Opinion
Civil Action No. 3:02-CV-0141-R
July 17, 2002
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Pursuant to the District Court's Order of Reference, entered February 25, 2002, Defendants' Amended Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6), filed June 5, 2002, is before this Court for hearing, if necessary, and for recommendation. For the following reasons, the Court RECOMMENDS that the motion be DENIED.
I. Procedural History
On January 22, 2002, Plaintiff Total Car Franchising Corporation (TCFC) filed suit in the Northern District of Texas against Defendants David Esh and Perfect Appearance, Inc., on the grounds of diversity jurisdiction. On April 19, 2002, TCFC filed its First Amended Complaint, alleging breach of a non-competition agreement, breach of contract, unjust enrichment, violation of the Georgia Trade Secrets Act, violation of Texas trade secret laws, and breach of a covenant of good faith and fair dealing.
On June 5, 2002, Defendants filed the instant motion to dismiss for failure to state a claim upon which relief can be granted. Defendants contend that this "is a simple breach of contract case" and that "[i]f Plaintiff cannot establish the existence of an agreement with the Defendants in Texas, the remaining causes of action also fail." (D.s' Br. at 2.) TCFC responds, in relevant part, that Defendants misconstrue the Rule 12(b)(6) standard and that not all of TCFC's claims are dependent on the existence of a contract. (P.'s Br. at 2.)
The Court will now discuss the legal standards which will guide its analysis.
II. Legal Standards
Motions to dismiss for failure to state a claim upon which relief can be granted are disfavored and rarely granted. Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir. 1981). A district court cannot dismiss a complaint, or any part of it, for failure to state a claim upon which relief can be granted unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995). In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In order to warrant dismissal, a complaint must show a bar to relief or a successful affirmative defense on its face. Clark v. Amoco Prod Co., 794 F.2d 967, 970 (5th Cir. 1986). "The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). In ruling on such a motion, the court cannot look beyond the face of the pleadings. Baker, 75 F.3d at 196; Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999), cert. denied, 530 U.S. 1229 (2000). A plaintiff, however, must plead specific facts, not mere conclusory allegations, to avoid dismissal. Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992).
A Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted shall be converted into a motion for summary judgment and disposed of as provided in Rule 56 whenever matters outside the pleadings are presented to and accepted by the court. FED. R. CIV. P. 12(b). Either the pleader or the moving party or both may bring the conversion process into operation by submitting extraneous matters. Hadges v. Yonkers Racing Corp., 733 F. Supp. 686 (S.D.N.Y. 1990). The Fifth Circuit has long recognized that materials filed concurrently with the pleadings are sufficient to convert a motion to dismiss into one for summary judgment. General Guar. Ins. Co. v. Parkerson, 369 F.2d 821 (5th Cir. 1966).
The Court now turns to the merits of the motion.
III. Analysis
As noted above, Defendants contend that none of TCFC's claims can stand once it is established that no contract existed between the parties in Texas. (D.s' Br. at 2.) TCFC, on the other hand, argues that the Defendants have misconstrued the Rule 12(b)(6) standard. (P.'s Br. at 2.) The Court concludes that TCFC's argument is meritorious.
Each of Defendants' grounds for dismissal under Rule 12(b)(6) would require the Court to consider whether a contract existed between TCFC and the Defendants. Defendants urge the Court to dismiss TCFC's claims upon consideration of the terms of the Limited Rights Franchise Agreement (LRFA), which Defendant Esh allegedly signed with TCFC in February 1995. (D.s' Br. at 2.) However, in ruling on a Rule 12(b)(6) motion to dismiss, the court cannot look beyond the face of the pleadings. Baker, 75 F.3d at 196; Spivey, 197 F.3d at 774. Because the Court cannot rule on Defendants' Rule 12(b)(6) motion to dismiss without considering the terms of the LRFA, the motion should be DENIED.
Furthermore, the instant case does not present a situation which would allow this Court to convert the Rule 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment. Defendants do not present the LRFA to the Court in their motion to dismiss, and, even if they had, the Court likely would not have accepted it at this early stage in the litigation. In its amended complaint, TCFC provides considerable detail regarding its claims against Defendants. (P.'s Am. Compl. ¶¶ 8-123.) For example, TCFC alleges that the LRFA was modified. (P.'s Am. Compl. ¶ 49.) Taking TCFC's allegations as true, Baker, 75 F.3d at 196, it is clear that the LRFA — by itself — would not resolve the disputes between the parties. Therefore, TCFC "is entitled to offer evidence to support the claims." Scheuer, 416 U.S. at 236.
IV. Recommendation
For the foregoing reasons, the Court RECOMMENDS that the Rule 12(b)(6) motion to dismiss be DENIED.