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TFO, Inc. v. Vantiv, Inc.

United States District Court, N.D. Alabama, Eastern Division

March 31, 2017

TFO, INC., Plaintiff,
VANTIV, INC., Defendant.



         Presently pending is the partial motion to dismiss filed by defendant, Vantiv, Inc. (Doc. 11). The motion has been fully briefed and is ripe for adjudication. (See Docs. 15-16). For the reasons that follow, the motion is due to be granted, and aside from TFO's claim for breach of contract, all claims asserted in the complaint are due to be dismissed.


         "Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to 'give the defendant fair notice of what the … claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Rule 8 "does not require 'detailed factual allegations, ' but it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. at 678 (quoting Twombly, 550 U.S. at 555, 557) (internal quotation marks omitted).

         To survive a motion to dismiss for failure to state a claim on which relief may be granted brought pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a 'probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557).


         TFO is a business that entered into a contractual agreement with Vantiv, whereby Vantiv agreed to process credit and debit card payments made by TFO's customers. (Doc. 1 at 2). The complaint alleges that, beginning in April 2016, Vantiv "failed to properly process credit or debit card transactions." (Id.). Slightly more specifically, the complaint alleges Vantiv has failed to credit TFO with money from its customers' purchases. (Id.). TFO also contends Vantiv began and continues to "re-run" its customers' card transactions, causing TFO's customers to be double charged for purchases. (Id. at 2-3). As a result, TFO alleges it has suffered, both because its customers blame it for double charging and because TFO has lost business as a result of its decision to cease accepting credit card payments. (Id. at 3).

         On these facts, the complaint asserts claims for breach of contract, fraud, money had and received, unjust enrichment, negligence, and wantonness. (Id. at 3-6). Vantiv's motion seeks dismissal of all claims except breach of contract. (Doc. 11). In response, TFO concedes dismissal is appropriate regarding its claims for money had and received, unjust enrichment, and negligence; however, TFO opposes dismissal as to its other claims. (Doc. 15 at 1). Accordingly, the only claims at issue are TFO's claims for fraud and wantonness. Each claim is addressed in turn.

         A. Fraud

         Vantiv moves to dismiss TFO's fraud claim on two grounds. First, Vantiv contends TFO has merely attempted to re-cast its breach of contract claim as a fraud claim. (Doc. 11-1 at 3). Next, Vantiv argues TFO has failed to plead its fraud claim with the particularity required under Rule 9(b) of the Federal Rules of Civil Procedure. (Id. at 4).

         Under Alabama law:

The elements of fraud are (1) a false representation (2) of a material existing fact (3) relied upon the plaintiff (4) who was damaged as a proximate result of the alleged misrepresentation. Earnest v. Pritchett-Moore, Inc., 401 So.2d 752 (Ala. 1981). If the fraud is based upon a promise to perform or abstain from performing some act in the future, two additional elements must be proved: (1) the defendant's intention, at the time of the alleged misrepresentation, not to do the act promised, coupled with (2) an intent to deceive. Clanton v. Bains Oil Co., 417 So.2d 149 (Ala. 1982).

P & S Bus., Inc. v. S. Cent. Bell Tel. Co., 466 So.2d 928, 930 (Ala. 1985). Additionally, a "mere breach of [] contract is not sufficient to support a charge of fraud" under Alabama law. McAdory v. Jones, 71 So.2d 526, 528 (Ala. 1954). Courts sitting in this district have held that, in order to state a cognizable fraud claim under Alabama law, the conduct alleged must be independent from a breach of contract. Stone v. Koch Farms of Gadsden, LLC, No. 12-3777-RBP, 2013 WL 121477, at *2-3 (N.D. Ala. Jan. 8, 2013); Townson v. Koch Farms, LLC, No. 13-1703-VEH, 2014 WL 1618376, at *2 (N.D. Ala. Apr. 22, 2014) (quoting Justice Houston's concurring opinion in Hunt Petroleum Corp. v. State, 901 So.2d 1, 11 (Ala. 2004)); see also Brown-Marx Assocs., Ltd. v. Emigrant Sav. Bank, 703 F.2d 1361, 1370-71 (11th Cir. 1983) ("Failure to perform a promise is not of itself adequate evidence of intent to support an action for fraud. A mere breach of a contractual provision is not sufficient to support a charge of fraud.") (citations omitted).

         Additionally, at the motion to dismiss stage, the Eleventh Circuit has held that the heightened pleading standard under Rule 9(b) requires a plaintiff to allege "(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the Plaintiffs; and (4) what the defendants ...

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