Adams v. Karl
Filing
63
OPINION AND ORDER. Defendants Van Deraa and Kissee's Motion to Dismiss, Doc. No. 55 , is GRANTED. Defendant Karl's Motion to Dismiss, Doc. No. 38 , is GRANTED. Plaintiff's Motion to Amend, Doc. No. 58 , is DENIED. Counts III, IV, V, VI, VII, VIII, and IX of the Amended Complaint are DISMISSED. Signed by Magistrate Judge Norah McCann King on 8/26/2014. (pes1)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
BRET ADAMS,
Plaintiff,
vs.
Civil Action 2:13-cv-894
Magistrate Judge King
GEORGE KARL, et al.,
Defendants.
OPINION AND ORDER
Plaintiff Bret Adams filed this action on September 11, 2013,
asserting a single breach of contract claim against defendant George
Karl.
Complaint, Doc. No. 1.
On February 28, 2014, plaintiff filed
an Amended Complaint, Doc. No. 28, asserting claims against defendant
Karl for breach of contract (Count I), breach of fiduciary duty (Count
II), fraud (Count III), and defamation (Count IV).
The Amended
Complaint also asserts claims for fraud (Count V), interference with
business relationship (Count VI), and defamation (Count VII) against
defendant Kim Van Deraa, and claims of fraud (Count VIII) and
defamation (Count IX) against defendant Chuck Kissee.
This matter is before the Court, with the consent of the parties
pursuant to 28 U.S.C. 636(c), for consideration of three motions.
Defendant Karl has moved to dismiss Counts II, III, and IV of the
Amended Complaint under Fed. R. Civ. P. 12(b)(6) for failure to state
a claim upon which relief can be granted.
George Karl’s Motion to
Dismiss Counts Two, Three, and Four of Bret Adams’ First Amended
Complaint (“Defendant Karl’s Motion”), Doc. No. 38.
Plaintiff has
voluntarily dismissed Count II of the Amended Complaint.
of Partial Dismissal With Prejudice, Doc. No. 45.
the dismissal of Counts III and IV.
Karl’s Motion, Doc. No. 50.
Stipulation
Plaintiff opposes
Plaintiff’s Response to Defendant
Defendant Karl has filed a reply.
Doc.
No. 54.
Defendants Van Deraa and Kissee have moved to dismiss all of
plaintiff’s claims against them under Fed. R. Civ. P. 12(b)(2) for
lack of personal jurisdiction and Fed. R. Civ. P. 12(b)(6) for failure
to state a claim upon which relief can be granted.
Defendants Kim Van
Deraa and Chuck Kissee’s Motion to Dismiss Counts Five, Six, Seven,
Eight, and Nine of Bret Adams’ First Amended Complaint (“Defendants
Van Deraa and Kissee’s Motion”), Doc. No. 55.
Defendants Van Deraa and Kissee’s Motion.
Plaintiff opposes
Plaintiff’s Response to
Defendants Van Deraa and Kissee’s Motion, Doc. No. 57.
Deraa and Kissee have filed a reply.
Defendants Van
Doc. No. 61.
After responding to both motions to dismiss, plaintiff filed a
motion for leave to file a second amended complaint.
Plaintiff’s
Motion for Leave to File Second Amended Complaint Instanter
(“Plaintiff’s Motion to Amend”), Doc. No. 58.
Plaintiff seeks to file
a second amended complaint to assert a claim for unjust enrichment
against defendant Karl.
Id. at p. 2.
The Proposed Second Amended
Complaint, Doc. No. 58-1, contains no new allegations against
defendants Van Deraa or Kissee.
Defendant Karl opposes Plaintiff’s
Motion to Amend on the basis of undue delay, prejudice, and futility.
Defendant Karl’s Response to Plaintiff’s Motion to Amend, Doc. No. 62.
Plaintiff has not filed a reply.
2
For the reasons that follow, Defendant Karl’s Motion is GRANTED.
Defendants Van Deraa and Kissee’s Motion is GRANTED.
Plaintiff’s
Motion to Amend is DENIED.
I.
Background
The Amended Complaint alleges the following: Plaintiff Bret Adams
is a sports and entertainment law attorney who has represented
defendant George Karl for nearly 20 years.
Amended Complaint, ¶¶ 1-2.
Defendant Karl is a former head coach in the National Basketball
Association; plaintiff negotiated defendant Karl’s contracts with the
Milwaukee Bucks and the Denver Nuggets.
Id. at ¶¶ 2-3, 13.
The
contractual agreement between plaintiff and defendant Karl “for the
past ten (10) years has been a monthly payment of $10,000.00 per
month.”
Id. at ¶ 4.
“Defendant Karl’s employment with the Denver Nuggets was
terminated on June 6, 2013.
At the time of his termination he still
had a year remaining on his contract, meaning he would continue to
draw a salary from the team even though he was no longer coaching.”
Id. at ¶ 12.
Defendant Karl has allegedly refused to pay plaintiff
since January 1, 2013.
Id. at ¶ 15.
“In 2001, Plaintiff and Defendant Karl created an investment
entity called Adams Karl Investments, LLC (“AKI”).”
Id. at ¶ 16.
AKI
was a joint venture; defendant Karl had a 75 percent ownership
interest and “made all primary investment decisions.”
17.
Id. at ¶¶ 16-
In 2009, defendant Karl authorized a conditional buy-out of
shares in the Golf Club of Dublin; plaintiff formalized and executed
the purchase agreement.
Id. at ¶¶ 26-28.
3
“Within six (6) months
after the consummation of the agreement, the Golf Club of Dublin filed
for involuntary bankruptcy, the conditions of the purchase agreement
were not met and the agreement terminated.”
Id. at ¶ 29.
The remaining partners of the Golf Club of Dublin thereafter
filed suit against AKI, plaintiff, and defendant Karl to recover under
the purchase agreement (the “2009 lawsuit”).
Id. at ¶¶ 24-30.
Three days prior to the commencement of the trial of the
2009 lawsuit, Defendant Karl paid the Plaintiffs of the
2009 lawsuit an undisclosed amount of money and agreed to
provide a deposition which would be harmful to the
Plaintiff in this action.
Defendant Karl testified,
contrary to previous sworn testimony in the 2009 lawsuit,
that he had never seen the agreement regarding the buy-out
transaction; that he would have never approved the
transaction; and that Plaintiff pressured him into signing
an affidavit by Plaintiff.
Id. at ¶ 33.
Defendant Karl’s deposition testimony was allegedly
false, constitutes “civil perjury,” and “forced Plaintiff to settle
the 2009 lawsuit wherein he had no personal liability.”
Id. at ¶¶ 32,
34-35.
In 2008, defendant Karl contacted plaintiff and indicated that he
wanted defendant Van Deraa “to become involved in his business
dealings and investment decisions.”
Id. at ¶ 36.
Defendant Chuck
Kissee, a non-licensed financial planner, was retained “to assist”
defendants Karl and Van Deraa.
Id. at ¶ 37.
Defendant Karl allegedly
instructed plaintiff to withhold information from defendant Van Deraa
and to provide “two sets of books” to conceal financial transactions.
Id. at ¶¶ 38-39.
“The U.S. Bank account for AKI was closed at the
instruction of Defendant Kissee to prohibit Defendant Van Deraa from
viewing the actual transactions which would have revealed Defendant
Karl’s misrepresentations to Defendant Van Deraa.”
4
Id. at ¶ 23.
In 2012, “Defendant Karl approached Plaintiff and indicated that
he had to reduce Plaintiff’s salary to keep Defendant Van Deraa
happy[.]”
Id. at ¶ 44.
Through a series of transactions referred to
as “AKI concealment” and plaintiff diverting funds “to Plaintiff’s law
firm IOLTA account to again conceal transactions from Defendant Van
Deraa,” plaintiff’s “salary was maintained.”
Id. at ¶¶ 45-46.
At an unspecified time, defendant Van Deraa allegedly “advised
Defendant Karl that Plaintiff had violated a fiduciary duty to
Defendant Karl and specifically recommended the termination of
[defendant Karl’s power of attorney held by plaintiff] and a severing
of the relationship between Plaintiff and Defendant Karl.”
49.
Id. at ¶
“In the fall of 2012 and spring of 2013, Defendants Van Deraa and
Kissee without Plaintiff’s knowledge of [sic] acquiescence, contacted
various partners, tenants, former employers, etc. to defame Plaintiff
and create the impression that Plaintiff had misrepresented Defendant
Karl.”
Id. at ¶ 50.
During the fall of 2012 and the spring of 2013,
defendants Van Deraa and Kissee also allegedly “improperly contact[ed]
Plaintiff pretending to be Defendant Karl for purposes of obtaining
information about business activities to which [they were] not a party
and not authorized to have.”
II.
Id. at ¶¶ 41, 78, 93.
Defendants Van Deraa and Kissee’s motion to dismiss for lack of
personal jurisdiction
A.
Standard
Federal Rule of Civil Procedure 12(b)(2) authorizes the filing of
a motion to dismiss for lack of personal jurisdiction over a
defendant.
In considering a properly supported motion to dismiss for
lack of personal jurisdiction, a district court is vested with the
5
discretion to decide the motion upon the affidavits alone, to permit
discovery in aid of deciding the motion, or to conduct an evidentiary
hearing to resolve any apparent factual question.
Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) (citing Serras v. First
Tenn. Bank Nat’l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)).
Here,
no party has requested additional discovery or an evidentiary hearing
and this Court concludes that neither is necessary to the resolution
of the issue of personal jurisdiction.
A plaintiff bears the burden of establishing personal
jurisdiction.
Estate of Thomson v. Toyota Motor Corp. Worldwide, 545
F.3d 357, 360 (6th Cir. 2008) (citing Brunner v. Hampson, 441 F.3d
457, 462 (6th Cir. 2006)).
However, where a Rule 12(b)(2) motion is
decided solely on written submissions and affidavits, as here, “the
plaintiff’s burden is relatively slight, and the plaintiff must make
only a prima facie showing that personal jurisdiction exists in order
to defeat dismissal.”
Id. (quotations and citations omitted).
Indeed, “[t]he pleadings and affidavits submitted must be viewed in a
light most favorable to the plaintiff, and the [] court should not
weigh ‘the controverting assertions of the party seeking dismissal.’”
Id. (quoting Theunissen, 935 F.2d at 1459).
Nevertheless, the
pleadings must set forth with reasonable particularity those specific
facts that support jurisdiction.
Palnik v. Westlake Entm't, Inc., 344
F. App'x 249, 251 (6th Cir. 2009) (quoting Neogen Corp. v. Neo Gen
Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002)).
6
B.
Discussion
“A Federal district court sitting in diversity must apply the law
of the forum state to determine whether it may exercise jurisdiction
over the person of a non-resident defendant.”1
Theunissen, 935 F.2d at
1459 (citing Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980)).
Constitutional concerns of due process, however, limit the application
of this principle.
Id. (citing Welsh, 631 F.2d at 439).
In order to satisfy notions of federal due process, a court may
exercise personal jurisdiction over a non-resident defendant only if
the exercise of such jurisdiction arises from “certain minimum
contacts with [the forum] such that [] maintenance of the suit does
not offend traditional notions of fair play and substantial justice.”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations
omitted).
The non-resident defendant must have conducted himself in
such a manner that he could “reasonably anticipate being haled into
court” in Ohio.
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980) (citations omitted).
This requirement is met if the
defendant “purposefully directed his activities at residents of the
forum, and the litigation results from alleged injuries that arise out
of or relate to those activities.”
Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472 (1985) (citations and quotations omitted).
1
Plaintiff and defendant Karl agree that the Court has subject matter
jurisdiction under 28 U.S.C. § 1332. Preliminary Pretrial Order, Doc. No.
12. The Amended Complaint does not, however, contain “a short and plain
statement of the grounds for the court’s jurisdiction.” Fed. R. Civ. P.
8(a). Although defendants Van Deraa and Kissee argue that plaintiff has
failed to allege subject matter jurisdiction, they do not dispute that they
are not residents of Ohio or that Ohio law applies to this dispute. See Van
Deraa and Kissee Response, p. 5 n.5.
7
The United States Court of Appeals for the Sixth Circuit employs
three criteria for determining whether the exercise of in personam
jurisdiction comports with due process:
First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing a
consequence in the forum state.
Second, the cause of
action must arise from the defendant's activities there.
Finally, the acts of the defendant or consequences caused
by the defendant must have a substantial enough connection
with the forum to make the exercise of jurisdiction over
the defendant reasonable.
Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th
Cir. 1968).
See also Calphalon Corp. v. Rowlette, 228 F.3d 718, 721-
22 (6th Cir. 2000).
“̔The purposeful availment requirement ensures that a defendant
will not be haled into a jurisdiction solely as a result of random,
fortuitous, or attenuated contacts, or of the unilateral activity of
another party or a third person.’”
Schneider v. Hardesty, 669 F.3d
693, 701-02 (6th Cir. 2012) (quoting Citizens Bank v. Parnes, 376 F.
App’x 496, 502 (6th Cir. 2010)).
In the case presently before the Court, defendant Van Deraa has
submitted a declaration under penalty of perjury declaring that she is
a resident of the State of Colorado and that, prior to the recent
mediation in this case, she had been in Ohio only twice and not since
2005.
Declaration of Kim Van Deraa, Doc. No. 55-1, ¶¶ 1-3.
Defendant
Van Deraa does “not have any business or personal dealings that cause
[her] to engage in commerce in Ohio” and she declares that “[a]ny
emails [she] sent to Bret Adams from George Karl’s email account were
sent and authorized on George Karl’s behalf.”
8
Id. at ¶¶ 4-5.
Defendant Kissee has submitted a declaration under penalty of
perjury declaring that he is a resident of the State of Idaho and
that, prior to the mediation in this case, he had never been in Ohio.
Declaration of Chuck Kissee, Doc. No. 55-2.
Defendant Kissee also
does “not have any business or personal dealings that cause [him] to
engage in commerce in Ohio.”
Id. at ¶ 4.
Defendant Kissee declares
that he has “never sent any emails to Bret Adams under George Karl’s
email account.”
Id. at ¶ 5.
Plaintiff has not produced any evidence to contradict defendants’
declarations or in support of his claim that the Court may properly
exercise personal jurisdiction over defendants Van Deraa and Kissee.
Plaintiff’s response to defendants’ motion to dismiss also fails to
cite any portion of the Amended Complaint to support his claim of
personal jurisdiction.
Instead, plaintiff summarizes his allegations
and argues that defendants have sufficient contacts with Ohio to
justify the exercise of personal jurisdiction over these defendants.
Plaintiff’s arguments are not well taken.
Notably, plaintiff neither alleges in the Amended Complaint nor
provides any evidence that defendants Van Deraa or Kissee took any
action in Ohio or directed action at Ohio or to an Ohio resident.
Plaintiff’s argument in his response suffers from the same
deficiencies.
For example, plaintiff argues in his response that
“Defendant Van Deraa purposefully contacted Defendant Karl requesting
him to reduce his commitment to Plaintiff and/or terminate his
relationship with Plaintiff.”
Plaintiff’s Response to Defendants Van
Deraa and Kissee’s Motion, p. 12.
Plaintiff also argues that
9
“Defendant Van Deraa told Defendant Karl that Plaintiff had violated
his fiduciary duties, she also recommended Plaintiff’s power of
attorney with Defendant Karl be terminated.
Further, she induced
Defendant Karl to reduce Plaintiff’s salary,2 and recommended that
Defendant Karl completely terminate his relationship with Plaintiff.”
Plaintiff’s Response to Defendants Van Deraa and Kissee’s Motion, p.
6.
These arguments are premised on defendant Van Deraa contacting
defendant Karl; there is no suggestion that defendant Van Deraa took
any action in Ohio or directed action to Ohio.
The Amended Complaint does allege that, during the fall of 2012
and the spring of 2013, defendants Van Deraa and Kissee “improperly
contact[ed] Plaintiff pretending to be Defendant Karl for purposes of
obtaining information about business activities to which [they were]
not a party and not authorized to have.”
93.
Amended Complaint, ¶¶ 78,
The Amended Complaint also alleges that defendant Van Deraa “had
unauthorized use of the Denver Nuggets personal e-mail address of
Defendant Karl and would write e-mails to Plaintiff pretending to be
Defendant Karl.”
Id. at ¶ 41.
Assuming, arguendo, that sending an
email “for purposes of obtaining information about business
activities” would be sufficient to confer jurisdiction under Ohio’s
long-arm statute, see R.C. § 2307.382(A)(6) (Ohio’s long-arm statute
provides for personal jurisdiction over a person who causes “tortious
injury in this state to any person by an act outside this state
2
The Amended Complaint alleges that “Defendant Karl approached Plaintiff and
indicated that he had to reduce Plaintiff’s salary to keep Defendant Van
Deraa happy[.]” Amended Complaint, ¶ 44. The Amended Complaint does not
allege that defendant Van Deraa induced defendant Karl to reduce plaintiff’s
salary.
10
committed with the purpose of injuring persons, when he might
reasonably have expected that some person would be injured thereby in
this state[.]”) (emphasis added); Calphalon Corp., 228 F.3d at 721
(recognizing that Ohio's long-arm statute does not extend to the
constitutional limits of the Due Process Clause), the Amended
Complaint does not allege, and there is no evidence, that emails were
sent to plaintiff in Ohio, that plaintiff received the emails in Ohio,
or even that plaintiff is a resident of Ohio.3
The Amended Complaint also alleges that, “[i]n the fall of 2012
and spring of 2013, Defendants Van Deraa and Kissee without
Plaintiff’s knowledge of [sic] acquiescence, contacted various
partners, tenants, former employers, etc. to defame Plaintiff and
create the impression that Plaintiff had misrepresented Defendant
Karl.”
Amended Complaint, ¶ 50.
Plaintiff argues in his response
that defendants are subject to personal jurisdiction in Ohio because
their alleged defamatory statements made outside of Ohio to
individuals outside of Ohio were made with the purpose of having an
effect on plaintiff in Ohio.
Plaintiff’s Response to Defendants Van
Deraa and Kissee’s Motion, pp. 13-14.
However, as plaintiff
acknowledges in his response, see id., “the Sixth Circuit has held
that the fact that a foreign organization could foresee that allegedly
defamatory statements would be circulated and have an effect in Ohio
is not, in itself, enough to create personal jurisdiction.”
J4
Promotions, Inc. v. Splash Dogs, LLC, No. 08-cv-977, 2009 WL 385611,
at *18 (N.D. Ohio Feb. 13, 2009) (citing Reynolds v. Int’l Amateur
3
The Amended Complaint does not contain “a short and plain statement of the
grounds for the court’s jurisdiction.” Fed. R. Civ. P. 8(a).
11
Athletic Fed’n, 23 F.3d 1110, 1120 (6th Cir. 1994)).
This analysis
also applies here.
Purposeful availment may exist when a defendant sends
communications into the forum that “form the bases for the action.”
See Schneider, 669 F.3d at 702 (quoting Intera Corp. v. Henderson, 428
F.3d 605, 616 (6th Cir. 2005) (“We have held previously that
purposeful availment may exist when a defendant makes telephone calls
and sends facsimiles into the forum state and such communications
‘form the bases for the action.’”).
See also Neal v. Janssen, 270
F.3d 328, 332 (6th Cir. 2001) (“When the actual content of the
communications into the forum gives rise to an intentional tort
action, that alone may constitute purposeful availment.”).
However,
there are no allegations or evidence that defendants Van Deraa or
Kissee sent communications into Ohio.
The Court also notes that
plaintiff has not alleged facts to support his defamation claims
against defendants Van Deraa and Kissee; plaintiff merely alleges the
legal conclusion that defendants made false or defamatory statements.
See Amended Complaint, ¶¶ 50, 87-89, 97-99.
Plaintiff’s allegations,
i.e., that defendants published an unspecified false or defamatory
statement outside of the state to individuals outside of the state, is
insufficient to establish personal jurisdiction over these defendants.
“As a general rule, the sovereign's exercise of power requires
some act by which the defendant ‘purposefully avails itself of the
privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws[.]’”
J. McIntyre
Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2787 (2011) (quoting Hanson
12
v. Denckla, 357 U.S. 235, 253 (1958)).
The Amended Complaint does not
allege, and plaintiff has not produced evidence that, defendant Van
Deraa or Kissee took any action in Ohio or directed any action at Ohio
or to an Ohio resident.
Accordingly, the Court cannot find that
defendants purposefully availed themselves of the privilege of acting
in Ohio or caused a consequence in Ohio.
Defendants Van Deraa and Kissee’s Motion, Doc. No. 55, is
therefore GRANTED.
Plaintiff’s claims against defendant Van Deraa and
Kissee are DISMISSED for lack of personal jurisdiction.
III. Defendant Karl’s Motion to Dismiss Counts III and IV of the
Amended Complaint
A.
Standard
A motion to dismiss under Rule 12(b)(6) attacks the legal
sufficiency of the complaint.
See Roth Steel Prods. v. Sharon Steel
Co., 705 F.2d 134, 155 (6th Cir. 1983).
In determining whether
dismissal on this basis is appropriate, a complaint must be construed
in the light most favorable to the plaintiff, and all well-pleaded
facts must be accepted as true.
See Bower v. Fed. Express Corp., 96
F.3d 200, 203 (6th Cir. 1996); Misch v. Cmty. Mut. Ins. Co., 896 F.
Supp. 734, 738 (S.D. Ohio 1994).
The United States Supreme Court has
explained that, “once a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the allegations
in the complaint.”
(2007).
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546
However, a plaintiff’s claim for relief “requires more than
labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.”
Id. at 555.
In addition, “Rule 9(b)
requires that ̔[i]n alleging fraud or mistake, a party must state with
13
particularity the circumstances constituting fraud or mistake.’”
Chesbrough v. VPA, P.C., 655 F.3d 461, 466 (6th Cir. 2011) (quoting
United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d
493, 503 (6th Cir. 2007)).
“Factual allegations must be enough to
raise a right to relief above the speculative level[.]”
Id.
Accordingly, a complaint must be dismissed if it does not plead
“enough facts to state a claim to relief that is plausible on its
face.”
Id. at 570.
B.
Discussion
Count III of the Amended Complaint alleges that, “[d]uring his
August, 2013 deposition Defendant Karl made statements the [sic]
directly contradicted his sworn testimony in the 2011 and 2012
depositions.”
Amended Complaint, ¶ 66.
The statements made in
defendant Karl’s August 2013 deposition were allegedly false and
caused plaintiff to settle the 2009 lawsuit “in which he had no
liability.”
Id. at ¶¶ 35, 67-68.
The Amended Complaint further
alleges that “Defendant Karl’s statements in the 2013 deposition
constitute fraud.”
Id. at ¶ 69.
Defendant Karl argues that plaintiff’s fraud claim should be
dismissed because, inter alia, his deposition testimony cannot serve
as the basis for a civil claim.
Defendant Karl’s Motion, p. 8.
This
Court agrees.
Under Ohio law, “[i]t is well established that claims of perjury,
subornation of perjury, and conspiracy to commit perjury, although
punishable under criminal statutes, may not form the basis of a civil
lawsuit.”
Whelan v. Vanderwist of Cincinnati, No. 2010-G-2999, 2011
14
WL 6938600, at ¶ 27 (Ohio Ct. App. Dec. 30, 2011) (citing Costell v.
Toledo Hosp., 527 N.E.2d 858, 860 (Ohio 1988) (“[A]ppellants have
essentially set forth allegations constituting perjury, subornation of
perjury, and conspiracy to commit perjury, all of which are punishable
under the criminal statutes but which, for public policy reasons, may
not be the basis of a civil lawsuit.”)).
See also Slayton v. Wells
Fargo Bank, NA, 2:12-CV-00283, 2013 WL 819229, at *6 (S.D. Ohio Mar.
5, 2013) (“Under Ohio law, ̔there is a very well established rule that
no action lies to recover damages caused by perjury, false swearing,
subornation of perjury, or an attempt to suborn perjury . . .
regardless of whether the perjurer was a party to, or a witness in,
the action or proceedings.’”) (quoting Anderson v. Smith, 964 N.E.2d
468 (Ohio Ct. App. 2011)).
“Witness immunity is based on the policy
rationale that ̔freedom of speech is essential in a judicial
proceeding to ensure justice.’”
Slayton, 2013 WL 819229 at *6
(quoting Morrow v. Reminger & Reminger Co., L.P.A., 915 N.E.2d 696
(Ohio Ct. App. 2009)).
“Applying this doctrine, ̔allegedly false or
fraudulent statements made via affidavits and trial testimony by
attorneys, parties, or witnesses in a civil lawsuit failed to state a
claim for falsification to recover damages, because parties are immune
from civil suits for remarks made in connection with a civil action.’”
Id. (quoting Hershey v. Edelman, 932 N.E.2d 386 (Ohio Ct. App. 2010)).
See also Grimm v. Wickman, No. 96508, 2011 WL 3557025, at ¶ 10 (Ohio
Ct. App. Aug. 11, 2011) (“[I]f we assume, as we must, that Wickman did
in fact make false statements in her affidavit filed in the Parkview I
case, she is absolutely immune from subsequent civil liability based
15
on that allegation.”).
In this case, the doctrine of witness immunity forecloses
plaintiff’s common law fraud claim.
Plaintiff’s fraud claim is based
on allegedly false statements made in defendant Karl’s testimony in
connection with the 2009 lawsuit; plaintiff characterizes this
testimony as “civil perjury.”
Amended Complaint, ¶¶ 32-34.
This is
exactly the type of conduct that the witness immunity doctrine
entails.
See Slayton, 2013 WL 819229 at *6 (“In this case, the
doctrine of witness immunity bars Slayton's common law fraud claim.
Slayton asserts fraud based on the filing of an allegedly false
affidavit during the state court foreclosure proceedings.
This is
exactly the type of conduct that the witness immunity doctrine
entails.”); Morrow, 915 N.E.2d at 705 (“̔[T]he giving of false
testimony in a judicial proceeding . . . does not give rise to a civil
action for damages resulting from the giving of the false testimony’
even when it is alleged that the witness knew the testimony to be
false.”) (quoting Schmidt v. State Aerial Farm Statistics, Inc., 403
N.E.2d 1026 (Ohio Ct. App. 1978)).
Count IV of the Amended Complaint asserts a claim of defamation
against defendant Karl.
A claim of defamation under Ohio law includes
the following elements:
First, there must be the assertion of a false statement of
fact; second, . . . the false statement was defamatory;
third, . . . the false defamatory statement was published
by defendants; fourth,
. . . the publication was the
proximate cause of the injury to the plaintiff; and fifth,
. . . the defendants acted with the requisite degree of
fault.
Voyticky v. Vill. of Timberlake, 412 F.3d 669, 677-78 (6th Cir. 2005)
16
(citing Celebreeze v. Dayton Newspapers, Inc., 535 N.E.2d 755, 759
(Ohio Ct. App. 1988)).
In the case presently before the Court, the Amended Complaint
alleges that, “[i]n his July 24, 2012 deposition testimony, Defendant
Karl acknowledged that he did not ‘present [Plaintiff] in a positive
light’ as a result of the defamatory and false allegations made by
Defendants Van Deraa and Kissee.”
Amended Complaint, ¶ 72.
The
allegedly “false statements were broadcast to third parties in the
form of several assistant coaches who consulted Karl about obtaining
the services that Plaintiff provides.”
Id. at ¶ 73.
“These
statements led to Plaintiff losing the opportunity to obtain new
business and caused him a loss of reputation among coaches in the
NBA.”
Id. at ¶ 74.
Defendant Karl argues that Count IV fails to state a colorable
claim for defamation because the Amended Complaint fails to identify a
false statement of fact made by defendant Karl.
Motion, p. 11.
Defendant Karl’s
In response, plaintiff argues that he has adequately
stated a claim for defamation but, again, he fails to cite any portion
of the Amended Complaint to support that argument:
Defendant Karl has uttered slanderous statements about
Plaintiff in the presence of others.
Specifically, said
statements were uttered to the other Defendants to this
action, who allegedly recited said comments to prospective
clients. These statements negatively impacted Plaintiff in
his profession, as Plaintiff lost the opportunity to obtain
said prospective contractual relationships.
Plaintiff’s Response to Defendant Karl’s Motion, p. 8.
The Amended Complaint fails to identify any false statement of
fact made by defendant Karl.
Plaintiff alleges that defendant Karl
17
“acknowledged [in deposition testimony] that he did not ‘present
[Plaintiff] in a positive light,’” as a result of statements made by
other individuals, Amended Complaint, ¶ 72, but he does not identify a
factual statement actually made by defendant Karl.
Plaintiff’s
response to defendant Karl’s motion is no better; plaintiff merely
argues that defendant Karl “uttered slanderous statements,” without
identifying the actual statements at issue.
to Defendant Karl’s Motion, p. 8.
See Plaintiff’s Response
In short, this Court concludes that
the Amended Complaint fails to state a claim for defamation because it
does not allege a specific defamatory statement published by defendant
Karl to a third party.
The Amended Complaint does not plead facts sufficient to state a
plausible claim for fraud or defamation against defendant Karl.
Defendant Karl’s Motion, Doc. No. 38, is therefore GRANTED.
Counts
III and IV of the Amended Complaint are DISMISSED.
IV.
Plaintiff’s Motion to Amend the Amended Complaint
A.
Standard
Plaintiff’s Motion to Amend is governed by Rule 15(a) of the
Federal Rules of Civil Procedure.
That rule provides that “[t]he
court should freely give leave [to amend] when justice so requires.”
Fed. R. Civ. P. 15(a)(2).
“[T]he thrust of Rule 15 is to reinforce
the principle that cases ‘should be tried on their merits rather than
the technicalities of pleadings.’”
Moore v. City of Paducah, 790 F.2d
557, 559 (6th Cir. 1986) (quoting Tefft v. Seward, 689 F.2d 637, 639
(6th Cir. 1982)).
The grant or denial of a request to amend a
complaint is left to the broad discretion of the trial court.
18
General
Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990).
In
exercising its discretion, the trial court may consider such factors
as “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, [and] futility of amendment.”
U.S. 178, 182 (1962).
Foman v. Davis, 371
“A proposed amendment is futile if the
amendment could not withstand a Rule 12(b)(6) motion to dismiss.”
Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir.
2000) (citing Thiokol Corp. v. Dep’t of Treasury, Revenue Div., 987
F.2d 376, 382-83 (6th Cir. 1993)).
B.
Discussion
Plaintiff seeks leave to file the Proposed Second Amended
Complaint “to include a cause of action for unjust enrichment” against
defendant Karl.
Plaintiff’s Motion to Amend, p. 2.
The Proposed
Second Amended Complaint references the contract that forms the basis
of plaintiff’s breach of contract claim and alleges that defendant
Karl “has wrongfully received the benefit of said contract, as
Defendant Karl has failed and/or refused to pay Plaintiff the ongoing
monthly payment of $10,000.00 per month since January 2013.
Further
said payments in the amount of $10,000.00 to Plaintiff were to
continue through 2018.”
Proposed Second Amended Complaint, ¶¶ 58-63.
This action has been pending since September 11, 2013, plaintiff
has already amended the Complaint and yet plaintiff offers no
explanation for his delay in asserting the proposed new cause of
action.
The Court therefore finds that plaintiff has acted with undue
19
delay in seeking leave to assert a cause of action for unjust
enrichment.
See Nw. Nat. Ins. Co. of Milwaukee, Wis. v. Joslyn, 53
F.3d 331, at *5-6 (6th Cir. May 8, 1995).
The Court also concludes
that defendant Karl would suffer significant prejudice should
plaintiff be permitted to yet again amend the complaint to assert the
proposed new claim.
See Ziegler v. Aukerman, 512 F.3d 777, 786 (6th
Cir. 2008) (“To deny a motion to amend, a court must find ̔at least
some significant showing of prejudice to the opponent.’”) (quoting
Moore, 790 F.2d at 562).
Notably, this case has now been pending for
almost one year and discovery is scheduled to close in slightly more
than three months.
In light of plaintiff’s delay in seeking to assert
a claim for unjust enrichment, the grant of Plaintiff’s Motion to
Amend will result in unreasonable burden on defendant Karl in the form
of increased litigation expenses and delay of the proceedings.
The Court also concludes that the proposed amendment would be
futile.
Plaintiff’s proposed claim for unjust enrichment asserts that
defendant Karl has been unjustly enriched by his alleged receipt of
the benefits of a contract while failing to fully perform his
obligations under the contract.
The contract in dispute is the
subject of plaintiff’s breach of contract claim in the Amended
Complaint (Count I).
Plaintiff’s proposed amendment is futile because
“Ohio law does not allow parties to ̔seek damages under quasicontractual theories of recovery’ such as a claim of unjust enrichment
when a contract governs the relationship.”
Cook v. Home Depot U.S.A.,
Inc., 2:06-CV-00571, 2007 WL 710220, at *8 (S.D. Ohio Mar. 6, 2007)
(quoting Davis & Tatera, Inc. v. Gray-Syracuse, Inc., 796 F. Supp.
20
1078, 1080 (S.D. Ohio 1992)).
Defendant argues, and plaintiff does
not contest, that a contract existed in this case and that plaintiff’s
breach of contract and unjust enrichment claims essentially challenge
the same conduct.
The proposed amendment would therefore be futile.
WHEREUPON, based on the foregoing, Defendants Van Deraa and
Kissee’s Motion, Doc. No. 55, is GRANTED.
Doc. No. 38, is GRANTED.
DENIED.
Defendant Karl’s Motion,
Plaintiff’s Motion to Amend, Doc. No. 58, is
Counts III, IV, V, VI, VII, VIII, and IX of the Amended
Complaint are DISMISSED.
August 26, 2014
s/Norah McCann King_______
Norah McCann King
United States Magistrate Judge
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