Travelhost Inc v. Brady et al
Filing
148
Memorandum Opinion and Order granting in part with prejudice and in part without prejudice 86 Motion to Dismiss Defendants' Counterclaims as to Defendants Donna Stamates and Jennifer Brady. (Ordered by Judge Barbara M.G. Lynn on 9/27/2012) (ctf)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
TRAVELHOST, INC.,
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Plaintiff,
v.
JENNIFER LEA BRADY, et al.,
Defendants.
Civil Action No. 3:11-cv-454-M
MEMORANDUM OPINION AND ORDER
Now before the Court is Plaintiff’s Motion to Dismiss Defendants’ Counterclaims. (Doc.
86). Having reviewed the relevant pleadings and applicable law, the Court GRANTS the
motion.
I. BACKGROUND
Plaintiff brought this suit for breach of contract, tortious interference, and conspiracy
against Defendants Jennifer Lea Brady, Andrew and Tiffany Seeley, Brian Thomas, Robert
Nickerson, Jr., and Donna Stamates. (Doc. 4 at 14-22). Subsequently, each Defendant filed a
First Amended Answer and Counterclaim, alleging (1) breach of fiduciary duty, (2) breach of
contract, and (3) fraudulent inducement. 1 (Docs. 80, 81, 82, 83, 84). On November 29, 2011,
Plaintiff filed its Consolidated Motion to Dismiss Defendants’ Counterclaims for failure to state
1
In all pertinent respects, the pleadings are identical.
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a claim, pursuant to Fed. R. Civ. P. 12(b)(6). (Doc. 86). Plaintiff’s motion remains pending only
as to Defendants Brady and Stamates. 2
To survive a Rule 12(b)(6) motion to dismiss, a pleading must contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” The pleading standard Rule
8 announces does not require “detailed factual allegations,” but it does demand more than an
unadorned accusation devoid of factual support. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 1949, 173 L.Ed.2d 868 (2009). While a court must accept all of the claimant's allegations
as true, it is not bound to accept as true “a legal conclusion couched as a factual allegation.” Id.
at 1949–50 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To survive a motion
to dismiss, a pleading must contain sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face. Twombly, 550 U.S. at 570. Where the facts do not permit the
court to infer more than the mere possibility of misconduct, the pleading has stopped short of
showing that the pleader is plausibly entitled to relief. Fed.R.Civ.P. 8(a)(2); Iqbal, 129 S.Ct. at
1950.
Breach of Fiduciary Duty and Breach of Contract Counterclaims
Plaintiff argues that as to their breach of fiduciary duty and breach of contract
counterclaims, Defendants have pled no facts establishing that Plaintiff owed a fiduciary duty to
either of them. (Doc. 86 at 6-7). Plaintiff also contends that Defendants’ allegation that
Travelhost breached its licensing agreements with Defendants “by failing to protect goodwill
associated with the limited license of the TRAVELHOST trademark” are “unduly vague and
2
On June 4, 2012, the action against Defendant Robert Nickerson was administratively closed, without prejudice to
being reopened by any party, due to Nickerson’s initiation of bankruptcy proceedings under Chapter 7 of the
Bankruptcy Code. (Doc. 124). Additionally, on August 12, 2012, Defendants Andrew and Tiffany Seeley’s and
Defendant Brian Thomas’s counterclaims were dismissed without prejudice, pursuant to the parties’ settlement
agreements. (Docs. 139, 140).
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conclusory.” (Id. at 8-10). Defendant Brady did not file a response to Plaintiff’s motion. 3 In her
response, filed August 22, 2012, 4 Defendant Stamates agreed to non-suit her breach of fiduciary
duty and breach of contract counterclaims, although that has yet to occur. (Doc. 141 at 2).
Finding no opposition to Plaintiff’s motion to dismiss Defendants Brady’s and Stamates’s
counterclaims for breach of fiduciary duty and breach of contract, Plaintiff’s Motion to Dismiss
is GRANTED.
Fraudulent Inducement Counterclaims
Plaintiff contends that Defendants Brady’s and Stamates’s fraudulent inducement claim
(1) is barred by the statute of limitations; (2) does not allege sufficient facts to state a claim under
Federal Rule of Civil Procedure 8; and (3) is not pled with particularity as required in Federal
Rule of Civil Procedure 9(b). (Doc. 143 at 5-8).
Under Texas law, a fraud claim requires proof of: (1) a material representation; (2) that
was false; and (3) when the speaker made the representation, he knew it was false or made it
recklessly without any knowledge of its truth and as a positive assertion; and (4) he made it with
the intention that it should be acted upon by the party; and (5) the party acted in reliance upon it;
and (6) the party suffered injury as a result. Johnson & Higgins of Tex., Inc. v. Kenneco Energy,
Inc., 962 S.W.2d 507, 524 (Tex. 1998). Moreover, to adequately state a claim for fraud, “the
plaintiff must ‘specify the statements contended to be fraudulent, identify the speaker, state when
and where the statements were made, and explain why the statements were fraudulent.’” ABC
Arbitrage v. Tchuruk, 291 F.3d 336, 350 (5th Cir. 2002) (internal quotations omitted).
3
On September 10, 2012, Plaintiff and Defendant Brady notified the Court that they reached an agreement to settle
the claims between them; however, the settlement documents have not yet been executed and no motion to dismiss
Plaintiff’s suit has been filed. (Docs. 142, 144).
4
The Court sua sponte enlarged the time for Defendant Stamates to file her opposition. (Doc. 135).
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By their counterclaims, Defendants Stamates and Brady assert that they relied to their
detriment on Plaintiff’s representations concerning the success of Plaintiff’s businesses. (Doc.
81 at 13; Doc. 82 at 13). Neither counterclaim, however, sufficiently alleges when the fraudulent
representations took place, where the statements were made, who made the statements, or how
the parties were injured by the statements. In her response, Defendant Stamates appears to rely
solely on a separate document – her affidavit – to state additional facts regarding her claim for
fraudulent inducement. (Doc. 48-1). That affidavit was previously filed in support of another
motion and cannot be relied upon to support or amend Defendant Stamates’s counterclaim. See
Ashcroft, 556 U.S. at 678 (“to survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face”) (emphasis
added). The counterclaim does not do so. Thus, Plaintiff’s Motion to Dismiss is GRANTED as
to Defendant Stamates’s and Brady’s fraudulent inducement counterclaims.
Dismissing an action with prejudice after giving the plaintiff only one opportunity to state
a claim is ordinarily unjustified. Jacquez v. Procunier, 801 F.2d 789, 792 (5th Cir. 1986); see
also Brown v. Texas A & M Univ., 804 F.2d 327, 334 (5th Cir. 1986) (“Unless we have searched
every nook and cranny of the record, like a hungry beggar searching a pantry for the last morsel
of food, and have determined that ‘even the most sympathetic reading of plaintiff’s pleadings
uncovers no theory and no facts that would subject the present defendants to liability,’ we must
remand to permit plaintiff to amend his claim if he can do so.”). If, however, a plaintiff has had
a fair opportunity to make her best case and has not done so, the court should dismiss the
complaint with prejudice even if the plaintiff has not had an opportunity to amend. Jacquez, 801
F.2d at 792-93.
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As to Defendants’ breach of fiduciary duty and breach of contract counterclaims, the
Court finds that each Defendant has pled her best case. Thus, those claims are DISMISSED
WITH PREJUDICE. As to each Defendant’s fraudulent inducement counterclaim, an
opportunity to amend should be given. 5 Thus, Defendants are granted leave to amend their
fraudulent inducement counterclaims within 14 days of the date of this Order, or those
claims will also be dismissed with prejudice.
CONCLUSION
Plaintiff’s Motion to Dismiss Defendants’ Counterclaims (Doc. 86) is GRANTED as to
Defendants Donna Stamates’s and Jennifer Brady’s counterclaims, in part with prejudice and in
part without prejudice.
SO ORDERED.
Dated: September 27, 2012.
5
The Court notes that there is a distinct possibility that each Defendant’s fraudulent inducement claim is barred by
the statute of limitations under Section 16.004 of the Texas Civil Practice and Remedies Code. However, the Court
finds that the statute of limitations issue has not been sufficiently briefed by the parties for the Court to render a
decision on that issue now. While the Defendants have been granted leave to amend their fraudulent inducement
claims, the Defendants should consider whether their fraudulent inducement claim is barred by limitations.
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