Tobia v. Loveland

Filing 12

MEMORANDUM OPINION AND ORDER DENYING 4 DEFENDANT'S MOTION TO DISMISS COMPLAINT. Signed by Senior Judge Frederick P. Stamp, Jr. on 5/15/2017. (copy to counsel via CM/ECF) (nmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
ADAM TOBIA,
Plaintiff,
v.

Civil Action No. 5:16CV187
(STAMP)

TERRENCE LOVELAND,
Defendant.
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANT’S MOTION TO DISMISS COMPLAINT
I.
On

February

27,

Background

2017,

defendant

Terrance

Loveland

(“Loveland”), by counsel, filed a motion to dismiss the complaint
in the above-styled civil action.

ECF No. 4.

The above-styled

civil action was filed subsequent to a related civil action also
pending before this Court. The first civil action, B and B Welding
and Fabricating, Inc. v. Tobia, Civil Action No. 5:16CV41, was
commenced when B and B Welding and Fabricating, LLC (“B and B”)
requested relief against Adam Tobia (“Tobia”) in the form of
declaratory judgment.

B and B performs construction services for

the oil and gas industry, and Tobia is a former employee of
B and B.

Tobia alleges that he had an employment contract with

B and B, and B and B claims that Tobia was employed on an at-will
basis.
Tobia then filed a third-party complaint against Loveland, the
chief executive officer and president of B and B.

The third-party

complaint alleged that Loveland fraudulently induced Tobia to work
for B and B by leading him to believe an employment contract had
been executed.

Loveland then filed a motion to dismiss Tobia’s

third-party complaint.

After oral argument on the motion to

dismiss the third-party complaint, Tobia determined that his claim
against Loveland was not derivative under Federal Rule of Civil
Procedure 14 and chose to proceed with an independent claim against
Loveland. Thus, the Court granted the motion to dismiss the thirdparty complaint, and Tobia filed this second civil action, Tobia v.
Loveland,

Civil

Action

No.

5:16CV187,

which

asserts

Tobia’s

fraudulent inducement claim against Loveland.
In Loveland’s present motion to dismiss the complaint in this
second civil action, Loveland argues that (1) Tobia fails to allege
any facts that support a legally cognizable claim against the
defendant and (2) the prior pending action doctrine compels that
this action be dismissed.
First, Loveland argues that the alleged facts do not support
a legally cognizable claim against him because a member of a
Limited Liability Company (“LLC”) is generally not liable for
alleged

wrongful

employment.
are

conduct

made

in

the

course

and

scope

of

Loveland claims that Tobia’s allegations against him

identical

to

Tobia’s

assertions

against

counterclaim in the first civil action.

B

and

B

in

his

Thus, Loveland claims

that, because he was acting as a member of B and B, there are no

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facts giving rise to personal liability against him. Loveland then
asserts that Tobia’s complaint fails to allege any facts in support
of piercing B and B’s corporate veil.
Second, Loveland argues that the prior pending action doctrine
compels dismissal of this civil action because this civil action is
duplicative of the claim already raised by Tobia in the first civil
action.

Loveland asserts that the civil actions are duplicative

because

the

controlling

issue

in

both

is

whether

Tobia

was

fraudulently induced by Loveland into believing a contract for
employment had been finalized.

Loveland further claims that the

two civil actions arise from the same transaction or occurrence and
involve exactly the same subject matter.

Thus, Loveland asserts

that, because this civil action was the later-filed suit, it should
be dismissed under the prior pending action doctrine.
On March 13, 2017, Tobia, by counsel, filed a response to the
motion.

ECF No. 6.

In his response, Tobia argues that the

complaint ascribes specific, wrongful conduct to Loveland and does
not allege that Loveland is liable solely because he is a member of
the LLC. Additionally, Tobia asserts that the prior pending action
doctrine does not support the dismissal of this civil action
because the first civil action does not include a claim against
Loveland and Loveland cannot be joined in the first civil action.
Thus,

Tobia

claims

that

this

second

civil

action

cannot

be

dismissed because it involves different parties and a resolution of

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the contract dispute in the first-filed case is not determinative
of Tobia’s fraudulent inducement claim against Loveland.

Lastly,

Tobia represents that he has not stated a separate claim to pierce
B and B’s corporate veil but rather a distinct claim against a
member of the LLC for that member’s individual conduct.

Loveland

did not file a reply to Tobia’s response to the motion.
II.

Applicable Law

In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
court must accept all well-pled facts contained in the complaint as
true.

Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc, 591 F.3d

250, 255 (4th Cir. 2009). However, “legal conclusions, elements of
a cause of action, and bare assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule 12(b)(6)
purposes.” Id.

(citing Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009)).

Court

This

inferences,

also

unreasonable

declines

conclusions,

to
or

consider

“unwarranted

arguments.”

Wahi

v.

Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir.
2009).
It has often been said that the purpose of a motion under Rule
12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; it is not a procedure for resolving a contest
about the facts or the merits of the case.

5B Charles Alan Wright

& Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.

4

1998).

The Rule 12(b)(6) motion also must be distinguished from a

motion for summary judgment under Federal Rule of Civil Procedure
56, which goes to the merits of the claim and is designed to test
whether there is a genuine issue of material fact.

Id.

For

purposes of the motion to dismiss, the complaint is construed in
the

light

essentially

most
the

favorable
court’s

to

the

inquiry

party
is

making

directed

the
to

claim

and

whether

the

allegations constitute a statement of a claim under Federal Rule of
Civil Procedure 8(a).

Id. § 1357.

A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“Facial

plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 556 U.S. at 678). Detailed factual
allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”

Twombly, 550 U.S. at 555.
III.

Discussion

This Court has construed the complaint in the light most
favorable to Tobia for the purposes of this motion to dismiss.

In

doing so, this Court finds that the complaint makes sufficient

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factual allegations against Loveland in his individual capacity to
survive the Rule 12(b)(6) motion to dismiss.
inducement

claim

is

legally

cognizable

The fraudulent
against

Loveland

individually regardless of the fact that there is a separate
pending action against B and B.

“By proscribing liability on the

sole basis of being a member or manager of an LLC, the [West
Virginia] Legislature implicitly has left intact the prospect of an
LLC member or manager being liable on grounds that are not based
solely on a person’s status as a member or manager of an LLC.”
Kubican v. The Tavern, LLC, 752 S.E.2d 299, 306 (W. Va. 2013)
(construing W. Va. Code § 31B-3-303).
“[b]y

his

conduct,

Loveland

The complaint alleges that,

personally

benefitted

employment of Tobia under false pretenses.”

from

the

ECF No. 1 at ¶ 24.

Without considering the merits of the allegations, this Court finds
that the complaint states a claim to relief that is sufficient on
its face, which is all that is required to survive a motion to
dismiss under Rule 12(b)(6).
The Court also finds that the prior pending action doctrine
does not compel dismissal of the present civil action.

“Under the

prior-pending-action doctrine, ‘the pendency of a prior action, in
a court of competent jurisdiction, between the same parties,
predicated upon the same cause of action and growing out of the
same

transaction,

and

in

which

identical

relief

is

sought,

constitutes good ground for abatement of the later suit.’” Quality

6

One Wireless, LLC v. Goldie Grp., LLC, 37 F. Supp. 3d 536, 540-41
(D. Mass. 2014).

As Tobia points out, the parties are not the same

in the two civil actions and the determination of the first is not
necessarily determinative of the second.

For example, a fact-

finder could conclude that there was no fraudulent inducement by
B and B in the first civil action but that there was fraudulent
inducement by Loveland in the second civil action. Thus, the prior
pending action doctrine is not a basis for the dismissal of this
civil action.
Furthermore, this Court finds that it would be premature to
consider the issue of piercing the corporate veil at this point.
Proving that it is proper to pierce the corporate veil requires
discovery, and courts have found that it is premature to decide the
issue even on a motion for summary judgment.

See Laya v. Erin

Homes, Inc., 352 S.E.2d 93, 102 (W. Va. 1986) (“[T]he propriety of
piercing the corporate veil should rarely be determined upon a
motion for summary judgment.

Instead, the propriety of piercing

the corporate veil usually involves numerous questions of fact for
the trier of the facts to determine upon all of the evidence.”).
Thus, it would be especially premature to determine the propriety
of

piercing

the

corporate

veil

complaint.

7

on

a

motion

to

dismiss

the

IV.

Conclusion

For the reasons set forth above, the defendant’s motion to
dismiss the complaint (ECF No. 4) is DENIED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:

May 15, 2017

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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