Opinion
Case No. 19-23600-CIV-WILLIAMS
2020-11-24
Jane POE, Plaintiff, v. John DOE, et al., Defendants.
Beshoy Rizk, Colby Grossman Conforti, Robert Mitchell Einhorn, Zarco, Einhorn, Salkwoski & Brito, P.A., John Thornton, do Campo & Thornton, P.A., Miami, FL, for Plaintiff. David Alan Rothstein, Lorenz Michel Pruss, Dimond Kaplan & Rothstein PA, Coconut Grove, FL, David Andrew Joseph, Malloy, Malloy, P.L., Miami, FL, for Defendants.
Beshoy Rizk, Colby Grossman Conforti, Robert Mitchell Einhorn, Zarco, Einhorn, Salkwoski & Brito, P.A., John Thornton, do Campo & Thornton, P.A., Miami, FL, for Plaintiff.
David Alan Rothstein, Lorenz Michel Pruss, Dimond Kaplan & Rothstein PA, Coconut Grove, FL, David Andrew Joseph, Malloy, Malloy, P.L., Miami, FL, for Defendants.
ORDER
KATHLEEN M. WILLIAMS, UNITED STATES DISTRICT JUDGE
THIS MATTER is before the Court on Defendant Jane Doe's Motion to Dismiss Counts I, II, III, IV, and VII of Plaintiff Jane Poe's Amended Complaint. (DE 36). Plaintiff filed a Response (DE 41) and Defendant filed a Reply (DE 47). For the reasons that follow, Defendant's motion is GRANTED IN PART AND DENIED IN PART .
I. BACKGROUND
In 2010, Plaintiff agreed to serve as a gestational surrogate for Defendant Jane Doe and Jane Doe's then husband. (DE 20). Before making this decision, Plaintiff "made extensive efforts to personally get to know Jane Doe" and her then husband, including an in-person meeting at her home in Tennessee. Following their communications and meeting, the three entered into a surrogacy agreement ("Surrogacy Agreement") that identified Jane Doe as the "Intended Mother" and Jane Doe's then husband ("husband") as the "Intended Father." Id. The Surrogacy Agreement stated that "[t]he Process will involve the Intended Mother producing eggs and the Intended Father producing semen that will be joined together to create embryos." Id. Plaintiff states that she was informed that Jane Doe and her husband were "medically vetted for diseases, including sexually transmitted diseases, and for compatibility with Plaintiff" and that "the results of this testing indicated that from a medical perspective, she would be a suitable gestational surrogate." Id. According to Plaintiff, from this medical testing, as well as the in-person meetings, telephone discussions, and correspondence, she "developed a level of trust in Jane Doe and [her husband] that allowed [her] to believe she was making the correct decision to allow their embryo to be implanted in her and to create a baby for them." Id. Ultimately, Plaintiff acted as a surrogate and, in 2011, she gave birth to a baby "that was immediately handed over to Jane Doe and" her husband.
In 2019, however, Plaintiff learned that the embryo transferred to her in 2010 was not created with Jane Doe's husband's semen. Instead, Defendant John Doe's semen was substituted and used in the in vitro fertilization process, without Plaintiff's knowledge or consent. According to Plaintiff, Jane Doe's husband, the intended father, "had no knowledge that he was in fact not the genetic father of the baby that Plaintiff carried." Id. Plaintiff avers that the resulting embryo was "implanted into [her] as part of a scheme meant to defraud [Jane Doe's husband] of fatherhood and deceive Plaintiff into carrying the child of Jane Doe and John Doe." Id. Plaintiff states that she did not consent "to being involved with John Doe, let alone carry his child" and "had never even met John Doe." Id. Plaintiff alleges that as a result she has experienced "stress, anxiety, mental anguish, and trauma," that Defendants "caus[ed] her to be battered physically and emotionally," and that she has suffered from, and has been diagnosed with, post-traumatic stress disorder." Id.
Plaintiff has pled seven counts against Defendants. Defendant Jane Doe challenges Counts I–IV and VII in her motion to dismiss. In Count I, Plaintiff alleges that Jane Doe induced Plaintiff to enter into the Surrogacy Agreement through fraudulent misrepresentations. Specifically, Plaintiff states that Jane Doe "falsely represented the material fact that the embryo to be implanted into [Plaintiff] would be created with the semen of" Jane Doe's husband. (DE 20). In Count II, Plaintiff claims that Jane Doe and John Doe "intentionally and willfully caused Plaintiff to be sexually battered, in that they induced offensive and harmful touching by the doctors and staff of the fertility clinic in St. Louis, Missouri that implanted an embryo via the vaginal canal and into the uterus of Plaintiff and thereby impregnated Plaintiff without her consent." Id. Plaintiff explains that she "did not consent and would not have consented to being touched had she known the embryo contained the genetic material of John Doe," nor did she agree to be impregnated by him. Id. In Count III, Plaintiff asserts that Jane Doe and John Doe "intentionally and willfully caused Plaintiff to be battered, in that they induced Plaintiff to submit to invasive medical treatments both in Tennessee and Missouri," and that she "has been harmed by the offensive touching induced by Jane Doe and John Doe." Id.
Counts IV pleads intentional infliction of emotional distress. According to Plaintiff, Jane Doe and John Doe engaged in deliberate, intentional, and reckless conduct through their "underlying scheme to impregnate Plaintiff without her consent" and by "publicly proclaiming their roles in the scheme and resulting battery." Id. Plaintiff states that Defendants’ conduct has "caused severe emotional distress that resulted in serious mental injury." Id. In her final count, Count VII, Plaintiff avers that Jane Doe and John Doe conspired to defraud and batter Plaintiff, "in order to trick her into carrying a child for John Doe." Id.
II. LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient facts to state a claim that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The Court's consideration is limited to the allegations in the complaint. See GSW, Inc. v. Long Cty. , 999 F.2d 1508, 1510 (11th Cir. 1993). All factual allegations are accepted as true and all reasonable inferences are drawn in the plaintiff's favor. See Speaker v. U.S. Dep't. of Health & Human Servs. Ctrs. for Disease Control & Prevention , 623 F.3d 1371, 1379 (11th Cir. 2010) ; see also Roberts v. Fla. Power & Light Co. , 146 F.3d 1305, 1307 (11th Cir. 1998). Although a plaintiff need not provide "detailed factual allegations," a complaint must provide "more than labels and conclusions." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "[A] formulaic recitation of the elements of a cause of action will not do." Id. Rule 12(b)(6) does not allow dismissal of a complaint because the court anticipates "actual proof of those facts is improbable" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Watts v. Fla. Int'l Univ. , 495 F.3d 1289 (11th Cir. 2007) (quoting Twombly , 550 U.S. at 545, 127 S.Ct. 1955 ).
III. ANALYSIS
Defendant Jane Doe presents two arguments in her motion to dismiss. First, she asserts that Plaintiff's fraud in the inducement claim (Count I) fails as a matter of law because "Plaintiff has not pleaded what is required to void or rescind an otherwise valid written agreement." (DE 36). Second, Defendant, in two paragraphs, argues that the remaining claims against her (Counts II, III, IV, and VII) all fail to state a claim because they "seek to recover money damages for various alleged torts," which cannot stand because "Plaintiff has not pleaded any facts that are wholly separate, distinguishable, and otherwise independent of the core breach of contract that lies at the heart of this case." (DE 36).
A. Count I
The Court applies Tennessee law to Plaintiff's fraud in the inducement claim. As Defendant notes, the Surrogacy Agreement indicates that it is governed by Tennessee law. (DE 36). "[U]nder Florida law, courts will enforce "choice-of-law provisions unless the law of the chosen forum contravenes strong public policy." " Maxcess, Inc. v. Lucent Techs., Inc. , 433 F.3d 1337, 1341 (11th Cir. 2005). Plaintiff also, albeit for different reasons, asserts that Tennessee law "and only Tennessee law governs the Fraud in the Inducement claim." (DE 41).
Defendant does not set forth extensive arguments on which law should govern Plaintiff's claims, but states that the Parties agreed that in the event of a breach of the Surrogacy Agreement, Tennessee law shall govern. (DE 36) (citing DE 20-1). In addition to Tennessee law, Defendant also cites to Florida and Missouri law to demonstrate that Plaintiff's claims fail under application of any state law that Plaintiff may assert. Plaintiff disagrees that her claims are all rooted in breach of the Surrogacy Agreement and, therefore, provides an analysis on the applicable law she believes applies to each claim.
Tennessee law requires five elements to state a claim for fraudulent inducement: "[t]he proponent of the contract (1) made a false statement concerning a fact material to the transaction (2) with knowledge of the statement's falsity or utter disregard for its truth (3) with the intent of inducing reliance on the statement, (4) that the statement was reasonably relied upon, and (5) that an injury resulted from this reliance." Tullahoma Indus., LLC v. Navajo Air, LLC , No. M201700109COAR3CV, 2018 WL 3752305, at *6 (Tenn. Ct. App. Aug. 7, 2018) (quoting Regions Bank v. Bric Constructors, LLC , 380 S.W.3d 740, 763 (Tenn. Ct. App. 2011) (citing Lamb v. MegaFlight , 26 S.W.3d 627, 630 (Tenn. Ct. App. 2000) )). To prevail, a plaintiff "must establish reasonable reliance on the alleged misrepresentations or omissions." Elite Physician Servs., LLC v. Citicorp Payment Servs., Inc. , No. 06 CIV. 2447 (BSJ), 2009 WL 10669137, at *7 (S.D.N.Y. Oct. 9, 2009).
Defendant does not assert that Plaintiff has failed to meet these elements but argues that Plaintiff's claim fails as a matter of law because Plaintiff has not pled "what is required to void or rescind an otherwise valid written agreement." (DE 36). Specifically, Defendant states that Plaintiff "must affirmatively plead facts establishing that she has returned the benefits received under the Surrogacy Agreement." Id. And, according to Defendant, Plaintiff has not only failed to do so, but has also failed to establish a basis for relief under a rescission remedy: it is "virtually impossible to return the parties to the status quo as it existed back then" as "Plaintiff in fact carried and delivered the child in question." Id. Defendant further argues that "Plaintiff continues to enjoy the benefits she received under the Surrogacy Agreement," namely, the sum of payments and expenses owed under the Agreement. Id.
Plaintiff acknowledges that a rescission remedy is "unavailable and unworkable in this case" but argues that she is "neither bringing a claim for rescission nor seeking rescission as a remedy." (DE 41). Instead, Plaintiff states that she is "properly seeking to void the perpetual terms of the surrogacy agreement which was procured by fraud." Id. Under Tennessee law, "a party induced by fraud to enter a contract may elect between two remedies: he may treat the contract as void and sue for the equitable remedy of rescission; or he may treat the contract as existing and sue for damages." Bailey v. Memphis Bonding Co., Inc. , No. 18-2115, 2019 WL 1300092, at *14 (W.D. Tenn. Mar. 21, 2019) ; see also Humphreys v. Bank of Am. , 557 F. App'x 416, 421 (6th Cir. 2014) ("[T]he fraudulent-inducement plaintiff ‘may elect between two remedies’: (1) ‘treat the contract as voidable and sue for the equitable remedy of rescission,’ or (2) ‘treat the contract as existing and sue for damages at law under the theory of ‘deceit.’ ’ ") (quoting Vance v. Schulder , 547 S.W.2d 927, 931 (Tenn. 1977) ). Whereas a party seeking to rescind a contract does not need to "show pecuniary loss," a party wishing to treat the contract as existing and sue for damages "must show he suffered pecuniary loss resulting from Defendants’ misrepresentations." Id.
As Plaintiff explicitly states that she is not seeking rescission, Plaintiff must identify the pecuniary loss she suffered as a result of the alleged fraud. In her response, however, Plaintiff does not allege that she suffered any economic loss. Nor does she make any such claim in her amended complaint. Courts have granted motions to dismiss fraud claims where a plaintiff fails to allege legally adequate damages. For example, in Bailey v. Memphis Bonding Co. , the court granted a motion to dismiss where the plaintiff alleged "no specific out-of-pocket loss" in support of his fraud claim. See Bailey v. Memphis Bonding Co., Inc. , 2019 WL 1300092, at *14. Indeed, in that case, the plaintiff was more particular in identifying pecuniary losses—he claimed that he suffered "damages in the loss of access to credit on the equity in his home" —and the court still found that the damages alleged were speculative and could not support a cause of action for fraud. Id. Citing to the Restatement (Second) of Torts, the court explained that "[o]ne who fraudulently makes a misrepresentation of fact ... is subject to liability to the other in deceit for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation." Id. And, the "Supreme Court has similarly noted that ‘the common law has long insisted that a plaintiff in [a deceit or misrepresentation] case show ... that he suffered actual economic loss." Id. ( ). Because Plaintiff has not alleged any type of monetary loss arising from her fraud claim, the court finds that she has not adequately pled a claim for fraudulent inducement. See e.g. , Sharp v. Memphis Bonding Co., Inc. , No. 18-2143, 2019 WL 1301993, at *14 (W.D. Tenn. Mar. 21, 2019) ("Without more, Sharp's ‘hypothetical difficulty’ in obtaining credit secured by the equity in his home is a speculative loss that cannot sustain his claims for fraud.").
The Court notes that Defendant's assertion that "Plaintiff can sue in tort for fraud only if she actually pleads facts establishing the elements of a claim for rescission" is incorrect. As discussed, "[u]nder Tennessee law, [a]n individual induced by fraud to enter into a contract may elect between two remedies. He may treat the contract as voidable and sue for the equitable remedy of rescission or he may treat the contract as existing and sue for damages at law under the theory of deceit in the ordinary case. The former is a contract action, while the latter is grounded in tort." Hamm v. Wyndham Resort Dev. Corp. , No. 3:19-CV-00426, 2020 WL 1853577, at *14 (M.D. Tenn. Apr. 13, 2020) (internal quotations and citations omitted). Thus, Plaintiff could adequately state a claim for fraudulent inducement, "grounded in tort," without seeking rescission, but has failed to do so.
B. Counts II, III, IV, and VII
Defendant next argues that the remaining claims against her (Counts II, III, IV, and VII) should all be dismissed because, although the claims "seek to recover money damages for various alleged torts," Plaintiff "has not pleaded any facts that are wholly separate, distinguishable, and otherwise independent of the core breach of contract that lies at the heart of this case." (DE 36). Specifically, Defendant states that the Surrogacy Agreement "created a duty to use sperm provided by the Intended Father," Jane Doe's husband; therefore, substituting that sperm "is a clear-cut example of a breach of contract." Id. In response, Plaintiff asserts that she has pled duties owed independent of the contract. Indeed, Plaintiff argues that she has not even made a breach of contract allegation, that "[t]here was no contractual provision that provided that Jane Doe not swap the semen," and that the parties to the contract all provided what they were supposed to provide." (DE 41). As Defendant agrees that "the law allows [Plaintiff] to pursue claims sounding in tort to the extent that she has alleged the breach of a duty that arises under the common law (as opposed to a duty that arises under the Contract)," the Court considers whether Plaintiffs’ tort claims, Counts II, III, IV, and VII, provide common law duties. See e.g. , Wise v. HSBC Mortg. Corp. , No. 4:15-CV-911, 2015 WL 6796955, at *4 (E.D. Mo. Nov. 6, 2015) ("[I]nasmuch as Wise's tort claims arise only from a duty predicated on the parties’ contract, they are barred. Attaching additional tort liability to a breach of contract claim is only allowed when an independent tort has been committed against the plaintiff and [t]he independent tort alleged cannot be dependent on the elements of the contract claim.") (internal quotations omitted).
In her Motion, Defendant does not identify the law governing each claim (or distinguish the claims in any capacity) and states that the law on this issue is the same in Florida, Tennessee, and Missouri. Plaintiff addresses Defendant's argument using Tennessee and Missouri law, and indicates that Count II (sexual battery) is governed by Missouri law; Count III (battery) implicates both Missouri and Tennessee law; Count IV (intentional infliction of emotional distress) is governed by Tennessee law; and Count VII (conspiracy) is governed by Tennessee or Missouri law. (DE 41). Defendant does not challenge or dispute Plaintiff's choice of law analysis in her Reply. Accordingly, the Court applies Missouri and Tennessee law to determine whether Counts II, III, IV, and VII state a claim.
According to Plaintiff, the allegations in her Complaint are not limited to the duties Defendant owed under the Surrogacy Agreement. For example, Plaintiff states that Defendant "had an independent legal duty not to sexually batter and impregnate Plaintiff without her consent," which "did not disappear when she entered into a contract to be impregnated by the intended father." (DE 41). Plaintiff further explains that the action is in tort even if the breach of duty also violated the terms of the contract." Id. The Court agrees. While "the mere breach of a contract" does not on its own provide a basis for tort liability, "the complained of act or omission which breaches a contract may also be a negligent act which would give rise to a liability in tort. In this latter instance, it is the act and not the breach of the contract which serves as the basis for the tort claim." Am. Mortg. Inv. Co. v. Hardin-Stockton Corp. , 671 S.W.2d 283, 293 (Mo. Ct. App. 1984). To be clear, Plaintiff's allegations do not rest on Defendant's husband's failure to provide sperm as contemplated under the Surrogacy Agreement, but rather on Defendant's alleged substitution of that sperm with Defendant John Doe's sperm. That is, Plaintiff is not alleging that Defendant breached the Surrogacy Agreement because the correct sperm was not used. Rather, Plaintiff's tort claims rest on Defendant's alleged use of the Surrogacy Agreement to impregnate her using Defendant John Doe's sperm without her knowledge or consent.
Drawing all reasonable inferences in Plaintiff's favor, the Court finds that even if Plaintiff's alleged acts constitute a breach of the Surrogacy Agreement, the acts also serve as the basis for Plaintiff's tort claims. See Am. Mortg. Inv. Co. , 671 S.W.2d at 293 ("Where the parties have entered into a contract, our common law has imposed the duty to perform with skill, care, and reasonable expedience and faithfulness in regard to the thing to be done or accomplished within the contract. The negligent failure to observe and perform any portion of that duty gives rise to an action in tort as well as an action for breach of contract."). Plaintiff cites Biscan v. Brown and Cupp v. Nat'l R.R. Passenger Corp. , to establish the common law duty of care that Defendant owed Plaintiff. (DE 41). In Biscan v. Brown , the court explained that "[i]n general, all persons have a duty ‘to use reasonable care to refrain from conduct that will foreseeably cause injury to others.’ " Biscan v. Brown , 160 S.W.3d 462, 478 (Tenn. 2005) (quoting Turner v. Jordan , 957 S.W.2d 815, 818 (Tenn. 1997) ). "The general duty of care does not include an affirmative duty to act for the protection of another, however, unless the defendant stands in some special relationship to either the person who is the source of the danger, or to the person who is foreseeably at risk from the danger." Id. at 478–79. Plaintiff states that her relationship as the gestational surrogate of Defendant's child constitutes a special relationship, creating the "duty to act for the protection of another." (DE 41). However, Plaintiff asserts that even if the relationship did not impose a special duty, "it was certainly foreseeable to the Defendant that Plaintiff would be harmed by the Defendant's deceit and concealment of the material fact that she would be impregnated by the semen of a man that she had never met." Id. At this stage, accepting Plaintiff's allegations as true, the Court agrees. Even if Defendant did not have "an affirmative duty to act for the protection" of Plaintiff, she still had "a duty to use reasonable care to refrain from conduct that will foreseeably cause injury to others." Biscan , 160 S.W.3d at 478.
Defendant has not provided any authority in her Reply to dispute Plaintiff's argument. And, Defendant's assertion that Plaintiff cannot argue "that Defendants owed her a common-law duty to impregnate her using the sperm of the Intended Father" misses the mark. As stated, Plaintiff's tort claims do not rest on the failure to use Jane Doe's husband's sperm, but rather on the use of John Doe's sperm without her knowledge or consent. Thus, the Court finds that Counts II, III, IV, and VII set forth plausible claims that withstand a motion to dismiss.
Not only is Defendant's Reply devoid of any law demonstrating how Counts II, III, IV, and VII fail to state a claim, Defendant's Motion to Dismiss does not analyze or discuss any authority to support this argument, providing only a series of string cites in footnotes. A review of these cases shows they are inapposite here. For example, in Rice v. Van Wagoner Companies, Inc. , the plaintiffs claimed damages under a tort theory of bad faith against an insurance company for its refusal to pay an insurance claim. See Rice v. Van Wagoner Companies, Inc. , 738 F. Supp. 252 (M.D. Tenn. 1990). Here, Plaintiff's tort claims are not based on Defendant's refusal to pay an amount owed under the Surrogacy Agreement, or even on Defendant's refusal to provide services set forth in the Surrogacy Agreement. Instead, Plaintiff's tort claims are based on Defendant's alleged use of the Surrogacy Agreement to "cause[ ] John Doe's genetical material" to be transferred to Plaintiff's uterus without her knowledge or consent. (DE 20). In Weese v. Wyndham Vacation Resorts , the court—at the summary judgment stage—determined that the plaintiffs’ allegations "did not involve the sort of risks of harm or safety associated with the duty element for a negligence claim." Weese v. Wyndham Vacation Resorts , No. 3:07-CV-433, 2009 WL 1884058, at *6 (E.D. Tenn. June 30, 2009). There, the plaintiffs claimed that a vacation resort's property manager "did not allow them to open the Grecian Muse [Day Spa] at the resort despite earlier agreeing to let them do so." Plaintiff's allegations, which must be accepted as true at this stage, are entirely different from the factual scenario considered by the Weese court. Ultimately, Defendant's cited cases establish what is undisputed: "a breach of contract alone does not give rise to a tort." Pippin v. Hill-Rom Co. , 615 F.3d 886, 889 (8th Cir. 2010). However, because Plaintiff has pled more than "a mere failure to complete the undertaking required by" the Surrogacy Agreement, her claims support the tort actions. Id.
Under Count V of her Complaint, Plaintiff indicates that she "demands judgment against JOHN DOE for compensatory damages, special damages, damages for present and future medical expenses, exemplary and punitive damages upon showing of basis for same, pain and suffering, and such other relief as this Court may deem just and proper." In her Response to Defendant's Motion, Plaintiff indicates that Count V is against both Jane Doe and John Doe and that the "[t]he Wherefore clause [of her complaint] inadvertently omitted Jane Doe." While it may have been inadvertent error to omit Defendant Jane Doe, Plaintiff cannot amend her Complaint through her Response to Defendant's motion if she, in fact, wishes to correct this error.
IV. CONCLUSION
For the foregoing reasons, the Court ORDERS AND ADJUDGES that Defendant's motion to dismiss (DE 36) is GRANTED IN PART AND DENIED IN PART. Count I of the Complaint is DISMISSED WITHOUT PREJUDICE . To the extent Plaintiff is able to cure the deficiencies identified in this Order, Plaintiff may amend her complaint as to Count I. Any amended complaint shall be filed within fourteen days of this Order. Defendant's motion as to the remaining counts is DENIED .
DONE AND ORDERED in chambers in Miami, Florida, this 24th day of November, 2020.