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Jarvis v. Taylor

United States District Court, M.D. Alabama, Northern Division

February 12, 2018

CHRISTOPHER JARVIS, Plaintiff,
v.
T. BRITT TAYLOR, et al., Defendants.

          REPORT AND RECOMMENDATION

          David A. Baker United States Magistrate Judge

         Plaintiff Christopher Jarvis filed a Complaint in this Court against Defendants T. Britt Taylor, Norman Chandler, James R. Johnson, and Taylor Chandler, LLC (“Taylor Chandler”) (collectively, “Defendants”), alleging claims of breach of implied covenant of good faith, fraudulent inducement, negligence, breach of contract, tortious interference with contract, tortious interference with business relationships, wantonness, civil conspiracy, and accounting. (Docs. 1, 6). Defendants filed a counter-claim against Plaintiff alleging three counts of breach of contract, breach of fiduciary duty, negligence, breach of loyalty, and fraud and suppression. (Doc. 10).

         This matter is before the court on Plaintiff's motion to dismiss the counterclaims for breach of loyalty, negligence, and fraud for failure to state a claim upon which relief can be granted. (Doc. 13). The motion is fully briefed and the arguments are taken under submission on the record without oral argument.

         I. JURISDICTION

         Subject matter jurisdiction is conferred by 28 U.S.C. § 1332 as to the parties' state law causes of action. The parties do not contest personal jurisdiction or venue, and there are adequate allegations to support both. See 28 U.S.C. § 1391. On June 29, 2017, this matter was referred to the undersigned by U.S. Chief District Judge W. Keith Watkins for disposition or recommendation on all pretrial matters. (Doc. 4). See also 28 U.S.C. § 636(b); Rule 72, Fed. R. Civ. P.; United States v. Raddatz, 447 U.S. 667 (1980); Jeffrey S. v. State Board of Education of State of Georgia, 896 F.2d 507 (11th Cir. 1990).

         II. BACKGROUND AND STATEMENT OF FACTS[1]

         Plaintiff was a life insurance broker who owned a company called Jade Risk, LLC (“Jade Risk”) with its principal place of business in Texas. (Doc. 10 at ¶¶ 6, 10). On July 1, 2016, Defendants purchased Jade Risk from Jarvis[2] pursuant to the terms of a Membership Interest Purchase Agreement. Id. at ¶ 9. Defendants Taylor Chandler hired Plaintiff as an employee simultaneously with the aforementioned sale. Id. at ¶ 15. As part of the sale of Jade Risk, Plaintiff provided Defendants with a spreadsheet for a 2016 forecast of Jade Risk clients that included 58 clients, of which, Defendants allege that “19 were entirely fabricated by” Plaintiff. Id. at ¶ 18. Defendants further alleged that Plaintiff suppressed from Defendants that he “planned on shutting down 24 of the other [clients] by the end of 2016.” Id. at ¶ 19. “As part of the closing, [Plaintiff] also executed a Membership Interest Purchase Agreement (the ‘Purchase Agreement'), an employee agreement (the ‘Employee Agreement'), and a restrictive covenants agreement (the ‘Restrictive Covenants Agreement').” Id. at ¶ 32. Defendants allege that Plaintiff engaged in a number of actions that “violated the aforementioned provisions of the Purchase Agreement, the Employment Agreement, and the Restrictive Covenants Agreement.” Id. at ¶ 57.

         III. STANDARD OF REVIEW

         A Rule 12(b)(6) motion to dismiss tests the sufficiency of the Complaint against the legal standard set forth in Rule 8: “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         When evaluating a motion to dismiss pursuant to Rule 12(b)(6), the court must take “the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Determining whether a complaint states a plausible claim for relief [is] ... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 663 (alteration in original) (citation omitted). “[F]acial plausibility” exists “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 standard also “calls for enough facts to raise a reasonable expectation that discovery will reveal evidence” of the claim. Twombly, 550 U.S. at 556. While the complaint need not set out “detailed factual allegations, ” it must provide sufficient factual amplification “to raise a right to relief above the speculative level.” Id. at 555.

         “So, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.'” Twombly, 550 U.S. 558 (quoting 5 Wight & Miller § 1216, at 233-34 (quoting in turn Daves v. Hawaiian Dredging Co., 114 F.Supp. 643, 645 (D. Haw. 1953)) (alteration original). “[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556).

         “In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

         IV. ...


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