Kashyap, LLC v. Natural Wellness USA, Inc., Civil Action No. DKC 11-0459

Decision Date16 June 2011
Docket NumberCivil Action No. DKC 11-0459
CourtU.S. District Court — District of Maryland


Civil Action No. DKC 11-0459


Dated: June 16, 2011


Presently pending and ready for resolution in this lease dispute is a motion to dismiss filed by Defendants Natural Wellness USA, Inc. and Zee TV USA, Inc. (ECF No. 8). The issues are fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Defendants' motion to dismiss will be denied.1

I. Background

A. Factual Background

According to the complaint, Plaintiff Kashyap, LLC ("Kashyap") currently owns a piece of commercial real estate in Bethesda, Maryland. (ECF No. 1 ¶ 5). On November 15, 2007, the former landlord of the property signed a lease agreement with

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Defendant Natural Wellness USA, Inc. ("Natural"). (Id. ¶ 8). Roughly a year later, on September 11, 2008, the former landlord assigned Kashyap all of its rights and obligations under the lease agreement with Natural. (Id. ¶ 9).

The agreement required Natural to satisfy certain conditions, some of which are especially relevant here. First, Natural was required to pay rent and additional charges at the beginning of each month for a ten-year period. (Id. ¶¶ 10-11; ECF No. 1-1, at 5). If Natural failed to make the required payments, the lease agreement provided Kashyap several possible remedies:

Any damages and/or loss of and/or deficiency in Rent sustained by Landlord may be recovered by Landlord, at Landlord's option: (i) in one (1) or more separate actions, at any time and from time to time, as and to the extent that said damages and/or Rent shall have accrued; or (ii) in a single action deferred until on or after the Expiration Date (in which event Tenant hereby agrees that the cause of action shall not be deemed to have accrued until the Expiration Date), or (iii) in a single proceeding prior to either the time of reletting or the Expiration Date, in which event Tenant agrees to pay Landlord the difference, if any, between (a) the present value of the Rent reserved under this Lease on the date of breach, discounted at eight percent (8%) per annum, and (b) the fair market value of the Lease on the date of the breach, the latter remedy hereby acknowledged to be a fair estimation of Landlord's damages and not an unenforceable penalty.

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(ECF No. 1-1 ¶ 2602(e)). Second, the lease agreement obligated Natural to "continuously and uninterruptedly operate its business" throughout the ten-year term of the tenancy. (ECF No. 1 ¶ 15).

In addition, the lease agreement contained a guarantee provision signed by Defendant Zee TV USA, Inc. ("Zee"). Under that provision, Zee "unconditionally, absolutely and irrevocably guarantee[d] . . . prompt and full payment and performance by [Natural]." (Id. ¶ 23). Zee signed the guarantee on the same day that Natural signed the lease. (Id. ).

Kashyap alleges that Natural ceased business operations, stopped paying rent, and abandoned the property in February 2010. (Id. ¶¶ 12, 15). On April 23, 2010, Kashyap provided notice to Zee that Natural had breached the lease agreement and that Kashyap expected payment from Zee as guarantor. (Id. ¶ 24). Zee did not pay. (Id.).

B. Procedural Background

Kashyap filed a complaint with this court on February 18, 2011. (ECF No. 1). Count I of the complaint alleges that Natural breached the lease agreement by failing to pay rent, ceasing business operations, and abandoning the property. (Id. ¶¶ 13, 17). Count II alleges that Zee, as guarantor of the lease agreement, breached the guarantee provision by failing to

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make payment in the amount owed by Natural. (Id. ¶ 25). Kashyap seeks compensatory and liquidated damages for the period from October 2010 through April 2011. (Id. ¶¶ 12-21).

On March 16, 2011, Natural and Zee filed the pending motion to dismiss Kashyap's complaint. (ECF No. 8). Kashyap opposed on March 23, 2011 (ECF No. 10) and Defendants replied shortly thereafter (ECF No. 12).

II. Standard of Review

Natural and Zee have moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). Accordingly, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and must construe all factual allegations in the light most favorable to the plaintiff, Harrison v. Westinghouse Savannah River Co. , 176 F.3d 776, 783 (4th Cir. 1999). The court need not take everything as true, however. For instance, the court need not accept unsupported legal allegations. Revene v. Charles County Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989). Nor must it agree with legal conclusions couched as factual allegations, Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), or conclusory factual allegations

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devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). And if the properly considered facts show nothing more than the "mere possibility of misconduct," the complaint should not survive a Rule 12(b)(6) motion. Iqbal, 129 S.Ct. at 1950 (quotation marks omitted).

III. Analysis

Natural and Zee seek dismissal because, in their view, this action "constitutes [a] non-consensual splitting of Kashyap's cause of action for breach of...

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