Lake Haven MHP Associates LLC v. Rocky Mountain Pure Snow, Inc. et al
Filing
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DECISION AND ORDER denying 10 Motion to Dismiss; granting 14 Motion to Amend or Correct. Plaintiffs motion (Docket No. 14) to amend the complaint is granted and Plaintiff is directed to file and serve the proposed amended complaint as the First Amended Complaint. Defendants motion to dismiss the complaint (Docket No. 10) is denied.Signed by Hon. Charles J. Siragusa on 5/2/11. (KAP)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
LAKE HAVEN MHP ASSOCIATES LLC,
Plaintiff,
-vsROCKY MOUNTAIN PURE SNOW, INC. a/k/a
ROCKY MOUNTAIN PURE, INC., DUANE
QUINN, INDIVIDUALLY AND DOING BUSINESS
AS ROCKY MOUNTAIN PURE, INC., GREGORY
QUINN, INDIVIDUALLY AND DOING BUSINESS
AS ROCKY MOUNTAIN PURE, INC., EEC
(NORTH AMERICA) LLC, and CARL MATTIA,
INDIVIDUALLY AND DOING BUSINESS AS EEC
NORTH AMERICA LLC,
DECISION & ORDER
10-CV-6679-CJS
Defendants.
APPEARANCES
For Plaintiff:
Thomas A. Fink, Esq.
Dennis J. Annechino, Esq.
Davidson Fink LLP
28 East Main Street, Suite 1700
Rochester, NY 14614
For Defendants Rocky Mountain Pure
Snow, Inc., Duane Quinn and Gregory
Quinn:
William A. Lundquist, Esq.
Hodgson Russ LLP
The Guaranty Building
140 Pearl Street, Suite 100
Buffalo, NY 14202
INTRODUCTION
Siragusa, J. This diversity breach of contract and fraud case is before the Court on
Defendants’ motion to dismiss, and Plaintiff’s cross-motion to amend the complaint. For
the reasons stated below, Plaintiff’s motion is granted and Defendants’ motion is denied.
The case will proceed on the amended complaint.1
BACKGROUND
Defendants Rocky Mountain Pure Snow, Inc., Duane Quinn and Gregory Quinn
(“Defendants”) moved for dismissal of the original complaint arguing that it did not
sufficiently allege anything more than a cause of for breach of contract against the
corporate entity Rocky Mountain Pure Snow, Inc. a/k/a Rocky Mountain Pure, Inc. (Def.s’
Mem. of Law (Docket No. 10-1) at 7.) Accordingly, Defendants argued that all other claims
should be dismissed. In response, Plaintiff filed an application to amend, including, a
proposed amended complaint. Since Federal Rule of Civil Procedure 15 requires the Court
to freely grant a motion to amend, except under certain circumstances, the Court will
review the allegations in the proposed amended complaint with regard to the motion to
dismiss.
STANDARDS OF LAW
Motion to Amend
The Federal Rules of Civil Procedure provide that leave to file an amended
complaint “shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a). However,
leave to amend may be denied in the face of “undue delay, bad faith or dilatory motive on
the part of the movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the amendment,
1
On April 6, 2011, the Court granted Plaintiff’s motion for entry of a default judgment against
EEC (North America) LLC and Car Mattia and the Clerk entered judgment against them on April
7, 2011.
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[or] futility of amendment....” Foman v. Davis, 371 U.S. 178, 182 (1962); see also United
States v. Continental Illinois Nat. Bank and Trust Co., 889 F.2d 1248, 1254 (2d Cir. 1989).
Motion to Dismiss
The U.S. Supreme Court, in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), clarified
the standard to be applied to a 12(b)(6) motion:
Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain
statement of the claim showing that the pleader is entitled to relief, in order to
give the defendant fair notice of what the claim is and the grounds upon which
it rests. W hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations, a Plaintiff's obligation to provide the
grounds of his entitlement to relief requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.
Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint
are true (even if doubtful in fact).
Id. at 1964-65 (citations and internal quotations omitted). See also, ATSI Communications,
Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (“To survive dismissal, the plaintiff
must provide the grounds upon which his claim rests through factual allegations sufficient
‘to raise a right to relief above the speculative level.’") (quoting Bell Atl. Corp. v. Twombly)
(footnote omitted); Iqbal v. Hasty, 490 F.3d 143 (2d Cir. 2007) (Indicating that Bell Atl. Corp.
v. Twombly adopted “a flexible ‘plausibility standard,’ which obliges a pleader to amplify a
claim with some factual allegations in those contexts where such amplification is needed to
render the claim plausible[,]” as opposed to merely conceivable.)
W hen applying this standard, a district court must accept the allegations contained
in the complaint as true and draw all reasonable inferences in favor of the nonmoving party.
Burnette v. Carothers, 192 F.3d 52, 56 (1999), cert. denied, 531 U.S. 1052 (2000). On the
other hand, “[c]onclusory allegations of the legal status of the defendants’ acts need not be
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accepted as true for the purposes of ruling on a motion to dismiss.” Hirsch v. Arthur
Andersen & Co., 72 F.3d 1085, 1092 (2d Cir. 1995)(citing In re American Express Co.
Shareholder Litig., 39 F.3d 395, 400-01 n. 3 (2d Cir.1994)). As the Supreme Court clarified
in Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009):
Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice. Id., at 555, (Although for the purposes
of a motion to dismiss we must take all of the factual allegations in the
complaint as true, we “are not bound to accept as true a legal conclusion
couched as a factual allegation” (internal quotation marks omitted)). Rule 8
marks a notable and generous departure from the hyper-technical,
code-pleading regime of a prior era, but it does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions. Second,
only a complaint that states a plausible claim for relief survives a motion to
dismiss. Id., at 556. Determining whether a complaint states a plausible claim
for relief will, as the Court of Appeals observed, be a context-specific task
that requires the reviewing court to draw on its judicial experience and
common sense. 490 F.3d at 157-158. But where the well-pleaded facts do
not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged—but it has not “show[n]”—“that the pleader is entitled
to relief.” Fed. Rule Civ. Proc. 8(a)(2).
Iqbal, 129 S. Ct. at 1949–50.
ANALYSIS
Not only does the proposed amended complaint set forth a plausible claim of action
for breach of contract against Rocky Mountain Pure Snow, Inc., which is not disputed, but
against the remaining defendants as well. Further, the Court determines upon its review
of the proposed amended complaint that it plausibly pleads causes of action for
conversion, fraud, unjust enrichment, and conspiracy to commit conversion and to commit
fraud.
Though not specifically raised by Defendants in their motion papers, the Court is
aware that in some instances, a fraud claim cannot be maintained in a breach of contract
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case. For example, in Rushing v. Nexpress Solutions, Inc., No. 05-CV-6243 CJS, 2009
U.S. Dist. LEXIS 2310 (W.D.N.Y. Jan. 14, 2009), the Court wrote:
a litigant cannot recast a breach of contract case as a tort, and that,
To maintain a claim of fraud in such a situation, a plaintiff must
either: (i) demonstrate a legal duty separate from the duty to
perform under the contract; or (ii) demonstrate a fraudulent
misrepresentation collateral or extraneous to the contract; or
(iii) seek special damages that are caused by the
misrepresentation and unrecoverable as contract damages.
Id., 2009 U.S. Dist. LEXIS 2310, 13-14 (quoting Bridgestone/Firestone v. Recovery Credit
Servs., 98 F.3d 13, 20 (2d Cir. 1996)). The Court determines that Plaintiff is not precluded
from alleging claims of fraud under the circumstances as presented in the factual
allegations of the proposed amended complaint.
CONCLUSION
Plaintiff’s motion (Docket No. 14) to amend the complaint is granted and Plaintiff is
directed to file and serve the proposed amended complaint as the First Amended
Complaint. Defendants’ motion to dismiss the complaint (Docket No. 10) is denied.
IT IS SO ORDERED.
Dated: May 2, 2011
Rochester, New York
ENTER:
/s/ Charles J. Siragusa
CHARLES J. SIRAGUSA
United States District Judge
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