VIRGINIA M. HERNANDEZ COVINGTON, District Judge.
This cause is before the Court pursuant to Plaintiffs' Joined Motion to Dismiss the Counterclaims for Failure to State a Claim and Strike Affirmative Defenses, which was filed on March 20, 2012. (Doc. # 73). Defendant Susan Perlmutter filed a Response in Opposition to the Motion (Doc. # 87) on April 16, 2012. For the reasons that follow, the Court grants in part and denies in part the Motion to Dismiss and denies the Motion to Strike Affirmative Defenses.
Plaintiffs initiated this action against their former employee, Susan Perlmutter, on September 16, 2011, asserting the following complaint counts: misappropriation of trade secrets (count one); breach of contract (count two); fraud in the inducement (count three); breach of fiduciary duty (count four); constructive fraud (count five); tortious interference with a business relationship (count six); temporary and permanent injunctive relief (count seven) and civil conspiracy (count eight).
Defendant asserted five counterclaims against Plaintiffs: (1) breach of contract; (2) unjust enrichment; (3) tortious interference with advantageous business and contractual relationships and future relationships; (4) bad faith; and (5) fraud in the inducement. (Doc. # 68). In addition, Defendant asserted various affirmative defenses. Plaintiffs seek to dismiss Defendant's counterclaims and strike Defendant's affirmative defenses.
A motion to dismiss a counterclaim under Rule 12(b)(6) of the Federal Rules of Civil Procedure is evaluated in the same manner as a motion to dismiss a complaint.
"While a [counterclaim] attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,. . . a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."
A counterclaim plaintiff must plead enough facts to state a plausible basis for the claim.
Affirmative defenses are subject to the general pleading requirements of Rule 8. Specifically, Rule 8(b)(1)(A), Fed.R.Civ.P., requires that a party "state in short plain terms its defenses to each claim asserted against it." Affirmative defenses are also evaluated against the touchstone of Rule 12(f), Fed.R.Civ.P., which states, "The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Although the Court has broad discretion in ruling on a motion to strike, such motions are disfavored due to their "drastic nature."
In addition, courts may strike a defense if it has "no possible relation to the controversy, may confuse the issues, or may cause prejudice to one of the parties."
In this diversity case, the Court applies the substantive law of the forum state unless federal constitutional or statutory law compels a contrary result.
Defendant Perlmutter alleges that prior to joining Leedom, she was a shareholder of MBK, Inc., and one of Leedom's competitors. (Doc. # 68 at 86). MBK is a "sub-ISO" in the payment processing industry.
Unbeknownst to Perlmutter, however, "Leedom was notified before the end of December 2010 that their status as an ISO was being terminated."
Perlmutter contends that she "needed a fully PCI compliant organization in order to process her book of business."
In order to state a claim for breach of contract, Perlmutter must establish: (1) the existence of a valid contract; (2) material breach thereof; and (3) damages flowing from the breach.
Perlmutter's counterclaim for breach of contract is sufficient to withstand Plaintiffs' Motion to Dismiss. Perlmutter alleges that she entered into a contract with Leedom—the offer letter—and that Leedom breached the contract by (1) misrepresenting Leedom's ISO status, PCI compliance, and ACH capability to Perlmutter and (2) by failing to pay Perlmutter monies due under the contract. Perlmutter has sufficiently alleged damages flowing from the breach in that she lost the benefit of the bargain because Leedom could not process her book of business as profitably as Leedom represented to Perlmutter and in that Leedom failed to pay promised compensation.
The Court rejects Leedom's argument that Perlmutter cannot maintain an action for breach of contract because Perlmutter cannot show that she performed her obligations under the contract. Here, looking solely at the counterclaim, the Court determines that Perlmutter has alleged performance of the contract by joining Leedom, furnishing her valuable book of business to Leedom, and by facilitating Leedom's establishment of relationships with entities such as U.S. Data Capture, PAI, and EFT Networks. (Doc. # 68 at ¶¶ 108-112). The Court also rejects Leedom's other arguments, including the argument that the alleged breach does not "go to the essence of" the contract. The Court determines that Perlmutter's allegations concerning breach are material and relate to the essence of the contract. The Court accordingly denies the Motion to Dismiss as to Perlmutter's breach of contract counterclaim.
To state a claim for unjust enrichment, a plaintiff must show that (1) the plaintiff conferred a benefit on the defendant, who had knowledge of the benefit; (2) the defendant voluntarily accepted and retained the benefit; and (3) under the circumstances it would be inequitable for the defendant to retain the benefit without paying for it.
As explained in
Here, Perlmutter has challenged the validity of the contract. Specifically, she contends that the contract was invalid from inception due to Leedom's fraudulent inducement of Perlmutter to enter into the contract. Accordingly, the Court declines to dismiss the unjust enrichment counterclaim on the basis of an express contract.
The essence of Perlmutter's unjust enrichment claim is that Leedom misled her into relinquishing her book of business to Leedom and then, after Leedom gained control over her book of business, terminated Perlmutter. Perlmutter adds that "Plaintiffs reaped the benefit of processing the Book of Business and Defendant's services without ever paying Defendant for her stock liquidation with MBK, her forgiven loan to MBK [in the amount of $64,000.00], or even her minimum monthly bonus at Leedom." (Doc. # 68 at ¶ 140).
Although Plaintiffs assert that Perlmutter has enjoyed the benefit of the bargain and has an adequate legal remedy for the acts on which the unjust enrichment claim is predicated, the Court determines that these arguments are unavailing and prematurely asserted at this juncture. Based on the allegations contained within the counterclaim, Perlmutter satisfies the elements of the claim and has alleged facts sufficient to raise her right to relief above the speculative level. The Court accordingly denies the Motion to Dismiss as to Unjust Enrichment.
Under Florida law, "the elements of tortious interference with a business relationship are: (1) the existence of a business relationship that affords the plaintiff existing or prospective legal rights; (2) the defendant's knowledge of the business relationship; (3) the defendant's intentional and unjustified interference with the relationship; and (4) damage to the plaintiff."
The counterclaim contains succinct factual allegations satisfying each of these elements:
(Doc. # 68 at ¶¶ 143-148).
Plaintiffs present fact-specific arguments concerning events after Perlmutter's termination and other matters extraneous to the allegations of the counterclaim in an effort to defeat the claim. However, these arguments are prematurely asserted at the Rule 12(b)(6) motion to dismiss stage. At this juncture, the Court determines that the tortious interference counterclaim survives the Motion to Dismiss.
In Counterclaim four, Perlmutter seeks attorney's fees and costs under the Florida Uniform Trade Secrets Act, Fla. Stat. § 688.001, et seq. Perlmutter describes her claim under the Act as a claim based on bad faith. Count one of Plaintiffs' complaint against Perlmutter alleges that Perlmutter violated the Act, alleging among other things that "Leedom's trade secrets were misappropriated by Perlmutter in violation of Fla. Stat. § 688.001." (Doc. # 1 at ¶ 31). Florida Statute § 688.005 states, "if a claim of misappropriation is made in bad faith . . ., the court may award reasonable attorney's fees to the prevailing party."
Perlmutter asserts that Plaintiffs are pursuing their Uniform Trade Secrets Act action against her in bad faith and accordingly, she requests attorney's fees and costs. Plaintiffs provide no legal support to buttress their arguments in support of the dismissal of Perlmutter's request for attorney's fees pursuant to the Act. Accordingly, the Motion to Dismiss is denied as to this claim.
Claims for fraudulent inducement are held to a heightened pleading standard pursuant to Rule 9(b), Fed.R.Civ.P., which states, "In alleging fraud . . . a party must state with particularity the circumstances constituting fraud." The Eleventh Circuit has commented that Rule 9(b) "serves an important purpose in fraud actions by alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral or fraudulent behavior."
Perlmutter's counterclaim satisfies each of the Rule 9(b) requirements, except Perlmutter fails to specify the time and place of each misrepresentation. Rule 9(b) requires not only the "who," and "what," but also the "when" and "where" of the alleged fraud.
Perlmutter has asserted various affirmative defenses to Leedom's complaint, which follow: (1) that the complaint fails to state a cause of action and fails to show a violation of the restrictive covenants contained in the offer letter within 50 miles of a location in which Plaintiffs are doing business; (2) that the complaint fails to establish proper venue; (3) that the complaint fails to establish personal jurisdiction over Perlmutter; (4) that the complaint fails to join indispensable parties; (5) that Perlmutter's contractual obligations owed to Leedom were voided due to Leedom's anticipatory breach of the contract; (6) failure of consideration; and (7) "Due to Plaintiffs' conduct in . . . failing to pay consideration and making material misrepresentations . . . to induce Defendant to accept employment, Defendant asserts that the doctrines of estoppel, unclean hands and unconscionability each render the Offer Letter invalid and unenforceable, and each further bars any relief sought by Plaintiffs." (Doc. # 68 at 5).
A true affirmative defense is "one that admits to the complaint, but avoids liability, wholly, or partly, by new allegations of excuse, justification or other negating matters."
Defenses one, four, and five are not true affirmative defenses. In these affirmative defenses, Perlmutter contends that Leedom's claims fail to state a cause of action, that the Complaint fails to join indispensable parties; and that anticipatory breach of the contract by Plaintiffs voided the contract. These defenses do not admit the allegations of the Complaint but avoid liability based upon some negating factor. Rather, Perlmutter raises in her affirmative defenses factual and legal issues bearing on the sufficiency of Plaintiffs' Complaint. Nevertheless, this Court is not inclined to strike these defenses. As explained in
As defenses one, four, and five attack the merits and procedural sufficiency of Plaintiffs' Complaint, the Court determines that these defenses pass muster under the standards noted above by putting into issue relevant and substantial legal and factual questions. Furthermore, the defenses relate squarely to the controversy, do not confuse the issues, and do not appear to cause prejudice to any party. The Court thus declines to strike defenses one, four and five.
To the extent that Defendant raises failure of consideration and estoppel, such defenses are true affirmative defenses as described in Rule 8(c)(1), Fed.R.Civ.P., and are not subject to being stricken based on Plaintiffs' challenge. In sum, the Court determines that the defenses challenged are not subject to the draconian sanction of being stricken. Thus, the Court denies the Motion to Strike.
Accordingly it is now