Snyder Development Co. v. Autozone, Inc.

          VASCURA MAGISTRATE JUDGE.

          OPINION & ORDER

          ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Third-Party Defendant's Motion to Dismiss for failure to state a claim. (ECF No. 29). For the reasons that follow, Third-Party Defendant's Motion is granted in part and denied in part.

         I. BACKGROUND

         Plaintiff Snyder brought this case alleging claims of breach of contract and negligence in relation with a lease entered with Defendant AutoZone.^[1] (ECF No. 2). In response, AutoZone brought suit against FD Gahanna. This Opinion & Order concerns the lease between Autozone Development and FD Gahanna. On April 3, 2015, AutoZone Development leased premises in the shopping center pursuant to a new lease with FD Gahanna (“FD Lease”). In exchange, FD Gahanna agreed to assume the responsibilities of the Snyder Lease - that is, the lease between AutoZone and Snyder - after an assignment had been executed. Id. In December 2015, the assignment had been executed, and AutoZone Development left the old premises and relocated to the new premises. Id. AutoZone Development then contacted Snyder for consent to the Assignment to FD Gahanna and consent was refused as FD Gahanna had already failed to pay Snyder for rent and other required items pursuant to Section 21.1 of the FD Lease and the Assignment in December. Id.

         Third Party Plaintiff AutoZone, Inc. brought this action against Third Party Defendant FD Gahanna for claims of Breach of Contract, Unjust Enrichment, Promissory Estoppel, Tortious Interference with Contract, Indemnification, and Contribution. Id. FD Gahanna filed a Motion to Dismiss (ECF No. 29), arguing that AutoZone failed to state a claim upon which relief could be granted. Fed.R.Civ.P. 12(b)(6). AutoZone filed a Response in Opposition (ECF No. 31) and FD Gahanna filed a Reply (ECF No. 34).

         II. STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 12(b)(6), the Court may dismiss a cause of action for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Such a motion “is a test of the plaintiff's cause of action as stated in the complaint, not a challenge to the plaintiff's factual allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). Thus, the Court “must construe the complaint in the light most favorable to the plaintiff” and “accept all well-pled factual allegations as true[.]” Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783, 790 (6th Cir. 2012). If more than one inference may be drawn from an allegation, the Court must resolve the conflict in favor of the plaintiff. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). The Court cannot dismiss a complaint for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id.

         Generally, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The allegations need not be detailed but must “give the defendant fair notice of what the claim is, and the grounds upon which it rests.” Nader v. Blackwell, 545 F.3d 459, 470 (6th Cir. 2008) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)). A complaint's factual allegations “must be enough to raise a right to relief above the speculative level, ” and must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). A claim is plausible when it contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court is not required to accept as true mere legal conclusions unsupported by factual allegations. Id. (citing Twombly, 550 U.S. at 555).

         III. LAW & ANALYSIS

         Under Ohio Law, relationships governed by contract law cannot also be governed by tort law. Ketcham v. Miller, 104 Ohio St. 372, 136 N.E. 145, 146 (1922). For the purposes of this Motion to Dismiss, this Court will not address whether the Third-Party Plaintiff AutoZone has to elect a specific remedy in tort or in contract. Third Party Plaintiff is allowed to plead in the alternative or inconsistently (See Fed. R. Civ. P. 8(d)) but at some point, AutoZone must elect whether it will pursue relief in tort or in contract. Preventing double recoveries for the same wrong is the primary purpose of the election-of-remedies doctrine. U.S. ex rel. Augustine v. Century Health Services, Inc., 289 F.3d 409, 416 (6th Cir. 2002) (citing Gens v. Resolution Trust Corp., 112 F.3d 569, 573 (1st Cir. 1997)). Therefore, this Court will only address whether Third Party Plaintiff AutoZone properly stated each claim for relief, regardless of whether recovery is possible.

         A. Breach of Contract

         AutoZone's first claim is for breach of contract. AutoZone argues that FD Gahanna materially breached Section 21.1 of the FD Lease and the Assignment by failing to make payments to Snyder for rent and other items that were required under the Snyder Lease; by failing to use good faith efforts to terminate the Snyder Lease; by failing to safeguard the Premises against the loss alleged and described in the Plaintiff's Complaint; and by procuring Snyder's refusal to consent to the Assignment (ECF No. 25). In response, FD Gahanna argues that AutoZone did not have consent to assign the Snyder Lease. For the purposes of this motion, this Court is only concerned with the agreement between AutoZone and FD Gahanna and not whether the Snyder Lease was properly assigned.

         In order properly to plead a claim for breach of contract, a plaintiff must show that there was a contract and that the contract was materially breached. A material breach of contract occurs when a party violates a term essential to the purpose of the agreement. See Troy Oaks Homes & Residential Club, Inc. v. Sokolowski,78 N.E.3d 365, 2016-Ohio-8427. Here, AutoZone alleges that FD Gahanna materially breached their lease agreement by failing to assume the liabilities of the Snyder Lease. Whether the failure to assume the liabilities constitutes a material breach is not a question that can be answered at this stage of litigation. To determine if an alleged breach is material, the factfinder must consider all of the circumstances of the case, including the conduct and relationship of the parties. Ohio Educ. Ass'n v. Lopez, 10th Dist. Franklin Co. No. 09AP-1165, 2010-Ohio-5709, ¶ 12. This Court is held to the standard for review for a 12(b) motion to dismiss and thus, cannot, at this stage, determine whether there was a breach because this Court cannot consider all of the circumstances of the case ...