Johnson v. Calhoun Funeral Homes, Inc. et al
Memorandum of Opinion and Order: Plaintiff's Motion to Dismiss Defendant Calhoun Funeral Homes, Inc.'s Counterclaim is GRANTED IN PART AND DENIED IN PART. Judge Patricia A. Gaughan on 2/17/17. (LC,S) re 12
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
Calhoun Funeral Hjomes, Inc., et al.,
CASE NO. 1:16 CV 2553
JUDGE PATRICIA A. GAUGHAN
Memorandum of Opinion and Order
This matter is before the Court upon Plaintiff’s Motion to Dismiss Defendant Calhoun
Funeral Homes, Inc.’s Counterclaim (Doc. 12). Plaintiff, a former employee of Defendant
Calhoun Funeral Home, Inc. (“CFHI”), brought this action alleging claims under the Fair Labor
Standards Act and the Ohio Civil Rights Act. In responding to Plaintiff’s Complaint, CFHI
brought claims for breach of contract, unjust enrichment, and promissory estoppel. Plaintiff now
moves to dismiss those counterclaims. For the reasons that follow, Plaintiff’s motion is
GRANTED IN PART AND DENIED IN PART.
Plaintiff was an employee of CFHI from 2006 until August 23, 2016, when CFHI alleges
that he walked off of the job. (Defs.’ Counterclaim ¶ 1). During his employment, Plaintiff
informed Byron Calhoun, owner of CFHI, that he was having financial difficulties. To help
Plaintiff avoid bankruptcy, CFHI agreed to pay off some of Plaintiff’s personal debts, with the
understanding that Plaintiff would repay CFHI once his financial difficulties subsided. On July
6, 2015, CFHI paid Plaintiff’s debts in the amount of $6,446.76, which Plaintiff has not repaid.
On October 19, 2016, Plaintiff filed this lawsuit, alleging that CFHI and Calhoun Funeral
Home, LLC, failed to pay him overtime wages and discriminated against him based on his
disability. CFHI filed a counterclaim for breach of contract, unjust enrichment, and promissory
estoppel based on Plaintiff’s failure to reimburse CFHI for the amount that it paid Plaintiff’s
creditors. Plaintiff now moves to dismiss those counterclaims. CFHI opposes Plaintiff’s motion.
STANDARD OF REVIEW
When considering a motion to dismiss under Rule 12(b)(6), the allegations of the
complaint must be taken as true and construed liberally in favor of the plaintiff. Lawrence v.
Chancery Court of Tenn., 188 F.3d 687, 691 (6th Cir. 1999). Notice pleading requires only that
the defendant be given “fair notice of what the plaintiff’s claim is and the grounds upon which it
rests.” Conley, 355 U.S. at 47. However, the complaint must set forth “more than the bare
assertion of legal conclusions.” Allard v. Weitzman (In Re DeLorean Motor Co.), 991 F.2d
1236, 1240 (6th Cir. 1993). Legal conclusions and unwarranted factual inferences are not
accepted as true, nor are mere conclusions afforded liberal Rule 12(b)(6) review. Hensley Mfg. v.
ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009). Dismissal is proper if the complaint lacks an
allegation regarding a required element necessary to obtain relief. Craighead v. E.F. Hutton &
Co., 899 F.2d 485, 489-490 (6th Cir. 1990).
In addition, a claimant must provide “enough facts to state a claim to relief that is
plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 (2007). A pleading
that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of
action will not do.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1955 (2009). Nor does a complaint suffice
if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id.
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. 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. 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 1949 (citations and quotations omitted).
A. Breach of Contract
Plaintiff first argues that CFHI’s breach of contract claim should be dismissed because
the alleged contract at issue is subject to Ohio’s Statute of Frauds, Ohio Revised Code §
1335.05, so it must have been in writing to be valid. Plaintiff relies on this language from §
1335.05 in support of his argument: “No person shall be brought whereby to charge the
defendant, upon a special promise, to answer for the debt, default, or miscarriage of another
person...unless the agreement upon which such action is brought, or some memorandum or note
thereof, is in writing and signed by the party to be charged therewith.” Under this provision, an
oral promise to answer for the debt of another is generally unenforceable. Trans Gear, Inc. v.
Lichtenberger, 128 Ohio App. 3d 504, 509, 715 N.E.2d 608, 610 (1998). Here, the debt at issue
is Plaintiff’s own debt, not the debt of another. Indeed, he admits this in his motion to dismiss:
“The alleged contract is a contract of indefinite duration that is meant to pay for Plaintiff’s
debts.” (Pl.’s Mot. to Dismiss at 2) (emphasis added). Thus, § 1335.05 is inapplicable.
Plaintiff next argues that, even if the Statute of Frauds does not apply, the breach of
contract claim should be dismissed because he has not yet breached any alleged contract. In
support, he notes that CFHI did not allege that Plaintiff’s financial difficulties have subsided, so
the breach of contract claim is premature. In response, CFHI does not dispute that the time for
performance has not arisen but argues that Plaintiff anticipatorily breached the agreement by
“filing a suit for damages against CFHI without taking into account the amount he owed CFHI
under the 2015 oral agreement.” (Defs.’ Br. in Opp. at 5).
An anticipatory repudiation occurs when one party to a contract refuses to perform under
the terms of the contract. Blake Homes, Ltd. v. FirstEnergy Corp., 173 Ohio App. 3d 230, 244,
87 N.E.2d 1041, 1051 (2007). “‘An anticipatory breach of contract by a promisor is a
repudiation of the promisor’s contractual duty before the time fixed for performance has
arrived.’” Sunesis Trucking Co. v. Thistledown Racetrack, L.L.C., 22 N.E.3d 190, 195–96 (Ohio
Ct. App. 2014). To constitute a breach, a repudiation of a contract must be unequivocal. Id. A
mere expression of doubt as to willingness or ability to perform is insufficient to constitute a
repudiation. Se. Land Dev., Ltd. v. Primrose Mgt. L.L.C., 2011 Ohio 2341, ¶ 7, 193 Ohio App.
3d 465, 472, 952 N.E.2d 563, 568–69 (citations omitted). A “repudiation” is “(1) a statement by
the obligor to the obligee indicating that the obligor will commit a breach that would of itself
give the obligee a claim for damages for total breach, or (2) a voluntary affirmative act which
renders the obligor unable or apparently unable to perform without such a breach.” Id.
Here, Plaintiff’s action in filing a lawsuit for claims that are unrelated to his alleged
contract to repay CFHI is not an “unequivocal” repudiation of the contract. Nor does any
statement in Plaintiff’s Amended Complaint, his motion to dismiss, or his reply brief indicate his
unequivocal intention not to perform the contract. Because CFHI has not alleged that the time for
performance has passed or that Plaintiff has unequivocally refused to perform, and its allegations
do not plausibly support that Plaintiff anticipatorily repudiated the contract, its breach of contract
claim is dismissed.
B. Unjust Enrichment
Next, Plaintiff moves to dismiss CFHI’s unjust enrichment claim. Unjust enrichment
occurs “when a party retains money or benefits which in justice and equity belong to another.”
Dailey v. Craigmyle & Son Farms, L.L.C.,177 Ohio App. 3d 439, 449, 894 N.E.2d 1301, 1309
(2008). To state a claim for unjust enrichment, CFHI must allege: (1) that it conferred a benefit
upon Plaintiff; (2) knowledge by Plaintiff of the benefit; and (3) that Plaintiff retained the benefit
under circumstances where it would be unjust to do so without payment. Hambleton v. R.C.
Barry Corp., 12 Ohio St. 3d 179, 183 (1984) (citations omitted). Under Ohio law, the benefitted
party need not act improperly before an unjust enrichment claim can be upheld. Instead, unjust
enrichment can result “from a failure to make restitution where it is equitable to do so. That may
arise when a person has passively received a benefit which it would be unconscionable for him
to retain” without paying compensation. Reisenfeld & Co. v. Network Group, Inc., 277 F.3d 856,
860-61 (quoting Cosby v. Cosby, 141 Ohio App.3d 320, 327, 750 N.E.2d 1207 (12th Dist. 2001)).
Plaintiff argues that CFHI has failed to allege any facts showing that Plaintiff has
retained a benefit because repayment of the benefit is not yet due. CFHI’s unjust enrichment
claim, however, is pled in the alternative to its breach of contract claim and is not premised on
the alleged oral agreement between CFHI and Plaintiff. Rather, CFHI alleges that it conferred a
benefit upon Plaintiff by repaying his debts, that Plaintiff was aware that CFHI made the
payments, and that Plaintiff has been unjustly enriched by not repaying CFHI. CFHI has pled
enough facts to state a claim for unjust enrichment that is plausible on its face. Plaintiff’s
argument that payment is not yet due goes to whether it would be unjust under the circumstances
for him to retain the benefit that CFHI has conferred on him, which is a factual question not
appropriate for resolution on a motion to dismiss. Plaintiff’s motion to dismiss this claim is,
C. Promissory Estoppel
Finally, Plaintiff moves to dismiss CFHI’s promissory estoppel claim. The Ohio Supreme
Court has adopted the Restatement’s definition of promissory estoppel: “A promise which the
promisor should reasonably expect to induce action or forbearance on the part of the promisee or
a third person and which does induce such action or forbearance is binding if injustice can be
avoided only be enforcement of the promise.” Talley v. Teamsters Local No. 377, 48 Ohio St. 2d
142, 146, 357 N.E.2d 44 (1976) (quoting Restatement of the Law, Contracts 2d, § 90); see also
Shampton v. Springboro, 98 Ohio St. 3d 457, 461, 786 N.E.2d 883, 887 (2003). To state a claim
for promissory estoppel, CFHI must allege “a clear and unambiguous promise and reliance by
the party to whom the promise is made. The reliance must be reasonable and foreseeable, and the
party relying on the promise must have been injured by the reliance.” Dailey v. Craigmyle & Son
Farms, L.L.C., 177 Ohio App. 3d 439, 446-47, 894 N.E.2d 1301, 1306-07 (2008). Whether the
defendant made “a clear and unambiguous promise” is a question of fact. Id.
Plaintiff argues that CFHI has not alleged a clear and unambiguous promise because it
does not allege when Plaintiff was required to repay the debt. In its promissory estoppel claim,
CFHI alleges that “[Plaintiff] promised CFHI that, if it paid off his personal debts, [Plaintiff]
would reimburse CFHI for the amount paid.” In reliance on this promise, CFHI paid $6,446.76
to Plaintiff’s creditors. (Counterclaim ¶¶ 17-18). Earlier, in its breach of contract claim, CFHI
alleged that it agreed to pay the debts with the understanding that Johnson would repay CFHI
once his financial difficulties subsided. (Id. 4). Plaintiff has not cited any cases where a promise
of repayment at a future date under circumstances such as this are too ambiguous or too unclear
to support a promissory estoppel claim. At this early stage of the litigation, without the benefit of
discovery, the Court cannot say with certainty that Plaintiff’s promise was not, as a matter of
law, sufficiently clear and unambiguous.1 Thus, Plaintiff’s motion to dismiss CFHI’s promissory
estoppel counterclaim is denied.
Plaintiff argues for the first time in his reply brief that the promissory estoppel
claim should be dismissed because CFHI did not plead that his conduct was
misleading. The Restatement’s definition of promissory estoppel, as adopted by
the Ohio Supreme Court, does not require that the promise be misleading.
Moreover, at least one Ohio appellate court has recently held that “false,
misleading, or fraudulent statements are not a required element of promissory
estoppel.” A N Bros. Corp. v. Total Quality Logistics, L.L.C., 59 N.E.3d 758, 770
(Ohio Ct. App. 2016). Thus, CFHI’s failure to plead that Plaintiff misled it is not
a basis for dismissing this claim.
For the foregoing reasons, Plaintiff’s Motion to Dismiss Defendant Calhoun Funeral
Homes, Inc.’s Counterclaim is GRANTED IN PART AND DENIED IN PART.
IT IS SO ORDERED.
/s/ Patricia A. Gaughan
PATRICIA A. GAUGHAN
United States District Judge
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