MARC T. TREADWELL, District Judge.
Isaac Culver, III and Progressive Consulting Technologies Inc. (the "Progressive Defendants") jointly move to dismiss Counts I, III, V, VIII, and XI of Plaintiff's Amended Complaint (Doc. 59) for failure to state a claim. Doc. 70. Alternatively, the Progressive Defendants move the Court to compel arbitration of their claims. The motion to dismiss is
The Progressive Defendants argue that Counts I (federal RICO), III (fraud), and VIII (negligence) are barred by the applicable four-year statutes of limitation. Doc. 70-1 at 5-9. "[A] Rule 12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is `apparent from the face of the complaint' that the claim is time-barred." La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004).
The parties' briefs focus on when the applicable statutes of limitations began to accrue, the Progressive Defendants contending that the accrual for all claims began no later than October 11, 2012 (two months outside of the limitations period), when Progressive submitted, and the Plaintiff paid, Progressive's first invoice for $500,000. Doc. 70-1 at 7-9. Recognizing that the discovery rule is applicable to the RICO and fraud claims, the Progressive Defendants further argue that fellow-Defendant Dallemand's knowledge of a "potential RICO violation" and "the alleged fraud" can be imputed to the Plaintiff. See id. at 8 ("Plaintiff clearly discovered the alleged fraud on September 24, 2012 at the very latest when the Superintendent of BCSD was presented with a Services Agreement that, according to Plaintiff, contained significantly higher rates."); see also id. at 7-8 (relying on Dallemand's removal of Ron Collier as Chief Financial Officer and investigation of Collier's department as reason to discover "a potential RICO violation"). The Plaintiff's allegations place Dallemand squarely in the middle of the scheme; accordingly, any argument that the Plaintiff knew or should have known something simply because Dallemand knew it is, to be charitable, surprising.
Moreover, as to the state-law claims, the Plaintiff has alleged acts of actual fraud involving moral turpitude by the Progressive Defendants that concealed the Plaintiff's injury well into the limitations period. Cf. Shipman v. Horizon Corp., 245 Ga. 808, 809, 267 S.E.2d 244, 246 (1980). ("[W]here the gravamen of the action is other than actual fraud, such as constructive fraud, negligence, breach of contract, etc., . . . separate independent actual fraud involving moral turpitude which debars and deters the plaintiff from bringing his action [will toll the statute of limitations] until the fraud is discovered or should have been discovered . . .").
Because it is not "apparent from the face of the complaint" that Counts I, III, and VIII are time-barred, these claims may not be dismissed on statute of limitations grounds.
Progressive argues that Count V, Progressive's breach of contract—the September 24, 2012, "Services Agreement" and the representations in the previous, September 17, 2012, "Contract Administration Plan"—must be dismissed because the merger clause in the Services Agreement prevents consideration of the Contract Administration Plan.
Under Federal Rule of Civil Procedure 12(g)(2), a defendant, subject to a few exceptions, may not raise a defense in a Rule 12 motion that was "available" to it, "but omitted from [an] earlier motion." Count V of the Plaintiff's initial Complaint contained a breach of contract claim against Progressive that was, for all relevant purposes, identical to Count V of the Amended Complaint. The substance of the alleged contract, including the incorporation of the representations contained in the Contract Administration Plan, is the same, word-for-word, in the two complaints. Compare Doc. 1 ¶ 191 ("Defendant Progressive was bound by the Services Agreement and the representations contained in the Contract Administration Plan, which served as the basis for the award of the Services Agreement, in its role as Project Manager for BCSD's Technology Project.") (emphasis added) with Doc. 59 ¶ 244 (same). The difference between the breach of contract claims alleged in the two complaints is that in the Amended Complaint the breach of contract claim is made in the alternative to the Plaintiff's separate claim, not made in the initial Complaint, that the Services Agreement is void for lack of authority.
It appears, though this is not at all clear from their briefs, that the Progressive Defendants also raise merger as a bar to any of the Plaintiff's claims for fraud in Count III arising out of acts prior to the execution of the Services Agreement. See Doc. 70-1 at 11 (seeking dismissal of breach of contract claim alone); see also id. at 9 (referring to fraud in caption); Doc. 89 at 2 (making one, isolated reference to fraud). Again, this defense was available to the Progressive Defendants when they filed their first motion to dismiss, and they cannot raise it now. Moreover, the Progressive Defendants miss the import of the Plaintiff's lack-of-authority allegation. They somehow construe it as implicating the doctrine of fraudulent inducement and from there, rescission, in support of their merger defense to the Plaintiff's allegations of preformation fraud. Docs. 70-1 at 10; 89 at 2-4. But the allegation is that Dallemand had no authority to bind the Plaintiff and, accordingly, no contract was formed with Progressive regardless of any fraud by the Progressive Defendants.
Ironically, when the Plaintiffs did not claim that the Services Agreement was void for lack of authority and the Plaintiff's breach of contract claim was not made in the alternative to this claim, the Defendants may have had a merger defense to any fraud preceding the execution of the Services Agreement. But the allegation that the Plaintiff never agreed to the Services Agreement, rather than making the merger defense "available," undermines its premise—Plaintiff being bound by the merger clause in the Services Agreement.
In sum, to the extent that the Progressive Defendants assert a merger defense to Count III, the defense was available to them when they filed their previous motion, so Rule 12(g)(2) bars them from asserting it here. But, in any event, the merger defense does not warrant dismissal of Count III in light of the Plaintiff's allegation that the Services Agreement containing the merger clause is void for lack of authority.
Lastly, the Progressive Defendants argue that Count XI, inducing and aiding a breach of fiduciary duty, does not state a recognized claim under Georgia law. Doc. 70-1 at 13-14. While this once appeared correct, it is no longer after Insight Technology, Inc. v. FreightCheck, LLC, 280 Ga.App. 19, 23-26, 633 S.E.2d 373, 377-79 (2006), as noted by the Plaintiff in its response brief. The Progressive Defendants' reply brief does not even acknowledge Insight Technology, instead doubling down on Eleventh Circuit cases decided before Insight Technology. Doc. 89 at 4 (citing Munford v. Valuation Research Corp. (Matter of Munford, Inc.), 98 F.3d 604, 613 (11th Cir. 1996) and Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145, 1157 (11th Cir. 2006)
"[F]ederal courts [sitting in diversity] must follow the decisions of the state's highest court, and in the absence of such decisions on an issue, must adhere to the decisions of the state's intermediate appellate courts unless there is some persuasive indication that the state's highest court would decide the issue otherwise." Flintkote Co. v. Dravo Corp., 678 F.2d 942, 945 (11th Cir. 1982). Of course, district courts are bound by the decisions of the Eleventh Circuit; but, as the Eleventh Circuit has recognized, when "state law changes or is clarified in a way that is inconsistent with the state law premise of one of our earlier decisions, the prior panel precedent rule does not bind us to follow our earlier decision." World Harvest Church, Inc. v. Guideone Mut. Ins. Co., 586 F.3d 950, 957 (11th Cir. 2009) (citation and quotation marks omitted). The Court has reviewed the Eleventh Circuit opinions cited by the Defendants. The Eleventh Circuit simply relied on the absence of Georgia case law expressly recognizing a claim for inducing and aiding a breach of fiduciary duty. See, e.g., Official Comm. of Unsecured Creditors of PSA, Inc., 437 F.3d at 1157.
The Progressive Defendants' motion (Doc. 70) is accordingly