United States District Court, S.D. Ohio, Western Division
AND ENTRY SUSTAINING DEFENDANTS IMPACT DESIGN LLC, D/B/A
ALLCUSTOMWEAR.COM, AND JOSHUA BATZ'S MOTION TO DISMISS
CLAIMS II, III, IV, V, VI, VIM AND IX OF PLAINTIFFS LIZARD
APPAREL AND PROMOTIONS, LLC, AND ELIZABETH L. LYBROOK'S
SECOND AMENDED COMPLAINT (DOC. #33); CLAIMS II (DETRIMENTAL
RELIANCE/PROMISSORY ESTOPPEL), III (UNJUST ENRICHMENT), IV
(TORTIOUS INTERFERENCE WITH CONTRACT, V (ACCOUNTING), VI
(BREACH OF FIDUCIARY DUTY), VIII (PUNITIVE DAMAGES) AND IX
(INJUNCTIVE RELIEF) OF THE SECOND AMENDED COMPLAINT (DOC.
#29) ARE DISMISSED WITH PREJUDICE, AND JUDGMENT SHALL
ULTIMATELY ENTER IN FAVOR OF DEFENDANTS AND AGAINST
PLAINTIFFS ON THOSE CLAIMS; PLAINTIFFS' PRAYER FOR
INJUNCTIVE RELIEF IS STRICKEN; PLAINTIFFS MAY, WITHIN
FOURTEEN DAYS OF THIS ENTRY, FILE A THIRD AMENDED COMPLAINT
THAT SETS FORTH AN APPROPRIATE PRAYER FOR INJUNCTIVE RELIEF;
PLAINTIFFS' CLAIMS ONE (BREACH OF CONTRACT) AND SEVEN
(DEFAMATION) AGAINST DEFENDANTS SHALL PROCEED TO
H. RICE UNITED STATES DISTRICT JUDGE.
2013, Plaintiffs LIZard Apparel and Promotions, LLC
("Lizard" or "LIZard") and Elizabeth L.
Lybrook ("Lybrook"), Lizard's owner and
operator (collectively "Plaintiffs"), entered into
a contract with Defendant Impact Design, LLC, d/b/a
Allcustomwear.com ("Impact" or
"Impact/ACW"), by which Impact would design and
host e-commerce websites, through which Lizard's
customers would order and pay for Lizard's products.
Also, Impact was responsible for collecting payments from
Lizard's customers and remitting a portion of those
payments to Lizard. See Doc. #29, ¶¶ 9-19,
PAGEID #234-35 (overview of relationship between Lizard and
Impact). The relationship between the parties soured, and on
or about February 22, 2016, Impact President Joshua Batz
("Batz") proposed to Lybrook that Impact and Lizard
"separate their business relationship at the end of
their contract terms[, ] which was [sic] June 30,
2016[.]" Id., ¶ 37, PAGEID #238. However,
on April 15, 2016, Impact "unilaterally terminated its
relationship and contracts [with Lizard, ] including access
to all sites except Signature Healthcare." Id.,
¶ 42. Further, Impact did not remit to Lizard its
contractually-allotted portion of sale proceeds after January
31, 2016. Id., ¶ 44, PAGEID #239.
October 20, 2016, Plaintiffs filed their Second Amended
Complaint. Doc. #29. On October 25, 2016, Impact and Batz
(collectively "Defendants") filed a Motion to
Dismiss Claims I! (Detrimental Reliance/Promissory Estoppel),
III (Unjust Enrichment), IV (Tortious Interference), V
(Accounting), VI (Breach of Fiduciary Duty), VIII (Punitive
Damages) and IX (Injunctive Relief) ("Motion").
Doc. #33. For the reasons set forth below, their Motion is
2013, Lybrook founded Lizard to "sell custom uniform
programs to the healthcare industry and other
industries." Doc. #29, ¶ 6, PAGEID #233. Lybrook
"approached [D]efendant Impact/ACW to provide an online
platform (i.e.[, ] to host online webstores) and to
assist her in the development of her customer specific online
e-commerce webstores, as well as, provide order fulfillment,
product returns and back office support." Id.,
¶ 9, PAGEID #234. Through a March 7, 2013, Engagement
Letter, Lizard and Impact entered into a contract, under
which Impact agreed to provide website design, hosting and
customer service ("Bilateral Agreement") for
Lizard. Doc. #29-1, §§1.1, 1.3-1.5, PAGEID #249.
Further, Impact would collect payment from Lizard's end
users and remit twenty percent of the proceeds to Lizard on a
monthly basis. Id. §§ 3.1-3.2, PAGEID
#250. As part of the Bilateral Agreement, Impact agreed to
"not knowingly provide an eCommerce site to any of
[Impact's] competitors that is intended for presentation
or use at one of [Lizard's] own customers where the
Impact Design solution has been presented."
Id., § 4. The Bilateral Agreement was
terminable at-will, Id., §10.1, PAGEID #251.
LIZard sold their [sic] custom e-commerce webstore
uniform program, LIZard and Impact/ACW entered into specific
agreements which related to each party's
obligations to ] LIZard's clients/end users." Doc.
#29, ¶ 20, PAGEID #235. Impact agreed that it would not
solicit the Lizard customer that was the subject of the
particular Sales Representative Agreement. Doc. #29-2, PAGEID
#253. Each such Agreement was terminable at-will.
Lizard entered into bilateral contracts ("Service
Agreements") with each of its end users. These Service
Agreements were to continue for an initial term of thirty-six
months. Doc. #29-3, § 5.1, PAGEID #259. However, the
Service Agreements allowed both Lizard and its end user to
terminate the Agreement prior to the expiration of the
initial term, without cause, subject to the terminating party
providing timely written notice. Id., § 5.4;
Doc. #29-7, § 5.4, PAGEID #268.
2015, however, Impact began selling "custom uniform
programs in direct competition with LIZard." Doc. #29,
¶ 32, PAGEID #237. After Plaintiffs rejected
Defendants' offer for Lizard to become a subsidiary of
Impact, "LIZard began exploring other options for her
[sic] business[, ] including a different platform
vendor[.j" Id., ¶ 35. "On February
22, 2016, Impact/ACW . . . proposed that the parties separate
their business relationship at the end of their contract
terms[, ] which was [sic] June 30, 2016[, J and
pledged to support LIZard's end users/customers until
that date." Id., ¶ 37, PAGEID #238. In
response, Plaintiffs, in April 2016, began using a new host
for the clients they acquired after February 22, 2016,
id., ¶ 41, and on April 15, 2016, Impact
"unilaterally terminated its relationship and contacts
[with] LIZard[, ] including access to all sites except
Signature Healthcare." Id., ¶ 42.
2016, Lizard filed the initial Complaint, Doc. #2, and two
Motions for Temporary Restraining Order and Preliminary
Injunction ("TRO Motions"), Doc. #3, 12, against
Impact and Batz. The parties subsequently resolved the
subject matter of the TRO Motions, Doc #24, and Plaintiffs
filed a Second Amended Complaint, Doc. #29, adding Lybrook as
Rule of Civil Procedure 8(a) provides that a complaint must
contain "a short and plain statement of the claim
showing that the pleader is entitled to relief." The
complaint must provide the defendant with "fair notice
of what the . . . claim is and the grounds upon which it
rests." Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct.
12(b)(6) allows a party to move for dismissal of a complaint
on the basis that it "fail[s] to state a claim upon
which relief can be granted." The moving party "has
the burden of showing that the opposing party has failed to
adequately state a claim for relief." DirecTV, Inc.
v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing
Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir.
1991)). The purpose of a Rulel 2(b)(6) motion "is to
allow a defendant to test whether, as a matter of law, the
plaintiff is entitled to legal relief even if everything
alleged in the complaint is true." Mayer v.
Mylod, 988 F.2d 635, 638 (6th Cir. 1993). In ruling on a
Rule 12(b)(6) motion, the Court must "construe the
complaint in the light most favorable to the plaintiff,
accept its [well-pleaded] allegations as true, and draw all
reasonable inferences in favor of the plaintiff."
Handy-Clay v. City of Memphis, 695 F.3d 531, 538
(6th Cir. 2012) (quoting Treesh, 487 F.3d at 476).
to survive a Rule 12(b)(6) motion, the complaint must contain
"enough facts to state a claim to relief that is
plausible on its face." Twombly, 550 U.S. at
570. Unless the facts alleged show that the plaintiff's
claim crosses "the line from conceivable to plausible,
[the] complaint must be dismissed." Id.
Although this standard does not require "detailed
factual allegations, " it does require more than
"labels and conclusions" or "a formulaic
recitation of the elements of a cause of action."
Id. at 555. "Rule 8 . . . does not unlock the
doors of discovery for a plaintiff armed with nothing more
than conclusions." Ashcroft v. Iqbal, 556 U.S.
662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Legal
conclusions "must be supported by well-pleaded factual
allegations . . . [that] plausibly give rise to an
entitlement of relief." Id. at 679.
"Although for the purposes of this motion to dismiss we
must take all the factual allegations in the complaint as
true, we are not bound to accept as true a legal conclusion
couched as a factual allegation." Papasan v.
Main, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209
Court's review of a Rule 12(b)(6) motion is generally
confined to the four corners of a complaint; nonetheless,
"a [C]ourt may consider 'exhibits attached to the
complaint, public records, items appearing in the record of
the case and exhibits attached to defendant's motion to
dismiss' without converting the motion to dismiss into a
motion for summary judgment." Thomas v.
Noder-Love, No. 13-2495, 621 F.App'x 825, 828 (6th
Cir. 2015) (quoting Rondigo, LLC. v. Twp. of
Richmond, 641 F.3d 673, 681 (6th Cir. 2011)).