Opinion
Civil Action No. 1:05-cv-1199-GET.
October 31, 2005
ORDER
The above-styled matter is presently before the court on:
(1) defendants Allied Claims Management, LLC, Safeguard Exteriors, Inc., Cornerstone Investment Group, LLC, Don Wilger, and Chris Stroud's motion to dismiss [docket no. 18];
(2) plaintiff's motion to dismiss counterclaims of Kris Holt
(3) defendant Bartow Brown's motion to dismiss [docket no. 26].
On May 5, 2005, plaintiff filed this action against numerous defendants alleging claims for conversion, civil theft, unjust lenrichment, breach of contract, implied contract, tortuous (interference with customers and contractors, breach of duty of loyalty, and aiding and abetting. Plaintiff also seeks litigation expenses and punitive damages.
On June 23, 2005, defendant Kris Holt filed an answer and counterclaim against plaintiff asserting claims for slander, libel and "doss of use." Plaintiff has moved to dismiss defendant Kris Holt's counterclaim.
On August 1, 2005, this court entered an order granting defendant Bartaw Brown's motion to set aside default. Defendant Bartow Brown's motion to dismiss was filed that same day. (Defendants Allied Claims Management, LLC, Safeguard Exteriors, Inc., Cornerstone Investment Group, LLC, Chris Stroud and Don Wilger (hereinafter "the Allied Claims defendants") also filed a motion to dismiss.
Motion to Dismiss Standard
A motion to dismiss under Rule 12(b) (6) attacks the legal sufficiency of the complaint. It is viewed with disfavor and rarely granted. See e.g., International Erectors, Inc. v. Wilhoit Steel Erectors Rental Service, 400 F.2d 465, 471 (5th Cir. 1968). A complaint should not be dismissed for failure to state a claim unless the plaintiff can prove no set of facts entitling him to relief. Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Pataula Electric Membership Corp. v. Whitworth, 951 F.2d 1238, 1240 (11th Cir. 1992). The court is to presume true all of the complaint's allegations and make all reasonable inferences in favor of the plaintiff. Duke v. Cleland, 5 F.3d 1399, 1402 (11th Cir. 1993). The rules require nothing more than "a short and plain statement" that will give the defendant fair notice of the claims and the grounds upon which they are based. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
Plaintiff's motion to dismiss
Plaintiff moves to dismiss the counterclaims of Kris Holt pursuant to Fed.R.Civ.P. 12 (b) (6) on the ground that Hop's counterclaim fails to allege any factual basis for the claims. Holt has not responded to the motion to dismiss.
Count One of the counterclaim states:
Plaintiff has slandered and committed acts of libell against Defendant Kris Holt, and has caused this independent contractor to lose wages and contracts. Plaintiff has violated the civil rights of defendant and has harassed defendant.
Count Two, labeled "Loss of Use," states: "Defendant realleges Paragraph 1 of Count I as if restated herein."
"Although a plaintiff is not held to a very high standard in a motion to dismiss for failure to state a claim, some minimal pleading standard does exist." Wagner v. Daewoo Heavy Industries Am. Corp., 289 F. 3d 1268, 1270 (11th Cir.), rev'd on other grounds, 314 F.3d 541 (11th Cir. 2002) (en banc). "To survive a motion to dismiss, plaintiffs must do more than merely state legal conclusions; they are required to allege some specific factual (bases for those conclusions or face dismissal of their claims." Jackson v. BellSouth Telecommunications, 372 F.3d 1250, 1262-1263 (11th Cir. 2004).
In the instant action, Holt makes conclusory allegations devoid of any supporting facts. Therefore, the court finds that Holt's counterclaims fail to meet the minimal pleading standards required by the federal rules. Accordingly, plaintiff's motion to dismiss Kris Holt's counterclaim [docket no. 23] is GRANTED.
Allied Claims Defendants' and Bartow Brown's Motions to Dismiss
These defendants move to dismiss all of plaintiff's claims against them, arguing that plaintiff's claims are "all based upon the theory that Defendants cannot cease employment and compete with their former employer" and that Georgia law does not recognize such a theory. The Allied Claims defendants also submitted the affidavit of Don Wilger in support of their motion to dismiss.
When considering a motion to dismiss, if "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in. Rule 56. . . ." Fed.R.Civ.P. 12 (b) (6). The court declines to convert defendants' motion to dismiss into a motion for summary judgment. Therefore, the court will not consider the affidavit of Wilger in resolving the Allied Claims defendants' motion to dismiss. Likewise, the court will not consider the affidavit submitted by plaintiff in response to these motions to dismiss.
Facts
In light of the foregoing, the court finds the following facts for the purpose of resolving these motions to dismiss. Plaintiff is a company that processes siding claims for building owners under various class action settlements. As a part of the class action settlements, property owners claiming to have defective siding are to submit to the manufacturer or claims administrator certain claim forms and supporting documents regarding the siding on structures they own.
Plaintiff, in conjunction with defendant Stroud, formed an Alabama limited liability corporation known as Consumer Recovery Services, LLC (hereinafter "CRS") CRS was formed for the purpose of submitting property owners' claims and supporting documents to the various manufacturers and claims administrators on behalf of property owners in accordance with the class action settlements and to undertake the repair of these homes, as well as other homes needing siding replacement or repairs.
After the formation of CRS, CRS retained field representatives/consultants including defendants Wilger, Holt, Jean Benjamin, Eustascious Mathurin, and Bartow Brown who solicited property owners with defective siding to submit claims for compensation. These claims were submitted through CRS.
Plaintiff, in its capacity as a member of CRS, paid all expenses related to training field representatives, advanced all expenses involved in marketing the defective claims program including sales material, travel, meals., and lodging for the field representatives, television advertising, and promotional materials. Plaintiff also paid administrative expenses for the operation of the business including telephone answering services for intake information. The answering service would then refer potential claims to Wilger, Holt, Benjamin, Mathurin and Brown who would meet (with property owners to inspect the property and determine whether the siding was the subject of any class actions and whether any potential claim existed. If the siding was subject to one of the class action settlements, Wilger, Holt, Benjamin, Mathurin and Brown would assist in the claim form preparation to be submitted to plaintiff for processing. Plaintiff paidd the field representatives/consultants for the submission of claims.
On or around March 31, 2003, Stroud was "debarred" from activities regarding submissions of claims on the Masonite Class Action Settlement. After that, plaintiff was allowed by Special Master Jack Etheridge to submit claims on behalf of claimants. Wilger, Holt, Benjamin, Mathurin and Brown continued to be field representatives/consultants for plaintiff and CRS and submitted claims to plaintiff and CRS for processing. Plaintiff continued to pay all expenses related to the claims processing service.
After his "debarment," Stroud, in conjunction with Wilger and Holt, decided to process siding claims outside of the plaintiff/CRS-established procedures while still enjoying the benefits of having plaintiff pay for the expenses. In May or June 2003, Stroud, Holt and Wilger formed defendant Allied. Claims Management, LLC. Allied Claims used field representatives including Benjamin, Mathurin and Brown to solicit and file claims in the class actions. E. Brown, an employee of plaintiff, would receive sales lead information from the answering services, contracted by and paid for by plaintiff, and divert those leads to Stroud, Halt and Wilger to solicit claims on behalf of Allied Clams. They used training, forms, advertising and administrative costs paid for by plaintiff to defendants' benefit and to the exclusion of plaintiff in operating Allied Claims. According to plaintiff, defendants then developed a fraudulent scheme designed to divert revenue by falsely concealing from the siding manufacturer their identities as a claims service company, causing the siding manufacturer to believe that the claims were submitted by the homeowner directly and not through Allied Claims. According to plaintiff, Allied Claims has continued in the business of soliciting claims having gained the advantages obtained by utilizing plaintiff's expenditure of funds, its training of personnel, its advertising and its marketing.
Discussion
As an initial matter, the court notes that plaintiff did not specifically respond to defendants' arguments regarding plaintiff's claim for civil theft. Therefore, the court assumes that plaintiff has abandoned this particular cause of action. Accordingly, defendants' Allied Claims motion to dismiss [docket no. 18] and defendant Bartow. Brown's motion to dismiss [docket no. 26] are GRANTED as to Count Two-Civil Theft.
As to the other counts, however, defendants' argument that plaintiff's claims are "based upon the theory that Defendants cannot cease employment and compete with their former employer" is unavailing. Plaintiff's complaint does not appear to assert a claims imply to prevent defendants from "earn[ing] a living or engag[ing] in the free market economy." Rather, plaintiff's complaint alleges, inter alia, that the defendants acted against the interests of plaintiff while working for plaintiff and using plaintiff's resources.
Therefore, having read and considered the arguments of the parties, the court finds that plaintiff's complaint, with the exception of the claim for "civil theft," sufficiently alleges claims that are cognizable under Georgia law. Accordingly, defendants Allied Claims Management, LLC, Safeguard Exteriors, Inc., Cornerstone Investment Group, LLC, Don Wilger, and Chris Stroud's motion to dismiss [docket no. 18] and defendant Bartow Brown's motion to dismiss [docket no. 26] are DENIED except as to plaintiff's claim for civil theft (Count Two).
Summary
(1) defendants Allied Claims Management, LLC, Safeguard Exteriors, Inc., Cornerstone Investment Group, LLC, Don Wilger, and Chris Stroud's motion to dismiss [docket no. 18] is GRANTED in part and DENIED in part. The motion is GRANTED as to plaintiff's claim for "Civil Theft" (Count Two). The motion is DENIED as to all other claims;
(2) plaintiff's motion to dismiss counterclaims of Kris Holt [docket no. 23] is GRANTED;
(3) defendant Bartow Brown's motion to dismiss [docket no. 26] is GRANTED in part and DENIED in part. The motion is GRANTED as to plaintiff's claim for "Civil Theft" (Count Two). The motion is DENIED as to all other claims against defendant Bartow Brown.
SO ORDERED.