United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the court on Defendant Jeffrey Scott
Thompson's “Motion to Dismiss Second Amended
Complaint.” (Doc. 19). Plaintiff Cajun Steamer
Ventures, LLC (“CS Ventures”) filed this suit
containing 14 counts against Mr. Thompson, a former CS
Ventures employee, for incidents occurring after Mr. Thompson
signed a Severance Agreement and Release of Claims
(“Release”) and Restrictive Covenant Agreement
(“RCA”) with CS Ventures. CS Ventures alleges
that Mr. Thompson violated various provisions of both
contracts; that, in the event the court finds that the RCA
was void, the Release was also void; and that Mr. Thompson
committed various torts, including defamation, intentional
interference with a contract, conversion, and fraud.
Thompson moves to dismiss CS Ventures' Second Amended
Complaint for two reasons: (1) the complaint is a shotgun
pleading in violation of Federal Rules of Civil Procedure
8(a)(2) and 10(b), and (2) the complaint fails to state a
claim upon which relief can be granted in violation of Rule
12(b)(6). The parties have fully briefed the motion, and the
motion is now ripe for review. For the reasons discussed
below, the court will GRANT IN PART and DENY IN PART Mr.
Thompson's motion to dismiss. (Doc. 19).
Steamer Bar & Grille (“Cajun Steamer”) is a
restaurant owned by CS Ventures with locations in Hoover,
Trussville, and Huntsville, Alabama, and Franklin, Tennessee.
When Cajun Steamer's first location opened in 2004, Mr.
Thompson was employed by CS Ventures and in charge of
restaurant operations for Cajun Steamer.
or 2015, CS Ventures built the Cajun Steamer Huntsville
location. It hired Anything Audio & Video, LLC to install
audio and visual equipment, which cost “tens of
thousands of dollars.” (Doc. 14 at 14). Mr. Thompson
allegedly used supplies from this project and invoiced CS
Ventures supposedly for audio and video equipment from
Anything Audio & Video, but was actually for work
performed on his house. In the process, Mr. Thompson
“specifically made false representations and also
suppressed information which was material to this
action.” (Id. at 15). During this time, Mr.
Thompson also allegedly “diverted equipment bought by
[CS Ventures] and used the equipment expressly for
installation at [his] house.” (Id. at 14). Mr.
Thompson also suppressed this information.
February 2, 2016, Mr. Thompson and CS Ventures executed the
Release and RCA. The Release “set forth the
respective rights and obligations of [Mr. Thompson and CS
Ventures] in connection with the termination of the
employment of [Mr. Thompson].” (Doc. 14 at 2).
According to the Release, Mr. Thompson's termination was
effective as of February 1, 2016. CS Ventures paid Mr.
Thompson $1.19 million to execute the two agreements-
approximately 10 times his salary.
prohibited Mr. Thompson from acting in conflict with the
“Business, ” defined as CS Ventures'
“operation of five (5) Cajun Steamer Bar and Grill
restaurants in Alabama, Tennessee, and Texas, serving
Louisiana style cuisine, including without limitation,
seafood, wings, soups, salads and chicken.” (Doc. 14-2
at 2). Specifically, Mr. Thompson could not (1) “engage
in the Business within a fifty (50) mile radius of any of the
current locations of the Cajun Steamer restaurants operated
by the Company in Alabama, Tennessee and Texas”; (2)
“recruit, solicit or otherwise contact customers or
prospective customers of the Company for the purpose of
engaging in the Business”; (3) “recruit, solicit
or induce any person or entity, who was an employee, agent,
independent contractor or representative of the Company . . .
to cease their employment, engagement or other relationship
with the Company or solicit the services of such
person”; or (4) disclose certain confidential and trade
secret information related to the Business. (Id. at
allowed CS Ventures to sue Mr. Thompson, including for
temporary and permanent injunctions, if Mr. Thompson breached
or threatened to breach the RCA.
Release, Mr. Thompson agreed to “not willfully perform
any acts (such as defamatory comments or threats of violence
or vengeful acts) which are detrimental to the name, business
or reputation of Company or Releasees.” (Doc. 14-1 at
3). He also agreed to indemnify CS Ventures for the cost
and/or damages caused by “the beach of any covenant,
agreement or obligation.” (Id. at 5).
conjunction with the execution of the agreements with Mr.
Thompson, X4 Investment Partners, LLC-the current parent
company of CS Ventures-executed a Membership Interest
Purchase Agreement with James T. Powers on February 9, 2016.
Through this agreement, X4 Investments acquired Mr.
Powers's 50% membership interest in Solstice Investments,
LLC in exchange for $1, 189, 859.92. Pursuant to Section 6.3
of the Purchase Agreement, Mr. Thompson's execution and
delivery of the Release was a condition precedent to X4's
obligation to close the Purchase Agreement transaction with
signing the Release and RCA, Mr. Thompson allegedly began
contacting employees to “discourage them from working
for Cajun Steamer.” (Doc. 14 at 4).
June or early July 2018, Mr. Thompson visited the Hoover
location of Cajun Steamer, and made allegedly defamatory
remarks to Cajun Steamer employees “and others.”
(Doc. 14 at 5). Specifically, Mr. Thompson told a manager
that Chandler Buie, who owns all outstanding membership
interests in X4, “did not understand the business, . .
. was not qualified to run the business, and [Mr. Thompson]
questioned his commitment to the Cajun Steamer
13, 2018, Mr. Thompson “contacted numerous employees
and customers to make an unknown announcement.” (Doc.
14 at 5). At the Trussville location of Cajun Steamer, Mr.
Thompson announced he would be opening a Cajun restaurant on
Highway 150 in Hoover, Alabama. This location would be within
50 miles of the Hoover and Trussville locations of Cajun
Thompson “then stole alcohol from the bar and drank
until 3 a.m., ” although he did pay for alcohol early
in the evening. (Doc. 14 at 5). “At some point during
the evening[, ] he disrobed in the presence of Cajun Steamer
Thompson later solicited the General Manager and Kitchen
Manager of the Trussville location to leave his or
their position as Cajun Steamer and work for Mr.
Thompson's new restaurant.
Thompson has also at unknown times “stated to numerous
individuals that he is buying back Cajun Steamer.”
(Doc. 14 at 6). Prospective purchasers of Cajun Steamer have
approached CS Ventures, and CS Ventures claims that Mr.
Thompson's statements “were made to intentionally
interfere with these proposed sales and potentially to
financially harm Plaintiff.” (Id.).
Ventures filed this suit alleging 14 causes of action against
Mr. Thompson. CS Ventures alleges four breaches of contract:
(1) breach of the RCA's non-compete clause; (2) breach of
the RCA's non-solicit clause; (3) breach of the RCA's
confidentiality clause; and (4) breach of the Release. It
alleges three arguments in support of rescission of the
Release, in the event that the court finds the RCA void: (1)
inadequate consideration; (2) fraudulent inducement; and (3)
mutual mistake of fact. It alleges five torts: (1)
defamation; (2) intentional interference with contract; (3)
conversion of alcohol and food; (4) conversion of electronic
equipment; and (5) fraud and/or suppression. CS Ventures
raises two final claims: (1) unjust enrichment; and (2) a
request for preliminary and permanent injunctions to enforce
the non-compete, non-solicit, and confidentiality provisions
of the RCA.
Standard of Review
12(b)(6) motion to dismiss attacks the legal sufficiency of
the complaint. Generally, the Federal Rules of Civil
Procedure require only that the complaint provide
“‘a short and plain statement of the claim'
that will give the defendant fair notice of what the
plaintiff's claim is and the grounds upon which it
rests.” Conley v. Gibson, 355 U.S. 41, 47
(1957) (quoting Fed.R.Civ.P. 8(a)). A plaintiff must provide
the grounds of his entitlement, but Rule 8 generally does not
require “detailed factual allegations.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley, 355 U.S. at 47). It does, however,
“demand more than an unadorned,
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Pleadings that contain nothing more than “a formulaic
recitation of the elements of a cause of action” do not
meet Rule 8 standards nor do pleadings suffice that are based
merely upon “labels or conclusions” or
“naked assertions” without supporting factual
allegations. Twombly, 550 U.S. at 555, 557.
Supreme Court explained that “[t]o 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 and explaining its decision in
Twombly, 550 U.S. at 570). To be plausible on its
face, the claim must contain enough facts that “allow
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. Although “[t]he plausibility standard
is not akin to a ‘probability requirement, '”
the complaint must demonstrate “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).
Supreme Court has identified “two working
principles” for the district court to use in applying
the facial plausibility standard. The first principle is
that, in evaluating motions to dismiss, the court must assume
the veracity of well-pleaded factual allegations; however,
the court does not have to accept as true legal conclusions
even when “couched as  factual allegation[s]”
or “threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements.”
Iqbal, 556 U.S. at 678. The second principle is that
“only a complaint that states a plausible claim for
relief survives a motion to dismiss.” Id. at
679. Thus, under prong one, the court determines the factual
allegations that are well-pleaded and assumes their veracity,
and then proceeds, under prong two, to determine the
claim's plausibility given the well-pleaded facts. That
task is “context-specific” and, to survive the
motion, the allegations must permit the court based on its
“judicial experience and common sense . . . to infer
more than the mere possibility of misconduct.”
Id. If the court determines that well-pleaded facts,
accepted as true, do not state a claim that is plausible, the
claim must be dismissed. Id.
“shotgun” style complaint exists when “each
count . . . adopts the allegations of all preceding counts.
Consequently, allegations of fact that may be material to a
determination of count one, but not count four, are
nonetheless made a part of count four. . . . [I]t is
virtually impossible to know which allegations of fact are
intended to support which claim(s) for relief.”
Paylor v. Hartford Fire Ins., 748 F.3d 1117, 1126
(11th Cir. 2014) (quoting Anderson v. Dist. Bd. of Trs.
of Cent. Fla. Cmty. Coll., 77 F.3d 364, 366 (11th Cir.
purpose of Rule 8 is to provide a defendant notice of the
claim and the facts supporting it. Grimsley v. Marshalls
of MA, Inc., 284 Fed.Appx. 604, 610 (11th Cir. 2008)
(“The point [of Rule 8] is to give the defendant fair
notice of what the claim is and the grounds upon which it
rests.”). Rule 10 works in conjunction with Rule 8 by
requiring each claim “founded on a separate transaction
or occurrence to be stated in separate counts if needed for
clarity.” Id. “These rules work together
so that [the plaintiff's] adversary can discern what he
is claiming and frame a responsive pleading.”
Thompson raises two main arguments why the court should
dismiss this case. First, he contends that the entire
complaint is a shotgun pleading in violation of Rules 8 and
10. Second, he contends that 10 of the 14 counts should be
dismissed for failure to state a claim pursuant to Rule
12(b)(6). Specifically, he argues that (1) the non-compete
clause fails to comply with Alabama law; (2) the non-solicit
clause fails to comply with Alabama law; (3) adequate
consideration was given for the RCA and Release, so the
Release should not be set aside; (4) the complaint contains
no allegation of fraudulent inducement; (5) the complaint
contains no allegation of mutual mistake; (6) the complaint
contains no allegation of breach of the confidentiality
agreement; (7) Mr. Thompson did not breach the Release
because he did not defame CS Ventures, only allegedly Mr.
Buie; (8) CS Ventures cannot recover for an allegedly
defamatory statement made against Mr. Buie; (9) the complaint
fails to allege facts regarding intentional interference with
contract; and (10) CS Ventures would have an adequate remedy
at law, so unjust enrichment is inappropriate. The court will
address each argument in turn.
Thompson argues that CS Ventures' Second Amended
Complaint is merely a shotgun pleading. Specifically, Mr.
Thompson points to the statement “Plaintiff
incorporates all previous paragraphs as if fully stated
herein” before each count in the complaint.” He
contends that this statement prevents him from being able to
discern which factual allegations apply to each count, and so
he cannot formulate an answer to the complaint. Additionally,
he contends that CS Ventures failed to set out each claim for
relief in a separate count and failed to allege “the
who, what, when, where, and how for each
element, except scienter, of each claim for
relief.” (Doc. 19 at 10 (quoting United States ex
rel. Creighton v. Beauty Basics Inc., No.
2:13-CV-1989-VEH, 2016 WL 3519365, at *3 (N.D. Ala. June 28,
court acknowledges Mr. Thompson's frustration with CS
Ventures' complaint. CS Ventures included the bare
minimum facts, alleged nearly as many counts as pages in the
complaint, and incorporated by reference all
paragraphs-regardless of relevance-in all counts
alleged. But while the complaint is by no means a model
pleading, it does not sink to the level of being a shotgun
states that a complaint must contain “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). The courts have
defined what “short and plain” means, and what is
too short and too plain. “Shotgun pleadings are those
that incorporate every antecedent allegation by reference
into each subsequent claim for relief or affirmative
defense.” Wagner v. First Horizon Pharm.
Corp., 464 F.3d 1273, 1279 (11th Cir. 2006). Such a
pleading “wreak[s] havoc on the judicial system”
by “divert[ing] already stretched judicial resources
into disputes that are not structurally prepared to use those
resources efficiently.” Id. (quoting Byrne
v. Nezhat, 261 F.3d 1075, 1130 (11th Cir. 2001)).
first sentence in each of the 14 claims, CS Ventures notes
“Plaintiff incorporates all previous paragraphs as if
fully stated herein.” (Doc. 14 at 6-8, 10-16). CS
Ventures failed to tailor the incorporation by reference to
the specific facts alleged in support of the count, and even
incorporated each count into future counts. But each count
does include a few general facts in support of the
example, in Count Ten for conversion of food and alcohol, the
complaint incorporates by reference all facts, and then adds
three sentences that (1) “Defendant wrongfully took
possession of [Plaintiff's] food and alcohol, ” (2)
“Defendant did not pay for the food and alcohol,
” and (3) “Plaintiff was injured by
Defendant's actions.” (Id. at 13). While
not the most robust description, Mr. Thompson is on notice of
what facts CS Ventures alleges in support of Count Ten even
though the complaint incorporated by reference all previous
paragraphs. Looking back to the fact section of the complaint
with this frame of reference, Mr. Thompson can see that the
relevant allegations are those relating to the July 13, 2018
incident at the Trussville location of Cajun Steamer, when CS
Ventures alleges that Mr. Thompson “stole alcohol from
the bar and frank until 3 a.m.” (Doc. 14 at 5).
notes that “[a] party must state its claims or defenses
in numbered paragraphs, each limited as far as practicable to
a single set of circumstances.” Fed.R.Civ.P. 10(b). CS
Ventures did separate each claim into numbered paragraphs,
and each of the 14 claims was limited to a single set of
circumstances-ignoring the unhelpful “Plaintiff
incorporates all previous paragraphs as if fully stated
herein” at the beginning of each count. Again, while
the claims did not helpfully list the exact paragraphs where
the facts in support were located, each claim included a
brief statement of the facts in support that sufficiently
gave Mr. Thompson notice of the claims alleged and the facts
alleged in support of those claims. So the complaint did not
violate Rule 10.
Thompson seeks to have the court enforce an instruction set
forth by Judge Hopkins in Creighton. In
Creighton, the plaintiff filed a shotgun pleading
alleging fraud, which has a heightened pleading standard
under Rule 9(b). 2016 WL 3519365, at *1-2. Judge Hopkins
instructed the plaintiff to refile her complaint, noting that
“the complaint must include the who, what, when, where,
and how for each element, except
scienter, of each claim for relief. The previous sentence
should be taken literally . . .
.” Id. at *3. But, apart from Count Four
alleging fraudulent inducement and Count Twelve alleging
fraud and/or suppression, the heightened pleading standard
under Rule 9(b) does not apply to this complaint. So Judge
Hopkins's instruction, which is tailored to the
requirements of Rule 9(b), does not apply to this case.
CS Ventures' complaint did provide sufficient individual
facts in each count to inform Mr. Thompson of which facts
would be used in support of which count, and because the
complaint stated its claims in numbered paragraphs limited to
a single set of circumstances, this complaint is not a
shotgun pleading. So, the court will DENY the motion to
dismiss on the grounds that the complaint is a shotgun
Failure to state a claim
Thompson argues that the court should dismiss Counts One,
Two, Three, Four, Five, Six, Seven, Eight, Nine, and Thirteen
for failure to state a claim. Each count will be discussed in
Count One: Breach of the non-compete clause
Thompson contends that CS Ventures failed to state a claim of
breach of the non-compete clause because the non-compete
clause is unenforceable. Specifically, he argues that the
non-complete clause violated Alabama law because he was not
an employee at the time of signing the contract.
Alabama law, a contract that restrains a person from
“exercising a lawful profession, trade, or business of
any kind” is void unless it falls within an exception.
Ala. Code § 8-1-190(a) (2015). Generally,
“[c]ontracts restraining employment are looked upon
with disfavor, because they tend not only to deprive the
public of efficient service, but ...