AwalNet Technology Co. v. EB Wireless, Inc. et al

Filing 55

ORDER Granting in Part and Denying in Part Plaintiff's Motion to File First Amended Complaint 19 . Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
AWALNET TECHNOLOGY,
Plaintiff,
Case No. 17-13411
v.
HON. DENISE PAGE HOOD
EB WIRELESS, INC., EDWARD
A. BAJOKA, and RODNEY MORET,
Defendants.
_________________________________________/
ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFF’S MOTION TO FILE FIRST AMENDED COMPLAINT [#19]
I.

INTRODUCTION
On October 19, 2017, Plaintiff filed a five-count complaint against Defendants

EB Wireless, Inc. (“EB Wireless”), Edward A. Bajoka (“Bajoka”), and Rodney Moret1
(hereinafter, “Rojas”), alleging: (a) breach of contract (Count I); (b) unjust enrichment
(Count II); (c) piercing the corporate veil as to EB Wireless (Count III); (d) statutory
conversion (Count IV); and (e) common-law conversion (Count V). Bajoka filed a
Motion to Dismiss Plaintiff’s conversion claims (Counts IV and V) pursuant to Rule
12(b)(6), which the Court recently granted.
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Defendant Rodney Moret is also known as Rodney Moret Rojas and his father, who also
goes by Rodney Moret, is also known as Rodney Moret Quezada. For purposes of this Order,
the Court shall refer to Defendant Rodney Moret as “Rojas” and his father as “Quezada.”

On March 26, 2018, Plaintiff filed a Motion to File First Amended Complaint
[Dkt. No. 19] to: (1) add EB Cellular Wholesale, LLC (“EB Cellular”) as a
party-Defendant; (2) add a count of unjust enrichment as to EB Cellular; (3) clarify
the conversion counts as to Bajoka, as he now claims he is not a shareholder in EB
Wireless, but the funds were placed in an account of another company he is a member,
and he withdrew funds from that account; (4) clarify the conversions counts as to
Moret, as the funds were not placed in an EB Wireless account, but in another account
of a company he is a member, and he withdrew funds from that account; and (5) add
a count of piercing the corporate veil as to EB Cellular. All Defendants have
responded to the Motion to File First Amended Complaint, and Plaintiff has filed a
reply.
For the reasons that follow, the Court grants in part and denies in part Plaintiff’s
Motion to File First Amended Complaint.
II.

BACKGROUND
This case stems from an agreement between Plaintiff and EB Wireless. At

some point prior to December 2016, EB Wireless was owned by Moret and Bajoka.
Bajoka was the incorporator for EB Wireless, as well as the President, but he
“disassociated with EB Wireless” in December 2016, at which time Moret became the
sole owner and officer of EB Wireless. On March 11, 2017, Plaintiff and EB Wireless
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entered into an agreement, pursuant to which Plaintiff would pay $110,550.00 to EB
Wireless, and EB Wireless would ship to Plaintiff’s place of business 8,844 used LG
L22C TracPhone A/B stock, with no cracked lenses and including the battery and
back door (“Products”). Plaintiff paid a total of $110,550.00 to EB Wireless in two
payments ($49,500.00 on March 16, 2017 and $61,050.00 on March 20, 2017), but
EB Wireless did not provide the Products to Plaintiff.
The $110,550.00 paid by Plaintiff to EB Wireless was deposited into a
Comerica Bank account, Number xxx3324, which was held by EB Cellular, not EB
Wireless (the “EB Cellular Account”). Bajoka was the organizer and resident agent
for EB Cellular, a company with the same address as EB Wireless. Plaintiff alleges
that Bajoka and Moret withdrew funds from the EB Cellular Account, as follows: (1)
Bajoka withdrew $15,000.00 on April 19, 2017; and (2) Moret withdrew $13,000.00
on April 3, 2017, $5,000.00 on April 5, 2017, $12,500.00 on April 11, 2017,
$10,400.00 on April 12, 2017, and $35,000.00 on July 6, 2017.
Bajoka represented Moret’s father, also named Rodney Moret (hereinafter
“Quezada”), in a criminal matter. In its Motion to File First Amended Complaint,
Plaintiff details Quezada’s convictions pursuant to guilty pleas for criminal sexual
conduct, health care fraud and distributing controlled substances, including being
ordered to pay $2,581,128.53 in restitution to the Medicare Trust fund. Plaintiff
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alleges that Quezada transferred $282,000 from a bank in the Dominican Republic –
Banco Popular Dominicano Account Number xxx2434 (“Account No. 2434”) – to the
EB Cellular Account in the course of five transactions between November 15, 2016
and February 17, 2017, a period of time when Moret and Bajoka allegedly were
withdrawing funds from the EB Cellular Account for their own purposes.
Plaintiff’s proposed First Amended Complaint adds a new party (EB Cellular)
and claims against EB Cellular, as well as new and amended allegations regarding the
conversion claims against Bajoka.

Specifically, the proposed First Amended

Complaint includes the following claims: (1) Breach of Contract (Count I); (2) Unjust
Enrichment as to EB Wireless (Count II); (3) Unjust Enrichment as to EB Cellular
(Count III); (4) Pierce the Corporate Veil as to EB Wireless (Count IV); (5) Pierce the
Corporate Veil as to EB Cellular (Count V); (6) Statutory Conversion (Count VI); and
(7) Common Law Conversion (Count VII).
III.

APPLICABLE LAW & ANALYSIS

A.

Motion to File First Amended Complaint
All Defendants agree that Plaintiff’s Complaint can be amended to add EB

Cellular as a party. Defendants also do not object to Plaintiff’s request to add an
unjust enrichment count and a piercing the corporate veil count against EB Cellular.
The Court grants Plaintiff’s Motion to File First Amended Complaint with respect to
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adding EB Cellular as a party and adding the unjust enrichment and piercing the
corporate veil counts against EB Cellular.
Defendants assert that Plaintiff’s proposed amendments regarding the statutory
and common law conversion claims against Bajoka should be denied because many
of the facts are irrelevant, scandalous, harassing, and serve no purpose other than to
tarnish Bajoka’s reputation as an attorney (specifically, those relating to Quezada).
Defendants argue that Plaintiff’s “reckless allegations . . . improperly insinuate that
. . . Bajoka either wrongfully transferred money to the EB Cellular Account paid to
. . . Bajoka by [Quezada] for legal services on behalf of [Quezada]; or even worse, .
. . that . . . Bajoka aided [Quezada] in hiding money from the U.S. Government that
should have been paid as restitution for [Quezada’s] criminal convictions.”
Defendants contend that Plaintiff has failed to establish a causal link between
Bajoka’s representations of Quezada, the order to pay restitution, and deposits from
Moret’s account to the EB Cellular Account.
Defendants assert that the allegations that Quezada deposited funds in the EB
Cellular account are misplaced because Plaintiff failed to conduct a proper inquiry that
would have revealed that “Sr. Rodney Moret” does not refer to Quezada. According
to Defendants, “Sr. Rodney Moret” is Spanish (the primary language spoken in the
Dominican Republic) and means “Senor Rodney Moret” and referes to Moret, not
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Quezada. In support of their argument that Plaintiff was making bad faith allegations,
Defendants cite numerous statements by Plaintiff’s owner (collectively, “Plaintiff’s
statements regarding reputation”):
A.

“Today i sent to you my guy to your office in Michigan,” “And he will
comes next Monday to your office to meet you,” (message accompanied
by a photograph of Mr. Bajoka’s business card).

B.

“You don’t care about your Reputation? It’s Your Most Valuable Asset.”

C.

I swear to god [. . .] We are going to posting about Edward bajoka and
Bajoka Law Group [. . .] And your reputation I will spoil it in
everywhere [. . .] I Will send to All email addresses And I will posting
and share in.
-Facebook pages
-Linkendin groups
-Linkedin Friends and more 1191 followers
-Twitter pages @bajokalaw @eddiebajoka -Bajokalaw.Blogspot.com
[. . .]
To : Chief Justice [. . .]
And i will not stop and i will showing to all the people in USA [. . .]
And If we don’t receive response during one week, that’s mean you
don’t care about your reputation I swear I will spoil it in everywhere [.
. .] I am telling you solve it amicably. We don’t spoil your reputation and
your business.

[Dkt. No. 21, Ex. 2 (WhatsApp Correspondence), Ex. 3 (WhatsApp Correspondence),
and Ex. 4 (Text Messages)] Defendants believe the Plaintiff’s statements regarding
reputation constituted threats to Bajoka’s safety and professional reputation if
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Defendants did not resolve this matter to Plaintiff’s satisfaction.
Plaintiff argues that EB Cellular was used as a sham for Bajoka and Moret,
particularly as Defendants have not explained why Quezada (Plaintiff asserts that “Sr.
Rodney Moret” is Quezada) deposited funds in the EB Cellular Account. Plaintiff
contends that Defendants’ statements that Moret deposited funds into the EB Cellular
Account are misleading. Plaintiff acknowledges that Moret may have deposited some
funds from a Banco Popular Domincano account into the EB Cellular Account, but
Plaintiff contends such funds were not from Account No. xxx 2434, the origin of the
$282,000.00 in deposits about which Plaintiff bases his allegations in the proposed
First Amended Complaint.
Plaintiff further argues that Bajoka (or any Defendant) could have provided
documentation regarding Banco Popular Dominicano accounts held by Moret, as
Plaintiff requested. Plaintiff asserts that Moret has refused to produce his bank
records from Banco Popular Dominicano and instead prepared an affidavit dated June
2, 2018. [Dkt. No. 21, Ex. 6] Plaintiff notes that Moret’s June 2, 2018 affidavit: (a)
does not include a representation that the $282,000.00 in funds was from Moret
(rather than from Quezada); and (b) none of the Defendants makes such a
representation in any brief filed with respect to the Motion to File First Amended
Complaint or the Motion for Rule 11 Sanctions.
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Under common law, conversion is “‘any distinct act of dominion wrongfully
exerted over another’s personal property in denial of or inconsistent with his rights
therein.’” Aroma Wines & Equip, Inc. v. Columbian Distribution Servs., Inc., 497
Mich. 337, 346, 871 N.W.2d 136, 141 (2015) (emphasis added) (quoting Thoma v.
Tracy Motor Sales, Inc., 360 Mich. 434, 438 (1960)(quoting Nelson & Witt v. Texas
Co., 256 Mich. 65, 70 (1931)). With respect to statutory conversion, the Aroma Wines
court stated: “we agree with the Court of Appeals that someone alleging conversion
[of another person’s property] to the defendant’s ‘own use’ under MCL
600.2919a(1)(a) must show that the defendant employed the converted property for
some purpose personal to the defendant’s interests, even if that purpose is not the
object’s ordinarily intended purpose.” Aroma Wines, 497 Mich. at 359 (emphasis
added).
As the Court stated when deciding the Motion to Dismiss Plaintiff’s Conversion
Claims:
[A] breach of a contractual obligation cannot support an action in tort
(such as statutory conversion and common law conversion)[] absent the
“violation of a legal duty separate and distinct from the contractual
obligation.” Rinaldo’s Constr. Corp. v. Michigan Bell Tel. Co., 454
Mich. 65, 83 (1997). See also Sherman v. Sea Ray Boats, 251 Mich.App.
41, 52 (2002) (“Michigan case law expressly provides that an action in
tort may not be maintained where a contractual agreement exists, unless
a duty, separate and distinct from the contractual obligation, is
established”); Brewster v. Martin Marietta Alum. Sales, Inc., 145
Mich.App. 641, 666-67 (1985) (when a plaintiff’s cause of action arises
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from a breach of contractual obligation, the appropriate claim lies in
contract, not in tort, because “[a] relationship did not exist . . . which
would give rise to a legal duty without the enforcement of the contract
promise itself”); Sudden Serv., Inc. v. Brockman Forklifts, Inc., 647
F.Supp.2d 811, 816 (E.D. Mich. 2008); Spizizen v. Nat’l City Corp.,
2009 WL 3757085, at *5 (E.D. Mich. 2009).
As in its initial Complaint, Plaintiff fails to identify any legal duty owed by
Bajoka (or the other Defendants) to Plaintiff that is separate and distinct from the
contractual obligations of EB Wireless under the agreement. There is no allegation
that Bajoka (or the other Defendants): (a) stole or embezzled property belonging to
Plaintiff, or converted such property to his own use or converted Plaintiff’s property
with the knowledge that the property was stolen, embezzled or converted or that such
theft has caused Plaintiff harm, see M.C.L. § 600.2919a; Aroma Wines, 497 Mich. at
361 (2015); or (b) obtained “a chattel [of Plaintiff’s] pursuant to a sale, lease, pledge,
gift or other transaction intending to acquire for himself or for another a proprietary
interest in it,” or “disposing of a chattel [of Plaintiff’s] by sale, lease, pledge, gift or
other transaction intending to transfer a proprietary interest in it.” Aroma Wines, 497
Mich. at 352.
The Court denies Plaintiff’s Motion to File First Amended Complaint as it
relates to the statutory and common law conversion claims against Bajoka.
IV.

CONCLUSION
Accordingly, for the reasons stated above, the Court GRANTS IN PART and
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DENIES IN PART Plaintiff’s Motion to File First Amended Complaint [#19].
The Court GRANTS Plaintiff leave to file a First Amended Complaint to add
EB Cellular as a party, as well as to add the allegations and claims against EB
Cellular. The Court DENIES Plaintiff leave to file – and ORDERS that Plaintiff shall
not file – in the First Amended Complaint: (1) any conversion claims against Bajoka;
or (2) any other proposed allegations against Bajoka that did not appear in the original
Complaint.
IT IS ORDERED.

S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: August 21, 2018
I hereby certify that a copy of the foregoing document was served upon counsel of
record on August 21, 2018, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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