Oj Commerce, LLC v. Ashley Furniture Indus., Inc.

• Decision Date: 17 September 2018
• Docket Number: Case No. 0:18-cv-61185-UU
• Citation: 359 F.Supp.3d 1163
• Parties: OJ COMMERCE, LLC, Plaintiff, v. ASHLEY FURNITURE INDUSTRIES, INC., Defendant.
• Court: U.S. District Court — Southern District of Florida

359 F.Supp.3d 1163

OJ COMMERCE, LLC, Plaintiff,

v.ASHLEY FURNITURE INDUSTRIES, INC., Defendant.

Case No. 0:18-cv-61185-UU

United States District Court, S.D. Florida.

Signed September 17, 2018

FILED September 18, 2018

Devin Freedman, Boies Schiller Flexner, Miami, FL, Shlomo Y. Hecht, Shlomo Y. Hecht PA, Miramar, FL, for Defendant.

Raquel M. Fernandez, Melissa Cade Pallett-Vasquez, Mitchell Edward Widom, Bilzin Sumberg Baena Price & Axelrod, Miami, FL, for Defendant.

ORDER ON MOTION TO DISMISS

URSULA UNGARO, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant's Motion to Dismiss Plaintiff's Complaint (the "Motion"). D.E. 13. The Court has reviewed the Motion, the pertinent portions of the record and is otherwise fully advised in the premises. For the following reasons the motion is GRANTED.

I. Factual Background

Unless otherwise indicated, the following facts are taken from the well-pleaded allegations in Plaintiff's amended complaint. D.E. 11.

A. The Parties

Plaintiff is a Delaware corporation with its principal place of business in Broward County, Florida, whose primary business is e-commerce retail, selling products to consumers through online marketplaces. D.E. 11 ¶ 1. Defendant is a Wisconsin corporation, with its principal place of business in Wisconsin that manufactures furniture to be sold to retailers like Plaintiff. Id. ¶ 2.

B. The Early Relationship

In mid-2013, Plaintiff and Defendant commenced a business relationship wherein Plaintiff would sell Defendant's products directly to consumers. Id. ¶ 7. Specifically, Plaintiff would receive orders from its customers, submit the orders to Defendant, Defendant would ship the orders directly to Plaintiff's customers, and Plaintiff would pay Defendant for these products. Id. To memorialize this agreement, the parties entered into an Electronic Commerce Agreement that established a process by which Plaintiff could submit electronic orders to Ashley for fulfillment. Id. ¶ 8; D.E. 7-1.

C. The Investments

On January 19, 2017, Defendant called Plaintiff to discuss Plaintiff's marketing of Defendant's products. D.E. 11 ¶ 10. At this meeting, Defendant allegedly asked Plaintiff to invest in their relationship by augmenting Plaintiff's catalogue of Defendant's goods by adding images, content and other marketing investments. Id. ¶ 11. Defendant allegedly assured Plaintiff that if it undertook these investments, Defendant would commit more merchandise, support, and personnel to Plaintiff to ensure a successful long-term relationship. Id.

On July 31, 2017, Defendant allegedly requested that Plaintiff enter into a shipping relationship with a third party shipping company,¹ which Defendant allegedly knew would require Plaintiff to "invest in expensive custom information technology development." D.E. 11 at 3. To induce Plaintiff to enter into this agreement, Defendant allegedly asserted that it would grant Plaintiff access to more of its product line through the end of 2018 and that Defendant would provide Plaintiff with sufficient merchandise, discounts and incentives such that the investment would pay for itself. Id. ¶ 14. On September 28, 2017, Defendant contacted Plaintiff to follow up on the expansion of Plaintiff's shipping capabilities and also asked Plaintiff to run various marketing promotions for the 2018 calendar year. D.E. 11 ¶¶ 15-16. Defendant reiterated that if Plaintiff ran these marketing promotions, Plaintiff would have the opportunity to sell Defendant's products throughout the entirety of 2018 and would earn back all of the money invested through discounts and incentives offered by Defendant.

In mid-November 2017, Defendant asked Plaintiff to integrate its inventory system with Defendant, which Defendant allegedly knew would require Plaintiff to invest in expensive custom technology. D.E. 11 ¶ 17. Defendant asserted that after making this investment, Plaintiff would have "live" access to Defendant's inventory throughout 2018 and be able to list Defendant's products immediately. Id. ¶ 18. Plaintiff also requested that Defendant update its product catalogue with Defendants new 2018 products, which Defendant allegedly knew would involve great cost. Id. ¶ 19. Defendant also reiterated that Plaintiff would earn back all of the money invested through discounts and incentives offered by Defendant. Id.

Finally on December 7, 2017, Defendant re-asserted all of the promotions and investments Defendant wanted Plaintiff to invest in and run until the end of 2018. D.E. 11 ¶ 20. Defendant allegedly promised Plaintiff that in return for its efforts, Defendant would:

(i) support OJC through 2018 with personnel and promotions sufficient to regain its investments and profit; (ii) work together to ensure OJC could replicate the success of the 2017 holiday season throughout the entire 2018 calendar year; and (iii) promised that the year of 2018 would be the best year of its business relationship with OJC D.E. 11 ¶ 23.

In reliance on these promises, Plaintiff spent significant resources preparing its 2018 offering of Defendant's products, including hiring data analysts, graphic designers, and expanding its shipping and programming systems. Id. ¶¶ 25-30.

D. Termination of Relationship

On February 13, 2018, Defendant terminated its relationship with Plaintiff. D.E. 11 ¶ 31. Defendant's stated rationale for the termination was that Defendant was changing its distribution strategy; the decision to terminate the relationship was not a result of any acts or omissions on the part of Plaintiff. Id. ¶ 32. Plaintiff alleges that as a result of its reasonable reliance on Defendant's representations and abrupt termination of its business, it has suffered damages. Id. ¶ 33.

E. Written Agreement

While not attached by Plaintiff, Defendant's motion to dismiss attaches the parties' written E-Commerce Agreement, entered into on May 14, 2013. (the "Agreement").² D.E. 13-1. The Agreement sets out the framework in which the parties are to share information, advertising materials and order information to facilitate purchase and sale transactions. The Agreement is governed by Wisconsin law. D.E. 13-1 ¶ 9.

II. Procedural Background

On May 25, 2018, Defendant removed the instant action to this Court. D.E. 1. On June 1, 2018, Defendant filed a motion to dismiss, D.E. 7, which was subsequently mooted by Plaintiff's amended complaint. D.E. 11. Plaintiff's amended complaint contains five counts under Florida law: breach of the oral contract, or in the alternative, promissory estoppel; fraudulent misrepresentation; negligent misrepresentation; and unjust enrichment. Id. Defendant then re-filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) on July 2, 2018. The Motion is fully briefed and ripe for disposition.

III. Legal Standard

In order to state a claim, Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." While a court, at this stage of the litigation, must consider the allegations contained in the plaintiff's complaint as true, this rule "is inapplicable to legal conclusions." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In addition, the complaint's allegations must include "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (citing Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

In practice, to survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Id. (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). 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. The plausibility standard requires more than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Id. Determining whether a complaint states a plausible claim for relief is a context-specific undertaking that requires the court to draw on its judicial experience and common sense. Id. at 679, 129 S.Ct. 1937.

IV. Analysis

As discussed supra , Plaintiff's amended complaint contains one count for breach of contract and four counts of alternative equitable remedies. D.E. 11. Defendant argues that Plaintiff's claims must be dismissed with prejudice because: (1) Plaintiff's claims are barred by the terms of the Agreement and Plaintiff should not be allowed to circumvent the terms of the Agreement; (2) Plaintiff's claims are barred by the Statute of Frauds; and (3) Plaintiff's complaint contains fatal pleading deficiencies. D.E. 13. The Court will address each contention in turn.

A. Are Plaintiff' s Claims Barred by the Agreement?

Although not entirely clear, Defendant's argument appears to be that the Agreement controls the parties' relationship and the terms of the Agreement bar Plaintiff's claims based on the alleged oral contract. In support, Defendant argues that the Agreement states that "All Transactions contemplated by this Agreement subsequent to the execution of this Agreement shall be controlled and governed by Ashley's Standard Terms and Conditions of Sale ...." D.E. 13-1 at 4 ¶ 8C (emphasis added). "Transactions" are defined as "purchase and sale transactions." D.E. 13-1 at 2. Defendant also points to the Standard Terms and Conditions of Sale, which further state that "[t]hese Standard Terms and Conditions of Sale ... shall govern and control all Transactions between [Plaintiff] and [D...