General Cable Corp. v. Highlander

• Decision Date: 15 May 2006
• Docket Number: No. 1:05 CV 00083.,1:05 CV 00083.
• Citation: 447 F.Supp.2d 879
• Parties: GENERAL CABLE CORPORATION, Plaintiff, Sharon F. HIGHLANDER, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

447 F.Supp.2d 879

GENERAL CABLE CORPORATION, Plaintiff,

Sharon F. HIGHLANDER, et al., Defendants.

No. 1:05 CV 00083.

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

May 15, 2006.

COPYRIGHT MATERIAL OMITTED

Michael Lawrence Cioffi, Thomas H. Stewart, Blank Rome Comisky & McCauley LLP, Cincinnati, OH, Brooke T. Iley, Washington, DC, Jeffrey E. Myers, Michael D. Keffer, Blank Rome LLP, Philadelphia, PA, for Plaintiff.

Curt Carl Hartman, Amelia, OH, Paul R. Boggs, III, Wallace, Boggs, Colvin, Rouse, & Bushelman, PLLC, Fort Wright, KY, for Defendants.

OPINION AND ORDER

SPIEGEL, Senior District Judge.

This matter is before the Court on Plaintiff General Cable's Motion to Dismiss Counterclaims (doc. 49), Defendants Sharon and Brent Highlander's Response in Opposition (doc. 63), Defendant AGEM Enterprises International, Inc.'s Response in Opposition (doe. 66), and Plaintiffs Reply (doc. 68). Also before the Court is Plaintiff General Cable's Motion to Strike Defendant AGEM's Counterclaim as to Robert Siverd and Jeffrey Myers (doc. 54), Defendant AGE M's Response in Opposition (doc. 67), and Plaintiffs Reply (doc. 70). Finally, the Court will review Plaintiffs Motion for Sanctions against Defendant AGEM and Its Attorney Under Rule 11 (doc. 61), Defendant AGEM's Response in Opposition (doe. 69), Plaintiffs Reply (doe. 73), and the Declaration of Paul R. Boggs III in Support of AGEM's Opposition (doc. 74). The Court held a hearing on these motions on March 15, 2006. On that same day, AGEM filed its Motion For Leave to File a Second Amended Counterclaim (doc. 75), to which Plaintiff filed a Response in Opposition (doe. 79).

For the reasons indicated herein, the Court GRANTS IN PART and DENIES IN PART Plaintiffs Motion to Dismiss such that Sharon Highlander's breach of employment contract counterclaim and AGEM's counterclaims for tortious interference with contract, fraudulent misrepresentation, and negligent misrepresentation all survive Plaintiffs Motion, but all remaining counterclaims asserted by the Highlanders are dismissed. The Court further GRANTS Plaintiffs Motion to Strike, but DENIES Plaintiffs Motion for Sanctions and ADVISES the parties to act in accordance with the Introductory Statement on Civility which prefaces the Local Rules of the Southern District of Ohio. Finally, the Court DENIES AGEM's Motion For Leave to File a Second Amended Counterclaim (doc. 75)

I. Background

Plaintiff General Cable Corporation ("General Cable"), a Delaware Corporation with its headquarters in Highland Heights, Kentucky, brought its Amended Complaint, asserting diversity, on March 8, 2005, alleging that its former Vice President and Chief Information Officer, Sharon Highlander, conspired with co-Defendants to award contracts to Defendant AGEM Enterprises International, Inc., ("AGEM"), a Nevada corporation and Ohio citizen, under commercially unreasonable terms detrimental to its interests (doe. 8). Plaintiff alleges that Sharon Highlander awarded such contracts in consideration for favorable terms in her and her husband Brent Highlander's business dealings with Defendant Stuart Hartman ("Hartman"), the owner of AGEM, thus breaching her fiduciary duty to General Cable (Id.). Plaintiff further alleges that Defendants AGEM, Hartman, and Brent Highlander knew of Sharon Highlander's fiduciary duties, and aided and abetted her in the breach of such duties; that Sharon Highlander made material misrepresentations and concealed facts about her relationship with AGEM and Hartman, constituting fraud and/or intentional misrepresentation; and all Defendants engaged in a civil conspiracy aimed at injuring Plaintiff (Id.).

On November 2, 2005, the Court denied a number of motions by Defendants attacking Plaintiffs claims as well as seeking to disqualify Plaintiffs Counsel (doe. 30). Subsequent to such Order, each respective Defendant filed an Answer, the Highlander Defendants filed Counterclaims, and Defendants filed Third Party Complaints against Plaintiff's in-house counsel, Robert Siverd, and outside counsel, Jeffrey Myers. The Highlanders later withdrew their Third Party Complaints, but AGEM withdrew such Complaint only to refile it in the form of an Amended Counterclaim.

The counterclaims brought by Defendants are primarily premised upon statements made by Siverd and Myers, at a meeting on January 11, 2005, to the effect that the Defendants' actions were criminal. In addition, Defendant Sharon Highlander alleges that Defendants breached the stock option and stock incentive plans General Cable had awarded her while an employee by seizing all such assets upon her termination. Sharon Highlander alleges Defendants had no just cause for her termination. Defendant AGEM further alleges that General Cable's termination of its 2004 Agreement with AGEM constitutes a breach of contract; that General Cable was unjustly enriched by its dealing with AGEM; that General Cable tortiously interfered with AGEM's contracts with AGEM employees and contractors; and that General Cable made false statements to AGEM to entice AGEM to continue to work for General Cable while currying favor with AGEM employees so as to hire them directly. Taken together, all of the counterclaims can be fairly summarized as follows:

Defendant Sharon Highlander brings counterclaims for (1) breach of employment contract, (2) defamation, (3) outrageous conduct/emotional distress, (4) malicious prosecution.

Defendant Brent Highlander brings counterclaims for (1) defamation, (2) outrageous conduct/emotional distress, and (3) malicious prosecution.

Defendant AGEM brings counterclaims for (1) breach of contract, (2) unjust enrichment, (3) tortious interference with contract, (4) fraudulent misrepresentation, (5) negligent misrepresentation, and (6) declaratory judgment.

Plaintiff's pending motions attack each of the counterclaims; seek to strike AGE M's counterclaims as to Robert Siverd and Jeffrey Myers for failure to obtain leave to add them as new parties and for lack of jurisdiction; and further seek Fed. R.Civ.P. 11 sanctions against Defendant AGEM and its attorney, Curt Hartman.

II. The Motion to Dismiss Standard

Plaintiff's Motion is governed by Fed. R. Civ. P 12(b)(1) and 12(b)(6). A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction attacks a cause of action in one of two ways: facially or factually. Fed.R.Civ.P. 12(b)(1); United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994). A facial attack challenges the sufficiency of the complaint itself. On such an attack, the court must take all material allegations in the complaint as true and construe them in a light most favorable to the non-moving party. Ritchie, 15 F.3d at 598 (citing Scheuer v. Rhodes, 416 U.S. 232, 235-37, 94 S.Ct. 1683, 40 L.Ed.2d 90, (1974)). In contrast, a factual attack challenges the factual existence of subject matter jurisdiction. The court reviewing such a motion need not presume that the factual allegations set forth in the complaint are true. Id. Instead, the court may weigh any evidence properly before it. See Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990); Rogers v. Stratton Indus., Inc., 798 F.2d 913, 918 (6th Cir.1986). In the instant matter, Plaintiff challenges the facial existence of subject matter jurisdiction under Rule 12(b)(1), and the Court shall therefore take all material allegations as true and construe them in a light most favorable to Defendants.

A Rule 12(b)(6) motion to dismiss requires the Court to determine whether a cognizable claim has been pleaded in the complaint. The basic federal pleading requirement is contained in Fed.R.Civ.P. 8(a), which states that, a pleading "shall contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). In its scrutiny of the complaint, the Court must construe all well-pleaded facts liberally in favor of the party opposing the motion. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1687, 40 L.Ed.2d 90 (1974). Rule 8(a)(2) operates to provide the defendant with "fair notice of what plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). A court examines a complaint in light of the objectives of Rule 8 using the standard articulated in Jones v. Sherrill, 827 F.2d 1102, 1103 (6th Cir.1987):

In reviewing a dismissal under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983), cert. denied, 469 U.S. 826, 105 S.Ct. 105, 83 L.Ed.2d 50 (1984). The motion to dismiss must be denied unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle her to relief. Id. at 158; Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

Jones, 827 F.2d at 1103.

The admonishment to liberally construe the claim, in this case, a set of counterclaims, when evaluating a Rule 12(b)(6) dismissal, does not relieve the pleader of his obligation to satisfy federal notice pleading requirements and allege more than bare assertions of legal conclusions. 5B Wright & Miller, Federal Practice and Procedure: § 1357 at 596 (1969). "In practice, a complaint ... must contain either direct or inferential allegations respecting all of the material elements [in order] to sustain a recovery under some viable legal theory." Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984), cert. denied, 470 U.S. 1054, 105 S.Ct. 1758, 84 L.Ed.2d 821 (1985) (quoting In Re: Plywood Antitrust Litigation, 655 F.2d 627, 641 (5th Cir.1981), cert. dismissed, 462 U.S. 1125, 103 S.Ct. 3100, 77 L.Ed.2d 1358 (1983)); see also Sutliff Inc. v. Donovan Companies, Inc., 727 F.2d 648, 654 (7th Cir.1984); 5 Wright & Miller, Federal Practice and Procedure: § 1216 at 121-23 (1969). The United...