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Malcmacher v. Jesse

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

December 11, 2017

LOUIS J. MALCMACHER, DDS, et al., Plaintiffs,
JAMES T. JESSE, DDS Defendant.


          DONALD C. NUGENT United States District Judge

         This matter is before the Court on the Second Motion for Judgment on the Pleadings filed by Plaintiffs, American Academy of Facial Esthetics, LLC (“AAFE”) and Louis J. Malcmacher, DDS. (Docket #21.) Plaintiffs assert they are entitled to judgment as a matter of law on all three claims raised by Defendant, James T. Jesse, in his Amended Counterclaim.

         Factual and Procedural Background

         From 2011 through 2014, Dr. Jesse contracted with AAFE to present Botox and dermal filler workshops in Ohio and California on behalf of AAFE. Dr. Malcmacher was President of AAFE. In July 2013, the California Dental Board notified Dr. Malcmacher and Dr. Jesse of a dispute (the “Dental Board Dispute”) involving events that occurred during a 2012 AAFE workshop for which Dr. Jesse was an instructor and during which it was alleged that live injections were performed on a non-patient, in violation of California regulations. Dr. Malcmacher and Dr. Jesse were represented by the same Ohio and California counsel in the Dental Board Dispute, which was resolved through a Citation Order.

         On July 9, 2015, Dr. Jesse filed an eight count Complaint in California State Court, James T. Jesse, D.D.S. v. Louis J. Malcmacher, D.D.S, et al., Case No. CIVDS1509595, Superior Court of the State of California, County of San Bernardino, Central District, alleging Intentional Misrepresentation, Concealment, False Promise, Negligent Misrepresentation, Breach of Contract, Breach of Covenant of Good Faith and Fair Dealing, Elder Abuse and Negligence, against Dr. Malcmacher and AAFE. Dr. Jesse alleged that he continued to perform Botox injections during workshops based on misrepresentations made by Dr. Malcmacher and AAFE that the injections were not illegal, subjecting him to Dental Board scrutiny and resulting in out-of-pocket expenses for his defense which Dr. Malcmacher and AAFE promised to compensate him for but never did. Dr. Jesse alleged that Dr. Malcmacher and AAFE took financial advantage of him by obtaining his services with the intent to defraud. Dr. Malcmacher and AAFE removed the case to the United States District Court for the Central District of California, Case No. 5:15 CV 1677, and filed a Counterclaim for Breach of Contract.

         The California District Court granted summary judgment in favor of Dr. Jesse on Dr. Malcmacher and AAFE's Breach of Contract Counterclaim, finding that the contract did not explicitly prohibit live injections. The California Court granted Dr. Malcmacher and AAFE summary judgment on Dr. Jesse's Intentional Misrepresentation, Negligent Misrepresentation, False Promise, Elder Abuse and Negligence claims. The remainder of the case - Dr. Jesse's claims for Fraudulent Concealment, Breach of Contract and Breach of Implied Covenant of good Faith and Fair Dealing - proceeded to trial and the jury entered a verdict in favor of Dr. Malcmacher and AAFE on all claims.

         Plaintiffs, Dr. Malcmacher and AAFE, initially filed the instant action in the Cuyahoga County Court of Common Pleas, Case No. CV 17 877466, on March 16, 2017. On April 17, 2017, Dr. Jesse filed a Notice of Removal with this Court pursuant to this Court's diversity jurisdiction. Plaintiffs assert claims against Dr. Jesse for Abuse of Process and Malicious Prosecution, alleging that the California lawsuit filed by Dr. Jesse was filed “to intentionally drive-up Dr. Malcmacher's and AAFE's costs and to force an unreasonable settlement” and filed without probable cause and with malice. On July 15, 2017, Dr. Jesse filed his Answer to Complaint and Amended Counterclaim, setting forth causes of action for Abuse of Process, Malicious Prosecution and Tortious Interference with Business Relationships.

         On August 9, 2017, Plaintiffs filed their Second Motion for Judgment on the Pleadings. (Docket #21.) Plaintiffs argue that Dr. Jesse's tortious interference claim is barred by the doctrine of res judicata, given that the California Litigation addressed the Dental Board Dispute, Dr. Jesse's contractual relationship with AAFE, and Dr. Jesse's services performed on behalf of AAFE; that the California litigation resulted in a jury verdict favorable to Plaintiffs; and, that Dr. Jesse's tortious interference claim could have been litigated in the California lawsuit. Further, Plaintiffs argue that Dr. Jesse has failed to sufficiently allege claims for abuse of process or malicious prosecution. On October 10, 2017, Dr. Jesse filed his Memorandum in Opposition. (Docket #27.) Dr. Jesse argues that “Plaintiffs' Complaint filed in this federal court is tantamount to harassment and is the basis for Jesse's counts for Abuse of Process and Malicious Prosecution.” (Docket #27, p. 2.) Further, Dr. Jesse argues that his intentional interference claim “is not solely based on the mere existence of the California Dental Board's investigation, ” and that the “availability of information to his past, current and prospective patients, from a simple background search of California Dental Board Disciplinary Actions and court dockets has caused and will continue to cause him to sustain damages.”

         Standard of Review

         The standard of review used by a district court to rule on a motion for judgment on the pleadings is the same as the standard used to rule on Rule 12(b)(6) motions. See Grindstaff v. Green, 133 F.3d 416, 421 (6th Cir. Tenn. 1998). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) allows a defendant to test the legal sufficiency of a complaint without being subject to discovery. See Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 566 (6th Cir. Ohio 2003). In evaluating a motion to dismiss, the court must construe the complaint in the light most favorable to the plaintiff, accept its factual allegations as true, and draw reasonable inferences in favorable of the plaintiff. See Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. Ky. 2007). The court will not, however, accept conclusions of law or unwarranted inferences cast in the form of factual allegations. See Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. Tenn. 2000). In order to survive a motion to dismiss, a complaint must provide the grounds of the entitlement to relief, which requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action. See Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007). That is, “[f]actual 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 (even if doubtful in fact).” Id. (internal citation omitted); see Association of Cleveland Fire Fighters v. City of Cleveland, No. 06-3823, 2007 WL 2768285, at *2 (6th Cir. Ohio Sept. 25, 2007) (recognizing that the Supreme Court “disavowed the oft-quoted Rule 12(b)(6) standard of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)”). Accordingly, the claims set forth in a complaint must be plausible, rather than conceivable. See Twombly, 127 S.Ct. at 1974.

         On a motion brought under Rule 12(b)(6), the court's inquiry is limited to the content of the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint may also be taken into account. See Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. Ohio 2001). It is with this standard in mind that the instant Motion must be decided.


          I. Intentional Interference with Business Relationships.

         The doctrine of res judicata encompasses the two related concepts of claim preclusion and issue preclusion. Anderson v. City of Blue Ash,798 F.3d 338, 350 (6th Cir. Ohio 2015). “‘Claim preclusion prevents subsequent actions, by the same parties or their privies, based on any claim arising out of a transaction that was the subject matter of a previous action.'” Id. (quoting O'Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59, 2007 Ohio 1102, 862 N.E.2d 803, 806 (Ohio 2007)). Claim preclusion also bars subsequent actions whose claims "could have been litigated in the previous suit." Id. The purpose of this doctrine is to promote the finality of judgments and thereby increase certainty, discourage multiple litigation, and conserve judicial resources. Westwood Chemical Co. v. Kulick, 656 F.2d 1224, 1229 (6th Cir. Ohio 1981). By contrast, issue preclusion, or collateral estoppel, prevents the “‘relitigation of any ...

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