Hinds County Human Resource Agency v. Canon U.S.A., Inc. et al
ORDER denying 7 Motion to Dismiss without prejudice. Signed by District Judge Kristi H. Johnson on 9/9/2021. (JBK)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
HINDS COUNTY HUMAN
CIVIL ACTION NO. 3:21-CV-383-KHJ-MTP
CANON U.S.A., INC.;
CANON SOLUTIONS AMERICA, INC.; and
CANON FINANCIAL SERVICES
This action is before the Court on Defendants’ Canon U.S.A., Inc. (“Canon
USA”), Canon Solutions America, Inc. (“Canon Solutions”), and Canon Financial
Services (“CFS”) (together “Defendants”) Motion to Dismiss . Defendants move
this Court to dismiss Counts II–IX of the Complaint [1-2] against Canon Solutions
and all Counts against Canon USA and CFS. . For the following reasons, the
Court denies Defendants’ Motion to Dismiss and allows Hinds County Human
Resource Agency (“HCHRA”) to amend its Complaint.
Facts and Procedural History
This dispute arises out of an alleged agreement between HCHRA and
Defendants over the rental of a Canon 6011 copier and related transactions. See  ¶ 25. HCHRA sued Defendants in state court, and the Defendants removed the
case to federal court. See Notice of Removal . Defendants now move to dismiss
most of HCHRA’s claims.
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In reviewing a Rule 12(b)(6) motion, the Court must consider whether the
plaintiff states a valid claim for relief. Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th
Cir. 2008). To state a valid claim for relief, the plaintiff must allege enough facts
that, when accepted as true, show “facial plausibility” and allow “the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 544, 556 (2007)).
Defendants move to dismiss these claims against Canon Solutions: Count II
(Tortious Breach of Contract); Count III (Contractual and Equitable
Indemnification); Count IV (Unjust Enrichment); Count V (Breach of Duty of Good
Faith and Fair Dealing); Count VI (Misrepresentation); Count VII (Fraud); Count
VIII (Fraudulent Inducement); and Count IX (Punitive Damages). Defendants move
to dismiss all claims against Canon USA and CFS. The Court finds that HCHRA
fails to state a claim on only a few of its claims.
A. Count II: Tortious Breach of Contract
A tortious breach of contract exists when a defendant’s breach of contract is
“attended by some intentional wrong, insult, abuse, or gross negligence, which
amounts to an independent tort.” State Farm Fire & Cas. Co. v. Simpson, 477 So. 2d
242, 248 (Miss. 1985) (quoting Am. Ry. Express Co. v. Bailey, 107 So. 761, 763
(Miss. 1926)). It requires a showing of maliciousness or reckless disregard for the
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rights of a plaintiff that go beyond a mere willingness to breach a contract.
Hamilton v. Hopkins, 834 So. 2d 695, 703–04 (Miss. 2003).
HCHRA’s Complaint alleges only a knowing or intentional breach of contract
without alleging any independently tortious facts. [1-2] ¶ 77–81. Neither is there
any showing that recklessness or malice occurred with the breach. Without facts
beyond the simple act of breach, HCHRA has not shown a tortious breach of
contract claim under Mississippi law. Count II therefore fails to state a claim upon
which relief can be granted.
B. Count III: Equitable Indemnification
HCHRA’s third claim asserts that their Rental Agreements contractually
obligate Canon Solutions to indemnify the organization for losses arising from
failure to perform. [1-2] ¶ 83. Alternatively, if not contractually obligated, HCHRA
contends that Canon Solutions should indemnify it under an equitable
indemnification theory. [1-2] ¶ 85. The Court only addresses the equitable
indemnification component of Count III.
At common law, equitable indemnification arises in a tort context where one
person’s “liability is secondary as opposed to primary, or is based upon imputed or
passive negligence, as opposed to active negligence” in which case, “[the person]
may be entitled, upon an equitable consideration, to shift his responsibility to
another joint [tortfeasor].” Home Ins. Co. v. Atlas Tank Mfg. Co., 230 So. 2d 549,
551 (Miss. 1970). It requires a showing that “(1) [t]he damages which the claimant
seeks to shift are imposed upon him as a result of some legal obligation to the
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injured person; and (2) . . . the claimant did not actively or affirmatively participate
in the wrong.” Id. (citing Bush v. City of Laurel, 215 So. 2d 256, 260 (Miss. 1968)).
HCHRA does not allege that it was liable for any tort or injury to a thirdparty that Canon Solutions should rightfully bear. For these reasons, the Court
finds that HCHRA has not asserted a claim for equitable indemnification.
C. Piercing the Corporate Veil
Defendants argue that HCHRA has not properly pleaded any claims against
Canon USA and CFS.  at 14–16. They correctly assert that the Complaint does
not clearly state contract claims against either Defendant and that it does not allege
any relationship HCHRA had with Canon USA and CFS establishing liability. In its
Response in Opposition, HCHRA, for the first time, asserts a theory that Canon
Solutions, Canon USA, and CFS were alter-egos and that the Court should impute
liability by piercing the corporate veil.  at 8–9. “A complaint may not be
amended by the plaintiff’s briefs in opposition to a motion to dismiss.” Sanderson v.
H.I.G. P-XI Holding, Inc., No. 99-3313, 2000 WL 1042813 (citing Burch v. City of
Nacogdoches, 174 F.3d 615, 617 n.5 (5th Cir. 1999)). Without pleading a veilpiercing theory, the Complaint does not readily state a claim against Canon USA
The Court will provide HCHRA an opportunity to amend its Complaint and
plead its best case. If it does not, the Court will dismiss all claims that do not state
a claim upon which relief should be granted.
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The Court DENIES Defendants’ Motion to Dismiss  without prejudice.
IT IS FURTHER ORDERED that the Court will allow HCHRA to amend its
Complaint to cure the deficiencies identified by the Court within 14 days from
SO ORDERED AND ADJUDGED this the 9th day of September, 2021.
s/ Kristi H. Johnson
UNITED STATES DISTRICT JUDGE
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