated with particularity.
The Sixth Circuit reads this rule liberally, however, requiring a plaintiff, at a
minimum to “allege the time, place, and content of the alleged misrepresentation on
which he or she relied; the fraudulent scheme; the fraudulent intent of the defendants;
and the injury resulting from the fraud.” Ballan v. Upjohn Co., 814 F.Supp. 1375,
1385 (W.D.Mich. 1992)(citing Michaels Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d
674, 679 (6th Cir. 1988)). However, “allegations of fraudulent misrepresentation must
be made with sufficient particularity and with a sufficient factual basis to support an
inference that they were knowingly made.” Id. The threshold test is whether the
complaint places the defendant on “sufficient notice of the misrepresentation,”
allowing the defendants to “answer, addressing in an informed way plaintiffs [sic]
claim of fraud.” Brewer [v. Monsanto Corp.,] 644 F.Supp. [1267], 1273 [M.D.Tenn.
1986)].
Coffey v. Foamex, L.P., 2 F.3d 157, 161-62 (6th Cir. 1993).
Count III is devoid of any identifying information concerning alleged misrepresentations to
Universal. Count III states, in pertinent part:
20. Vista made material representations to Universal by charging processing fees to
certain individuals and informing Universal that such certain individuals agreed to
sign up for Universal’s home warranty program and pay the initial processing fee, and
by claiming entitlement to payment from Universal for acquiring such alleged
customer sign up.
-3-
21. Vista’s material representations that certain individuals agreed to sign up as
customers of Universal’s home warranty program and agreed to pay the initial
processing fee were false...
Universal has not identified when, where, or in what context the alleged false representations
were made. It has not identified who made the representations or who those representations
concerned. The fraud claim is simply insufficient under Rule 9(b).
The claim for indemnification is similarly deficient. While Count IV states that the Dealer
Agreement provides for Vista to indemnify Universal “from any and all liability, claims, demands,
causes of action and expenses, including costs and reasonable attorney fees, resulting from any act
or omission of Vista” (Count IV, ¶ 27), the count states only generally that “[a]s a result of Vista’s
acts and omissions, third parties have asserted claims and made demands upon Universal,” (Count
IV, ¶ 28) causing it to incur attorney fees and other costs and causing Universal to suffer economic
damages. (Count IV, ¶¶ 29, 30). This Count does not identify any facts upon which a claim for
indemnification under the Dealer Agreement could be premised.
Motion having been made and for the reasons stated herein and the court being otherwise
sufficiently advised, IT IS HEREBY ORDERED AND ADJUDGED that the motion of the
defendant, Vista Marketing, LLC, to dismiss and for a more definite statement (DN 7) is
GRANTED, and Count II of the Complaint is DISMISSED. IT IS FURTHER ORDERED that
the plaintiff, Universal Administrators Service, Inc., provide a more definite statement as to Count
III and Count IV of the Complaint within twenty-one (21) days from the date of entry of this
order, in accordance with Fed.R.Civ.P. 9(e) and this memorandum opinion.
IT IS SO ORDERED.
September 29, 2011
-4-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?