Bradford v. Nationwide Insurance Company of America et al
Filing
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ORDER GRANTING 3 Motion to Dismiss ; GRANTING 9 Motion to Dismiss. Signed by Judge Robert Pitman. (td)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
MARK BRADFORD,
Plaintiff,
v.
NATIONWIDE INSURANCE COMPANY
OF AMERICA; NATIONWIDE MUTUAL
INSURANCE COMPANY; ON YOUR SIDE
NATIONWIDE INSURANCE AGENCY,
INC.; NATIONWIDE INSURANCE
COMPANY OF FLORIDA; NATIONWIDE
GENERAL INSURANCE COMPANY;
PCM LOGISTICS, LLC; AF BUSINESS
SERVICES, LCC; ISO CLAIMS SERVICES,
INC.; and AGENT DOES 1-999;
Defendants.
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1:17-CV-1067-RP
ORDER
Before the Court are motions to dismiss filed by Defendants Nationwide Insurance
Company of America; Nationwide Mutual Insurance Company; On Your Side Nationwide
Insurance Agency, Inc.; Nationwide Insurance Company of Florida; and Nationwide General
Insurance Company (collectively, “Nationwide”), (Dkt. 3), and Defendant ISO Claims Services, Inc.
(“ISO Claims”), (Dkts. 9, 10). Having considered the parties’ arguments, the record, and the relevant
law, the Court agrees that dismissal of Plaintiff’s claims is appropriate under Federal Rule of Civil
Procedure 12(b)(6).
I. BACKGROUND
Plaintiff Mark Bradford (“Bradford”) is a software developer who allegedly develops and
distributes products that create forms used in the home mortgage lending and insurance industries
(the “WinSketch products”). (Compl., Dkt. 1, at 7). According to Bradford, he owns the copyright
for a product called WinSketch Insurance, which he developed for Nationwide but which
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Nationwide lacks permission to use. (Id. at 7–8). Bradford alleges that Nationwide has and continues
to use WinSketch Insurance without a license. (Id. at 8). Bradford asserts causes of action against
Nationwide for tortious interference with contract and fraud, (id. at 8–9), and requests relief under
the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Civ. Prac. & Rem. Code § 17.50(a)(2), as
well as 17 U.S.C. §§ 503 and 504, (id. at 11). Bradford’s complaint includes no allegations specific to
ISO Claims. Nationwide and ISO Claims each ask the Court to dismiss all of Bradford’s claims with
prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). (Nationwide Mot. Dismiss, Dkt. 3, at
20; ISO Claims Mem. Mot. Dismiss, Dkt. 10, at 12).
II. LEGAL STANDARD
Pursuant to Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon
which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “To survive a Rule 12(b)(6) motion to dismiss,
a complaint ‘does not need detailed factual allegations,’ but must provide the plaintiff’s grounds for
entitlement to relief—including factual allegations that when assumed to be true ‘raise a right to
relief above the speculative level.’” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “[W]here 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.” Id. at 679 (quotation
marks and citation omitted).
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III. DISCUSSION
A. Nationwide
1. Copyright infringement
Nationwide argues that Bradford fails to plausibly allege that it infringed Bradford’s
copyright to the WinSketch Insurance software. (Nationwide Mot. Dismiss, Dkt. 3, at 10–11). The
Court agrees. To prove a claim for copyright infringement, a plaintiff must establish: (1) ownership
of the copyrighted material and (2) copying by the defendant. Computer Mgmt. Assistance Co. v. Robert
F. DeCastro, Inc., 220 F.3d 396, 400 (5th Cir. 2000). To prove copying, a plaintiff must prove factual
copying and substantial similarity. Positive Black Talk Inc. v. Cash Money Records, Inc., 394 F.3d 357, 367
(5th Cir. 2004), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010). A
plaintiff must also prove that a defendant used the accused copies in a manner described in 17
U.S.C. § 106. See Engenium Sols., Inc. v. Symphonic Techs., Inc., 924 F. Supp. 2d 757, 782 (S.D. Tex. 2013)
(“After establishing these threshold requirements, a plaintiff must prove that a defendant used the
accused copies in any of the ways described in Section 106 of the Copyright Statute.”) (citation and
quotation marks omitted); Playboy Enterprises, Inc. v. Webbworld, Inc., 991 F. Supp. 543, 551 (N.D. Tex.
1997), aff’d, 168 F.3d 486 (5th Cir. 1999) (“[The plaintiff] must establish that [the defendant] has
violated one or more of the five exclusive rights granted to a copyright holder [in Section 106].”).
Nationwide argues that Bradford failed to allege that it infringed any of the exclusive rights
defined in Section 106, which include:
(1)
(2)
(3)
to reproduce the copyrighted work in copies or phonorecords;
to prepare derivative works based upon the copyrighted work; [or]
to distribute copies or phonorecords of the copyrighted work to the public
by sale or other transfer of ownership, or by rental, lease, or lending;
17 U.S.C. § 106. (Nationwide Mot. Dismiss, Dkt. 3, at 10). Bradford fails to address this
argument in his response. (See Resp. Nationwide Mot. Dismiss, Dkt. 6, at 2–4). In his
complaint, Bradford alleges that Nationwide has used WinSketch Insurance without a
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license. (See, e.g., Compl., Dkt. 1, at 4). Bradford does not, however, allege that Nationwide
reproduced or distributed copies of the software. Bradford alleges that Nationwide is using
WinSketch Insurance, (id. at 5), and that other unnamed defendants conspired to distribute
WinSketch Insurance to Nationwide, (id.). These allegations, however, do not state a claim
for copyright infringement because they do not allege that Nationwide is infringing any of
Bradford’s exclusive rights under Section 106. The Court therefore agrees with Nationwide
that dismissal of this claim under Rule 12(b)(6) is appropriate.
2. DTPA
Nationwide argues that Bradford’s DTPA claim should be dismissed because Bradford fails
to allege that he is a consumer. (Nationwide Mot. Dismiss, Dkt. 3, at 13). The Court agrees. “Only a
‘consumer’ can maintain a cause of action directly under the DTPA.” Crown Life Ins. Co. v. Casteel, 22
S.W.3d 378, 286 (Tex. 2000). A consumer under the DTPA is one who “seeks or acquires by
purchase or lease, any goods or services.” TEX. BUS. & COM. CODE § 17.45(4). According to
Bradford’s complaint, he did not seek or acquire goods or services from Nationwide; on the
contrary, he provided goods to Nationwide. (See Compl., Dkt. 1, at 5–6 (alleging that it was
deceptive for unidentified defendants to distribute WinSketch Insurance without a license)). Because
Bradford does not plausibly allege that he is a consumer with respect to Nationwide, he cannot
maintain a cause of action against it under the DTPA.
3. Tortious Interference with Contract
Nationwide argues that Bradford’s tortious interference with contract claim should be
dismissed because Bradford fails to plausibly allege the existence of a contract. (Nationwide Mot.
Dismiss, Dkt. 3, at 14–15). The Court agrees. “ The elements of tortious interference with a contract
are (1) the existence of a contract subject to interference; (2) a willful and intentional act of
interference; (3) the act was a proximate cause of damages; and (4) actual damages or loss occurred.”
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Immobiliere Jeuness Establissement v. Amegy Bank Nat’l Ass’n, 525 S.W.3d 875, 880 n.2 (Tex. App.—
Houston [14th Dist.] 2017, no pet.). “To prevail on a tortious interference claim, a plaintiff must
present evidence that the defendant interfered with a specific contract.” Better Bus. Bureau of Metro.
Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 361 (Tex. App.—Houston [1st Dist.] 2013, pet.
denied). Bradford alleges that Nationwide “intentionally interfered with its Distributorship
Agreements” without identifying the other parties to those agreements or even a specific agreement
with which Natiowide interfered. Failure to allege a specific contract warrants dismissal. See Serafine v.
Blunt, 466 S.W.3d 352, 361 (Tex. App.—Austin 2015, no pet.) (dismissing plaintiffs’ tortious
interference claim where they “did not provide detail about the specific terms of the contract or
attach to his affidavit any contract or other document memorializing any agreement”).
4. Fraud
Nationwide argues that Bradford’s fraud claim should be dismissed because Bradford fails to
plead his claim with the particularity required by Federal Rule of Civil Procedure 9(b). (Nationwide
Mot. Dismiss, Dkt. 3, at 14–15). The Court agrees. Rule 9(b) requires a plaintiff to “state with
particularity the circumstances constituting fraud or mistake.” See also Carroll v. Fort James Corp., 470
F.3d 1171, 1174 (5th Cir. 2006) (“Rule 9(b) requires that plaintiffs plead enough facts to illustrate
“the ‘who, what, when, where, and how’ of the alleged fraud.”) (citation omitted). Bradford fails to
identify a fraudulent statement or any details about when and where such a statement was made. (See
Compl., Dkt. 1, at 9). A dismissal for failure to plead fraud with particularity in accordance with Rule
9(b) is treated as a Rule 12(b)(6) dismissal for failure to state a claim. U.S. ex rel. Steury v. Cardinal
Health, Inc., 735 F.3d 202, 204 (5th Cir. 2013). Because Bradford failed to plead his fraud claim with
sufficient particularity, the Court will dismiss that claim.
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B. ISO Claims
ISO Claims asks the Court to dismiss all of Bradford’s claims against it because his
complaint fails to allege any facts concerning ISO Claims. (ISO Claims Mem. Mot. Dismiss, Dkt. 10,
at 1). Bradford has not responded to ISO Claims’ motion. See W.D. Tex. Loc. R. CV-7(e)(2) (stating
that the Court may grant a motion as unopposed when no timely response is filed). The Court will
grant ISO Claims’ motion as unopposed and dismiss Bradford’s claims against it.
III. CONCLUSION
Both Nationwide and ISO Claims ask the Court to dismiss Bradford’s claims with prejudice.
(Nationwide Mot. Dismiss, Dkt. 3, at 20; ISO Claims Mem. Mot. Dismiss, Dkt. 10, at 12). Bradford
requests leave to amend his complaint. (Resp. Nationwide Mot. Dismiss, Dkt. 6, at 6). While the
decision to allow a party to amend its pleadings is within a district court’s discretion, Norman v.
Apache Corp., 19 F.3d 1017, 1021 (5th Cir. 1994) (citation omitted), Rule 15 “evinces a bias in favor
of granting leave to amend,” Lyn–Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir. 2002).
“The Court should grant the opportunity to amend unless it concludes that the plaintiff cannot
prevail under any legal scenario based on the factual allegations alleged in the complaint.” Linder v.
Deutsche Bank Nat’l Tr. Co., No. EP-14-CV-00259-DCG, 2015 WL 12743639, at *6 (W.D. Tex. Jan.
6, 2015) (citing Carroll v. Fort James Corp., 470 F.3d. 1171, 1175 (5th Cir. 2006)). That is, the Court
may appropriately dismiss an action with prejudice without giving an opportunity to amend if it
finds that the plaintiff has already alleged his or her best case. Jones v. Greninger, 188 F.3d 322, 327
(5th Cir. 1999). The Court also observes the Fifth Circuit’s reluctance to dispose of a cause of action
simply for failure to comply with a response deadline imposed by the local rules. See Johnson v.
Pettiford, 442 F.3d 917, 918 (5th Cir. 2006) (noting disapproval of an automatic grant of a dispositive
motion for failure to comply with local rules).
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Here, Bradford has not yet amended his complaint, and the Court is dismissing his claims
either because he failed to allege facts required to establish elements of a cause of action or because
he failed to respond in accordance with the Court’s local rules. Accordingly, the Court will grant
Bradford leave to amend.
Therefore, the Court ORDERS that Nationwide’s Motion to Dismiss, (Dkt. 3), and ISO
Claims’ Motion to Dismiss, (Dkt. 9), are each GRANTED, insofar as the Court dismisses
Bradford’s claims against the Nationwide defendants and against ISO Claims. However, those
claims are DISMISSED WITHOUT PREJUDICE and Bradford is granted leave to amend his
complaint.
SIGNED on May 31, 2018.
_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE
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