Beckworth v. Bizier
| Decision Date | 18 December 2012 |
| Docket Number | CIVIL CASE NO. 3:12-CV-512-MOC-DSC |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | GLENN BECKWORTH, WILLIS BECKWORTH and VICKY JUNEAU, Plaintiffs, v. MARCEL O. BIZIER, Defendant. |
THIS MATTER is before the Court on "Defendant=s Motion to Dismiss or, In the Alternative, Motion to Transfer," Doc. 11, filed October 1, 2012, and the parties= associated briefs and exhibits, Docs. 12 and 13.
This matter has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. ' 636(b)(1), and is now ripe for consideration.
Having fully considered the arguments, the record, and the applicable authority, the undersigned respectfully recommends that Defendant=s Motion to Dismiss be granted, as discussed below.
Accepting the allegations of the Complaint, Doc. 1-1, as true, as we must at this early stage in the proceeding, Plaintiffs and Defendant are the shareholders of Discount Trophy & Co. Inc. (ADiscount Trophy@), a Connecticut corporation engaged in the wholesale of trophy and awards components to retailers. Doc. 1-1, && 12, 14. Defendant Marcel O. Bizier is thePresident and CEO of Discount Trophy, one of its directors, and owner of seventy-five percent of Discount Trophy=s shares. Id. && 12, 22. Plaintiffs own twenty-five percent of Discount Trophy=s shares. Id. & 22. Beckworth is the Vice-President and Chief Operating Officer of Discount Trophy and one of its directors. Id. & 23.
Prior to becoming shareholders of Discount Trophy, Plaintiffs were partners in Plastic Plus Awards, a Louisiana general partnership, that was engaged in the wholesale of trophy and awards components to retailers. Id. && 7, 14. By an agreement dated November 20, 2008 (the AMerger Agreement@), Discount Trophy acquired Plastic Plus Awards and Plaintiffs received twenty-five percent of Discount Trophy=s shares. Id. Ex. A and B. Plaintiffs allege that they also received twenty percent of the shares in Marco Plastics Industries, Inc. (AMPI@), which also is a Connecticut corporation. Id. && 16, 60. Defendant=s four children owned all of the shares of MPI prior to the Merger Agreement. They now own eighty percent of MPI=s shares. Id. & 57, Ex. A. ' 1.1(m). Defendant does not own any shares in MPI. Plaintiffs allege that Defendant "controls the day-to-day affairs" of MPI and "acts as either a de jure or de facto president, chief executive officer and director" of MPI. Id. & 60. Plaintiffs also allege that MPI acts as a conduit for ordering trophy and awards components and reselling them to Discount Trophy. Id. & 16.
Plaintiffs assert seven claims in their Complaint, Doc. 1-1. The Complaint references agreements that were executed either simultaneously with or subsequent to the execution of the Merger Agreement, including a Shareholder Agreement made between Discount Trophy, Defendant and Plaintiffs dated November 20, 2008 (the AShareholder Agreement,@ Doc 1-1, Ex. B); an Employment Agreement between Discount Trophy and Beckworth (ABeckworthEmployment Agreement,@ Doc. 1-1, Ex. C); and an Employment Agreement between Discount Trophy and Defendant (ABizier Employment Agreement,@ Doc. 1-1, Ex. C).
On October 1, 2012, Defendant filed this Motion to Dismiss, Doc. 11, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendant argues that Plaintiffs lack standing to bring the first, third, fourth and fifth claims directly against Defendant. Defendant argues that these claims may only be brought as a derivative action on behalf of the corporations of which Plaintiffs are shareholders. Defendant contends that since Plaintiffs allege injuries to the corporations, any recoveries would accrue to the corporations and not to them individually. Plaintiffs allege damages based upon a reduction in the value of their stock. Defendant also argues that Plaintiffs fail to state a breach of contract claim against Defendant in the second and sixth claims. Defendant argues that the second claim fails because he is not a party to the contract at issue. He contends that the sixth claim fails because an expression of anticipation to enter into a future contract is not enforceable as a matter of law. Finally, Defendant argues that the Court lacks jurisdiction over Plaintiffs= seventh claim for an inspection of the books and records of Discount Trophy, a Connecticut corporation, because the proper jurisdiction is the Connecticut Superior Court. In the alternative, Defendant requests that if the Court has jurisdiction over the seventh claim, that the action be transferred to the District of Connecticut pursuant to 28 U.S.C. ' 1404.
In APlaintiffs= Response in Opposition to Defendant=s Motion to Dismiss, or in the Alternative, Motion to Transfer,@ Doc. 12, Plaintiffs argue that Defendant=s contention that this action must be brought as a derivative action is based on an incorrect application of the internal affairs doctrine. Plaintiffs assert that Florida and North Carolina law apply in this case andwould allow Plaintiffs to bring a direct action against Defendant.
The Motion to Dismiss has been fully briefed and is now ripe for review.
Pursuant to Rule 12(b)(1), a claim may be dismissed for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). The existence of subject matter jurisdiction is a threshold issue the court must address before considering the merits of the case. Jones v. Am. Postal Workers Union, 192 F.3d 417, 422 (4th Cir. 1999). The plaintiff has the burden of proving that subject matter jurisdiction exists. Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). When a defendant challenges subject matter jurisdiction pursuant to Rule 12(b)(1), Athe district court is to regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.@ Id. The district court should grant the Rule 12(b)(1) motion to dismiss Aonly if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.@ Id.
In reviewing a Rule 12(b)(6) motion, "the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at563. A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1960 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949.
In Iqbal, the Supreme Court articulated a two-step process for determining whether a complaint meets this plausibility standard. First, the court identifies allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Id. at 1951. AThreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.@ Id. (citing Twombly, 550 U.S. at 554-55) (allegation that government officials adopted challenged policy Abecause of@ its adverse effects on protected group was conclusory and not assumed to be true). Although the pleading requirements stated in ARule 8 [of the Federal Rules of Civil Procedure] mark[] a notable and generous departure from the hyper-technical, code-pleading regime of a prior era ... it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.@ Id. at 1950.
Second, to the extent there are well-pleaded factual allegations, the court should assume their truth and then determine whether they plausibly give rise to an entitlement to relief. Id. at 1951. ADetermining whether a complaint contains sufficient facts to state a plausible claim for relief Awill ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.@ Id. at 1950. AWhere the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not >show[n]=->that the pleader is entitled to relief,=@ and therefore should be dismissed. Id.(quoting Fed. R. Civ. P. 8(a)(2)). In other words, if after taking the complaint=s well-pleaded factual allegations as true, a lawful alternative explanation appears a Amore likel@ cause of the complained of behavior, the claim for relief is not plausible. Id. at 1951-52.
Applying these principles in Iqbal to the plaintiff=s allegation that the defendants had adopted a discriminatory policy permitting "restrictive conditions of confinement" for post-September 11 detainees, the Supreme Court held "the complaint does not show, or even intimate, that petitioners purposefully housed detainees in [restrictive conditions] due to their race, religion or national origin." Iqbal, 129 S. Ct. at 1952. Accordingly, dismissal was appropriate. Id.
To continue reading
Request your trial