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Cork-Howard Construction Company v. Dirty D Properties, LLC

United States District Court, N.D. Ohio, Western Division

November 20, 2017

Cork-Howard Construction Company, Plaintiff
v.
Dirty D Properties, LLC, et al., Defendants

          MEMORANDUM OPINION

          JEFFREY J. HELMICK, UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Before me is Plaintiff Cork-Howard Construction Company's motion to dismiss Defendant Dirty D Properties, LLC's counterclaims three through six. (Doc. No. 17). Defendant Dirty D Properties, LLC opposed the motion. (Doc. No. 25).

         II. Background

         Plaintiff Cork-Howard Construction Company (“CHC”) and Defendant Dirty D Properties, LLC executed a contract on December 4, 2015. (Doc. No. 10 at 5). Under the contract, CHC agreed to perform construction services at Dirty D's Marco's Pizza property in Lima, Ohio over the course of the next 90 days. Id. While roof repair was not included in the original contract, the contract was amended after approximately 30 days to add work to the roof of the property. Id. Before the amendment to the contract, at CHC's direction, Defendant RBK Enterprise, LLC installed a tarp onto the top of the building to protect the property. Id. But on December 26, 2015, a rain storm caused substantial damage to the property due to allegedly faulty installation of the tarp. Id. Further, because electrical work in the basement was allegedly not properly performed, the sump pump was not operational during the storm. Id. Since that time, Dirty D claims CHC has not fulfilled its obligations under the contract other than repairing some of the water damage. Id. Because of this alleged failure, Dirty D brings counterclaims of breach of contract, breach of warranty, fraud, promissory estoppel, negligent construction, and negligent hiring, retention, and supervision.

         III. Standard

         Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a lawsuit for “failure to state a claim upon which relief can be granted.” Courts must accept as true all of the factual allegations contained in the complaint when ruling on a motion to dismiss. Erickson v. Pardus, 551 U.S. 89, 94 (2007); Thurman v. Pfizer, Inc., 484 F.3d 855, 859 (6th Cir. 2007). To survive a motion to dismiss under Rule 12(b)(6), “even though a complaint need not contain ‘detailed' factual allegations, its ‘factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true.'” Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         Conclusory allegations or legal conclusions masquerading as factual allegations will not suffice. Twombly, 550 U.S. at 555 (stating that the complaint must contain something more than “a formulaic recitation of the elements of a cause of action”). A complaint must state sufficient facts to, when accepted as true, state a claim “that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining that the plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully” and requires the complaint to allow the court to draw the reasonable inference that the defendant is liable for the alleged misconduct).

         In conjunction with this standard, I am cognizant that Federal Rule of Civil Procedure 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.' Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Erickson v. Pardus, 551 U.S. at 93 (citing Twombly, 550 U.S. at 596); see also Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295-96 (6th Cir 2008). I “may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein.” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).

         IV. Discussion

         CHC moves to dismiss Dirty D's claims of fraud, promissory estoppel, negligent construction, and negligent hiring, retention, and supervision on grounds that these claims cannot coexist with Dirty D's contract claims.

         A. Tort Claims

         “[U]nder Ohio law[, ] the existence of a contract action generally excludes the opportunity to present the same case as a tort claim.” Wolfe v. Cont'l Cas. Co., 647 F.2d 705, 710 (6th Cir. 1981) (citing Ketcham v. Miller, 104 Ohio St. 372 (1922)). Instead, a tort claim may be asserted only when “a party breaches a duty which he owes to another independently of the contract, that is, a duty which would exist even if no contract existed.” Battista v. Lebanon Trotting Ass'n, 538 F.2d 111, 117 (6th Cir. 1976) (“The tort liability of parties to a contract arises from the breach of some positive legal duty imposed by law because of the relationship of the parties, rather than from a mere omission to perform a contract obligation.”) (citing Bowman v. Goldman Bros. Co., 109 N.E.2d 556, 557) (Ohio Ct. App. 1952)); see also Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 276 (1983) (“[I]t is well established in Ohio that it is no tort to breach a contract, regardless of motive. Rather, the liability arises from the breach of the positive legal duty imposed by law due to the relationships of the parties.”) (citations omitted).

         1. Fraudulent Inducement Generally, “a breach of contract does not create a tort claim, regardless of the motive of the promisor.” Battista, 538 F.2d at 118; see also Ketcham, 104 Ohio St. 372, at syl. ¶ 1 (finding a breach of contract could not be converted to a tort regardless of whether “the breach was unlawful, willful, wanton, and malicious.”); The Salvation Army v. Blue Cross & Blue Shield of N. Ohio, 92 Ohio App.3d 571, 578 (Ohio Ct. App. 1993) (“The addition of the adverbs intentionally, willfully, and fraudulently will not change a breach of contract claim to one sounding in tort.”); Res. Title Agency, Inc. v. MorrealeReal Estate Servs., Inc., 314 F.Supp.2d 763, 774 (N.D. Ohio 2004) (“If the gravamen of the complaint is for breach of contract, the cause of action will not be transformed into one sounding in tort by the charge of tortious conduct or the addition of the adverbs intentionally, willfully, and fraudulently.”). But Dirty D's first claim is pled as one of fraudulent inducement which may coexist with a claim of breach of contract. See Res. Title Agency, Inc., 314 F.Supp.2d at 774-75. To establish a fraudulent inducement claim, “a plaintiff must prove that the defendant made a knowing, material ...


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