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Barefield Workplace Solutions, Inc. v. Miller's of Columbia, Inc., 3:17-CV-87-HTW-LRA. (2018)

Court: District Court, S.D. Mississippi Number: infdco20181004818 Visitors: 3
Filed: Sep. 30, 2018
Latest Update: Sep. 30, 2018
Summary: ORDER HENRY T. WINGATE , District Judge . BEFORE THIS COURT is Defendant Paul H. Olsen's Motion to Dismiss [Docket no. 101] and the Motion to Dismiss Pursuant to Rule 12(b)(2) 1 [Docket no. 99] filed by defendants Shirisha Janumpally ("Janumpally"), Silvia Valleru ("Valleru"), Lionshead Enterprises, Corp. ("Lionshead"), Suresh Venkat Doki ("Doki"), and Suresh Boyapati ("Boyapati") (hereinafter collectively referred to as "Defendants"). All Defendants filed their memorandum briefs
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ORDER

BEFORE THIS COURT is Defendant Paul H. Olsen's Motion to Dismiss [Docket no. 101] and the Motion to Dismiss Pursuant to Rule 12(b)(2)1 [Docket no. 99] filed by defendants Shirisha Janumpally ("Janumpally"), Silvia Valleru ("Valleru"), Lionshead Enterprises, Corp. ("Lionshead"), Suresh Venkat Doki ("Doki"), and Suresh Boyapati ("Boyapati") (hereinafter collectively referred to as "Defendants"). All Defendants filed their memorandum briefs in support of their motions to dismiss on the same date, November 15, 2017 [Dockets no. 100 and 102]. The motions to dismiss address the Second Amended Complaint [Docket no. 95] filed by the plaintiff, Barefield Workplace Solutions, Inc. (hereinafter referred to as "Barefield"). Barefield filed its responses in opposition and memorandums in support of its opposition on November 29, 2017. [Docket nos. 104, 105, 106 and 107]. Defendant Paul H. Olsen (hereinafter referred to as "Olsen") filed his reply on December 6, 2017. [Docket no. 110]. The remaining defendants filed their reply on December 13, 2017. [Docket no. 113].

In their motions to dismiss, Defendants campaign that each of them lacks sufficient contacts with Mississippi to support the assertion of personal jurisdiction over them according to the requirements of Mississippi's Long-Arm Statute and Due Process under the Fourteenth Amendment to the United States Constitution. Premised upon Rule 12(b)(6)2, Olsen's motion further contends that Barefield's second amended complaint does not state a cause of action upon which relief can be granted. For the reasons presented herein, this court DENIES in part and GRANTS in part Defendant Olsen's Motion to Dismiss [Docket no. 101] and DENIES Defendants' Motion to Dismiss Pursuant to Rule 12(b)(2) [Docket no. 99].

I. JURISDICTION

This court possesses federal subject matter jurisdiction over the parties based on diversity of citizenship under Title 28 U.S.C. § 13323 because the matter in controversy exceeds the sum of $75,000, exclusive of interests and costs, and is between citizens of different states. Complete diversity of citizenship exists here, as none of the defendants resides in the same state as the plaintiff4.

A federal court with diversity jurisdiction applies the substantive law of the forum state. Learmonth v. Sears, Roebuck & Co. 710 F.3d 249, 258 (5th Cir. 2013). A district court, then, must apply the choice of law rules of the state in which the action is brought. Williamson Pounders Architects PC v. Tunica Cty., Miss. 597 F.3d 292, 295 (5th Cir. 2010). Mississippi is the forum state for the lawsuit sub judice. Its choice of law provisions must be enforced here and given effect unless Mississippi's provisions are arbitrary or fundamentally unfair. Id. Thus, obedient to the longstanding doctrine of Erie Railroad Co., v. Tompkins, 304 U.S. 64 (1938), this court, sitting in Mississippi, applies the substantive law of Mississippi to this dispute.

Barefield's second amended complaint further asserts subject matter jurisdiction pursuant to Title 28 U.S.C. § 13315 by virtue of 18 U.S.C. § 1964(c) and the claims arising under Title 18 U.S.C. § 1964(c) and § 1964(d). This court reminds the parties that Barefield withdrew all RICO-related causes of action in its second amended complaint; therefore, subject matter jurisdiction is not proper under Title 28 U.S.C. § 1331.

II. PARTIES

Barefield is a furniture supply company with its principal place of business located in Mississippi.

Miller's of Columbia (hereinafter referred to as "MOC") is a North Carolina furniture company with its principal place of business located in Columbia, South Carolina.

Janumpally is an adult resident of Fairfax, Virginia. Janumpally is the Chief Executive Officer of MOC.

Valleru is the President and Treasurer of MOC and an adult resident of Fairfax, Virginia.

Lionshead is a Delaware corporation with its principal place of business located in Manassas, Virginia. Lionshead is the appointed manager of MOC.

Doki is Lionshead's employee and an adult resident citizen of Manassa, Virginia.

Boyapati is Lionhead's employee and an adult resident citizen of Ashburn, Virginia.

Olsen is MOC's Chief Operating Officer and an adult resident citizen of Columbia, South Carolina.

III. FACTUAL AND PROCEDURAL HISTORY

This lawsuit arises from a contractual agreement between Barefield and MOC, whereby Barefield and MOC collaborated to procure and install furniture for the Bureau of Land Management (hereinafter referred to as "BLM") in Flowood, Mississippi. Under the agreement, Barefield would purchase the requisite furniture from Kimball, a major officer furniture manufacturer. MOC would then reimburse Barefield for all furniture orders with funds received from the U.S. government. At the time of the contractual agreement between Barefield and MOC, Olsen and his brother, David Olsen, owned MOC. In February 2016, Janumpally and Valleru successfully acquired 70% of MOC's voting shares and assumed majority control of the company.

In their capacity as MOC's officers, Janumpally and Valleru appointed Lionshead as manager of MOC. Olsen, in his capacity as Chief Operating Officer of MOC, signed the agreement with Lionshead. Upon discovering the change of ownership in MOC, Plaintiff's CEO, Paul Maczka, expressed concerns to Olsen about the "financial logistics" of the contract. In response to Barefield's expressed concerns, Olsen emailed Plaintiff to set up a telephone conference with Defendant Doki of Lionshead, the "new owner's representative," and Paul Maczka.

During the telephonic conference, Doki and Olsen represented to Paul Maczka that because the order had already been placed, payment instructions to Barefield could not be changed. Olsen and Doki then suggested holding the BLM contract funds in an escrow account to alleviate Barefield's financial concerns.

Barefield agreed to proceed with the BLM project. In accordance with the terms of the agreement, Barefield placed the furniture order with Kimball and paid Kimball for the cost of the furniture. Barefield submitted two invoices for the total amount of $346,923.41. Barefield purchased and installed the furniture at BLM; however, Barefield never received reimbursement payment from MOC and filed this suit on February 8, 2017. [Docket no. 1].

Defendants Janumpally and Valleru filed a Motion to Dismiss Barefield's Complaint Pursuant to FRCP Rule (12)(b)(2) on March 1, 2017. [Docket no. 11]. Olsen filed a Motion to Dismiss pursuant to FRCP Rules (12)(b)(2) for Lack of Personal Jurisdiction and (12)(b)(6) for Failing to State of Cause of Action on April 5, 2017. [Docket no. 15]. In compliance with the Federal Rules of Civil Procedure, Plaintiff filed an Amended Complaint on October 10, 2017. [Docket no. 84]. Defendant Olsen filed another Motion to Dismiss in response to Plaintiff's first amended complaint on October 30, 2017. [Docket no. 91]. Plaintiff filed its Second Amended Complaint on November 1, 2017. [Docket no. 95].

In its Second Amended Complaint, Barefield alleges the following causes of actions against Defendants Janumpally, Valleru, Lionshead, Doki, and Boyapati: Breach of Fiduciary Duty, Coversion, Civil Conspiracy, Fraud, Breach of the Duty of Good Faith and Fair Dealing, and Unjust Enrichment. Id. Barefield raises the following causes of action against Defendant Olsen: Breach of Fiduciary Duty (escrow), Conversion, Fraud, and Bad Faith and Unfair Dealing. Id.

IV. LAW AND ANALYSIS

A.

IN PERSONAM JURISDICTION

Defendants contend that this court does not have personal jurisdiction over them. Barefield has the burden of establishing a district court's jurisdiction over the non-resident defendants; however, proof by a preponderance of the evidence is not required. Plaintiff need only make out a prima facie case to meet its burden of establishing personal jurisdiction. See Luv n' Care Ltd. v. InstaMix, Inc., 483 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)).

In making this determination, uncontroverted allegations in a plaintiff's complaint, other than conclusory allegations, must be taken as true. Additionally, factual conflicts must be resolved in favor of the plaintiff. Id. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001).

In diversity cases under 28 U.S.C. § 1332, such as this matter before the Court, the exercise of personal jurisdiction over a non-resident defendant must comport with both federal constitutional due process requirements and the long-arm statute of the state in which the district court is located." Companion Prop. and Cas. Ins. Co. v. Palermo, 723 F.3d 557, 559 (5th Cir. 2013)(citing Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006)).

Under the provisions of Mississippi's Long-Arm Statute, three activities permit Mississippi courts to exercise personal jurisdiction over a nonresident defendant: If that person has (1) entered into a contract to be performed in Mississippi; (2) has committed a tort in Mississippi; or, (3) is conducting business in Mississippi." The assertion of personal jurisdiction also requires that the strictures of due process are met. Dunn v. Yager, 58 So.2d 1171, 1184 (Miss. 2011) (citing Yatham v. Young, 912 So.2d 467, 469-70 (Miss. 2005)).

These structures of Mississippi's Long-Arm Statute are commonly referred to as the three prongs: the contract prong, the tort prong and the doing business prong. ITL Int'l, Inc. v. Constenla S.A., 669 F.3d 493, 497 (5th Cir. 2012).

The exercise of personal jurisdiction must also comport with the requirements of federal due process, as above mentioned. See Stripling v. Jordan Prod. Co., 234 F.3d 863, 869 (5th Cir. 2000) (as cited in Davenport v. Hansaworld USA, No. 2:12-cv-233, 2013 WL 5406900). Due process requires that a defendant over whom personal jurisdiction is sought have certain minimum contacts with the forum state, "such that maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, (1945).

1. Defendants Janumpally, Valleru, Lionshead, Doki, and Boyapati's Rule 12(b)(2) Motion to Dismiss

Defendants assert that each of them lacks sufficient contacts with the State of Mississippi to support the assertion of personal jurisdiction over them [Motion to Dismiss doc. no. 99 at p. 1]. More specifically, Defendants claim that they "have never been to Mississippi, done business in Mississippi, done business with anyone in Mississippi or had any connection of any kind with Mississippi" Id. This Court disagrees.

Personal jurisdiction may be general or specific. General personal jurisdiction arises when the defendant's contacts are `continuous and systematic'. Plaintiff in the case sub judice has not alleged that any of the defendants had continuous or systematic contact with the State of Mississippi.

Plaintiff alleges personal jurisdiction that is "specific," that is, that Plaintiff's claim arises from the defendants' contact with Mississippi. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868 (1984). Where a plaintiff alleges specific jurisdiction, due process requires (l) minimum contacts by the defendant purposefully directed at the forum state, (2) a nexus between the defendant's contacts and the plaintiff's claims, and (3) that the exercise of jurisdiction over the defendant be fair and reasonable. ITL Int'l, Inc, 669 F.3d at 498.

"Under the tort prong of the Mississippi Long-Arm Statute, personal jurisdiction is proper if any element of the tort (or any part of any element) takes place in Mississippi." Internet Doorway, Inc. v. Parks, 138 F.Supp.2d 773, 776 (S.D. Miss. 2001) (quoting Allred v. Moore & Peterson, 117 F.3d 278, 282 (5th Cir.1997), cert. denied, 522 U.S. 1048 (1998)). Defendants' assertion that none of them has ever been to Mississippi is not alone dispositive, as a nonresident defendant need not be physically present in the State to commit a tort in that State if the injury from the tort occurs in the State. See, e.g., Knight v. Woodfield, 50 So.3d 995, 998-99 (Miss. 2011)(affirming trial court's denial of motion to dismiss for lack of personal jurisdiction in an alienation of affection case, where the defendant was a Louisiana resident who, from Louisiana, frequently called, sent text messages to, and emailed plaintiff's wife in Mississippi).

The injury from the tort must be an actual injury, not economic collateral damages. Jobe v. ATR Marketing, Inc., 87 F.3d 751, 753 (5th Cir.1996). Where loss and damages are elements of the tort, and not mere consequences of a tort having occurred elsewhere, a plaintiff sufficiently establishes a prima facie showing that the tort prong of the Mississippi Long-Arm Statute provides for the exercise of personal jurisdiction over the plaintiff. Unified Brands, Inc. v. Teders, 868 F.Supp.2d 572, 579 (S.D. Miss 2012). This Court is satisfied that injury is an element of Barefield's claims against the Defendants. All parties agreed that payment was to be made to Barefield in Mississippi for contractual services performed at a government facility in Mississippi. In the case at bar, the injury, loss of income to a Mississippi corporation, occurred in Mississippi as the place of performance for the BLM contract.

This Court's exercise of personal jurisdiction over the Defendants also comports with the requirements of federal due process. Minimum contacts may be established by just a single act, by which the non-resident defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Ruston Gas Turbines, Inc., v. Donaldson Co., 9 F.3d 415, 419 (5th Cir.1993).

Defendants Janumpally and Valleru took ownership and control of MOC in 2016, at a time when MOC was actively participating in a government contract with a Mississippi corporation for the procurement and installation of furniture at a government facility in Mississippi. Janumpally and Valleru did not enter into the BLM contract at its formation; however, they availed themselves to the benefits and protections of Mississippi by representing themselves as parties to the contract. Defendant Doki further established contact with Mississippi by suggesting that the funds to pay Barefield be held in escrow. Doki and Boyapati, through their positions in Lionshead, received and managed Barefield's payment funds for MOC. At the heart of the matter is whether the Defendants' conduct showed that they reasonably anticipated being brought into court in the forum state. Vanderbilt Mortgage & Fin., Inc. v. Flores, 692 F.3d 358, 375 (5thCir. 2012) (citing McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009)). This Court concludes that theirs did.

Once the plaintiff has established a prima facie case that the defendant has sufficient minimum contacts with Mississippi, the burden shifts to the defendant to show that the exercise of jurisdiction would be unreasonable. Luv n' Care Ltd., 438 F.3d at 473. Defendants have not met that burden; therefore, this Court's jurisdiction over Defendants is permissible; Defendants actively conducted business activities in Mississippi; and, in addition, Mississippi's Long-Arm Statute applies.

2. Defendant Paul H. Olsen's Rule 12(b)(2) Motion to Dismiss

Defendant Olsen also contends that this Court does not have personal jurisdiction over him. In applying the same analysis to Olsen as to the other Defendants, this Court finds that Barefield has not asserted general jurisdiction over Olsen; rather, this Court must determine whether Olsen had sufficient contact with Mississippi to permit the exercise of specific personal jurisdiction. First, the Court examines Mississippi's Long-Arm Statute as it applies to Olsen's actions.

In order for jurisdiction to attach under the tort prong of Mississippi's Long-Arm Statute, Barefield must show that Olsen committed a tort in Mississippi, "in whole or in part." Smith v. Temco, Inc., 252 So.2d 212, 216 (Miss. 1971). Olsen, in his Memorandum in Support of his Motion to Dismiss, asserts that jurisdiction does not attach simply because the "damages" in this case occurred in Mississippi. [Docket no. 102 at p. 10]. In the matter at hand, damages are an element of the torts alleged, and these damages manifest in the form of loss income to a Mississippi corporation. As such, Barefield adequately states a prima facie showing that the tort prong of Mississippi's Long-Arm Statute has been satisfied in accordance with Unified Brands, Inc., 868 F.Supp.2d 572.

Olsen further contends that the only acts of Defendant Olsen alleged by Barefield relate to a single phone call. Id. at p. 11. In personam jurisdiction turns initially on the well-pleaded allegations of the complaint. Petters v. Petters, 560 So.2d 1017, 1019 (Miss. 1979). Barefield shows in its Second Amended Complaint that Olsen contacted employees or officers of Barefield on at least four separate occasions. [Docket no. 95 at p. 5]. These four contacts are as follows: (1) Olsen's email to Paul Maczka on June 22, 2016. Id. (2) Olsen's email to Paul Maczka on June 23, 2016. Id. (3) Olsen's email, showing Barefield's employee, Marisa Elrod, as a recipient on September 21, 2106. Id. (4) Olsen's email again copying Marisa Elrod as a recipient on October 27, 2016. Id. As previously mentioned, Olsen also orchestrated and participated in the telephone conference with Paul Maczka in Mississippi. Olsen's emails and phone calls were directed to Barefield's respresentatives in Mississippi, and his actions are sufficient to establish sufficient minimum contacts in compliance with the requirement of the Due Process Clause of the Fourteenth Amendment.

The factors considered in order to test the reasonableness of this Court's exercise of jurisdiction are: (1) the burden on the defendant; (2) the forum state's interest; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies. Asahi Metal Indus. Co. v. Sup Ct. of California, Solano Country, 480 U.S. 102, 113 (1987). Defendant Olsen has not shown that the exercise of jurisdiction would be unreasonable; therefore, this Court finds that it has personal jurisdiction over Olsen.

RULE 12(b)(6) MOTION TO DISMISS STANDARD

Olsen also attacks Barefield's Second Amended Complaint under Rule 12(b)(6) of Federal Rules of Civil Procedure for "failure to state a claim upon which relief can be granted." When tasked with this question, this court must consider the facts in the light most favorable to the plaintiff and determine whether the complaint states a valid claim for relief. United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 379 (5th Cir. 2003).

The United States Supreme Court unequivocally has stated the complaint must allege sufficient facts to give rise to a plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A claim has facial plausibility when the plaintiff pleads factual conduct that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. In considering a motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court "looks only at the sufficiency of the allegations in the pleadings and assumes them to be true. If the allegations are sufficient to allege jurisdiction, the court must deny the motion." Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981).

Plaintiff contends that Olsen's Motion to Dismiss under Rule 12(b)(6) should be denied because it violates Federal Civil Procedure Rule (12)(g)(2)6. In support of its position, Plaintiff explains that because Olsen failed to assert certain arguments in his Motion to Dismiss Plaintiff's First Amended Complaint [Docket No. 91], he is now banned from filing a successive motion containing the omitted arguments.

An amended complaint is normally treated as completely replacing the former pleading. Cicchettis v. Lucey, 514 F.2d 362 (1st Cit. 1975); Bullen v. De Bretteville, 239 F.2d 824, 833 (9th Cir. 1956), cert. denied sub nom. Treasure Co. v. Bullen, 353 U.S. 947, 77 S.Ct. 825, 1 L.Ed.2d 856 (1957). It is well-settled that an amended complaint "supercedes the original complaint and renders it of no legal effect unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleading." Canal Ins. Co. v. Coleman, 625 F.3d 244, 246 n. 2 (5th Cir.2010) (citing King v. Dogan, 31 F.3d 344, 346 (5th Cir.1994)); Ross v. Hutchins Police Dept., No. 3:09-CV-0168-M, 2009 WL 1514364 (N.D.Tex. May 29, 2009).

The second amended complaint; therefore, replaces Barefield's first amended complaint for all purposes, including Olsen's right to assert defenses by a motion pursuant to Federal Civil Procedure Rule 12. In its second amended Complaint, Plaintiff asserts claims of Breach of Fiduciary Duty (Escrow), Conversion, Fraud, and Bad Faith and Unfair Dealing against Olsen. [Doc. no. 95].

1. Breach of Fiduciary Duty

In order sufficiently to assert a cause of action for breach of fiduciary duty in Mississippi, a plaintiff must establish that a duty actually exists. Holland v. Peoples Bank & Tr. Co., 3 So.3d 94, 102 (Miss. 2008). Whenever a relationship exists between two people in which one person is in a position to exercise a dominant influence upon the former, arising either from weakness of mind or body, or through trust, the law does not hesitate to characterize such a relationship as "fiduciary" in character. The relationship arises when a dominant, overmastering influence controls over a dependent person or trust justifiably reposed." Mabus v. St. James Episcopal Church, 884 So.2d 747, 758 (Miss. 2004) (citations omitted). A fiduciary relationship "is a very broad term embracing both technical fiduciary relations and those informal relations which exist wherever one person trusts in or relies upon another." Hopewell Enterprises, Inc. v. Trustmark Nat. Bank, 680 So.2d 812 (Miss. 1996).

In its Second Amended Complaint, Barefield has alleged facts to show that Barefield expressed its concerns about MOC's change in management and consulted with Olsen. [Doc no. 95 at p. 5]. It is also undisputed that Olsen, along with Defendant Doki, providing a solution to Barefield's angst, stated that the BLM funds could be held in escrow. Id. This Court finds that Barefield's Second Amended Complaint states a proper claim for breach of fiduciary duty against Olsen.

2. Conversion

In Mississippi, in order to show a claim for conversion, a party must present sufficient proof of a wrongful possession, or the exercise of a dominion in exclusion or defiance of the owner's right, or of an unauthorized and injurious use, or of a wrongful detention after demand. Covington Cty Bank v. Magee, 177 So.3d 826, 829 (Miss. 2015). Barefield alleges sufficient facts to show that MOC or its officers are in wrongful possession of funds belonging to Barefield. At the time of the claim, Olsen was MOC's Chief Operating Officer, and Barefield alleges that Olsen actively participated in the conversion. This Court finds that Barefield has sufficiently stated a cause of action against Olsen for conversion.

3. Fraud

Under Mississippi law, a prima facie showing of Fraud requires: (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the matter reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance upon its truth; (8) his right to rely thereon; (9) his consequent and proximate injury. Lacy v. Morrison, 906 So.2d 126, 129 (Miss. 2004) (citations and quotation marks omitted). "[A] claim of fraudulent representation cannot be predicated on a promise relating to future actions. Fraudulent misrepresentations must be related to past or presently existing facts." Spragins v. Sunburst Bank, 605 So.2d 777, 781 (Miss. 1992) (citations omitted). A promise of future conduct; nonetheless, meets the requirement of a "representation" when "the promise was made with the present intent not to perform." Bank of Shaw, a Branch of Grenada Bank v. Posey, 573 So.2d 1355, 1359 (Miss. 1990).

Barefield alleges that Olsen promised to hold the BLM contract funds in escrow in order to ensure that Barefield procures and installs the furniture for BLM in Mississippi. Barefield contends that Olsen knew his promise was false at the time he made the promise. At the time Olsen made the promise, he was the Chief Operating Officer of MOC; therefore, Barefield had a right to rely upon, and did indeed rely upon, Olsen's promise. This Court finds that Olsen has stated a prima facie case for Fraud.

4. Bad Faith and Unfair Dealing

The duty of good faith and fair dealing attaches to all contracts in Mississippi.7 "The breach of good faith is bad faith characterized by some conduct which violates standards of decency, fairness or reasonableness." Cenac v. Murry, 609 So.2d 1257, 1272 (Miss. 1992); citing Restatement (Second) of Contracts § 205, 100 (1979). This Court has previously established the common law tort of bad faith and breach of good faith and fair dealing as a separate claim, which may encompass various claims in the plaintiff's complaint. See Turnipseed v. Unim Life Ins. Co. of Am., 230 F.Supp.2d 727, 729 (S.D. Miss. 2002). Barefield does not, however, show that Turnipseed applies here. Olsen was not a party to the contract; as such, this Court questions whether he may be held liable for the breach of the duty of good faith and fair dealing. Plaintiff has not provided any authority to support such a contention. As such, this Court dismisses Plaintiff Barefield's claim for Bad Faith and Unfair Dealing against Defendant Olsen without Prejudice.

V. CONCLUSION

For the reasons stated herein, this Court declines to dismiss this lawsuit and declines to dismiss any of the defendants from this litigation. The Court; however, dismisses Plaintiff's Cause of Action for Bad Faith and Unfair Dealing against Defendant Paul H. Olsen without prejudice.

IT IS, THEREFORE, ORDERED that the Defendants' Motion to Dismiss Pursuant to Rule 12(b)(2) [Docket No. 99] is DENIED.

IT IS FURTHER ORDERED that Defendant Paul H. Olsen's Motion to Dismiss [Docket no. 101] is DENIED IN PART and GRANTED IN PART.

SO ORDERED AND ADJUDGED.

FootNotes


1. Rule 12(b) of the Federal Rules of Civil Procedure provides:

(b) How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:. . .(2) lack of personal jurisdiction;

2. (b) How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion: . . . 6) failure to state a claim upon which relief can be granted; Fed. R. Civ. P. 12
3. 28 U.S.C. § 1332 states:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between—

(1) Citizens of different States; . . .

4. "If the case involves more than one plaintiff and more than one defendant, the court must be certain that all plaintiffs have a different citizenship from all defendants." Getty Oil Corp. v. Ins. Co. of f. Am., 841 F.2d 1254, 1258 (5th Cir.1988) (citing B, Inc. v. Miller Brewing Co., 663 F.2d 545, 548-49 (5th Cir. Unit A Dec.1981)). (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 S.Ct. 435 (1806)).
5. 28 U.S.C. § 1331 states:

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

6. (g) Joining Motions. . . (2) Limitations on Further Motions. Except as provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule must not make another motion under this rule raising a defense that was available to the party but omitted from its earlier motion. Fed. R. Civ. P. 12
7. All contracts contain an implied covenant of good faith and fair dealing in performance and enforcement. Citations Omitted. The covenant of good faith and fair dealing in contract has force in the statutory law as well. "Every contract or duty within this code imposes an obligation of good faith in its performance or enforcement." Miss.Code Ann. § 75-1-203 (1972).

Cenac v. Murry, 609 So.2d 1257, 1272 (Miss. 1992)

Source:  Leagle

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