Gordon v. Blue Mountain Therapy, LLC
MEMORANDUM OPINION. Signed by Judge Thomas T. Cullen on 06/04/2021. (ssm)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
JAREL COLE GORDON,
Plaintiff and Counter-Defendant,
BLUE MOUNTAIN THERAPY, LLC,
Defendant and Counter-Plaintiff.
Civil Action No. 7:20cv00692
Hon. Thomas T. Cullen
United States District Judge
Defendant Blue Mountain Therapy, LLC (“BMT” or “Blue Mountain”), hired Plaintiff
Jarel Gordon in April 2017 and later promoted him to develop therapy programs for children
with special needs. At some point thereafter, Gordon began using personal leave to care for
his brother who suffers from serious health conditions. Gordon alleges that less than a year
later, BMT unlawfully terminated his employment. Gordon, in turn, filed the present action
under the Family Medical Leave Act, 29 U.S.C. §§ 2601 et seq., and the Americans with
Disabilities Act, 42 U.S.C. §§ 12101 et seq.
After this suit was filed, BMT filed a counterclaim alleging that while employed with
BMT, Gordon secretly entered into contracts for his own benefit that should have gone to his
employer. BMT maintains that in doing so, Gordon both committed fraud and violated (1)
his Employment Agreement, (2) the duty of loyalty he owed to BMT, and (3) the corporate
opportunity doctrine. Gordon has moved to dismiss the Counterclaim in its entirety for failure
to state a claim. The motion has been fully briefed and argued, and it is ripe for decision.
For the reasons explained below, the court finds that BMT has plausibly alleged claims
for breach of contract, breach of the common law duty of loyalty, breach of the corporate
opportunity doctrine, and fraud. The court will therefore deny Gordon’s motion to dismiss
in its entirety.
In considering Gordon’s motion to dismiss, the court construes as true the following
allegations in BMT’s Counterclaim. 1 See, e.g., Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th
Cir. 2017) (“When ruling on a motion to dismiss, courts must accept as true all of the factual
allegations contained in the complaint and draw all reasonable inferences in favor of the
BMT provides a variety of health therapy services in Virginia and Tennessee.
Countercl. ¶ 6, ECF No. 5. BMT regularly enters into contracts with school systems and other
entities to provide therapy services to students. Id. ¶ 7.
BMT hired Gordon in April 2017 and entered into a written employment agreement
with him on June 28, 2017, for the position of Licensed Behavior Analyst/Behavior Specialist.
Id. ¶¶ 8, 9. On January 8, 2018, BMT and Gordon entered into a second written employment
agreement for the position of Director of ABA Services. Id. ¶ 10. Then, on August 15, 2018,
BMT and Gordon entered into an “Amendment to Employment Offer for Full-Time Director
of ABA Services.” Id. ¶ 11.
Gordon’s January 8, 2018, Employment Agreement stipulates that he agree to “remain
loyal to Blue Mountain, its owners and interests.” Id. ¶ 12 (quoting Countercl. Ex. 2 ¶ 4(d),
ECF No. 5-2). Moreover, Gordon was obliged under the Agreement to “declare any and all
The court will not summarize the detailed allegations in Gordon’s Complaint, because they are not relevant
to his motion to dismiss BMT’s Counterclaim.
potential conflicts of interest at the time of signing [the] Agreement, and any future conflicts
as they arise.” Id. (quoting Countercl. Ex. 2 ¶ 5(a)). The January 8, 2018, Agreement advises
that conflicts include, but are not limited to, “taking steps to start a competing company or
ownership interest in, or operation of, any contract therapy agency or contract therapy related
operation, or any relationship whether personal or professional which would impair
[Gordon’s] ability to devote his . . . full efforts and loyalty to Blue Mountain.” Id. (first
alteration in original). Finally, the Agreement provides that “[f]ailure to declare a potential
conflict of interest at the time a conflict is known or anticipated will result in immediate
termination and potential damages due Blue Mountain.” Id. (quoting Countercl. Ex. 2 ¶ 5(b)).
In an email to Clint Waddell, President of BMT, Gordon represented that he was “not
seeking other contracts” outside of his role with BMT. Id. ¶ 13 (quoting Countercl. Ex. 4,
ECF No. 5-4). But after sending this email, Gordon apparently entered into a contract with a
“school system(s) or other third party” to provide therapy to students of said “school system(s)
or other third party.” Id. ¶ 15. BMT asserts that Gordon entered into this contract outside of
his role with BMT, and that the contract “required Gordon to provide therapy services to
students similar to the therapy services Gordon provided as an employee of [BMT] to BMT’s
patients.” Id. ¶ 16. And BMT claims that Gordon neither informed it of this business
opportunity nor told BMT that he had taken it for himself. Id. ¶¶ 17–18. BMT also alleges
that Gordon concealed and misrepresented his relationship with the “school system(s) or
other third party,” received compensation for the services he provided, and never submitted
any of the compensation he earned to BMT. Id. ¶¶ 20–22. Finally, BMT maintains that
Gordon’s outside work on behalf of the “school system(s) or other third party” prevented him
from fully performing his expected duties for BMT. Id. ¶ 23.
During a December 13, 2019 meeting, a third party inadvertently revealed to Waddell
that Gordon had been providing therapy services to individuals outside of his employment
Id. ¶ 25.
Waddell investigated this allegation and terminated Gordon’s
employment. ¶ 26. Following his termination, Gordon formed an entity named “Wild Child
Therapeutic Services,” which provided services to clients, customers, or patients that BMT
asserts either are or would have been “covered clients” had Gordon presented the
opportunities to BMT and pursued the opportunities on behalf of BMT rather than for his
own benefit. Id. ¶ 28.
The Counterclaim raises the following counts: (1) “Breach of Contract – Conflict of
Interest”; (2) “Breach of the Common Law Duty of Loyalty”; (3) “Violation of the Corporate
Opportunity Doctrine”; (4) “Breach of Contract – Restrictive Covenant”; (5) “Breach of
Contract – Failure to Perform Duties”; and (6) “Fraud & Misrepresentation – Other
Gordon filed his Complaint on November 11, 2020. ECF No. 1. On February 15,
2021, BMT filed its Answer and Counterclaim. ECF No. 5. Then, on February 26, 2021,
Gordon filed a motion to dismiss the Counterclaim in its entirety for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6). ECF No. 16. The Honorable Glen E. Conrad,
Senior United States District Judge, transferred the case to this court on April 16, 2021. The
court held a hearing on the motion to dismiss on May 24, 2021.
MOTION TO DISMISS STANDARD
Federal Rule of Civil Procedure 12(b)(6) permits a party to move to dismiss a complaint
for failure to state a claim upon which relief can be granted. “While 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.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation and quotation marks omitted).
To survive dismissal, “a complaint must contain sufficient factual matter, accepted as true, to
‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 570). A claim is plausible if the complaint “pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
Gordon argues that the Counterclaim fails to state a claim and therefore must be
dismissed in its entirety. The court will address each count in turn.
Count I to the Counterclaim alleges Gordon breached Paragraph 5 of his Employment
Agreement with BMT by entering into “contract(s) with a school system(s) or third party to
provide therapy services that Gordon could have provided as an employee of [BMT],” and
thereby creating a conflict of interest that he failed to disclose. Countercl. ¶¶ 34–37. To state
a claim for breach of contract in Virginia, a plaintiff must show: “(1) a legally enforceable
obligation of a defendant to a plaintiff; (2) the defendant’s violation or breach of that
obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation.” Filak
v. George, 594 S.E.2d 610, 619 (Va. 2004).
In moving to dismiss, Gordon argues Paragraph 5, which covers Conflicts of Interest,
is too ambiguous to support a breach of contract claim. Pl.’s Mem. Supp. Mot. Dismiss 5,
ECF No. 17. Paragraph 5(a) provides:
Employee shall declare any and all potential conflicts of interest
at the time of signing this Agreement, and any future conflicts as
they arise. Such conflicts include, but are not limited to, taking
steps to start a competing company or ownership interest in, or
operation of, any contract therapy agency of contract therapy
related operation, or any relationship whether personal or
professional which would impair Employee’s ability to devote his
or her full efforts and loyalty to Blue Mountain.
Countercl. Ex. 2 ¶ 5(a). To this end, Gordon contends that the phrase “devote . . . full efforts”
is impermissibly subjective because an employer and employee could interpret its meaning
differently. Pl.’s Mem. Supp. Mot. Dismiss 5–6. Gordon also contends in the alternative that
BMT has not pleaded sufficient facts under Federal Rule of Civil Procedure 8 because the
Counterclaim merely alleges that Gordon attempted to enter into outside contracts with “a
school system(s) or other third party to provide therapy services,” but does not actually name
any alleged “school system(s) or other third parties.” Id. at 6 (quoting Countercl. ¶¶ 15, 20–
The court does not agree that Paragraph 5(b) is ambiguous and concludes that Count
I states a claim for breach of contract. Paragraph 5(b) plainly bars Gordon from competing
with BMT and from incurring conflicts of interest, and the Counterclaim plausibly alleges that
Gordon did just that by secretly entering into side deals for his own benefit. Gordon’s
arguments concerning Rule 8 are also unpersuasive. As BMT points out, “[t]he specific
identity of the school system” Gordon allegedly contracted with “is irrelevant for purposes of
BMT’s counterclaim.” Def.’s Mem. Opp’n Mot. Dismiss 6, ECF No. 18. Although BMT will
ultimately need to determine which school systems or other third parties Gordon allegedly did
business with to establish this claim, those identities are not material at the motion to dismiss
stage. By its terms, the employment agreement prohibited Gordon from personally contracting
with any school system, and Count I adequately alleges that he did just that. The court will
therefore deny the motion to dismiss as to Count I.
Count II alleges Gordon breached the common law duty of loyalty he owed to BMT
by entering into outside contracts and directly competing with BMT. Id. ¶¶ 40–42. The
Supreme Court of Virginia has “long recognized that under the common law an employee,
including an employee-at-will, owes a fiduciary duty of loyalty to his employer during his
employment.” Williams v. Dominion Tech. Partners, L.L.C, 576 S.E.2d 752, 757 (Va. 2003).
Included within this duty is “is the more specific duty that the employee not compete with his
employer during his employment.” Id. The employee is therefore “duty bound not to act
adversely to the interest of his employer by serving or acquiring any private interest of his own
in antagonism or opposition thereto.” Powers v. Coble, No. 7:05cv00436, 2007 WL 840114, at
*3 (W.D. Va. Mar. 16, 2007) (quoting Horne v. Holley, 188 S.E.2d 169, 172 (Va. 1936)).
Gordon asserts that “Counts I and II cannot exist together.” Pl.’s Mem. Supp. Mot.
Dismiss 5. And because (1) under the Employment Agreement Gordon was required to
disclose conflicts of interest, and (2) Count I alleges Gordon breached the Employment
Agreement for failing to do so, Count II cannot survive the motion to dismiss, Gordon
Another court in this district has already considered a similar argument and found it
In Combined Insurance Company of America v. Wiest, the court rejected the
proposition that tort claims for breach of fiduciary duties in the employment context are
precluded when an employment contract governs. 578 F. Supp 2d 822, 832–33 (W.D. Va.
Because Virginia law recognizes the tort of breach of fiduciary duties in the
employment context, and “almost all employment relationships are founded on contract,” the
Weist court persuasively reasoned that “it is abundantly clear that the Supreme Court of
Virginia did not intend to render the two causes of action mutually exclusive.” Id. at 833.
Gordon has failed to cite any authority undermining this conclusion. Accordingly, the court
will deny the motion to dismiss as to Count II.
Count III alleges Gordon violated the common law corporate opportunity doctrine by
“enter[ing] into contracts with a school system(s) or third party to provide therapy services for
his own benefit, rather than the best interest of his employer” and failing to disclose those
business opportunities to BMT. Countercl. ¶¶ 47–49. “It is a fundamental principle that a
corporate officer or director is under a fiduciary obligation not to divert a corporate business
opportunity for personal gain because the opportunity is considered the property of the
corporation.” Today Homes, Inc. v. Williams, 634 S.E.2d 737, 742–43 (Va. 2006). Gordon argues
the court should dismiss Count III with prejudice because, in Virginia, “a ‘violation of the
Corporate Opportunity’ is only cognizable as a claim under a breach of the duty of loyalty.”
Pl.’s Mem. Supp. Mot. Dismiss 7.
BMT instead asserts that Gordon seized business
opportunities for his own benefit and at BMT’s expense while he was employed there and that
this conduct “constitute[s] a tort, whether it is called ‘breach of duty’ or violation of the
‘corporate opportunity doctrine.’” Def.’s Mem. Opp’n Mot. Dismiss 11.
As a threshold matter, the court acknowledges that in terms of pleading, “usurpation
of corporate business opportunity is generally considered a breach of fiduciary duty rather
than conduct constituting a direct cause of action.” Feddeman & Co., C.P.A., P.C., v. Langan
Assocs., P.C., 530 S.E.2d 668, 675 n.1 (Va. 2000). The court agrees, however, with BMT’s
assertion that “[t]he fact that BMT’s counterclaim did not specify that the Corporate
Opportunity Doctrine is technically a subcategory of an employee’s fiduciary duty is irrelevant
and not grounds for dismissal,” and that Gordon’s argument is ultimately one of “semantics.”
Def.’s Mem. Opp’n Mot. Dismiss 11. The Counterclaim alleges Gordon failed to disclose
business opportunities to BMT and instead entered into contracts for his own benefit while
still employed with BMT. See Countercl. ¶¶ 47–49. Whether the cause of action arising from
these allegations is more aptly labeled a breach of fiduciary duties is beside the point. In the
body of its counterclaim, BMT has plausibly alleged a breach of the corporate opportunity
doctrine, and the court will therefore deny the motion to dismiss as to Count III.
Count IV alleges Gordon breached Paragraph 8 of his Employment Agreement with
BMT by refusing to pay BMT “a sum equal to the gross fees” that Gordon billed other school
systems over a one-year period. Countercl. ¶¶ 52–57. Paragraph 8, titled “Restrictive
Covenant,” is expressly intended “to discourage Employee from ever soliciting covered clients
for a competing entity,” and stipulates as follows:
If this Agreement is terminated and Employee forms, joins or
assists a competing entity for him/her self, in partnership with
one or more persons, or as an agent or employee of a corporation
or some other entity, then Employee agrees to reimburse Blue
Mountain a sum equal to the gross fees billed by Blue Mountain
and the gross fees billed by any of Blue Mountain ’s affiliated
companies, for each covered client for the last twelve months of
service immediately preceding Employee’s termination of
employment with Blue Mountain, or in the event of less than
twelve months service to the covered client, an annualized
amount of the gross fees.
Countercl. Ex. 2 ¶ 8. Gordon argues that Paragraph 8 is unenforceable and that Count IV
therefore fails to state a claim. Pl.’s Mem. Supp. Mot. Dismiss 7–10.
In Virginia, a restrictive covenant such as a non-compete or non-solicitation agreement
is enforceable if it is (1) “narrowly drawn to protect the employer’s legitimate business
interest,” (2) “not unduly burdensome on the employee’s ability to earn a living,” and (3) “not
against public policy.” Wiest, 578 F. Supp. 2d at 828 (quoting Omniplex World Servs. v. U.S.
Investigations Servs., Inc., 618 S.E.2d 340, 342 (Va. 2005)). Restrictive covenants are disfavored
restraints on trade, and courts strictly construe any ambiguous provisions therein against the
employer. Id. Determining the enforceability of such an agreement “requires consideration
of the agreement in terms of function, geographic scope, and duration, with these factors
considered together.” Id. The employer “bears the burden of proving each of these factors.”
Home Paramount Pest Control Cos., Inc. v. Shaffer, 718 S.E.2d 762, 764 (Va. 2011).
Moreover, a particular restrictive covenant’s validity “must be determined on its own
facts.” Assurance Data, Inc. v. Malyevac, 747 S.E.2d 804, 808 (Va. 2013) (quoting Mod. Env’ts,
Inc. v. Stinnett, 561 S.E.2d 694, 695 (Va. 2002)). “This factual determination may not be made
‘in a factual vacuum,’ and courts must determine if a restrictive covenant is enforceable ‘based
on the evidence presented.’” O’Sullivan Films v. Neaves, No. 5:17-CV-00031, 2017 WL 4798997,
at *7 (W.D. Va. Oct. 24, 2017) (quoting Assurance Data, 747 S.E.2d at 808) (alteration omitted).
In Neaves, a court in this district concluded that the enforceability of a restrictive covenant
cannot be determined on a motion to dismiss for failure to state a claim. Id. at *8. Because
“Assurance Data forecloses facial attacks on restrictive covenants” and “requires that [the
employer] be given the chance to present evidence that shows that the restraints in the [nonsolicitation agreement] were no greater than necessary to protect its business,” the court
concluded that the issue could not be resolved at the Rule 12(b)(6) stage. Id.
In light of Neaves and Assurance Data, the court will deny the motion to dismiss as to
Count IV. With a fully developed factual record, Gordon may ultimately establish that the
covenant at issue is impermissibly restrictive under Virginia law. But discovery has not yet
occurred, and Paragraph 8’s enforceability may not be determined “in factual vacuum.”
Assurance Data, 747 S.E.2d at 808. Accordingly, dismissal at this stage is not appropriate.
Count V again asserts a breach of contract claim, this time alleging that Gordon
breached Paragraphs 4 and 5 of his Employment Agreement “by neglecting his duties and not
performing the work that was required of him under the Employment Agreement.”
Countercl. ¶¶ 60–61. As stated above, Paragraph 5 barred Gordon from incurring conflicts
of interest. Paragraph 4 provides for various requirements, including that Gordon “maintain
regular office hours” while understanding “that the hours of work may be adjusted as job
requirements demand,” and that Gordon “meet the expectations of Blue Mountain
management.” Countercl. Ex. 2 ¶ 4. Paragraph 4 also requires that Gordon “remain loyal to
Blue Mountain, its owners and interests” while employed there. Id.
Gordon argues that Count V fails to state a claim for breach of contract for a variety
of reasons, including because the Employment Agreement provided BMT an exclusive remedy
that BMT capitalized on when it terminated Gordon for cause in December 2019. Pl.’s Mem.
Supp. Mot. Dismiss 10. Gordon contends that because “the Court cannot provide any relief
that Defendant did not already exercise, namely terminating Plaintiff, Count V should be
dismissed with prejudice.” Id.
The court does not agree. Nothing in the Employment Agreement limits BMT from
obtaining damages in the event of a breach. Indeed, Paragraph 5(b) of the Employment
explicitly states that “[f]ailure to declare a potential conflict of interest at the time a conflict of
interest at the time a conflict is known or anticipated will result in immediate termination and
potential damages due Blue Mountain.” Countercl. Ex. 2 ¶ 5(b) (emphasis added). And as
BMT points out, Gordon’s own Complaint seeks damages for BMT’s alleged breach of the
Employment Agreement. Gordon’s argument that BMT already obtained all available relief
when it terminated Gordon is belied by the express language of the contract.
BMT has adequately stated a claim for breach of Paragraphs 4 and 5 of the
Employment Agreement by alleging Gordon neglected his duties by pursuing outside business
for his own benefit after assuring BMT that he could not do so. The court will therefore allow
Count V to move forward.
Finally, VI alleges Gordon made false and materially misleading representations of fact
when he sent an email to Waddell asserting that Gordon declined a school consulting contract,
and that he was not seeking other contracts. Countercl. ¶¶ 64–65. BMT claims that it
reasonably relied on these misrepresentations to its detriment and suffered damages. Id. ¶¶
In Virginia, to state a claim for fraud, the plaintiff must allege “(1) a false
representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to
mislead, (5) reliance by the party misled, and (6) resulting damage to the party misled.” State
Farm Mut. Auto. Ins. Co. v Remley, 618 S.E.2d 316, 321 (Va. 2005) (quoting Prospect Dev. Co. v.
Bershader, 515 S.E.2d 291, 297 (Va. 1991)).
Gordon first argues that Count VI must be dismissed under the “source of duty” rule
because it sounds only in contract law, and not tort law. Alternatively, Gordon asserts that
Count VI does not satisfy Rule 9’s specificity requirement.
a. Source of Duty Rule
In moving to dismiss, Gordon contends that the source of duty rule requires that the
court determine whether Count VI sounds in contract or tort. Gordon asserts that Counts I,
IV, and V to the Counterclaim all relate to an alleged breach of contract related to his alleged
failure to disclose business opportunities to BMT, meaning that “[a]ny alleged
misrepresentation related to these alleged business opportunities would sound in contract
under the breach of contract counts.” Pl.’s Mem. Supp. Mot. Dismiss 11. He therefore argues
that Count VI, a fraud claim, “cannot survive contemporaneously with contract claims
covering the same acts or omissions . . . .” Id.
“In determining whether a cause of action sounds in tort, contract, or both, the source
of the duty violated must be ascertained.” Tingler v. Graystone Homes, Inc., 834 S.E.2d 244, 254
(Va. 2019) (quoting MCR Fed., LLC, v. JB&A, Inc., 808 S.E.2d 186, 192 (Va. 2017)) (internal
quotation marks omitted). The Supreme Court of Virginia has instructed that a claim is
founded only on contract, and not tort, if it arises from “an act of omission or non-feasance
which, without proof of a contract to do what was left undone, would not give rise to any
cause of action (because no duty apart from contract to do what is complained of exists) . . .
.” Richmond Metro. Auth. v. McDevitt. St. Bovis, Inc., 507 S.E.2d 344, 347 (Va. 1998) (quoting
Oleyar v. Kerr, Trustee, 225 S.E.2d 398, 399–400 (Va. 1976)).
Moreover, a court in this district and the United States District Court for the Eastern
District of Virginia have both concluded that “Richmond Metro properly preserved the
traditional distinction in Virginia law between ‘a statement that is false when made (which is
fraud) and a statement that becomes false only when the promisor later fails to keep his word
(which is a breach of contract).’” Pre-Fab Steel Erectors, Inc. v. Stephens, No. 6:08-cv-00039, 2009
WL 891828, at *9 (W.D. Va. Apr. 1, 2009) (quoting Insteel Industries, Inc. v. Costanza Contracting
Co., Inc., 276 F. Supp. 2d 479, 485 (E.D. Va. 2003)).
In Pre-Fab, this court allowed a fraud claim to proceed after it determined that it “ar[ose]
from a common law duty separate and independent from any contractual duties arising from
Plaintiff’s arrangements with Defendants.” Id. at *9. The court concluded that the plaintiffs’
allegations that the defendants “took advantage of their access to Plaintiff’s funds, dealt
Plaintiff’s funds to themselves, and failed to disclose and deliberately concealed the
unauthorized pay raises and distributions” amounted to “allegations not of a mere failure to
perform the contract, i.e., nonfeasance, but of malfeasance” and allowed the fraud claim to
survive the defendants’ motion to dismiss. Id.
For similar reasons, the court finds that BMT’s fraud claim “can co-exist with a breach
of contract claim in this action, certainly at the motion to dismiss stage.” Id. As BMT points
out, Count VI does not arise from any duty Gordon owed under the Employment Agreement,
but rather “is based on the fact that Plaintiff made a false statement regarding a material fact
that was intended to mislead BMT, conceal facts from BMT, and benefit Plaintiff’s personal
business to the detriment of BMT.” Def.’s Mem. Opp’n Mot. Dismiss 20. The Counterclaim
alleges Gordon made “false and materially misleading” representations of fact when he told
Waddell in a September 16, 2018, email that he (1) “passed on a school consultation contract,”
(2) could not simultaneously “do the school consultation contract and perform his duties for
[BMT]” and (3) “was not seeking other contracts.” Countercl. ¶ 64. Gordon’s statements, as
alleged, therefore amount to “not of a mere failure to perform the contract, i.e., nonfeasance,
but of malfeasance,” meaning Count VI is not barred under the source of duty rule. Pre-Fab,
2009 WL 891828, at *9.
b. Rule 9(b)
Gordon also argues that Count VI does not satisfy Rule 9(b)’s specificity requirement
because it does not plead “what entities, if any, Plaintiff allegedly contracted without
Defendant’s knowledge.” Pl.’s Mem. Supp. Mot. Dismiss 11. Federal Rule of Civil Procedure
9(b) requires that parties plead fraud claims with particularity. “[T]he circumstances required
to be pled with particularity under Rule 9(b) are the time, place, and contents of the false
representations, as well as the identity of the person making the misrepresentation and what
he obtained thereby.” McCauley v. Home Loan Inv. Bank, F.S.B., 710 F.3d 551, 559 (4th Cir.
2013) (internal quotation marks and citation omitted). The Fourth Circuit has cautioned that
“a court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that
the defendant has been made aware of the particular circumstances for which [it] will have to
prepare a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those
facts.” Edmondson v. Eagle Nat’l Bank, 922 F.3d 535, 553 (4th Cir 2019) (internal quotation
marks and citation omitted) (alteration in original).
The court finds Gordon’s arguments unpersuasive. The Counterclaim alleges that
Gordon made specific fraudulent statements in an email to BMT President Clint Waddell and
includes that email as an exhibit. See Countercl. Ex. 4. As BMT points out, “[i]t is hard to be
more particular than that.” Def.’s Mem. Opp’n Mot. Dismiss 21. Finally, because Count VI
alleges that Gordon, on a date certain, falsely assured Waddell he was not pursuing outside
contracts for his own benefit and that BMT reasonably relied on that misrepresentation to its
detriment, the specific identity of any client he contracted with is immaterial—at least at this
preliminary stage. In sum, Count VI adequately states a claim for fraud.
For the reasons stated above, Gordon’s motion will be DENIED.
The clerk is directed to forward a copy of this Memorandum Opinion and the
accompanying Order to all counsel of record.
ENTERED this 4th day of June, 2021.
/s/ Thomas T. Cullen
HON. THOMAS T. CULLEN
UNITED STATES DISTRICT JUDGE
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